TPG Inc. 10-K

Item 8. Financial Statements a nd Supp lementary Data Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 140 Consolidated Statements of Financial Condition as of December 31, 202 4 and 202 3 143 Consolidated Statements of Operations for the Years Ended December 31, 202 4 , 202 3 and 202 2 144 Consolidated Statements of Changes in Equity for the Years Ended December 31, 202 4 , 202 3 and 202 2 145 Consolidated Statements of Cash Flows for the Years Ended December 31, 202 4 , 202 3 and 202 2 148 Notes to Consolidated Financial Statements 150 139 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of TPG Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated statements of financial condition of TPG Inc. and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. Basis for Opinions The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 140 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Fair Value - Underlying Investments Without Readily Determinable Fair Values Used in the Calculation of Performance Allocations — Refer to Notes 2 and 4 of the financial statements Critical Audit Matter Description The Company, as a general partner, is entitled to an allocation of income from certain TPG Funds (“TPG Funds”), assuming certain investment returns are achieved, referred to as “Performance Allocations”. Performance Allocations are allocated based on cumulative fund performance as of each reporting date, and after specified investment returns to the TPG Funds’ limited partners are achieved. The fair value of the underlying investments held by the TPG Funds is a significant input into this calculation. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Performance Allocations to reflect either (a) positive performance resulting in an increase in the Performance Allocations or (b) negative performance that would cause the amount due to the general partner to be less than the amount previously recognized, resulting in a negative adjustment to Performance Allocations. In each case, Performance Allocations are calculated on a cumulative basis and cumulative results are compared to amounts previously recorded with a current period adjustment, positive or negative, recorded. Accrued but unpaid Performance Allocations as of the reporting date are reflected in Investments in the consolidated statements of financial condition. We identified the valuation of certain investments without readily determinable fair values used in the calculation of Performance Allocations as a critical audit matter because of the valuation techniques, assumptions, and subjectivity of the unobservable inputs used in the valuation, and changes in the fair value of these investments directly impacts the amount of Performance Allocations the Company accrues for the period. Auditing these inputs required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists who possess significant investment valuation expertise. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to valuation techniques, assumptions, and unobservable inputs used by management to estimate the fair values of certain investments with unobservable inputs (“Level III”) included the following, among others: • We involved more senior, more experienced audit team members to perform audit procedures. • We tested the effectiveness of internal controls over the determination of the fair value of certain Level III Investments. • We utilized our fair value specialists to assist in the evaluation of management’s valuation methodologies and valuation assumptions including the unobservable inputs used to estimate fair value. • We assessed the consistency by which management applied its valuation process. • We evaluated management’s ability to accurately forecast future revenues or operating margins by comparing actual results to management’s historical forecasts for certain investments. 141 Table of Contents • We evaluated management’s ability to accurately estimate the fair value of Level III investments by comparing the previous estimates of fair value to subsequent market transactions. /s/ Deloitte & Touche LLP Fort Worth, Texas February 18, 2025 We have served as the Company’s auditor since 2015. 142 Table of Contents TPG Inc. Consolidated Statements of Financial Condition (dollars in thousands, except share data) December 31, 2024 December 31, 2023 Assets Cash and cash equivalents $ 808,017 $ 665,188 Restricted cash (1) 13,175 13,183 Due from affiliates 447,012 418,977 Investments (includes assets pledged of $ 720,933 and $ 648,529 as of December 31, 2024 and December 31, 2023, respectively (1) ) 7,503,281 6,724,112 Intangible assets, net 533,707 649,508 Goodwill 436,079 436,079 Other assets 793,838 462,625 Total assets $ 10,535,109 $ 9,369,672 Liabilities and Equity Liabilities Accounts payable and accrued expenses $ 211,914 $ 171,796 Due to affiliates 465,137 143,175 Debt obligations (1) 1,281,984 945,052 Accrued performance allocation compensation 4,376,523 4,096,052 Other liabilities 607,562 652,463 Total liabilities 6,943,120 6,008,538 Commitments and contingencies (Note 17) Equity Class A common stock $ 0.001 par value, 2,340,000,000 shares authorized ( 109,211,355 and 80,596,501 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively) 109 80 Class B common stock $ 0.001 par value, 750,000,000 shares authorized ( 255,756,502 and 281,657,626 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively) 256 282 Preferred stock, $ 0.001 par value, 25,000,000 shares authorized ( 0 issued and outstanding as of December 31, 2024 and December 31, 2023) — — Additional paid-in-capital 970,719 613,476 Accumulated deficit ( 186,983 ) ( 34,681 ) Non-controlling interests 2,807,888 2,781,977 Total equity 3,591,989 3,361,134 Total liabilities and equity $ 10,535,109 $ 9,369,672 _________________ (1) The Company’s consolidated total assets and liabilities as of December 31, 2024 and December 31, 2023 include assets and liabilities of variable interest entities (“VIEs”). These assets can be used only to satisfy obligations of the VIEs, and the creditors of the VIEs have recourse only to these assets, and not to TPG Inc. See Notes 2, 11 and 12 to the Consolidated Financial Statements . See accompanying notes to Consolidated Financial Statements. 143 Table of Contents TPG Inc. Consolidated Statements of Operations (dollars in thousands, except share and per share data) Year Ended December 31, 2024 2023 2022 Revenues Fees and other $ 2,087,076 $ 1,534,626 $ 1,246,635 Capital allocation-based income 1,413,006 855,285 756,252 Total revenues 3,500,082 2,389,911 2,002,887 Expenses Compensation and benefits: Cash-based compensation and benefits 835,328 547,377 473,696 Equity-based compensation 1,006,312 654,922 627,714 Performance allocation compensation 930,053 591,676 416,556 Total compensation and benefits 2,771,693 1,793,975 1,517,966 General, administrative and other 583,733 482,574 368,915 Depreciation and amortization 135,386 47,673 32,990 Interest expense 87,511 38,528 21,612 Expenses of consolidated Public SPACs — 1,053 3,316 Total expenses 3,578,323 2,363,803 1,944,799 Investment income (loss) Income (loss) from investments: Net (losses) gains from investment activities ( 29,326 ) 6,564 ( 110,131 ) Interest, dividends and other 82,743 42,622 9,168 Investment and other income of consolidated Public SPACs — 8,359 19,123 Total investment income (loss) 53,417 57,545 ( 81,840 ) (Loss) income before income taxes ( 24,824 ) 83,653 ( 23,752 ) Income tax expense 52,091 60,268 32,483 Net (loss) income ( 76,915 ) 23,385 ( 56,235 ) Net loss attributable to redeemable equity in Public SPACs prior to Reorganization and IPO — — ( 517 ) Net income attributable to other non-controlling interests prior to Reorganization and IPO — — 966 Net income attributable to TPG Group Holdings prior to Reorganization and IPO — — 5,256 Net income attributable to redeemable equity in Public SPACs — 12,044 15,165 Net loss attributable to non-controlling interests in TPG Operating Group ( 175,927 ) ( 92,411 ) ( 180,824 ) Net income attributable to other non-controlling interests 75,529 23,662 11,293 Net income attributable to TPG Inc. subsequent to Reorganization and IPO $ 23,483 $ 80,090 $ 92,426 Net income (loss) per share data: Net income (loss) available to Class A common stock per share Basic $ 0.00 $ 0.89 $ 1.10 Diluted $ ( 0.42 ) $ ( 0.04 ) $ ( 0.19 ) Weighted-average shares of Class A common stock outstanding Basic 100,219,905 80,334,871 79,255,411 Diluted 364,725,579 317,944,496 308,908,052 See accompanying notes to Consolidated Financial Statements. 144 Table of Contents TPG Inc. Consolidated Statements of Changes in Equity (dollars in thousands, except share data) Shares of TPG Inc. TPG Inc. Partners' Capital Class A Common Stock Class B Common Stock Class A Common Stock, at par value Class B Common Stock, at par value Additional Paid-In Capital Retained Earnings (Deficit) Total TPG Inc. Equity Non-Controlling Interests Total Partners' Capital/ Equity Balance at January 1, 2022 $ 1,606,593 — — $ — $ — $ — $ — $ — $ 4,654,821 $ 6,261,414 Net income prior to Reorganization and IPO 5,256 — — — — — — — 966 6,222 Change in redemption value of redeemable non-controlling interest prior to Reorganization and IPO ( 110 ) — — — — — — — ( 407 ) ( 517 ) Effect of Reorganization and purchase of units in the Partnership ( 1,611,739 ) 48,984,961 229,652,641 49 230 271,780 ( 27 ) 272,032 1,341,603 1,896 Issuance of common stock in IPO, net of underwriting discount and issuance costs — 28,310,194 — 28 — 784,611 — 784,639 ( 25,426 ) 759,213 Purchase of Partnership Interests with IPO proceeds — — — — — — — — ( 379,597 ) ( 379,597 ) Issuance of common stock from Underwriters' exercise of over-allotment option, net of underwriting discount and issuance costs — 1,775,410 — 2 — 49,754 — 49,756 — 49,756 Equity reallocation between controlling and non-controlling interests prior to Reorganization and IPO — — — — — ( 654,129 ) — ( 654,129 ) 654,129 — Acquisition of NewQuest — — — — — 33,584 — 33,584 ( 33,584 ) — Deferred tax effect resulting from purchase of Class A Units, net of amounts payable under Tax Receivable Agreement — — — — — ( 13,232 ) — ( 13,232 ) — ( 13,232 ) Liability-based performance allocation compensation — — — — — — — — ( 3,525,767 ) ( 3,525,767 ) Net income (loss) subsequent to Reorganization and IPO — — — — — — 92,426 92,426 ( 169,531 ) ( 77,105 ) Shares issued for equity-based awards — 169,493 — 0 — 1,088 — 1,088 ( 901 ) 187 Equity-based compensation subsequent to Reorganization and IPO — — — — — 31,841 — 31,841 602,647 634,488 Capital contributions subsequent to Reorganization and IPO — — — — — — — — 13,039 13,039 Dividends/Distributions — — — — — — ( 89,675 ) ( 89,675 ) ( 576,955 ) ( 666,630 ) Change in redemption value of redeemable non-controlling interest subsequent to Reorganization and IPO — — — — — 1,342 — 1,342 21,162 22,504 Balance at December 31, 2022 $ — 79,240,058 229,652,641 $ 79 $ 230 $ 506,639 $ 2,724 $ 509,672 $ 2,576,199 $ 3,085,871 See accompanying notes to Consolidated Financial Statements. 145 Table of Contents TPG Inc. Consolidated Statements of Changes in Equity (dollars in thousands, except share data) Shares of TPG Inc. TPG Inc. Class A Common Stock Class B Common Stock Class A Common Stock, at par value Class B Common Stock, at par value Additional Paid-In Capital Retained Earnings (Deficit) Total TPG Inc. Equity Non-Controlling Interests Total Equity Balance at January 1, 2023 79,240,058 229,652,641 $ 79 $ 230 $ 506,639 $ 2,724 $ 509,672 $ 2,576,199 $ 3,085,871 Net income (loss) — — — — — 80,090 80,090 ( 68,749 ) 11,341 Equity-based compensation — — — — 49,579 — 49,579 590,443 640,022 Capital contributions — — — — — — — 21,769 21,769 Dividends/distributions — — — — — ( 117,495 ) ( 117,495 ) ( 539,309 ) ( 656,804 ) Change in redemption value of redeemable non-controlling interest — — — — 1,457 — 1,457 25,971 27,428 Shares issued for net settlement of equity-based awards 356,443 — 0 — 0 — — — — Withholding taxes paid on net settlement of equity-based awards — — — — ( 1,752 ) — ( 1,752 ) ( 5,126 ) ( 6,878 ) Deferred tax effects resulting from changes in equity — — — — ( 767 ) — ( 767 ) — ( 767 ) Exchange of Common Units to TPG Inc. Class A Common stock 1,000,000 ( 1,000,000 ) 1 ( 1 ) 1,085 — 1,085 — 1,085 Acquisition (see Note 3) — 53,004,985 — 53 ( 53 ) — — 238,067 238,067 Equity reallocation between controlling and non-controlling interest — — — — 57,288 — 57,288 ( 57,288 ) — Balance at December 31, 2023 80,596,501 281,657,626 $ 80 $ 282 $ 613,476 $ ( 34,681 ) $ 579,157 $ 2,781,977 $ 3,361,134 See accompanying notes to Consolidated Financial Statements. 146 Table of Contents TPG Inc. Consolidated Statements of Changes in Equity (dollars in thousands, except share data) Shares of TPG Inc. TPG Inc. Class A Common Stock Class B Common Stock Class A Common Stock, at par value Class B Common Stock, at par value Additional Paid-In Capital Retained Earnings (Deficit) Total TPG Inc. Equity Non-Controlling Interests Total Equity Balance at January 1, 2024 80,596,501 281,657,626 $ 80 $ 282 $ 613,476 $ ( 34,681 ) $ 579,157 $ 2,781,977 $ 3,361,134 Net income (loss) — — — — — 23,483 23,483 ( 100,398 ) ( 76,915 ) Equity-based compensation — — — — 192,852 — 192,852 756,591 949,443 Capital contributions — — — — — — — 220,934 220,934 Dividends/distributions — — — — — ( 175,785 ) ( 175,785 ) ( 657,595 ) ( 833,380 ) Shares issued for net settlement of equity-based awards 2,713,730 — 3 — ( 3 ) — — — — Withholding taxes paid on net settlement of equity-based awards — — — — ( 21,361 ) — ( 21,361 ) ( 46,310 ) ( 67,671 ) Exchange of Common Units to TPG Inc. Class A Common stock 25,901,124 ( 25,901,124 ) 26 ( 26 ) 38,444 — 38,444 — 38,444 Equity reallocation between controlling and non-controlling interest — — — — 147,311 — 147,311 ( 147,311 ) — Balance at December 31, 2024 109,211,355 255,756,502 $ 109 $ 256 $ 970,719 $ ( 186,983 ) $ 784,101 $ 2,807,888 $ 3,591,989 See accompanying notes to Consolidated Financial Statements. 147 Table of Contents TPG Inc. Consolidated Statements of Cash Flows (dollars in thousands) Year Ended December 31, 2024 2023 2022 Operating activities: Net (loss) income $ ( 76,915 ) $ 23,385 $ ( 56,235 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Equity-based compensation 1,006,312 654,922 627,714 Performance allocation compensation 930,053 591,676 416,556 Net losses (gains) from investment activities 29,326 ( 6,564 ) 110,131 Capital allocation-based income ( 1,413,006 ) ( 855,285 ) ( 756,252 ) Depreciation and amortization 135,386 47,673 32,990 Other non-cash activities 43,856 52,955 ( 3,051 ) Unrealized gains from investment activities of consolidated Public SPACs — ( 667 ) ( 12,382 ) Changes in operating assets and liabilities: Purchases of investments ( 862,821 ) ( 303,118 ) ( 109,093 ) Proceeds from investments 1,460,532 798,478 1,567,684 Due from affiliates ( 18,862 ) 41,268 ( 42,378 ) Other assets ( 25,063 ) ( 44,475 ) ( 35,893 ) Accounts payable and accrued expenses 52,610 ( 231,542 ) ( 14,235 ) Due to affiliates 26,635 ( 161,833 ) ( 12,528 ) Accrued performance allocation compensation ( 647,128 ) ( 505,024 ) ( 672,375 ) Other liabilities ( 108,769 ) ( 40,283 ) ( 22,515 ) Changes related to consolidated Public SPACs: Cash and cash equivalents related to consolidated Public SPACs — 5,097 274 Assets held in Trust Accounts — 653,635 346,392 Other assets — 457 18,611 Other liabilities — ( 237 ) ( 7,537 ) Net cash provided by operating activities 532,146 720,518 1,375,878 Investing activities: Acquisition of Angelo Gordon ( 16,334 ) ( 356,835 ) — Repayments of notes receivable from affiliates — — 14,937 Advances on notes receivable from affiliates — — ( 15,500 ) Purchases of fixed assets ( 28,131 ) ( 16,728 ) ( 2,449 ) Net cash used in investing activities ( 44,465 ) ( 373,563 ) ( 3,012 ) Financing activities: Proceeds from issuance of common stock in IPO, net of underwriting and issuance costs — — 770,865 Proceeds from issuance of common stock from underwriters' exercise of over-allotment option, net of underwriting and issuance costs — — 49,756 Purchase of partnership interests with IPO proceeds — — ( 379,597 ) Reorganization activities — — 2,124 Proceeds from debt obligations 1,388,500 651,000 30,000 Repayment of debt obligations ( 1,037,500 ) ( 150,000 ) ( 30,000 ) Issuance costs on debt obligations ( 16,632 ) ( 900 ) — Withholding taxes paid on net settlement of equity-based awards ( 67,671 ) ( 6,878 ) — Contributions from holders of other non-controlling interests 220,934 21,769 7,822 Distributions to holders of other non-controlling interests — — ( 318,942 ) Dividends/Distributions ( 832,491 ) ( 643,224 ) ( 662,812 ) Distributions to partners — — ( 355,282 ) Redemption of redeemable equity — ( 661,001 ) ( 352,014 ) Net cash used in financing activities $ ( 344,860 ) $ ( 789,234 ) $ ( 1,238,080 ) See accompanying notes to Consolidated Financial Statements. 148 Table of Contents Year Ended December 31, 2024 2023 2022 Net change in cash, cash equivalents and restricted cash $ 142,821 $ ( 442,279 ) $ 134,786 Cash, cash equivalents and restricted cash, beginning of period 678,371 1,120,650 985,864 Cash, cash equivalents and restricted cash, end of period $ 821,192 $ 678,371 $ 1,120,650 Supplemental disclosures of other cash flow information: Cash paid for income taxes $ 42,293 $ 51,130 $ 48,327 Cash paid for interest 65,371 33,549 18,352 Reconciliation of cash, cash equivalents and restricted cash, end of period: Cash and cash equivalents $ 808,017 $ 665,188 $ 1,107,484 Restricted cash 13,175 13,183 13,166 Cash, cash equivalents and restricted cash, end of period $ 821,192 $ 678,371 $ 1,120,650 See accompanying notes to Consolidated Financial Statements. 149 Table of Contents TPG Inc. Notes to Consolidated Financial Statements 1. Organization TPG Inc., along with its consolidated subsidiaries (collectively “TPG,” or the “Company”) is a leading global alternative asset manager on behalf of third-party investors under the “TPG” brand name. TPG Inc. includes the consolidated accounts of management companies, general partners of pooled investment entities and variable interest entities, in which the Company is the primary beneficiary, held by TPG Operating Group II, L.P., a holding company (“TPG Operating Group”). As of December 31, 2024, TPG Inc. held approximately 30 % of the outstanding Common Units of the TPG Operating Group. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements (the “Consolidated Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All dollar amounts are stated in thousands unless otherwise indicated. All intercompany transactions and balances have been eliminated. Certain comparative amounts for the prior fiscal period have been reclassified to conform to the financial statement presentation as of and for the period ended December 31, 2024. The Consolidated Financial Statements include the accounts of TPG Inc., TPG Operating Group and their consolidated subsidiaries, management companies, the general partners of funds and entities that meet the definition of a variable interest entity (“VIE”) for which the Company is considered the primary beneficiary. Public SPACs are consolidated pursuant to U.S. GAAP, and the accompanying Consolidated Financial Statements include the assets, liabilities, revenues, expenses and cash flows of the consolidated Public SPACs. All of the management fees and other amounts earned from the consolidated Public SPACs are eliminated in consolidation. In addition, the equivalent expense amounts recorded by the consolidated Public SPACs are also eliminated, with such reduction of expenses allocated to controlling interest holders. Accordingly, the consolidation of these entities has no net effect on net income attributable to TPG Inc. or net income attributable to other non-controlling interests. As of December 31, 2024 and December 31, 2023, the Company did not have any investment in consolidated Public SPACs. Use of Estimates The preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of revenues, expenses, and investment income during the reporting periods. Actual results could differ from those estimates and such differences could be material to the Consolidated Financial Statements. Principles of Consolidation The types of entities TPG assesses for consolidation include subsidiaries, management companies, broker-dealers, general partners of investment funds, investment funds, SPACs and other entities. Each of these entities is assessed for consolidation on a case by case basis depending on the specific facts and circumstances surrounding that entity. TPG first considers whether an entity is considered a VIE and therefore whether to apply the consolidation guidance under the VIE model. Entities that do not qualify as VIEs are assessed for consolidation as voting interest entities (“VOE”) under the voting interest model. 150 Table of Contents TPG Inc. Notes to Consolidated Financial Statements An entity is considered to be a VIE if any of the following conditions exist: (i) the equity investment at risk is not sufficient to finance the activities of the entity without additional subordinated financial support, (ii) as a group, the holders of the equity investment at risk lack the power to direct the activities that most significantly impact the entity’s economic performance or the obligation to absorb the expected losses or right to receive the expected residual returns, and (iii) the voting rights of some holders of the equity investment at risk are disproportionate to their obligation to absorb losses or right to receive returns, and substantially all of the activities are conducted on behalf of the holder of equity investment at risk with disproportionately few voting rights. For limited partnerships, partners lack power if neither (i) a simple majority or lower threshold (including a single limited partner) with equity at risk is able to exercise substantive kick-out rights through voting interests over the general partner, nor (ii) limited partners with equity at risk are able to exercise substantive participating rights over the general partners. TPG consolidates all VIEs in which it is the primary beneficiary. An entity is determined to be the primary beneficiary if it holds a controlling financial interest in a VIE. A controlling financial interest is defined as (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (i) whether an entity in which TPG holds a variable interest is a VIE and (ii) whether TPG’s involvement, through holding an interest directly or indirectly in the entity or contractually through other variable interests, would give it a controlling financial interest. Performance of that analysis requires judgment. The analysis can generally be performed qualitatively; however, if it is not readily apparent that TPG is not the primary beneficiary, a quantitative analysis may also be performed. TPG factors in all economic interests including interests held through related parties, to determine if it holds a variable interest. Fees earned by TPG that are customary and commensurate with the level of effort required for the services provided, and where TPG does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered variable interests. TPG determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and continuously reconsiders that conclusion when facts and circumstances change. Entities that are determined not to be VIEs are generally considered to be VOEs and are evaluated under the voting interest model. TPG consolidates VOEs that it controls through a majority voting interest or through other means. Investments Investments consist of investments in private equity funds, real estate funds, hedge funds and credit funds, including our share of any performance allocations and equity method and other proprietary investments. Investments denominated in currencies other than the U.S. dollar are valued based on the spot rate of the respective currency at the end of the reporting period with changes related to exchange rate movements reflected in the Consolidated Financial Statements. Equity Method – Performance Allocations and Capital Interests Investments in which the Company is deemed to have significant influence, but not control, are accounted for using the equity method of accounting except in cases where the fair value option has been elected. The Company as general partner has significant influence over the TPG funds in which it invests but does not consolidate. The Company uses the equity method of accounting for these interests whereby it records both its proportionate and disproportionate allocation of the underlying profits or losses of these entities in revenues in the accompanying Consolidated Financial Statements. The carrying amounts of equity method investments are included in investments in the Consolidated Financial Statements. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The difference between the carrying value and its estimated fair value is recognized as an impairment when the loss is deemed other than temporary. The TPG funds are considered investment companies under Accounting Standards Codification (“ASC” or the “Codification”) Topic 946, Financial Services – Investment Companies (“ASC 946”). The Company, along with the TPG funds, applies the specialized accounting promulgated in ASC 946 and, as such, neither the Company nor the TPG funds consolidate wholly-owned, majority-owned and/or controlled portfolio companies. The TPG funds record all investments in the portfolio companies at fair value. Investments in publicly traded securities are generally valued at quoted market prices based upon the last sales price on the measurement date. Discounts are applied, where appropriate, to reflect restrictions on the marketability of the investment. 151 Table of Contents TPG Inc. Notes to Consolidated Financial Statements When observable prices are not available for investments, the general partners use the market and income approaches to determine fair value. The market approach consists of utilizing observable market data, such as current trading or acquisition multiples of comparable companies, and applying it to key financial metrics, such as earnings before interest, depreciation and taxes, of the portfolio company. The comparability of the identified set of comparable companies to the portfolio company, among other factors, is considered in the application of the market approach. The general partners, depending on the type of investment or stage of the portfolio company’s lifecycle, may also utilize a discounted cash flow analysis, an income approach, in combination with the market approach in determining fair value of investments. The income approach involves discounting projected cash flows of the portfolio company at a rate commensurate with the level of risk associated with those cash flows. In accordance with ASC Topic 820, Fair Value Measurement (“ASC 820”) market participant assumptions are used in the determination of the discount rate. In applying valuation techniques used in the determination of fair value, the general partners assume a reasonable period of time for liquidation of the investment and take into consideration the financial condition and operating results of the underlying portfolio company, the nature of the investment, restrictions on marketability, market conditions, foreign currency exposures and other factors. In determining the fair value of investments, the general partners exercise significant judgment and use the best information available as of the measurement date. Due to the inherent uncertainty of valuations, the fair values reflected in the accompanying Consolidated Financial Statements may differ materially from values that would have been used had a readily available market existed for such investments and may differ materially from the values that may ultimately be realized. Investments Held to Maturity The Company holds investments in the notes issued by CLO funds that are held to maturity. The Company has the intent and ability to hold these investments until maturity. Held to maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method. The effective interest method uses projected cash flows and includes uncertainties and contingencies that are difficult to predict and are subject to future events that may impact estimated interest income prospectively. Certain tranches of the notes were purchased at a discount and are being amortized back to par value until they mature at various dates between 2033 to 2035. If the Company failed to keep these investments as held to maturity it would be required to reclassify them as trading securities and would measure at fair value. Where applicable, impairment is recognized related to investments in the CLO funds in accordance with U.S. GAAP. The CLO funds evaluate securities for impairment on a security-by-security basis based on adverse changes in expected cash flows. Those investments were fair valued in purchase accounting as discussed in Note 3 to the Consolidated Financial Statements. Equity Method Investments – Other The Company holds non-controlling, limited partnership interests in certain other partnerships in which it has significant influence over their operations. The Company uses the equity method of accounting for these interests whereby it records its proportionate share of the underlying income or losses of these entities in net gains (losses) from investment activities in the accompanying Consolidated Financial Statements. The carrying amounts of equity method investments are included in investments in the Consolidated Financial Statements. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The difference between the carrying value and its estimated fair value is recognized as an impairment when the loss is deemed other than temporary and recorded in net gains (losses) from investment activities within the Consolidated Financial Statements. Equity Method – Fair Value Option The Company elects the fair value option for certain investments that would otherwise be accounted for using the equity method of accounting. Such election is irrevocable and is applied on an investment-by-investment basis at initial recognition. The fair value of such investments is based on quoted prices in an active market. Changes in the fair value of these equity method investments are recognized in net gains (losses) from investment activities in the Consolidated Financial Statements. 152 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Equity Investments The Company holds non-controlling ownership interests in which it does not have significant influence over their operations. The Company records such investments at fair value when there is a readily determinable fair value. For certain nonpublic partnerships without readily determinable fair values, the Company has elected to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Impairment is evaluated when significant changes occur that may impact the investee in an adverse manner. Impairment, if any, is recognized in net gains (losses) from investment activities in the Consolidated Financial Statements. Investments Held for Sale and Other Investments held for sale and other are held primarily for the purpose of selling in the near term. The Company elects the fair value option, in accordance with ASC Topic 825, Financial Instruments , for certain investments held for sale with changes in fair value recognized in net gains (losses) from investment activities in the Consolidated Financial Statements. Such election is irrevocable and is applied on an investment-by-investment basis at initial recognition. Management believes that the election of the fair value option for investments held for sale improves financial reporting by presenting the most relevant market indication of investments held for sale. The Company records investments held for sale and other at fair value using discounted cash flow and market comparable approaches. Interest income on investments held for sale and other is calculated based upon the contractual rate of the investment, where applicable, and recorded in interest, dividends and other in the Consolidated Financial Statements. For investments held for sale, up-front costs and certain other fees are expensed as incurred, or at the time of funding for the respective investment. Loan Held for Sale From time to time, the Company may enter into transactions in which it arranges short-term funding for affiliates, such as portfolio companies or investees, as part of the Company’s capital markets activities. The Company invests in loans issued by portfolio companies that are held for sale. Loans held for sale are recorded at the lower of amortized cost basis or fair value, in which the fair value approximates the carrying amounts represented in the Consolidated Financial Statements. Non-Controlling Interests Non-controlling interests consists of ownership interests held by third-party investors in certain entities that are consolidated, but not 100% owned. The aggregate of the income or loss and corresponding equity that is not owned by the Company is included in non-controlling interests in the Consolidated Financial Statements. Allocation of income to non-controlling interest holders is based on the respective entities’ governing documents. 153 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Revenues Revenues consisted of the following (in thousands): Year Ended December 31, 2024 2023 2022 Management fees $ 1,637,990 $ 1,187,947 $ 919,830 Monitoring fees 29,625 10,866 14,330 Transaction fees 140,599 99,427 97,909 Incentive fees 33,032 2,815 5,183 Expense reimbursements and other 245,830 233,571 209,383 Total fees and other 2,087,076 1,534,626 1,246,635 Performance allocations 1,301,766 808,248 720,106 Capital interests 111,240 47,037 36,146 Total capital allocation-based income 1,413,006 855,285 756,252 Total revenues $ 3,500,082 $ 2,389,911 $ 2,002,887 Fees and Other Fees and other are accounted for as contracts with customers under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The guidance for contracts with customers provides a five-step framework that requires the Company to (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when the Company satisfies its performance obligations. In determining the transaction price, the Company includes variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. 154 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Revenue Streams Customer Performance Obligations satisfied over time or point in time (a) Variable or Fixed Consideration Revenue Recognition Classification of Uncollected Amounts (b) Management Fees TPG funds, limited partners and other vehicles Asset management services are satisfied over time (daily) because the customer receives and consumes the benefits of the advisory services daily Consideration is variable since over time the management fee varies based on fluctuations in the basis of the calculation of the fee Management fees are recognized each reporting period based on the value provided to the customer for that reporting period Due from affiliates – unconsolidated VIEs Monitoring Fees Portfolio companies In connection with the investment advisory services provided, the Company earns monitoring fees for providing oversight and advisory services to certain portfolio companies over time Consideration is variable when based on fluctuations in the basis of the calculation of the fee Consideration is fixed when based on a fixed agreed-upon amount Monitoring fees are recognized each reporting period based on the value provided to the customer for that reporting period Due from affiliates – portfolio companies Transaction Fees Portfolio companies, third-parties and other vehicles The company provides advisory services, debt and equity arrangements, and underwriting and placement services for a fee at a point in time Consideration is fixed and is based on a point in time Transaction fees are recognized on or shortly after the transaction is completed Due from affiliates – portfolio companies Other assets - other Incentive Fees TPG funds, limited partners and other vehicles Investment management services performed over a period of time that result in achievement of minimum investment return levels Consideration is variable since incentive fees are contingent upon the TPG Fund or vehicles achieving more than the stipulated investment threshold return Incentive fees are recognized at the end of the performance measurement period if the investment performance is achieved Due from affiliates – unconsolidated VIEs Expense Reimbursements and other TPG funds, portfolio companies and third-parties Expense reimbursements incurred at a point in time relate to providing investment, management and monitoring services. Other revenue is performed over time. Expense reimbursements and other are fixed consideration Expense reimbursements and other are recognized as the expenses are incurred or services are rendered Due from affiliates – portfolio companies and unconsolidated VIEs Other assets – other _________________ (a) There were no significant judgments made in evaluating when a customer obtains control of the promised service for performance obligations satisfied at a point in time. (b) See Note 14 to the Consolidated Financial Statements for amounts classified in due from affiliates. Management Fees The Company provides investment management services to the TPG funds, limited partners, SMAs and clients, and other vehicles in exchange for a management fee. Management fees also include catch-up fees, also known as out of period management fees, which are fees paid in any given period that relate to a prior period, usually as the result of a new limited partner coming into a fund in a subsequent close. Management fees are determined quarterly based on an annual rate and are generally based upon a percentage of capital committed, net funded capital commitments, cost of investments, Net Asset Value (“NAV”) or actively invested capital or as otherwise defined in the respective management agreements. Since some of the factors that cause management fees to fluctuate are outside of the Company’s control, management fees are considered constrained and are not included in the transaction price until the uncertainty relating to the constraint is subsequently resolved. However, as these fees are payable on a regular basis, the uncertainty relating to the constraint is resolved and accordingly revenue is recognized at the end of the period. After the contract is established, management does not make any significant judgments in determining the transaction price. Management fee rates generally range between the following: Management fee base Low High Committed capital 0.50 % 2.00 % Actively invested capital 0.25 % 2.00 % Net funded capital commitments 0.50 % 1.75 % Cost of investments 0.33 % 1.00 % NAV 0.50 % 1.50 % 155 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Under the terms of the management agreements with certain TPG funds, the Company is required to reduce management fees payable by funds by an agreed upon percentage of certain fees, including monitoring and transaction fees earned from portfolio companies. These amounts are generally applied as a reduction of the management fee that is otherwise billed to the investment fund and are recorded as a reduction of revenues in the Consolidated Statement of Operations. For the years ended December 31, 2024, 2023 and 2022 these amounts totaled $ 48.9 million, $ 6.4 million and $ 11.5 million, respectively. Amounts payable to investment funds are recorded in due to affiliates in the Consolidated Financial Statements. See Note 14 to the Consolidated Financial Statements. Monitoring Fees The Company provides monitoring services to certain portfolio companies in exchange for a fee, which is recognized over time as services are rendered. After the monitoring contract is established, there are no significant judgments made in determining the transaction price. Transaction Fees The Company provides capital structuring and other advice to portfolio companies, third parties and other vehicles generally in connection with debt and equity arrangements, as well as underwriting and placement services for a fee at a point in time when the underlying advisory services rendered are complete. Transaction fees are separately negotiated for each transaction and are generally based on the underlying transaction value. After the contract is established, management makes no significant judgments when determining the transaction price. Incentive Fees The Company provides investment management services to certain TPG funds and other vehicles in exchange for a management fee as discussed above and, in some cases, an incentive fee when the Company is not entitled to performance allocations, as further discussed below. Incentive fees are considered variable consideration in the scope of the revenue guidance as these fees are affected by changes in the fair value of investments over the performance period. The Company recognizes incentive fees only when these amounts are no longer subject to significant reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period. After the contract is established, there are no significant judgments made when determining the transaction price. Expense Reimbursements and Other In providing investment management and advisory services to TPG funds and monitoring services to the portfolio companies, TPG routinely contracts for services from third parties. In situations where the Company is viewed, for accounting purposes only, as having incurred these third-party costs on behalf of the TPG funds or portfolio companies, the cost of such services is presented net as a reduction of the Company’s revenues. In all other situations, the expenses and related reimbursements associated with these services are presented on a gross basis, which are classified as part of the Company’s expenses, and reimbursements of such costs are classified as expense reimbursements within revenues in the Consolidated Financial Statements. After the contract is established, there are no significant judgments made when determining the transaction price. Capital Allocation-Based Income (Loss) Capital allocation-based income (loss) is earned from the TPG funds when the Company has a general partner’s capital interest and is entitled to a disproportionate allocation of investment income (referred to hereafter as “performance allocations”). The Company records capital allocation-based income (loss) under the equity method of accounting assuming the fund was liquidated as of each reporting date pursuant to each TPG fund’s governing agreements. Accordingly, these general partner interests are accounted for outside of the scope of ASC 606. Other arrangements surrounding contractual incentive fees through an advisory contract are separate and distinct and accounted for in accordance with ASC 606. In these incentive fee arrangements, the Company’s economics in the entity do not involve an allocation of capital. See discussion above regarding “Incentive Fees”. 156 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Open-end funds can issue and redeem interests to investors on an on-going basis at the then-current net asset values subject to the fund’s policies as specified in governing documents. The Company generally receives performance allocations from its open-end funds based on a percentage of annual fund profits, reduced by minimum return hurdles, and subject to prior year loss carry-forwards. Performance allocations are either paid in the first quarter following the performance year or during the calendar year if there are investor redemptions and are generally not subject to repayment by the Company. Performance allocations attributed to certain non-liquid investments (“side pocket investments”) owned by open-end funds is paid when the associated side pocket investments are realized. Performance allocations for closed-end funds are allocated to the general partners based on cumulative fund performance as of each reporting date, and after specified investment returns to the funds’ limited partners are achieved. At the end of each reporting period, the TPG funds calculate and allocate the performance allocations that would then be due to the general partner for each TPG fund, pursuant to the TPG fund governing agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments (and the investment returns to the funds’ limited partners) varies between reporting periods, it is necessary to make adjustments to amounts recorded as performance allocations to reflect either (i) positive performance resulting in an increase in the performance allocations allocated to the general partner or (ii) negative performance that would cause the amount due to the general partner to be less than the amount previously recognized, resulting in a negative adjustment to performance allocations allocated to the general partner. In each case, performance allocations are calculated on a cumulative basis and cumulative results are compared to amounts previously recorded with a current period adjustment, positive or negative, recorded. The Company ceases to record negative performance allocations once previously recognized performance allocations for a TPG fund have been fully reversed, including realized performance allocations. The general partner is not obligated to make payments for guaranteed returns or hurdles of a fund and, therefore, cannot have negative performance allocations over the life of a fund. Accrued but unpaid performance allocations as of the reporting date are reflected in investments in the Company’s Consolidated Financial Statements. Performance allocations received by the general partners of the respective TPG funds are subject to clawback to the extent the performance allocations received by the general partner exceed the amount the general partner is ultimately entitled to receive based on cumulative fund results. Generally, the actual clawback liability does not become due until eighteen months after the realized loss is incurred; however, individual fund terms vary. For disclosures at December 31, 2024 related to clawback, see Note 17 to the Consolidated Financial Statements. Revenue related to performance allocations for consolidated TPG funds is eliminated in consolidation. The Company earns management fees, incentive fees and capital allocation-based income (loss) from investment funds and other vehicles whose primary focus is making investments in varying geographical locations and earns transaction and monitoring fees from portfolio companies located in varying geographies, including North America, Europe and Asia-Pacific. The primary geographic region in which the Company invests in is North America and the majority of its revenues from contracts with customers are also generated in North America. Investment Income Income from Equity Method Investments The carrying value of equity method investments in proprietary investments where the Company exerts significant influence is generally determined based on the amounts invested, adjusted for the equity in earnings or losses of the investee allocated based on the Company’s ownership percentage, less distributions and any impairment. The Company records its proportionate share of investee’s equity in earnings or losses based on the most recently available financial information, which in certain cases may lag the date of TPG’s financial statements by up to three calendar months. Income from equity method investments is recorded in net gains (losses) from investment activities on the Consolidated Financial Statements. Income from Investments Held for Sale and Other Income from investments held for sale and other includes unrealized gains and losses resulting from changes in the fair value of these investments during the period. Income from investments held for sale and other is recorded in net gains (losses) from investment activities on the Consolidated Financial Statements. 157 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Income from Equity Method Investments for which the Fair Value Option Was Elected Income from equity method investments for which the fair value option was elected includes realized gains and losses from the sale of investments, and unrealized gains and losses from changes in the fair value during the period as a result of quoted prices in an active market. Discounts are applied, where appropriate, to reflect restrictions on the marketability of the investment. Income from equity method investments for which the fair value option was elected is recorded in net gains (losses) from investment activities on the Consolidated Financial Statements. Income from Equity Investments Income from equity investments, which represent investments held through equity securities of an investee that the Company does not hold significant influence over, includes realized gains from the sale of investments and unrealized gains and losses result from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Income from equity investments is recorded in net gains (losses) from investment activities on the Consolidated Financial Statements. Investment and other income of consolidated Public SPACs Investment and other income of consolidated Public SPACs includes unrealized gains and losses from changes in fair value of warrants and forward purchase agreements (“FPAs”) and interest, dividends and other income related to Public SPACs. Interest, Dividends and Other Interest income is recognized as earned. Dividend income is recognized by the Company on the ex-dividend date, or in the absence of a formal declaration, on the date it is received. Compensation and Benefits Cash-based compensation and benefits includes (i) salaries and wages, (ii) benefits and (iii) discretionary cash bonuses. Bonuses are accrued over the service period to which they relate. Compensation expense related to the issuance of equity-based awards is measured at grant-date fair value. Compensation expense for awards that vest over a future service period is recognized over the relevant service period on a straight-line basis. Compensation expense for awards that do not require future service is recognized immediately. Compensation expense for awards that contain both market and service conditions is based on grant-date fair value that factors in the probability that the market conditions will be achieved and is recognized on a tranche by tranche basis using the accelerated attribution method. The requisite service period for those awards is the longer of the explicit service period and the derived service period. Compensation expense for awards that contain both performance and service conditions is recognized, if the Company deems it probable that the performance condition will be met, over the longer of the implicit or explicit service period. Compensation expense for awards to recipients with retirement eligibility provisions (allowing such recipient to continue vesting upon departure from TPG) is either expensed immediately or amortized to the retirement eligibility date. The Company recognizes equity-based award forfeitures in the period they occur as a reversal of previously recognized compensation expense. Performance allocation compensation expense and accrued performance allocation compensation is the portion of performance allocations that TPG allocates to certain of its employees and certain other advisors of the Company. Performance allocations due to our partners and professionals are accounted for as compensation expense in conjunction with the recognition of the related performance allocations and, until paid, are recognized as accrued performance allocation compensation. Accordingly, upon a reversal of performance allocations, the related compensation expense, if any, is also reversed. 158 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Net Income (Loss) Per Share of Class A Common Stock Basic income (loss) per share of Class A common stock is calculated by dividing net income (loss) attributable to TPG Inc. by the weighted-average shares of Class A common stock, unvested participating shares of Class A common stock outstanding for the period and vested deferred restricted shares of Class A common stock that have been earned for which issuance of the related shares of Class A common stock is deferred until future periods. Diluted income (loss) per share of Class A Common Stock reflects the impact of all dilutive securities. Unvested participating shares of common stock are excluded from the computation in periods of loss as they are not contractually obligated to share in losses. The Company applies the treasury stock method to determine the dilutive weighted-average common shares represented by the unvested restricted stock units (“RSUs”). The Company applies the if-converted method to the TPG Operating Group partnership units to determine the dilutive impact, if any, of the exchange right included in the TPG Operating Group partnership units. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash on deposit with banks and other short-term investments with an initial maturity of 90 days or less. Restricted cash balances relate to cash balances reserved for the payment of interest on the Company’s secured borrowings. Derivative Liabilities of Public SPACs Financial derivative assets and liabilities related to our consolidated Public SPACs’ investment activities consist of warrant liabilities and forward purchase agreements. The Company recognizes these derivative instruments as assets or liabilities at fair value in the accompanying Consolidated Financial Statements. Changes in the fair value of derivative contracts entered into by the Company are included in current period earnings. These derivative contracts are not designated as hedging instruments for accounting purposes. These derivatives were agreements in which a consolidated Public SPAC and a counterparty agreed to exchange cash flows based on agreed-upon terms. As a result of the derivative transaction, the Company was exposed to the risk that counterparties would have failed to fulfill their contractual obligations. To mitigate such counterparty risk, the applicable Public SPAC only entered into contracts with major financial institutions, all of which had investment grade ratings. Counterparty credit risk is evaluated in determining the fair value of the derivative instruments. In the normal course of business, the Company incurs commitments and is exposed to risks resulting from its investment and financing transactions, including derivative instruments. The value of a derivative instrument is based upon an underlying instrument. These instruments are subject to various risks similar to non-derivative instruments including market, credit, liquidity, performance and operational risks. The Company manages these risks on an aggregate basis as part of its risk management policies and as such, does not distinguish derivative income or loss from any other category of instruments for financial statement presentation purposes. The leverage inherent in the Company’s derivative instruments increases the sensitivity of the Company’s earnings to market changes. Notional amounts often are used to express the volume of these transactions, but the amounts potentially subject to risk are much smaller. The Company routinely evaluates its contractual arrangements to determine whether embedded derivatives exist. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not clearly and closely related, if a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative and if the combined instrument is not measured at fair value through profit or loss. For derivative contracts where an enforceable master netting agreement is in place, the Company has elected to offset derivative assets and liabilities, as well as cash that may have been received or pledged, as part of collateral arrangements with the respective counterparty in the Consolidated Financial Statements. The master netting agreements provide the Company and the counterparty the right to liquidate collateral and the right to offset each other’s obligations in the event of default by either party. 159 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Certain of the Company’s consolidated Public SPACs issued public warrants and FPAs in conjunction with their IPO. The Company accounts for warrants and FPAs of the consolidated Public SPAC’s ordinary shares that are not indexed to its own stock as liabilities at fair value on the balance sheet. These warrants and FPAs are subject to remeasurement at each balance sheet date and any change in fair value is recognized in the Company’s Consolidated Financial Statements. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants and FPAs that do not meet all the criteria for equity classification, the warrants and FPAs are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants and FPAs are recognized as a non-cash gain or loss on the Consolidated Financial Statements . Fair Value Measurement ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure financial assets and liabilities reported at fair value. The observability of inputs is impacted by a number of factors, including the type of instrument, characteristics specific to the instrument, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements). Financial instruments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value. The three levels of the fair value hierarchy under ASC 820 are as follows: Level I – Quoted prices (unadjusted) in active markets for identical financial instruments at the measurement date are used. The types of instruments generally included in Level I are publicly listed equities and debt. Level II – Pricing inputs are other than quoted prices included within Level I that are observable for the financial instrument, either directly or indirectly. Level II pricing inputs include quoted prices for similar financial instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other than quoted prices that are observable for the instrument, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. The types of instruments generally included in Level II are restricted securities listed in active markets, corporate bonds and loans. Level III – Pricing inputs are unobservable and include situations where there is little, if any, market activity for the financial instrument. The inputs used in determination of fair value require significant judgment and estimation. The types of instruments generally included in Level III are privately held debt, equity securities and contingent consideration. In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the instrument is categorized in its entirety is determined based on the lowest level input that is significant to the instrument. Assessing the significance of a particular input to the valuation of an instrument in its entirety requires judgment and considers factors specific to the instrument. The categorization of an instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the perceived risk of that instrument. In certain instances, an instrument that is measured and reported at fair value may be transferred into or out of Level I, II, or III of the fair value hierarchy. In certain cases, debt and equity securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular instrument, pricing services may use certain information with respect to transactions in such instruments, quotations from dealers, pricing matrices, market transactions of comparable instruments and various relationships between instruments. When a security is valued based on dealer quotes, the Company subjects those quotes to various criteria in making the determination as to whether a particular instrument would qualify for treatment as a Level II or Level III instrument. Some of the factors considered include the number and quality of quotes, the standard deviations of the observed quotes and the corroboration of the quotes to independent pricing services. 160 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Level III instruments may include common and preferred equity securities, corporate debt, other privately issued securities and contingent consideration. When observable prices are not available for these securities, one or more valuation techniques (e.g., the market approach and/or the income approach) for which sufficient and reliable data is available are used. Within Level III, the use of the market approach generally consists of using comparable market transactions or other data, while the use of the income approach generally utilizes the net present value of estimated future cash flows, adjusted, as appropriate, for liquidity, credit, market and other risk factors. Due to the inherent uncertainty of these valuations, the fair values reflected in the accompanying Consolidated Financial Statements may differ materially from values that would have been used had a readily available market for the instruments existed and may differ materially from the values that may ultimately be realized. The period of time over which the underlying assets of the instruments will be liquidated is unknown. Due From and Due To Affiliates The Company considers current and former limited partners of funds and employees, including their related entities, entities controlled by the Company’s Founders but not consolidated by the Company, portfolio companies of TPG funds, and unconsolidated TPG funds to be affiliates (“Affiliates”). Receivables from and payables to affiliates are recorded at their expected settlement amount in due from and due to affiliates in the Consolidated Financial Statements. Business Combinations The Company accounts for business combinations using the acquisition method under ASC Topic 805, Business Combinations (“ASC 805”) under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed generally using the fair values determined by management as of the acquisition date. Management’s determination of fair value of assets acquired and liabilities assumed at the acquisition date is based on the best information available in the circumstances and may incorporate management’s own assumptions and involve a significant degree of judgment. Management uses its best estimates and assumptions to accurately assign fair value to the tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those acquired intangible assets. Examples of critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to, future expected cash inflows and outflows, future fundraising assumptions, expected useful life, discount rates and income tax rates. Our estimates for future cash flows are based on historical data, various internal estimates and certain external sources, and are based on assumptions that are consistent with the plans and estimates we are using to manage the underlying assets acquired. Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results. For business combinations accounted for under the acquisition method, the purchase consideration, including the fair value of certain elements of contingent consideration as of the acquisition date, in excess of the fair value of net assets acquired is recorded as goodwill. Goodwill Goodwill represents the excess of consideration transferred, the fair value in any noncontrolling interest in the acquiree and the fair value of any previously held equity interest in the acquiree over the net of the acquisition-date values of the identifiable assets and liabilities assumed. Goodwill is not amortized. Goodwill is reviewed for impairment at least annually utilizing a qualitative or quantitative approach, and more frequently if circumstances indicate impairment may have occurred. The impairment testing for goodwill under the qualitative approach is based first on an assessment to determine if it is more likely than not that the fair value of the Company’s reporting unit is less than its respective carrying value. If it is determined that it is more likely than not that the reporting unit’s fair value is less than its carrying value, the Company performs a quantitative analysis. When the quantitative approach indicates an impairment, an impairment loss is recognized to the extent by which the carrying value exceeds the fair value, not to exceed the total amount of goodwill. As of December 31, 2024, we believe it is more likely than not that the fair value of our reporting unit exceeds its carrying value. 161 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Intangible Assets The Company’s intangible assets primarily consist of the fair value of its interests in future performance allocations from certain funds and the fair value of acquired investor relationships representing the fair value of management fees earned from existing investors in future funds. Finite-lived intangible assets are amortized over their estimated useful lives, which range from two to 20 years, and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Amortization expense is included in depreciation and amortization expense in the Consolidated Financial Statements. Operating Leases At contract inception, the Company determines if an arrangement contains a lease by evaluating whether (i) an identified asset has been deployed in a contract explicitly or implicitly and (ii) the Company obtains substantially all the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. Additionally, at contract inception the Company will evaluate whether the lease is an operating or finance lease. Right-of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. To the extent these payments are fixed or determinable, they are included as part of the lease payments used to measure the lease liability. The Company’s ROU assets are recognized as the initial measurement of the lease liabilities plus any initial direct costs and any prepaid lease payments less lease incentives received, if any. The lease terms may include options to extend or terminate the lease which are accounted for when it is reasonably certain that the Company will exercise that option. If the discount rate implicit to the lease is not readily determinable, incremental borrowing rates of the Company are used. The incremental borrowing rates are based on the information available including, but not limited to, collateral assumptions, the term of the lease, and the economic environment in which the lease is denominated at the commencement date. The Company elected the package of practical expedients provided under the guidance. The practical expedient package applies to leases commenced prior to the adoption of ASC Topic 842, Leases (“ASC 842”) and permits companies not to reassess whether existing or expired contracts are or contain a lease, the lease classification, and any initial direct costs for any existing leases. The Company has elected to not separate the lease and non-lease components within the contract. Therefore, all fixed payments associated with the lease are included in the ROU asset and the lease liability. These costs often relate to the fixed payments for a proportionate share of real estate taxes, common area maintenance and other operating costs in addition to a base rent. Any variable payments related to the lease are recorded as lease expense when and as incurred. The Company has elected this practical expedient for all lease classes. The Company did not elect the hindsight practical expedient. The Company has elected the short-term lease expedient. A short-term lease is a lease that, as of the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For such leases, the Company will not apply the recognition requirements of ASC 842 and instead will recognize the lease payments as lease cost on a straight-line basis over the lease term. Additionally, the Company elected the practical expedient which allows an entity to not reassess whether any existing land easements are or contain leases. The Company’s leases primarily consist of operating leases for real estate, which have remaining terms of one to 10 years. Some of those leases include options to extend for additional terms ranging from one to 10 years. The Company’s other leases, including those for office equipment, vehicles and aircraft, are not significant. Additionally, the Company’s leases do not contain restrictions or covenants that restrict the Company from incurring other financial obligations. The Company also does not provide any residual value guarantees for the leases. From time to time, the Company enters into certain sublease agreements that have terms similar to the remaining terms of the master lease agreements between TPG and the landlord. Sublease income is recorded as an offset to general, administrative and other in the accompanying Consolidated Financial Statements. Operating lease expense is recognized on a straight-line basis over the lease term and is recorded within general, administrative and other in the accompanying Consolidated Financial Statements (see Note 16 to the Consolidated Financial Statements). 162 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Redeemable Equity from Consolidated Public SPACs Redeemable equity from consolidated Public SPACs represents the shares issued by the Company’s consolidated Public SPACs that are redeemable for cash by the public shareholders in the event of an election to redeem by individual public shareholders at the time of the business combination. The Company accounts for redeemable equity in accordance with ASC Topic 480-10-S99, Distinguishing Liabilities from Equity (“ASC 480”), which states redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. The redeemable non-controlling interests are initially recorded at their original issuance price and are subsequently allocated their proportionate share of the underlying gains or losses of the Public SPACs. The Company adjusts the redeemable equity to full redemption value on a quarterly basis. If a Public SPAC is unable to complete a business combination within the time period required by its governing documents, this equity becomes redeemable and is reclassified out of redeemable equity and into Public SPAC current redeemable equity in accordance with ASC 480 as the Public SPAC prepares for dissolution. Fixed Assets Fixed assets consist primarily of leasehold improvements, furniture, fixtures and equipment, computer hardware and software and other fixed assets which are recorded at cost, less accumulated depreciation. Leasehold improvements are amortized using the straight-line method, over the shorter of the respective estimated useful life or the lease term. Depreciation of furniture, fixtures, equipment and computer hardware and software is recorded over the estimated useful life of the asset, generally three to seven years , using the straight-line method. The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Upon the occurrence of a triggering event, management compares the estimated undiscounted cash flows associated with the long-lived asset to its carrying value to determine whether an impairment has occurred. If the undiscounted cash flows are less than the carrying value, an impairment is recorded as the difference between the fair value of the long-lived asset and its carrying value. Fair value is based on estimated discounted cash flows associated with the long-lived asset. Foreign Currency The functional currency of the Company’s international subsidiaries is the U.S. Dollar. Non-U.S. dollar denominated assets and liabilities of foreign operations are remeasured at rates of exchange as of the end of the reporting period. Non-U.S. dollar revenues and expenses of foreign operations are remeasured at average rates of exchange during the period. Gains and losses resulting from remeasurement are included in general, administrative and other in the accompanying Consolidated Statements of Operations. Foreign currency gains and losses resulting from transactions in currencies other than the functional currency are also included in general, administrative and other in the Consolidated Statements of Operations during the period the transaction occurred. Repurchase Agreements The Company, through its subsidiary, has financed the purchase of certain investments in the debt tranches of certain CLO Funds through a repurchase agreement. The Company records these investments as an asset and the related borrowings under the repurchase agreements are recorded as a liability on the Consolidated Statements of Financial Condition. The amount borrowed is the amount equal to the debt investment outstanding in the CLO. Interest income earned and interest expense incurred on the repurchase obligation are reported on the Consolidated Statements of Operations. Accrued interest receivable on investments is included in other assets and accrued interest payable on repurchase agreements is included in accounts payable and accrued expenses on the Consolidated Statements of Financial Condition. Securities sold under agreements to repurchase are accounted for as collateralized financing transactions. The Company provides securities to counterparties to collateralize amounts borrowed under repurchase agreements on terms that permit the counterparties to repledge or resell the securities to others. Securities transferred to counterparties under repurchase agreements are included within investments in the Consolidated Statements of Financial Condition. Cash received under a repurchase agreement is recognized as a liability within other liabilities in the Consolidated Statements of Financial Condition. Interest expense is recognized on an effective yield basis and is included within interest expense in the Consolidated Statements of Operations. 163 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Income Taxes The Company is treated as a corporation for U.S. federal and state income tax purposes. The Company is subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to our allocable share of taxable income generated by the TPG Operating Group partnerships. Prior to the Reorganization and the IPO, the Company was treated as a partnership for U.S. federal income tax purposes and therefore was not subject to U.S. federal and state income taxes except for certain consolidated subsidiaries that were subject to taxation in the United States (federal, state and local) and foreign jurisdictions as a result of their entity classification for tax reporting purposes. The provision for income taxes in the historical Consolidated Financial Statements consists of U.S. (federal, state and local) and foreign income taxes with respect to certain consolidated subsidiaries. Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period in which the enactment date occurs. Under ASC Topic 740, Income Taxes , a valuation allowance is established when management believes it is more likely than not that a deferred tax asset will not be realized. The realization of deferred tax assets is dependent on the amount of our future taxable income. When evaluating the realizability of deferred tax assets, all evidence (both positive and negative) is considered. This evidence includes, but is not limited to, expectations regarding future earnings, future reversals of existing temporary tax differences and tax planning strategies. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties. The Company reviews its tax positions quarterly and adjusts its tax balances as new information becomes available. The Company recognizes interest and penalties relating to unrecognized tax benefits as income tax expense (benefit) within the Consolidated Financial Statements. Segment Reporting The Company provides a variety of fee-based asset management services to the TPG funds, limited partners, SMAs and clients, and other vehicles, primarily in North America. The Company is also entitled to performance allocations from the TPG funds when the Company has a general partner interest. The Company operates its business as a single operating and reportable segment, as the Company’s CODM, its CEO, manages the business on a consolidated basis. The Company operates collaboratively across product lines through shared investment themes and relies on shared support functions that spans across product lines. The CODM uses consolidated net income as one of the primary measures to make resource allocation decisions and evaluate the performance of the Company. There is no difference between segment assets and total consolidated assets. As the Company operates as a single segment, the accounting policies utilized by the segment are consistent with those included in the Consolidated Financial Statements here within. Regulated Entities At December 31, 2024, the Company consolidates a registered broker-dealer subsidiary that is subject to the minimum net capital requirements of the SEC and FINRA that may restrict the Company’s ability to withdraw funds from the broker-dealer. The broker-dealer has continuously operated in excess of its minimum net capital requirements. Certain other U.S. and non-U.S. entities are subject to various investment adviser, commodity pool operator and trader regulations. This includes a number of U.S. entities that are registered as investment advisers with the SEC. 164 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Recent Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) . ASU 2024-03 aims to enhance transparency for users of financial statements by requiring public business entities to provide more detailed information about the types of expenses in commonly presented expense captions. In particular, ASU 2024-03 contains new required tabular disclosures related to the amounts of specified natural expenses (e.g., employee compensation, depreciation, intangible asset amortization, etc.) disclosed in a particular expense caption. Additionally, ASU 2024-03 clarifies that certain other expenses and gains or losses that must be disclosed under existing GAAP recorded in a relevant expense caption must also be presented in the same tabular disclosure. Lastly, ASU 2024-03 requires separate disclosure of selling expenses. ASU 2024-03 is effective for the Company beginning in after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of adoption of ASU 2024-03 on its Consolidated Financial Statements and disclosures. On March 21, 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards , which provides illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements within the scope of ASC Topic 718, Compensation—Stock Compensation . For public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. The Company is currently evaluating the impact of adoption of ASU 2024-01, but does not expect the adoption to have a material impact on its Consolidated Financial Statements and disclosures. On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which is primarily applicable to public companies and requires a significant expansion of the granularity of the income tax rate reconciliation as well as an expansion of other income tax disclosures. ASU 2023-09 requires a company to disclose specific income tax categories within the rate reconciliation table and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate. There are also additional disclosures related to income taxes paid disaggregated by jurisdictions. The ASU is effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adoption of ASU 2023-09 on its Consolidated Financial Statements and disclosures. Recently Adopted Accounting Guidance In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”) and included within each reported measure of segment profit or loss and an amount and description of the composition of other segment items. The ASU also contained additional disclosure requirements around the segment measure of profitability, the chief operating decision maker, and other required disclosures. The Company adopted ASU 2023-07 on January 1, 2024. Refer to Note 2: Segment Reporting for further details. 3. Acquisitions Angelo Gordon Acquisition On November 1, 2023 (the “Acquisition Date”), the Company and certain of its affiliated entities (the “TPG Parties”) completed the acquisition (the “Acquisition”) of all of the voting interests and significant economics in Angelo, Gordon & Co., L.P., AG Funds L.P. and AG Partners, L.P. (collectively, “Angelo Gordon”) and certain of their affiliated entities (together with Angelo Gordon, the “Angelo Gordon Parties”), an alternative investment firm focused on credit and real estate investing, pursuant to the terms and conditions set forth in the Transaction Agreement (as amended, the “Transaction Agreement”), dated as of May 14, 2023, by and among the TPG Parties and Angelo Gordon Parties. As a result of the Acquisition, the Company expanded its platform diversity, with Angelo Gordon’s alternative investment focus on credit and real estate investing. 165 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The Acquisition was accounted for as a business combination under ASC Topic 805, Business Combinations (“ASC 805”), with assets acquired and liabilities assumed recorded at fair value. Pursuant to the Transaction Agreement, the Company acquired Angelo Gordon for both cash and non-cash consideration under U.S. GAAP equal to $ 1,143.4 million (“Purchase Price”) as described below. The Purchase Price included a combination of: • $ 740.7 million in cash paid at closing; • $ 16.3 million paid during the year ended December 31, 2024 to the sellers of Angelo Gordon as a result of post close net working capital adjustments; • 9.2 million vested Common Units (and an equal number of Class B common stock) and 43.8 million unvested Common Units which are deemed to be compensatory under U.S. GAAP; • the rights to an aggregate cash payment, payable in three payments of $ 50.0 million each, reflecting an aggregate of $ 150.0 million (the “Aggregate Annual Cash Holdback Amount”); and • the non-compensatory portion under U.S. GAAP of a total earnout payment of up to $ 400.0 million in value (the “Earnout Payment”), subject to the satisfaction of certain fee-related revenue (“FRR”) targets during the period beginning on January 1, 2026 and ending on December 31, 2026 (the “Measurement Period”). 166 Table of Contents TPG Inc. Notes to Consolidated Financial Statements As of December 31, 2024, the accounting for the Acquisition was complete. The following table summarizes the fair value of amounts recognized for the assets acquired and liabilities assumed and resulting goodwill as of the Acquisition Date (in thousands): November 1, 2023 Purchase Price Cash (a) $ 740,703 Amounts payable to seller (b) 16,334 Common Units (c) 233,894 Fair value of Aggregate Annual Cash Holdback Amount (d) 125,158 Fair value of Earnout Payment (e) 27,315 Total Purchase Price $ 1,143,404 Recognized amounts of identifiable assets acquired and liabilities assumed Cash and cash equivalents $ 383,868 Due from affiliates 184,252 Investments 1,046,375 Intangible assets 547,500 Other assets 172,282 Total assets 2,334,277 Accounts payable and accrued expenses 307,308 Due to affiliates 150,228 Accrued performance allocation compensation 744,903 Other liabilities 190,147 Total liabilities 1,392,586 Assets acquired/liabilities assumed 941,691 Total Purchase Price 1,143,404 Non-controlling interest of Angelo Gordon 4,172 Goodwill $ 205,885 _________________ (a) Represents the closing cash consideration of $ 740.7 million, which was comprised of $ 270.7 million of cash on hand and $ 470.0 million of proceeds from drawing on the Company’s Senior Unsecured Revolving Credit Facility. Out of the closing cash consideration of $ 740.7 million, $ 100.0 million was held in escrow on behalf of the sellers, which was fully released during the year ended December 31, 2024. (b) Represents the difference between the estimated cash consideration paid at closing and the final cash consideration determined no later than April 30, 2024 in accordance with the amended terms of the Transaction Agreement, which was fully paid as of June 30, 2024. (c) Represents the fair value of approximately 9.2 million vested Common Units granted to the Angelo Gordon partners upon consummation of the Acquisition. The fair value of Common Units was based on a $ 28.18 closing price for the shares of Class A common stock on the Acquisition Date, adjusted for a discount for lack of marketability. Approximately 43.8 million unvested Common Units and 8.4 million Service Awards available to be granted in connection with the Acquisition are considered compensatory under U.S. GAAP and are not part of the Purchase Price. Refer to Note 19 to the Consolidated Financial Statements for details. (d) Represents the estimated fair value of the Aggregate Annual Cash Holdback Amount of $ 150.0 million, which is payable in three equal annual installments of $ 50.0 million, subject to the absence of promote shortfall in each respective calendar year (2024, 2025 and 2026). The estimated fair value of $ 125.2 million, reflected as contingent consideration, was determined using a present value approach. Inputs to fair value include the present value period and the discount rate applied to the annual payments. (e) Represents the estimated fair value of the non-compensatory portion of the Earnout Payment expected to be paid in the form of cash and vested Common Units to Angelo Gordon partners upon satisfaction of certain FRR targets during the Measurement Period. This amount, reflected as contingent consideration, was determined using a multiple probability simulation approach. Inputs to the fair value include probability adjusted FRR amounts and FRR target thresholds. The compensatory portion of the Earnout Payment to the Angelo Gordon partners is treated as post-combination compensation expense, as services are required from such partners post-Closing. See Note 19 to the Consolidated Financial Statements for details. 167 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The total Purchase Price was allocated to the fair value of assets acquired and liabilities assumed as of the Acquisition Date, with the excess Purchase Price recorded as goodwill. A third-party valuation specialist assisted the Company with the fair value estimates for the assets acquired and liabilities assumed. The Company recorded $ 205.9 million of goodwill as of the Acquisition Date. Goodwill is primarily attributable to the scale, skill sets, operations and expected synergies that can be achieved subsequent to the Acquisition. The goodwill recorded is not deductible for tax purposes. The fair value and weighted average estimated useful lives of the acquired identifiable intangible assets as of the Acquisition Date consist of the following (in thousands): Fair Value Valuation Methodology Estimated Average Useful Life (in years) Management contracts $ 287,000 Multi-period excess earnings method ("MPEEM") 5 - 12.5 Contractual performance fee allocations 199,000 Discounted cash flow analysis 6.5 Technology 46,000 Replacement cost analysis and relief from royalty analysis 4 Trade name 15,500 Relief from royalty method 5.5 Fair value of intangible assets acquired $ 547,500 The following unaudited pro forma information presents a summary of the Company’s Consolidated Statements of Operations for the years ended December 31, 2023 and 2022 , as if the acquisition was completed as of January 1, 2022 (in thousands): Year Ended December 31, 2023 2022 Revenues $ 3,045,143 $ 2,600,420 Net income attributable to TPG Inc./controlling interest 66,550 ( 25,798 ) These pro forma amounts have been calculated after applying the following material adjustments that were directly attributable to the Acquisition: • adjustments to exclude amounts related to Angelo Gordon’s CLOs that were deconsolidated as of September 30, 2023 in accordance with the terms of the Transaction Agreement; • adjustments to include the impact of the additional amortization that would have been recorded assuming the fair value adjustments to intangible assets had been applied on January 1, 2022; • adjustments to interest expense for additional funding obtained by TPG in connection with the Acquisition; • adjustments to include additional equity-based compensation expense related to Common Units and Service Awards issued to Angelo Gordon partners and professionals, as if the grants occurred on January 1, 2022; • adjustments for changes in the performance allocation compensation to Angelo Gordon partners in connection with the Acquisition; • adjustments to allocation of net income to reflect the pro-rata economic ownership attributable to TPG post Acquisition; • adjustments to reflect the tax effects of the Angelo Gordon Acquisition and the related adjustments as if Angelo Gordon had been included in the Company’s results as of January 1, 2022; and • adjustments to include transaction costs in earnings as if the Acquisition occurred on January 1, 2022. 168 Table of Contents TPG Inc. Notes to Consolidated Financial Statements 4. Investments Investments consist of the following (in thousands): December 31, 2024 2023 Equity method - performance allocations $ 5,958,079 $ 5,664,550 Equity method - capital interests (includes assets pledged of $ 647,448 and $ 570,806 as of December 31, 2024 and December 31, 2023, respectively) 1,284,255 923,440 Loan held for sale 47,880 — Investments held to maturity, at amortized cost (includes assets pledged of $ 73,485 and $ 77,723 as of December 31, 2024 and December 31, 2023, respectively) 78,941 83,512 Investments held for sale and other (a) 121,995 — Equity method - fair value option — 36,171 Equity method - other 12,003 11,761 Equity investments 128 4,678 Total investments $ 7,503,281 $ 6,724,112 _______________ (a) As of December 31, 2024, investments held for sale and other includes $ 78.1 million of investments held for sale for which the fair value option has been elected. Net gains (losses) from performance allocations and capital interests are disclosed in the Revenue section of Note 2 to the Consolidated Financial Statements. The following table summarizes net gains (losses) from investment activities (in thousands): Year Ended December 31, 2024 2023 2022 Net gains of investments held for sale and other $ 2,572 $ — $ — Net (losses) gains of equity method investments, fair value option ( 26,785 ) 15,264 ( 25,106 ) Net (losses) gains of equity method investments - other ( 1,217 ) ( 1,306 ) 802 Net losses from equity investments ( 3,896 ) ( 7,394 ) ( 85,827 ) Total net (losses) gains from investment activities $ ( 29,326 ) $ 6,564 $ ( 110,131 ) Loan Held for Sale As of December 31, 2024, the Company entered into a short-term funding arrangement as part of the Company’s capital markets activities for $ 47.9 million, which is recorded at amortized cost basis in investments on the Consolidated Statements of Financial Condition. Investments Held to Maturity, at Amortized Cost In connection with the Acquisition described in Note 3, the Company acquired investments held to maturity, and the carrying value of these investments are included in investments on the Consolidated Statements of Financial Condition. The Company estimates an allowance for credit losses (“ACL”) on the investments classified as held to maturity securities. The fair value of investments held to maturity, excluding any reserves for credit losses, was $ 81.6 million and $ 83.8 million at December 31, 2024 and 2023, respectively. 169 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Equity Method Investments, Fair Value Option In November 2024, the Company disposed of its entire ownership interest in Nerdy Inc. (“NRDY”) consisting of 10.5 million shares of Class A common stock. As of December 31, 2023, the Company held a 6.1 % beneficial ownership interest in NRDY consisting of 10.5 million shares of Class A common stock, with an aggregate fair value of $ 36.2 million. Equity Method Investments The Company evaluates its equity method investments in which it has not elected the fair value option for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. During the years ended December 31, 2024, 2023 and 2022, the Company did no t recognize any impairment losses on an equity method investment without a readily determinable fair value. Summarized Financial Information TPG evaluates each of its equity method investments to determine if any are significant as defined in the regulations promulgated by the SEC. As of and for the years ended December 31, 2024, 2023 and 2022, no individual equity method investment held by TPG met the significance criteria. As such, TPG is not required to present separate financial statements for any of its equity method investments. The following table shows summarized financial information relating to the Consolidated Statements of Financial Condition for all of TPG’s equity method investments assuming 100 % ownership as of December 31, 2024 and 2023 (in thousands): December 31, 2024 2023 Total assets $ 153,574,291 $ 138,435,777 Total liabilities 29,826,843 25,778,711 Total equity 123,747,448 112,657,066 The following table shows summarized financial information relating to the Consolidated Statements of Operations for all of TPG’s equity method investments assuming 100 % ownership for the years ended December 31, 2024, 2023 and 2022 (in thousands): Year Ended December 31, 2024 2023 2022 Revenues $ 13,639,080 $ 11,092,500 $ 5,838,155 Expenses 4,379,772 4,134,838 1,855,509 Net income $ 9,259,308 $ 6,957,662 $ 3,982,646 5. Derivative Instruments The consolidated Public SPACs enter into derivative contracts in connection with their proprietary trading activities, including warrants and FPAs, which meet the definition of a derivative in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”). As a result of the use of derivative contracts, the consolidated Public SPACs are exposed to the risk that counterparties will fail to fulfill their contractual obligations and are exposed to the volatility of the underlying instruments. As of December 31, 2024 and December 31, 2023, the Company did not hold any FPAs or warrants. 170 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Net gains on derivative instruments are included in the Consolidated Statements of Operations as investment and other income of consolidated Public SPACs. The following are net gains recognized on derivative instruments of consolidated Public SPACs (in thousands): Year Ended December 31, 2024 2023 2022 Unrealized gains, net on public warrants $ — $ 667 $ 10,996 Unrealized gains, net on forward purchase agreements — — 1,386 Net gains on derivative instruments of Public SPACs $ — $ 667 $ 12,382 6. Fair Value Measurement The following tables summarize the valuation of the Company’s financial assets and liabilities that fall within the fair value hierarchy (in thousands): December 31, 2024 Level I Level II Level III Total Assets Investments held for sale and other (a) $ — $ — $ 121,995 $ 121,995 Equity investments 128 — — 128 Total assets $ 128 $ — $ 121,995 $ 122,123 Liabilities Aggregate Annual Cash Holdback Amount (b) $ — $ — $ 107,991 $ 107,991 Earnout Payment (b) — — 32,769 32,769 Total liabilities $ — $ — $ 140,760 $ 140,760 _______________ (a) Investments held for sale and other are held primarily for the purpose of selling in the near term as described in Note 2 to the Consolidated Financial Statements. (b) Contingent consideration related to the acquisition of Angelo Gordon described in Note 3 to the Consolidated Financial Statements. December 31, 2023 Level I Level II Level III Total Assets Equity method investments, fair value option $ 36,171 $ — $ — $ 36,171 Equity investments 4,678 — — 4,678 Total assets $ 40,849 $ — $ — $ 40,849 Liabilities Aggregate Annual Cash Holdback Amount (a) $ — $ — $ 126,779 $ 126,779 Earnout Payment (a) — — 29,520 29,520 Total liabilities $ — $ — $ 156,299 $ 156,299 _______________ (a) Contingent consideration related to the acquisition of Angelo Gordon described in Note 3 to the Consolidated Financial Statements. 171 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The valuation methodology used in the determination of the changes in fair value of financial assets for which Level III inputs were used at December 31, 2024 included a combination of the discounted cash flow approach and market comparable approach. The valuation methodology used in the determination of the changes in fair value of financial liabilities for which Level III inputs were used at December 31, 2024 and 2023 included a combination of the present value approach and multiple probability simulation approach. The following tables summarize the changes in the fair value of financial instruments for which the Company has used Level III inputs to determine fair value (in thousands): Year Ended December 31, 2024 2023 Investments held for sale and other Balance, beginning of period $ — $ — Purchases 119,423 — Unrealized gains, net 2,572 — Balance, end of period $ 121,995 $ — Financial liabilities Balance, beginning of period $ 156,299 $ — Acquisition (a) — 152,473 Unrealized (gains) losses, net (b) ( 15,539 ) 3,826 Balance, end of period $ 140,760 $ 156,299 _______________ (a) Contingent consideration established in connection with the acquisition of Angelo Gordon described in Note 3 to the Consolidated Financial Statements. (b) For the year ended December 31, 2024, unrealized gains on financial liabilities includes a $ 29.5 million gain on the Aggregate Annual Cash Holdback liability related to the acquisition of Angelo Gordon, which is recorded in interest, dividends, and other in the Consolidated Statement of Operations. Pursuant to the Transaction Agreement, the Company recognized additional cash-based compensation expense and benefits in the Consolidated Statement of Operations payable to TPG AG employees in lieu of paying the full annual cash holdback amount for 2024. Total realized and unrealized gains and losses recorded for Level III investments held for sale and other are reported in net gains (losses) from investment activities in the Consolidated Statements of Operations. Total realized and unrealized gains and losses recorded for Level III financial liabilities are reported in interest, dividends and other in the Consolidated Statements of Operations. The following tables provide qualitative information about instruments categorized in Level III of the fair value hierarchy as of December 31, 2024 and December 31, 2023. In addition to the techniques and inputs noted in the table below, in accordance with the valuation policy, other valuation techniques and methodologies are used when determining fair value measurements. The below table is not intended to be all-inclusive, but rather provides information on the significant Level III inputs as they relate to the Company’s fair value measurements (fair value measurements in thousands): 172 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Fair Value as of December 31, 2024 Valuation Technique(s) Unobservable Input(s) (a) Range (Weighted Average) (b) Assets Investments held for sale and other $ 121,995 Discounted cash flow Yield 18.6 % - 24.7 % ( 20.8 %) Market comparable Adjusted EBITDA multiple 9.25 x - 10.00 x ( 9.30 x) $ 121,995 Liabilities Aggregate Annual Cash Holdback Amount $ 107,991 Present value Discount rate 8.0 % Earnout Payment 32,769 Multiple probability simulation Estimated revenue volatility 20.8 % $ 140,760 _______________ (a) In determining certain of these inputs, management evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company-specific developments including exit strategies and realization opportunities. Management has determined that market participants would take these inputs into account when valuing the instruments. (b) Inputs weighted based on fair value of instruments in range. Fair Value as of December 31, 2023 Valuation Technique(s) Unobservable Input(s) (a) Range (Weighted Average) (b) Liabilities Aggregate Annual Cash Holdback Amount $ 126,779 Present value Discount rate 8.0 % Earnout Payment 29,520 Multiple probability simulation Estimated revenue volatility 22.8 % $ 156,299 ______________ (a) In determining certain of these inputs, management evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company-specific developments including exit strategies and realization opportunities. Management has determined that market participants would take these inputs into account when valuing the instruments. (b) Inputs weighted based on fair value of instruments in range. 173 Table of Contents TPG Inc. Notes to Consolidated Financial Statements 7. Intangible Assets and Goodwill As discussed in Note 3 to the Consolidated Financial Statements, the Company completed the acquisition of Angelo Gordon on November 1, 2023, which resulted in the recognition of certain identifiable intangible assets and goodwill, which are presented as intangible assets and goodwill, respectively, on the Consolidated Statements of Financial Condition. Intangible Assets, Net The following table summarizes the carrying values of intangible assets as of December 31, 2024 and December 31, 2023 (in thousands): December 31, 2024 2023 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Contractual performance fee allocations (a) $ 313,000 $ ( 92,718 ) $ 220,282 $ 331,600 $ ( 54,707 ) $ 276,893 Management contracts (a) 302,000 ( 53,680 ) 248,320 307,000 ( 20,553 ) 286,447 Technology (a) 46,000 ( 13,417 ) 32,583 46,000 ( 1,917 ) 44,083 Investor relationships 25,000 ( 7,292 ) 17,708 25,000 ( 5,208 ) 19,792 Trade name (a) 15,500 ( 3,288 ) 12,212 15,500 ( 500 ) 15,000 Other intangible assets (a)(b) 8,494 ( 5,892 ) 2,602 8,494 ( 1,201 ) 7,293 Total intangible assets, net $ 709,994 $ ( 176,287 ) $ 533,707 $ 733,594 $ ( 84,086 ) $ 649,508 _______________ (a) Includes intangible assets with a net carrying value of $ 456.1 million and $ 540.4 million as of December 31, 2024 and December 31, 2023, respectively, related to the acquisition of Angelo Gordon described in Note 3 to the Consolidated Financial Statements. (b) Includes indefinite-lived intangible assets of $ 1.0 million as of December 31, 2024 and December 31, 2023. The Company recognized no material impairment losses on intangible assets during the years ended December 31, 2024, 2023 and 2022. Intangible asset amortization expense was $ 115.8 million, $ 41.2 million and $ 28.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. The following table presents estimated remaining amortization expense for finite-lived intangible assets that existed as of December 31, 2024 (in thousands): 2025 $ 101,519 2026 98,089 2027 96,149 2028 75,304 2029 49,699 Thereafter 111,953 Total $ 532,713 174 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Goodwill The following table summarizes the carrying value of the Company’s goodwill as of December 31, 2024 and 2023 (in thousands): December 31, 2024 2023 Goodwill Balance, beginning of period $ 436,079 $ 230,194 Acquisition — 205,885 Balance, end of period $ 436,079 $ 436,079 As of December 31, 2024, there have been no impairment losses recognized on goodwill. 8. Other Assets Other assets consist of the following (in thousands): December 31, 2024 2023 Fixed assets, net: Leasehold improvements $ 161,962 $ 142,545 Computer hardware and software 38,596 33,955 Furniture, fixtures and equipment 8,267 13,728 Other fixed assets 34,369 31,350 Accumulated depreciation ( 153,740 ) ( 139,900 ) Total fixed assets, net 89,454 81,678 Deferred tax assets 352,951 24,086 Right-of-use assets 208,501 227,610 Prepaid expenses 73,422 56,398 Other 69,510 72,853 Other assets $ 793,838 $ 462,625 9. Accounts Payable and Accrued Expenses, and Other Liabilities Accounts payable and accrued expenses consist of the following (in thousands): December 31, 2024 2023 Trade accounts payable $ 45,606 $ 42,565 Accrued expenses 166,308 129,231 Accounts payable and accrued expenses $ 211,914 $ 171,796 175 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Other liabilities consist of the following (in thousands): December 31, 2024 2023 Lease obligation $ 223,131 $ 235,537 Clawback liability (see Note 17) 5,450 58,317 Contingent consideration 140,760 156,299 Repurchase agreements 78,196 83,336 Liability classified awards (see Note 19) 67,703 12,421 Other 92,322 106,553 Other liabilities $ 607,562 $ 652,463 Contingent Consideration In connection with the Acquisition described in Note 3, the Company recorded contingent consideration liabilities of $ 152.5 million to reflect the estimated fair value of the contingent consideration for the Earnout Payment and Aggregate Annual Cash Holdback Amount as of the Acquisition Date. Contingent consideration is included in other liabilities on the Consolidated Statements of Financial Condition. Contingent consideration is remeasured at each reporting period, and any changes in fair value are recognized as interest, dividends and other in the Consolidated Statements of Operations. As of December 31, 2024 and 2023, other liabilities include $ 140.8 million and $ 156.3 million, respectively, related to contingent consideration. Repurchase Agreements In connection with the Acquisition described in Note 3, the Company holds various investments in CLO funds. Northwoods European Management, LLC (“ECLO”), a consolidated subsidiary of the Company has a master repurchase agreement with NWCC Cayman LLC (“Nearwater”) with respect to the Company’s investment in the debt tranches of various CLO Funds. The repurchase agreement extends a facility of a maximum of 100,000 Euros to ECLO for future investment in the debt issued by CLO Funds. The repurchase agreement bears interest at a rate of 0.5 % spread above the interest earned by ECLO on the tranches of notes subject to the master repurchase agreement. The weighted average interest rate for the periods ended December 31, 2024 and 2023 is 5.9 % and 6.1 %, respectively. ECLO had outstanding borrowings under the repurchase agreement with Nearwater as of December 31, 2024 and 2023 to finance its investments in the debt of three CLO Funds with maturity dates ranging from November 25, 2033 through March 15, 2034. As of December 31, 2024 and 2023, borrowings of $ 58.9 million and $ 62.8 million, respectively, are outstanding on the facility which is recorded in other liabilities on the Consolidated Statements of Financial Condition. ECLO pledges as collateral its investments in the debt of the CLO Funds fully collateralizing all outstanding borrowings drawn under the repurchase agreement. All outstanding borrowings drawn from the repurchase agreement mature in a period greater than 90 days. ECLO entered into an additional master repurchase agreement with Citibank, N.A. on December 22, 2021, to finance the purchase of the Company’s investment in one of the CLO funds managed by the entity. The repurchase agreement bears interest at a rate of 0.5 % spread above the interest earned by ECLO on the tranches of notes subject to the master repurchase agreement. The weighted average interest rate for the periods ended December 31, 2024 and 2023 is 5.6 % and 6.3 %, respectively. ECLO had outstanding borrowings under the repurchase agreement as of December 31, 2024 and 2023 to finance the investment in the debt of one CLO Fund with a maturity date of October 15, 2035. As of December 31, 2024 and 2023, borrowings of $ 19.3 million and $ 20.5 million, respectively, are outstanding on the repurchase agreement which is recorded in other liabilities on the Consolidated Statements of Financial Condition. ECLO pledges as collateral its investments in the debt of the CLO Funds fully collateralizing all outstanding borrowings drawn under the repurchase agreement. All outstanding borrowings drawn from the repurchase agreement mature in a period greater than 90 days. 176 Table of Contents TPG Inc. Notes to Consolidated Financial Statements 10. Credit and Market Risk The Company holds substantially all of its excess cash in bank deposits at highly rated banking corporations or investments in highly rated money market funds, which are included in cash and cash equivalents and restricted cash in the Consolidated Financial Statements. The Company continually monitors the risk associated with these deposits and investments. Management believes the carrying values of these assets are reasonable taking into consideration credit and market risks along with estimated collateral values, payment histories and other information. In the normal course of business, TPG encounters market and credit risk concentrations. Market risk reflects changes in the value of investments due to changes in interest rates, credit spreads or other market factors. The TPG funds are subject to credit risk to the extent any counterparty is unable to deliver cash balances, securities, or the fair value of swaps, or clear security transactions on the TPG funds’ behalf. The settlement, clearing and depository operations for the TPG funds’ securities trading activities are performed pursuant to agreements with counterparties, which are primarily global financial institutions. The TPG funds manage this risk by monitoring daily the financial condition and credit quality of the parties with which the TPG funds conduct business, but in the event of default by any of the TPG funds’ counterparties, the loss to the TPG funds could be material. The Company is subject to potential concentration risk related to the investors’ commitments to TPG funds. At December 31, 2024, no individual investor accounted for more than 10% of the total committed capital to TPG’s active funds. Furthermore, certain of the TPG funds’ investments are made in private companies and there are generally no public markets for the underlying securities at the current time. The TPG funds’ ability to liquidate their publicly traded investments are often subject to limitations, including discounts that may be required to be taken on quoted prices due to the number of shares being sold. Subordinate investments held by TPG may be less marketable, or in some instances illiquid, because of the absence of registration under federal securities laws, contractual restrictions on transfer, the small size of the market and the small size of the issue (relative to issues of comparable interests). As a result, the TPG funds may encounter difficulty in selling its investments or may, if required to liquidate investments to satisfy redemption requests of its investors or debt service obligations, be compelled to sell such investments at less than fair value. Other limitations for TPG to dispose of an investment and realize value include currency fluctuations and natural disasters. The TPG funds make investments outside of the United States. Investments outside the United States may be subject to less developed bankruptcy, corporate, partnership and other laws (which may have the effect of disregarding or otherwise circumventing the limited liability structures potentially causing the actions or liabilities of one fund or a portfolio company to adversely impact the TPG funds or an unrelated fund or portfolio company). Non-U.S. investments are subject to the same risks associated with the TPG funds’ U.S. investments as well as additional risks, such as fluctuations in foreign currency exchange rates, unexpected changes in regulatory requirements, heightened risk of political and economic instability, difficulties in managing non-U.S. investments, potentially adverse tax consequences and the burden of complying with a wide variety of foreign laws. Furthermore, TPG is exposed to economic risk concentrations related to certain large investments as well as concentrations of investments in certain industries and geographies. TPG is exposed to economic risk concentrations insofar as the Company is dependent on the ability of the TPG funds that it manages to compensate it for the services it provides to these TPG funds. Further, the incentive income component of this compensation is based on the ability of such TPG funds to generate returns above certain specified thresholds. Additionally, TPG is exposed to interest rate risk. TPG has debt obligations that have variable rates. Interest rate changes may therefore affect the amount of interest payments, future earnings and cash flows. 177 Table of Contents TPG Inc. Notes to Consolidated Financial Statements TPG’s derivative financial instruments contain credit risk to the extent that its counterparties may be unable to meet the terms of the agreements. Some of the markets in which the Company may effect its transactions are “over-the-counter” or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight unlike members of exchange-based markets. This exposes the Company to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the applicable contract (whether or not such dispute is bona fide) or because of a credit or liquidity problem, causing the Company to suffer losses. Such “counterparty risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the Company has concentrated its transactions with a single or small group of counterparties. TPG attempts to minimize this risk by limiting its counterparties to major financial institutions with strong credit ratings. 11. Variable Interest Entities TPG consolidates VIEs in which it is considered the primary beneficiary as described in Note 2 to the Consolidated Financial Statements. TPG’s investment strategies differ by TPG fund; however, the fundamental risks have similar characteristics, including loss of invested capital and loss of management fees and performance allocations. The Company does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs other than its own capital commitments. The assets of consolidated VIEs may only be used to settle obligations of these consolidated VIEs. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities. The Company holds variable interests in certain VIEs which are not consolidated as it is determined that the Company is not the primary beneficiary. The Company’s involvement with such entities is in the form of direct equity interests and fee arrangements. The fundamental risks have similar characteristics, including loss of invested capital and loss of management fees and performance allocations. Accordingly, disaggregation of TPG’s involvement by type of VIE would not provide more useful information. TPG may have an obligation as general partner to provide commitments to unconsolidated VIEs. For the years ended December 31, 2024 and 2023, TPG did not provide any amounts to unconsolidated VIEs other than its obligated commitments. The maximum exposure to loss represents the loss of assets recognized by TPG relating to non-consolidated entities and any amounts due to non-consolidated entities. The assets and liabilities recognized in the Company’s Consolidated Statements of Financial Condition related to its interest in these non-consolidated VIEs and its maximum exposure to loss relating to non-consolidated VIEs were as follows (in thousands): December 31, 2024 2023 Investments (includes assets pledged of $ 647,448 and $ 570,806 as of December 31, 2024 and December 31, 2023, respectively) $ 1,257,220 $ 903,119 Due from affiliates 340,835 293,233 Potential clawback obligation 2,140,355 1,910,247 Due to affiliates 57,239 56,262 Maximum exposure to loss $ 3,795,649 $ 3,162,861 Additionally, cumulative performance allocations of $ 6.0 billion and $ 5.7 billion as of December 31, 2024 and 2023, respectively, are subject to reversal in the event of future losses. RemainCo The TPG Operating Group and RemainCo entered into certain agreements to effectuate the go-forward relationship between the entities. The arrangements discussed below represent the TPG Operating Group’s variable interests in RemainCo, which do not provide the TPG Operating Group with the power to direct the activities that most significantly impact RemainCo’s performance and operations. As a result, RemainCo represents a non-consolidated VIE. 178 Table of Contents TPG Inc. Notes to Consolidated Financial Statements RemainCo Performance Earnings Agreement In accordance with the TPG Operating Group’s agreement with RemainCo (the “RemainCo Performance Earnings Agreement”), RemainCo is entitled to distributions in respect of performance allocations from TPG funds as described below. For certain existing TPG funds that are advanced in their life cycles, which we refer to as the “Excluded Funds,” RemainCo is generally entitled to receive distributions of performance allocations not previously designated for partners and employees or unaffiliated third parties, and the TPG Operating Group is not entitled to further performance allocations from the Excluded Funds. For TPG funds of a more recent vintage and for future TPG funds, which we collectively refer to as the “Included Funds,” RemainCo is entitled to a base performance allocation ranging from 10 % to 15 % (subject to limited exceptions, including TPG funds acquired in a business combination or formed with meaningful participation by the counterparty of such business combination) depending upon the Included Fund (the “Base Entitlement”). With respect to any TPG Fund that holds a first closing involving non-affiliated investors (a “First Closing”) on or after the fifth anniversary of the IPO, the Base Entitlement will step down ratably for each annual period following the fifth anniversary of the IPO through the fifteenth anniversary. RemainCo will not be entitled to distributions of performance allocations with respect to TPG funds that have not held a First Closing on or prior to the fifteenth anniversary of the IPO. Once determined, RemainCo’s entitlement to the performance allocation percentage with respect to any TPG Fund will remain in effect for the life of the applicable fund. RemainCo is obligated to fund its pro rata share of clawback obligations with respect to any TPG fund (in proportion to the Base Entitlement with respect to such TPG fund) either directly or through indemnity or similar obligations to the TPG Operating Group. In the event that the underlying assets of RemainCo are not sufficient to cover the clawback amount, the TPG Operating Group is obligated to cover any shortfall of the clawback. This shortfall covered by the TPG Operating Group would be required to be repaid by RemainCo out of future distributions. Further, in the calendar years 2022, 2023 and 2024, if the amount otherwise available under the discretionary performance allocation program is less than $ 110.0 million, $ 120.0 million and $ 130.0 million, respectively, our Chief Executive Officer can determine to increase the performance allocations available under such performance allocation program by an amount equal to the shortfall plus $ 10.0 million (which we refer to as “Performance Allocation Increases”), by allocating amounts to the holders of Promote Units that would have otherwise been distributable to RemainCo. The maximum Performance Allocation Increase in any year is $ 40.0 million. In the calendar years 2024 and 2023, the Performance Allocation Increase to the holders of Promote Units was $ 32.2 million and $ 29.2 million, respectively. In the calendar year 2022, there was no Performance Allocation Increase. RemainCo Administrative Services Agreement The TPG Operating Group has entered into an administrative services agreement with RemainCo whereby the TPG Operating Group provides RemainCo with certain administrative services, including maintaining RemainCo’s books and records, tax and financial reporting and similar support which began on January 1, 2022. In exchange for these services, RemainCo pays the TPG Operating Group an annual administration fee in the amount of 1 % per annum of the net asset value of RemainCo’s assets, with such amount payable quarterly in advance and recorded in expense reimbursements and other within revenues in the Consolidated Statements of Operations. Securitization Vehicles During 2018, certain subsidiaries of the Company issued $ 200.0 million in privately placed securitization notes. Certain equity interests of these subsidiaries serve as collateral for the notes. The Company used one or more special purpose entities that are considered VIEs to issue notes to third-party investors in the securitization transactions. The notes issued by these VIEs are backed by the cash flows related to the Company’s equity method investments (“Participation Rights”) in certain funds. The Company determined that it is the primary beneficiary of the securitization vehicles because (i) its servicing responsibilities for the Participation Rights give the Company the power to direct the activities that most significantly impact the performance of the VIEs, and (ii) its variable interests in the VIEs give the Company the obligation to absorb losses and the right to receive residual returns that could potentially be significant. In 2019, certain subsidiaries of the Company issued an additional $ 50.0 million in privately placed securitization notes. 179 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The transfer of Participation Rights to the special purpose entities are considered sales for legal purposes. However, the Participation Rights and the related debt remain on the Company’s Consolidated Statements of Financial Condition. The Company recognizes interest expense on the secured borrowings issued by the special purpose entities. The Participation Rights of the VIEs, cash and restricted cash serve as the sole source of repayment for the notes issued by these entities. Investors in the notes issued by the VIEs do not have recourse to the Company or to its other assets. Additionally, the Participation Rights and other assets directly held by the VIEs are not available to satisfy the general obligations of the Company. As the primary beneficiary of these entities, the Company is exposed to credit, interest rate and market risk from the Participation Rights in the VIEs. However, the Company’s exposure to these risks did not change as a result of the transfer of Participation Rights to the VIEs. The Company may also be exposed to interest rate risk arising from the secured notes issued by the VIEs. As of December 31, 2024 and December 31, 2023, the carrying amount of secured notes issued by the VIEs was $ 245.9 million and $ 245.6 million, respectively, and is shown in the Company’s Consolidated Statements of Financial Condition as debt obligations, net of unamortized issuance costs of $ 4.1 million and $ 4.4 million, respectively. The following table depicts the total assets and liabilities related to VIE securitization transactions included in the Company’s Consolidated Statements of Financial Condition (in thousands): December 31, 2024 2023 Cash and cash equivalents $ 21,297 $ 6,057 Restricted cash 13,175 13,183 Participation rights receivable (a) 647,448 570,806 Due from affiliates 435 434 Total assets $ 682,355 $ 590,480 Accrued interest $ 191 $ 191 Due to affiliates and other 162 5,484 Secured borrowings, net 245,875 245,567 Total liabilities $ 246,228 $ 251,242 _______________ (a) Participation rights receivable related to VIE securitization transactions are included in investments in the Company’s Consolidated Statements of Financial Condition . 12. Debt Obligations On March 5, 2024, the Notes Issuer issued $ 600.0 million aggregate principal amount of Senior Notes due 2034 (“Senior Notes”). The Senior Notes will mature on March 5, 2034, unless earlier accelerated, redeemed or repurchased. The Senior Notes are fully and unconditionally guaranteed, jointly and severally, by each of the Guarantors, and are unsecured and unsubordinated obligations of the Notes Issuer and the Guarantors. The Senior Notes bear interest at a rate of 5.875 % per annum. Interest on the Senior Notes is payable semi-annually in arrears on March 5 and September 5 of each year, beginning on September 5, 2024. The Senior Notes contain certain covenants which, subject to certain limitations, restrict the ability of the Notes Issuer and, as applicable, the Guarantors to merge, consolidate or sell, assign, transfer, lease or convey all or substantially all of their combined assets, or create liens on the voting stock of their subsidiaries. On March 4, 2024, the Notes Issuer issued $ 400.0 million aggregate principal amount of Fixed-Rate Junior Subordinated Notes due 2064 (the “Subordinated Notes”). The Subordinated Notes bear interest at a rate of 6.950 % per annum. Interest on the Subordinated Notes is payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, beginning on June 15, 2024, subject to the Notes Issuer’s right, on one or more occasions, to defer the payment of interest on the notes for up to five consecutive years. The Subordinated Notes are fully and 180 Table of Contents TPG Inc. Notes to Consolidated Financial Statements unconditionally guaranteed, jointly and severally, by each of the Guarantors, and are unsecured and subordinated obligations of the Notes Issuer and the Guarantors. The Subordinated Notes will mature on March 15, 2064, unless earlier accelerated, redeemed or repurchased. The Subordinated Notes may be redeemed at the Notes Issuer’s option (i) in whole at any time or in part from time to time on or after March 15, 2029 at a redemption price equal to their principal amount plus any accrued and unpaid interest, (ii) upon occurrence of a Tax Redemption Event, as defined in the Subordinated Notes’ First Supplemental Indenture, at a price equal to 100 % of their principal amount plus any accrued and unpaid interest or (iii) in whole, but not in part, at any time prior to March 15, 2029 upon the occurrence of a Rating Agency Event, as defined in the Subordinated Notes’ First Supplemental Indenture, at a price equal to 102 % of their principal amount plus any accrued and unpaid interest. The Subordinated Notes contain certain covenants which, subject to certain limitations, restrict the ability of the Notes Issuer and, as applicable, the Guarantors to merge, consolidate or sell, assign, transfer, lease or convey all or substantially all of their combined assets, or create liens on the voting stock of their subsidiaries. The Company used the net proceeds from these offerings to repay all the outstanding borrowings under its Senior Unsecured Revolving Credit Facility and Senior Unsecured Term Loan and for general corporate purposes. Transaction costs related to the note issuances have been capitalized and are amortized over the life of each respective note. The following table summarizes the Company’s and its subsidiaries’ debt obligations (in thousands): As of December 31, 2024 As of December 31, 2023 Debt Origination Date Maturity Date Borrowing Capacity Carrying Value Interest Rate Carrying Value Interest Rate Senior Unsecured Revolving Credit Facility (a) March 2011 September 2028 $ 1,200,000 $ — 5.43 % $ 501,000 6.45 % Senior Notes (b) March 2024 March 2034 600,000 594,051 5.88 % — — Subordinated Notes (c) March 2024 March 2064 400,000 390,058 6.95 % — — Senior Unsecured Term Loan (d) December 2021 — — — — 198,485 6.45 % Secured Borrowings - Tranche A (e) May 2018 June 2038 200,000 196,683 5.33 % 196,434 5.33 % Secured Borrowings - Tranche B (e) October 2019 June 2038 50,000 49,192 4.75 % 49,133 4.75 % 364-Day Revolving Credit Facility (f) April 2023 April 2025 150,000 52,000 6.33 % — 7.35 % Subordinated Credit Facility (g) August 2014 August 2026 30,000 — 6.68 % — 7.70 % Total debt obligations $ 2,630,000 $ 1,281,984 $ 945,052 _______________ (a) The Senior Unsecured Revolving Credit Facility, as amended, has aggregate revolving commitments of $ 1.2 billion and is scheduled to mature on September 26, 2028. Dollar-denominated principal amounts outstanding under the Amended Senior Unsecured Revolving Credit Facility accrue interest, at the option of the applicable borrower, either (i) at a base rate plus applicable margin not to exceed 0.25 % per annum or (ii) at a term SOFR rate plus a 0.10 % per annum adjustment and an applicable margin not to exceed 1.25 %. The Senior Unsecured Revolving Credit Facility contains customary representations, covenants and events of default. Financial covenants consist of a maximum leverage ratio and a requirement to keep a minimum amount of fee-earning assets under management, each tested quarterly. At December 31, 2024, the Company is in compliance with these covenants and conditions. During January 2025, the Company drew $ 180.0 million under its Senior Unsecured Revolving Credit Facility. (b) On March 5, 2024, the Notes Issuer issued $ 600.0 million aggregate principal amount of Senior Notes due 2034 as described above. (c) On March 4, 2024, the Notes Issuer issued $ 400.0 million aggregate principal amount of Fixed-Rate Junior Subordinated Notes due 2064 as described above. (d) The Senior Unsecured Term Loan was repaid in its entirety on March 6, 2024 with net proceeds from the issuance of Senior Notes and Subordinated Notes. Prior to prepayment, principal amounts outstanding under the Senior Unsecured Term Loan Agreement accrued interest, at the option of the borrower, either (i) at a base rate plus an applicable margin of 0.00 % or (ii) at a term SOFR rate plus a 0.10 % per annum adjustment and an applicable margin of 1.00 %. (e) The Company’s secured borrowings are issued using on-balance sheet securitization vehicles, as further discussed in Note 11 to the Consolidated Financial Statements. The secured borrowings are repayable only from collections on the underlying securitized equity method investments and 181 Table of Contents TPG Inc. Notes to Consolidated Financial Statements restricted cash. The secured borrowings are separated into two tranches. Tranche A secured borrowings were issued in May 2018 at a fixed rate of 5.33 % with an aggregate principal balance of $ 200.0 million due June 21, 2038, with interest paid semiannually. Tranche B secured borrowings were issued in October 2019 at a fixed rate of 4.75 % with an aggregate principal balance of $ 50.0 million due June 21, 2038, with interest paid semiannually. The secured borrowings contain an optional redemption feature giving the Company the right to call the notes in full or in part. If the secured borrowings are not redeemed on or prior to June 20, 2028, the Company is required to pay additional interest equal to 4.00 % per annum. The secured borrowings contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, default provisions and operating covenants, limitations on certain consolidations, mergers and sales of assets. At December 31, 2024, the Company is in compliance with these covenants and conditions. (f) On April 14, 2023, a consolidated subsidiary of the Company entered into a 364 -day revolving credit facility (the “ 364 -Day Credit Facility”) with Mizuho Bank, Ltd., acting as administrative agent, to provide the subsidiary with revolving borrowings of up to $ 150.0 million. Borrowings under the 364 -Day Credit Facility are subject to one of three interest rates depending on the type of drawdown requested. Alternate Base Rate (“ABR”) loans are denominated in US Dollars and subject to a variable interest rate computed daily as the higher of the Federal Funds Rate plus 0.50 % or the one-month Term SOFR plus 1.00 %, plus an applicable margin of between 1.00 % and 2.00 %, depending on the term of the loan. Term Benchmark Loans may be denominated in US Dollars or Euros, and are subject to a fixed interest rate computed as the SOFR rate for a period comparable to the term of the loan in effect two business days prior to the date of borrowing, plus an applicable margin of between 2.00 % and 3.00 %, depending on the term of the loan. Risk-Free Rate (“RFR”) loans are denominated in Sterling and subject to a fixed interest rate computed daily as the Sterling Overnight Index Average (“SONIA”) in effect five business days prior to the date of borrowing, plus an applicable margin of between 2.00 % and 3.00 %, depending on the term of the loan. The subsidiary is also required to a pay a quarterly facility fee equal to 0.30 % per annum of the total facility capacity of $ 150.0 million, as well as certain customary fees for any issued loans. The Company entered into an equity commitment letter in connection with the 364 -Day Credit Facility, committing to provide capital contributions, if and when required, to the consolidated subsidiary throughout the life of the facility. In April 2024, the consolidated subsidiary amended the 364 -Day Credit Facility to extend the commitment termination date to April 11, 2025. (g) A consolidated subsidiary of the Company entered into two $ 15.0 million subordinated revolving credit facilities (collectively, the “Subordinated Credit Facility”), for a total commitment of $ 30.0 million. The Subordinated Credit Facility is available for direct borrowings and is guaranteed by certain members of the TPG Operating Group. In August 2024, the subsidiary extended the maturity date of the Subordinated Credit Facility from August 2025 to August 2026. The interest rate for borrowings under the Subordinated Credit Facility is calculated at a term SOFR rate plus a 0.10 % per annum adjustment and 2.25 %. The following table provides information regarding the fair values of the Company’s debt which are carried at amortized cost (in thousands): Fair Value as of December 31 2024 2023 Senior Notes (a) $ 614,844 $ — Subordinated Notes (b) 406,720 — Secured Borrowings - Tranche A (c) 196,403 193,461 Secured Borrowings - Tranche B (c) 48,194 47,240 _______________ (a) Fair value is based on indicative quotes and the notes are classified as Level II within the fair value hierarchy. (b) Fair value is based on quoted prices in active markets since the debt is publicly listed and the notes are classified as Level I within the fair value hierarchy. (c) Fair value is based on current market rates and credit spreads of the Company’s Senior Notes and debt with similar maturities. The notes are classified as Level II within the fair value hierarchy. In the case of the Company’s Senior Unsecured Revolving Credit Facility, Subordinated Credit Facility, Senior Unsecured Term Loan and 364 -Day Credit Facility, the fair values approximate the carrying amounts represented in the Consolidated Financial Statements due to their variable rate nature. During the years ended December 31, 2024, 2023 and 2022, the Company incurred interest expense of $ 77.1 million, $ 31.8 million and $ 19.0 million respectively, on its debt obligations. 13. Income Taxes As a result of the Reorganization, the Company is treated as a corporation for U.S. federal and state income tax purposes. The Company is subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to its allocable share of taxable income generated by the TPG Operating Group. Prior to the Reorganization, the Company was treated as a partnership for U.S. federal income tax purposes and therefore was not subject to U.S. federal and state income taxes except for certain consolidated subsidiaries that were subject to taxation in the United States (federal, state and local) and in foreign jurisdictions. 182 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The income (loss) before income taxes includes the following components (in thousands): Year Ended December 31, 2024 2023 2022 Income (loss) before income taxes United States $ ( 144,214 ) $ 18,303 $ 80,872 International 119,390 65,350 ( 104,624 ) $ ( 24,824 ) $ 83,653 $ ( 23,752 ) The Company has provided U.S. federal, foreign and state and local corporate income tax for certain consolidated subsidiaries. The provision for income taxes consists of the following (in thousands): Year Ended December 31, 2024 2023 2022 Current income taxes (benefit) Federal $ 26,460 $ 24,314 $ 44,714 State and local 8,368 6,680 9,466 International 11,906 9,198 5,443 46,734 40,192 59,623 Deferred income taxes (benefit) Federal 15,412 18,258 ( 21,639 ) State and local 88 1,570 ( 4,769 ) International ( 10,143 ) 248 ( 732 ) 5,357 20,076 ( 27,140 ) Income tax expense (benefit) $ 52,091 $ 60,268 $ 32,483 183 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Income taxes are provided at the applicable statutory rates. The tax effects of temporary differences resulted in the following deferred tax assets and liabilities (in thousands): December 31, 2024 2023 Deferred tax assets Investment in TPG Operating Group $ 406,730 $ 86,571 Accruals 10,782 1,245 Fixed Assets 1,220 629 Net operating loss carryforwards 248 25 Equity-based compensation 21,752 20,021 Lease liability 2,116 2,029 Foreign tax credits 1,111 1,830 Other 236 5,797 444,195 118,147 Less: valuation allowance ( 89,321 ) ( 92,599 ) Deferred tax assets, net $ 354,874 $ 25,548 Deferred tax liabilities Right-of-use assets $ 1,869 $ 1,890 Intangibles 6,298 6,989 Other 53 — Deferred tax liabilities, net $ 8,220 $ 8,879 As of December 31, 2024 and December 31, 2023, the Company has recognized net deferred tax assets before the considerations of valuation allowances in the am oun t of $ 436.0 million and $ 109.3 million, respectively, which primarily relates to excess income tax basis versus book basis differences in connection with the Company’s investment in the TPG Operating Group. The excess of income tax basis in the TPG Operating Group is primarily due to the Reorganization and subsequent exchanges of Common Units for Class A common stock, including the exchanges of Common Units for Class A common stock on February 27, 2024, May 21, 2024, August 19, 2024, and November 15, 2024. As a result of the Reorganization and subsequent exchanges, the Company recorded deferred tax assets generated by the step-up in the tax basis of assets, that will be recovered as those underlying assets are sold or the tax basis is amortized. At December 31, 2024 the Company has foreign tax credits available in the United States in the amount of $ 1.1 million, which will begin to expire in 2032 if not utilized. The Company does not have any U.S. federal or state and local net operating loss carryforwards for the period ended December 31, 2024. The Company has approximately $ 0.2 million of foreign net operating loss carryforwards, which are not expected to be utilized before they expire beginning in 2025 and are subject to a full valuation allowance for the period ended December 31, 2024. The Company evaluates the realizability of its deferred tax asset on a quarterly basis and adjusts the valuation allowance when it is more-likely-than-not that all or a portion of the deferred tax asset may not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. In projecting its taxable income, the Company begins with historic results and incorporates assumptions of the amount of future pretax operating income. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates that the Company uses to manage its business. The Company’s projections of future taxable income that include the effects of originating and reversing temporary differences, including those for the tax basis intangibles, indicate that it is more likely than not that the benefits from our deferred tax assets will be realized. 184 Table of Contents TPG Inc. Notes to Consolidated Financial Statements As of December 31, 2024 and December 31, 2023, the Company has recognized a valuation allowance of $ 89.3 million and $ 92.6 million, respectively, which primarily relates to the Company’s investment in the TPG Operating Group. In evaluating the realizability of the deferred tax asset related to the Company’s investment in the TPG Operating Group, the Company determined that a portion of excess income tax basis in the TPG Operating Group will only reverse upon a sale of the Company’s interest in the TPG Operating Group which is not expected to occur in the foreseeable future. In addition, the Company has recognized valuation allowances against certain foreign tax credits available for use in the United States in the amount of $ 0.4 million, which are expected to expire, as well as a valuation allowance of $ 0.6 million against certain foreign deferred tax assets, including our foreign net operating loss carryforwards, as it is more likely than not that this portion of our foreign deferred tax assets is not realizable. The current year net decrease in our valuation allowance, as compared to the prior year, was $ 3.3 million of which a $ 8.3 million decrease was charged to income tax expense and a $ 5.0 million increase was recognized through equity. As of December 31, 2024 and December 31, 2023, the Company’s liability pursuant to the Tax Receivable Agreement related to the Reorganization and subsequent exchanges of TPG Operating Group partnership units for common stock was $ 331.3 million and $ 24.6 million, respectively. During the year ended December 31, 2024, certain holders of Common Units exchanged 25,901,124 Common Units for an equal number of shares of Class A Common Stock as described in Note 20 to the Consolidated Financial Statements. In connection with these exchanges, the Company recorded an additional liability pursuant to the Tax Receivable Agreement of $ 308.9 million, which is included in due to affiliates within the Consolidated Statements of Financial Condition. During the year ended December 31, 2024, the Company made payments of $ 2.2 million in connection with the Tax Receivable Agreement. The following table reconciles the U.S. federal statutory tax rate to the effective income tax rate of the Company’s income tax expense: Year Ended December 31, 2024 2023 2022 U.S. federal taxes at statutory rate 21.0 % 21.0 % 21.0 % Income passed through to partners ( 73.5 ) 9.6 ( 136.2 ) State and local income taxes ( 35.5 ) 12.0 ( 25.9 ) Foreign Taxes, net of U.S. foreign tax credits ( 36.8 ) 7.7 ( 17.3 ) Equity-based compensation ( 104.0 ) ( 1.3 ) 2.0 Change in TPG Operating Group tax basis estimate — — 21.7 Return to Provision 13.9 ( 0.9 ) 3.9 Change in valuation allowance 33.6 20.8 ( 4.3 ) Change in tax status of statutory subsidiaries — 2.9 — Other reconciling items ( 28.5 ) 0.2 ( 1.7 ) Effective income tax rate ( 209.8 %) 72.0 % ( 136.8 %) The Company’s effective tax rate was ( 209.8 )%, 72.0 % and ( 136.8 )% for the years ended December 31, 2024, 2023 and 2022, respectively. The Company’s effective tax rate is dependent on many factors, including the estimated amount of income subject to tax. Consequently, the effective tax rate can vary from period to period. The Company’s overall effective tax rate in each of the periods described above deviates from the statutory rate due to the factors provided including, but not necessarily limited to, the portion of income and losses that are allocated to non-controlling interests, as the tax liability on such income or loss is borne by the holders of such non-controlling interests. 185 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The following is a tabular reconciliation of unrecognized tax benefits, excluding interest and penalties (in thousands): Year Ended December 31, 2024 2023 2022 Unrecognized tax benefits - January 1 $ 1,987 $ 2,024 $ 1,965 Additions related to current year positions 28 711 259 Reductions for tax positions of prior years — ( 360 ) — Lapse of statute of limitations — ( 386 ) — Exchange rate fluctuations ( 17 ) ( 2 ) ( 200 ) Unrecognized tax benefits - December 31 $ 1,998 $ 1,987 $ 2,024 The Company recognizes interest accrued on uncertain tax benefits in income tax expense. For the years ended December 31, 2024, 2023 and 2022, the Company recognized interest of $ 1.1 million, $ 0.9 million and $ 1.1 million, respectively. The Company recognized penalties of $ 1.1 million, $ 1.1 million and $ 1.3 million for the years ended December 31, 2024, and 2023 and 2022, respectively. As of December 31, 2024, the Company has unrecognized tax benefits of $ 4.2 million, which, if recognized, would impact the effective tax rate. The Company does not believe that it has any tax position for which it is reasonably possible that it will be required to record significant amounts of unrecognized tax benefits within the next twelve months. The Company applies the provisions of ASC 740, which clarifies the accounting and disclosure for uncertainty in tax positions. The Company analyzed its tax filing positions for all federal, state, local and foreign tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. In the normal course of business, the Company is subject to examination by U.S. federal and certain state, local and foreign tax regulators. At December 31, 2024, U.S. federal tax returns related to 2022 through 2023 and predecessor entities for the year 2021 are generally open under the normal statute of limitations and therefore subject to examination. State and local tax returns of our predecessor entities are generally open to audit for tax years between 2020 to 2021. In addition, certain foreign subsidiaries’ tax returns from 2011 to 2023 are also open for examination by various regulators. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any current or future audit will have a material adverse effect on the Company’s Consolidated Financial Statements. In December 2021, the Organization for Economic Cooperation and Development (“OECD”) released the Pillar Two Model rules (also referred to as the global minimum tax or Global Anti-Base Erosion “GloBE” rules), which were designed to ensure multinational enterprises pay a certain level of tax within every jurisdiction in which they operate. While it is uncertain whether the United States will enact legislation to adopt Pillar Two, several other jurisdictions in which we operate have enacted these rules, with a January 1, 2024 effective date. The Company is monitoring developments and evaluating the potential impact. As of December 31, 2024, the Company has analyzed enacted legislation and determined that an accrual related to Pillar Two top up tax is not required. However, the Company continues to evaluate any new legislation and the potential implications of these rules on future results. 186 Table of Contents TPG Inc. Notes to Consolidated Financial Statements 14. Related Party Transactions Due From and Due To Affiliates Due from affiliates and due to affiliates consist of the following (in thousands): December 31, 2024 2023 Portfolio companies $ 55,914 $ 60,227 Partners and employees 2,657 2,293 Other related entities 47,606 63,224 Unconsolidated VIEs 340,835 293,233 Due from affiliates $ 447,012 $ 418,977 Portfolio companies $ 10,731 $ 8,461 Partners and employees 373,452 51,647 Other related entities 23,715 26,805 Unconsolidated VIEs 57,239 56,262 Due to affiliates $ 465,137 $ 143,175 Affiliate receivables and payables historically have been settled in the normal course of business without formal payment terms, generally do not require any form of collateral and do not bear interest. Tax Receivable Agreement Pursuant to the Exchange Agreement, certain employees and partners of TPG Partner Holdings are authorized to exchange Common Units for an equal number of shares of Class A Common Stock. During the year ended December 31, 2024, these partners and employees exchanged 25,901,124 Common Units, as described in Note 20 to the Consolidated Financial Statements. These exchanges resulted in an increase in the Company’s tax basis of its investment in the TPG Operating Group and is subject to the Tax Receivable Agreement. At December 31, 2024, the Company recorded a Tax Receivable Agreement liability in the amount of $ 308.9 million in connection with the exchanges that occurred during the year which is included in the partners and employees balance in due to affiliates in the Consolidated Statements of Financial Condition. Fund Investments Certain of the Company’s investment professionals and other individuals have made investments of their own capital in the TPG funds. These investments are generally not subject to management fees or performance allocations at the discretion of the general partner. Investments made by these individuals during the years ended December 31, 2024 and 2023 totaled $ 179.4 million and $ 267.0 million, respectively. Fee Income from Affiliates Substantially all revenues are generated from TPG funds, limited partners of TPG funds, or portfolio companies. The Company disclosed revenues in Note 2 to the Consolidated Financial Statements. Loans to Affiliates From time to time, the Company may enter into transactions in which it arranges short-term funding for affiliates, such as portfolio companies, as part of the Company’s capital markets activities. Under this arrangement, the Company may draw all or substantially all of its availability for borrowings under the 364-Day Credit Facility. Borrowings made under this facility are generally short-term fundings that are intended to be syndicated to third parties. 187 Table of Contents TPG Inc. Notes to Consolidated Financial Statements RemainCo Administrative Services Agreement In exchange for services provided by TPG Operating Group, RemainCo pays TPG Operating Group an annual administration fee in the amount of 1 % per annum of the net asset value of RemainCo’s assets, with such amount payable quarterly in advance. The fees earned by the Company for the years ended December 31, 2024, 2023 and 2022 were $ 15.9 million. $ 17.8 million and $ 19.8 million, respectively, and recorded in fees and other in the Consolidated Statements of Operations. Other Related Party Transactions The Company has entered into contracts to provide services or facilities for a fee from a former affiliate. As of April 2024, the contracts to provide services to such party have ended. A portion of these fees are recognized as fees and other in the Consolidated Statements of Operations in the amount of $ 10.9 million, $ 28.9 million and $ 23.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. During the years ended December 31, 2024, 2023 and 2022, these related parties made payments associated with these arrangements of $ 18.2 million, $ 35.8 million and $ 26.2 million, respectively. 15. Redeemable Equity Investment in SPACs The Company has invested in and sponsored SPACs which were formed for the purposes of effecting a merger, asset acquisition, stock purchase, reorganization or other business combination. In the IPO of each of these SPACs, either common shares or units (which include one Class A ordinary share and, in some cases, a fraction of a redeemable public warrant which entitled the holder to purchase one share of Class A ordinary shares at a fixed exercise price) were sold to investors. Each SPAC provided its public shareholders the option to redeem their shares either (i) in connection with a shareholder meeting to approve the business combination or (ii) by means of a tender offer. Assets held in Trust Accounts related to gross proceeds received from the IPO and could only be used for the initial business combination and any possible investor redemptions. If the SPAC was unable to complete a business combination within a specified time frame, typically within 24 months of the IPO close date, the SPACs redeemed all public shares. The ownership interest in each SPAC which was not owned by the Company was reflected as redeemable equity attributable to Public SPACs in the accompanying Consolidated Financial Statements. During the years ended December 31, 2023 and 2022 the Company redeemed all outstanding shares of the Public SPACs. As of December 31, 2023, the Company no longer had any investment in consolidated Public SPACs. The Company consolidated these SPACs during the period before the initial business combination, and therefore the Class F ordinary shares, Class G ordinary shares, private placement shares, private placement warrants and FPAs with consolidated related parties were eliminated in consolidation. Redeemable Equity from Consolidated Public SPACs Redeemable equity from consolidated Public SPACs represents the shares issued by the Company’s consolidated Public SPACs that are redeemable for cash in the event of an election to redeem by individual public shareholders at the time of the business combination. Additionally, these shares become automatically redeemable with the Public SPAC’s failure to complete a business combination, tender offer or stockholder approval provisions. The ownership interest in each SPAC which is not owned by the Company is reflected as redeemable equity from consolidated Public SPACs in the accompanying Consolidated Financial Statements. Offering costs related to Class A ordinary shares issued by SPACs consisted of legal, accounting, underwriting fees and other costs incurred that are directly related to the IPO. The Company had no such activity during the years ended December 31, 2024, 2023 and 2022. As of December 31, 2024 and 2023 the Company held no redeemable equity. As of December 31, 2022, the redeemable equity consisted of 65.0 million outstanding Class A ordinary shares, and these interests were classified outside of partners’ capital totaling $ 653.6 million, which represented the full redemption value and equaled the assets held in Trust Accounts. 188 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The following table summarizes the adjustments to redeemable equity (in thousands): Year Ended December 31, 2024 2023 2022 Beginning balance $ — $ 653,635 $ 1,000,027 Current and deferred offering costs — 22,750 12,959 Net income attributable to redeemable equity — 12,044 14,648 Redemptions / withdrawals — ( 661,001 ) ( 352,014 ) Change in redemption value of redeemable non-controlling interest — ( 27,428 ) ( 21,985 ) Total redeemable equity $ — $ — $ 653,635 Supplemental non-cash financing activities related to deferred underwriting costs for Public SPACs for the Consolidated Statements of Cash Flows during the year ended December 31, 2023 and 2022 was $ 22.8 million and $ 12.3 million, respectively. 16. Operating Leases The following tables summarize the Company’s lease cost, cash flows, and other supplemental information related to its operating leases. The components of lease expense were as follows (in thousands): Year Ended December 31, 2024 2023 2022 Lease cost (a) : Operating lease cost $ 47,966 $ 29,878 $ 26,371 Short-term lease costs 730 587 562 Variable lease cost 11,254 8,089 6,381 Sublease income ( 2,482 ) ( 3,400 ) ( 3,947 ) Total lease cost $ 57,468 $ 35,154 $ 29,367 Weighted-average remaining lease term 5.9 6.7 7.1 Weighted-average discount rate 5.03 % 5.09 % 4.11 % __________ (a) Office rent expense for the years ended December 31, 2024, 2023 and 2022 was $ 48.2 million, $ 29.7 million and $ 26.1 million, respectively. Supplemental Consolidated Statements of Cash Flows information related to leases were as follows (in thousands): Year Ended December 31, 2024 2023 2022 Cash paid for amounts included in the measurement of lease liabilities $ 42,272 $ 34,492 $ 28,458 Right-of-use assets obtained in the Acquisition (see Note 3) — 107,716 — Other non-cash changes in right-of-use assets 19,502 13,057 6,311 Non-cash right-of-use assets and lease liability termination ( 2,038 ) ( 743 ) ( 13,375 ) 189 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The following table shows the undiscounted cash flows on an annual basis for operating lease liabilities as of December 31, 2024 (in thousands): Year Due Lease Amount 2025 $ 38,927 2026 45,396 2027 41,169 2028 40,084 2029 38,756 Thereafter 54,800 Total future undiscounted operating lease payments (a) 259,132 Less: imputed interest ( 36,001 ) Present value of operating lease liabilities $ 223,131 __________ (a) Lease payments required exclude approximately $ 735.4 million for a lease signed, but not yet commenced. This lease is related to office space and will commence in 2025 with a lease term estimated to end in 2041. 17. Commitments and Contingencies Guarantees Certain of the Company’s consolidated entities have provided guarantees for obligations related to a third-party lending program that enables certain of our eligible employees to obtain financing for capital contributions into TPG funds. At December 31, 2024, the amounts outstanding related to these guarantees were $ 137.5 million, and the maximum obligations guaranteed under these agreements is $ 192.9 million. Commitments At December 31, 2024, the TPG Operating Group had unfunded investment commitments of $ 644.3 million to the investment funds that the Company manages and other strategic investments. Contingent Obligations (Clawback) With Affiliates The governing agreements of the TPG funds that pay performance allocations generally include a clawback provision that, if triggered, may give rise to a contingent obligation requiring the general partner to return amounts to the fund for distribution to the fund investors at the end of the life of the fund. Performance allocations received by the general partners of the respective TPG funds are subject to clawback to the extent the performance allocations received by the general partners exceeds the amount the general partners are ultimately entitled to receive based on cumulative fund results. At December 31, 2024, if all investments held by the TPG funds were liquidated at their current unrealized fair value, there would be clawback of $ 5.5 million, net of tax, for which a performance fee reserve was recorded within other liabilities in the Consolidated Statements of Financial Condition. At December 31, 2024, if all remaining investments were deemed worthless, a possibility management views as remote, the amount of performance allocations subject to potential clawback would be $ 2,140.4 million. During the year ended December 31, 2024, the general partner made a payment of $ 58.3 million on the clawback liability. 190 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Legal Actions and Other Proceedings From time to time, the Company is involved in legal proceedings, litigation and claims incidental to the conduct of our business, including with respect to acquisitions, bankruptcy, insolvency and other types of proceedings. Such lawsuits may involve claims against our portfolio companies that adversely affect the value of certain investments owned by TPG’s funds. The Company’s business is also subject to extensive regulation, which has and may result in the Company becoming subject to examinations, inquiries and investigations by various U.S. and non-U.S. governmental and regulatory agencies, including but not limited to the SEC, Department of Justice, state attorneys general, Financial Industry Regulatory Authority and the U.K. Financial Conduct Authority. Such examinations, inquiries and investigations may result in the commencement of civil, criminal or administrative proceedings or fines against the Company or its personnel. The Company accrues a liability for legal proceedings in accordance with U.S. GAAP. In particular, the Company establishes an accrued liability for loss contingencies when a settlement arising from a legal proceeding is both probable and reasonably estimable. If the matter is not probable or reasonably estimable, no such liability is recorded. Examples of this include: (i) the proceedings may be in early stages; (ii) damages sought may be unspecified, unsupportable, unexplained or uncertain; (iii) discovery may not have started or is incomplete; (iv) there may be uncertainty as to the outcome of pending appeals or motions; (v) there may be significant factual issues to be resolved or (vi) there may be novel legal issues or unsettled legal theories to be presented or a large number of parties. Consequently, management is unable to estimate a range of potential loss, if any, related to such matters. Even when the Company accrues a liability for a loss contingency in such cases, there may be an exposure to loss in excess of any amounts accrued. Loss contingencies may be, in part or in whole, subject to insurance or other payments such as contributions and/or indemnity, which may reduce any ultimate loss. Based on information presently known by management, the Company has not recorded a potential liability related to any pending legal proceeding except as disclosed below, and is not subject to any legal proceedings that we expect to have a material impact on our operations, financial positions or cash flows. It is not possible, however, to predict the ultimate outcome of all pending legal proceedings, and the claimants in the matter discussed below seek potentially large and indeterminate amounts. As such, although we do not consider such an outcome likely, given the inherent unpredictability of legal proceedings, it is possible that an adverse outcome in the matter described below or certain other matters could have a material effect on the Company’s financial results in any particular period. Since 2011, a number of TPG-related entities and individuals, including David Bonderman and Jim Coulter, have been named as defendants/respondents in a series of lawsuits in the United States, United Kingdom, and Luxembourg concerning an investment TPG held from 2005-2007 in a Greek telecommunications company, known then as TIM Hellas (“Hellas”). Entities and individuals related to Apax Partners, a London based investment firm also invested in Hellas at the time, have been named in the suits as well. The cases all allege generally that a late 2006 refinancing of the Hellas group of companies was improper. To date, most of the lawsuits filed in New York Federal and State courts against TPG and Apax-related defendants have been dismissed, with those dismissals upheld on appeal, or the appeal period has passed. A lawsuit pending in the District Court of Luxembourg against two former TPG partners and two individuals related to Apax involved in the investment has been decided after trial in their favor on all claims and is now on appeal. In February 2018, a High Court case in London against a number of TPG and Apax-related parties and individuals was abandoned by the claimants in the early days of a scheduled six-week trial with costs of $ 9.5 million awarded to the TPG and Apax-related parties, of which $ 3.4 million was awarded to TPG. In addition to the Luxembourg appeal, there are several cases against TPG and Apax-related parties pending in New York state court. In one case, the Court granted and denied in part motions to dismiss by all defendants, paring back the parties, claims and amounts at issue, and appeals of that decision are pending. In a second case, the Appellate Division recently granted summary judgment to the TPG-related parties on the sole remaining claim in that case, and plaintiffs are appealing that judgement to New York’s Court of Appeals. Finally, a third group of plaintiffs, similarly situated to those in the other cases, recently filed new claims seeking recovery from numerous TPG and Apax-related parties. The prior noted stayed federal actions have now been dismissed with prejudice by court order and stipulation. The Company believes that the suits related to the Hellas investment are without merit and intends to continue to defend them vigorously. 191 Table of Contents TPG Inc. Notes to Consolidated Financial Statements In October 2022, the Company received a document request from the SEC focusing on the use and retention of business-related electronic communications, which, as has been publicly reported, is part of an industry-wide review. The Company cooperated with the SEC’s investigation and reached a settlement, which was announced in January 2025. As of December 31, 2024, the Company updated its accrued liability to equal the amount it agreed to pay as part of the settlement. Indemnifications In the normal course of business, the Company enters into contracts that contain a variety of representations and warranties that provide general indemnifications. In addition, certain of the Company’s funds have provided certain indemnities relating to environmental and other matters and has provided nonrecourse carve-out guarantees for fraud, willful misconduct and other customary wrongful acts, each in connection with the financing of certain real estate investments that the Company has made. The Company’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Company that have not yet occurred. However, based on experience, the Company expects the risk of material loss to be remote. 18. Net Income (Loss) Per Class A Common Share The Company calculates its basic and diluted income (loss) per share using the two-class method for all periods presented, which defines unvested share-based payment awards that contain nonforfeitable rights to dividends as participating securities. The two-class method is an allocation formula that determines income per share for each share of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all income (distributed and undistributed) is allocated to common shares and participating securities based on their respective rights to receive dividends. In computing the dilutive effect that the exchange of TPG Operating Group partnership units would have on net income available to Class A common stock per share, TPG considered that net income (loss) available to holders of shares of Class A common stock would increase due to the elimination of non-controlling interests in the TPG Operating Group, inclusive of any tax impact. The hypothetical conversion may be dilutive to the extent there is activity at the TPG Inc. level that has not previously been attributed to the non-controlling interests or if there is a change in tax rate as a result of a hypothetical conversion. 192 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net income (loss) per share of Class A common stock (in thousands, except share and per share data): Year Ended December 31, 2024 2023 2022 Numerator: Net (loss) income $ ( 76,915 ) $ 23,385 $ ( 56,235 ) Less: Net loss attributable to redeemable equity in Public SPACs prior to IPO — — ( 517 ) Net income attributable to other non-controlling interests prior to Reorganization and IPO — — 966 Net income attributable to TPG Group Holdings prior to Reorganization and IPO — — 5,256 Net (loss) income subsequent to IPO ( 76,915 ) 23,385 ( 61,940 ) Less: Net income attributable to redeemable equity in Public SPACs — 12,044 15,165 Net loss attributable to non-controlling interests in TPG Operating Group ( 175,927 ) ( 92,411 ) ( 180,824 ) Net income attributable to other non-controlling interests 75,529 23,662 11,293 Net income attributable to Class A Common Stockholders prior to distributions 23,483 80,090 92,426 Reallocation of earnings to unvested participating restricted stock units (a) ( 23,790 ) ( 8,872 ) ( 4,994 ) Net (loss) income attributable to Class A Common Stockholders - Basic ( 307 ) 71,218 87,432 Net loss assuming exchange of non-controlling interest ( 154,503 ) ( 82,900 ) ( 147,133 ) Reallocation of income from participating securities assuming exchange of Common Units — — 132 Net loss attributable to Class A Common Stockholders - Diluted $ ( 154,810 ) $ ( 11,682 ) $ ( 59,569 ) Denominator: Weighted-Average Shares of Common Stock Outstanding - Basic 100,219,905 80,334,871 79,255,411 Exchange of Common Units to Class A Common Stock 264,505,674 237,609,625 229,652,641 Weighted-Average Shares of Common Stock Outstanding - Diluted 364,725,579 317,944,496 308,908,052 Net income (loss) available to Class A common stock per share Basic $ 0.00 $ 0.89 $ 1.10 Diluted $ ( 0.42 ) $ ( 0.04 ) $ ( 0.19 ) Dividends declared per share of Class A Common Stock (b) $ 1.65 $ 1.40 $ 1.09 ___________ (a) No undistributed losses were allocated to unvested participating RSUs during the years ended December 31, 2024, 2023 and 2022, as the holders do not have a contractual obligation to share in the losses of the Company with common stockholders. (b) Dividends declared reflects the calendar date of the declaration for each distribution. The fourth quarter dividends were declared on February 11, 2025 and are payable on March 7, 2025. 193 Table of Contents TPG Inc. Notes to Consolidated Financial Statements 19. Equity-Based Compensation Restricted Stock Unit Awards Under the Company’s Omnibus Equity Incentive Plan (the “Omnibus Plan”), the Company is permitted to grant equity awards representing ownership interests in TPG Inc.’s Class A common stock. On March 11, 2024, an additional 21,980,027 shares of Class A common stock were registered, increasing the share reserve to 36,225,413 , of which 29,956,603 were available to be issued as of December 31, 2024. Service Awards Ordinary Service Awards In the ordinary course of business, the Company grants equity awards subject to service conditions, granted as part of the Company’s standard incentive structure initiatives. These awards are referred to as (“Ordinary Service Awards”). From time to time, the Company also grants equity awards that are subject to service conditions, a portion of which are granted on a non-standard basis to reward or incentivize key contributions that advance the Company’s long-term goals of value creation. These non-standard awards are referred to as (“Special Purpose Service Awards,” and collectively with Ordinary Service Awards, “Service Awards”). Dividend equivalents are paid on the vested and unvested portion of the Service Awards when the dividend occurs. Special Purpose Employee Service Awards In conjunction with the IPO in 2022, TPG employees, certain of the Company’s executives and certain non-employees received one-time grants of equity-based awards in the form of Special Purpose Service Awards which entitle the holder to one share of Class A common stock upon vesting. These units generally vest over a term of four to six-years . Additionally, in conjunction with the Angelo Gordon Acquisition, described in Note 3 to the Consolidated Financial Statements, the Company agreed to grant an aggregate of 8.4 million Special Purpose Service Awards to former Angelo Gordon employees to promote retention post-closing, of which 7.8 million are outstanding to date. These units generally vest over a term of five years . Special Purpose IPO Executive Service Awards Under the Omnibus Plan and in conjunction with the IPO, the Company granted 1.1 million restricted stock units as Special Purpose Service Awards in order to incentivize and retain key members of management and further their alignment with our shareholders (the “IPO Executive Service Awards”). The IPO Executive Service Awards are subject to service-based vesting conditions over a five-year service period with vesting having commenced on the second anniversary of the grant date. Compensation expense for these awards is recognized on a straight-line basis. Special Purpose CEO Service Award Under the Omnibus Plan, the Company granted a long-term performance incentive award to the Company’s Chief Executive Officer, Jon Winkelried, on November 30, 2023, comprised of 2.6 million restricted stock units as Special Purpose Service Awards, intended to incentivize Mr. Winkelried to drive shareholder value in a manner that is aligned with stockholder interests, reward him for organic and inorganic Company growth, and bring his compensation in-line with peer competitors in order to promote and ensure retention (the “CEO Service Award”). The CEO Service Award is subject to service-based vesting conditions over a four-year service period beginning on January 13, 2025 and each one-year anniversary thereafter. Compensation expense for this award is recognized on a straight-line basis. 194 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The following table summarizes the outstanding RSUs for Service Awards as of December 31, 2024 (in millions, including share data): Units Outstanding as of December 31, 2024 Compensation Expense for the Year Ended December 31, Unrecognized Compensation Expense as of December 31, 2024 2024 2023 Restricted Stock Units Ordinary Service Awards 8.7 $ 94.2 $ 44.3 $ 259.8 Special Purpose Service Awards 16.6 135.4 75.7 330.9 Total Service Award RSUs 25.3 $ 229.6 $ 120.0 $ 590.7 For the years ended December 31, 2024 and 2023 the Company granted 6.9 million and 20.6 million Service Awards, respectively. The grant date fair value was the public share price on each respective grant date. The following table presents the rollforward of the Company’s unvested Service Awards for the year ended December 31, 2024 (awards in millions): Service Awards Weighted-Average Grant Date Fair Value Balance at December 31, 2023 23.3 $ 30.62 Granted 6.9 43.97 Vested ( 4.1 ) 30.55 Forfeited ( 0.8 ) 30.19 Balance at December 31, 2024 25.3 $ 34.30 As of December 31, 2024, there was approximately $ 590.7 million of total estimated unrecognized compensation expense related to unvested Service Awards, which is expected to be recognized over the weighted average remaining requisite service period of 3.1 years. Market and Performance Condition Awards Ordinary Performance Condition Awards During the ordinary course of business, the Company grants equity awards, subject to a combination of service and performance conditions, as part of the Company’s standard incentive structure initiatives. These awards are referred to as (“Ordinary Performance Condition Awards”). In 2024, the Company granted 0.3 million of Ordinary Performance Condition Awards. The weighted-average grant date fair value per share was $ 48.93 for these awards. The Company recognizes compensation expense using the accelerated attribution method on a tranche-by-tranche basis. Expense is recognized from the date of grant through the requisite service period of 4.4 years to the extent the performance condition is deemed probable. The Company deemed these awards probable of vesting as of December 31, 2024. In 2022, the Company also granted 0.1 million of Ordinary Performance Condition Awards. As these awards were deemed improbable of vesting in a prior period, the Company is no longer recognizing equity-based compensation expense associated with these awards and will continue to monitor the awards until the end of the respective performance period. From time to time, the Company grants equity awards that are subject to a combination of service and market conditions, granted on a non-standard basis to reward or incentivize key contributions that advance the Company’s long-term goals of value creation. These awards are referred to as (“Special Purpose Market Condition Awards,” and collectively with the Ordinary Performance Condition Awards, “Market and Performance Condition Awards”). 195 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Special Purpose IPO Executive Market Condition Awards Under the Omnibus Plan and in conjunction with the IPO, the Company also granted 1.1 million restricted stock units as Special Purpose Market Condition Awards in order to incentivize and retain key members of management and further their alignment with our shareholders (the “IPO Executive Market Condition Awards”). The IPO Executive Market Condition Awards are subject to both market performance and service based vesting conditions, including (i) a time-based component requiring a five-year service period and (ii) a market price component with a target Class A common stock share price at $ 44.25 within five years and $ 59.00 within eight years. Dividend equivalents accrue on the vested and unvested Special Purpose Service Awards when the dividend occurs. Dividend equivalents accrue for vested and unvested portions of the IPO Executive Market Condition Awards and are paid only when both the applicable service and market performance conditions are satisfied. Compensation expense for the IPO Executive Market Condition Awards is recognized using the accelerated attribution method on a tranche-by-tranche basis. During 2024, both market price components of Class A common stock share price of $ 44.25 and $ 59.00 were met, which triggered vesting of 0.2 million IPO Executive Market Condition Awards. Special Purpose CEO Market Conditions Award The long-term performance incentive award granted to Jon Winkelried under the Omnibus Plan on November 30, 2023, is also comprised of 3.9 million restricted stock units as Special Purpose Market Condition Awards, and is intended to incentivize Mr. Winkelried to drive shareholder value in a manner that is aligned with stockholder interests, reward him for organic and inorganic Company growth, and bring his compensation in-line with peer competitors in order to promote and ensure retention (the “CEO Market Conditions Award”). The CEO Market Conditions Award is subject to both market performance and service based vesting conditions, including (i) a time-based component requiring a five-year service period and (ii) a market price component that is only achieved when the 30-day volume weighted average trading price of a share of Class A common stock meets or exceeds certain stock price hurdles. 25 % of each service vesting tranche of the CEO Market Conditions Award is eligible to be earned and vest following achievement of each of the following Class A common stock prices: $ 52.50 , $ 58.45 , $ 64.05 and $ 70.00 . These stock price hurdles represent a premium of 150 %, 167 %, 183 % and 200 % of the closing price of a share of Class A common stock on the date of grant. The first market hurdle must be achieved by January 13, 2029, and the remaining hurdles by January 13, 2030. If the applicable market hurdles are not achieved by the specified periods, the applicable portions of the CEO Market Conditions Award will be forfeited. Restricted stock units from the CEO Market Conditions Award that (i) vest prior to January 13, 2029 will be settled promptly following January 13, 2029, and (ii) vest after January 13, 2029 will be settled promptly following January 13, 2030, subject to certain other accelerated settlement conditions. Dividend equivalents accrue for the vested and unvested portions of the CEO Market Conditions Award and are paid only if and when both the applicable service and market conditions are satisfied. Compensation expense for the CEO Market Conditions Award is recognized using the accelerated attribution method on a tranche-by-tranche basis. As of December 31, 2024, the first three market hurdles of the CEO Market Conditions Award of Class A common stock share prices of $ 52.50 , $ 58.45 and $ 64.05 were met. As such, 20 % of these tranches have vested or will vest on each of January 13, 2025, 2026, 2027, 2028 and 2029. 196 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The following table summarizes the outstanding RSUs for Market and Performance Condition Awards as of December 31, 2024 (in millions, including share data): Units Outstanding as of December 31, 2024 Compensation Expense for the Year Ended December 31, Unrecognized Compensation Expense as of December 31, 2024 2024 2023 Restricted Stock Units Ordinary Performance Condition Awards 0.5 $ 3.1 $ 1.0 $ 11.0 Special Purpose Market Condition Awards 4.6 29.2 8.8 54.4 Total Market and Performance Condition Award RSUs 5.1 $ 32.3 $ 9.8 $ 65.4 The following table presents the roll forwards of the Company’s unvested Special Purpose Market Condition Awards for the year ended December 31, 2024 (awards in millions): Market Condition Awards Weighted Average Grant Date Fair Value Balance at December 31, 2023 5.0 $ 20.10 Granted — — Vested ( 0.2 ) 16.59 Forfeited ( 0.2 ) 16.58 Balance at December 31, 2024 4.6 $ 20.41 As of December 31, 2024, there was approximately $ 54.4 million of total estimated unrecognized compensation expense related to unvested Special Purpose Market Condition Awards, which is expected to be recognized over the weighted average remaining requisite service period of 2.5 years. Total Restricted Stock Units For the years ended December 31, 2024, 2023 and 2022, the Company recorded total restricted stock unit compensation expense of $ 261.9 million, $ 129.8 million and $ 83.8 million respectively. The expense associated with awards granted to certain non-employees of the Company is recognized in general, administrative and other in our Consolidated Statements of Operations and tot aled $ 6.4 million, $ 3.7 million and $ 7.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. For the years ended December 31, 2024 and 2023, the Company had 4,368,774 and 562,790 restricted stock units vest at a fair value of $ 179.1 million and $ 18.5 million, respectively (excluding vested, but unsettled units). During the year ended December 31, 2024, the restricted stock units were settled by issuing 2,713,730 shares of TPG Inc. Class A common stock, net of withholding tax of $ 68.0 million (excluding vested, but unsettled units). During the year ended December 31, 2023, the restricted stock units were settled by issuing 356,443 shares of TPG Inc. Class A common stock, net of withholding tax of $ 6.9 million (excluding vested, but unsettled units). 197 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The following table summarizes all outstanding RSU awards as of December 31, 2024 (in millions, including share data): Units Outstanding as of December 31, 2024 Compensation Expense for the Year Ended December 31, Unrecognized Compensation Expense as of December 31, 2024 2024 2023 Restricted Stock Units Ordinary Awards: Service Awards 8.7 $ 94.2 $ 44.3 $ 259.8 Performance Condition Awards 0.5 3.1 1.0 11.0 Special Purpose Awards: Service Awards 16.6 135.4 75.7 330.9 Market Condition Awards 4.6 29.2 8.8 54.4 Total Restricted Stock Units 30.4 $ 261.9 $ 129.8 $ 656.1 In January 2025, the Company issued 4.5 million shares of Class A common stock in connection with the vesting of RSUs. In January 2025, the Company granted 3.4 million in RSUs. The units vest in equal tranches over a period of three to five years . Other Awards As a result of the Reorganization and the IPO in 2022, certain of the Company’s current partners hold restricted indirect interests in Common Units through TPG Partner Holdings and indirect economic interests through RemainCo. TPG Partner Holdings and RemainCo are presented as non-controlling interest holders within the Company’s Consolidated Financial Statements. The interests in TPG Partner Holdings (“TPH Units”) and indirectly in RemainCo (“RPH Units”) are generally subject to service, or, in certain cases, to both service and performance conditions. Holders of these interests participate in distributions regardless of the vesting status. Additionally, in conjunction with the Reorganization, the IPO and the acquisition of NewQuest, certain TPG partners and NewQuest principals were granted Common Units directly at TPG Operating Group and Class A common stock subject to both service and performance conditions, some of which are deemed probable of achieving. In conjunction with the Angelo Gordon Acquisition, as described in Note 3 to the Consolidated Financial Statements, the Company granted 43.8 million of unvested Common Units to former Angelo Gordon partners (included in Common Units below), which are considered compensatory under ASC 718. These units generally vest over a term of five years and participate in distributions at the TPG Operating Group along with all vested equity. 198 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The following table summarizes the outstanding Other Awards as of December 31, 2024 (in millions, including share data): Unvested Units/Shares Outstanding as of December 31, 2024 Compensation Expense for the Year Ended December 31, Unrecognized Compensation Expense as of December 31, 2024 2024 2023 TPH and RPH Units TPH units 26.1 $ 289.6 $ 363.3 $ 619.3 RPH units 0.2 55.1 73.3 73.8 Total TPH and RPH Units 26.3 $ 344.7 $ 436.6 $ 693.1 Common Units and Class A Common Stock Common Units 36.0 $ 324.1 $ 54.9 $ 764.2 Class A Common Stock 0.3 17.2 17.6 0.4 Total Common Units and Class A Common Stock 36.3 $ 341.3 $ 72.5 $ 764.6 TPH and RPH Units The Company accounts for the TPH Units and RPH Units as compensation expense in accordance with ASC 718. The unvested TPH and RPH Units are recognized as equity-based compensation subject to primarily service vesting conditions and in certain cases performance conditions, some of which are deemed probable of achieving. The Company recognized compensation expense of $ 344.7 million, $ 436.6 million and $ 508.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. There is no additional dilution to our stockholders related to these interests. Contractually these units are only related to non-controlling interest holders of the TPG Operating Group, and there is no impact to the allocation of income and distributions to TPG Inc. Therefore, the Company has allocated these expense amounts to its non-controlling interest holders. The following table presents the roll forwards of the Company’s unvested TPH Units and RPH Units for the year ended December 31, 2024 (units in millions): TPH Units RPH Units Partnership Units Grant Date Fair Value Partnership Units Grant Date Fair Value Balance at December 31, 2023 37.2 $ 24.54 0.3 $ 457.10 Reallocated 2.2 49.91 — — Vested ( 11.1 ) 24.27 ( 0.1 ) 457.10 Forfeited ( 2.2 ) 24.70 ( 0.0 ) 457.10 Balance at December 31, 2024 26.1 $ 26.74 0.2 $ 457.10 Forfeited TPH Units were reallocated to certain existing unit holders in accordance with the applicable governing documents. The grant date fair value of the reallocated awards was determined based on the fair value of TPG’s common stock at the time of reallocation. As of December 31, 2024, there was approximately $ 693.1 million of total estimated unrecognized compensation expense related to outstanding unvested awards, of which TPH Units and RPH Units represented $ 619.3 million and $ 73.8 million, respectively. 199 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Common Units and Class A Common Stock In accordance with ASC 718, all Other Awards are also recognized as equity-based compensation. The Company recognized compensation expense of $ 341.3 million, $ 72.5 million and $ 41.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. As TPG Operating Group holders would accrete pro-rata or benefit directly upon forfeiture of those awards, this compensation expense was allocated pro-rata to all controlling and non-controlling interest holders of TPG Inc. The following table presents the roll forwards of the Company’s unvested TOG Units and Class A Common Stock Awards for the year ended December 31, 2024 (awards in millions): Common Units Class A Common Stock Partnership Units Grant Date Fair Value Partnership Units Grant Date Fair Value Balance at December 31, 2023 45.4 $ 25.43 1.1 $ 29.50 Reallocated 0.2 48.78 — — Vested ( 9.4 ) 25.60 ( 0.8 ) 29.50 Forfeited ( 0.2 ) 25.38 — — Balance at December 31, 2024 36.0 $ 25.50 0.3 $ 29.50 Forfeited Common Units were reallocated to certain existing unit holders in accordance with the applicable governing documents. The grant date fair value of the reallocated awards was determined based on the fair value of TPG’s common stock at the time of reallocation. Total unrecognized compensation expense related to outstanding unvested awards as of December 31, 2024 wa s $ 764.6 million. Other Liability Classified Awards In conjunction with the Acquisition discussed in Note 3 to the Consolidated Financial Statements, the Company granted liability-classified Common Unit awards to Angelo Gordon partners. Those awards represent the compensatory portion of the Earnout Payment under ASC 718 and as such, require both continuous service over a period of five years and the satisfaction of FRR targets during the Measurement Period defined in Note 3 to the Consolidated Financial Statements. These liability-classified awards will be settled with a variable number of both vested and unvested Common Units upon the satisfaction of the FRR targets and do not participate in TPG Operating Group distributions before settlement. The fair value of these awards will be remeasured every reporting period and is based on the satisfaction of the respective FRR targets. For the years ended December 31, 2024 and 2023, the Company recognized compensation expense of $ 55.3 million and $ 12.4 million, respectively related to its liability-classified awards with a corresponding increase in other liabilities. Compensation expense for those awards is recognized using the accelerated attribution method on a tranche by tranche basis. Total unrecognized compensation expense related to these awards as of December 31, 2024 was $ 76.9 million . TRTX Awards Certain employees of the Company receive awards (“TRTX Awards”) from TPG RE Finance Trust, Inc. (“TRTX”), a publicly traded real estate investment trust, externally managed and advised by TPG RE Finance Trust Management, L.P., a wholly-owned subsidiary of the Company, for services provided to TRTX. Generally, the TRTX Awards vest over four years for employees and at grant date for directors of TRTX. The TRTX Awards granted to certain employees of the Company are recorded in other assets and due to affiliates in the Consolidated Statements of Financial Condition. The grant date fair value of the asset is amortized through compensation and benefits expense on a straight-line basis over the vesting period in the Consolidated Statements of Operations. Compensation and benefits expense is offset by related management fees earned by the Company from TRTX. During the years ended December 31, 2024 and 2023, the Company recognized $ 9.3 million and $ 7.2 million, respectively. During the year ended December 31, 2022 the Company recognized le ss than $ 0.01 million of such expense. 200 Table of Contents TPG Inc. Notes to Consolidated Financial Statements Other Compensation Matters TPG provides voluntary defined contribution plans for its U.S. and U.K. employees who meet certain eligibility requirements. The current defined contribution plan for U.S. employees is a 401(k) profit-sharing plan that was adopted in May 1996. The current defined contribution plan for U.K. employees is a pension plan that was adopted in January 2010. Employees may elect to make contributions up to legally established limits. Both plans provide for employer contributions at the Company’s discretion. The Company’s contribution expenses were $ 26.6 million, $ 15.2 million and $ 12.7 million, for the years ended December 31, 2024, 2023 and 2022, respectively. Compensation includes a significant performance-based component in the form of discretionary bonuses. The Company incurred discretionary bonus expense of $ 330.0 million, $ 220.7 million and $ 205.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. 20. Equity The Company has three classes of common stock outstanding, Class A common stock, nonvoting Class A common stock and Class B common stock. Class A common stock is traded on the Nasdaq Global Select Market. The Company is authorized to issue 2,240,000,000 shares of Class A common stock with a par value of $ 0.001 per share, 100,000,000 shares of nonvoting Class A common stock, 750,000,000 shares of Class B common stock with a par value of $ 0.001 per share, and 25,000,000 shares of preferred stock, with a par value of $ 0.001 per share. Each share of the Company’s Class A common stock entitles its holder to one vote, and each share of our Class B common stock entitles its holder to ten votes. Holders of Class A common stock and Class B common stock generally vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval. The nonvoting Class A common stock have the same rights and privileges as, rank equally and share ratably with, and are identical in all respects as to all matters to, the Class A common stock, except that the nonvoting Class A common stock have no voting rights other than such rights as may be required by law. Holders of Class A common stock are entitled to receive dividends when and if declared by the board of directors. Holders of the Class B common stock are not entitled to dividends in respect of their shares of Class B common stock. During the year ended December 31, 2024, certain stockholders transferred to third parties 1,652,938 shares of the Company’s nonvoting Class A common stock at which point such shares converted automatically into shares of Class A common stock in accordance with their terms. As of December 31, 2024, 102,605,392 shares of Class A common stock and 6,605,963 shares of nonvoting Class A common stock were outstanding, 255,756,502 shares of Class B common stock were outstanding, and there were no shares of preferred stock outstanding. Dividends and distributions Dividends and distributions are reflected in the Consolidated Statements of Changes in Equity when declared by the board of directors. Dividends are made to Class A common stockholders and distributions are made to holders of non-controlling interests in subsidiaries. 201 Table of Contents TPG Inc. Notes to Consolidated Financial Statements The table below presents information regarding the quarterly dividends on the Class A common stock, which were made at the sole discretion of the Board of Directors of the Company. Date Declared Record Date Payment Date Dividend per Class A Common Share May 15, 2023 May 25, 2023 June 5, 2023 $ 0.20 August 8, 2023 August 18, 2023 September 1, 2023 0.22 November 7, 2023 November 17, 2023 December 1, 2023 0.48 February 13, 2024 February 23, 2024 March 8, 2024 0.44 Total 2023 Dividend Year (through Q4 2023) $ 1.34 May 8, 2024 May 20, 2024 June 3, 2024 $ 0.41 August 6, 2024 August 16, 2024 August 30, 2024 0.42 November 4, 2024 November 14, 2024 December 2, 2024 0.38 February 11, 2025 February 21, 2025 March 7, 2025 0.53 Total 2024 Dividend Year (through Q4 2024) $ 1.74 Exchanges of Common Units Pursuant to the Exchange Agreement, certain holders of Common Units, including certain partners and employees, are authorized to exchange Common Units for an equal number of shares of Class A common stock. During the years ended December 31, 2024 and 2023, certain holders of Common Units exchanged Common Units for an equal number of shares of Class A common stock resulting in the issuance of shares of Class A common stock and the cancellation of an equal number of shares of Class B common stock for no additional consideration as follows: Exchange Date Class A Common Stock Issued 2024 Exchanges (a) February 27, 2024 17,704,987 May 21, 2024 1,998,593 August 19, 2024 1,042,119 November 15, 2024 5,155,425 2023 Exchange March 30, 2023 1,000,000 __________ (a) The issuance of the shares of Class A common stock to such holders of Common Units was registered pursuant to the Company’s registration statements on Form S-3 filed on November 2, 2023 and September 13, 2024. The supplemental non-cash financing activities related to equity for the Consolidated Statements of Cash Flows are as follows (in thousands): Year Ended December 31, 2024 2023 2022 Distributions to holders of other non-controlling interests $ 13,504 $ 17,779 $ 3,964 Deferred tax assets 335,529 — — Due to affiliates 297,085 — — Additional paid-in-capital 38,444 — — 202 Table of Contents TPG Inc. Notes to Consolidated Financial Statements 21. Subsequent Events Other than the events noted above in the footnotes to the Consolidated Financial Statements, there have been no additional events since December 31, 2024 that require recognition or disclosure in the Consolidated Financial Statements. 203 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures None.