Oaktree Capital Group, LLC Announces Fourth Quarter and Full-Year 2012 Financial Results

  Oaktree Capital Group, LLC Announces Fourth Quarter and Full-Year 2012
  Financial Results

  *Adjusted net income per Class A unit grew to $1.36 and $4.06 for the
    fourth quarter and full-year 2012, respectively, from $0.33 and $2.15 in
    2011, driven by gains in incentive and investment income.
  *Distributable earnings per Class A unit grew to $1.37 and $3.82 for the
    fourth quarter and full-year 2012, respectively, from $0.39 and $2.62 in
    2011, on continued strong fee-related earnings and higher incentive income
    and investment income proceeds.
  *Economic net income per Class A unit grew to $1.47 and $5.75 for the
    fourth quarter and full-year 2012, respectively, from $1.05 and $1.26 in
    2011, driven by a substantial increase in incentives created for the
    full-year period.
  *Gross capital raised grew to $11.0 billion in 2012 from $9.8 billion in
    2011, representing the sixth consecutive year of $9.8 billion or more.
    Over the last six years, Oaktree has raised a total of $76.3 billion.
  *GAAP net income attributable to Oaktree Capital Group, LLC was $39.3
    million and $107.8 million for the fourth quarter and year ended December
    31, 2012, respectively.
  *Oaktree declares a quarterly distribution of $1.05 per ClassA unit, for
    an aggregate distribution of $2.94 for fiscal year 2012.

Business Wire

LOS ANGELES -- February 14, 2013

Oaktree Capital Group, LLC (NYSE: OAK) today reported its financial results
for the fourth quarter and year ended December 31, 2012.

Adjusted net income (“ANI”) rose 187%, to $220.4 million in the fourth quarter
of 2012, from $76.7 million in the fourth quarter of 2011, on a 71% increase
in total segment revenues. The growth in revenues, to $447.0 million from
$261.4 million, reflected substantially higher incentive income. Strong
fee-related earnings (“FRE”) and incentive income, together with investment
income proceeds from Oaktree funds and DoubleLine Capital LP and its affiliate
(together, “DoubleLine”), drove distributable earnings up 382%, to $238.1
million in the fourth quarter of 2012 from $49.4 million in the fourth quarter
of 2011.

ANI rose 67%, to $717.3 million in the year ended December 31, 2012 from
$428.4 million in the prior year, on a 34% increase in total segment revenues.
The growth in revenues, to $1.4 billion in 2012 from $1.1 billion in 2011,
resulted from record annual incentive income and higher investment income. The
incentive income, coupled with higher investment income proceeds from Oaktree
funds and DoubleLine, drove distributable earnings to an annual record of
$672.2 million in 2012, up 38% from $488.5 million in 2011.

Oaktree’s closed-end funds distributed a quarterly record $5.7 billion to
investors in the fourth quarter of 2012 and an annual record $12.7 billion for
full-year 2012.

Howard Marks, Chairman, said, “The fourth quarter of 2012 was a record quarter
within a record year for Oaktree. Across the firm, our investment teams
delivered the type of performance that is the hallmark of Oaktree’s
risk-controlled, value-driven investment approach. Compelling returns across
our many asset classes drove revenues, distributable earnings and
distributions to our clients and unitholders to their highest levels ever.”

In addition to ANI, Oaktree calculates economic net income (“ENI”) to
facilitate comparability with other alternative asset managers that use ENI as
their profit measure. Unlike ANI, ENI measures incentive income based on
market values. ENI fell 7%, to $221.7 million in the fourth quarter of 2012
from $237.2 million in the fourth quarter of 2011, and rose 236% for the
annual period, to $971.7 million in 2012 from $289.5 million in 2011.

GAAP-basis results for the fourth quarter and year ended December 31, 2012
included net income attributable to Oaktree Capital Group, LLC of $39.3
million and $107.8 million, respectively.

Assets under management were $77.1 billion as of December 31, 2012, down $3.9
billion from September 30, 2012 and up $2.2 billion since December 31, 2011.
The decline during the fourth quarter reflected closed-end fund distributions,
while the year-over-year gain resulted from market-value appreciation in
Oaktree’s funds. Management fee-generating assets under management were $66.8
billion as of December 31, 2012, little changed from $66.2 billion at
September 30, 2012 and $67.0 billion as of December 31, 2011. Oaktree’s new
distressed debt fund, Oaktree Opportunities Fund IX, L.P. (“Opps IX”), with
$5.0 billion of capital commitments, has not yet commenced its investment
period and thus was not included in management fee-generating assets under
management as of December 31, 2012.

Gross capital raised of $2.3 billion in the fourth quarter brought the
full-year 2012 total to $11.0 billion. During the fourth quarter, Oaktree held
an interim closing for Oaktree Enhanced Income Fund, L.P. (“EIF”), which
invests in senior loan assets on a leveraged basis. EIF had its final close in
February 2013 and is expected to reach a total fund size, including leverage,
of over $2.0 billion, exceeding our initial target of $1.5 billion. Following
its second and most recent close in January 2013, Oaktree Real Estate
Opportunities Fund VI, L.P. (“ROF VI”) has committed capital of $436 million,
towards a targeted size of $1.5 billion.

In January 2013, Oaktree launched the marketing of Oaktree Principal Fund VI,
L.P. (“PF VI”), a control investing closed-end fund, with a target of $3.0
billion in capital commitments. Oaktree’s control investing funds primarily
invest to gain control of, or significant influence over, middle-market
companies that are experiencing distress or dislocation.

On February 7, 2013, OCM Opportunities Fund VIIb, L.P. (“Opps VIIb”) made its
first distribution of the year, in the aggregate cash amount of $700 million.
From that distribution, Oaktree currently expects to recognize gross incentive
income of approximately $195 million, before associated incentive income
compensation expense, in the first quarter of 2013. Using balances as of
December 31, 2012, the recognition of $195 million as gross incentive income
would leave approximately $937 million as Opps VIIb’s remaining gross accrued
incentive (fund level). Opps VIIb is now through both the “catch-up” layer of
its distribution waterfall and any impact from prior tax-related incentive
distributions to Oaktree; thus, Oaktree’s incentive share of Opps VIIb’s
future distributions attributable to its limited partners will equal 20%,
before associated incentive income compensation expense.

Oaktree declares a distribution of $1.05 per Class A unit with respect to the
fourth quarter of 2012, payable on March 1, 2013 to unitholders of record on
February 25, 2013. This payout will bring to $2.94 the total distributions
applicable to fiscal year 2012.

The table below presents: (a)fee-related earnings, distributable earnings,
adjusted net income and economic net income, in each case for both the
Operating Group and per ClassA unit; and (b)assets under management and
accrued incentives (fund level) data. Please refer to the Glossary for
definitions.

                      As of or for the Three         As of or for the Year Ended
                         Months Ended December 31,         December 31,
                         2012          2011             2012          2011
                         (in thousands, except per unit data or as otherwise indicated)
Segment Results:
Fee-related              $  71,760        $  79,532        $ 307,299        $ 314,968
earnings
Fee-related
earnings-OCG per         0.40             0.39             1.62             1.47
Class A unit
Distributable            238,134          49,423           672,181          488,535
earnings
Distributable
earnings-OCG per         1.37             0.39             3.82             2.62
Class A unit
Adjusted net             220,376          76,707           717,250          428,384
income
Adjusted net
income-OCG per           1.36             0.33             4.06             2.15
Class A unit
Economic net             221,705          237,214          971,733          289,512
income
Economic net
income-OCG per           1.47             1.05             5.75             1.26
Class A unit
Operating Metrics:
Assets under
management (in
millions):
Assets under             $  77,051        $  74,857        $ 77,051         $ 74,857
management
Management
fee-generating           66,784           66,964           66,784           66,964
assets under
management
Incentive-creating
assets under             33,989           36,155           33,989           36,155
management
Uncalled capital         11,201           11,201           11,201           11,201
commitments
Accrued incentives
(fund level):
Incentives created       209,500          201,747          911,947          (75,916   )
(fund level)
Incentives created
(fund level), net
of associated            116,994          120,548          522,800          (30,600   )
incentive income
compensation
expense
Accrued incentives       2,137,798        1,686,967        2,137,798        1,686,967
(fund level)
Accrued incentives
(fund level), net
of associated            1,282,194        1,027,711        1,282,194        1,027,711
incentive income
compensation
expense
                                                                                      

Note: Oaktree discloses in this earnings release certain financial measures,
including fee-related earnings, fee-related earnings-OCG per ClassA unit,
distributable earnings, distributable earnings-OCG per ClassA unit, adjusted
net income, adjusted net income-OCG per ClassA unit, economic net income and
economic net income-OCG per ClassA unit, that are calculated and presented on
the basis of methodologies other than in accordance with generally accepted
accounting principles in the United States (“non-GAAP”). Reconciliations of
these non-GAAP financial measures to the most directly comparable financial
measures calculated and presented in accordance with GAAP are presented in
Exhibit A. All non-GAAP measures, except adjusted net income, and all interim
results presented in this earnings release are unaudited. GAAP-basis results
for the year ended December 31, 2012 are subject to the completion of
Oaktree’s annual audit. All information in this earnings release gives effect
to the conversion of previously outstanding 13,000 Class C units into ClassA
units on a one-for-one basis before the initial public offering of ClassA
units.

Operating Metrics

Assets under management

Assets under management (“AUM”) were $77.1 billion as of December 31, 2012, as
compared with $81.0 billion as of September30, 2012 and $74.9 billion as of
December 31, 2011. The $3.9 billion decrease since September30, 2012
primarily reflected $5.7 billion in distributions to investors in our
closed-end funds and $1.6 billion in uncalled capital commitments associated
with the end of closed-end fund investment periods, partially offset by $2.1
billion of market-value gains. The $5.7 billion of closed-end fund
distributions primarily included $2.5 billion by Opps VIIb, $1.2 billion by
other distressed debt funds and $1.1 billion by control investing funds.
Oaktree PPIP Fund, L.P. (“PPIP”) represented $1.2 billion of the $1.6 billion
in uncalled capital commitments to funds whose investment periods ended in the
fourth quarter of 2012.

The $2.2 billion increase in AUM during 2012 was attributable primarily to
market-value gains of $9.6 billion and new capital commitments of $6.5 billion
to closed-end funds, partially offset by $12.7 billion of distributions to
investors in closed-end funds. Of the new capital commitments, Opps IX
represented $5.0 billion. Net inflows to open-end funds were $0.5 billion,
driven by $1.0 billion in net inflows to U.S. high yield bonds.

Management fee-generating assets under management

Management fee-generating assets under management (“management fee-generating
AUM”) were $66.8 billion as of December 31, 2012, as compared to $66.2 billion
as of September30, 2012 and $67.0 billion as of December 31, 2011. The
increase of $0.6 billion in the fourth quarter of 2012 represented increases
of $0.9 billion from market-value gains in funds for which management fees are
based on NAV and $0.6 billion in net inflows across open-end funds, partially
offset by a decrease of $1.1 billion attributable to closed-end funds in
liquidation. Of the latter, Opps VIIb accounted for $0.7 billion.

As compared to December 31, 2011, management fee-generating AUM decreased $0.2
billion, reflecting the net effect of a $5.5 billion decline from asset sales
by closed-end funds in liquidation, $3.9 billion in market-value gains in
funds for which management fees are based on NAV, and an increase of $1.0
billion upon closings for Oaktree Real Estate Opportunities Fund V, L.P. (“ROF
V”) and ROF VI, and drawdowns by PPIP and EIF, including leverage.

Incentive-creating assets under management

Incentive-creating assets under management (“incentive-creating AUM”) were
$34.0 billion as of December 31, 2012, as compared with $37.1 billion as of
September30, 2012 and $36.2 billion as of December 31, 2011. The decrease of
$3.1 billion in the fourth quarter of 2012 reflected closed-end fund
distributions of $5.3 billion, partially offset by drawdowns and market-value
gains of $1.0 billion and $1.1 billion, respectively.

As compared to December 31, 2011, incentive-creating AUM decreased $2.2
billion, primarily reflecting the net effect of $12.1 billion in closed-end
fund distributions, $4.5 billion in drawdowns and $5.4 billion in market-value
gains. Of the $34.0 billion in incentive-creating AUM as of December 31, 2012,
$25.6 billion, or 75.3%, was generating incentives at the fund level.

Accrued incentives (fund level) and incentives created (fund level)

Accrued incentives (fund level) amounted to $2.1 billion as of December 31,
2012, as compared with $2.1 billion as of September30, 2012 and $1.7 billion
as of December 31, 2011. The $0.4 billion increase in 2012 resulted from
$911.9 million of incentives created, less $461.1 million of segment incentive
income recognized.

Net of incentive income compensation expense, accrued incentives (fund level)
amounted to $1.3 billion, $1.3 billion and $1.0 billion as of December 31,
2012,September30, 2012 and December 31, 2011, respectively.

Uncalled capital commitments

Uncalled capital commitments amounted to $11.2 billion as of December 31,
2012, as compared with $13.3 billion as of September30, 2012 and $11.2
billion as of December 31, 2011.

Segment Results

Revenues

Total segment revenues increased $185.6 million, or 71.0%, to $447.0 million
for the fourth quarter of 2012 from $261.4 million for the fourth quarter of
2011, as a result of growth of $178.2 million in incentive income and $8.7
million in investment income, slightly offset by a decline of $1.4 million in
management fees.

Total segment revenues increased $358.9 million, or 34.1%, to $1.41 billion
for the year ended December 31, 2012 from $1.05 billion for 2011, as a result
of growth of $23.1 million in management fees, $157.1 million in incentive
income and $178.6 million in investment income.

Management fees

Management fees decreased $1.4 million, or 0.8%, to $184.7 million for the
fourth quarter of 2012 from $186.1 million in the prior year’s fourth quarter.
The decline reflected a decrease of $17.6 million in fees attributable to
closed-end funds in liquidation and increases of $8.0 million from new
commitments to closed-end funds and $5.4 million from open-end funds resulting
from market-value gains and net inflows. Among closed-end funds in
liquidation, Opps VIIb accounted for $9.5 million of the decline. During the
fourth quarter of 2012, closed-end funds accounted for $140.8 million, or
76.2%, of total management fees.

Management fees increased $23.1 million, or 3.2%, to $747.4 million for
full-year 2012 from $724.3 million in 2011. The increase reflected $94.6
million from new commitments to closed-end funds and a decline of $67.8
million attributable to closed-end funds in liquidation. Funds that accounted
for the majority of the new capital commitments were Oaktree Opportunities
Fund VIIIb, L.P. (“Opps VIIIb”), Oaktree European Principal Fund III, L.P.
(“EPF III”), ROF V and ROF VI. Of the funds in liquidation, Opps VIIb
accounted for $40.7 million of the decline. During 2012, closed-end funds
accounted for $580.6 million, or 77.7%, of total management fees.

Incentive income

Incentive income increased $178.2 million, or 555.1%, to $210.3 million for
the fourth quarter of 2012, from $32.1 million for the prior year’s fourth
quarter. Tax-related incentive distributions from Opps VIIb accounted for
$103.8 million of the total $210.3 million in the fourth quarter of 2012 and
none of the prior year’s $32.1 million. In the fourth quarter of 2012, $40.4
million of incentive income was attributable to the annual incentive fee from
our evergreen fund Oaktree Value Opportunities Fund, L.P., with the remaining
$66.1 million arising primarily from distributions by four different control
investing and real estate funds.

Incentive income increased $157.1 million, or 51.7%, to $461.1 million for the
year ended December 31, 2012, from $304.0 million in 2011. Of the $461.1
million, $203.5 million was attributable to realizations and related
distributions by five of our real estate and control investing funds.
Tax-related incentive distributions accounted for $200.7 million and $202.2
million of incentive income in 2012 and 2011, respectively, in both cases
largely attributable to Opps VIIb.

Investment income

Investment income increased $8.7 million, or 20.1%, to $52.0 million for the
fourth quarter of 2012 from $43.3 million for the fourth quarter of 2011,
primarily as a result of Oaktree’s investment in DoubleLine and secondarily as
a result of higher income from Oaktree funds. Oaktree’s income from its
one-fifth ownership of DoubleLine grew from $1.0 million in the fourth quarter
of 2011 to $6.8 million in the fourth quarter of 2012, of which the latter
included $2.8 million attributable to performance fees.

Investment income increased $178.6 million, or 750.4%, to $202.4 million for
the year ended December 31, 2012 from $23.8 million for 2011. Oaktree’s
investments in funds contributed $157.7 million of the increase, largely
reflecting the considerably stronger financial markets in 2012 versus 2011.
The remainder was primarily attributable to DoubleLine’s income, of which
Oaktree’s share increased from $1.8 million in 2011 to $22.9 million in 2012,
with the latter including $8.0 million related to performance fees.

Expenses

Compensation and benefits

Compensation and benefits for the fourth quarter of 2012 amounted to $82.1
million, an increase of $2.1 million, or 2.6%, from the fourth quarter of
2011. For the year ended December 31, 2012, compensation and benefits rose
$22.0 million, or 7.1%, to $330.1 million from $308.1 million in 2011.
Headcount, primarily in non-investment areas, grew 11.2% during 2012.

Incentive income compensation expense

Incentive income compensation expense rose $36.4 million, or 53.6%, to $104.3
million for the fourth quarter of 2012 from $67.9 million for the fourth
quarter of 2011. For the year ended December 31, 2012, incentive income
compensation expense rose $43.4 million, or 24.2%, to $222.6 million from
$179.2 million for 2011. Benefiting comparisons for both 2012 periods was a
charge of $55.5 million in the fourth quarter of 2011 upon the acquisition of
a small portion of certain investment professionals’ carried interest in Opps
VIIb. Serving to increase compensation expense in the 2012 periods were
increases in incentive income revenue of $178.2 million and $157.1 million in
the fourth quarter and full-year 2012, respectively.

General, administrative and other expenses

General, administrative and other expenses increased $4.3 million, or 16.2%,
to $30.8 million for the fourth quarter of 2012 from $26.5 million in the
fourth quarter of 2011. For the year ended December 31, 2012, general,
administrative and other expenses rose $8.9 million, or 8.8%, to $110.1
million from $101.2 million for 2011. Excluding the impact of foreign
currency-related items, general, administrative and other expenses increased
$2.8 million, or 10.7%, to $29.5 million for the fourth quarter of 2012, and
$5.6 million, or 5.5%, to $107.0 million for full-year 2012. In each case, the
increase reflected costs associated with corporate growth, enhancements to our
operational infrastructure, heightened industry regulatory demands and being a
public company.

Adjusted net income

Adjusted net income rose $143.7 million, or 187.4%, to $220.4 million for the
fourth quarter of 2012 from $76.7 million for the fourth quarter of 2011,
reflecting $141.8 million higher incentive income, net of incentive income
compensation expense, an increase of $8.7 million in investment income, and a
decrease of $7.7 million in fee-related earnings. The portion of adjusted net
income attributable to our ClassA units (“adjusted net income-OCG”) was $41.0
million and $7.4 million for the fourth quarters of 2012 and 2011,
respectively. On a per Class A unit basis, adjusted net income-OCG amounted to
$1.36 and $0.33 for the fourth quarters of 2012 and 2011, respectively.

Adjusted net income rose $288.9 million, or 67.4%, to $717.3 million for the
year ended December 31, 2012 from $428.4 million for 2011, reflecting
increases of $178.6 million in investment income and $113.7 million in
incentive income, net of incentive income compensation expense, and a decrease
of $7.7 million in fee-related earnings. Adjusted net income-OCG was $114.4
million and $48.8 million for the years ended December 31, 2012 and 2011,
respectively. On a per Class A unit basis, adjusted net income-OCG amounted to
$4.06 and $2.15 for 2012 and 2011, respectively.

The effective income tax rates applied to ANI for the years ended December 31,
2012 and 2011, respectively, were 14% and 24%, resulting in effective income
tax rates of 7% and 35% for the fourth quarters of 2012 and 2011,
respectively. The full-year 2012 effective income tax rate of 14% for adjusted
net income-OCG excluded a one-time adjustment to deferred tax assets.
Including this adjustment, the effective income tax rate for 2012 was 18%. The
effective income tax rate is a function of the mix of income and other
factors, each of which often varies significantly within or between years and
can have a material impact on the particular year’s income tax expense.

Fee-related earnings

Fee-related earnings decreased $7.7 million, or 9.7%, to $71.8 million for the
fourth quarter of 2012 from $79.5 million for the fourth quarter of 2011,
reflecting the $1.4 million decline in management fees and $4.3 million
increase in general, administrative and other expenses. The portion of FRE
attributable to our ClassA units (“fee-related earnings-OCG”) was $0.40 and
$0.39 per ClassA unit for the fourth quarters of 2012 and 2011, respectively.

Fee-related earnings decreased $7.7 million, or 2.4%, to $307.3 million for
the year ended December 31, 2012 from $315.0 million for 2011. Fee-related
earnings-OCG were $1.62 and $1.47 per Class A unit for 2012 and 2011,
respectively.

The effective income tax rates applied to FRE for the years ended December 31,
2012 and 2011, respectively, were 18% and 29%, resulting in effective income
tax rates of 16% and 25% for the fourth quarters of 2012 and 2011,
respectively. The full-year 2012 effective income tax rate of 18% for
fee-related earnings-OCG excluded a one-time adjustment to deferred tax
assets. Including this adjustment, the effective income tax rate for 2012 was
28%.

Distributable earnings

Distributable earnings increased $188.7 million, or 382.0%, to $238.1 million
for the fourth quarter of 2012 from $49.4 million for the fourth quarter of
2011, reflecting increases of $141.8 million in incentive income, net of
incentive income compensation expense, and $52.7 million in receipts of
investment income, slightly offset by a decline of $7.7 million in fee-related
earnings. For the fourth quarter of 2012, receipts of investment income
totaled $70.2 million and reflected $50.0 million from fund liquidations and
$20.8 million from Oaktree’s one-fifth equity ownership in DoubleLine, of
which the latter included $4.8 million attributable to performance fees. The
portion of distributable earnings attributable to our ClassA units
(“distributable earnings-OCG”) was $1.37 and $0.39 per unit for the fourth
quarters of 2012 and 2011, respectively, reflecting distributable earnings per
Operating Group unit of $1.58 and $0.33, respectively, less costs borne by
ClassA unitholders for professional fees and other expenses, cash taxes
attributable to the Intermediate Holding Companies and amounts payable
pursuant to the tax receivable agreement.

Distributable earnings increased $183.7 million, or 37.6%, to $672.2 million
for the year ended December 31, 2012 from $488.5 million for 2011, reflecting
increases of $113.7 million in incentive income, net of incentive income
compensation expense, and $73.3 million in receipts of investment income,
slightly offset by a decline of $7.7 million in fee-related earnings. For
full-year 2012, receipts of investment income totaled $163.5 million and
reflected $129.6 million from fund liquidations and $33.8 million from
Oaktree’s one-fifth equity ownership in DoubleLine, of which the latter
included $8.7 million attributable to performance fees. Distributable
earnings-OCG were $3.82 and $2.62 per unit for 2012 and 2011, respectively,
reflecting distributable earnings per Operating Group unit of $4.47 and $3.29,
respectively, less the aforementioned costs borne by ClassA unitholders.

GAAP-Basis Results

Net income attributable to Oaktree Capital Group, LLC was $39.3 million for
the fourth quarter of 2012. The comparable amount in the fourth quarter of
2011 was a net loss of $28.9 million, which included significant non-cash
compensation expense stemming from the vesting of units held by Oaktree’s
employees at the time of our private equity offering in May 2007. The vesting
period for that equity ended on January2, 2012.

Net income attributable to Oaktree Capital Group, LLC was $107.8 million for
the year ended December 31, 2012. The comparable amount in 2011 was a net loss
of $96.0 million, which included a full year’s worth of the previously
mentioned non-cash compensation expense.

Capital and Liquidity

As of December 31, 2012, Oaktree had an available cash balance of $458.2
million, or $828.8 million when including investments in U.S. Treasury and
government agency securities, and $615.2 million in outstanding debt. Oaktree
had then and currently has no borrowings outstanding against its $500 million
revolving bank credit facility. Oaktree’s investments in funds and companies
had a carrying value of $1.1 billion as of December 31, 2012. While all of
these investments in funds and companies follow the equity method of
accounting, whereby original cost is adjusted for Oaktree’s share of
income/loss and distributions, investments in funds reflect each fund’s
holdings at fair value, whereas investments in DoubleLine and other companies
are not adjusted to reflect the fair value of the underlying companies.

Distribution

Oaktree Capital Group, LLC has declared a distribution attributable to the
fourth quarter of 2012 of $1.05 per ClassA unit, bringing to $2.94 the
aggregate distributions for the four quarters applicable to fiscal year 2012.
This distribution will be paid on March 1, 2013 to ClassA unitholders of
record at the close of business on February25, 2013.

Conference Call

Oaktree will host a conference call to discuss fourth quarter and full-year
2012 results today at 2:00 p.m. Eastern Time / 11:00 a.m. Pacific Time. The
conference call may be accessed by dialing (888)769-9724 (U.S. callers) or +1
(415)228-4639 (non-U.S. callers), participant password OAKTREE.
Alternatively, a live webcast of the conference call can be accessed through
the Unitholders – Investor Relations section of the Oaktree website,
http://ir.oaktreecapital.com/.

For those individuals unable to listen to the live broadcast of the conference
call, a replay will be available for 30 days on Oaktree’s website, or by
dialing (800)294-4350 (U.S. callers) or +1 (402)220-9777 (non-U.S. callers),
beginning approximately one hour after the broadcast.

About Oaktree

Oaktree is a leading global investment management firm focused on alternative
markets, with $77.1 billion in assets under management as of December 31,
2012. The firm emphasizes an opportunistic, value-oriented and risk-controlled
approach to investments in distressed debt, corporate debt (including high
yield debt and senior loans), control investing, convertible securities, real
estate and listed equities. Headquartered in Los Angeles, the firm has over
700 employees and offices in 13 cities worldwide. For additional information,
please visit Oaktree’s website at www.oaktreecapital.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of
Section27A of the U.S. Securities Act of 1933 (the “Securities Act”) and
Section21E of the U.S. Securities Exchange Act of 1934, each as amended,
which reflect the current views of Oaktree Capital Group, LLC (“OCG”), with
respect to, among other things, its future results of operations and financial
performance. In some cases, you can identify forward-looking statements by
words such as “anticipate,” “approximately,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,”
“predict,” “seek,” “should,” “will” and “would” or the negative version of
these words or other comparable or similar words. These statements identify
prospective information. Important factors could cause actual results to
differ, possibly materially, from those indicated in these statements.
Forward-looking statements are based on OCG’s beliefs, assumptions and
expectations of its future performance, taking into account all information
currently available to OCG. Such forward-looking statements are subject to
risks and uncertainties and assumptions relating to OCG’s operations,
financial results, financial condition, business prospects, growth strategy
and liquidity, including, but not limited to, changes in our anticipated
revenue and income, which are inherently volatile; changes in the value of our
investments; the pace of our raising of new funds; the timing and receipt of
and impact of taxes on carried interest; distributions from and liquidation of
our existing funds; changes in our operating or other expenses; the degree to
which we encounter competition; and general economic and market conditions.
The factors listed in the section captioned “Risk Factors” in OCG’s prospectus
dated April11, 2012, which was filed with the SEC on April12, 2012 in
accordance with Rule 424(b) of the Securities Act, and in Part II, Item1A,
“Risk Factors” in the Company’s Quarterly Report on Form10-Q for the quarter
ended June30, 2012, each of which is accessible on the SEC’s website at
www.sec.gov, provide examples of risks, uncertainties and events that may
cause OCG’s actual results to differ materially from the expectations
described in its forward-looking statements.

Forward-looking statements speak only as of the date the statements are made.
Except as required by law, OCG does not undertake any obligation to publicly
update or review any forward-looking statement, whether as a result of new
information, future developments or otherwise.

This release and its contents do not constitute and should not be construed as
(a)a recommendation to buy, (b)an offer to buy or solicitation of an offer
to buy, (c)an offer to sell or (d)advice in relation to, any securities of
OCG or securities of any Oaktree investment fund.

Consolidated
Statements of                                        
Operations
(GAAP basis)
                                                            
                      Three Months Ended
                                                            Year Ended December 31,
                      December 31,
                      2012            2011               2012            2011
                      (in thousands, except per unit data)
Consolidated
Statements of
Operations:
Revenues:
Management fees       $   42,755         $  35,945          $  134,568         $  140,715
Incentive             4,047             —                 10,415            15,055     
income
Total revenues        46,802            35,945            144,983           155,770    
Expenses:
Compensation          (82,111    )       (80,103    )       (330,018   )       (308,194   )
and benefits
Incentive
income                (104,326   )       (67,862    )       (222,594   )       (179,234   )
compensation
expense
Equity-based          (8,860     )       (238,183   )       (36,342    )       (948,746   )
compensation
Total
compensation          (195,297   )       (386,148   )       (588,954   )       (1,436,174 )
and benefits
expense
General,
administrative        (30,847    )       (26,232    )       (108,814   )       (103,617   )
and other
expenses
Consolidated          (21,864    )       (29,561    )       (92,835    )       (105,073   )
fund expenses
Total expenses        (248,008   )       (441,941   )       (790,603   )       (1,644,864 )
Other income
(loss):
Interest              (12,134    )       (13,079    )       (45,773    )       (50,943    )
expense
Interest and          510,353            571,648            1,966,317          2,565,630
dividend income
Net realized
gain on               1,655,818          435,369            4,560,782          1,744,135
investments
Net change in
unrealized
appreciation          (599,436   )       1,140,128          835,160            (3,064,676 )
(depreciation)
on investments
Investment            7,699              (46        )       25,382             8,600
income (loss)
Other income          (1,507     )       (1,604     )       7,027             (1,209     )
(expense), net
Total other           1,560,793         2,132,416         7,348,895         1,201,537  
income
Income (loss)
before income         1,359,587          1,726,420          6,703,275          (287,557   )
taxes
Income taxes          (3,365     )       (5,168     )       (30,858    )       (21,088    )
Net income            1,356,222          1,721,252          6,672,417          (308,645   )
(loss)
Less:
Net income
attributable to
non-controlling
redeemable            (1,148,042 )       (1,888,260 )       (6,016,342 )       (233,573   )
interests in
consolidated
funds
Net (income)
loss
attributable to       (168,909   )       138,065           (548,265   )       446,246    
OCGH
non-controlling
interest
Net income
(loss)
attributable to       $   39,271        $  (28,943 )       $  107,810        $  (95,972 )
Oaktree Capital
Group, LLC
Distributions
declared per          $   0.55          $  0.29           $  2.31           $  2.34    
Class A unit
Net income
(loss) per unit
(basic and
diluted):
Net income
(loss) per            $   1.30          $  (1.28   )       $  3.83           $  (4.23   )
Class A unit
Weighted
average number
of Class A            30,181            22,677            28,170            22,677     
units
outstanding
                                                                                          

Segment Financial                                     
Data
                                                             
                         As of or for the Three              As of or for the Year

                         Months Ended December 31,           Ended December 31,
                         2012           2011              2012           2011
                         (in thousands, except per unit data or as otherwise indicated)
Segment Statements
of Operations
Data: ^(1)
Revenues:
Management fees          $ 184,748         $ 186,065         $ 747,440         $ 724,321
Incentive income         210,255           32,057            461,116           303,963
Investment income        52,010           43,259           202,392          23,763    
Total revenues           447,013          261,381          1,410,948        1,052,047 
Expenses:
Compensation and         (82,144   )       (80,036   )       (330,059  )       (308,115  )
benefits
Incentive income
compensation             (104,326  )       (67,862   )       (222,594  )       (179,234  )
expense
General,
administrative and       (30,844   )       (26,497   )       (110,082  )       (101,238  )
other expenses
Total expenses           (217,314  )       (174,395  )       (662,735  )       (588,587  )
Adjusted net
income before            229,699           86,986            748,213           463,460
interest and other
income (expense)
Interest expense,
net of interest          (7,816    )       (8,675    )       (31,730   )       (33,867   )
income ^(2)
Other income             (1,507    )       (1,604    )       767              (1,209    )
(expense), net
Adjusted net             $ 220,376        $ 76,707         $ 717,250        $ 428,384 
income
Adjusted net             $ 41,011          $ 7,420           $ 114,395         $ 48,777
income-OCG
Adjusted net
income-OCG per           1.36              0.33              4.06              2.15
Class A unit
Fee-related              71,760            79,532            307,299           314,968
earnings
Fee-related              11,986            8,844             45,587            33,397
earnings-OCG
Fee-related
earnings-OCG per         0.40              0.39              1.62              1.47
Class A unit
Distributable            238,134           49,423            672,181           488,535
earnings
Distributable            41,252            8,817             107,678           59,446
earnings-OCG
Distributable
earnings-OCG per         1.37              0.39              3.82              2.62
Class A unit
Economic net             221,705           237,214           971,733           289,512
income
Economic net             44,385            23,790            161,980           28,500
income-OCG
Economic net
income-OCG per           1.47              1.05              5.75              1.26
Class A unit
Weighted average
number of                150,463           148,531           150,539           148,633
Operating Group
units outstanding
Weighted average
number of Class A        30,181            22,677            28,170            22,677
units outstanding
Operating Metrics:
Assets under
management (in
millions):
Assets under             $ 77,051          $ 74,857          $ 77,051          $ 74,857
management
Management
fee-generating           66,784            66,964            66,784            66,964
assets under
management
Incentive-creating
assets under             33,989            36,155            33,989            36,155
management
Uncalled capital         11,201            11,201            11,201            11,201
commitments ^(3)
Accrued incentives
(fund level): ^(4)
Incentives created       209,500           201,747           911,947           (75,916   )
(fund level)
Incentives created
(fund level), net
of associated            116,994           120,548           522,800           (30,600   )
incentive income
compensation
expense
Accrued incentives       2,137,798         1,686,967         2,137,798         1,686,967
(fund level)
Accrued incentives
(fund level), net
of associated            1,282,194         1,027,711         1,282,194         1,027,711
incentive income
compensation
expense
                                                                                         

      Our business is comprised of one segment, our investment management
      segment, which consists of the investment management services that we
      provide to our clients. The components of revenues and expenses used in
      determining adjusted net income do not give effect to the consolidation
      of the funds that we manage. In addition, adjusted net income excludes
(1)  the effect of: (a) non-cash equity compensation charges related to
      Oaktree Capital Group Holdings, L.P. (“OCGH”) units issued prior to our
      initial public offering, (b) income taxes, (c) expenses that OCG or its
      Intermediate Holding Companies bear directly and (d) the adjustment for
      the OCGH non-controlling interest. Adjusted net income is calculated at
      the Operating Group level. For additional information regarding the
      reconciling adjustments discussed above, please see Exhibit A.
      Interest income was $0.7 million and $0.1 million for the three months
(2)   ended December 31, 2012 and 2011, respectively, and $2.6 million and
      $2.3 million for the years ended December 31, 2012 and 2011,
      respectively.
      Uncalled capital commitments represent undrawn capital commitments by
      partners (including Oaktree as general partner) of our closed-end funds
(3)   in their investment periods. If a fund distributes capital during its
      investment period, that capital is typically subject to possible recall,
      in which case it is included in uncalled capital commitments.
      Our funds record as accrued incentives the incentive income that would
      be paid to us if the funds were liquidated at their reported values as
      of the date of the financial statements. Incentives created (fund level)
      refers to the amount generated by the funds during the period. We refer
      to the amount of incentive income recognized as revenue by us as segment
      incentive income. We recognize incentive income when it becomes fixed or
      determinable, all related contingencies have been removed and collection
      is reasonably assured. Amounts recognized by us as incentive income no
(4)   longer are included in accrued incentives (fund level), the term we use
      for remaining fund-level accruals. Incentives created (fund level),
      incentive income and accrued incentives (fund level) are presented
      gross, without deduction for direct compensation expense that is owed to
      our investment professionals associated with the particular fund when we
      earn the incentive income. We call that charge “incentive income
      compensation expense.” Incentive income compensation expense varies by
      the investment strategy and vintage of the particular fund, among other
      factors, but generally equals between 40% and 55% of segment incentive
      income revenue.
      

Operating Metrics

We monitor certain operating metrics that are either common to the alternative
asset management industry or that we believe provide important data regarding
our business. As described below, these operating metrics include AUM,
management fee-generating AUM, incentive-creating AUM, incentives created
(fund level), accrued incentives (fund level) and uncalled capital
commitments.

Assets Under                  
Management
                                    
                                    As of
                                    December         September        December
                                    31,           30,           31,

                                    2012             2012             2011
                                    (in millions)
Assets Under Management:
Closed-end funds                    $ 45,700         $ 50,966         $ 47,425
Open-end funds                      29,092           27,589           25,042
Evergreen funds                     2,259           2,412           2,390    
Total                               $ 77,051        $ 80,967        $ 74,857 
                                                                      
                    Three Months Ended
                                                     Year Ended December 31,
                    December 31,
                    2012            2011             2012             2011
                    (in millions)
Change in
Assets Under
Management:
Beginning           $ 80,967        $ 73,010         $ 74,857         $ 82,672
balance
Closed-end
funds:
New capital         599             1,602            6,456            5,734
commitments
Distributions
for a               (5,716   )      (1,574   )       (12,663  )       (10,547  )
realization
event/other
Uncalled
capital
commitments         (1,634   )      (18      )       (1,634   )       (1,227   )
at end of
investment
period
Foreign
currency            142             (267     )       99               (260     )
translation
Change in
market value        1,216           1,688            5,810            394
^(1)
Change in
applicable          127             (43      )       207              (50      )
leverage
Open-end
funds:
Contributions       1,607           535              4,394            3,702
Redemptions         (967     )      (1,406   )       (3,869   )       (5,039   )
Foreign
currency            81              (89      )       65               (93      )
translation
Change in
market value        782             1,390            3,460            350
^(1)
Evergreen
funds:
Contributions       71              196              140              345
Redemptions         (282     )      (256     )       (548     )       (531     )
Distributions
from                (23      )      (11      )       (57      )       (537     )
restructured
funds
Foreign
currency            1               (2       )       1                20
translation
Change in
market value        80             102             333             (76      )
^(1)
Ending              $ 77,051       $ 74,857        $ 77,051        $ 74,857 
balance

      Change in market value represents the change in NAV of our funds
(1)  resulting from current income and realized and unrealized gains/losses
      on investments, less management fees and other fund expenses.
      

Management
Fee-Generating                
AUM
                                     
                                     As of
                                     December         September        December
                                     31,           30,           31,

                                     2012             2012             2011
                                     (in millions)
Management Fee-Generating
Assets Under Management:
Closed-end funds                     $ 35,750         $ 36,509         $ 39,867
Open-end funds                       29,056           27,553           25,025
Evergreen funds                      1,978           2,109           2,072    
Total                                $ 66,784        $ 66,171        $ 66,964 
                                                                       
                     Three Months Ended
                                                      Year Ended December 31,
                     December 31,
                     2012            2011             2012             2011
                     (in millions)
Change in
Management
Fee-Generating
Assets Under
Management:
Beginning            $ 66,171        $ 63,367         $ 66,964         $ 66,175
balance
Closed-end
funds:
New capital
commitments to
funds that pay       —               4,431            486              7,997
fees based on
committed
capital
Capital drawn
by funds that
pay fees based       222             277              968              1,034
on drawn
capital or NAV
Change for
funds that pay
fees based on
the lesser of
funded capital       (1,071   )      (1,466   )       (5,457   )       (4,285   )
or cost basis
during
liquidation
^(1)
Change in fee
basis from
committed            —               —                —                (978     )
capital to
drawn capital
Uncalled
capital
commitments at
end of
investment           (57      )      —                (57      )       (1,066   )
period for
funds that pay
fees based on
committed
capital
Distributions
by funds that        (141     )      (70      )       (512     )       (460     )
pay fees based
on NAV
Foreign
currency             143             (53      )       148              (23      )
translation
Change in
market value         19              53               125              (12      )
^(2)
Change in
applicable           126             (43      )       182              (50      )
leverage
Open-end
funds:
Contributions        1,608           535              4,380            3,701
Redemptions          (967     )      (1,405   )       (3,869   )       (5,039   )
Foreign
currency             81              (89      )       65               (93      )
translation
Change in            781             1,390            3,455            351
market value
Evergreen
funds:
Contributions        71              196              140              345
Redemptions          (282     )      (255     )       (548     )       (527     )
Change in            80             96              314             (106     )
market value
Ending balance       $ 66,784       $ 66,964        $ 66,784        $ 66,964 
                                                                                

      For most closed-end funds, management fees are charged during the
      liquidation period on the lesser of (a) total funded capital and (b) the
      cost basis of assets remaining in the fund, with the cost basis of
(1)  assets generally calculated by excluding cash balances. Thus, changes in
      fee basis during the liquidation period are not dependent on
      distributions made from the fund; rather, they are tied to the cost
      basis of the fund’s investments, which generally declines as the fund
      sells assets.
(2)   The change in market value reflects certain funds that pay management
      fees based on NAV and leverage, as applicable.
      

                                              As of December 31,
                                                 2012           2011
                                                 (in millions)
Reconciliation of Assets Under Management
to Management Fee-Generating Assets Under
Management:
Assets under management                          $ 77,051           $ 74,857
Difference between assets under management
and committed capital or cost basis for          (3,164   )         (4,031   )
closed-end funds ^(1)
Capital commitments to funds that have not       (5,016   )         (85      )
yet begun to generate management fees
Undrawn capital commitments to funds for
which management fees are based on drawn         (584     )         (1,981   )
capital or NAV
Oaktree's general partner investments in         (1,041   )         (1,052   )
management fee-generating funds
Closed-end funds that are no longer paying       (231     )         (472     )
management fees
Funds for which management fees were             (231     )         (272     )
permanently waived
Management fee-generating assets under           $ 66,784          $ 66,964 
management
                                                                             

(1)  Not applicable to closed-end funds that pay management fees based on NAV
      or leverage, as applicable.
      

The period-end weighted average annual management fee rates applicable to the
respective management fee-generating AUM balances are set forth below:

                                                As of December 31,
                                                     2012         2011
Weighted Average Annual Management Fee
Rates:
Closed-end funds                                     1.51 %             1.48 %
Open-end funds                                       0.49               0.47
Evergreen funds                                      1.82               1.79
Overall                                              1.07               1.11
                                                                             

Incentive-Creating AUM   
                             
                             As of
                             December 31,       September 30,       December
                                                              31,
                             2012               2012
                                                                    2011
                             (in millions)
Incentive-Creating
Assets Under
Management:
Closed-end funds             $  32,058          $  34,980           $  34,062
Evergreen funds              1,931             2,091              2,093
Total                        $  33,989         $  37,071          $  36,155
                                                                       

Accrued
Incentives
and                                                 
Incentives
Created
(Fund Level)
                                                           
                   As of or for the Three                  As of or for the Year
                   Months Ended December 31,               Ended December 31,
                   2012             2011                2012             2011
                   (in thousands)
Accrued
Incentives
(Fund
Level):
Beginning         $ 2,138,553        $ 1,517,277        $ 1,686,967        $ 2,066,846 
balance
Incentives
created
(fund
level):
Closed-end         196,273             201,355             869,557             (81,216     )
funds
Evergreen          13,227             392                42,390             5,300       
funds
Total
incentives         209,500            201,747            911,947            (75,916     )
created
(fund level)
Less:
segment
incentive          (210,255    )       (32,057     )       (461,116    )       (303,963    )
income
recognized
by us
Ending             $ 2,137,798        $ 1,686,967        $ 2,137,798        $ 1,686,967 
balance
Accrued
incentives
(fund
level), net
of                 $ 1,282,194        $ 1,027,711        $ 1,282,194        $ 1,027,711 
associated
incentive
income
compensation
expense
                                                                                           

Uncalled Capital Commitments

Uncalled capital commitments amounted to $11.2 billion as of December 31,
2012, as compared with $13.3 billion as of September30, 2012 and $11.2
billion as of December 31, 2011.

Segment Results

Our business is comprised of one segment, our investment management segment,
which consists of the investment management services that we provide to our
clients.

Adjusted Net Income

Adjusted net income and adjusted net income-OCG, as well as per unit data, for
the three and twelve months ended December 31, 2012 and 2011, are set forth
below:

                      Three Months Ended
                                                    Year Ended December 31,
                      December 31,
                      2012           2011              2012                 2011
                      (in thousands, except per unit data)
Revenues:
Management fees       $ 184,748         $ 186,065         $ 747,440              $ 724,321
Incentive             210,255           32,057            461,116                303,963
income
Investment            52,010           43,259           202,392               23,763    
income
Total revenues        447,013          261,381          1,410,948             1,052,047 
Expenses:
Compensation          (82,144   )       (80,036   )       (330,059  )            (308,115  )
and benefits
Incentive
income                (104,326  )       (67,862   )       (222,594  )            (179,234  )
compensation
expense
General,
administrative        (30,844   )       (26,497   )       (110,082  )            (101,238  )
and other
expenses
Total expenses        (217,314  )       (174,395  )       (662,735  )            (588,587  )
Adjusted net
income before
interest and          229,699           86,986            748,213                463,460
other income
(expense)
Interest
expense, net of       (7,816    )       (8,675    )       (31,730   )            (33,867   )
interest income
^(1)
Other income          (1,507    )       (1,604    )       767                   (1,209    )
(expense), net
Adjusted net          220,376           76,707            717,250                428,384
income
Adjusted net
income
attributable to       (176,171  )       (64,997   )       (582,746  )            (363,068  )
OCGH
non-controlling
interest
Non-Operating
Group other           —                 —                 6,260       ^(2)    —
income
Non-Operating         (160      )       (364      )       (553      )            (768      )
Group expenses
Adjusted net
income-OCG            44,045            11,346            140,211                64,548
before income
taxes
Income                (3,034    )       (3,926    )       (25,816   ) ^(2)    (15,771   )
taxes-OCG
Adjusted net          $ 41,011         $ 7,420          $ 114,395             $ 48,777  
income-OCG
Adjusted net
income-OCG per        $ 1.36           $ 0.33           $ 4.06                $ 2.15    
Class A unit
Weighted
average number
of Class A            30,181           22,677           28,170                22,677    
units
outstanding
                                                                                           

      Interest income was $0.7 million and $0.1 million for the three months
(1)  ended December 31, 2012 and 2011, respectively, and $2.6 million and
      $2.3 million for the years ended December 31, 2012 and 2011,
      respectively.
      A one-time adjustment in the second quarter of 2012 had the effect of
      increasing income taxes-OCG by $(7,134) and increasing non-Operating
      Group other income by $6,260, for a net effect of additional after-tax
(2)   OCG expense of $(874). This adjustment stemmed from reductions in
      deferred tax assets and the liability for amounts due to affiliates. The
      effective income tax rate applicable to adjusted net income-OCG before
      income taxes for the year ended December 31, 2012 was 14% without the
      $(7,134) one-time expense and 18% with it.
      

Investment
Income                                       
(Loss)
                                                    
                  Three Months Ended
                                                    Year Ended December 31,
                  December 31,
                  2012          2011             2012           2011
                  (in thousands)
Income
(loss) from
investments
in funds:
Oaktree
funds:
Distressed        $ 21,157         $ 32,748         $ 106,810         $ 11,857
debt
Control           7,271            5,216            28,322            2,226
investing
Corporate         4,461            2,783            14,670            2,507
debt
Real estate       6,726            3,173            19,927            3,417
Listed            6,178            (457     )       8,307             (2,962   )
equities
Convertible       27               10               141               (78      )
securities
Non-Oaktree       (186     )       (1,375   )       1,526             5,006
Income from
investments
in
companies:
DoubleLine        6,376           1,161           22,689           1,790    
and other
Total
investment        $ 52,010        $ 43,259        $ 202,392        $ 23,763 
income
                                                                               

Fee-Related Earnings

Fee-related earnings and fee-related earnings-OCG, as well as per unit data,
for the three and twelve months ended December 31, 2012 and 2011, are set
forth below:

                      Three Months Ended
                                                       Year Ended December 31,
                      December 31,
                      2012            2011                2012                2011
                      (in thousands, except per unit data)
Management
fees:
Closed-end            $ 140,800           $ 147,279           $ 580,636              $ 555,014
funds
Open-end funds        34,485              29,123              128,821                126,014
Evergreen funds       9,463              9,663              37,983                43,293    
Total                 184,748            186,065            747,440               724,321   
management fees
Expenses:
Compensation          (82,144   )         (80,036   )         (330,059  )            (308,115  )
and benefits
General,
administrative        (30,844   )         (26,497   )         (110,082  )            (101,238  )
and other
expenses
Total expenses        (112,988  )         (106,533  )         (440,141  )            (409,353  )
Fee-related           71,760              79,532              307,299                314,968
earnings
Fee-related
earnings
attributable to       (57,365   )         (67,390   )         (250,014  )            (266,917  )
OCGH
non-controlling
interest
Non-Operating
Group other           —                   —                   6,260       ^(1)      —
income
Non-Operating         (160      )         (365      )         (551      )            (770      )
Group expenses
Fee-related
earnings-OCG          14,235              11,777              62,994                 47,281
before income
taxes
Fee-related
earnings-OCG          (2,249    )         (2,933    )         (17,407   ) ^(1)      (13,884   )
income taxes
Fee-related           $ 11,986           $ 8,844            $ 45,587              $ 33,397  
earnings-OCG
Fee-related
earnings-OCG          $ 0.40             $ 0.39             $ 1.62                $ 1.47    
per Class A
unit
Weighted
average number
of Class A            30,181             22,677             28,170                22,677    
units
outstanding
                                                                                               

      A one-time adjustment in the second quarter of 2012 had the effect of
      increasing income taxes-OCG by $(7,134) and increasing non-Operating
      Group other income by $6,260, for a net effect of additional after-tax
(1)  OCG expense of $(874). This adjustment stemmed from reductions in
      deferred tax assets and the liability for amounts due to affiliates. The
      effective income tax rate applicable to fee-related earnings-OCG before
      income taxes for the year ended December 31, 2012 was 18% without the
      $(7,134) one-time expense and 28% with it.
      

Distributable Earnings and Distribution Calculation

Distributable earnings and the calculations of the distributions attributable
to the three and twelve months ended December 31, 2012 and 2011, are set forth
below:

                    Three Months Ended
                                                 Year Ended December 31,
                    December 31,
                    2012           2011             2012           2011
                    (in thousands, except per unit data)
Distributable
Earnings:
Fee-related         $ 71,760          $ 79,532         $ 307,299         $ 314,968
earnings
Incentive
income, net
of incentive        105,929           (35,805  )       238,522           124,729
income
compensation
expense
Receipts of
investment          50,013            17,259           129,621           88,693
income from
funds ^(1)
Receipts of
investment
income from         20,170            183              33,838            1,496
DoubleLine
and other
companies
Interest
expense, net        (7,816    )       (8,675   )       (31,730   )       (33,867   )
of interest
income
Operating
Group income        (415      )       (1,467   )       (6,136    )       (6,275    )
taxes
Other income
(expense),          (1,507    )       (1,604   )       767              (1,209    )
net
Distributable       $ 238,134        $ 49,423        $ 672,181        $ 488,535 
earnings
Distribution
Calculation:
Operating
Group
distribution        $ 191,070         $ 92,298         $ 540,419         $ 370,033
with respect
to the period
Distribution
per Operating       $ 1.27            $ 0.62           $ 3.59            $ 2.49
Group unit
Adjustments
per Class A
unit:
Distributable
earnings-OCG        (0.16     )       (0.15    )       (0.40     )       (0.74     )
income taxes
Tax
receivable          (0.05     )       (0.04    )       (0.21     )       (0.16     )
agreement
Non-Operating
Group               (0.01     )       (0.01    )       (0.04     )       (0.04     )
expenses
Other
adjustments,        —                —               —                0.31      
net ^ (2)
Distribution
per Class A         $ 1.05           $ 0.42          $ 2.94           $ 1.86    
unit ^ (3)
                                                                                   

      This adjustment characterizes a portion of the distributions received
      from Oaktree and non-Oaktree funds as receipts of investment income or
      loss. In general, the income or loss component of a distribution from a
(1)  fund is calculated by multiplying the amount of the distribution by the
      ratio of our investment’s undistributed income or loss to our remaining
      investment balance. In addition, if the distribution is made during the
      investment period, it is generally not reflected in distributable
      earnings until after the investment period ends.
(2)   This adjustment reflects inter-quarter timing differences.
      With respect to the three months ended December 31, 2012, the
(3)   distribution was announced on February 14, 2013 and is payable on March
      1, 2013.
      


                                                
Units
Outstanding
                                                       
                       Three Months Ended
                                                      Year Ended December 31,
                       December 31,
                       2012         2011            2012         2011
                       (in thousands)
Weighted Average
Units:
OCGH                   120,282         125,854         122,369         125,956
Class A                30,181         22,677         28,170         22,677
Total                  150,463        148,531        150,539        148,633
Units Eligible
for Fiscal
Period
Distribution:
OCGH                   120,268         126,191
Class A                30,181         22,677  
Total                  150,449        148,868 
                                                                       

Subsequent to Oaktree’s initial public offering in April 2012, Oaktree issued
567,000 restricted OCGH units and 7,804 Class A units to its employees and
directors, of which 522,000 OCGH units and 6,381 Class A units were granted in
January2013 and are not eligible for the distribution applicable to the
fourth quarter of 2012. All units granted to employees and directors are
subject to annual vesting, typically over periods of five to ten years.

Segment Statements of Financial Condition

                                          As of December 31,
                                             2012              2011
                                             (in thousands)
Assets:
Cash and cash-equivalents                    $ 458,191             $ 297,230
U.S. Treasury and government agency          370,614               381,697
securities
Management fees receivable                   27,351                23,207
Incentive income receivable                  82,182                28,892
Corporate investments, at equity             1,115,952             1,159,287
Deferred tax assets                          159,171               72,986
Other assets                                 146,087              120,609
Total assets                                 $ 2,359,548          $ 2,083,908
Liabilities and Capital:
Liabilities:
Accounts payable and accrued expenses        $ 214,311             $ 250,191
Due to affiliates                            136,165               57,574
Debt obligations                             615,179              652,143
Total liabilities                            965,655              959,908
Capital:
OCGH non-controlling interest in             1,087,491             935,858
consolidated subsidiaries
Unitholders’ capital attributable to         306,402              188,142
Oaktree Capital Group, LLC
Total capital                                1,393,893            1,124,000
Total liabilities and capital                $ 2,359,548          $ 2,083,908
                                                                     

Corporate Investments, at Equity

                                          As of December 31,
                                             2012              2011
                                             (in thousands)
Investments in funds:
Oaktree funds:
Distressed debt                              $ 475,476             $ 542,539
Control investing                            264,186               239,706
Corporate debt                               115,250               141,972
Real estate                                  107,408               81,502
Listed equities                              69,222                39,262
Convertible securities                       1,392                 1,251
Non-Oaktree                                  53,591                91,520
Investments in companies:
DoubleLine and other                         29,427               21,535
Total corporate investments, at equity       $ 1,115,952          $ 1,159,287
                                                                     

Fund Data

Certain information regarding our closed-end, open-end and evergreen funds is
set forth below.

Closed-End Funds

                             As of December 31, 2012
                                                                                                                                            Unreturned
                  Investment                                                                                     Oaktree       Accrued      Drawn        IRR Since
                  Period         Total       Drawn      Fund Net    Distri-butions   Net        Management       Segment       Incentives   Capital      Inception        Multiple
                                 Committed  Capital   Income     Since            Asset      Fee-Generating   Incentive     (Fund        Plus        ^(4)             of Drawn
                                 Capital     ^(1)       Since       Inception        Value      AUM              Income        Level)       Accrued                        Capital
                  Start   End                           Inception                                                Recog-nized   ^(2)         Preferred                      ^(5)
                  Date    Date                                                                                                              Return       Gross   Net
                                                                                                                                            ^(3)
                  (in millions)
Distressed
Debt
TCW Special       Oct.    Oct.
Credits Fund      1988    1991   $  97       $ 97       $   121     $    218       $ —        $ —              $ —           $ —          $ —            29.0 %   24.7 %   2.3x
I, L.P. ^(6)
TCW Special       Jul.    Jul.
Credits Fund      1990    1993   261         261        505         766              —          —                —             —            —            41.6     35.7     3.1
II, L.P. ^(6)
TCW Special
Credits Fund      Dec.    Dec.   153         153        323         476              —          —                —             —            —            44.0     37.9     3.1
IIb, L.P.         1990    1993
^(6)
TCW Special
Credits Fund      Nov.    Nov.   329         329        470         799              —          —                —             —            —            26.2     22.1     2.5
III, L.P.         1991    1994
^(6)
TCW Special
Credits Fund      Apr.    Apr.   447         447        459         906              —          —                —             —            —            21.2     17.9     2.1
IIIb, L.P.        1992    1995
^(6)
TCW Special       Jun.    Jun.
Credits Fund      1993    1996   394         394        462         856              —          —                —             —            —            21.1     17.3     2.2
IV, L.P. ^(6)
OCM               Oct.    Oct.
Opportunities     1995    1998   771         771        568         1,339            —          —                74            —            —            12.4     10.2     1.8
Fund, L.P.
OCM               Oct.    Oct.
Opportunities     1997    2000   1,550       1,550      989         2,539            —          —                197           —            —            11.0     8.5      1.7
Fund II, L.P.
OCM
Opportunities     Sep.    Sep.   2,077       2,077      1,287       3,335            28         —                248           6            —            15.4     11.9     1.7
Fund III,         1999    2002
L.P.
OCM               Sep.    Sep.
Opportunities     2001    2004   2,125       2,125      1,727       3,845            7          —                340           1            —            35.0     28.1     1.9
Fund IV, L.P.
OCM
Opportunities     May     May    1,339       1,339      1,260       2,596            3          —                248           1            —            57.8     47.3     2.0
Fund IVb,         2002    2005
L.P.
OCM               Jun.    Jun.
Opportunities     2004    2007   1,179       1,179      917         1,905            191        254              142           38           —            18.6     14.2     1.9
Fund V, L.P.
OCM               Jul.    Jul.
Opportunities     2005    2008   1,773       1,773      1,155       2,073            855        920              76            149          638          11.8     8.5      1.7
Fund VI, L.P.
OCM
Opportunities     Mar.    Mar.   3,598       3,598      1,379       3,442            1,535      1,588            9             61           1,461        10.8     8.1      1.5
Fund VII,         2007    2010
L.P.
OCM
Opportunities     May     May    10,940      9,844      8,555       12,804           5,595      4,963            530           1,132        —            23.7     18.0     1.9
Fund VIIb,        2008    2011
L.P.
Special           Nov.    Oct.   253         253        271         260              264        203              5             48           55           31.9     25.7     2.1
Account A         2008    2012
Oaktree
Opportunities     Oct.    Oct.   4,507       4,507      1,179       489              5,198      4,403            —             230          4,799        14.7     9.7      1.3
Fund VIII,        2009    2012
L.P.
Special           Nov.    Nov.   1,031       1,060      294         155              1,199      1,163            —             13           1,112        15.9     14.9     1.3
Account B         2009    2012
Oaktree
Opportunities     Aug.    Aug.   2,692       2,019      143         1                2,161      2,625            —             27           2,121        16.9     9.0      1.1
Fund VIIIb,       2011    2014
L.P.
Oaktree
Opportunities     TBD     —      4,964       —          —           —                —          —                —             —            —            —       —       —
Fund IX, L.P.
                                                                                                                                                         22.9 %   17.5 %
Global
Principal
Investments
TCW Special       Apr.    Apr.
Credits Fund      1994    1997   $  401      $ 401      $   349     $    750       $ —        $ —              $ —           $ —          $ —            17.2 %   14.6 %   1.9x
V, L.P. ^(6)
OCM Principal     Jul.    Jul.
Opportunities     1996    1999   625         625        282         907              —          —                —             —            —            6.4      5.4      1.5
Fund, L.P.
OCM Principal     Dec.    Dec.
Opportunities     2000    2005   1,275       1,275      1,208       2,455            27         —                231           5            —            23.3     17.8     2.0
Fund II, L.P.
OCM Principal
Opportunities     Nov.    Nov.   1,400       1,400      952         1,762            590        574              42            144          200          15.0     10.5     1.8
Fund III,         2003    2008
L.P.
OCM Principal     Oct.    Oct.
Opportunities     2006    2011   3,328       3,328      1,041       1,642            2,728      2,339            —             —            3,068        8.8      6.3      1.4
Fund IV, L.P.
Oaktree           Feb.    Feb.
Principal         2009    2014   2,827       2,021      318         84               2,257      2,756            —             16           2,235        15.2     8.1      1.3
Fund V, L.P.
Special           Dec.    Feb.   505         414        202         65               550        355              9             31           432          21.7    15.9    1.5
Account C         2008    2014
                                                                                                                                                         13.3 %   9.8  %
Asia
Principal
Investments
OCM Asia
Principal         May     May    $  578      $ 503      $   13      $    60          $ 456      $    361       $ —           $ —            $  622       5.1  %   0.6  %   1.2x
Opportunities     2006    2011
Fund, L.P.
                                                                                                                                                                           
European
Principal
Investments
^(7)
OCM European
Principal         Mar.    Mar.   $  495      $ 460      $   330     $    159         $ 632      $    370         $    1        $   45       $  573       10.8 %   8.3  %   1.8x
Opportunities     2006    2009
Fund, L.P.
OCM European
Principal         Dec.    Dec.   €  1,759    € 1,685    €   318     €    245         € 1,759    €    1,545       €    12       €   —        €  1,868     10.5     6.3      1.3
Opportunities     2007    2012
Fund II, L.P.
Oaktree
European          Nov.    Nov.
Principal         2011    2016   €  3,164    € 1,186    €   25      €    3           € 1,208    €    3,083       €    —        €   —        €  1,255     12.1    2.7     1.1
Fund III,
L.P.
                                                                                                                                                         10.8 %   6.6  %
Power
Opportunities
OCM/GFI Power     Nov.    Nov.
Opportunities     1999    2004   $  449      $ 383      $   251     $    634       $ —        $ —                $    23     $ —          $   —         20.1 %   13.1 %   1.8x
Fund, L.P.
OCM/GFI Power     Nov.    Nov.
Opportunities     2004    2009   1,021       541        1,460       1,888            113        39               93            7            —            76.4     59.2     3.9
Fund II, L.P.
Oaktree Power
Opportunities     Apr.    Apr.   1,062       303        49          5                347        1,036            —             9            325          31.1    11.7    1.3
Fund III,         2010    2015
L.P.
                                                                                                                                                         35.3 %   27.4 %
                                                                                                                                                                           

                             As of December 31, 2012
                                                                                                                                                   Unreturned
                  Investment                                                                                          Oaktree         Accrued      Drawn        IRR Since
                  Period         Total       Drawn     Fund Net         Distri-butions    Net      Management         Segment         Incentives   Capital      Inception ^(4)     Multiple
                                 Committed  Capital  Income          Since            Asset   Fee-Generating   Incentive     (Fund       Plus                            of Drawn
                                 Capital     ^(1)      Since            Inception         Value    AUM                Income          Level)       Accrued                          Capital
                  Start   End                          Inception                                                      Recog-nized     ^(2)         Preferred                        ^(5)
                  Date    Date                                                                                                                     Return       Gross    Net
                                                                                                                                                   ^(3)
                  (in millions)
Real Estate
TCW Special       Aug.    Aug.
Credits Fund      1994    1997   $   506     $  506    $  666           $    1,172       $  —     $      —         $ —               $    —       $    —       21.1%   17.4%   2.4x
VI, L.P. ^(6)
OCM Real
Estate            Feb.    Feb.   379         379       295              665              9        —                  56              4            —            10.5      8.4       1.9
Opportunities     1996    1999
Fund A, L.P.
OCM Real
Estate            Mar.    Mar.   285         285       172              455              2        —                  —               —            52           8.2       7.1       1.7
Opportunities     1997    2000
Fund B, L.P.
OCM Real
Estate            Dec.    Dec.   464         440       266              705              1        —                  52              —            —            15.2      11.1      1.7
Opportunities     1998    2001
Fund II, L.P.
OCM Real
Estate            Sep.    Sep.
Opportunities     2002    2005   707         707       651              1,223            135      —                  102             27           —            15.9      11.9      2.0
Fund III,
L.P.
Oaktree Real
Estate            Dec.    Dec.   450         450       232              183              499      353                6               37           402          17.4      11.2      1.6
Opportunities     2007    2011
Fund IV, L.P.
Special           Nov.    Nov.   256         262       107              119              250      166                —               11           211          16.8      15.0      1.4
Account D         2009    2012
Oaktree Real
Estate            Mar.    Mar.   1,283       1,283     167              23               1,427    1,251              —               32           1,379        15.2      9.5       1.2
Opportunities     2011    2015
Fund V, L.P.
Oaktree Real
Estate            Aug.    Aug.
Opportunities     2012    2016   255         178       (2)             —                176      235                —               —            182          nm        nm        1.0
Fund VI, L.P.
^(8)
                                                                                                                                                                15.4%     11.9%
Asia Real
Estate
Oaktree Asia                                                     *Story
Special           May     Apr.   $   50      $  19     $  10     too
Situations        2008    2009                                   large*
Fund, L.P.

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