Slide 1: Blackstone's Third Quarter 2012 Earnings
Exhibit 99.2 Blackstone’s Third Quarter 2012 Earnings October 18, 2012
Slide 2: Blackstone's Third Quarter 2012 Highlights
Blackstone’s Third Quarter 2012 Highlights $622 million of Economic Net Income (“ENI”) was our third best quarter since going public. $1.3 billion of year-to-date ENI, a record, up 24% from the same period last year. GAAP net income was $129 million in the quarter net of non-cash IPO related expense
Slide 3: Blackstone's Third Quarter 2012 Earnings
Blackstone’s Third Quarter 2012 Earnings % Change % Change (Dollars in Thousands, Except per Unit Data) 3Q'11 3Q'12 vs. 3Q'11 YTD'11 YTD'12 vs. YTD'11 Fee Revenues $ 451,082 $ 509,192 13% $ 1,412,469 $ 1,539,862 9% Performance Fees (457,279) 602,999 n/m 816,576 1,123,592 38% Investment Income (Loss)
Slide 4: Walkdown of Financial Metrics
Walkdown of Financial Metrics 3Q'12 YTD'12 (a) (a) (Dollars in Thousands, Except per Unit Data) Results Per Unit Results Per Unit Base Management Fees $ 398,088 $ 1,174,938 Transaction and Other Fees, Net 45,126 133,050 Advisory Fees 59,951 229,169 Management Fee Offsets (8,454) (29,477) Interest In
Slide 5: Private Equity
Private Equity Revenues were up substantially year-over-year driven by an increase in Performance Fees and Investment Income. • Overall carrying value of assets was up 7.1% for the quarter with appreciation across all contributed funds. • Improved market conditions drove the segment’s public holding
Slide 6: Real Estate
Real Estate Revenues for the quarter were up materially from last year driven by a significant increase in Performance Fees reflecting the continued improvement of operating fundamentals across our office, retail and hotel portfolios. • Real Estate investments of $34.0 billion were up 4.9% for the q
Slide 7: Hedge Fund Solutions
Hedge Fund Solutions Revenues more than doubled from the year ago quarter driven by 17% Fee-Earning AUM growth and fund performance. Composite returns (a) were up 3.3% net for the quarter and up 6.2% net year-to-date. • As of quarter-end, $18.5 billion or 77% of Incentive Fee-Earning AUM was estimat
Slide 8: Credit
Credit Revenues for the quarter were up reflecting a significant increase in Performance Fees. Total AUM grew 8% during the quarter and 62% from the prior year to a record $55 billion driven by new product launches, strong net inflows, market appreciation and the Harbourmaster acquisition in the fir
Slide 9: Financial Advisory
Financial Advisory Revenues were down 29% from the same quarter last year primarily from delays in deal closings, particularly in our strategic advisory business. Despite the slow quarter, activity levels remained largely in line with last year. Restructuring maintained its #1 ranking for worldwide
Slide 10: Assets Under Management
Assets Under Management Fee-Earning AUM grew to a record $169 billion, up 27% in the last twelve months, as $43 billion of gross inflows more than offset $11 billion of capital returned to investors during the same period. • Including commitments, not yet earning fees, Blackstone’s Fee-Earning AUM w
Slide 11: 3Q'12 Available Capital Summary
3Q’12 Available Capital Summary Substantial levels of committed undrawn capital (“dry powder”) with $36 billion at the end of the third quarter. $10 billion of Total AUM was not yet earning base management fees at the end of the quarter due largely to fund structures where fees are triggered by the
Slide 12: Distribution Calculation
Distribution Calculation Earned $0.15 of Distributable Earnings per common unit during the third quarter, bringing year-to-date Distributable Earnings to $0.46 per common unit. Declared a quarterly distribution of $0.10 per common unit to record holders as of November 15, 2012; payable on November 3
Slide 13: Balance Sheet Highlights
(a) Balance Sheet Highlights At September 30, 2012, Blackstone had $2.3 billion in total cash and liquid investments. In total, Blackstone had $6.4 billion or $5.66 per unit in cash and investments at quarter end. In August, Blackstone issued senior notes of $400 million (4.75%) due 2023 and $250 mi
Slide 14: GAAP Statement of Operations
GAAP Statement of Operations % Change % Change (Dollars in Thousands, Except per Unit Data) (Unaudited) 3Q'11 3Q'12 vs. 3Q'11 YTD'11 YTD'12 vs. YTD'11 Revenues Management and Advisory Fees, Net $ 425,193 $ 469,109 10% $ 1,335,971 $ 1,428,833 7% Performance Fees Realized Carried Interest (9,633) 83,7
Slide 15: Appendix
Blackstone
Slide 16: Total Segments
Total Segments (Dollars in Thousands) 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 YTD'11 YTD'12 Revenues Management and Advisory Fees, Net Base Management Fees $ 322,371 $ 336,753 $ 395,506 $ 381,344 $ 398,088 $ 944,432 $ 1,174,938 Advisory Fees 86,178 123,567 75,846 93,372 59,951 258,673 229,169 (a) Transaction
Slide 17: Private Equity
Private Equity (Dollars in Thousands) 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 YTD'11 YTD'12 Revenues Management Fees, Net Base Management Fees $ 85,534 $ 84,231 $ 85,789 $ 87,475 $ 86,136 $ 247,766 $ 259,400 (a) Transactionand Other Fees,Net 21,430 23,879 18,097 14,951 25,693 109,125 58,741 ManagementFeeOffse
Slide 18: Real Estate
Real Estate (Dollars in Thousands) 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 YTD'11 YTD'12 Revenues Management Fees, Net Base Management Fees $ 97,925 $ 103,947 $ 147,802 $ 127,817 $ 135,659 $ 290,831 $ 411,278 Transaction and Other Fees, Net (a) 19,551 19,128 14,412 25,151 14,937 90,382 54,500 (b) Management F
Slide 19: Hedge Fund Solutions
Hedge Fund Solutions (Dollars in Thousands) 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 YTD'11 YTD'12 Revenues Management Fees, Net Base Management Fees $ 79,355 $ 81,606 $ 81,821 $ 84,278 $ 87,334 $ 234,257 $ 253,433 (a) Transaction and Other Fees, Net 740 470 92 65 4 2,328 161 (b) Management Fee Offsets (258) (
Slide 20: Credit
Credit (Dollars in Thousands) 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 YTD'11 YTD'12 Revenues Management Fees, Net Base Management Fees (a) $ 59,557 $ 66,969 $ 80,094 $ 81,774 $ 88,959 $ 171,578 $ 250,827 Transaction and Other Fees, Net (26) 312 5,725 9,184 4,486 1,568 19,395 Management Fee Offsets (b) (67) (2
Slide 21: Financial Advisory
Financial Advisory (Dollars in Thousands) 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 YTD'11 YTD'12 Revenues Advisory Fees $ 86,178 $ 123,567 $ 75,846 $ 93,372 $ 59,951 $ 258,673 $ 229,169 Transaction and Other Fees, Net 98 7 145 102 6 314 253 Total Advisory and Transaction Fees 86,276 123,574 75,991 93,474 59,95
Slide 22: Fee-Earning AUM Net Flows
Fee-Earning AUM Net Flows Fee-Earning AUM was up $11 billion or 7% from last quarter and up $35.7 billion or 27% from a year ago driven mainly by net inflows across the segments and to a lesser extent market appreciation. Private Equity includes our new tactical opportunities fund as well as our ene
Slide 23: Total AUM Net Flows
Total AUM Net Flows Total AUM was up $14.3 billion or 8% from last quarter and up $46.9 billion or 30% from a year ago driven by strong net inflows and market appreciation across the segments. Private Equity market appreciation was $3.2 billion over the last year, driven mainly by positive performan
Slide 24: Net Accrued Performance Fees and Carried Interest Status
Net AccruedPerformanceFeesandCarriedInterestStatus(a) Blackstone had $2 billion of accrued performance fees, net of compensation, as of the end of the third quarter. BCP V and BREP Int’l II were below their respective carried interest thresholds as of quarter-end. (d) Carried Interest Status (excl.
Slide 25: Investment Records as of September 30, 2012
InvestmentRecordsasof September30, 2012(a) Committed Available Unrealized Investments Realized Investments Total Investments (d) 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 / O
Slide 26: Investment Records as of September 30, 2012 – Notes
InvestmentRecordsasof September30, 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, i
Slide 27: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Dollars in Thousands) 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 YTD'11 YTD'12 Net Income (Loss) Attributable to The Blackstone Group L.P. $ (274,567) $ (22,677) $ 58,325 $ (74,964) $ 128,824 $ (145,626) $ 112,185 Net Income (Loss) Attributable to Non-Controlling Inte
Slide 28: Reconciliation of GAAP to Non-GAAP Measures – Notes
Reconciliation of GAAPto Non-GAAPMeasures– 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 Transaction-R
Slide 29: Calculation of Certain Non-GAAP Financial Metric Components
Calculation of Certain Non-GAAP Financial Metric Components (Dollars in Thousands) 3Q'12 YTD'12 Interest Income and Dividend Revenue $ 12,004 $ 31,740 Other Revenue 2,477 442 InvestmentIncome - Blackstone'sTreasuryCashManagementStrategies(a) 12,877 21,079 Interest Income and Other Revenue $ 27,358 $
Slide 30: Unit Rollforward
Unit Rollforward 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 YTD'11 YTD'12 Total GAAPWeighted-AverageCommonUnits Outstanding - Basic 487,189,657 490,511,637 506,985,529 528,778,977 544,716,399 470,551,727 526,892,258 Adjustments: Weighted-Average Unvested Deferred Restricted Common Units - - 10,404,029 - 2,207,20
Slide 31: 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 32: 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