Blackstone SOTP Valuation Analysis – No Direct Allegations

Morgan Stanley | sesearcs NORTH AMERICA INSIGHT ~~ Blackstone SOTP and Sensitivity Analysis Exhibit 36: SOTP for BX Blackstone (BX) Siimeot-the-Parte/Components oe Downside Case Upside Case C- (BX) Price C-Corp Corp Change SOTP Conversion Conversion 2018e Pre-Tax Core FRE / Sh $1.00 $1.00 0% $1.00 0% Tax Rate 24% 24% 0% 24% 0% Fee Related Earni 2018e After-Tax Core FRE / Sh $0.76 $0.76 0% $0.76 0% arnings FRE Multiple 15.0x 15.0x 0.0x ZOUK 1.95x Core FRE Value $11.36 $11.36 0% $17.03 50% + Balance Balance Sheet Net Cash and rn c Sheet Investments / Sh (as of 3Q17) oad eee thee wane ao a Accrued Net Accrued Carry / Sh (as of $3.01 $2.29 24% $2.29 24% Carry 3Q17) + Avg Net Carried interest / Sh ° A Market (2018e-2020e) $2.07 $1.57 -24% $1.57 -24% Implied Carry ; Value Multiple 9.5x 8.3x -1.2x alex 2.0x Market Implied Carry Value ! $19.59] $13.04 -33% $18.04 8% Total Value $36.78 $29.51 -20% $40.18 9% Valuation 2018e EPS $3.26 $2.62 -20% $2.62 -20% P/E 11.3x 11.3x 0.0x 15.4x 4.1x Source: Company Data, Morgan Stanley Research estimates Exhibit 37: Exhibit 38: BX Estimated Potential Share Price in C-corp Conversion BX Estimated % Change in Current Share Price Multiple on Future Performance Fees Multiple on Future Performance Fees © 6.3x 7.3x 8.3x 9.3x 10.3x 11.5x 12.3x » 6.3x 7.3x 8.3x 9.3x 10.3x 11.5x 12.3x é é Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates HOUSE_OVERSIGHT_025574