Form 8-K Blackstone Group Inc For: Jul 18

July 18, 2019 6:56 AM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 18, 2019

The Blackstone Group Inc.

(Exact name of Registrant as specified in its charter)


Delaware *(State or other jurisdiction of* *incorporation)*	001-33551 *(Commission File Number)*	20-8875684 *(I.R.S. Employer* *Identification No.)*

345 Park Avenue New York, New York *(Address of principal executive offices)*		10154 *(Zip Code)*

(212) 583-5000

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Class A Common Stock

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 18, 2019, The Blackstone Group Inc. issued a press release and detailed presentation announcing financial results for its second quarter ended June 30, 2019.

The press release is attached hereto as Exhibit 99.1. All information in the press release is furnished but not filed.

Item 9.01 Financial Statements and Exhibits.

(d)

Exhibits.


Exhibit No.		Description
	99.1	Press release of The Blackstone Group Inc. dated July 18, 2019.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 18, 2019


The Blackstone Group Inc.



By:		/s/ Michael S. Chae
Name:		Michael S. Chae
Title:		Chief Financial Officer

Exhibit 99.1

LOGO

Blackstone Reports Second Quarter 2019 Results

New York, July 18, 2019: Blackstone (NYSE: BX) today reported its second quarter 2019 results.

Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, “Blackstone’s strong second-quarter results were highlighted by $45 billion of new capital inflows from our limited partners. Total Assets Under Management rose to a record $545 billion, up 24% year over year, driven by an unprecedented $151 billion of inflows over the last twelve months and positive investment performance. These results reflect the enormous confidence our firm has earned with global investors through decades of delivering strong performance and innovation. We marked the firm’s final quarter as a publicly-traded partnership, culminating in our transition to a corporation as of July 1. Investor reception to the conversion has been exceedingly positive, and we are beginning to see the benefits of having a vastly larger universe of potential shareholders.”

Blackstone issued a full detailed presentation of its second quarter 2019 results, which can be viewed at www.blackstone.com.

Dividend

Blackstone has declared a quarterly dividend of $0.48 per common share to record holders of common shares at the close of business on July 29, 2019. This dividend will be paid on August 5, 2019.

Quarterly Investor Call Details

Blackstone will host a conference call on July 18, 2019 at 9:00 a.m. ET to discuss second quarter 2019 results. The conference call can be accessed via the Shareholders section of Blackstone’s website at www.blackstone.com or by dialing +1 (877) 391-6747 (U.S. domestic) or +1 (617) 597-9291 (international), passcode 149 943 55#. For those unable to listen to the live broadcast, a replay will be available on www.blackstone.com or by dialing +1 (888) 286-8010 (U.S. domestic) or +1 (617) 801-6888 (international), passcode 109 924 29#.

About Blackstone

Blackstone is one of the world’s leading investment firms. We seek to create positive economic impact and long-term value for our investors, the companies in which we invest, and the communities in which we work. We do this by using extraordinary people and flexible capital to help companies solve problems. Our businesses, with $545 billion in assets under management, include investment vehicles focused on private

The Blackstone Group Inc.

345 Park Avenue

New York, New York 10154

T 212 583 5000

equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. Further information is available at www.blackstone.com. Follow Blackstone on twitter @Blackstone.

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 our current views with respect to, among other things, our operations, taxes, earnings and financial performance, share repurchases and dividends. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

This presentation does not constitute an offer of any Blackstone Fund.

Investor and Media Relations Contacts

Joan Solotar

Blackstone

Tel: +1 (212) 583-5068

[email protected]

Weston Tucker

Blackstone

Tel: +1 (212) 583-5231

[email protected]

Christine Anderson

Blackstone

Tel: +1 (212) 583-5182

[email protected]

July 18, 2019

Blackstone’s Second Quarter 2019 Earnings

Blackstone

Blackstone’s Second Quarter 2019 GAAP Results

GAAP

Net

Income

was

$647

million

for

the

quarter

and

$1.7

billion

year-to-date.

GAAP

Net

Income

Attributable

The

Blackstone

Group

L.P.

was

$306

million

for

the

quarter

and

$787

million

year-to-date.

Income Before Provision for Taxes Margin is calculated by dividing Income Before Provision for Taxes by Total Revenues. Effective July 1, 2019, The Blackstone Group L.P. converted

from

Delaware

limited

partnership

Delaware

corporation,

The

Blackstone

Group

Inc.

(the

“Conversion”).

This

presentation

includes

results

for

The

Blackstone

Group

L.P.

prior

the

Conversion

and

for

the

quarter

ended

June

30,

2019.

any

time

prior

the

Conversion,

references

“Blackstone,”

“the

Company,”

“our”

and

similar

terms

mean

The

Blackstone Group L.P. and its consolidated subsidiaries and, as of any time after the Conversion, The Blackstone Group Inc. and its consolidated subsidiaries.

(Dollars in Thousands, Except per Unit Data) (Unaudited)

2Q'18

2Q'19

2Q'18 YTD

2Q'19 YTD

2Q'17 LTM

2Q'18 LTM

2Q'19 LTM

Revenues

Management and Advisory Fees, Net

721,384

840,378

1,450,233

1,650,104

2,575,989

2,865,214

3,227,667

Incentive Fees

19,378

21,915

31,944

34,047

179,504

187,644

59,643

Investment Income (Loss)

Performance Allocations

Realized

503,376

332,520

773,016

574,895

2,654,741

2,630,260

1,678,386

Unrealized

440,351

157,732

1,068,440

821,731

349,657

992,056

314,664

Principal Investments

Realized

129,197

145,040

171,342

218,301

602,103

430,709

462,821

Unrealized

103,468

(37,345)

215,242

131,699

806

290,760

(33,626)

Total Investment Income

1,176,392

597,947

2,228,040

1,746,626

3,607,307

4,343,785

2,422,245

Interest and Dividend Revenue

40,073

43,686

75,458

87,770

112,561

152,956

184,259

Other

675,343

(17,120)

616,026

(6,870)

(11,446)

546,673

49,421

Total Revenues

2,632,570

1,486,806

4,401,701

3,511,677

6,463,915

8,096,272

5,943,235

Expenses

Compensation and Benefits

Compensation

427,479

438,521

816,882

909,918

1,352,773

1,540,575

1,702,993

Incentive Fee Compensation

9,743

8,886

16,405

14,292

83,870

78,187

31,803

Performance Allocations Compensation

Realized

186,398

125,825

298,460

212,220

880,435

1,018,209

624,836

Unrealized

189,991

64,518

444,426

351,533

316,754

453,777

226,849

Total Compensation and Benefits

813,611

637,750

1,576,173

1,487,963

2,633,832

3,090,748

2,586,481

General, Administrative and Other

145,828

175,308

272,541

321,370

508,616

532,185

643,702

Interest Expense

39,320

43,596

77,991

85,598

159,755

194,142

171,597

Fund Expenses

17,622

5,586

72,607

8,473

112,105

131,649

14,352

Total Expenses

1,016,381

862,240

1,999,312

1,903,404

3,414,308

3,948,724

3,416,132

Other Income

Reduction of Tax Receivable Agreement Liability

403,855

Net Gains from Fund Investment Activities

73,519

61,131

184,118

191,456

311,091

329,529

199,060

Income Before Provision for Taxes

1,689,708

685,697

2,586,507

1,799,729

3,360,698

4,880,932

2,726,163

Provision for Taxes

138,731

38,736

193,226

79,891

162,846

849,328

136,055

Net Income

1,550,977

646,961

2,393,281

1,719,838

3,197,852

4,031,604

2,590,108

Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities

905

1,095

(370)

3,575

15,418

10,445

1,841

Net Income Attributable to Non-Controlling Interests in Consolidated Entities

129,078

80,744

284,577

267,577

392,966

530,387

341,878

Net Income Attributable to Non-Controlling Interests in Blackstone Holdings

678,952

259,330

999,160

661,590

1,319,656

1,698,800

1,027,419

Net Income Attributable to The Blackstone Group L.P. ("BX")

742,042

305,792

1,109,914

787,096

1,469,812

1,791,972

1,218,970

Net Income per Common Unit, Basic

1.09

0.45

1.64

1.17

2.25

2.66

1.80

Net Income per Common Unit, Diluted

1.09

0.45

1.63

1.16

2.22

2.66

1.79

Income Before Provision for Taxes Margin

64.2%

46.1%

58.8%

51.2%

52.0%

60.3%

45.9%

Blackstone

Blackstone’s Second Quarter 2019 Highlights

The changes in carrying value, fund returns and composite returns presented throughout this presentation represent those of the applicable Blackstone Funds and not those of

Blackstone. Common shares repurchased includes shares for which trades were executed in the second quarter and settlement occurred in the third quarter. All references to shares or

per share amounts prior to the Conversion refer to Units or per Unit amounts. See pages 33-34, Definitions and Dividend Policy, for definitions of terms used throughout this presentation.

Financial

Measures

Fee Related Earnings (“FRE”) of $422 million ($0.35/share) in the quarter, up 24%

year-

over-year

•

FRE was $796 million year-to-date ($0.66/share), up 18% year-over-year

Distributable Earnings (“DE”) of $709 million ($0.57/share) in the quarter, up 1% year-

over-year

•

DE was $1.2 billion year-to-date ($1.01/share), up 4% year-over-year

Net Accrued Performance Revenues receivable of $4.0 billion ($3.39/share), up 4% year-

over-year

Capital

Metrics

Total Assets Under Management (“AUM”) of $545.5 billion, up 24% year-over-year

Inflows of $45.1 billion in the quarter and a record $150.7 billion for the LTM

Realizations of $10.6 billion in the quarter and $38.4 billion for the LTM

Deployment of $18.3 billion in the quarter and a record $56.3 billion for the LTM

Shareholder

Dividends

Dividend of $0.48 per common share payable on August 5, 2019

•

Dividends of $0.85 per common share year-to-date

Repurchased 7.0 million common shares in the quarter and 22.3 million common shares

for the LTM

•

Increased share repurchase authorization to $1.0 billion

Nearly $900 million distributed with respect to the second quarter to shareholders through

dividends and share repurchases

Corporate

Structure

Completed the conversion to a corporation on July

2019

Blackstone

Blackstone’s Second Quarter 2019 Segment Earnings

Fee Related Earnings per Share is based on end of period DE Shares Outstanding (see page 24, Share Summary). DE per Common Share is based on DE Attributable to Common

Shareholders (see page 23, Shareholder Dividends) and end of period Participating Common Shares outstanding. YTD per Share amounts represent the sum of the last two quarters. See

pages 31-32 for the Reconciliation of GAAP to Total Segment Measures.

% Change

(Dollars in Thousands, Except per Share Data)

2Q'18

2Q'19

vs. 2Q'18

2Q'18 YTD

2Q'19 YTD

vs. 2Q'18 YTD

Management and Advisory Fees, Net

722,994

844,156

17%

1,459,038

1,658,218

14%

Fee Related Performance Revenues

45,515

13,624

(70)%

49,352

21,403

(57)%

Fee Related Compensation

(306,243)

(293,834)

(4)%

(602,317)

(617,865)

Other Operating Expenses

(122,466)

(142,121)

16%

(229,558)

(265,432)

16%

Fee Related Earnings

339,800

421,825

24%

676,515

796,324

18%

FRE per Share

0.28

0.35

25%

0.56

0.66

18%

Realized Performance Revenues

477,544

341,386

(29)%

755,915

588,155

(22)%

Realized Performance Compensation

(172,894)

(125,466)

(27)%

(287,723)

(210,706)

(27)%

Realized Principal Investment Income

94,647

123,557

31%

123,340

149,465

21%

Net Realizations

399,297

339,477

(15)%

591,532

526,914

(11)%

Total Segment Distributable Earnings

739,097

761,302

1,268,047

1,323,238

Net Interest Income

2,842

2,761

(3)%

989

7,822

691%

Taxes and Related Payables

(41,797)

(55,201)

32%

(66,839)

(84,240)

26%

Distributable Earnings

700,142

708,862

1,202,197

1,246,820

DE per Common Share

0.56

0.57

0.97

1.01

Total Segment Revenues

1,340,700

1,322,723

(1)%

2,387,645

2,417,241

Total Assets Under Management

439,386,656

545,482,337

24%

439,386,656

545,482,337

24%

Fee-Earning Assets Under Management

332,978,145

387,864,642

16%

332,978,145

387,864,642

16%

Blackstone

Summary of Financials by Segment

Fee Related Earnings

(Dollars in Millions)

Performance

across

segments

generated

LTM

Fee

Earnings

$1.6

billion

and

LTM

Segment

Distributable

Earnings

$2.9

billion.

•

2Q’19

LTM

Distributable

Earnings

$2.7

billion.

Segment Distributable Earnings

(Dollars in Millions)

2Q’19 LTM Total: $1,576

2Q’19 LTM Total: $2,881

Real Estate

Private Equity

Hedge Fund Solutions

Credit

$652

$421

$297

$205

$1,216

$1,062

$339

$264

Blackstone

Fee Related Earnings

LTM

Fee

Earnings

$1.31

per

15%

year-over-year,

and

has

increased

30%

since

2Q’17

LTM.

LTM

Fee

Earnings

margin

increased

from

45.1%

47.3%

year-over-year,

and

has

increased

260

basis

points

since

2Q’17

LTM.

Fee Related Earnings

(Per Share)

Fee Related Earnings Margin

$1.01

$1.14

$1.31

2Q'17 LTM

2Q'18 LTM

2Q'19 LTM

FRE Margin is calculated by dividing Fee Related Earnings by Fee Related Revenues (defined as the sum of Total Segment Management and Advisory Fees, Net and Fee Related

Performance Revenues).

44.7%

45.1%

47.3%

2Q'17 LTM

2Q'18 LTM

2Q'19 LTM

Blackstone

2Q'19

2Q'19 LTM

Real Estate

Opportunistic Funds

4.4%

12.7%

Core+

0.8%

9.0%

Private Equity

Corporate Private Equity

0.7%

9.6%

Tactical Opportunities

1.3%

7.9%

Strategic Partners

(2.6)%

7.9%

Hedge Fund Solutions

BPS Composite

2.0%

4.8%

Credit

Performing Credit

3.7%

9.8%

Distressed

(2.1)%

(5.1)%

Investment Performance and Net Accrued Performance Revenues

Range

performance

across

strategies

the

quarter;

Net

Accrued

Performance

Revenues

were

$4.0

billion

($3.39/share),

year-over-year.

•

Appreciation

generated

$349

million

additional

Net

Accrued

Performance

Revenues,

offsetting

$162

million

Net

Realized

Distributions.

Net Accrued

Performance Revenues

(Dollars in Millions)

Investment Performance

(Appreciation / Gross Returns)

$3,872

$3,859

$4,044

$349

$162

2Q'18

1Q'19

Net Performance

Revenues

Net Realized

Distributions

2Q'19

Investment Performance represents fund appreciation for Real Estate and Private Equity and gross returns for Hedge Fund Solutions and Credit. Appreciation for core+ funds

excludes BREIT. BPS Composite net returns were 1.8% and 4.0% for 2Q’19 and 2Q’19 LTM, respectively. Performing Credit net returns were 2.8% and 6.9% for 2Q’19 and 2Q’19 LTM,

respectively. Distressed net returns were (2.5)% and (5.2)% for 2Q’19 and 2Q’19 LTM, respectively. Net Realized Distributions excludes Net Performance Revenues realized, but not

yet distributed as of the reporting date and included in the Net Accrued Performance Revenues balance.

Blackstone

Capital Metrics Activity

Inflows

were

$45.1

billion

the

quarter,

bringing

LTM

inflows

record

$150.7

billion.

•

Notable

inflows

the

quarter

include

$8.4

billion

for

the

initial

for

the

sixth

Real

Estate

European

opportunistic

fund

and

$7.2

billion

raised

for

Infrastructure,

bringing

the

Infrastructure

platform

$14.0

billion.

Realizations

were

$10.6

billion

the

quarter

and

$38.4

billion

for

the

LTM.

Deployed

$18.3

billion

the

quarter

and

$56.3

billion

for

the

LTM.

•

Committed

additional

$8.4

billion

during

the

quarter

that

not

yet

deployed.

(Dollars in Millions)

Private Equity includes Corporate Private Equity, Core Private Equity, Life Sciences, and BTAS.

Inflows

Realizations

Capital Deployed

2Q'19

2Q'19 LTM

2Q'19

2Q'19 LTM

2Q'19

2Q'19 LTM

Total Real Estate

14,365

42,130

3,990

14,729

3,933

16,807

Opportunistic

10,165

29,168

3,126

10,573

1,180

7,624

Core+

3,002

8,591

505

2,421

2,364

6,915

BREDS

1,198

4,371

359

1,735

389

2,268

Total Private Equity

16,807

62,101

4,679

15,717

8,529

25,745

Private Equity

2,448

32,267

2,866

10,093

3,506

10,001

Tactical Opportunities

822

7,033

1,191

2,992

1,793

5,173

Strategic Partners

6,348

13,412

621

2,632

3,203

8,069

Infrastructure

7,189

9,388

2,503

Hedge Fund Solutions

BAAM

3,813

12,724

296

773

2,102

3,136

Credit

GSO/BIS/Harvest

10,127

33,770

1,630

7,136

3,719

10,623

Total Blackstone

45,111

150,725

10,594

38,355

18,284

56,312

Real Estate

Private Equity

Blackstone

$23.4

$27.8

$3.8

$5.2

$4.7

$14.3

$32.4

$44.5

$64.3

$91.7

2Q'18

2Q'19

$94.3

$104.5

$71.9

$74.7

$78.0

$96.5

$88.8

$112.3

$333.0

$387.9

2Q'18

2Q'19

$123.1

$139.3

$77.4

$81.4

$119.5

$171.2

$119.4

$153.6

$439.4

$545.5

2Q'18

2Q'19

Assets Under Management

Total AUM increased to $545.5 billion, up 24% year-over-year, driven by $150.7 billion of inflows despite

$65.1

billion of realizations and outflows.

Fee-Earning AUM of $387.9 billion was up 16% year-over-year as $100.6 billion of inflows outpaced $52.0

billion

of realizations and outflows.

Perpetual Capital AUM reached $91.7 billion, up 43% year-over-year.

Fee-Earning AUM

(Dollars in Billions)

Total AUM

(Dollars in Billions)

Real Estate

Hedge Fund Solutions

Credit

Private Equity

Perpetual Capital AUM

(Dollars in Billions)

Blackstone

$39.0

$22.0

$25.5

$38.8

$42.7

$45.0

$40.6

$54.4

$62.3

$64.7

$78.6

$93.8

$183.1

$197.8

$226.6

2Q'17

2Q'18

2Q'19

Additional Capital Detail

Invested Performance Revenue Eligible AUM reached $226.6 billion at quarter end, up 15% year-over-year, and

has increased 24% since the second quarter of 2017.

Record

undrawn

capital

(“Total

Dry

Powder”)

available

for

investment

$150.3

billion,

driven

fundraising

activity

for

the

latest

flagship

funds.

Total Dry Powder

(Dollars in Billions)

2Q’19 Total: $150.3

Invested Performance Revenue

Eligible AUM

(Dollars in Billions)

Real Estate

Private Equity

Hedge Fund Solutions

Credit

Invested Performance Revenue Eligible AUM represents the fair value of invested assets that are eligible to earn performance revenues.

$45.1

$74.9

$2.4

$27.9

Segment Highlights

Blackstone

Real Estate

Appreciation for core+ funds excludes BREIT.

Total

AUM:

Increased

29%

record

$153.6

billion

with

inflows

$14.4

billion

the

quarter

and

$42.1

billion

for

the

LTM.

•

Held

$8.4

billion

initial

for

the

sixth

European

opportunistic

fund;

raised

$2.0

billion

BREIT

and

$1.4

billion

BREP

IX,

which

commenced

its

investment

period

June

3rd.

Realizations:

$4.0

billion

the

quarter

and

$14.7

billion

for

the

LTM;

realizations

the

quarter

included

two

secondary

sales

Invitation

Homes

and

the

sale

Boca

Resorts.

Capital

Deployed:

$3.9

billion

the

quarter

and

$16.8

billion

for

the

LTM;

deployment

the

quarter

included

the

acquisition

Seattle

office

portfolio

BPP

U.S.

and

Australian

office

portfolio

BREP.

•

Committed

additional

$6.1

billion

during

the

quarter

that

not

yet

deployed,

driven

the

acquisition

GLP’s

179

million

square

foot

U.S.

industrial

portfolio,

the

largest

ever

private

real

estate

transaction

globally.

Appreciation:

Opportunistic

funds

and

core+

funds

increased

4.4%

and

0.8%

the

quarter,

and

12.7%

and

9.0%

for

the

LTM,

respectively.

% Change

(Dollars in Thousands)

2Q'18

2Q'19

vs. 2Q'18

2Q'18 YTD

2Q'19 YTD

vs. 2Q'18 YTD

Management Fees, Net

269,754

277,940

517,700

561,816

Fee Related Performance Revenues

45,515

11,072

(76)%

50,018

17,748

(65)%

Fee Related Compensation

(120,783)

(97,795)

(19)%

(221,393)

(212,611)

(4)%

Other Operating Expenses

(36,026)

(40,114)

11%

(65,443)

(79,100)

21%

Fee Related Earnings

158,460

151,103

(5)%

280,882

287,853

Realized Performance Revenues

317,509

198,573

(37)%

468,690

275,755

(41)%

Realized Performance Compensation

(94,716)

(67,742)

(28)%

(150,831)

(97,642)

(35)%

Realized Principal Investment Income

50,199

47,420

(6)%

64,889

45,289

(30)%

Net Realizations

272,992

178,251

(35)%

382,748

223,402

(42)%

Segment Distributable Earnings

431,452

329,354

(24)%

663,630

511,255

(23)%

Segment Revenues

682,977

535,005

(22)%

1,101,297

900,608

(18)%

Total AUM

119,399,973

153,604,820

29%

119,399,973

153,604,820

29%

Fee-Earning AUM

88,776,501

112,287,094

26%

88,776,501

112,287,094

26%

Blackstone

Private Equity

Total

AUM:

Increased

43%

record

$171.2

billion

with

inflows

$16.8

billion

the

quarter

and

$62.1

billion

for

the

LTM.

•

Raised

$15.7

billion

capital

primarily

driven

Infrastructure

and

Strategic

Partners

the

quarter.

Realizations:

$4.7

billion

the

quarter,

including

the

sale

Cloverleaf,

and

$15.7

billion

for

the

LTM.

Capital

Deployed:

$8.5

billion

the

quarter

and

$25.7

billion

for

the

LTM,

including

the

acquisition

Ultimate

Software

and

Aadhar

the

quarter.

•

Committed

additional

$1.6

billion

during

the

quarter

that

not

yet

deployed,

including

Core

Private

Equity’s

investment

Merlin

Entertainments.

Appreciation:

Corporate

Private

Equity

increased

0.7%

the

quarter

driven

underlying

appreciation

the

private

portfolio,

partially

offset

decreases

the

public

portfolio

and

certain

energy

positions,

and

was

9.6%

for

the

LTM.

% Change

(Dollars in Thousands)

2Q'18

2Q'19

vs. 2Q'18

2Q'18 YTD

2Q'19 YTD

vs. 2Q'18 YTD

Management and Advisory Fees, Net

203,950

278,976

37%

394,812

530,699

34%

Fee Related Compensation

(94,170)

(105,107)

12%

(183,736)

(212,694)

16%

Other Operating Expenses

(36,047)

(40,429)

12%

(67,198)

(74,630)

11%

Fee Related Earnings

73,733

133,440

81%

143,878

243,375

69%

Realized Performance Revenues

138,171

122,907

(11)%

215,294

279,506

30%

Realized Performance Compensation

(68,513)

(52,081)

(24)%

(101,558)

(102,637)

Realized Principal Investment Income

32,600

42,906

32%

38,938

68,045

75%

Net Realizations

102,258

113,732

11%

152,674

244,914

60%

Segment Distributable Earnings

175,991

247,172

40%

296,552

488,289

65%

Segment Revenues

374,721

444,789

19%

649,044

878,250

35%

Total AUM

119,524,518

171,171,687

43%

119,524,518

171,171,687

43%

Fee-Earning AUM

78,045,697

96,467,272

24%

78,045,697

96,467,272

24%

Blackstone

Hedge Fund Solutions

Total

AUM:

Increased

record

$81.4

billion

with

inflows

$3.8

billion

the

quarter

and

$12.7

billion

for

the

LTM.

•

Increase

primarily

driven

platform

diversification,

well

appreciation

customized

strategies

and

individual

investor

and

specialized

solutions.

•

July

subscriptions

$1.1

billion

are

not

yet

included

Total

AUM.

Returns:

BPS

Composite

gross

returns

2.0%

the

quarter

(1.8%

net),

outperforming

net

basis

the

HFRX

Global

Return

Index

which

returned

1.6%.

•

Gross

returns

4.8%

for

the

LTM

(4.0%

net)

with

less

than

one

fifth

the

volatility

broader

markets,

outperforming

net

basis

the

HFRX

Global

Return

Index

which

returned

(2.0)%.

% Change

(Dollars in Thousands)

2Q'18

2Q'19

vs. 2Q'18

2Q'18 YTD

2Q'19 YTD

vs. 2Q'18 YTD

Management Fees, Net

130,365

137,713

259,938

275,359

Fee Related Compensation

(40,533)

(36,622)

(10)%

(80,172)

(79,576)

(1)%

Other Operating Expenses

(18,494)

(21,112)

14%

(37,279)

(38,997)

Fee Related Earnings

71,338

79,979

12%

142,487

156,786

10%

Realized Performance Revenues

7,270

11,960

65%

17,447

16,051

(8)%

Realized Performance Compensation

(2,546)

(2,175)

(15)%

(5,469)

(3,588)

(34)%

Realized Principal Investment Income

7,766

12,306

58%

8,406

12,023

43%

Net Realizations

12,490

22,091

77%

20,384

24,486

20%

Segment Distributable Earnings

83,828

102,070

22%

162,871

181,272

11%

Segment Revenues

145,401

161,979

11%

285,791

303,433

Total AUM

77,403,078

81,435,680

77,403,078

81,435,680

Fee-Earning AUM

71,889,290

74,653,420

71,889,290

74,653,420

The BPS Composite gross and net returns are based on the BAAM Principal Solutions (“BPS”) Composite, which does not include BAAM's individual investor solutions (liquid alternatives), ventures (seeding and minority

interests), strategic opportunities (co-invests), and advisory (non-discretionary) platforms, except for investments by BPS funds directly into those platforms. BAAM-managed funds in liquidation and non fee-paying assets

(net returns only) are also excluded. The funds/accounts that comprise the BPS Composite are not managed within a single fund or account and are managed with different mandates. There is no guarantee that BAAM would

have made the same mix of investments in a stand-alone fund/account. The BPS Composite is not an investible product and, as such, the performance of the BPS Composite does not represent the performance of an actual

fund or account.

Blackstone

Credit

Total

AUM:

Increased

13%

$139.3

billion

with

inflows

$10.1

billion

the

quarter

and

$33.8

billion

for

the

LTM.

•

Concluded

fundraising

for

the

second

energy

credit

fund

strategy

and

held

the

second

for

the

second

European

senior

debt

fund

strategy

the

quarter.

•

Fundraising

the

quarter

brought

Total

AUM

for

U.S.

direct

lending

strategies

$9.7

billion.

•

the

quarter,

Insurance

Solutions

had

$5.5

billion

gross

inflows,

including

$2.8

billion

commitments

for

three

private

structured

credit

mandates,

$705

million

from

the

launch

diversified

alternatives

product,

and

organic

growth

existing

relationships.

Realizations:

$1.6

billion

the

quarter

and

$7.1

billion

for

the

LTM.

Capital

Deployed:

Record

$3.7

billion

the

quarter

including

Targa

Badlands,

Ultimate

Software

and

Custom

Ink

and

$10.6

billion

for

the

LTM;

committed

additional

$336

million

the

quarter

that

not

yet

deployed.

Returns:

Strong

gross

returns

3.7%

the

quarter

for

Performing

Credit;

gross

returns

(2.1)%

the

quarter

for

Distressed

driven

certain

energy

positions.

% Change

(Dollars in Thousands)

2Q'18

2Q'19

vs. 2Q'18

2Q'18 YTD

2Q'19 YTD

vs. 2Q'18 YTD

Management Fees, Net

118,925

149,527

26%

286,588

290,344

Fee Related Performance Revenues

2,552

n/m

(666)

3,655

n/m

Fee Related Compensation

(50,757)

(54,310)

(117,016)

(112,984)

(3)%

Other Operating Expenses

(31,899)

(40,466)

27%

(59,638)

(72,705)

22%

Fee Related Earnings

36,269

57,303

58%

109,268

108,310

(1)%

Realized Performance Revenues

14,594

7,946

(46)%

54,484

16,843

(69)%

Realized Performance Compensation

(7,119)

(3,468)

(51)%

(29,865)

(6,839)

(77)%

Realized Principal Investment Income

4,082

20,925

413%

11,107

24,108

117%

Net Realizations

11,557

25,403

120%

35,726

34,112

(5)%

Segment Distributable Earnings

47,826

82,706

73%

144,994

142,422

(2)%

Segment Revenues

137,601

180,950

32%

351,513

334,950

(5)%

Total AUM

123,059,087

139,270,150

13%

123,059,087

139,270,150

13%

Fee-Earning AUM

94,266,657

104,456,856

11%

94,266,657

104,456,856

11%

Performing Credit includes mezzanine lending funds, middle market direct lending funds and other performing credit strategy funds. Distressed includes credit alpha strategies, stressed /

distressed funds and energy strategies. The gross returns represent a weighted-average composite of the fee-earning funds exceeding $100 million of fair value at each respective quarter end

for each strategy. Gross returns exclude the Blackstone Funds that were contributed to GSO as part of Blackstone’s acquisition of GSO in March 2008. Performing Credit net returns were 2.8%

for 2Q’19. Distressed net returns were (2.5)% for 2Q’19.

Supplemental Details

Blackstone

Total Segments

(Dollars in Thousands)

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

2Q'18 YTD

2Q'19 YTD

Management and Advisory Fees, Net

Base Management Fees

692,915

721,606

722,648

757,518

805,315

1,400,071

1,562,833

Transaction, Advisory and Other Fees, Net

40,912

73,944

77,576

65,150

61,495

77,978

126,645

Management Fee Offsets

(10,833)

(16,331)

(2,029)

(8,606)

(22,654)

(19,011)

(31,260)

Total Management and Advisory Fees, Net

722,994

779,219

798,195

814,062

844,156

1,459,038

1,658,218

Fee Related Performance Revenues

45,515

30,299

44,185

7,779

13,624

49,352

21,403

Fee Related Compensation

(306,243)

(334,545)

(279,284)

(324,031)

(293,834)

(602,317)

(617,865)

Other Operating Expenses

(122,466)

(128,745)

(130,025)

(123,311)

(142,121)

(229,558)

(265,432)

Fee Related Earnings

339,800

346,228

433,071

374,499

421,825

676,515

796,324

Realized Performance Revenues

477,544

572,159

483,697

246,769

341,386

755,915

588,155

Realized Performance Compensation

(172,894)

(190,773)

(199,645)

(85,240)

(125,466)

(287,723)

(210,706)

Realized Principal Investment Income

94,647

65,620

47,098

25,908

123,557

123,340

149,465

Total Net Realizations

399,297

447,006

331,150

187,437

339,477

591,532

526,914

Total Segment Distributable Earnings

739,097

793,234

764,221

561,936

761,302

1,268,047

1,323,238

Net Interest Income (Loss)

2,842

9,013

11,923

5,061

2,761

989

7,822

Taxes and Related Payables

(41,797)

(32,963)

(54,063)

(29,039)

(55,201)

(66,839)

(84,240)

Distributable Earnings

700,142

769,284

722,081

537,958

708,862

1,202,197

1,246,820

Total Segment Revenues

1,340,700

1,447,297

1,373,175

1,094,518

1,322,723

2,387,645

2,417,241

Total Assets Under Management

439,386,656

456,691,832

472,242,317

511,777,762

545,482,337

439,386,656

545,482,337

Fee-Earning Assets Under Management

332,978,145

342,261,123

342,527,507

352,993,394

387,864,642

332,978,145

387,864,642

Weighted-Average Fee-Earning AUM

328,594,512

340,994,284

343,514,196

349,589,269

368,900,952

334,643,503

359,104,556

LP Capital Invested

8,026,698

9,358,423

14,218,797

10,844,363

15,057,660

17,350,027

25,902,023

Total Capital Invested

8,351,772

9,894,470

16,349,738

11,783,583

18,283,803

18,471,291

30,067,386

Blackstone

2Q’19 Total AUM Rollforward

(Dollars in Millions)

2Q’19 LTM Total AUM Rollforward

(Dollars in Millions)

Inflows include contributions, capital raised, other increases in available capital, purchases, inter-segment allocations and acquisitions. Outflows represent redemptions, client

withdrawals and other decreases in available capital. Realizations represent realizations from the disposition of assets. Market Activity represents gains (losses) on portfolio

investments and the impact of foreign exchange rate fluctuations. AUM is reported in the segment where the assets are managed.

Assets Under Management

2Q’19 Fee-Earning AUM Rollforward

(Dollars in Millions)

2Q’19 LTM Fee-Earning AUM Rollforward

(Dollars in Millions)

Real

Private

Hedge Fund

Estate

Equity

Solutions

1Q'19

140,334

158,989

80,183

132,272

511,778

Inflows

14,365

16,807

3,813

10,127

45,111

Outflows

(600)

(179)

(4,115)

(2,341)

(7,235)

Net Inflows (Outflows)

13,765

16,628

(302)

7,785

37,876

Realizations

(3,990)

(4,679)

(296)

(1,630)

(10,594)

Market Activity

3,496

234

1,851

842

6,423

2Q'19

153,605

171,172

81,436

139,270

545,482

QoQ Increase

Credit

Total

Real

Private

Hedge Fund

Estate

Equity

Solutions

2Q'18

119,400

119,525

77,403

123,059

439,387

Inflows

42,130

62,101

12,724

33,770

150,725

Outflows

(2,762)

(1,260)

(11,331)

(11,346)

(26,699)

Net Inflows

39,367

60,842

1,393

22,424

124,026

Realizations

(14,729)

(15,717)

(773)

(7,136)

(38,355)

Market Activity

9,567

6,523

3,412

923

20,425

2Q'19

153,605

171,172

81,436

139,270

545,482

YoY Increase

29%

43%

13%

24%

Credit

Total

Real

Private

Hedge Fund

Estate

Equity

Solutions

2Q'18

88,777

78,046

71,889

94,267

332,978

Inflows

36,337

28,021

11,372

24,871

100,601

Outflows

(6,244)

(1,974)

(11,032)

(9,522)

(28,772)

Net Inflows

30,093

26,047

340

15,349

71,829

Realizations

(9,417)

(7,658)

(714)

(5,432)

(23,221)

Market Activity

2,834

3,139

273

6,279

2Q'19

112,287

96,467

74,653

104,457

387,865

YoY Increase

26%

24%

11%

16%

Credit

Total

Real

Private

Hedge Fund

Estate

Equity

Solutions

1Q'19

94,223

85,447

73,647

99,676

352,993

Inflows

25,130

13,724

3,578

7,549

49,981

Outflows

(5,572)

(444)

(3,944)

(2,232)

(12,192)

Net Inflows (Outflows)

19,559

13,279

(365)

5,317

37,789

Realizations

(2,375)

(2,104)

(276)

(1,201)

(5,957)

Market Activity

881

(155)

1,648

665

3,039

2Q'19

112,287

96,467

74,653

104,457

387,865

QoQ Increase

19%

13%

10%

Credit

Total

$9.26

$8.94

2Q'18

2Q'19

June

30,

2019,

Blackstone

had

$4.8

billion

total

cash,

cash

equivalents,

and

corporate

treasury

investments

and

$10.7

billion

cash

and

net

investments,

$8.94

per

share.

Blackstone

has

net

debt,

$1.6

billion

undrawn

credit

revolver

and

maintains

A+/A+

ratings.

•

April

10,

2019,

Blackstone

issued

€600

million

10-year

notes

1.5%

coupon.

Deconsolidated Balance Sheet Highlights

Balance Sheet Highlights are preliminary, and exclude the consolidated Blackstone Funds. GP/Fund Investments include Blackstone investments in Real Estate, Private Equity, Hedge Fund Solutions,

and Credit, which were $770 million, $691 million, $109 million, and $287 million, respectively, as of June 30, 2019. Cash and Net Investments per share amounts are calculated using period end DE

Shares Outstanding (see page 24, Share Summary).

A+/A+

Rated by S&P and Fitch

$1.6 billion

Undrawn Credit Revolver

with September 2023 Maturity

$4.8 billion

Total Cash and

Corporate Treasury

Cash and Net Investments

(Per Share)

(Dollars in Millions)

2Q’19

Cash and Cash Equivalents

1,484

Corporate Treasury

Investments

3,293

GP/Fund Investments

1,857

Net Accrued Performance

Revenues

4,044

Cash

and Net Investments

10,679

Outstanding

Bonds (at par)

4,206

Blackstone

Net Accrued Performance Revenues

Net Accrued Performance Revenues are presented net of performance compensation and do not include clawback amounts, if any, which are disclosed in the 10-K/Q. Net Realized Performance Revenues are

included in DE. Net Realized Performance Revenues above represent Performance Revenues realized, but not yet distributed as of the reporting date and included in the Net Accrued Performance Revenues balance.

When these fees are received, the receivable is reduced without further impacting DE. Per Share calculations are based on end of period DE Shares Outstanding (see page 24, Share Summary).

2Q’19 QoQ Rollforward

(Dollars in Millions)

2Q’19 LTM Rollforward

(Dollars in Millions)

Blackstone

1Q'19

Net

Performance

Revenues

Net Realized

Distributions

2Q'19

Real Estate

1,978

259

(103)

2,133

Private Equity

1,633

(53)

1,599

HFS

(1)

Credit

222

(5)

244

Total

3,859

349

(162)

4,044

QoQ Increase

2Q'18

Net

Performance

Revenues

Net Realized

Distributions

2Q'19

Real Estate

1,893

758

(518)

2,133

Private Equity

1,657

443

(501)

1,599

HFS

(10)

Credit

299

(23)

(32)

244

Total

3,872

1,234

(1,061)

4,044

YoY Increase

Net Accrued Performance Revenues

(Dollars in Millions, Except per Share Data)

2Q'18

1Q'19

2Q'19

Per Share

QoQ

Change

YoY

Change

BREP IV

0.01

(3)

BREP V

159

0.05

(8)

(105)

BREP VI

132

106

0.09

(26)

BREP VII

592

552

542

0.45

(10)

(50)

BREP VIII

317

464

517

0.43

200

BREP International II

0.02

BREP Europe III

(33)

BREP Europe IV

211

213

209

0.18

(4)

(2)

BREP Europe V

137

161

0.13

100

BREP Asia I

110

137

159

0.13

BPP

194

245

242

0.20

(3)

BREIT

0.03

BREDS

0.02

(1)

BTAS

0.03

Total Real Estate

1,893

1,978

2,133

1.78

155

240

Private Equity

BCP IV

0.03

(5)

(62)

BCP V

(87)

BCP VI

911

789

755

0.63

(34)

(156)

BCP VII

256

293

0.25

199

BCP Asia

(0)

BEP I

142

131

134

0.11

(8)

BEP II

0.05

(16)

Tactical Opportunities

152

158

140

0.12

(18)

(12)

Strategic Partners

109

0.08

(11)

BCEP

0.03

BTAS

0.04

Other

(1)

Total Private Equity

1,657

1,633

1,599

1.34

(34)

(58)

Total Hedge Fund Solutions

0.06

Total Credit

299

222

244

0.20

(55)

Net Accrued Performance Revenues

3,872

3,859

4,044

3.39

185

172

Memo: Net Realized Performance Revenues

0.06

Real Estate

Blackstone

Investment

Records

June

30,

2019

(a)

Notes on page 22.

(Dollars in Thousands, Except Where Noted)

Committed

Available

Unrealized Investments

Realized Investments

Total Investments

Net IRRs (d)

Fund (Investment Period Beginning Date / Ending Date)

Capital

Capital (b)

Value

MOIC (c)

% Public

Value

MOIC (c)

Value

MOIC (c)

Realized

Total

Real Estate

Pre-BREP

140,714

n/a

345,190

2.5x

345,190

2.5x

33%

BREP I (Sep 1994 / Oct 1996)

380,708

n/a

1,327,708

2.8x

1,327,708

2.8x

40%

BREP II (Oct 1996 / Mar 1999)

1,198,339

n/a

2,531,614

2.1x

2,531,614

2.1x

19%

BREP III (Apr 1999 / Apr 2003)

1,522,708

n/a

3,330,406

2.4x

3,330,406

2.4x

21%

BREP IV (Apr 2003 / Dec 2005)

2,198,694

85,178

0.1x

53%

4,493,255

2.2x

4,578,433

1.7x

28%

12%

BREP V (Dec 2005 / Feb 2007)

5,539,418

519,637

1.6x

33%

12,804,964

2.3x

13,324,601

2.3x

12%

11%

BREP VI (Feb 2007 / Aug 2011)

11,060,444

1,007,808

2.5x

53%

26,707,066

2.5x

27,714,874

2.5x

13%

BREP VII (Aug 2011 / Apr 2015)

13,496,564

1,906,353

8,990,819

1.7x

16%

20,543,254

2.1x

29,534,073

2.0x

24%

17%

BREP VIII (Apr 2015 / Jun 2019)

16,585,073

5,069,766

15,875,492

1.4x

5,251,374

1.6x

21,126,866

1.4x

27%

15%

BREP IX (Jun 2019 / Dec 2024)

19,562,369

n/a

Total Global BREP

71,685,031

26,538,488

26,478,934

1.5x

77,334,831

2.2x

103,813,765

2.0x

18%

16%

BREP Int'l (Jan 2001 / Sep 2005)

824,172

€

n/a

1,370,659

€

2.1x

1,370,659

€

2.1x

23%

BREP Int'l II (Sep 2005 / Jun 2008) (e)

1,629,748

167,659

4.4x

2,392,421

1.8x

2,560,080

1.8x

BREP Europe III (Jun 2008 / Sep 2013)

3,205,167

465,609

665,111

0.9x

5,496,293

2.5x

6,161,404

2.1x

21%

15%

BREP Europe IV (Sep 2013 / Dec 2016)

6,709,145

1,346,165

4,161,915

1.6x

13%

7,564,756

2.0x

11,726,671

1.8x

24%

17%

BREP Europe V (Dec 2016 / Jun 2022)

7,944,368

2,928,021

6,474,004

1.3x

186,289

2.4x

6,660,293

1.3x

64%

17%

BREP Europe VI (TBD)

7,525,683

7,525,681

n/a

Total Euro BREP

27,838,283

€

12,265,476

€

11,468,689

€

1.4x

17,010,418

€

2.1x

28,479,107

€

1.7x

16%

14%

BREP Asia I (Jun 2013 / Dec 2017)

5,096,361

1,728,965

4,211,773

1.5x

11%

3,312,116

1.8x

7,523,889

1.6x

21%

15%

BREP Asia II (Dec 2017 / Jun 2023)

7,179,916

5,408,481

1,968,923

1.1x

2,000

n/m

1,970,923

1.1x

n/m

BREP Co-Investment (f)

7,045,918

157,335

1,767,526

1.9x

26%

12,666,695

2.1x

14,434,221

2.1x

16%

Total BREP

124,393,601

47,740,949

47,848,849

1.4x

12%

114,954,153

2.2x

162,803,002

1.9x

18%

15%

BPP (Various) (g)

26,737,038

1,222,865

30,407,207

1.2x

4,504,405

2.3x

34,911,612

1.3x

n/m

10%

BREDS High-Yield (Various) (h)

12,053,117

2,422,012

3,554,670

1.1x

10,742,370

1.3x

14,297,040

1.2x

11%

Private Equity

BCP I (Oct 1987 / Oct 1993)

859,081

n/a

1,741,738

2.6x

1,741,738

2.6x

19%

BCP II (Oct 1993 / Aug 1997)

1,361,100

n/a

3,256,819

2.5x

3,256,819

2.5x

32%

BCP III (Aug 1997 / Nov 2002)

3,967,422

n/a

9,184,688

2.3x

9,184,688

2.3x

14%

BCOM (Jun 2000 / Jun 2006)

2,137,330

24,575

13,723

n/a

2,953,649

1.4x

2,967,372

1.4x

BCP IV (Nov 2002 / Dec 2005)

6,773,182

204,794

169,034

2.6x

21,417,730

2.9x

21,586,764

2.9x

36%

BCP V (Dec 2005 / Jan 2011)

21,013,586

1,039,733

803,327

0.8x

44%

37,188,995

1.9x

37,992,322

1.9x

BCP VI (Jan 2011 / May 2016)

15,191,541

1,740,222

13,779,127

1.7x

38%

13,530,145

2.1x

27,309,272

1.9x

19%

13%

BEP I (Aug 2011 / Feb 2015)

2,435,285

224,784

1,942,443

1.9x

58%

2,655,839

1.9x

4,598,282

1.9x

16%

14%

BEP II (Feb 2015 / Feb 2021)

4,912,842

857,610

4,410,554

1.3x

269,992

1.8x

4,680,546

1.3x

24%

BCP VII (May 2016 / May 2022)

18,787,568

7,414,455

12,744,292

1.4x

1,167,223

1.7x

13,911,515

1.4x

42%

19%

BCP Asia (Dec 2017 / Dec 2023)

2,389,096

1,495,423

565,977

1.3x

n/a

565,977

1.3x

n/a

37%

BEP III (TBD)

3,808,631

n/a

BCP VIII (TBD)

23,186,208

n/a

Total Corporate Private Equity

106,822,872

39,996,435

34,428,477

1.5x

19%

93,366,818

2.1x

127,795,295

1.9x

16%

15%

Blackstone

Investment

Records

June

30,

2019

(a)

–

Continued

Notes on page 22.

(Dollars in Thousands, Except Where Noted)

Committed

Available

Unrealized Investments

Realized Investments

Total Investments

Net IRRs (d)

Fund (Investment Period Beginning Date / Ending Date)

Capital

Capital (b)

Value

MOIC (c)

% Public

Value

MOIC (c)

Value

MOIC (c)

Realized

Total

Private Equity (continued)

Tactical Opportunities (Various)

23,700,086

10,574,775

10,193,246

1.2x

10%

7,679,719

1.7x

17,872,965

1.4x

21%

10%

Tactical Opportunities Co-Investment and Other (Various)

5,938,806

1,955,170

3,777,453

1.2x

1,767,187

1.5x

5,544,640

1.3x

24%

12%

Total Tactical Opportunities

29,638,892

12,529,945

13,970,699

1.2x

9,446,906

1.7x

23,417,605

1.4x

21%

11%

Strategic Partners I-V (Various) (i)

11,862,601

1,752,541

1,281,172

n/m

16,352,178

n/m

17,633,350

1.5x

n/a

13%

Strategic Partners VI (Apr 2014 / Apr 2016) (i)

4,362,750

1,123,539

1,590,319

n/m

2,956,879

n/m

4,547,198

1.5x

n/a

17%

Strategic Partners VII (May 2016 / Mar 2019) (i)

7,489,970

2,489,452

5,673,278

n/m

885,791

n/m

6,559,069

1.4x

n/a

25%

Strategic Partners RA II (May 2017 / Mar 2022) (i)

1,749,807

684,257

730,741

n/m

109,311

n/m

840,052

1.2x

n/a

17%

Strategic Partners VIII (Mar 2019 / Jul 2023) (i)

10,533,600

7,676,804

591,603

n/m

n/a

591,603

1.0x

n/a

n/m

Strategic Partners RE, SMA and Other (Various) (i)

5,665,536

1,881,140

1,926,558

n/m

968,040

n/m

2,894,598

1.3x

n/a

17%

Total Strategic Partners

41,664,264

15,607,733

11,793,671

n/m

21,272,199

n/m

33,065,870

1.4x

n/a

14%

BCEP (Jan 2017 / Jan 2021) (j)

4,755,613

2,281,812

3,102,524

1.2x

378,007

1.6x

3,480,531

1.3x

27%

14%

BIP (Various)

13,659,163

12,471,902

1,187,262

1.0x

100%

n/a

1,187,262

1.0x

n/a

n/m

Hedge Fund Solutions

Total Strategic Capital Holdings (Dec 2013 / Jun 2020) (k)

3,378,575

730,855

1,676,269

1.1x

392,301

n/m

2,068,570

1.4x

n/a

2,000,000

97,114

22,864

1.2x

4,772,270

1.6x

4,795,134

1.6x

n/a

17%

Mezzanine II (Nov 2011 / Nov 2016)

4,120,000

1,078,506

1,898,494

1.0x

4,816,985

1.6x

6,715,479

1.4x

n/a

12%

Mezzanine III (Sep 2016 / Sep 2021)

6,639,133

2,260,839

4,323,712

1.1x

1,248,248

1.6x

5,571,960

1.2x

n/a

13%

Stressed / Distressed Investing I (Sep 2009 / May 2013)

3,253,143

135,000

201,288

0.4x

5,744,873

1.6x

5,946,161

1.4x

n/a

10%

Stressed / Distressed Investing II (Jun 2013 / Jun 2018)

5,125,000

540,145

1,686,278

0.8x

18%

3,971,120

1.3x

5,657,398

1.1x

n/a

Stressed / Distressed Investing III (Dec 2017/ Dec 2022)

7,356,380

5,447,806

1,780,427

1.0x

553,681

1.3x

2,334,108

1.1x

n/a

15%

Energy Select Opportunities (Nov 2015 / Nov 2018)

2,856,867

884,658

2,022,053

1.2x

670,729

1.6x

2,692,782

1.3x

n/a

12%

Energy Select Opportunities II (Feb 2019 / Feb 2024)

3,347,431

2,976,038

489,928

1.0x

n/a

489,928

1.0x

n/a

n/m

Euro

European Senior Debt Fund (Feb 2015 / Feb 2019)

1,964,689

€

318,903

€

2,108,075

€

1.0x

940,008

€

1.6x

3,048,083

€

1.2x

n/a

10%

European Senior Debt Fund II (Jun 2019 / Jun 2024)

629,740

€

476,310

€

152,443

€

1.0x

€

n/a

152,443

€

1.0x

n/a

n/m

Total Credit

37,678,960

14,325,694

14,999,276

1.0x

22,853,291

1.5x

37,852,567

1.3x

n/a

12%

Credit (l)

Mezzanine I (Jul 2007 / Oct 2011)

Blackstone

Investment

Records

June

30,

2019

–

Notes

The returns presented herein represent those of the applicable Blackstone Funds and not those of The Blackstone Group Inc.

n/m

Not meaningful generally due to the limited time since initial investment.

n/a

Not applicable.

(a)

Preliminary. Excludes investment vehicles where Blackstone does not earn fees.

(b)

Available Capital represents total investable capital commitments, including side-by-side, adjusted for certain expenses and expired or

recallable capital and may include leverage, less invested capital. This amount is not reduced by outstanding commitments to investments.

(c)

Multiple of Invested Capital (“MOIC”) represents carrying value, before management fees, expenses and Performance Revenues, divided by

invested capital.

(d)

Net Internal Rate of Return (“IRR”) represents the annualized inception to June 30, 2019 IRR on total invested capital based on realized

proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. IRRs are calculated using

actual timing of limited partner cash flows. Initial inception date cash flow may differ from the Investment Period Beginning Date.

(e)

The 8% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP

International II performance reflects a 7% Realized Net IRR and a 7% Total Net IRR.

(f)

BREP Co-Investment represents co-investment capital raised for various BREP investments. The Net IRR reflected is calculated by

aggregating each co-investment’s realized proceeds and unrealized value, as applicable, after management fees, expenses and

Performance Revenues.

(g)

BPP represents the core+ real estate funds which invest with a more modest risk profile and lower leverage. Excludes BREIT.

(h)

BREDS High-Yield represents the flagship real estate debt drawdown funds only and excludes BREDS High-Grade.

(i)

Realizations are treated as return of capital until fully recovered and therefore unrealized and realized MOICs are not meaningful. If

information is not available on a timely basis, returns are calculated from results that are reported on a three month lag.

(j)

BCEP,

Blackstone

Core

Equity

Partners,

core

private

equity

fund

which

invests

with

modest

risk

profile

and

longer

hold

period.

(k)

Represents Blackstone Strategic Capital Holdings (including Co-investment) which is focused on acquiring strategic minority positions in

alternative asset managers.

(l)

Funds presented represent the flagship credit drawdown funds only. The Total Credit Net IRR is the combined IRR of the credit drawdown

funds presented.

Shareholder Dividends

A detailed description of Blackstone’s dividend policy and the definition of Distributable Earnings can be found on pages 33-34, Definitions and Dividend Policy. DE before Certain Payables represents Distributable Earnings

before the deduction for the Payable Under Tax Receivable Agreement and tax expense (benefit) of wholly-owned subsidiaries. Per Share calculations are based on end of period Participating Common Shares

(page 24, Share Summary); actual dividends are paid to shareholders as of the applicable record date. Retained capital is withheld pro-rata from common and Blackstone Holdings Partnership shareholders. Common

shareholders’ share was $60 million for 2Q’19 and $107 million for 2Q’19 YTD.

Generated

$0.57

Distributable

Earnings

per

common

during

the

quarter,

bringing

the

year-to-date

amount

$1.01

per

common

share.

Blackstone

declared

quarterly

dividend

$0.48

per

common

record

holders

July

29,

2019;

payable

August

2019.

Blackstone

% Change

(Dollars in Thousands, Except per Share Data)

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

vs. 2Q'18

2Q'18 YTD

2Q'19 YTD

vs. 2Q'18 YTD

Distributable Earnings

700,142

769,284

722,081

537,958

708,862

1,202,197

1,246,820

Add: Other Payables Attributable

to Common Shareholders

29,379

22,980

43,345

14,598

39,673

35%

36,407

54,271

49%

DE before Certain Payables

729,521

792,264

765,426

552,556

748,535

1,238,604

1,301,091

Percent to Common Shareholders

57%

56%

DE before Certain Payables Attributable

to Common Shareholders

414,071

447,516

429,433

310,832

419,502

699,704

730,334

Less: Other Payables Attributable

to Common Shareholders

(29,379)

(22,980)

(43,345)

(14,598)

(39,673)

35%

(36,407)

(54,271)

49%

DE Attributable to Common Shareholders

384,692

424,536

386,088

296,234

379,829

(1)%

663,297

676,063

DE per Common Share

0.56

0.63

0.57

0.44

0.57

0.97

1.01

Less: Retained Capital per Common Share

(0.08)

(0.09)

(0.07)

(0.09)

13%

(0.14)

(0.16)

14%

Special Cash Dividend per Common Share

0.10

n/m

0.10

n/m

Actual Dividend per Common Share

0.58

0.64

0.58

0.37

0.48

(17)%

0.93

0.85

(9)%

Record Date

Jul 29, 2019

Payable Date

Aug 5, 2019

Share Summary

Common Shareholders receive tax benefits from deductions taken by Blackstone’s corporate tax paying subsidiaries and bear responsibility for the deduction from Distributable Earnings

of the Payable Under Tax Receivable Agreement and certain other tax-related payables. Participating Common Shares and Participating Partnership Shares include both issued and

outstanding shares and unvested shares that participate in dividends. Common shares repurchased includes shares for which trades were executed in the second quarter and settlement

occurred in the third quarter.

Distributable

Earnings

Outstanding

quarter

end

1,195

million

shares.

•

Repurchased

7.0

million

common

the

quarter

and

22.3

million

common

for

the

LTM.

•

Increased

repurchase

authorization

$1.0

billion.

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

Participating Common Shares

682,801,258

678,771,864

672,755,818

674,457,578

669,561,793

Participating Partnership Shares

520,175,306

522,898,542

526,370,654

524,504,626

525,165,724

Distributable Earnings Shares Outstanding

1,202,976,564

1,201,670,406

1,199,126,472

1,198,962,204

1,194,727,517

Blackstone

Reconciliations and Disclosures

Blackstone

Notes on pages 27-28.

Reconciliation of GAAP to Non-GAAP Measures

QTD

YTD

LTM

(Dollars in Thousands)

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

2Q'18

2Q'19

2Q'17

2Q'18

2Q'19

Net Income (Loss) Attributable to The Blackstone Group L.P.

742,042

442,742

(10,868)

481,304

305,792

1,109,914

787,096

1,469,812

1,791,972

1,218,970

Net Income Attributable to Non-Controlling Interests

in Blackstone Holdings

678,952

360,576

5,253

402,260

259,330

999,160

661,590

1,319,656

1,698,800

1,027,419

Net Income (Loss) Attributable to Non-Controlling Interests

in Consolidated Entities

129,078

143,101

(68,800)

186,833

80,744

284,577

267,577

392,966

530,387

341,878

Net Income (Loss) Attributable to Redeemable

Non-Controlling Interests in Consolidated Entities

905

2,569

(4,303)

2,480

1,095

(370)

3,575

15,418

10,445

1,841

Net Income (Loss)

1,550,977

948,988

(78,718)

1,072,877

646,961

2,393,281

1,719,838

3,197,852

4,031,604

2,590,108

Provision for Taxes

138,731

26,798

29,366

41,155

38,736

193,226

79,891

162,846

849,328

136,055

Income (Loss) Before Provision for Taxes

1,689,708

975,786

(49,352)

1,114,032

685,697

2,586,507

1,799,729

3,360,698

4,880,932

2,726,163

Transaction-Related Charges (a)

(470,078)

79,242

76,431

89,451

106,994

(417,589)

196,445

245,655

(708,930)

352,118

Amortization of Intangibles (b)

14,873

14,856

15,392

16,483

29,746

32,966

60,738

55,355

63,214

Impact of Consolidation (c)

(129,983)

(145,670)

73,103

(189,313)

(81,839)

(284,207)

(271,152)

(408,384)

(540,832)

(343,719)

Unrealized Performance Revenues (d)

(440,424)

(298,931)

806,531

(664,333)

(157,398)

(1,068,763)

(821,731)

(350,633)

(991,702)

(314,131)

Unrealized Performance Allocations Compensation (e)

189,991

178,184

(302,868)

287,015

64,518

444,426

351,533

316,754

453,777

226,849

Unrealized Principal Investment (Income) Loss (f)

(52,126)

(28,704)

160,659

(139,925)

56,353

(66,104)

(83,572)

101,233

(67,000)

48,383

Other Revenues (g)

(94,416)

(9,092)

(46,854)

(13,189)

20,150

(33,522)

6,961

18,342

35,773

(48,985)

Equity-Based Compensation (h)

34,394

36,576

43,102

66,776

53,105

78,542

119,881

96,929

127,748

199,559

Taxes and Related Payables (i)

(41,797)

(32,963)

(54,063)

(29,039)

(55,201)

(66,839)

(84,240)

(197,382)

(178,212)

(171,266)

Distributable Earnings

700,142

769,284

722,081

537,958

708,862

1,202,197

1,246,820

3,243,950

3,066,909

2,738,185

Taxes and Related Payables (i)

41,797

32,963

54,063

29,039

55,201

66,839

84,240

197,382

178,212

171,266

Net Interest (Income) Loss (j)

(2,842)

(9,013)

(11,923)

(5,061)

(2,761)

(989)

(7,822)

42,271

31,384

(28,758)

Total Segment Distributable Earnings

739,097

793,234

764,221

561,936

761,302

1,268,047

1,323,238

3,483,603

3,276,505

2,880,693

Realized Performance Revenues (k)

(477,544)

(572,159)

(483,697)

(246,769)

(341,386)

(755,915)

(588,155)

(2,731,564)

(2,657,434)

(1,644,011)

Realized Performance Compensation (l)

172,894

190,773

199,645

85,240

125,466

287,723

210,706

909,329

1,009,830

601,124

Realized Principal Investment Income (m)

(94,647)

(65,620)

(47,098)

(25,908)

(123,557)

(123,340)

(149,465)

(460,081)

(255,753)

(262,183)

Fee Related Earnings

339,800

346,228

433,071

374,499

421,825

676,515

796,324

1,201,287

1,373,148

1,575,623

Adjusted EBITDA Reconciliation

Distributable Earnings

700,142

769,284

722,081

537,958

708,862

1,202,197

1,246,820

3,243,950

3,066,909

2,738,185

Interest Expense (n)

38,885

40,923

41,792

41,638

43,230

77,123

84,868

155,249

190,217

167,583

Taxes and Related Payables (i)

41,797

32,963

54,063

29,039

55,201

66,839

84,240

197,382

178,212

171,266

Depreciation and Amortization

5,986

5,681

5,964

5,789

6,000

12,237

11,789

31,956

24,857

23,434

Adjusted EBITDA

786,810

848,851

823,900

614,424

813,293

1,358,396

1,427,717

3,628,537

3,460,195

3,100,468

Blackstone

Reconciliation

GAAP

Non-GAAP

Measures

–

Notes

Note:

See pages 33-34, Definitions and Dividend Policy.

(a)

This adjustment removes Transaction-Related Charges, which are excluded from Blackstone's segment presentation. Transaction-Related Charges arise from corporate actions

including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent

consideration

arrangements,

changes

the

balance

the

tax

receivable

agreement

resulting

from

change

tax

law

similar

event,

transaction

costs

and

any

gains

losses

associated with these corporate actions.

(b)

This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone's segment presentation. This amount includes amortization of

intangibles associated with Blackstone’s investment in Pátria, which is accounted for under the equity method.

(c)

This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone's segment presentation. This adjustment includes the elimination of

Blackstone’s interest in these funds and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(d)

This adjustment removes Unrealized Performance Revenues on a segment basis. The Segment Adjustment represents the add back of performance revenues earned from

consolidated Blackstone Funds which have been eliminated in consolidation.

(e)

This adjustment removes Unrealized Performance Allocations Compensation.

(f)

This adjustment removes Unrealized Principal Investment Income (Loss) on a segment basis. The Segment Adjustment represents (1) the add back of Principal Investment Income,

including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the

ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(g)

This adjustment removes Other Revenues on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds

which have been eliminated in consolidation, and (2) the removal of certain Transaction-Related Charges. For the three months ended June 30, 2018, Transaction-Related Charges

included $580.9 million of Other Revenues received upon the conclusion of Blackstone’s investment sub-advisory relationship with

(h)

This adjustment removes Equity-Based Compensation on a segment basis.

QTD

YTD

LTM

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

2Q'18

2Q'19

2Q'17

2Q'18

2Q'19

GAAP Unrealized Performance Allocations

440,351

299,238

(806,305)

663,999

157,732

1,068,440

821,731

349,657

992,056

314,664

Segment Adjustment

(307)

(226)

334

(334)

323

976

(354)

(533)

Unrealized Performance Revenues

440,424

298,931

(806,531)

664,333

157,398

1,068,763

821,731

350,633

991,702

314,131

Investments’

funds.

QTD

YTD

LTM

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

2Q'18

2Q'19

2Q'17

2Q'18

2Q'19

GAAP Other Revenue

675,343

9,368

46,923

10,250

(17,120)

616,026

(6,870)

(11,446)

546,673

49,421

Segment Adjustment

(580,927)

(276)

(69)

2,939

(3,030)

(582,504)

(91)

(6,896)

(582,446)

(436)

Other Revenues

94,416

9,092

46,854

13,189

(20,150)

33,522

(6,961)

(18,342)

(35,773)

48,985

QTD

YTD

LTM

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

2Q'18

2Q'19

2Q'17

2Q'18

2Q'19

GAAP Unrealized Principal Investment Income (Loss)

103,468

52,840

(218,165)

169,044

(37,345)

215,242

131,699

806

290,760

(33,626)

Segment Adjustment

(51,342)

(24,136)

57,506

(29,119)

(19,008)

(149,138)

(48,127)

(102,039)

(223,760)

(14,757)

Unrealized Principal Investment Income (Loss)

52,126

28,704

(160,659)

139,925

(56,353)

66,104

83,572

(101,233)

67,000

(48,383)

Blackstone

Reconciliation

GAAP

Non-GAAP

Measures

–

Notes

Continued

(i)

Taxes represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes and adjusted to

exclude the tax impact of any divestitures. Related Payables represent tax-related payables including the amount payable under the Tax Receivable Agreement.

(k)

This adjustment removes the total segment amounts of Realized Performance Revenues.

(l)

This adjustment removes the total segment amounts of Realized Performance Compensation.

(m)

This adjustment removes the total segment amount of Realized Principal Investment Income.

(n)

This adjustment adds back Interest Expense on a segment basis.

Reconciliation

GAAP

Common

Units

Outstanding

Distributable

Earnings

Outstanding

Disclosure

Weighted-Average

Units

Outstanding

(j)

This adjustment removes Interest and Dividend Revenue less Interest Expense on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned

from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of interest expense associated with the Tax Receivable Agreement.

QTD

YTD

LTM

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

2Q'18

2Q'19

2Q'17

2Q'18

2Q'19

Taxes

20,026

12,793

38,975

15,344

34,209

38,254

49,553

97,208

96,812

101,321

Related Payables

21,771

20,170

15,088

13,695

20,992

28,585

34,687

100,174

81,400

69,945

Taxes and Related Payables

41,797

32,963

54,063

29,039

55,201

66,839

84,240

197,382

178,212

171,266

QTD

YTD

LTM

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

2Q'18

2Q'19

2Q'17

2Q'18

2Q'19

GAAP Interest and Dividend Revenue

40,073

48,604

47,885

44,084

43,686

75,458

87,770

112,561

152,956

184,259

Segment Adjustment

1,654

1,332

5,830

2,615

2,305

2,654

4,920

417

5,877

12,082

Interest and Dividend Revenue

41,727

49,936

53,715

46,699

45,991

78,112

92,690

112,978

158,833

196,341

GAAP Interest Expense

39,320

41,355

44,644

42,002

43,596

77,991

85,598

159,755

194,142

171,597

Segment Adjustment

(435)

(432)

(2,852)

(364)

(366)

(868)

(730)

(4,506)

(3,925)

(4,014)

Interest Expense

38,885

40,923

41,792

41,638

43,230

77,123

84,868

155,249

190,217

167,583

Net Interest Income (Loss)

2,842

9,013

11,923

5,061

2,761

989

7,822

(42,271)

(31,384)

28,758

QTD

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

GAAP Common Units Outstanding

673,544,082

669,411,215

663,212,830

665,331,887

660,588,369

Unvested Participating Common Shares

9,257,176

9,360,649

9,542,988

9,125,691

8,973,424

Participating Common Shares

682,801,258

678,771,864

672,755,818

674,457,578

669,561,793

Participating Partnership Shares

520,175,306

522,898,542

526,370,654

524,504,626

525,165,724

Distributable Earnings Shares Outstanding

1,202,976,564

1,201,670,406

1,199,126,472

1,198,962,204

1,194,727,517

QTD

YTD

LTM

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

2Q'18

2Q'19

2Q'17

2Q'18

2Q'19

Total

GAAP

Weighted-Average

Common

Units

Outstanding

Basic

681,794,492

682,435,177

676,629,572

674,507,698

673,655,305

678,156,936

674,079,074

657,868,076

673,078,646

676,828,114

Weighted-Average Unvested Deferred Restricted Common Units

216,118

230,759

207,752

330,639

207,526

269,196

1,236,773

444,760

257,322

Weighted-Average Blackstone Holdings Partnership Units

523,212,047

525,764,790

532,363,486

526,244,006

538,678,130

524,831,943

Total

GAAP

Weighted-Average

Units

Outstanding

Diluted

682,010,610

1,205,877,983

676,629,572

1,200,480,240

673,985,944

1,210,727,948

1,200,592,276

1,197,782,979

673,523,406

1,201,917,379

Blackstone

Blackstone’s Second Quarter 2019 GAAP Balance Sheet Results

See page 30, Reconciliation of GAAP to Non-GAAP Balance Sheet Measures.

(Dollars in Thousands) (Unaudited)

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

Assets

Cash and Cash Equivalents

1,710,251

1,937,963

2,207,841

1,570,741

1,484,444

Cash Held by Blackstone Funds and Other

288,675

408,561

337,320

217,625

324,609

Investments

22,008,182

22,094,920

20,377,031

21,180,950

22,242,040

Accounts Receivable

917,717

875,647

636,238

711,889

802,066

Due from Affiliates

2,015,949

2,017,637

1,994,123

2,320,291

2,211,737

Intangible Assets, Net

380,844

366,368

468,507

450,757

433,007

Goodwill

1,778,192

1,869,860

Other Assets

252,936

269,470

294,248

302,033

354,253

Right-of-Use Assets

521,932

507,065

Deferred Tax Assets

722,551

711,599

739,482

728,873

743,132

Total Assets

30,075,297

30,460,357

28,924,650

29,874,951

30,972,213

Liabilities and Equity

Loans Payable

10,195,403

10,161,886

9,951,862

10,011,155

10,676,138

Due to Affiliates

967,250

981,980

1,035,776

1,045,452

1,081,899

Accrued Compensation and Benefits

2,987,977

3,414,215

2,942,128

3,001,597

3,308,595

Securities Sold, Not Yet Purchased

155,780

166,309

142,617

128,106

128,512

Repurchase Agreements

182,489

199,488

222,202

218,865

207,676

Operating Lease Liabilities

587,408

574,619

Accounts Payable, Accrued Expenses and Other Liabilities

950,802

829,496

875,979

735,667

929,688

Total Liabilities

15,439,701

15,753,374

15,170,564

15,728,250

16,907,127

Redeemable Non-Controlling Interests in Consolidated Entities

158,799

153,504

141,779

136,941

101,310

Equity

Partners' Capital

7,105,225

7,024,079

6,415,700

6,501,072

6,335,897

Accumulated Other Comprehensive Loss

(57,876)

(36,562)

(36,476)

(32,430)

(27,542)

Non-Controlling Interests in Consolidated Entities

3,492,621

3,673,135

3,648,766

3,852,346

3,869,303

Non-Controlling Interests in Blackstone Entities

3,936,827

3,892,827

3,584,317

3,688,772

3,786,118

Total Equity

14,476,797

14,553,479

13,612,307

14,009,760

13,963,776

Total Liabilities and Equity

30,075,297

30,460,357

28,924,650

29,874,951

30,972,213

Blackstone

Reconciliation of GAAP to Non-GAAP Balance Sheet Measures

(a)

This adjustment adds back investments in consolidated Blackstone Funds which have been eliminated in consolidation.

(b)

Represents GAAP accrued performance revenue recorded within Due from Affiliates.

(c)

Represents GAAP accrued performance compensation associated with Accrued Performance Allocations and is recorded within Accrued Compensation and Benefits and Due to

Affiliates.

(d)

This adjustment adds other assets related to Treasury Operations that are recorded within Accounts Receivable, reverse repurchase agreements and Due from Affiliates.

(e)

This adjustment adds other liabilities related to Treasury Operations that are recorded within Accounts Payable, Accrued Expenses and Other Liabilities, Repurchase Agreements

and securities sold short, not yet purchased.

(f)

This adjustment removes amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests and adds back investments

in consolidated Blackstone Funds which have been eliminated in consolidation.

(g)

This adjustment removes amounts related to consolidated Blackstone Funds.

(Dollars in Thousands)

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

Investments of Consolidated Blackstone Funds

8,608,565

8,503,423

8,376,338

8,603,847

8,633,794

Equity Method Investments

Partnership Investments

3,589,234

3,690,841

3,649,423

3,815,993

3,802,565

Accrued Performance Allocations

6,354,179

6,722,430

5,883,924

6,486,450

6,743,542

Corporate Treasury Investments

3,088,001

2,883,610

2,206,493

2,005,174

2,797,908

Other Investments

368,203

294,616

260,853

269,486

264,231

Total GAAP Investments

22,008,182

22,094,920

20,377,031

21,180,950

22,242,040

Accrued Performance Allocations -

GAAP

6,354,179

6,722,430

5,883,924

6,486,450

6,743,542

Impact of Consolidation (a)

534

229

374

607

Due From Affiliates -

GAAP (b)

26,365

13,546

33,419

9,483

25,022

Less: Accrued Performance Compensation -

GAAP (c)

(2,509,219)

(2,700,828)

(2,394,747)

(2,638,374)

(2,724,998)

Net Accrued Performance Revenues

3,871,859

4,035,377

3,522,596

3,857,933

4,044,173

Corporate Treasury Investments -

GAAP

3,088,001

2,883,610

2,206,493

2,005,174

2,797,908

Impact of Consolidation (a)

74,021

75,340

73,106

75,988

160,644

Other Assets (d)

462,321

586,527

438,454

519,884

425,823

Other Liabilities (e)

(105,979)

(91,406)

(205,332)

(101,605)

(91,016)

Corporate

Treasury

Investments

Deconsolidated

3,518,364

3,454,071

2,512,721

2,499,441

3,293,359

Partnership and Other Investments -

GAAP

3,957,437

3,985,457

3,910,276

4,085,479

4,066,796

Impact of Consolidation (f)

(1,919,052)

(1,991,871)

(2,015,417)

(2,095,717)

(2,209,825)

GP/Fund

Investments

Deconsolidated

2,038,385

1,993,586

1,894,859

1,989,762

1,856,971

Loans

Payable

GAAP

10,195,403

10,161,886

9,951,862

10,011,155

10,676,138

Impact of Consolidation (g)

(6,707,046)

(6,679,598)

(6,480,711)

(6,561,111)

(6,536,221)

Outstanding Bonds (Carrying Value)

3,488,357

3,482,288

3,471,151

3,450,044

4,139,917

Unamortized Discount/Premium

63,886

62,755

60,879

59,576

66,033

Outstanding

Bonds

(at

par)

Deconsolidated

3,552,243

3,545,043

3,532,030

3,509,620

4,205,950

Blackstone

Reconciliation of GAAP to Total Segment Measures

QTD

YTD

LTM

(Dollars in Thousands)

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

2Q'18

2Q'19

2Q'17

2Q'18

2Q'19

Management and Advisory Fees, Net

GAAP

721,384

780,009

797,554

809,726

840,378

1,450,233

1,650,104

2,575,989

2,865,214

3,227,667

Segment Adjustment (a)

1,610

(790)

641

4,336

3,778

8,805

8,114

8,000

18,198

7,965

Total Segment

722,994

779,219

798,195

814,062

844,156

1,459,038

1,658,218

2,583,989

2,883,412

3,235,632

GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues

GAAP

Incentive Fees

19,378

9,799

15,797

12,132

21,915

31,944

34,047

179,504

187,644

59,643

Investment

Income

Realized

Performance

Allocations

503,376

592,103

511,388

242,375

332,520

773,016

574,895

2,654,741

2,630,260

1,678,386

GAAP

522,754

601,902

527,185

254,507

354,435

804,960

608,942

2,834,245

2,817,904

1,738,029

Total Segment

Less: Realized Performance Revenues

(477,544)

(572,159)

(483,697)

(246,769)

(341,386)

(755,915)

(588,155)

(2,731,564)

(2,657,434)

(1,644,011)

Segment Adjustment (b)

305

556

697

575

307

616

2,173

2,757

1,869

Total Segment

45,515

30,299

44,185

7,779

13,624

49,352

21,403

104,854

163,227

95,887

GAAP Compensation to Total Segment Fee Related Compensation

GAAP

Compensation

427,479

419,285

373,790

471,397

438,521

816,882

909,918

1,352,773

1,540,575

1,702,993

Incentive Fees Compensation

9,743

7,251

10,260

5,406

8,886

16,405

14,292

83,870

78,187

31,803

Realized Performance Allocations Compensation

186,398

200,442

212,174

86,395

125,825

298,460

212,220

880,435

1,018,209

624,836

GAAP

623,620

626,978

596,224

563,198

573,232

1,131,747

1,136,430

2,317,078

2,636,971

2,359,632

Total Segment

Less: Realized Performance Compensation

(172,894)

(190,773)

(199,645)

(85,240)

(125,466)

(287,723)

(210,706)

(909,329)

(1,009,830)

(601,124)

(31,483)

(33,514)

(39,968)

(63,708)

(50,225)

(71,731)

(113,933)

(88,024)

(113,049)

(187,415)

(2,911)

(3,062)

(3,134)

(3,068)

(2,880)

(6,811)

(5,948)

(8,905)

(14,699)

(12,144)

Segment Adjustment (c)

(110,089)

(65,084)

(74,193)

(87,151)

(100,827)

(163,165)

(187,978)

(248,831)

(278,026)

(327,255)

Total Segment

306,243

334,545

279,284

324,031

293,834

602,317

617,865

1,061,989

1,221,367

1,231,694

GAAP General, Administrative and Other to Total Segment Other Operating Expenses

GAAP

145,828

168,813

153,519

146,062

175,308

272,541

321,370

508,616

532,185

643,702

Segment Adjustment (d)

(23,362)

(40,068)

(23,494)

(22,751)

(33,187)

(42,983)

(55,938)

(83,049)

(80,061)

(119,500)

Total Segment

122,466

128,745

130,025

123,311

142,121

229,558

265,432

425,567

452,124

524,202

Realized Performance Revenues

GAAP

Incentive Fees

19,378

9,799

15,797

12,132

21,915

31,944

34,047

179,504

187,644

59,643

Investment

Income

Realized

Performance

Allocations

503,376

592,103

511,388

242,375

332,520

773,016

574,895

2,654,741

2,630,260

1,678,386

GAAP

522,754

601,902

527,185

254,507

354,435

804,960

608,942

2,834,245

2,817,904

1,738,029

Total Segment

Less: Fee Related Performance Revenues

(45,515)

(30,299)

(44,185)

(7,779)

(13,624)

(49,352)

(21,403)

(104,854)

(163,227)

(95,887)

Segment Adjustment (b)

305

556

697

575

307

616

2,173

2,757

1,869

Total Segment

477,544

572,159

483,697

246,769

341,386

755,915

588,155

2,731,564

2,657,434

1,644,011

Less: Equity-Based Compensation - Operating Compensation

Less: Equity-Based Compensation - Performance Compensation

Blackstone

Reconciliation

GAAP

Total

Segment

Measures

–

Continued

This analysis reconciles the components of Total Segment Distributable Earnings (page 3) to their equivalent GAAP measures, reported on the Consolidated Statement of Operations

(page 1). Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles, the

expense of equity-based awards and Transaction-Related Charges.

(a)

Represents (1) the add back of net management fees earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of revenue

from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the

Total Segment measures.

(b)

Represents the add back of Performance Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.

(c)

Represents the removal of Transaction-Related Charges that are not recorded in the Total Segment measures.

(d)

Represents the removal of (1) the amortization of transaction-related intangibles, and (2) certain expenses reimbursed by the Blackstone Funds, which are presented gross

under

GAAP

but

netted

against

Management

and

Advisory

Fees,

Net

the

Total

Segment

measures.

(e)

Represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in

consolidation,

and

(2)

the

removal

amounts

associated

with

the

ownership

Blackstone

consolidated

operating

partnerships

held

non-controlling

interests.

(f)

Represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of interest

expense associated with the Tax Receivable Agreement.

QTD

YTD

LTM

(Dollars in Thousands)

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

2Q'18

2Q'19

2Q'17

2Q'18

2Q'19

Realized Performance Compensation

GAAP

Incentive Fee Compensation

9,743

7,251

10,260

5,406

8,886

16,405

14,292

83,870

78,187

31,803

Realized Performance Allocations Compensation

186,398

200,442

212,174

86,395

125,825

298,460

212,220

880,435

1,018,209

624,836

GAAP

196,141

207,693

222,434

91,801

134,711

314,865

226,512

964,305

1,096,396

656,639

Total Segment

Less: Fee Related Performance Compensation

(20,336)

(13,858)

(19,655)

(3,493)

(6,365)

(20,331)

(9,858)

(46,071)

(71,867)

(43,371)

(2,911)

(3,062)

(3,134)

(3,068)

(2,880)

(6,811)

(5,948)

(8,905)

(14,699)

(12,144)

Total Segment

172,894

190,773

199,645

85,240

125,466

287,723

210,706

909,329

1,009,830

601,124

Realized Principal Investment Income

GAAP

129,197

134,619

109,901

73,261

145,040

171,342

218,301

602,103

430,709

462,821

Segment Adjustment (e)

(34,550)

(68,999)

(62,803)

(47,353)

(21,483)

(48,002)

(68,836)

(142,022)

(174,956)

(200,638)

Total Segment

94,647

65,620

47,098

25,908

123,557

123,340

149,465

460,081

255,753

262,183

GAAP Interest and Dividend Revenue net of Interest Expense to Total Segment Net Interest Income (Loss)

GAAP

Interest and Dividend Revenue

40,073

48,604

47,885

44,084

43,686

75,458

87,770

112,561

152,956

184,259

Interest Expense

(39,320)

(41,355)

(44,644)

(42,002)

(43,596)

(77,991)

(85,598)

(159,755)

(194,142)

(171,597)

GAAP

753

7,249

3,241

2,082

(2,533)

2,172

(47,194)

(41,186)

12,662

Segment Adjustment (f)

2,089

1,764

8,682

2,979

2,671

3,522

5,650

4,923

9,802

16,096

Total Segment

2,842

9,013

11,923

5,061

2,761

989

7,822

(42,271)

(31,384)

28,758

Less: Equity-Based Compensation - Performance Compensation

Blackstone

Definitions and Dividend Policy

Blackstone discloses the following operating metrics and 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:

•

Segment

Distributable

Earnings,

“Segment

DE”,

Blackstone’s

segment

profitability

measure

used

make

operating

decisions

and

assess

performance

across

Blackstone’s four segments. Segment DE represents the net realized earnings of Blackstone’s segments and is the sum of Fee Related Earnings and Net Realizations

for each segment. Blackstone’s segments are presented on a basis that deconsolidates Blackstone Funds, eliminates non-controlling ownership interests in

Blackstone’s consolidated Operating Partnerships, removes the amortization of intangible assets and removes Transaction-Related Charges. Segment DE excludes

unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for

Taxes.

Net Realizations

is presented on a segment basis and is the sum of Realized Principal Investment Income and Realized Performance Revenues (which

Realized Performance Revenues excluding Fee Related Performance Revenues), less Realized Performance Compensation (which refers to Realized Performance

Compensation excluding Fee Related Performance Compensation and Equity-Based Performance Compensation).

Total

Segment

Revenues

and

Segment

Revenues

represent

Net

Management

and

Advisory

Fees,

Fee

Performance

Revenues,

Realized

Performance

Revenues and Realized Principal Investment Income.

•

Distributable

Earnings,

“DE”,

derived

from

Blackstone’s

segment

reported

results.

used

assess

performance

and

amounts

available

for

dividends

Blackstone shareholders, including Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships. DE is the sum of Segment DE

plus Net Interest Income (Loss) less Taxes and Related Payables. DE excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its

most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes.

Net

Interest

Income

(Loss)

presented

segment

basis

and

equal

Interest

and

Dividend

Revenue

less

Interest

Expense,

adjusted

for

the

impact

consolidation of Blackstone Funds, and interest expense associated with the Tax Receivable Agreement.

Taxes

and

Payables

represent

the

total

GAAP

tax

provision

adjusted

include

only

the

current

tax

provision

(benefit)

calculated

Income

(Loss)

Before Provision for Taxes excluding the tax impact of any divestitures and including the Payable under the Tax Receivable Agreement.

•

Fee

Earnings,

“FRE”,

performance

measure

used

assess

Blackstone’s

ability

generate

profits

from

revenues

that

are

measured

and

received

a recurring basis and not subject to future realization events. FRE equals management and advisory fees (net of management fee reductions and offsets) plus Fee

Related Performance Revenues, less (a) Fee Related Compensation on a segment basis, and (b) Other Operating Expenses. FRE is derived from and reconciled to,

but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes.

Fee

Compensation

presented

segment

basis

and

refers

the

compensation

expense,

excluding

Equity-Based

Compensation,

directly

(a) Management and Advisory Fees, Net and (b) Fee Related Performance Revenues, referred to as Fee Related Performance Compensation.

Fee

Performance

Revenues

refers

the

realized

portion

Performance

Revenues

from

Perpetual

Capital

that

are

(a)

measured

and

received

recurring basis, and (b) not dependent on realization events from the underlying investments.

Perpetual

Capital

refers

the

component

assets

under

management

with

indefinite

term,

that

not

liquidation,

and

for

which

there

requirement

to return capital to investors through redemption requests in the ordinary course of business, except where funded by new capital inflows. Includes co-

investment capital with an investor right to convert into Perpetual Capital.

refers

Blackstone

Definitions

and

Dividend

Policy

–

Continued

•

Adjusted

Earnings

Before

Interest,

Taxes

and

Depreciation

and

Amortization,

“Adjusted

EBITDA”,

supplemental

measure

used

assess

performance

derived from Blackstone’s segment results and may be used to assess its ability to service its borrowings. Adjusted EBITDA represents Distributable Earnings plus

the addition of (a) Interest Expense on a segment basis, (b) Taxes and Related Payables, and (c) Depreciation and Amortization. Adjusted EBITDA is derived from

and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes.

•

Performance

Revenues

collectively

refers

to:

(a)

Incentive

Fees,

and

(b)

Performance

Allocations.

•

Performance

Compensation

collectively

refers

to:

(a)

Incentive

Fee

Compensation,

and

(b)

Performance

Allocations

Compensation.

•

Transaction-Related

Charges

arise

from

corporate

actions

including

acquisitions,

divestitures,

and

Blackstone’s

initial

public

offering.

They

consist

primarily

equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting

from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.

Dividend Policy. Blackstone’s intention is to dividend quarterly to common shareholders approximately 85% of The Blackstone Group Inc.’s share of Distributable

Earnings, subject to adjustment by amounts determined by Blackstone’s board of directors to be necessary or appropriate to provide for the conduct of its business,

to make appropriate investments in its business and funds, to comply with applicable law, any of its debt instruments or other agreements, or to provide for future

cash

requirements

such

tax-related

payments,

clawback

obligations

and

dividends

shareholders

for

any

ensuing

quarter.

The

dividend

amount

could

also

adjusted

upward

any

one

quarter.

All

the

foregoing

subject

the

qualification

that

the

declaration

and

payment

any

dividends

are

the

sole

discretion

Blackstone’s board of directors and our board of directors may change our dividend policy at any time, including, without limitation, to eliminate such dividends

entirely.

Blackstone

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 our current views with respect to, among other things, our

operations,

taxes

earnings

and

financial

performance,

repurchases

and

dividends.

You

can

identify

these

forward-looking

statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,”

“seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other

comparable

words.

Such

forward-looking

statements

are

subject

various

risks

and

uncertainties.

Accordingly,

there

are

will

important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We

believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on

Form 10-K for the year ended December 31, 2018 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as

such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission

(“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be

read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The

forward-looking

statements

speak

only

the

date

this

report,

and

undertake

obligation

publicly

update

review

any

forward-looking statement, whether as a result of new information, future developments or otherwise.

This presentation does not constitute an offer of any Blackstone Fund.

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