TPG(US:TPG)2024-05-08 20:26Part I. Financial Information This section details TPG Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements This section presents TPG Inc.'s unaudited condensed consolidated financial statements, including financial condition, operations, equity, cash flows, and detailed notes Condensed Consolidated Statements of Financial Condition TPG Inc.'s financial condition as of March 31, 2024, shows total assets increased to $9.94 billion, liabilities rose to $6.64 billion, and total equity slightly decreased Key Financial Condition Metrics | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Assets | | | | Cash and cash equivalents | $1,090,713 | $665,188 | | Investments | $6,834,809 | $6,724,112 | | Total assets | $9,939,449 | $9,369,672 | | Liabilities | | | | Debt obligations | $1,229,230 | $945,052 | | Accrued performance allocation compensation | $4,144,452 | $4,096,052 | | Total liabilities | $6,643,131 | $6,008,538 | | Equity | | | | Total equity | $3,296,318 | $3,361,134 | Condensed Consolidated Statements of Operations For Q1 2024, total revenues increased by 28% to $824.1 million, but net income attributable to TPG Inc. decreased by 38% to $15.5 million due to rising expenses Key Operating Metrics | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Change (%) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :-------------------- | :--------- | | Total revenues | $824,071 | $643,145 | $180,926 | 28% | | Total expenses | $836,397 | $620,117 | $216,280 | 35% | | Net (loss) income | $(9,006) | $35,674 | $(44,680) | -125% | | Net income attributable to TPG Inc. | $15,519 | $25,055 | $(9,536) | -38% | | Basic EPS | $0.09 | $0.27 | $(0.18) | -67% | | Diluted EPS | $(0.11) | $(0.01) | $(0.10) | -1000% | Condensed Consolidated Statements of Changes in Equity Total equity decreased from $3.36 billion to $3.30 billion, influenced by net income, equity compensation, dividends, and Common Unit exchanges for Class A Common Stock Key Equity Movements | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total TPG Inc. Equity (End of Period) | $720,358 | $579,157 | | Other Non-Controlling Interests (End of Period) | $2,575,960 | $2,781,977 | | Total Equity (End of Period) | $3,296,318 | $3,361,134 | | Net income (loss) attributable to TPG Inc. | $15,519 | N/A | | Equity-based compensation | $37,285 | N/A | | Dividends/distributions | $(40,358) | N/A | | Exchange of Common Units to TPG Inc. Class A Common stock | $16,555 | N/A | - A significant exchange of 17,704,987 Common Units for an equal number of Class A Common Stock occurred, leading to an increase in Class A shares and a decrease in Class B shares23268 Condensed Consolidated Statements of Cash Flows Net cash from operating activities significantly increased to $436.7 million in Q1 2024, while investing activities used $25.3 million, and financing activities provided $14.3 million Key Cash Flow Activities | Cash Flow Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Net cash provided by operating activities | $436,713 | $35,800 | | Net cash used in investing activities | $(25,341) | $(896) | | Net cash provided by (used in) financing activities | $14,297 | $(210,331) | | Net change in cash, cash equivalents and restricted cash | $425,669 | $(175,427) | | Cash, cash equivalents and restricted cash, end of period | $1,104,040 | $945,223 | Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering organization, accounting policies, acquisitions, investments, debt, and equity Note 1. Organization TPG Inc. operates as a leading global alternative asset manager, consolidating various entities, and held approximately 28% of the TPG Operating Group's Common Units - TPG Inc. is a leading global alternative asset manager, consolidating various entities including management companies and general partners of pooled investment entities31 - As of March 31, 2024, TPG Inc. held approximately 28% of the outstanding Common Units of the TPG Operating Group32 Note 2. Summary of Significant Accounting Policies This note outlines TPG's accounting practices, including U.S. GAAP adherence, VIE/VOE consolidation, revenue recognition for fees and capital allocation-based income, and investment valuation - Financial statements are prepared in accordance with U.S. GAAP, requiring management estimates and assumptions3337 - TPG consolidates Variable Interest Entities (VIEs) where it is the primary beneficiary and Voting Interest Entities (VOEs) it controls through a majority voting interest404344 - Revenue streams include management fees, monitoring fees, transaction fees, incentive fees, and expense reimbursements (accounted for under ASC 606), and capital allocation-based income (accounted for under equity method)6576 Revenue by Type | Revenue Type | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Management fees | $407,417 | $250,000 | | Monitoring fees | $6,108 | $2,756 | | Transaction fees | $36,186 | $2,473 | | Incentive fees | $3,875 | $0 | | Expense reimbursements and other | $58,709 | $56,242 | | Performance allocations | $289,643 | $315,707 | | Capital interests | $22,133 | $15,967 | Note 3. Acquisitions TPG acquired Angelo Gordon on November 1, 2023, for $1.14 billion, expanding into credit and real estate, and recognizing $205.9 million in goodwill - TPG completed the acquisition of Angelo Gordon on November 1, 2023, expanding into credit and real estate investing130 Angelo Gordon Purchase Price Components | Purchase Price Component | Amount (in thousands) | | :-------------------------------- | :-------------------- | | Cash | $740,703 | | Amounts payable to seller | $15,677 | | Common Units | $233,894 | | Fair value of Aggregate Annual Cash Holdback Amount | $125,158 | | Fair value of Earnout Payment | $27,315 | | Total Purchase Price | $1,142,747 | - The acquisition resulted in $205.9 million of goodwill, primarily attributed to scale, skill sets, operations, and expected synergies137138 Note 4. Investments TPG's investments include equity method and