Blackstone Inc. · NYSE:BX
Blackstone — Q4 2012 Earnings Presentation
33 slides from Blackstone's earnings presentation, Jan 31, 2013
Slide 1: Blackstone's Full Year and Fourth Quarter 2012 Earnings
Exhibit 99.2 Blackstone’s Full Year and Fourth Quarter 2012 Earnings January 31, 2013
Slide 2: Blackstone's Full Year and Fourth Quarter 2012 Highlights
Blackstone’s Full Year and Fourth Quarter 2012 Highlights Economic Net Income (“ENI”) was up 30% in 2012 to nearly $2 billion, or $1.77 per unit, the highest full year total since going public, on strong revenue growth to over $4 billion. • Fourth quarter ENI of $670 million was driven by sustained
Slide 3: Blackstone's Fourth Quarter and Full Year 2012 Earnings
Blackstone’s Fourth Quarter and Full Year 2012 Earnings % Change % Change (Dollars in Thousands, Except per Unit Data) 4Q'11 4Q'12 vs. 4Q'11 FY'11 FY'12 vs. FY'11 Fee Revenues $ 511,335 $ 646,903 27% $ 1,923,804 $ 2,186,765 14% Performance Fees 357,950 470,173 31% 1,174,526 1,593,765 36% Investment
Slide 4: Walkdown of Financial Metrics
Walkdown of Financial Metrics 4Q'12 FY'12 (a) (a) (Dollars in Thousands, Except per Unit Data) Results Per Unit Results Per Unit Base Management Fees $ 416,465 $ 1,591,403 Advisory Fees 128,248 357,417 Transaction and Other Fees, Net 94,069 227,119 Management Fee Offsets (11,476) (40,953) Interest I
Slide 5: Private Equity
Private Equity Revenues were up 43% to $828 million in 2012 driven by sharp increases in Performance Fees and Investment Income, resulting in $412 million of Economic Income, up 71% from 2011. Overall carrying value of segment portfolio assets (a) was up 7.0% for the quarter and 14.3% for the full y
Slide 6: Real Estate
Real Estate Revenues for the year were up 3% from 2011 driven by a 22% increase in Fee Revenues resulting primarily from Base Management Fees generated by the final close for our latest global fund, which reached $13.3 billion in total fund commitments. BREP investments (a) were up 3.7% for the quar
Slide 7: Hedge Fund Solutions
Hedge Fund Solutions Revenues were up 36% for the year driven by a substantial increase in Performance Fees due to strong fund performance as investors sought stable risk-adjusted returns. Composite returns (a) were up 2.2% net for the quarter and up 8.6% net for the full year. • As of year-end, $18
Slide 8: Credit
Credit Economic Income for the year was up 130% to a record $325 million reflecting substantial increases in Fee Revenues and Performance Fees as inflows and returns continued to outperform the market. Total AUM grew 53% during the year to a record $56.4 billion, driven by new product launches, stro
Slide 9: Financial Advisory
Financial Advisory Collectively, the firm’s advisory businesses outperformed the broader market which saw sharp declines in 2012. Revenues for the quarter were up 4% from the same period a year ago and were down 6% for the year primarily from delays in deal closings, particularly in our Park Hill pl
Slide 10: Assets Under Management
Assets Under Management Fee-Earning AUM was up 23% in 2012 to $168 billion, as $42.7 billion of gross inflows and $4.8 billion of market appreciation more than offset $16.4 billion of outflows and realizations. • Including commitments, not yet earning fees, Fee-Earning AUM was $180 billion, up 32% f
Slide 11: 4Q'12 Available Capital Summary
4Q’12 Available Capital Summary Maintained substantial levels of committed undrawn capital (“dry powder”) with $35 billion at year end. $12 billion of Total AUM was not yet earning Base Management Fees at year end due largely to fund structures with fees that are triggered by the investment of capit
Slide 12: Distribution Calculation
Distribution Calculation Earned $0.39 of Distributable Earnings per common unit during the fourth quarter, bringing full year Distributable Earnings to $0.85 per common unit, up 42% year-over-year. Declared a quarterly distribution of $0.42 per common unit to record holders as of February 11, 2013;
Slide 13: Balance Sheet Highlights
(a) Balance Sheet Highlights At December 31, 2012, Blackstone had $2.3 billion in total cash and liquid investments. In total, Blackstone had $6.7 billion or $5.95 per unit in cash and investments at quarter end. There are currently no borrowings outstanding against the $1.1 billion revolving credit
Slide 14: GAAP Statement of Operations
GAAP Statement of Operations % Change % Change (Dollars in Thousands, Except per Unit Data) (Unaudited) 4Q'11 4Q'12 vs. 4Q'11 FY'11 FY'12 vs. FY'11 Revenues Management and Advisory Fees, Net $ 475,779 $ 601,860 26% $ 1,811,750 $ 2,030,693 12% Performance Fees Realized Carried Interest 12,387 174,168
Slide 15: Appendix
Appendix
Slide 16: Total Segments
Total Segments % Change (Dollars in Thousands) 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 FY'11 FY'12 vs. FY'11 Revenues Management and Advisory Fees, Net Base Management Fees $ 336,753 $ 395,506 $ 381,344 $ 398,088 $ 416,465 $ 1,281,185 $ 1,591,403 24% Advisory Fees 123,567 75,846 93,372 59,951 128,248 382,240
Slide 17: Private Equity
Private Equity % Change (Dollars in Thousands) 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 FY'11 FY'12 vs. FY'11 Revenues Management Fees, Net Base Management Fees $ 84,231 $ 85,789 $ 87,475 $ 86,136 $ 89,194 $ 331,997 $ 348,594 5% (a) Transaction and Other Fees,Net 23,879 18,097 14,951 25,693 41,339 133,004 100,
Slide 18: Real Estate
Real Estate % Change (Dollars in Thousands) 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 FY'11 FY'12 vs. FY'11 Revenues Management Fees, Net Base Management Fees $ 103,947 $ 147,802 $ 127,817 $ 135,659 $ 140,044 $ 394,778 $ 551,322 40% (a) Transaction and Other Fees, Net 19,128 14,412 25,151 14,937 31,181 109,510
Slide 19: Hedge Fund Solutions
Hedge Fund Solutions % Change (Dollars in Thousands) 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 FY'11 FY'12 vs. FY'11 Revenues Management Fees, Net Base Management Fees $ 81,606 $ 81,821 $ 84,278 $ 87,334 $ 92,777 $ 315,863 $ 346,210 10% (a) Transaction and Other Fees,Net 470 92 65 4 27 2,798 188 (93)% (b) Manag
Slide 20: Credit
Credit % Change (Dollars in Thousands) 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 FY'11 FY'12 vs. FY'11 Revenues Management Fees, Net Base Management Fees $ 66,969 $ 80,094 $ 81,774 $ 88,959 $ 94,450 $ 238,547 $ 345,277 45% (a) 312 5,725 9,184 4,486 21,480 1,880 40,875 n/m Transaction and Other Fees, Net (b) (20
Slide 21: Financial Advisory
Financial Advisory % Change (Dollars in Thousands) 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 FY'11 FY'12 vs. FY'11 Revenues Advisory Fees 123,567 75,846 93,372 59,951 128,248 382,240 357,417 (6)% Transaction and Other Fees, Net 7 145 102 6 42 321 295 (8)% Total Advisory and Transaction Fees 123,574 75,991 93,47
Slide 22: Fee-Earning AUM Net Flows
Fee-Earning AUM Net Flows Fee-Earning AUM was up $31 billion or 23% from a year ago driven mainly by continued strong net inflows and to a lesser extent market appreciation. The fourth quarter saw an increase in exit activity with realizations exceeding half of the full year’s amount. Private Equity
Slide 23: Total AUM Net Flows
Total AUM Net Flows Total AUM was up $44 billion or 26% for the year driven by strong net inflows and market appreciation across all of Blackstone’s investment segments. Realization activity continued to improve and we returned $9.3 billion to our investors during the quarter and $18.5 billion durin
Slide 24: Net Accrued Performance Fees and Carried Interest Status
Net AccruedPerformanceFeesandCarriedInterestStatus(a) Blackstone had $2.2 billion of accrued performance fees, net of performance fee compensation, as of year end. BCP V and BREP Int’l II were below their respective carried interest thresholds as of year end. Carried Interest Status (excl. (d) SBS)
Slide 25: Investment Records as of December 31, 2012
InvestmentRecordsasof December31, 2012(a) (d) Committed Available Unrealized Investments Realized Investments Total Investments Net IRRs (Dollars in Thousands, Except Where Noted) Capital Capital(b) Value MOIC(c) % Public Value MOIC(c) Value MOIC(c) Realized Total Private Equity BCP I (Oct 1987 / Oc
Slide 26: Investment Records as of December 31, 2012 – Notes
Investment Records as of December 31, 2012 – Notes The returns presented herein represent those of the applicable Blackstone Funds and not those of The Blackstone Group L.P. n/m Not meaningful. n/a Not applicable. (a) Preliminary. (b) Available Capital represents total investable capital commitments
Slide 27: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Dollars in Thousands) 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 FY'11 FY'12 Net Income (Loss) Attributable to The Blackstone Group L.P. $ (22,677) $ 58,325 $ (74,964) $ 128,824 $ 106,413 $ (168,303) $ 218,598 Net Income (Loss) Attributable to Non-Controlling Interest
Slide 28: Reconciliation of GAAP to Non-GAAP Measures – Notes
Reconciliation of GAAP to Non-GAAP Measures – Notes Note: Prior period amounts have been adjusted to conform to the current period presentation and definitions. See also Appendix – Definitions. (a) This adjustment adds back to Income (Loss) Before Provision (Benefit) for Taxes amounts for Transactio
Slide 29: Calculation of Certain Non-GAAP Financial Metric Components
Calculation of Certain Non-GAAP Financial Metric Components (Dollars in Thousands) 4Q'12 FY'12 Interest Income and Dividend Revenue $ 14,890 $ 46,630 Other Revenue 4,707 5,149 InvestmentIncome - Blackstone'sTreasuryCashManagementStrategies (a) 4,690 25,769 Interest Income and Other Revenue $ 24,287
Slide 30: Unit Rollforward
Unit Rollforward 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 FY'11 FY'12 Total GAAP Weighted-Average Common Units Outstanding -Basic 490,511,637 506,985,529 528,778,977 544,716,399 553,989,577 475,582,718 533,703,606 Adjustments: Weighted-Average Unvested Deferred Restricted Common Units - 10,404,029 - 2,207,204
Slide 31: Distribution Policy
Distribution Policy For 2013, Blackstone’s intention is to distribute to common unitholders each quarter substantially all of its Net Cash Available for Distribution to Common Unitholders, subject to a base quarterly distribution of $0.12 per unit. Net Cash Available for Distribution to Common Unith
Slide 32: Definitions
Definitions Blackstone discloses the following financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America (“non-GAAP”) in this presentation: • Blackstone uses Economic Incom
Slide 33: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which reflect Blackstone’s current views with respect to, among other things, Blackstone’s operat