Blackstone (BX) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Blackstone Reports Fourth Quarter and

Full Year 2011 Results

Despite challenging market and economic conditions, Economic Net Income (“ENI”) was $1.4 billion for the full year 2011. ENI was $450 million for the fourth quarter of 2011, compared to $513 million for the fourth quarter of 2010.

Distributable Earnings were $697 million for the full year 2011; Distributable Earnings were $178 million for the fourth quarter of 2011, compared to $239 million in the fourth quarter of 2010.

GAAP Results Attributable to The Blackstone Group L.P. improved in 2011 with a net loss of $269 million, compared to a net loss of $370 million in 2010, in each case including net IPO and acquisition-related charges. GAAP Net Loss Attributable to The Blackstone Group L.P. was $123 million in the fourth quarter of 2011, compared to a net loss of $11 million in the fourth quarter of 2010.

Fee-Earning Assets Under Management increased 25% to a record $137 billion at December 31, 2011, from $110 billion at December 31, 2010, while Total Assets Under Management increased 30% to $166 billion at December 31, 2011.

Blackstone declares a quarterly distribution of $0.22 per common unit which brings full year distributions to $0.52 per common unit.

New York, February 2, 2012: The Blackstone Group L.P. (NYSE: BX) today reported its fourth quarter and full year 2011 results.

Economic Net Income (“ENI”) was $1.389 billion for the full year 2011, slightly lower than $1.418 billion ENI for the full year 2010. The decline in ENI compared to the full year 2010 was driven principally by a slowing in the rate of increase in the carrying value of assets as of December 31, 2011 across Blackstone’s investment segments, offset by an increase of $246.5 million, or 15%, in Total Management and Advisory Fees to $1.878 billion for the full year 2011. ENI was $449.9 million for the three months ended December 31, 2011, a decrease of $62.8 million, compared to ENI of $512.7 million for the three months ended December 31, 2010, primarily attributable to decreases in Performance Fees and Investment Income.

Driven by strong net inflows during the last year, Blackstone’s managed assets demonstrated consistent growth with Fee-Earning Assets Under Management and Total Assets Under Management rising to a record $136.8 billion and $166.2 billion, respectively, at December 31, 2011. The Blackstone funds had $32.9 billion of committed but uninvested capital, or “dry powder”, at the end of 2011.

The Blackstone Group^® L.P.

345 Park Avenue

New York, NY 10154

212 583-5000

For the full year 2011, Total Segment Revenues were $3.3 billion, up 5% from $3.1 billion for the full year 2010 due to higher Management Fees and Performance Fees, offset by a decrease in Investment Income. Total Management Fees increased to $1.9 billion, up 15% from $1.6 billion for the full year 2010, principally due to the increase in Fee-Earning Assets Under Management. Performance Fees increased 27% to $1.2 billion in 2011 driven by increases in the Real Estate segment, which more than offset decreases in the other investment segments. Investment Income was lower across all segments due to a slowing in appreciation over the prior year.

Total Segment Expenses were $1.7 billion for the full year 2011, an increase from $1.6 billion for the full year 2010, primarily due to an increase of $101.5 million in Compensation, excluding Performance Fee Compensation. Compensation was up 12% to $960.6 million for the full year 2011, principally as a result of increased investment across Blackstone supporting its continued strong growth. Blackstone’s non-compensation expenses were up 22% from full year 2010 driven mostly by professional fees, financing activities and occupancy costs related to continuing global expansion and the launch of new products.

GAAP results for the year ended December 31, 2011 included Revenues of $3.3 billion, compared to $3.1 billion for the full year 2010, and Net Loss Attributable to The Blackstone Group L.P. of $269.0 million, compared to a net loss of $370.0 million for the full year 2010. GAAP results for the fourth quarter of 2011 included Revenues of $915.1 million, compared to $1.1 billion for the fourth quarter of 2010, and Net Loss Attributable to The Blackstone Group L.P. of $123.4 million, compared to a net loss of $11.0 million for the fourth quarter of 2010.

Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, “Despite volatile markets and struggling economies, Blackstone had strong performance in 2011. Our investors view us as a critical partner, helping them protect and grow their capital. We again reported net inflows in every one of our businesses with record fee-earning assets under management of $137 billion at year end, up 25% year over year. During 2011, we invested or committed over $16 billion from our drawdown funds, which we believe will yield attractive results for our investors as well as provide capital that is critical to spurring economic growth, supporting job creation and restoring confidence in our nation’s future. We also distributed approximately $9 billion to our drawdown fund investors during the year.”

The table below details Blackstone’s ENI, Net Fee Related Earnings from Operations, Distributable Earnings and Fee-Earning Assets Under Management as of, and for, the fourth quarters of 2011 and 2010, and for the full years 2011 and 2010. ENI, Total Segments includes unrealized gains (losses) and the direct compensation impact related to those gains (losses), but excludes IPO and acquisition-related charges.

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	Quarter Ended December 31,				Variance					Year Ended December 31,				Variance
	2011		2010		$		%			2011		2010		$		%
	(Unaudited, Dollars in Thousands, Except Per Unit Amounts)
Economic Net Income, Total Segments	$	482,772	$	606,106	$	(123,334)		-20	%	$	1,584,971	$	1,580,770	$	4,201		0	%
Provision for Income Taxes (a)		32,871		93,357		(60,486)		-65	%		196,127		163,109		33,018		20	%
Economic Net Income, After Taxes	$	449,901	$	512,749	$	(62,848)		-12	%	$	1,388,844	$	1,417,661	$	(28,817)		-2	%
Economic Net Income, After Taxes per Adjusted Unit (b)	$	0.40	$	0.46	$	(0.06)		-13	%	$	1.25	$	1.28	$	(0.03)		-2	%
Net Fee Related Earnings from Operations	$	152,344	$	122,740	$	29,604		24	%	$	502,095	$	442,314	$	59,781		14	%
Distributable Earnings	$	178,186	$	239,197	$	(61,011)		-26	%	$	696,724	$	701,784	$	(5,060)		-1	%
Distributable Earnings per Common Unit (c)	$	0.16	$	0.20	$	(0.04)		-20	%	$	0.60	$	0.62	$	(0.02)		-3	%
Fee-Earning Assets Under Management:
Private Equity	$	37,237,791	$	24,188,555	$	13,049,236		54	%
Real Estate		31,236,540		26,814,714		4,421,826		16	%
Hedge Fund Solutions		37,819,636		33,159,795		4,659,841		14	%
Credit Businesses		30,462,786		25,337,158		5,125,628		20	%
Total Fee-Earning Assets Under Management	$	136,756,753	$	109,500,222	$	27,256,531		25	%

(a) Represents the implied provision for income taxes calculated using a similar methodology applied in calculating the tax provision for The Blackstone Group L.P.

(b) Adjusted Units represents the weighted-average unit count for Economic Net Income. A reconciliation of this item to the comparable GAAP measure is presented in Exhibit 4 to this release.

(c) See Exhibit 4 for the calculation of Distributable Earnings Units Outstanding.

SEGMENT REVIEW

Private Equity

Private Equity had full year revenues of $578.8 million, compared to revenues of $828.4 million for the full year 2010. The decrease from full year 2010 was principally due to lower Performance Fees and Investment Income, partially offset by an increase in Total Management Fees of $102.6 million due to an increase in Fee-Earning Assets Under Management. Revenues were $190.9 million for the fourth quarter of 2011, compared to $252.8 million in the fourth quarter of 2010. The decrease from the fourth quarter of 2010 was principally due to a $93.9 million decrease in Performance Fees, partially offset by an increase in Total Management Fees of $27.6 million.

The carrying value of assets in the contributed Private Equity funds increased by 5.3% for the full year 2011 driven by an increase in the carrying value of our energy holdings as well as positive performance of our publicly traded investments, particularly those that had initial public offerings in 2011. The carrying value of the segment’s investments increased by 3.3% in the fourth quarter of 2011 due to stronger public markets and increases in the carrying value of the segment’s privately held investments in the energy and retail/consumer sectors, partially offset by foreign currency losses. Annual growth in EBITDA of the private equity portfolio companies averaged approximately 8% to 10%, compared to the prior year. As of December 31, 2011, the unrealized value and cumulative realized proceeds, before carried interest, fees and expenses, for Blackstone’s contributed Private Equity funds was 1.4 times investors’ original investments. On a realized/partially realized basis, this multiple was 2.3 times investors’ original investments.

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ENI was $241.1 million for the full year 2011, down from $485.5 million for the full year 2010, a result of lower Performance Fees and Investment Income. ENI was $106.7 million for the fourth quarter of 2011, down from $161.7 million in 2010, principally a result of lower Performance Fees.

Fee-Earning Assets Under Management were $37.2 billion at December 31, 2011 compared to $24.2 billion at December 31, 2010, due to the commencement of the investment period for the BCP VI, Energy and China funds.

Limited Partner Capital Invested during the full year 2011 totaled $3.8 billion, an increase from $1.7 billion invested during the full year 2010. Limited Partner Capital Invested during the fourth quarter of 2011 was $1.1 billion, up significantly from $116.9 million during the fourth quarter of 2010. Dry powder for Private Equity was $16.3 billion as of December 31, 2011. Blackstone’s Private Equity segment’s funds had $286.7 million of Limited Partner Capital committed to transactions which had not yet closed as of December 31, 2011.

Real Estate

Real Estate had full year revenues of $1.6 billion, compared to revenues of $1.0 billion for the full year 2010. Revenues were $392.4 million for the fourth quarter of 2011, compared to $417.2 million in 2010. The increase from full year 2010 was principally due to a year over year increase in Performance Fees of $652.3 million. Fourth quarter 2011 revenues decreased $24.8 million from the fourth quarter of 2010, principally due to declines in Investment Income and Transaction and Other Fees, partially offset by an increase in Performance Fees.

The carrying value of assets in contributed Real Estate funds, including fee-paying co-investments, increased 16.7% and 3.3% for the full year 2011 and for the fourth quarter of 2011, respectively. Similar to prior quarters, and despite the continued volatility in the global economy and public equity markets, operating fundamentals remained healthy across all of the segment’s properties. For 2011, RevPAR (Revenue per Available Room) of Blackstone’s significant hospitality investments increased between 6% and 8% for 2011 over 2010. During the fourth quarter of 2011, occupancy levels and market rental rates within Blackstone’s significant office investments increased over 3% and approximately 5%, respectively, compared to the same period in 2010. On a trailing twelve month basis through the third quarter of 2011, the latest available financial information, retail sales in the mall investments were up approximately 8%. At December 31, 2011, occupancy levels at the grocery anchored retail centers were in excess of 88%, the highest occupancy levels achieved by Blackstone’s properties in over 18 months. The increase in Performance Fees was primarily related to the strong performance of the funds’ office, hospitality and retail investments with a portion of the increase due to the impact of the “catch-up” provisions of the funds. As of December 31, 2011, the unrealized value and cumulative realized proceeds, before carried interest, fees and expenses, of Blackstone’s contributed Real Estate funds, including fee-paying co-investments, represented 1.4 times investors’ original investment. On a realized/partially realized basis, this multiple was 2.1 times investors’ original investments.

ENI for the Real Estate segment was $1.0 billion for the full year 2011 compared to $639.5 million for 2010, driven principally by the increase in Performance Fees. ENI was $250.8 million for the fourth quarter of 2011, down from $280.8 million in the fourth quarter of 2010. The decrease was due to the revenue decline discussed above.

Fee-Earning Assets Under Management were $31.2 billion at December 31, 2011, compared to $26.8 billion at December 31, 2010. Fee-Earning Assets Under Management increased in 2011 principally due to the commencement of the investment period of the BREP VII fund.

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Limited Partner Capital Invested during 2011 was $6.1 billion, up from $4.1 billion in 2010. Limited Partner Capital Invested during the fourth quarter of 2011 was $995.6 million, down from $2.3 billion during the fourth quarter of 2010. Dry powder for Real Estate was $10.0 billion as of December 31, 2011. Blackstone’s Real Estate segment’s funds had $939.7 million of Limited Partner Capital committed to transactions which had not yet closed as of December 31, 2011.

Hedge Fund Solutions

Hedge Fund Solutions had full year revenues of $338.5 million compared to revenues of $366.8 million for the full year 2010. Revenues were $91.4 million for the fourth quarter of 2011, compared to $119.1 million in 2010. The decrease from full year 2010 was principally due to decreases in Performance Fees and Investment Income of $47.4 million and $30.5 million, respectively, partially offset by an increase in Total Management Fees of 15% to $317.7 million for the full year 2011. Fourth quarter 2011 revenues decreased $27.8 million from the fourth quarter of 2010 principally due to declines in Performance Fees and Investment Income.

The returns for the underlying assets for Blackstone’s Hedge Fund Solutions’ funds were 1.6% for the fourth quarter of 2011 and (1.0)% for the full year 2011.

ENI for the Hedge Fund Solutions segment declined 29% to $140.8 million for the full year 2011 compared to $198.3 million for the full year 2010. ENI was $31.5 million for the fourth quarter of 2011, down from $70.7 million in the fourth quarter of 2010. The full year and quarterly decreases were driven principally by the decreases in Performance Fees and Investment Income mentioned above.

Fee-Earning Assets Under Management for the segment grew 14% to a record $37.8 billion at December 31, 2011, compared to $33.2 billion at December 31, 2010. Net inflows for Blackstone’s Hedge Fund Solutions business came primarily from its commingled and customized investment products and its long only solutions business. Hedge Fund Solutions had $271.5 million of net inflows of Fee-Earning Assets Under Management for the fourth quarter of 2011, bringing year to date net fee-earning inflows to $6.4 billion.

Credit Businesses

Credit Businesses had full year revenues of $395.0 million in 2011 compared to revenues of $478.7 million for the full year 2010. The decrease from full year 2010 to full year 2011 was principally due to Performance Fees of $141.8 million, compared to $261.1 million in 2010. This was partially offset by an increase in Total Management Fees of 23% or $44.1 million. Revenues were $125.1 million for the fourth quarter of 2011, compared to $165.6 million for the fourth quarter of 2010. The decrease from the fourth quarter of 2010 was also principally due to declines in Performance Fees and Investment Income.

The returns of the underlying assets for Blackstone’s Credit Businesses for the fourth quarter of 2011 were 4.3% for the hedge funds, 2.1% for the rescue lending funds, and 4.9% for the mezzanine funds. For the full year 2011, the returns of the underlying assets for Blackstone’s credit-oriented businesses were 8.9% for the hedge funds, 4.4% for the rescue lending funds, and 28.1% for the mezzanine funds.

ENI for the Credit Businesses segment decreased by 18% to $141.6 million for the full year 2011 compared to $173.7 million for the full year 2010. ENI decreased by 14% to $54.7 million for the fourth quarter of 2011 compared to $63.5 million for the fourth quarter of 2010. The full year and fourth quarter 2011 declines in ENI were attributable to the lower Performance Fees and Investment Income mentioned above.

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Fee-Earning Assets Under Management for the segment increased 20% to $30.5 billion at December 31, 2011 from $25.3 billion at December 31, 2010. The $5.1 billion increase was due to drawdowns of Limited Partner Capital in the mezzanine funds and rescue lending funds which trigger the commencement of management fees. In addition, there was strong year over year growth in the long-only platform, including the acquisition of the Allied Irish Banks CLOs during the second quarter of 2011.

Dry powder of drawdown funds for the Credit Businesses segment was $5.1 billion as of December 31, 2011.

On January 5, 2012, the Credit Businesses completed the acquisition of Harbourmaster Capital, a leading European leveraged loan manager and adviser with €7.5 billion ($9.8 billion) of Assets Under Management as of December 31, 2011.

Financial Advisory

Financial Advisory had full year revenues of $389.9 million compared to revenues of $431.9 million for the full year 2010. Revenues were $125.3 million for the fourth quarter of 2011 compared to $131.1 million in 2010. The decrease from full year 2010 was principally due to decreases in fees from Blackstone’s restructuring and reorganization business, partially offset by an increase from Blackstone’s fund placement business.

ENI was $59.6 million for the full year 2011 compared to $83.7 million for the full year 2010. Fourth quarter 2011 ENI increased $9.7 million to $39.1 million from the fourth quarter of 2010.

CAPITAL AND LIQUIDITY

As of December 31, 2011, Blackstone had $1.6 billion in cash, Treasury cash management strategies and liquid Blackstone funds. Long-term debt totaled $1.0 billion in borrowings from the 2010 and 2009 bond issuances. Blackstone has no borrowings outstanding against its $1 billion revolving credit facility, which expires in April 2016.

DISTRIBUTION

The Blackstone Group L.P. has declared a quarterly distribution of $0.22 per common unit to record holders of common units at the close of business on March 15, 2012. This distribution will be paid on March 30, 2012.

Blackstone’s general partner maintains the right to determine the amount to be distributed from The Blackstone Group L.P.’s net after-tax share of its annual Distributable Earnings. Distributable Earnings will only be a starting point for the determination of the amount to be distributed to unitholders because in determining the amount to be distributed Blackstone will subtract from Distributable Earnings any amounts determined by its general partner 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 distributions to its unitholders for any ensuing quarter. The aggregate amounts of Blackstone’s distributions to unitholders will typically be less than its Distributable Earnings for that year.

As was the case for 2011, Blackstone’s current intention is to distribute to its common unitholders substantially all of The Blackstone Group L.P.’s net after-tax share of annual Distributable Earnings less the amount of its realized investment gains and returns of capital from investments and acquisitions. This determination has been based on the continued pace of organic and inorganic growth and the potential for further strategic initiatives and the retained amount will be used for those purposes. The retained cash will

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be deducted from the fourth quarter distribution which is made in the first quarter of the ensuing calendar year. Distributions for the first three quarters will remain unchanged at $0.10 per unit. All distributions are subject to Blackstone’s discretion to retain additional amounts from the amount of annual Distributable Earnings to be distributed as described above.

Because Blackstone will not know what its Distributable Earnings will be for any fiscal year until the end of such year, Blackstone expects that its first three quarterly distributions in respect of any given year will be based on its anticipated annualized Net Fee Related Earnings. For the fourth quarter of each year Blackstone expects to pay the remaining amount of the year’s Distributable Earnings less realized investment gains and returns of capital from investments and acquisitions. As such, the distributions for the first three quarters are expected to be smaller than the final quarterly distribution in respect of such year.

All of the foregoing is subject to the qualification that the declaration and payment of any distributions are at the sole discretion of Blackstone’s general partner and the general partner may change its distribution policy at any time.

Because the wholly-owned subsidiaries of The Blackstone Group L.P. must pay taxes and make payments under the tax receivable agreements described in Blackstone’s Annual Report on Form 10-K, the amounts ultimately distributed by The Blackstone Group L.P. to its common unitholders in respect of each fiscal year are expected to be different, on a per unit basis, than the amounts distributed by the Blackstone Holdings partnerships to the Blackstone personnel and others who are limited partners of the Blackstone Holdings partnerships in respect of their Blackstone Holdings partnership units.

# # #

Blackstone will host a conference call on February 2, 2012 at 11:00 a.m. ET to discuss 2011 results. The conference call can be accessed by dialing (877) 391-6747 (U.S. domestic) or +1 (617) 597-9291 (international), pass code 31241240. Additionally, the conference call will be broadcast live over the internet and can be accessed by all interested parties through the Investor Relations section of The Blackstone Group’s website http://ir.blackstone.com. For those unable to listen to the live broadcast, a replay will be available on Blackstone’s website or by dialing (888) 286-8010 (U.S. domestic) or +1 (617) 801-6888 (international), conference ID number 73697179, beginning approximately two hours after the event.

Blackstone expects to host conference calls to report its 2012 results as follows: first quarter results, April 19, 2012; second quarter results, July 19, 2012; third quarter results, October 18, 2012 and fourth quarter and full year results, January 31, 2013.

Investor Relations Contacts:

Joan Solotar

The Blackstone Group

Tel: +1 (212) 583-5068

solotar@blackstone.com

Weston Tucker

The Blackstone Group

Tel: +1 (212) 583-5231

tucker@blackstone.com

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Media Relations Contact:

Peter Rose

The Blackstone Group

Tel: +1 (212) 583-5871

rose@blackstone.com

About The Blackstone Group

Blackstone (NYSE:BX) is one of the world’s leading investment and advisory firms. Blackstone seeks to create positive economic impact and long-term value for its investors, the companies invested in, the companies advised and the broader global economy. Blackstone does this through the commitment of its extraordinary people and flexible capital. Blackstone’s alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions, credit-oriented funds and closed-end mutual funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com. Follow Blackstone on Twitter @Blackstone.

Forward-Looking Statements

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which reflect Blackstone’s current views with respect to, among other things, Blackstone’s operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “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. Blackstone believes these factors include but are not limited to those described under the section entitled “Risk Factors” in its Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as such factors may be updated from time to time in its periodic filings with the 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 release and in the filings. Blackstone undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

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

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THE BLACKSTONE GROUP L.P.

Exhibit 1a. Consolidated Statements of Operations

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

	Quarter Ended December 31,
	2011			2010
Revenues
Management and Advisory Fees	$	475,779		$	461,345
Performance Fees
Realized		64,435			194,780
Unrealized		293,667			258,809
Total Performance Fees		358,102			453,589
Investment Income
Realized		9,860			(336	)
Unrealized		55,665			160,313
Total Investment Income		65,525			159,977
Interest and Dividend Revenue		10,004			10,296
Other		5,695			(1,192	)
Total Revenues		915,105			1,084,015
Expenses
Compensation and Benefits
Compensation		568,319			696,561
Performance Fee Compensation
Realized		46,730			72,734
Unrealized		47,998			70,615
Total Compensation and Benefits		663,047			839,910
General, Administrative and Other		150,937			124,505
Interest Expense		16,051			14,596
Fund Expenses		6,462			10,730
Total Expenses		836,497			989,741
Other Income
Reversal of Tax Receivable Agreement Liability		197,816			—
Net Gains from Fund Investment Activities		464,179			104,369
Total Other Income		661,995			104,369
Income Before Provision for Taxes		740,603			198,643
Provision for Taxes		251,644			59,867
Net Income		488,959			138,776
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		(9,635	)		37,666
Net Income Attributable to Non-Controlling Interests in Consolidated Entities		466,452			25,496
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings		155,547			86,587
Net Loss Attributable to The Blackstone Group L.P.	$	(123,405	)	$	(10,973	)
Net Loss per Common Unit, Basic and Diluted	$	(0.25	)	$	(0.03	)

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THE BLACKSTONE GROUP L.P.

Exhibit 1b. Consolidated Statements of Operations

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

	Year Ended December 31,
	2011			2010
Revenues
Management and Advisory Fees	$	1,811,750		$	1,584,748
Performance Fees
Realized		229,006			366,721
Unrealized		953,654			571,113
Total Performance Fees		1,182,660			937,834
Investment Income
Realized		87,542			29,157
Unrealized		125,781			532,004
Total Investment Income		213,323			561,161
Interest and Dividend Revenue		37,427			36,218
Other		7,416			(619	)
Total Revenues		3,252,576			3,119,342
Expenses
Compensation and Benefits
Compensation		2,421,712			3,253,226
Performance Fee Compensation
Realized		99,527			128,316
Unrealized		217,186			228,647
Total Compensation and Benefits		2,738,425			3,610,189
General, Administrative and Other		531,370			466,358
Interest Expense		57,824			41,229
Fund Expenses		25,507			26,214
Total Expenses		3,353,126			4,143,990
Other Income
Reversal of Tax Receivable Agreement Liability		197,816			—
Net Gains from Fund Investment Activities		14,935			501,994
Total Other Income		212,751			501,994
Income (Loss) Before Provision for Taxes		112,201			(522,654	)
Provision for Taxes		347,056			84,669
Net Loss		(234,855	)		(607,323	)
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		(32,526	)		84,837
Net Income Attributable to Non-Controlling Interests in Consolidated Entities		15,610			346,312
Net Income (Loss) Attributable to Non-Controlling Interests in Blackstone Holdings		51,092			(668,444	)
Net Loss Attributable to The Blackstone Group L.P.	$	(269,031	)	$	(370,028	)
Net Loss per Common Unit, Basic and Diluted	$	(0.57	)	$	(1.02	)

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THE BLACKSTONE GROUP L.P.

Exhibit 2a. Economic Net Income and Net Fee Related Earnings from Operations

(Unaudited, Dollars in Thousands)

The tables below detail Blackstone’s Economic Net Income and Net Fee Related Earnings from Operations. Net Fee Related Earnings from Operations is a supplemental measure of after tax performance used to highlight earnings from operations excluding the income from and related profit sharing expenses of Blackstone’s performance fees and investment income, except for interest income. The reconciliation of Economic Net Income to Net Fee Related Earnings from Operations is presented in Exhibit 2b to this release.

	Three Months Ended																								Twelve Months Ended
																															Dec 31, 2011 vs.
	Mar 31,			Jun 30,			Sep 30,			Dec 31,			Mar 31,			Jun 30,			Sep 30,			Dec 31,			Dec 31,			Dec 31,			Dec 31, 2010
	2010			2010			2010			2010			2011			2011			2011			2011			2010			2011			$			%
Economic Net Income, Total Segments
Revenues
Management and Advisory Fees
Base Management Fees	$	251,971		$	262,914		$	269,434		$	285,152		$	305,587		$	316,474		$	322,371		$	336,753		$	1,069,471		$	1,281,185		$	211,714			20	%
Advisory Fees		76,568			134,099			84,541			130,932			70,252			102,243			86,178			123,567			426,140			382,240			(43,900	)		-10	%
Transaction and Other Fees, Net *		35,260			20,617			22,948			58,923			58,363			103,561			41,793			43,796			137,748			247,513			109,765			80	%
Management Fee Offsets **		(1,178	)		(179	)		(674	)		(282	)		(8,536	)		(8,675	)		(7,703	)		(8,479	)		(2,313	)		(33,393	)		(31,080	)		N/M
Total Management and Advisory Fees		362,621			417,451			376,249			474,725			425,666			513,603			442,639			495,637			1,631,046			1,877,545			246,499			15	%
Performance Fees
Realized		53,881			46,374			66,039			195,369			95,600			60,215			7,897			64,224			361,663			227,936			(133,727	)		-37	%
Unrealized		132,333			(20,738	)		192,745			260,286			505,197			612,843			(465,176	)		293,726			564,626			946,590			381,964			68	%
Total Performance Fees		186,214			25,636			258,784			455,655			600,797			673,058			(457,279	)		357,950			926,289			1,174,526			248,237			27	%
Investment Income (Loss)
Realized		5,307			15,721			14,276			11,611			23,499			30,732			31,647			16,697			46,915			102,575			55,660			119	%
Unrealized		151,521			87,186			128,247			134,680			102,577			106,837			(165,753	)		39,028			501,634			82,689			(418,945	)		-84	%
Total Investment Income (Loss)		156,828			102,907			142,523			146,291			126,076			137,569			(134,106	)		55,725			548,549			185,264			(363,285	)		-66	%
Interest Income and Dividend Revenue		8,690			6,930			10,187			10,289			9,448			9,283			10,110			10,003			36,096			38,844			2,748			8	%
Other		(3,250	)		(644	)		4,468			(1,192	)		2,259			1,128			(1,667	)		5,695			(618	)		7,415			8,033			N/M
Total Revenues		711,103			552,280			792,211			1,085,768			1,164,246			1,334,641			(140,303	)		925,010			3,141,362			3,283,594			142,232			5	%
Expenses
Compensation and Benefits
Compensation		190,637			220,662			210,582			237,233			224,532			272,392			238,207			225,438			859,114			960,569			101,455			12	%
Performance Fee Compensation
Realized		7,741			22,879			24,962			72,734			14,543			27,711			10,543			46,730			128,316			99,527			(28,789	)		-22	%
Unrealized		54,600			(892	)		104,323			70,615			162,525			118,097			(111,435	)		47,998			228,646			217,185			(11,461	)		-5	%
Total Compensation and Benefits		252,978			242,649			339,867			380,582			401,600			418,200			137,315			320,166			1,216,076			1,277,281			61,205			5	%
Other Operating Expenses		73,023			88,160			84,253			99,080			102,975			99,363			96,932			122,072			344,516			421,342			76,826			22	%
Total Expenses		326,001			330,809			424,120			479,662			504,575			517,563			234,247			442,238			1,560,592			1,698,623			138,031			9	%
Total Economic Net Income (Loss)	$	385,102		$	221,471		$	368,091		$	606,106		$	659,671		$	817,078		$	(374,550	)	$	482,772		$	1,580,770		$	1,584,971		$	4,201			0	%
Total Net Fee Related Earnings from Operations	$	98,745		$	107,915		$	112,914		$	122,740		$	98,546		$	143,563		$	107,642		$	152,344		$	442,314		$	502,095		$	59,781			14	%

* Transaction and Other Fees, Net, are net of amounts, if any, shared with limited partners including, for Private Equity, broken deal expenses.

** Primarily placement fees.

continued...

11

THE BLACKSTONE GROUP L.P.

Exhibit 2a. Economic Net Income and Net Fee Related Earnings from Operations

(Unaudited, Dollars in Thousands)

	Three Months Ended																								Twelve Months Ended
																															Dec 31, 2011 vs.
	Mar 31,			Jun 30,			Sep 30,			Dec 31,			Mar 31,			Jun 30,			Sep 30,			Dec 31,			Dec 31,			Dec 31,			Dec 31, 2010
	2010			2010			2010			2010			2011			2011			2011			2011			2010			2011			$			%
Private Equity
Revenues
Management Fees
Base Management Fees	$	65,432		$	66,795		$	66,077		$	65,003		$	79,935		$	82,297		$	85,534		$	84,231		$	263,307		$	331,997		$	68,690			26	%
Transaction and Other Fees, Net *		31,972			16,367			13,348			10,556			35,342			52,353			21,430			23,879			72,243			133,004			60,761			84	%
Management Fee Offsets **		—			—			(91	)		(97	)		(7,889	)		(7,629	)		(6,498	)		(5,057	)		(188	)		(27,073	)		(26,885	)		N/M
Total Management Fees		97,404			83,162			79,334			75,462			107,388			127,021			100,466			103,053			335,362			437,928			102,566			31	%
Performance Fees
Realized		46,175			1,106			44,814			64,774			82,389			1,362			(17,966	)		(28,392	)		156,869			37,393			(119,476	)		-76	%
Unrealized		45,549			(24,020	)		45,499			84,466			32,537			187,190			(270,014	)		83,777			151,494			33,490			(118,004	)		-78	%
Total Performance Fees		91,724			(22,914	)		90,313			149,240			114,926			188,552			(287,980	)		55,385			308,363			70,883			(237,480	)		-77	%
Investment Income (Loss)
Realized		(495	)		3,141			9,940			2,746			17,907			3,021			20,548			3,512			15,332			44,988			29,656			193	%
Unrealized		84,684			17,275			30,491			20,838			29,126			76,947			(121,688	)		25,091			153,288			9,476			(143,812	)		-94	%
Total Investment Income (Loss)		84,189			20,416			40,431			23,584			47,033			79,968			(101,140	)		28,603			168,620			54,464			(114,156	)		-68	%
Interest Income and Dividend Revenue		3,428			2,728			3,802			4,086			3,505			3,197			3,396			3,651			14,044			13,749			(295	)		-2	%
Other		100			460			1,061			400			811			665			141			193			2,021			1,810			(211	)		-10	%
Total Revenues		276,845			83,852			214,941			252,772			273,663			399,403			(285,117	)		190,885			828,410			578,834			(249,576	)		-30	%
Expenses
Compensation and Benefits
Compensation		46,910			46,612			47,552			38,271			54,924			64,633			52,388			45,611			179,345			217,556			38,211			21	%
Performance Fee Compensation
Realized		6,005			128			10,783			15,711			7,718			49			(2,443	)		(3,859	)		32,627			1,465			(31,162	)		-96	%
Unrealized		6,344			(10,296	)		18,306			6,966			5,464			29,309			(44,955	)		7,953			21,320			(2,229	)		(23,549	)		N/M
Total Compensation and Benefits		59,259			36,444			76,641			60,948			68,106			93,991			4,990			49,705			233,292			216,792			(16,500	)		-7	%
Other Operating Expenses		24,431			28,677			26,359			30,122			28,713			30,124			27,588			34,493			109,589			120,918			11,329			10	%
Total Expenses		83,690			65,121			103,000			91,070			96,819			124,115			32,578			84,198			342,881			337,710			(5,171	)		-2	%
Total Economic Net Income (Loss)	$	193,155		$	18,731		$	111,941		$	161,702		$	176,844		$	275,288		$	(317,695	)	$	106,687		$	485,529		$	241,124		$	(244,405	)		-50	%

* Transaction and Other Fees, Net, are net of amounts, if any, shared with limited partners including, for Private Equity, broken deal expenses.

** Primarily placement fees.

continued...

12

THE BLACKSTONE GROUP L.P.

Exhibit 2a. Economic Net Income and Net Fee Related Earnings from Operations—Continued

(Unaudited, Dollars in Thousands)

	Three Months Ended																								Twelve Months Ended
																															Dec 31, 2011 vs.
	Mar 31,			Jun 30,			Sep 30,			Dec 31,			Mar 31,			Jun 30,			Sep 30,			Dec 31,			Dec 31,			Dec 31,			Dec 31, 2010
	2010			2010			2010			2010			2011			2011			2011			2011			2010			2011			$			%
Real Estate
Revenues
Management Fees
Base Management Fees	$	83,060		$	82,916		$	83,232		$	89,220		$	95,439		$	97,467		$	97,925		$	103,947		$	338,428		$	394,778		$	56,350			17	%
Transaction and Other Fees, Net *		1,942			2,979			8,538			46,455			21,543			49,288			19,551			19,128			59,914			109,510			49,596			83	%
Management Fee Offsets **		(489	)		(110	)		(401	)		(71	)		(505	)		(745	)		(880	)		(2,820	)		(1,071	)		(4,950	)		(3,879	)		N/M
Total Management Fees		84,513			85,785			91,369			135,604			116,477			146,010			116,596			120,255			397,271			499,338			102,067			26	%
Performance Fees
Realized		5,948			16,319			5,010			13,011			2,593			20,832			5,308			3,740			40,288			32,473			(7,815	)		-19	%
Unrealized		11,391			21,117			69,910			154,553			368,104			429,458			(120,176	)		239,690			256,971			917,076			660,105			N/M
Total Performance Fees		17,339			37,436			74,920			167,564			370,697			450,290			(114,868	)		243,430			297,259			949,549			652,290			N/M
Investment Income (Loss)
Realized		2,632			3,900			2,159			2,560			2,919			11,394			7,313			6,346			11,251			27,972			16,721			149	%
Unrealized		46,892			79,543			83,968			108,576			61,406			37,332			(26,060	)		19,970			318,979			92,648			(226,331	)		-71	%
Total Investment Income (Loss)		49,524			83,443			86,127			111,136			64,325			48,726			(18,747	)		26,316			330,230			120,620			(209,610	)		-63	%
Interest Income and Dividend Revenue		2,718			2,178			3,026			3,251			3,288			2,989			3,195			3,430			11,173			12,902			1,729			15	%
Other		(1,876	)		(390	)		2,330			(400	)		860			515			(1,390	)		(1,046	)		(336	)		(1,061	)		(725	)		N/M
Total Revenues		152,218			208,452			257,772			417,155			555,647			648,530			(15,214	)		392,385			1,035,597			1,581,348			545,751			53	%
Expenses
Compensation and Benefits
Compensation		40,150			44,528			43,219			55,280			57,627			70,651			54,986			53,507			183,177			236,771			53,594			29	%
Performance Fee Compensation
Realized		1,524			8,895			1,806			3,619			1,230			9,382			2,251			1,804			15,844			14,667			(1,177	)		-7	%
Unrealized		6,937			15,999			46,182			53,746			106,501			91,021			(30,510	)		57,234			122,864			224,246			101,382			83	%
Total Compensation and Benefits		48,611			69,422			91,207			112,645			165,358			171,054			26,727			112,545			321,885			475,684			153,799			48	%
Other Operating Expenses		14,290			17,647			18,584			23,668			28,366			22,971			23,495			29,027			74,189			103,859			29,670			40	%
Total Expenses		62,901			87,069			109,791			136,313			193,724			194,025			50,222			141,572			396,074			579,543			183,469			46	%
Total Economic Net Income (Loss)	$	89,317		$	121,383		$	147,981		$	280,842		$	361,923		$	454,505		$	(65,436	)	$	250,813		$	639,523		$	1,001,805		$	362,282			57	%

* Transaction and Other Fees, Net, are net of amounts, if any, shared with limited partners.

** Primarily placement fees.

continued...

13

THE BLACKSTONE GROUP L.P.

Exhibit 2a. Economic Net Income and Net Fee Related Earnings from Operations—Continued

(Unaudited, Dollars in Thousands)

	Three Months Ended																								Twelve Months Ended
																															Dec 31, 2011 vs.
	Mar 31,			Jun 30,			Sep 30,			Dec 31,			Mar 31,			Jun 30,			Sep 30,			Dec 31,			Dec 31,			Dec 31,			Dec 31, 2010
	2010			2010			2010			2010			2011			2011			2011			2011			2010			2011			$			%
Hedge Fund Solutions
Revenues
Management Fees
Base Management Fees	$	63,866		$	65,533		$	69,305		$	74,069		$	75,612		$	79,290		$	79,355		$	81,606		$	272,773		$	315,863		$	43,090			16	%
Transaction and Other Fees, Net *		809			870			846			1,047			727			861			740			470			3,572			2,798			(774	)		-22	%
Management Fee Offsets **		—			(72	)		(163	)		(95	)		(124	)		(196	)		(258	)		(402	)		(330	)		(980	)		(650	)		-197	%
Total Management Fees		64,675			66,331			69,988			75,021			76,215			79,955			79,837			81,674			276,015			317,681			41,666			15	%
Performance Fees
Realized		2,117			1,021			872			52,616			893			667			5,764			4,148			56,626			11,472			(45,154	)		-80	%
Unrealized		10,413			(2,596	)		14,137			(18,972	)		19,253			3,441			(19,861	)		(2,059	)		2,982			774			(2,208	)		-74	%
Total Performance Fees		12,530			(1,575	)		15,009			33,644			20,146			4,108			(14,097	)		2,089			59,608			12,246			(47,362	)		-79	%
Investment Income (Loss)
Realized		(250	)		5,438			1,050			3,580			1,341			12,855			1,023			2,503			9,818			17,722			7,904			81	%
Unrealized		11,880			(6,749	)		7,831			6,399			7,120			(12,864	)		(10,034	)		(3,253	)		19,361			(19,031	)		(38,392	)		N/M
Total Investment Income (Loss)		11,630			(1,311	)		8,881			9,979			8,461			(9	)		(9,011	)		(750	)		29,179			(1,309	)		(30,488	)		N/M
Interest Income and Dividend Revenue		475			353			498			543			516			472			500			537			1,869			2,025			156			8	%
Other		(83	)		(40	)		270			(50	)		104			(38	)		18			7,818			97			7,902			7,805			N/M
Total Revenues		89,227			63,758			94,646			119,137			105,442			84,488			57,247			91,368			366,768			338,545			(28,223	)		-8	%
Expenses
Compensation and Benefits
Compensation		20,742			26,388			24,506			23,750			28,093			31,674			30,667			38,525			95,386			128,959			33,573			35	%
Performance Fee Compensation
Realized		771			356			3,313			16,193			300			253			2,257			688			20,633			3,498			(17,135	)		-83	%
Unrealized		3,783			(977	)		5,075			(6,814	)		5,358			2,955			(7,214	)		(865	)		1,067			234			(833	)		-78	%
Total Compensation and Benefits		25,296			25,767			32,894			33,129			33,751			34,882			25,710			38,348			117,086			132,691			15,605			13	%
Other Operating Expenses		11,285			12,353			12,388			15,334			13,008			16,075			14,421			21,568			51,360			65,072			13,712			27	%
Total Expenses		36,581			38,120			45,282			48,463			46,759			50,957			40,131			59,916			168,446			197,763			29,317			17	%
Total Economic Net Income	$	52,646		$	25,638		$	49,364		$	70,674		$	58,683		$	33,531		$	17,116		$	31,452		$	198,322		$	140,782		$	(57,540	)		-29	%

* Transaction and Other Fees, Net, are net of amounts, if any, shared with limited partners.

** Primarily placement fees.

continued...

14

THE BLACKSTONE GROUP L.P.

Exhibit 2a. Economic Net Income and Net Fee Related Earnings from Operations—Continued

(Unaudited, Dollars in Thousands)

	Three Months Ended																								Twelve Months Ended
																															Dec 31, 2011 vs.
	Mar 31,			Jun 30,			Sep 30,			Dec 31,			Mar 31,			Jun 30,			Sep 30,			Dec 31,			Dec 31,			Dec 31,			Dec 31, 2010
	2010			2010			2010			2010			2011			2011			2011			2011			2010			2011			$			%
Credit Businesses
Revenues
Management Fees
Base Management Fees	$	39,613		$	47,670		$	50,820		$	56,860		$	54,601		$	57,420		$	59,557		$	66,969		$	194,963		$	238,547		$	43,584			22	%
Transaction and Other Fees, Net *		536			299			216			606			745			849			(26	)		312			1,657			1,880			223			13	%
Management Fee Offsets **		(689	)		3			(19	)		(19	)		(18	)		(105	)		(67	)		(200	)		(724	)		(390	)		334			46	%
Total Management Fees		39,460			47,972			51,017			57,447			55,328			58,164			59,464			67,081			195,896			240,037			44,141			23	%
Performance Fees
Realized		(359	)		27,928			15,343			64,968			9,725			37,354			14,791			84,728			107,880			146,598			38,718			36	%
Unrealized		64,980			(15,239	)		63,199			40,239			85,303			(7,246	)		(55,125	)		(27,682	)		153,179			(4,750	)		(157,929	)		N/M
Total Performance Fees		64,621			12,689			78,542			105,207			95,028			30,108			(40,334	)		57,046			261,059			141,848			(119,211	)		-46	%
Investment Income (Loss)
Realized		3,233			3,291			658			2,518			1,235			3,236			2,807			4,021			9,700			11,299			1,599			16	%
Unrealized		7,835			(3,444	)		5,350			(269	)		4,532			5,437			(7,800	)		(2,877	)		9,472			(708	)		(10,180	)		N/M
Total Investment Income (Loss)		11,068			(153	)		6,008			2,249			5,767			8,673			(4,993	)		1,144			19,172			10,591			(8,581	)		-45	%
Interest Income and Dividend Revenue		673			403			1,252			710			453			902			1,404			610			3,038			3,369			331			11	%
Other		(459	)		(332	)		330			(27	)		98			(47	)		(132	)		(772	)		(488	)		(853	)		(365	)		-75	%
Total Revenues		115,363			60,579			137,149			165,586			156,674			97,800			15,409			125,109			478,677			394,992			(83,685	)		-17	%
Expenses
Compensation and Benefits
Compensation		28,343			26,982			28,774			39,158			29,549			33,071			40,533			25,435			123,257			128,588			5,331			4	%
Performance Fee Compensation
Realized		(559	)		13,500			9,060			37,211			5,295			18,027			8,478			48,097			59,212			79,897			20,685			35	%
Unrealized		37,536			(5,618	)		34,760			16,717			45,202			(5,188	)		(28,756	)		(16,324	)		83,395			(5,066	)		(88,461	)		N/M
Total Compensation and Benefits		65,320			34,864			72,594			93,086			80,046			45,910			20,255			57,208			265,864			203,419			(62,445	)		-23	%
Other Operating Expenses		8,290			12,167			9,669			8,980			15,357			10,226			11,210			13,162			39,106			49,955			10,849			28	%
Total Expenses		73,610			47,031			82,263			102,066			95,403			56,136			31,465			70,370			304,970			253,374			(51,596	)		-17	%
Total Economic Net Income (Loss)	$	41,753		$	13,548		$	54,886		$	63,520		$	61,271		$	41,664		$	(16,056	)	$	54,739		$	173,707		$	141,618		$	(32,089	)		-18	%

* Transaction and Other Fees, Net, are net of amounts, if any, shared with limited partners.

** Primarily placement fees.

continued...

15

THE BLACKSTONE GROUP L.P.

Exhibit 2a. Economic Net Income and Net Fee Related Earnings from Operations—Continued

(Unaudited, Dollars in Thousands)

	Three Months Ended																						Twelve Months Ended
																													Dec 31, 2011 vs.
	Mar 31,			Jun 30,			Sep 30,		Dec 31,			Mar 31,		Jun 30,			Sep 30,			Dec 31,			Dec 31,			Dec 31,			Dec 31, 2010
	2010			2010			2010		2010			2011		2011			2011			2011			2010			2011			$			%
Financial Advisory
Revenues
Advisory Fees	$	76,568		$	134,099		$	84,541	$	130,932		$	70,252	$	102,243		$	86,178		$	123,567		$	426,140		$	382,240		$	(43,900	)		-10	%
Transaction and Other Fees, Net		1			102			—		259			6		210			98			7			362			321			(41	)		-11	%
Total Advisory and Transaction Fees		76,569			134,201			84,541		131,191			70,258		102,453			86,276			123,574			426,502			382,561			(43,941	)		-10	%
Investment Income (Loss)
Realized		187			(49	)		469		207			97		226			(44	)		315			814			594			(220	)		-27	%
Unrealized		230			561			607		(864	)		393		(15	)		(171	)		97			534			304			(230	)		N/M
Total Investment Income (Loss)		417			512			1,076		(657	)		490		211			(215	)		412			1,348			898			(450	)		-33	%
Interest Income and Dividend Revenue		1,396			1,268			1,609		1,699			1,686		1,723			1,615			1,775			5,972			6,799			827			14	%
Other		(932	)		(342	)		477		(1,115	)		386		33			(304	)		(498	)		(1,912	)		(383	)		1,529			80	%
Total Revenues		77,450			135,639			87,703		131,118			72,820		104,420			87,372			125,263			431,910			389,875			(42,035	)		-10	%
Expenses
Compensation and Benefits
Compensation		54,492			76,152			66,531		80,774			54,339		72,363			59,633			62,360			277,949			248,695			(29,254	)		-11	%
Total Compensation and Benefits		54,492			76,152			66,531		80,774			54,339		72,363			59,633			62,360			277,949			248,695			(29,254	)		-11	%
Other Operating Expenses		14,727			17,316			17,253		20,976			17,531		19,967			20,218			23,822			70,272			81,538			11,266			16	%
Total Expenses		69,219			93,468			83,784		101,750			71,870		92,330			79,851			86,182			348,221			330,233			(17,988	)		-5	%
Economic Net Income	$	8,231		$	42,171		$	3,919	$	29,368		$	950	$	12,090		$	7,521		$	39,081		$	83,689		$	59,642		$	(24,047	)		-29	%

continued...

16

THE BLACKSTONE GROUP L.P.

Exhibit 2b. Reconciliation of Income (Loss) Before Provision (Benefit) for Taxes to Total Segments, Economic Net Income (Loss), of

Total Segments, Economic Net Income (Loss) to Net Fee Related Earnings from Operations, of Net Fee Related Earnings from

Operations to Distributable Earnings and of Earnings Before Interest, Taxes and Depreciation and Amortization from Net Fee

Related Earnings from Operations to Net Fee Related Earnings from Operations

(Unaudited, Dollars in Thousands)

	Three Months Ended																								Twelve Months Ended
	March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			December 31, 2010			December 31, 2011
Income (Loss) Before Provision (Benefit) for Taxes	$	(227,671	)	$	(636,928	)	$	143,302		$	198,643		$	117,214		$	248,796		$	(994,412	)	$	740,603		$	(522,654	)	$	112,201
IPO and Acquisition-Related Charges (a)		726,722			749,930			438,568			453,975			427,227			430,829			264,068			147,808			2,369,195			1,269,932
Amortization of Intangibles (b)		39,512			40,822			40,872			44,172			44,174			44,905			45,665			51,178			165,378			185,922
(Income) Loss Associated with Non-Controlling Interests in (Income) Loss of Consolidated Entities (c)		(153,461	)		67,647			(254,651	)		(90,684	)		71,056			92,548			310,129			(456,817	)		(431,149	)		16,916
Total Segments
Total Segments, Economic Net Income (Loss)		385,102			221,471			368,091			606,106			659,671			817,078			(374,550	)		482,772			1,580,770			1,584,971
Performance Fees Adjustment (d)		(186,214	)		(25,636	)		(258,784	)		(455,655	)		(600,797	)		(673,058	)		457,279			(357,950	)		(926,289	)		(1,174,526	)
Investment Income (Loss) Adjustment (e)		(156,828	)		(102,907	)		(142,523	)		(146,291	)		(126,076	)		(137,569	)		134,106			(55,725	)		(548,549	)		(185,264	)
Investment Income—Blackstone’s Treasury Cash Management Strategies (f)		3,665			5,062			11,226			(4,676	)		1,302			4,038			(3,011	)		2,271			15,277			4,600
Performance Fee Compensation and Benefits Adjustment (g)		62,341			21,987			129,285			143,349			177,068			145,808			(100,892	)		94,728			356,962			316,712
Taxes Payable (h)		(9,321	)		(12,062	)		5,619			(20,093	)		(12,622	)		(12,734	)		(5,290	)		(13,752	)		(35,857	)		(44,398	)
Net Fee Related Earnings from Operations		98,745			107,915			112,914			122,740			98,546			143,563			107,642			152,344			442,314			502,095
Realized Performance Fees (i)		46,140			23,495			41,077			122,635			81,057			32,504			(2,646	)		17,494			233,347			128,409
Realized Investment Income (Loss) (j)		5,307			15,721			14,276			11,611			23,499			30,732			31,647			16,697			46,915			102,575
Adjustment Related to Realized Investment Income—Blackstone’s Treasury Cash Management Strategies (k)		(1,264	)		512			(4,874	)		(2,156	)		(1,010	)		(2,343	)		(309	)		(2,395	)		(7,782	)		(6,057	)
Other Payables Including Payable Under Tax Receivable Agreement		(232	)		(68	)		2,923			(15,633	)		(177	)		(13,578	)		(10,589	)		(5,954	)		(13,010	)		(30,298	)
Distributable Earnings	$	148,696		$	147,575		$	166,316		$	239,197		$	201,915		$	190,878		$	125,745		$	178,186		$	701,784		$	696,724
Earnings Before Interest, Taxes and Depreciation and Amortization from Net Fee Related Earnings from Operations (l)	$	115,013		$	138,889		$	129,847		$	226,617		$	137,423		$	183,770		$	140,190		$	255,702		$	610,366		$	717,085

(a) This adjustment adds back to Income (Loss) Before Provision for Taxes amounts for Transaction-Related Charges which include principally equity-based compensation charges associated with Blackstone’s initial public offering and long-term retention programs outside of annual deferred compensation and other corporate actions.

(b) This adjustment adds back to Income (Loss) Before Provision for Taxes amounts for the Amortization of Intangibles which are associated with Blackstone’s initial public offering and other corporate actions.

(c) This adjustment adds back to Income (Loss) Before Provision for Taxes the amount of (Income) Loss Associated with Non-Controlling Interests in (Income) Loss of Consolidated Entities and includes the amount of Management Fee Revenues associated with Consolidated CLO Entities.

continued...

17

THE BLACKSTONE GROUP L.P.

Exhibit 2b. Reconciliation of Income (Loss) Before Provision (Benefit) for Taxes to Total Segments, Economic Net Income (Loss), of Total Segments, Economic Net Income (Loss) to Net Fee Related Earnings from Operations, of Net Fee Related Earnings from Operations to Distributable Earnings and of Earnings Before Interest, Taxes and Depreciation and Amortization from Net Fee Related Earnings from Operations to Net Fee Related Earnings from Operations

(Unaudited, Dollars in Thousands)

(d)	This adjustment removes from ENI the total segment amount of Performance Fees.
(e)	This adjustment removes from ENI the total segment amount of Investment Income (Loss).
(f)	This adjustment represents the realized and unrealized gain on Blackstone’s Treasury cash management strategies which are a component of Investment Income (Loss) but included in Net Fee Related Earnings.
(g)	This adjustment removes from expenses the compensation and benefit amounts related to Blackstone’s profit sharing plans related to Performance Fees.
(h)	Represents an implied payable for income taxes calculated using a similar methodology applied in calculating the current provision for The Blackstone Group L.P.
(i)	Represents the adjustment for realized Performance Fees net of corresponding actual amounts due under Blackstone’s profit sharing plans related thereto.
(j)	Represents the adjustment for Blackstone’s Investment Income (Loss)—Realized.
(k)	Represents the elimination of Realized Investment Income (Loss) attributable to Blackstone’s Treasury cash management strategies which is a component of both Net Fee Related Earnings from Operations and Realized Investment Income (Loss).
(l)	Earnings Before Interest, Taxes and Depreciation and Amortization from Net Fee Related Earnings from Operations represents Net Fee Related Earnings from Operations adding back the implied cash taxes payable component from the Distributable Earnings reconciliation presented above, which is included in (h), segment interest and depreciation and amortization, and segment amortization of non-cash deferred compensation awards. The cash taxes payable component of (h) was $9.3 million, $12.1 million, $(5.6) million, $20.1 million, $12.6 million, $12.7 million, $5.3 million and $13.8 million for the three months ended March 31, 2010, June 30, 2010, September 30, 2010, December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011, respectively. The cash taxes payable component of (h) was $44.4 million and $35.9 million for the years ended December 31, 2011 and 2010, respectively. Interest was $6.3 million, $6.8 million, $10.3 million, $13.2 million, $12.7 million, $13.1 million, $12.6 million and $14.8 million for the three months ended March 31, 2010, June 30, 2010, September 30, 2010, December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011, respectively. Interest was $53.2 million and $36.7 million for the years ended December 31, 2011 and 2010, respectively. Depreciation and amortization was $6.4 million, $6.1 million, $6.6 million, $7.6 million, $8.2 million, $7.8 million, $8.3 million and $8.5 million for the three months ended March 31, 2010, June 30, 2010, September 30, 2010, December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011, respectively. Depreciation and amortization was $32.8 million and $26.6 million for the years ended December 31, 2011 and 2010, respectively. Amortization of non-cash deferred compensation was $(5.8) million, $6.0 million, $5.7 million, $63.0 million, $5.4 million, $6.6 million, $6.4 million and $66.3 million for the three months ended March 31, 2010, June 30, 2010, September 30, 2010, December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011, respectively. Amortization of non-cash deferred compensation was $84.6 million and $68.9 million for the years ended December 31, 2011 and 2010, respectively.

18

THE BLACKSTONE GROUP L.P.

Exhibit 3. Distributable Earnings

(Dollars in Thousands)

The following table calculates Blackstone’s Distributable Earnings. Distributable Earnings is a supplemental measure of performance to assess amounts available for distributions to Blackstone unitholders, including Blackstone personnel.

	Three Months Ended December 31,						Year Ended December 31,
	2011			2010			2011			2010
Fee Related Earnings
Revenues
Total Management and Advisory Fees (a)	$	495,637		$	474,725		$	1,877,545		$	1,631,046
Interest and Dividend Revenue (a)		10,003			10,289			38,844			36,096
Other (a)		5,695			(1,192	)		7,415			(618	)
Investment Income—Blackstone’s Treasury Cash Management Strategies (b)		2,271			(4,676	)		4,600			15,277
Total Revenues		513,606			479,146			1,928,404			1,681,801
Expenses
Compensation and Benefits—Compensation (a)		225,438			237,233			960,569			859,114
Other Operating Expenses (a)		122,072			99,080			421,342			344,516
Cash Taxes (c)		13,752			20,093			44,398			35,857
Total Expenses		361,262			356,406			1,426,309			1,239,487
Net Fee Related Earnings from Operations		152,344			122,740			502,095			442,314
Performance Fees, Net of Compensation
Performance Fees—Realized (a)		64,224			195,369			227,936			361,663
Compensation and Benefits—Performance Fee Compensation—Realized (a)		(46,730	)		(72,734	)		(99,527	)		(128,316	)
Total Performance Fees, Net of Compensation		17,494			122,635			128,409			233,347
Investment Income and Other
Investment Income—Realized (a)		16,697			11,611			102,575			46,915
Adjustment Related to Realized Investment Income—Blackstone’s Treasury Cash Management Strategies (d)		(2,395	)		(2,156	)		(6,057	)		(7,782	)
Other Payables Including Payable Under Tax Receivable Agreement		(5,954	)		(15,633	)		(30,298	)		(13,010	)
Total Investment Income and Other		8,348			(6,178	)		66,220			26,123
Distributable Earnings	$	178,186		$	239,197		$	696,724		$	701,784

(a) Represents the total segment amounts of the respective captions.

(b) Represents the inclusion of Investment Income from Blackstone’s Treasury cash management strategies.

(c) Represents the provisions for and/or adjustments to income taxes that were calculated using a similar methodology applied in calculating the current provision for The Blackstone Group L.P.

(d) Represents the elimination of Realized Investment Income attributable to Blackstone’s Treasury cash management strategies which is a component of Net Fee Related Earnings from Operations.

19

THE BLACKSTONE GROUP L.P.

Exhibit 4. Total GAAP Weighted-Average Common Units Outstanding—Basic and Diluted and Reconciliation of Total GAAP Weighted-Average Common Units Outstanding—Basic and Diluted to Weighted-Average Economic Net Income Adjusted Units with End of Period Economic Net Income Adjusted Units Outstanding and Reconciliation of Total GAAP Common Units Outstanding to Distributable Earnings Units Outstanding

The following table provides Blackstone’s Total GAAP Weighted-Average Common Units Outstanding—Basic and Diluted.

	Three Months Ended December 31,				Year Ended December 31,
	2011		2010		2011		2010
Total GAAP Weighted-Average Common Units Outstanding—Basic and Diluted (a)		490,511,637		389,804,253		475,582,718		364,021,369

The following table provides a reconciliation of Blackstone’s Total GAAP Weighted-Average Common Units Outstanding—Basic and Diluted to Weighted-Average Economic Net Income Adjusted Units and presents the end of period Economic Net Income Adjusted Units Outstanding.

	Three Months Ended December 31,				As of and for the Year Ended December 31,
	2011		2010		2011		2010
Total GAAP Weighted-Average Common Units Outstanding—Basic and Diluted		490,511,637		389,804,253		475,582,718		364,021,369
Adjustments:
Weighted-Average Blackstone Holdings Partnership Units		613,105,891		712,339,304		628,115,753		736,772,290
Weighted-Average Unvested Deferred Restricted Common Units		12,469,282		11,146,014		9,244,394		4,366,661
Weighted-Average Economic Net Income Adjusted Units		1,116,086,810		1,113,289,571		1,112,942,865		1,105,160,320
Economic Net Income Adjusted Units, End of Period						1,108,034,890		1,116,771,651

The following table provides a reconciliation of Blackstone’s Total GAAP Common Units Outstanding to Distributable Earnings Units Outstanding.

	December 31,
	2011		2010
Total GAAP Common Units Outstanding (b)		495,599,976		420,631,857
Adjustments:
Blackstone Holdings Partnership Units		608,718,156		681,451,592
Distributable Earnings Units Outstanding (c)		1,104,318,132		1,102,083,449

(a) Unvested Deferred Restricted Common Units and Blackstone Holdings Partnership Units are anti-dilutive for the three and twelve months periods presented due to Net Losses in each of the periods presented.

(b) Common unit holders 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 the Tax Receivable Agreement and certain other tax-related payables.

(c) Excludes units which are not entitled to distributions.

20

THE BLACKSTONE GROUP L.P.

Exhibit 5. Assets Under Management

(Dollars in Thousands)

	As of and for the Periods Ended December 31,
	2011		2010
Total Assets Under Management (End of Period)
Private Equity	$	45,863,673	$	29,319,136
Real Estate		42,852,669		33,165,124
Hedge Fund Solutions		40,534,768		34,587,292
Credit Businesses		36,977,394		31,052,368
	$	166,228,504	$	128,123,920
Fee-Earning Assets Under Management (End of Period)
Private Equity	$	37,237,791	$	24,188,555
Real Estate		31,236,540		26,814,714
Hedge Fund Solutions		37,819,636		33,159,795
Credit Businesses		30,462,786		25,337,158
	$	136,756,753	$	109,500,222
Weighted-Average Fee-Earning Assets Under Management (Three Months Ended)
Private Equity	$	37,147,118	$	24,261,703
Real Estate		31,474,333		25,186,050
Hedge Fund Solutions		38,452,740		32,833,483
Credit Businesses		29,802,567		24,662,395
	$	136,876,758	$	106,943,631
Weighted-Average Fee-Earning Assets Under Management (Year Ended)
Private Equity	$	36,119,173	$	24,402,498
Real Estate		28,377,319		24,155,125
Hedge Fund Solutions		37,372,569		30,464,728
Credit Businesses		27,603,964		23,070,117
	$	129,473,025	$	102,092,468

21

THE BLACKSTONE GROUP L.P.

Exhibit 6. Limited Partner Capital Invested Metrics

(Dollars in Thousands)

	As of and for the Periods Ended December 31,
	2011		2010
Limited Partner Capital Invested (Three Months Ended)
Private Equity	$	1,093,406	$	116,899
Real Estate		995,643		2,314,891
Hedge Fund Solutions		288,237		73,443
Credit Businesses		1,028,639		294,574
	$	3,405,925	$	2,799,807
Limited Partner Capital Invested (Year Ended)
Private Equity	$	3,828,428	$	1,653,493
Real Estate		6,141,416		4,072,527
Hedge Fund Solutions		889,259		223,981
Credit Businesses		2,650,137		1,407,993
	$	13,509,240	$	7,357,994
Fund Level Unrealized Value (a) (End of Period)
Private Equity
Cost	$	22,340,158	$	20,065,870
Unrealized Value	$	24,481,757	$	21,923,177
Real Estate
Cost	$	21,421,451	$	16,121,104
Unrealized Value	$	27,410,054	$	18,698,405
Credit Businesses
Cost	$	5,379,019	$	3,681,137
Unrealized Value	$	5,752,512	$	4,267,377

(a) Cost and unrealized value represent the limited partners’ share, including co-investments arranged by Blackstone, of those fund level investments on which carried interest can be earned, before carried interest allocations to Blackstone, when a fund achieves cumulative investment returns in excess of a specified rate.

22

THE BLACKSTONE GROUP L.P.

Exhibit 7. Definitions of Non-GAAP Financial Information

Blackstone discloses the following financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America (“non-GAAP”) in the attached press release:

• Blackstone uses Economic Net Income, or “ENI”, as a key measure of value creation, a benchmark of its performance and in making resource deployment and compensation decisions across its five segments. ENI represents segment net income before taxes excluding transaction-related charges. Transaction-related charges arise from Blackstone’s initial public offering (“IPO”) and long-term retention programs outside of annual deferred compensation and other corporate actions, including acquisitions. Transaction-related charges include equity-based compensation charges, the amortization of intangible assets and contingent consideration associated with acquisitions. ENI presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages.

• Economic Net Income After Taxes represents ENI adjusted to reflect the implied provision (benefit) for income taxes calculated using a similar methodology as applied in calculating the tax provision (benefit) for The Blackstone Group L.P. but consistent with the ENI concepts as noted above.

• Blackstone uses Net Fee Related Earnings from Operations as a key measure to highlight earnings from operations excluding: (a) the income related to performance fees and related carry plan costs, (b) income earned from Blackstone’s investments in the Blackstone Funds, and (c) realized and unrealized gains (losses) from other investments except for such gains (losses) from Blackstone’s Treasury cash management strategies. Blackstone uses Net Fee Related Earnings from Operations as a measure to assess whether recurring revenue from its businesses is sufficient to adequately cover all of its operating expenses and generate profits. Net Fee Related Earnings from Operations equals contractual fee revenues, investment income from Blackstone’s Treasury cash management strategies and interest income, less (a) compensation expenses (which includes amortization of non-IPO and non-acquisition-related equity-based awards, but excludes amortization of IPO and acquisition-related equity-based awards, carried interest and incentive fee compensation), (b) other operating expenses, and (c) cash taxes due on earnings from operations as calculated using a similar methodology as applied in calculating the current tax provision (benefit) for The Blackstone Group L.P.

• Blackstone uses Earnings Before Interest, Taxes and Depreciation and Amortization from Net Fee Related Earnings from Operations (“EBITDA-NFRE”) as a measure of segment performance and an indicator of its ability to cover recurring operating expenses. EBITDA-NFRE equals Net Fee Related Earnings from Operations before segment interest expense, segment depreciation and amortization, segment amortization of non-cash deferred compensation and the cash taxes included in Net Fee Related Earnings from Operations.

• Distributable Earnings, which is derived from Blackstone’s segment reported results, is a supplemental measure to assess performance and amounts available for distributions to Blackstone unitholders, including Blackstone personnel and others who are limited partners of the Blackstone Holdings partnerships. Distributable Earnings is intended to show the amount of net realized earnings without the effects of the consolidation of the Blackstone Funds.

Distributable Earnings, which is a component of Economic Net Income, is the sum across all segments of: (a) Total Management and Advisory Fees, (b) Interest and Dividend Revenue, (c) Other Revenue, (d) Realized Performance Fees, and (e) Realized Investment Income (Loss); less (a) Compensation, (b) Realized Performance Fee Compensation, (c) Other Operating Expenses, and (d) Cash Taxes and Payables Under the Tax Receivable Agreement. Distributable Earnings is reconciled to Blackstone’s Consolidated Statement of Operations. It is Blackstone’s current intention that on an annual basis it will distribute to unitholders all of its Distributable Earnings, less realized investment gains and returns of capital from investments and acquisitions, in excess of amounts determined by its general partner 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 distributions to its unitholders for any ensuing quarter.

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THE BLACKSTONE GROUP L.P.

Exhibit 7. Definitions of Non-GAAP Financial Information

Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are included within this press release. These non-GAAP financial measures should be considered in addition to and not as a substitute for, or superior to, financial measures presented in accordance with GAAP.

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