Blackstone (BX) 8-K Blackstone Reports Record First Quarter Results

Blackstone’s First Quarter 2013 Earnings

April 18, 2013

Exhibit 99.2

Blackstone

1

Blackstone’s funds returned $23 billion of capital to investors during the last twelve months.

Total cash and corporate treasury investments were $2.2 billion at quarter end, and total net value of cash

and investments was $6.7 billion or $5.93 per DE unit.

Blackstone declared a first quarter distribution of $0.30 per common unit, up 200% year-over-year,

reflecting a significant increase in Distributable Earnings and the new distribution policy of paying out

cash earnings following the quarter in which they are earned

Blackstone’s First Quarter 2013 Highlights

(a)

A

detailed description of Blackstone’s distribution policy can be found in Appendix  –  Definitions and Distribution Policy.

Gross inflows totaled over $8 billion in the first quarter and $34 billion in the last twelve months, 

including $31 billion of organic growth into new funds, products and strategies.

GAAP Net Income was $168 million for the quarter, net of certain non-cash IPO and transaction related

expenses and exclusion of net income attributable to non-controlling interests, mainly “inside ownership”.

Economic Net Income (“ENI”) rose 28% to $628 million for the quarter, or $0.55 per unit, up from

$491

million, or $0.44 per unit, in last year’s first quarter driven by strong fund performance.

Distributable Earnings (“DE”) increased 134% year-over-year to $379 million, or $0.33 per common unit,

compared with $162 million and $0.15 per unit in the year ago period.

Realization activity generated $319 million of Realized Performance Fees, up significantly from

$19

million in first quarter 2012, bringing the last twelve months to $929 million.

Total AUM reached a record $218 billion, up 15% year-over-year with double-digit increases across all

investing businesses, through a combination of strong inflows and carrying value appreciation.

(a)

.

Blackstone

2

Blackstone’s First Quarter 2013 Earnings

LTM represents the last twelve months’ results for the respective periods presented. LTM per unit amounts equal the sum of the relevant per unit amounts for the preceding four quarters. 

(a)

ENI per Unit is based on the Weighted-Average ENI Adjusted Units.  

(b)

DE per Common Unit equals DE Attributable to Common Unitholders divided by Total GAAP Common Units Outstanding. 

% Change

% Change

(Dollars in Thousands, Except per Unit Data)

1Q'12

1Q'13

vs. 1Q'12

1Q'12 LTM

1Q'13 LTM

vs. 1Q'12 LTM

Fee Revenues

504,911

$       

520,883

$       

3%

1,991,342

$    

2,202,737

$    

11%

Performance Fees

385,756

603,999

57%

959,485

1,812,008

89%

Investment Income

83,406

134,771

62%

142,594

337,609

137%

Total Revenues

974,073

$       

1,259,653

$   

29%

3,093,421

$   

4,352,354

$   

41%

Total Expenses

473,805

621,316

31%

1,667,853

2,173,278

30%

Taxes

9,051

10,031

11%

42,015

46,688

11%

Economic Net Income ("ENI")

491,217

$       

628,306

$       

28%

1,383,553

$   

2,132,388

$   

54%

ENI per Unit

(a)

0.44

$             

0.55

$             

25%

1.25

$             

1.88

$             

50%

GAAP Net Income (Loss)

58,325

$         

167,635

$       

187%

(152,682)

$      

327,908

$       

n/m

Fee Related Earnings ("FRE")

146,928

$       

137,733

$       

(6)%

582,253

$       

691,118

$       

19%

Distributable Earnings ("DE")

162,121

$       

378,827

$       

134%

656,930

$       

1,250,631

$   

90%

DE per Common Unit

(b)

0.15

$             

0.33

$             

120%

0.57

$             

1.03

$             

81%

Total Assets Under Management

190,074,167

$

218,210,672

$

15%

190,074,167

$

218,210,672

$

15%

Fee-Earning Assets Under Management

156,261,446

$

170,949,347

$

9%

156,261,446

$

170,949,347

$

9%

Blackstone

3

Walkdown of Financial Metrics

(Dollars in Thousands, Except per Unit Data)

See Appendix – Walkdown of Financial Metrics – Calculation of Certain Non-GAAP Financial Metric Components for the calculation of the amounts presented herein that are not the 

respective captions from the Total Segment information.

(a)

Fee Related Earnings per Unit is based on DE Units Outstanding; DE per Unit equals DE per Common Unit; and ENI per Unit is based on Weighted-Average ENI Adjusted Units. (See

Appendix - Unit Rollforward). 1Q’13 LTM per unit amounts equal the sum of the relevant per unit amounts for the preceding four quarters. 

1Q'13

1Q'13 LTM

Results

Per Unit

(a)

Results

Per Unit

(a)

Base Management Fees

408,747

$      

1,604,644

$   

Advisory Fees

67,020

348,591

Transaction and Other Fees, Net

37,974

226,622

Management Fee Offsets

(9,662)

(37,565)

Interest Income and Other Revenue

15,075

78,175

Compensation

(266,977)

(1,042,981)

Other Operating Expenses

(114,444)

(486,368)

Fee Related Earnings

137,733

$      

0.12

$            

691,118

$      

0.61

$            

Net Realized Incentive Fees

14,219

174,614

Net Realized Carried Interest

204,733

430,100

Net Realized Investment Income

34,290

90,221

Taxes and Related Payables

(12,148)

(135,422)

Distributable Earnings

378,827

$      

0.33

$            

1,250,631

$   

1.03

$            

Net Unrealized Incentive Fees

63,277

23,152

Net Unrealized Carried Interest

81,875

540,213

Net Unrealized Investment Income

102,210

229,658

Add Back: Related Payables

2,117

88,734

Economic Net Income

628,306

$      

0.55

$            

2,132,388

$   

1.88

$            

Blackstone

4

Summary Walkdown of GAAP to Non-GAAP Financial Metrics

GAAP

Economic Income

“EI”

Fee Related Earnings

“FRE”

Distributable Earnings

“DE”

Adjusted EBITDA

$426

Income Before Provision for Taxes

+

IPO and Acquisition-Related Charges

–

Impact of Consolidated Funds

$638

=

Economic Income

–

Net Performance Fees

–

Fund Investment Income

$138

=

Fee Related Earnings

+

Net Realized Performance Fees

+

Realized Investment Income

–

Taxes and Related Payables

$379

=

Distributable Earnings

+

Interest, Taxes and Depreciation and Amortization

=

Adjusted EBITDA

(Dollars in Millions)

1Q’13

$479

$1,508

$2,179

$691

$1,251

LTM

$1,037

See Appendix – Reconciliation of GAAP to Non-GAAP Measures for details.

Blackstone

5

Private Equity

18.2%

1Q’13

LTM

increase

in

fund

carrying

value

(a)

$545 million

Net Accrued Performance Fees at 1Q’13

$140 million

1Q’13 Realized Performance Fees

Economic Income for the quarter increased 15% year-over-year driven primarily by strong fund performance.

Overall

carrying

value

of

portfolio

assets

(a)

appreciated

7.9%

during

the

quarter

and

18.2%

over

the

last

twelve

months,

driven

materially

by

BCP

V

and

to

a

lesser

extent

by

BCP

VI

and

BEP.

Realization activity was robust with $2.0 billion during the quarter and $4.6 billion over the last twelve months.

•

First quarter activity included secondary sales in TRW, TeamHealth, TDC, Kosmos, Bank United and Nielsen at

an average 2.7x MOIC

(b)

and the successful Pinnacle IPO resulting in a quarter end valuation of 2.5x MOIC.

•

Realized Performance Fees totaled $140 million in first quarter 2013 compared with $4 million a year ago.

•

Three additional portfolio companies have an S-1 on file with expected 2013 offerings.

Invested and committed $325 million of capital for the quarter and $4.4 billion during the last twelve months.

Raised an additional $1.0 billion of commitments for our tactical opportunities investment vehicles during the

quarter, increasing total capital commitments to that strategy to $2.6 billion.

(a)

Core Private Equity portfolio (BCP, BCOM and BEP), Tactical Opportunities and Other Funds (including fee-paying co-invest).

(b)

Represents the Multiple of Invested Capital (“MOIC”).

% Change

% Change

(Dollars in Thousands)

1Q'12

1Q'13

vs. 1Q'12

1Q'12 LTM

1Q'13 LTM

vs. 1Q'12 LTM

Fee Revenues

102,309

$         

113,627

$         

11%

444,092

$        

470,039

$        

6%

Performance Fees

37,984

55,938

47%

(6,059)

276,132

n/m

Investment Income

30,380

55,873

84%

37,811

136,653

261%

Total Revenues

170,673

225,438

32%

475,844

882,824

86%

Compensation

52,547

60,203

15%

215,179

230,365

7%

Performance Fee Compensation

(732)

32,865

n/m

(14,678)

95,831

n/m

Other Operating Expenses

28,881

29,168

1%

121,086

131,132

8%

Total Expenses

80,696

122,236

51%

321,587

457,328

42%

Economic Income

89,977

$           

103,202

$         

15%

154,257

$        

425,496

$        

176%

Total AUM

47,624,013

$   

52,491,811

$   

10%

47,624,013

$  

52,491,811

$  

10%

Fee-Earning AUM

37,323,635

$   

36,785,770

$   

(1)%

37,323,635

$  

36,785,770

$  

(1)%

Blackstone

6

Real Estate

17.2%

1Q’13

LTM

increase

in

fund

carrying

value

(a)

$1.4 billion

Net Accrued Performance Fees at 1Q’13

$354 million

1Q’13 Performance Fees

Economic Income for the quarter increased 32% to $353 million driven by strong fund performance.

•

Performance Fees were $354 million generated primarily by BREP V, VI, VII and BREP Europe III.

•

Fee-Earning AUM increased 15% year-over-year, however Fee Revenues declined modestly reflecting

$19.5

million of one-time BREP VII management fee “catch-up”

in first quarter 2012.

Overall

carrying

value

of

BREP

investments

(a)

appreciated

6.3%

for

the

quarter

and

17.2%

over

the

last

twelve

months,

driven

by

increasingly

favorable

real

estate

operating

fundamentals

and

asset

value

appreciation.

Realization

activity

remained

strong

with

more

than

$930

million

of

realizations

during

the

quarter

and

$4.1

billion

over

the

last

twelve

months.

•

Realized Performance Fees totaled $72 million in the quarter compared to just $9 million a year ago.

Invested $1.2 billion of total capital with an additional $1.9 billion committed but not yet invested at quarter end,

bringing the last twelve months total capital invested plus quarter end commitments to $10.5 billion.

In April, held initial closing for latest Debt Strategies drawdown fund with $2.0 billion of total commitments.

Debt

Strategies

drawdown

funds

(b)

appreciated

2.7%

for

the

quarter

and

10.8%

over

the

last

twelve

months,

while

the

real

estate

liquid

funds

appreciated

4.9%

and

16.7%

for

the

quarter

and

the

last

twelve

months,

respectively.

(a)

BREP portfolio (including fee-paying co-invest).

(b)

Excludes Capital Trust drawdown funds.

(c)

1Q’12 Fee Revenues included $19.5 million of one-time BREP VII Management Fee “catch-up”.

(d)

Performance Fees included $41.9 million in 1Q’12 and $193.2 million in 1Q’12 LTM due to the impact of the profit allocation “catch-up” provisions for BREP V and VI.

% Change

% Change

(Dollars in Thousands)

1Q'12

1Q'13

vs. 1Q'12

1Q'12 LTM

1Q'13 LTM

vs. 1Q'12 LTM

Fee Revenues

(c)

155,430

$        

144,365

(7)%

545,984

$       

612,671

$       

12%

Performance Fees

(d)

238,030

354,341

49%

816,882

990,726

21%

Investment Income

33,724

69,837

107%

90,019

172,290

91%

Total Revenues

427,184

568,543

33%

1,452,885

1,775,687

22%

Compensation

68,889

69,459

1%

248,033

271,692

10%

Performance Fee Compensation

62,122

117,678

89%

193,304

295,933

53%

Other Operating Expenses

28,924

28,462

(2)%

104,417

123,252

18%

Total Expenses

159,935

215,599

35%

545,754

690,877

27%

Economic Income

267,249

$        

352,944

$        

32%

907,131

$       

1,084,810

$   

20%

Total AUM

48,322,760

$  

59,475,215

$  

23%

48,322,760

$ 

59,475,215

$ 

23%

Fee-Earning AUM

36,647,462

$  

42,140,507

$  

15%

36,647,462

$ 

42,140,507

$ 

15%

Blackstone

7

Hedge Fund Solutions

$25 billion

1Q’13

Incentive

Fee-Earning

AUM

(c)

Revenues for the quarter were up 43% year-over-year to $168 million driven by an increase in Fee-Earning AUM

and strong investment performance, resulting in Economic Income up 41% year-over-year to $94 million.

•

Performance Fees, which mostly crystallize at year end, more than doubled as $23.6 billion or 94% of Incentive

Fee-Earning AUM was above its High Water Mark and/or Hurdle, up from

just $11.2 billion or 52% a year ago.

BAAM

Composite

(a)

was

up

4.4%

for

the

quarter

and

10.0%

for

the

last

twelve

months

with

one-quarter

the

volatility

of

the

MSCI

World

Index

(b)

.

Fee-Earning AUM reached a record $46 billion driven by strong fund performance and $885 million of net inflows

for the quarter and $2.2 billion for the last twelve months.

•

Launched

six

new

customized

funds

and

one

new

commingled

fund

so

far

this

year

including

April

1

st

launches.

•

April

1

st

subscriptions

of

$944

million

are

not

included

in

quarter

end

Fee-Earning

AUM.

(a)

BAAM’s Core Composite does not include BAAM’s long-only equity, long-biased commodities, seed, strategic opportunities (external investments), and advisory platforms. 

On a net of fees basis, the BAAM Composite was up 4.0% for the quarter and 8.8% for the last twelve months with one-quarter the volatility of the MSCI World Index.

(b)

The MSCI World Index is a world stock market index with over 1,600 stocks from 23 countries including the United States.

(c)

Represents currently invested incentive fee eligible AUM above or below High Water Mark or Relevant Benchmark. Totals may not add due to rounding.

Above

HWM /

Hurdle

Below

% Change

% Change

(Dollars in Thousands)

1Q'12

1Q'13

vs. 1Q'12

1Q'12 LTM

1Q'13 LTM

vs. 1Q'12 LTM

Fee Revenues

81,837

$           

93,772

$           

15%

332,610

$        

362,874

$        

9%

Performance Fees

26,485

69,210

161%

18,585

135,200

n/m

Investment Income (Loss)

8,874

4,765

(46)%

(896)

11,678

n/m

Total Revenues

117,196

167,747

43%

350,299

509,752

46%

Compensation

28,233

33,868

20%

129,099

125,366

(3)%

Performance Fee Compensation

8,672

24,858

187%

6,746

40,583

n/m

Other Operating Expenses

13,934

15,159

9%

65,998

59,034

(11)%

Total Expenses

50,839

73,885

45%

201,843

224,983

11%

Economic Income

66,357

$           

93,862

$           

41%

148,456

$        

284,769

$        

92%

Total AUM

43,351,275

$   

48,187,865

$   

11%

43,351,275

$  

48,187,865

$  

11%

Fee-Earning AUM

40,543,772

$   

45,585,454

$   

12%

40,543,772

$  

45,585,454

$  

12%

$1.4B / 6%

$23.6B / 94%

Blackstone

8

Credit

$58 billion

1Q’13 Total AUM

Customized

Credit Strategies

(c)

Rescue

Lending

Mezzanine

Funds

Hedge Fund

Strategies

CLOs

Revenues were up 27% year-over-year driven by an increase in Fee Revenues and favorable fund performance.

•

Realized Performance Fees were $93 million for the quarter, up from just $3 million during the year ago period.

Total AUM grew 14% year-over-year to a record $58 billion, driven by strong net inflows, which included several

new product launches and fund closings, and market appreciation.

Investment performance

(a)

in our credit strategies remained strong across the platform:

•

Hedge

strategies

were

up

6.1%

for

the

quarter

and

19.2%

over

the

last

twelve

months.

•

Mezzanine strategies were up 8.3% for the quarter and 39.3% for the last twelve months.

•

Rescue Lending strategies were up 5.7% for the quarter and 19.8%

for the last twelve months.

Priced two new CLOs during the quarter totaling $1.2 billion in AUM and five new CLOs in the last seven months

totaling $2.8 billion in AUM.

Fundraising

continues

for

our

second

rescue

lending

fund

with

quarter

end

commitments

of

$3.3

billion

(b)

.

In April, GSO and State Street Global Advisors launched the first-ever actively managed senior loan exchange

traded fund, SPDR Blackstone / GSO Senior Loan ETF under the symbol SRLN.

% Change

% Change

(Dollars in Thousands)

1Q'12

1Q'13

vs. 1Q'12

1Q'12 LTM

1Q'13 LTM

vs. 1Q'12 LTM

Fee Revenues

87,700

$           

100,541

$         

15%

274,374

$        

402,145

$        

47%

Performance Fees

83,257

124,510

50%

130,077

409,950

215%

Investment Income

9,894

4,421

(55)%

14,718

14,907

1%

Total Revenues

180,851

229,472

27%

419,169

827,002

97%

Compensation

37,143

45,521

23%

136,182

190,455

40%

Performance Fee Compensation

39,450

64,494

63%

63,784

211,582

232%

Other Operating Expenses

17,096

20,962

23%

51,694

88,354

71%

Total Expenses

93,689

130,977

40%

251,660

490,391

95%

Economic Income

87,162

$           

98,495

$           

13%

167,509

$        

336,611

$        

101%

Total AUM

50,776,119

$   

58,055,781

$   

14%

50,776,119

$  

58,055,781

$  

14%

Fee-Earning AUM

41,746,577

$   

46,437,616

$   

11%

41,746,577

$  

46,437,616

$  

11%

$7.9

$7.2

$4.3

$15.0

$23.6

Totals may not add due to rounding.

Represents weighted average performance of the assets of the respective flagship funds within each strategy. Hedge strategies net returns were 4.6% for 1Q’13 and 14.3% LTM, Mezzanine strategies net returns

were 6.8% for 1Q’13 and 28.2% LTM and Rescue Lending strategies net returns were 4.8% for 1Q’13 and 15.9% LTM.

Represents total commitments, which are included in Total AUM as of quarter end 2013, but none of which are included in Fee-Earning AUM.

Includes business development companies (“BDCs”), closed-end funds, commingled funds and separately managed accounts.

(a)

(b)

(c)

Blackstone

9

Financial Advisory

Revenues for the quarter were down 12% from the same period a year ago, primarily from fewer deal closings in 

our Blackstone Advisory Partners and Park Hill placement services businesses, despite steady pipelines.

•

First quarter results are impacted by full year compensation accruals which, typically, reduce income for the

first quarter compared to full year results.

Blackstone

Advisory

Partners’

revenue

declined

year-over-year

as

advisory

activity

in

the

industry

generally

slowed and there were fewer closed transactions after a record level of activity in the fourth quarter of 2012.

Restructuring revenue increased year-over-year, reflecting continued strong performance despite an improving

economy and strong financing markets as the business continues to diversify its client and mandate coverage.

Park Hill’s revenue declined year-over-year, however the pipeline remains solid as challenging fundraising market

conditions continue to drive demand for alternative asset placement services.

% Change

% Change

(Dollars in Thousands)

1Q'12

1Q'13

vs. 1Q'12

1Q'12 LTM

1Q'13 LTM

vs. 1Q'12 LTM

Fee Revenues

77,635

$          

68,578

$          

(12)%

394,282

$       

355,008

$       

(10)%

Investment Income (Loss)

534

(125)

n/m

942

2,081

121%

Total Revenues

78,169

68,453

(12)%

395,224

357,089

(10)%

Compensation

67,960

57,926

(15)%

262,316

225,103

(14)%

Other Operating Expenses

20,686

20,693

0%

84,693

84,596

(0)%

Total Expenses

88,646

78,619

(11)%

347,009

309,699

(11)%

Economic Income (Loss)

(10,477)

$        

(10,166)

$        

3%

48,215

$         

47,390

$         

(2)%

Blackstone

10

Assets Under Management

Fee-Earning

AUM:

up

9%

year-over-year

to

a

record

$171

billion,

as

$30

billion

of

gross

inflows

and

$4

billion

of

market

appreciation

more

than

offset

$18

billion

of

outflows

largely

related

to

realizations. 

•

Including commitments, not yet earning fees, Fee-Earning AUM was $185 billion, up 18% year-over-year.

Total

AUM:

increased

15%

year-over-year

to

a

record

$218

billion

driven

by

$31

billion

of

organic

inflows

and

$18

billion

of

market

appreciation

across

all

investment

businesses,

each

of

which

are

at

record

levels.

Fee-Earning AUM by Segment

(Dollars in Billions)

$156.3

$167.9

$170.9

Total AUM by Segment

(Dollars in Billions)

$190.1

$210.2

$218.2

Credit

Hedge Fund

Solutions

Real

Estate

Private

Equity

Credit

Hedge Fund

Solutions

Real

Estate

Private

Equity

Totals may not add due to rounding.

$37.3

$37.1

$36.8

$36.6

$41.9

$42.1

$40.5

$43.5

$45.6

$41.7

$45.4

$46.4

$47.6

$51.0

$52.5

$48.3

$56.7

$59.5

$43.4

$46.1

$48.2

$50.8

$56.4

$58.1

1Q'12

4Q'12

1Q'13

1Q'12

4Q'12

1Q'13

Blackstone

11

1Q’13 Available Capital Summary

Maintained

substantial

levels

of

committed

undrawn

capital

(“dry

powder”)

with

$35.8

billion

at

quarter

end.

$13.6 billion of Total AUM was not yet earning Base Management Fees at quarter end due largely to fund

structures with fees that are triggered by the investment of capital.

Performance Fee Eligible AUM was $131.4 billion at quarter end, including $74.9 billion ($88.5 billion at fair

value) currently earning Performance Fees.

(a)

Represents illiquid drawdown funds only; excludes marketable vehicles; includes both Fee-Earning (third party) capital and GP/employee commitments which do not earn fees.  Amounts reduced by outstanding

commitments to invest, but for which capital has not been called.

(b)

Represents

(i)

committed

uninvested

capital

of

our

Private

Equity

and

Real

Estate

drawdown

funds

with

closed

investment

periods,

and

(ii)

committed

uninvested

capital

for

our

Real

Estate

debt

strategies

drawdown funds, our Credit Mezzanine and Rescue Lending funds and our Hedge Fund Solutions Strategic Alliance Fund.

(c)

Represents

invested

and

to

be

invested

capital,

including

closed

commitments

for

funds

whose

investment

period

has

not

yet

commenced,

on

which

performance

fees

could

be

earned

if

certain

hurdles

are

met.

$36 billion Dry Powder

(a)

Credit

Private

Equity

Real

Estate

$14 billion Not Yet Earning

Base Management Fees

(b)

$131 billion Performance

Fee Eligible AUM

(c)

Credit

Hedge Fund

Solutions

Real

Estate

Private

Equity

Currently Earning

Performance Fees

Invested/Committed Not Yet

Earning Performance Fees

To Be Invested

$2.9

$1.8

$1.2

$7.7

Hedge

Fund

Solutions

$16.2

$10.3

$1.2

$8.0

Blackstone

12

Unitholder Distribution

Earned $0.33 of Distributable Earnings per common unit during the first quarter, up 120% year-over-year.

Declared a quarterly distribution of $0.30 per common unit to record holders as of April 29, 2013; payable on

May 6, 2013.

Blackstone increased its base quarterly distribution to $0.12 per unit, up 20% from $0.10 per unit in 2012, and

any

excess

Net

Cash

Available

for

Distribution

to

Common

Unitholders

is

distributed

each

quarter

as

earned

(a)

.

•

This new policy is reflected in the 200% year-over-year increase in the distribution to Common Unitholders in

the first quarter of 2013.

(a)

A

detailed

description

of

Blackstone’s

distribution

policy

can

be

found

in

Appendix

–

Definitions

and

Distribution

Policy.

(b)

DE

before

Certain

Payables

represents

Distributable

Earnings

before

the

deduction

for

the

Payable

Under

Tax

Receivable

Agreement

and

tax

expense

(benefit)

of

wholly-owned

subsidiaries.

(c)

Per

Unit

calculations

are

based

on

Total

Common

Units

Outstanding

(see

Appendix

–

Unit

Rollforward);

actual

distributions

are

paid

to

applicable

unitholders

as

of

the

record

date.

(d)

Retained

capital

is

withheld

pro-rata

from

common

and

Blackstone

Partnership

unitholders.

Common

unitholders’

share

was

$18.8

million

for

1Q’13.

New Policy

% Change

(Dollars in Thousands, Except per Unit Data)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

vs. 1Q'12

Distributable Earnings ("DE")

162,121

$   

188,404

$   

189,635

$   

493,765

$   

378,827

$      

134%

Add: Other Payables Attributable to Common Unitholders

100

10,284

20,012

61,237

2,204

n/m

DE

before

Certain

Payables

(b)

162,221

198,688

209,647

555,002

381,031

135%

Percent to Common Unitholders

46%

47%

48%

51%

51%

DE before Certain Payables Attributable to Common Unitholders

74,766

93,991

100,396

281,207

193,670

159%

Less: Other Payables Attributable to Common Unitholders

(100)

(10,284)

(20,012)

(61,237)

(2,204)

n/m

DE Attributable to Common Unitholders

74,666

83,707

80,384

219,970

191,466

156%

DE per Common Unit

(c)

0.15

$        

0.16

$        

0.15

$        

0.39

$        

0.33

$            

120%

Less: Retained Capital per Unit

(d)

(0.03)

$       

(0.02)

$       

(0.03)

$       

(0.05)

$       

(0.03)

$           

-

Net Cash Available for Distribution per Common Unit

(c)

0.12

$        

0.14

$        

0.12

$        

0.34

$        

0.30

$            

150%

Actual Distribution per Common Unit

(c)

0.10

$        

0.10

$        

0.10

$        

0.42

$        

0.30

$            

200%

Record Date

April 29, 2013

Payable Date

May 6, 2013

Blackstone

13

Balance Sheet Highlights

(a)

(a)

Preliminary, excludes the consolidated Blackstone funds.  Totals

may not add due to rounding.

(b)

Primarily Blackstone investments in Hedge Fund Solutions and non-drawdown Credit.

(c)

Illiquids include Blackstone investments in all drawdown funds in Private Equity, Real Estate and Credit.

(d)

Senior notes of $600 million issued August 2009 maturing on August 15, 2019 (6.625% coupon), $400 million issued September 2010 maturing on March 15, 2021 (5.875% coupon), $400 million issued August 2012 maturing on

February

15,

2023

(4.750%

coupon)

and

$250

million

issued

August

2012

maturing

on

August

15,

2042

(6.250%

coupon),

net

of

$15

million

held

by

Blackstone.

(Dollars in Millions)

1Q’13

Cash and Cash Equivalents

$

815

Treasury Cash Management Strategies

1,255

Liquid Investments

(b)

142

Illiquid Investments

(c)

2,220

Net Performance Fees

2,261

Total Net Value

$

6,693

Outstanding Bonds (at par)

(d)

$

1,635

A/A+

rated by S&P / Fitch

$1.1 billion

undrawn credit revolver with

July 2017 maturity

$2.2 billion

total cash and corporate

treasury investments

$5.93

Cash and Investments per DE unit

$1.97

Illiquids

$6.7 billion

Total Net Value

At

March

31,

2013,

Blackstone

had

$2.2

billion

in

total

cash

and

corporate

treasury

investments

and

$6.7

billion

of

total net value, or $5.93 per unit, up 34% from $4.41 a year ago.

Long-term debt of $1.6 billion from the 2009, 2010 and 2012 bond issuances.

There are currently no borrowings outstanding against the $1.1 billion revolving credit facility expiring in 2017.

$2.00

$0.18

$0.99

$0.80

$1.96

Net Performance

Fees

Total Cash and

Treasury Investments

Private Equity

Real Estate

Other

Additional 1Q’13 Information

Blackstone had strong Performance Fees across all of its investing businesses of $604 million ($364 million net of

compensation) during the quarter. Why is the Net Accrued Performance Fee balance, which was a record

$2.3

billion, up only $23 million from the prior quarter? (See page 25.)

•

The below table details the change in Net Accrued Performance Fees from 4Q’12 (Dollars in Millions):

In 1Q’13, why does Private Equity have positive Realized Carried Interest of $140 million and negative Unrealized

Carried Interest of $84 million if the carrying value of assets appreciated during the quarter? (See page 18.)

•

When Performance Fees, in this case, Carried Interest, are realized, they generate positive Realized Carried

Interest, but have an offsetting negative amount in Unrealized Carried Interest, which reflects the movement of

Unrealized or Accrued Performance Fees being converted into Realized. This is typical in a robust realization

quarter because the fund is realizing previously recognized value.

Why are 1Q’13 Fee Related Earnings down 6% year-over-year despite an increase in Fee Revenues of 3%?

•

There are three specific items that contributed to the year-over-year decline in Fee Related Earnings:

First,

in

1Q’12,

Real

Estate

benefited

from

$19.5

million

of

revenues

related

to

a

management

fee

“catch

up”

coinciding with additional closings of BREP VII, a $13.4 billion fund.

Additionally, there were certain non-recurring benefits in 1Q’12 related to the Credit / GSO buyout.

And lastly, Fee Related Earnings were impacted by the firm’s 10 and 30-year bond issuances of $650 million

in 3Q’12. Excluding the bond impact, Other Operating Expenses were actually down year-over-year.

4Q’12 Balance

$2,238)

-

2012 Net Realized Performance Fees, Paid in 1Q’13

(152)

+ 1Q’13 Total Performance Fees, Net of Compensation  (Accrued)

364)

-

1Q’13 Realized Performance Fees, Net of Compensation

(219)

+ 1Q’13 Net Realized Performance Fees, Not Yet Paid

30)

1Q’13 Balance

$2,261)

14

Blackstone

Over

the

last

twelve

months,

Fee

Related

Earnings

increased

19%,

which

is

greater

than

the

11%

increase

in

Fee

Revenues

for

the

same

period.

•

Blackstone

GAAP Statement of Operations

% Change

% Change

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

1Q'12

1Q'13

vs. 1Q'12

1Q'12 LTM

1Q'13 LTM

vs. 1Q'12 LTM

Revenues

Management and Advisory Fees, Net

471,676

$         

482,133

$         

2%

1,870,688

$      

2,041,150

$      

9%

Performance Fees

Realized Carried Interest

13,560

294,170

n/m

59,066

608,032

n/m

Realized Incentive Fees

5,279

23,741

n/m

92,576

320,263

246%

Unrealized Carried Interest

298,796

177,347

(41)%

838,166

872,741

4%

Unrealized Incentive Fees

67,135

105,798

58%

(30,982)

8,302

n/m

Total Performance Fees

384,770

601,056

56%

958,826

1,809,338

89%

Investment Income

Realized

16,335

42,353

159%

91,094

119,981

32%

Unrealized

72,826

106,230

46%

91,212

289,635

218%

Total Investment Income

89,161

148,583

67%

182,306

409,616

125%

Interest and Dividend Revenue

7,636

12,557

64%

35,573

45,275

27%

Other

(1,207)

2,144

n/m

3,950

8,499

115%

Total Revenues

952,036

1,246,473

31%

3,051,343

4,313,878

41%

Expenses

Compensation and Benefits

Compensation

495,255

451,430

(9)%

2,257,484

2,047,873

(9)%

Performance Fee Compensation

Realized Carried Interest

7,938

89,437

n/m

37,984

177,932

n/m

Realized Incentive Fees

4,252

10,508

147%

59,190

146,298

147%

Unrealized Carried Interest

84,543

95,472

13%

196,533

332,528

69%

Unrealized Incentive Fees

12,779

44,478

248%

(44,550)

(12,829)

71%

Total Compensation and Benefits

604,767

691,325

14%

2,506,641

2,691,802

7%

General, Administrative and Other

142,766

109,306

(23)%

579,693

515,278

(11)%

Interest Expense

14,518

27,062

86%

58,539

85,414

46%

Fund Expenses

21,742

7,408

(66)%

36,125

19,495

(46)%

Total Expenses

783,793

835,101

7%

3,180,998

3,311,989

4%

Other Income

Reversal of Tax Receivable Agreement Liability

-

-

n/m

197,816

-

(100)%

Net Gains from Fund Investment Activities

288,142

67,210

(77)%

348,268

35,213

(90)%

Income Before Provision for Taxes

456,385

$         

478,582

$         

5%

416,429

$         

1,037,102

$      

149%

Provision for Taxes

38,753

50,993

32%

345,614

197,263

(43)%

Net Income

417,632

$         

427,589

$         

2%

70,815

$           

839,839

$         

n/m

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

54,259

62,316

15%

6,653

111,655

n/m

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

197,643

(9,452)

n/m

299,389

(107,136)

n/m

Net Income (Loss) Attributable to Non-Controlling Interests in Blackstone Holdings

107,405

207,090

93%

(82,545)

507,412

n/m

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

58,325

$           

167,635

$         

187%

(152,682)

$        

327,908

$         

n/m

Net Income per Common Unit, Basic

0.12

$                 

0.29

$                 

142%

n/a

n/a

n/a

Net Income per Common Unit, Diluted

0.11

$                 

0.29

$                 

n/m

n/a

n/a

n/a

15

Appendix

Blackstone

17

Total Segments

(a)

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

(b)

Primarily placement fees.

(Dollars in Thousands)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

1Q'12 LTM

1Q'13 LTM

Revenues

Management and Advisory Fees, Net

Base Management Fees

395,506

$           

381,344

$           

398,088

$           

416,465

$           

408,747

$           

1,371,104

$        

1,604,644

$        

Advisory Fees

75,846

93,372

59,951

128,248

67,020

387,834

348,591

Transaction and Other Fees, Net

(a)

38,471

49,453

45,126

94,069

37,974

227,621

226,622

Management Fee Offsets

(b)

(13,050)

(7,973)

(8,454)

(11,476)

(9,662)

(37,907)

(37,565)

Total Management and Advisory Fees, Net

496,773

516,196

494,711

627,306

504,079

1,948,652

2,142,292

Performance Fees

Realized Carried Interest

13,560

55,929

83,765

174,168

294,170

59,066

608,032

Realized Incentive Fees

5,279

11,692

11,620

272,873

24,727

92,109

320,912

Unrealized Carried Interest

298,796

84,290

403,465

207,639

177,347

838,166

872,741

Unrealized Incentive Fees

68,121

(17,074)

104,149

(184,507)

107,755

(29,856)

10,323

Total Performance Fees

385,756

134,837

602,999

470,173

603,999

959,485

1,812,008

Investment Income (Loss)

Realized

23,492

9,360

25,098

37,448

38,110

102,568

110,016

Unrealized

59,914

(25,624)

82,334

74,222

96,661

40,026

227,593

Total Investment Income (Loss)

83,406

(16,264)

107,432

111,670

134,771

142,594

337,609

Interest Income and Dividend Revenue

9,345

10,391

12,004

14,890

14,661

38,741

51,946

Other

(1,207)

(828)

2,477

4,707

2,143

3,949

8,499

Total Revenues

974,073

644,332

1,219,623

1,228,746

1,259,653

3,093,421

4,352,354

Expenses

Compensation

254,772

268,884

259,561

247,559

266,977

990,809

1,042,981

Performance Fee Compensation

Realized Carried Interest

7,938

7,899

22,023

58,573

89,437

37,984

177,932

Realized Incentive Fees

4,252

5,575

4,457

125,758

10,508

                ��

59,190

146,298

Unrealized Carried Interest

84,543

36,815

128,863

71,378

95,472

196,532

332,528

Unrealized Incentive Fees

12,779

(9,596)

44,254

(91,965)

44,478

(44,550)

(12,829)

Total Compensation and Benefits

364,284

309,577

459,158

411,303

506,872

1,239,965

1,686,910

Other Operating Expenses

109,521

113,038

127,456

131,430

114,444

427,888

486,368

Total Expenses

473,805

422,615

586,614

542,733

621,316

1,667,853

2,173,278

Economic Income

500,268

$           

221,717

$           

633,009

$           

686,013

$           

638,337

$           

1,425,568

$        

2,179,076

$        

Economic Net Income

491,217

$           

212,349

$           

621,752

$           

669,981

$           

628,306

$           

1,383,553

$        

2,132,388

$        

Fee Related Earnings

146,928

$           

145,729

$           

135,052

$           

272,604

$           

137,733

$           

582,253

$           

691,118

$           

Distributable Earnings

162,121

$           

188,404

$           

189,635

$           

493,765

$           

378,827

$           

656,930

$           

1,250,631

$        

Total Assets Under Management

190,074,167

$    

190,267,831

$    

204,551,572

$    

210,219,960

$    

218,210,672

$    

190,074,167

$    

218,210,672

$    

Fee-Earning Assets Under Management

156,261,446

$    

157,646,521

$    

168,630,082

$    

167,880,440

$    

170,949,347

$    

156,261,446

$    

170,949,347

$    

Weighted Average Fee-Earning AUM

154,354,070

$    

156,426,744

$    

162,377,631

$    

168,328,454

$    

169,551,186

$    

137,681,607

$    

164,747,339

$    

LP Capital Invested

2,719,433

$        

2,403,623

$        

3,085,441

$        

5,690,474

$        

1,784,463

$        

14,533,678

$      

12,964,001

$      

Total Capital Invested

3,134,385

$        

2,525,648

$        

3,754,061

$        

6,200,755

$        

1,840,474

$        

15,995,211

$      

14,320,938

$      

Blackstone

18

Private Equity

(a)

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

(b)

Primarily placement fees.

(Dollars in Thousands)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

1Q'12 LTM

1Q'13 LTM

Revenues

Management Fees, Net

Base Management Fees

85,789

$        

87,475

$        

86,136

$        

89,194

$        

86,246

$        

337,851

$        

349,051

$        

Transaction and Other Fees, Net

(a)

18,097

14,951

25,693

41,339

24,453

115,759

106,436

Management Fee Offsets

(b)

(3,782)

(672)

(767)

(705)

(480)

(22,966)

(2,624)

Total Management Fees, Net

100,104

101,754

111,062

129,828

110,219

430,644

452,863

Performance Fees

Realized Carried Interest

3,933

28,781

31,592

45,491

139,892

(41,063)

245,756

Unrealized Carried Interest

34,051

(87,893)

128,746

73,477

(83,954)

35,004

30,376

Total Performance Fees

37,984

(59,112)

160,338

118,968

55,938

(6,059)

276,132

Investment Income (Loss)

Realized

13,911

(6,195)

7,189

10,918

24,162

40,992

36,074

Unrealized

16,469

(28,337)

43,267

53,938

31,711

(3,181)

100,579

Total Investment Income (Loss)

30,380

(34,532)

50,456

64,856

55,873

37,811

136,653

Interest Income and Dividend Revenue

2,420

3,114

3,413

4,609

2,984

12,664

14,120

Other

(215)

562

1,650

420

424

784

3,056

Total Revenues

170,673

11,786

326,919

318,681

225,438

475,844

882,824

Expenses

Compensation

52,547

53,775

62,424

53,963

60,203

215,179

230,365

Performance Fee Compensation

Realized Carried Interest

320

804

1,048

1,507

16,246

(5,933)

19,605

Unrealized Carried Interest

(1,052)

(8,259)

43,228

24,638

16,619

(8,745)

76,226

Total Compensation and Benefits

51,815

46,320

106,700

80,108

93,068

200,501

326,196

Other Operating Expenses

28,881

30,521

30,944

40,499

29,168

121,086

131,132

Total Expenses

80,696

76,841

137,644

120,607

122,236

321,587

457,328

Economic Income (Loss)

89,977

$        

(65,055)

$       

189,275

$      

198,074

$      

103,202

$      

154,257

$        

425,496

$        

Total Assets Under Management

47,624,013

$

46,633,552

$

50,222,312

$

51,002,973

$

52,491,811

$

47,624,013

$  

52,491,811

$  

Fee-Earning Assets Under Management

37,323,635

$

37,159,452

$

38,505,497

$

37,050,167

$

36,785,770

$

37,323,635

$  

36,785,770

$  

Weighted Average Fee-Earning AUM

37,491,735

$

37,434,520

$

38,096,139

$

38,507,697

$

36,907,936

$

37,037,582

$  

38,028,891

$  

LP Capital Invested

643,044

$      

102,899

$      

1,015,605

$   

1,461,987

$   

276,987

$      

3,781,845

$    

2,857,478

$    

Total Capital Invested

680,035

$      

108,977

$      

1,427,871

$   

1,860,738

$   

291,011

$      

4,399,498

$    

3,688,597

$    

Blackstone

19

Real Estate

(a)

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

(b)

Primarily placement fees.

(Dollars in Thousands)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

1Q'12 LTM

1Q'13 LTM

Revenues

Management Fees, Net

Base Management Fees

147,802

$      

127,817

$      

135,659

$      

140,044

$      

138,346

$      

447,141

$      

541,866

$      

14,412

25,151

14,937

31,181

9,140

102,379

80,409

(8,627)

(5,357)

(6,034)

(8,591)

(7,286)

(13,072)

(27,268)

Total Management Fees, Net

153,587

147,611

144,562

162,634

140,200

536,448

595,007

Performance Fees

Realized Carried Interest

8,617

13,539

51,845

91,113

68,773

29,090

225,270

Realized Incentive Fees

(1)

7,766

4,879

13,012

3,092

9,406

28,749

Unrealized Carried Interest

221,500

144,510

207,695

110,059

280,076

773,472

742,340

Unrealized Incentive Fees

7,914

(1,526)

6,150

(12,657)

2,400

4,914

(5,633)

Total Performance Fees

238,030

164,289

270,569

201,527

354,341

816,882

990,726

Investment Income

Realized

7,812

9,067

10,324

18,099

9,534

32,865

47,024

Unrealized

25,912

14,944

33,676

16,343

60,303

57,154

125,266

Total Investment Income

33,724

24,011

44,000

34,442

69,837

90,019

172,290

Interest Income and Dividend Revenue

2,552

3,277

3,581

5,038

4,298

12,166

16,194

Other

(709)

(590)

1,941

252

(133)

(2,630)

1,470

Total Revenues

427,184

338,598

464,653

403,893

568,543

1,452,885

1,775,687

Expenses

Compensation

68,889

76,576

71,456

54,201

69,459

248,033

271,692

Performance Fee Compensation

Realized Carried Interest

4,077

3,401

19,822

35,118

25,863

13,054

84,204

Realized Incentive Fees

2

3,871

2,570

6,617

1,724

4,462

14,782

Unrealized Carried Interest

54,275

31,677

47,940

31,590

89,057

174,457

200,264

Unrealized Incentive Fees

3,768

(629)

2,876

(6,598)

1,034

1,331

(3,317)

Total Compensation and Benefits

131,011

114,896

144,664

120,928

187,137

441,337

567,625

Other Operating Expenses

28,924

26,560

31,284

36,946

28,462

104,417

123,252

Total Expenses

159,935

141,456

175,948

157,874

215,599

545,754

690,877

Economic Income

267,249

$      

197,142

$      

288,705

$      

246,019

$      

352,944

$      

907,131

$      

1,084,810

$  

Total Assets Under Management

48,322,760

$

50,225,950

$

53,546,023

$

56,695,645

$

59,475,215

$

48,322,760

$

59,475,215

$

Fee-Earning Assets Under Management

36,647,462

$

38,476,123

$

40,609,286

$

41,931,339

$

42,140,507

$

36,647,462

$

42,140,507

$

Weighted Average Fee-Earning AUM

35,983,336

$

36,882,087

$

38,947,049

$

40,164,238

$

41,682,661

$

32,017,030

$

39,878,906

$

LP Capital Invested

1,143,555

$   

1,855,108

$   

1,342,811

$   

3,876,701

$   

1,175,775

$   

6,630,543

$   

8,250,395

$   

Total Capital Invested

1,172,883

$   

1,954,731

$   

1,397,249

$   

3,990,620

$   

1,202,736

$   

6,982,086

$   

8,545,336

$   

(a)

Transaction and Other Fees, Net

(b)

Management Fee Offsets

Blackstone

20

Hedge Fund Solutions

(a)

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

(b)

Primarily placement fees.

(Dollars in Thousands)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

1Q'12 LTM

1Q'13 LTM

Revenues

Management Fees, Net

Base Management Fees

81,821

$        

84,278

$        

87,334

$        

92,777

$        

92,791

$        

322,072

$      

357,180

$      

Transaction and Other Fees, Net

(a)

92

65

4

27

4

2,163

100

Management Fee Offsets

(b)

(335)

(375)

(382)

(322)

(324)

(1,191)

(1,403)

Total Management Fees, Net

81,578

83,968

86,956

92,482

92,471

323,044

355,877

Performance Fees

Realized Incentive Fees

3,298

1,175

2,637

76,323

13,709

13,877

93,844

Unrealized Incentive Fees

23,187

(10,981)

36,635

(39,799)

55,501

4,708

41,356

Total Performance Fees

26,485

(9,806)

39,272

36,524

69,210

18,585

135,200

Investment Income (Loss)

Realized

503

929

637

5,201

852

16,884

7,619

Unrealized

8,371

(3,636)

5,199

(1,417)

3,913

(17,780)

4,059

Total Investment Income (Loss)

8,874

(2,707)

5,836

3,784

4,765

(896)

11,678

Interest Income and Dividend Revenue

386

495

540

718

1,216

1,895

2,969

Other

(127)

27

315

3,601

85

7,671

4,028

Total Revenues

117,196

71,977

132,919

137,109

167,747

350,299

509,752

Expenses

Compensation

28,233

34,559

28,826

28,113

33,868

129,099

125,366

Performance Fee Compensation

Realized Incentive Fees

1,378

(345)

1,062

20,985

5,022

4,576

26,724

Unrealized Incentive Fees

7,294

(2,820)

8,062

(11,219)

19,836

2,170

13,859

Total Compensation and Benefits

36,905

31,394

37,950

37,879

58,726

135,845

165,949

Other Operating Expenses

13,934

14,506

12,878

16,491

15,159

65,998

59,034

Total Expenses

50,839

45,900

50,828

54,370

73,885

201,843

224,983

Economic Income

66,357

$        

26,077

$        

82,091

$        

82,739

$        

93,862

$        

148,456

$      

284,769

$      

Total Assets Under Management

43,351,275

$

42,888,946

$

46,218,618

$

46,092,505

$

48,187,865

$

43,351,275

$

48,187,865

$

Fee-Earning Assets Under Management

40,543,772

$

40,161,179

$

43,601,541

$

43,478,791

$

45,585,454

$

40,543,772

$

45,585,454

$

Weighted Average Fee-Earning AUM

39,904,474

$

40,528,701

$

42,005,752

$

43,709,019

$

44,999,899

$

37,586,897

$

42,972,258

$

LP Capital Invested

4,661

$          

-

$               

196,180

$      

-

$               

55,849

$        

697,278

$      

252,029

$      

Total Capital Invested

5,502

$          

-

$               

207,250

$      

-

$               

59,000

$        

740,395

$      

266,250

$      

Blackstone

21

Credit

(a)

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

(b)

Primarily placement fees.

(Dollars in Thousands)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

1Q'12 LTM

1Q'13 LTM

Revenues

Management Fees, Net

Base Management Fees

80,094

$        

81,774

$        

88,959

$        

94,450

$        

91,364

$        

264,040

$      

356,547

$      

5,725

9,184

4,486

21,480

4,374

6,860

39,524

(306)

(1,569)

(1,271)

(1,858)

(1,572)

(678)

(6,270)

Total Management Fees, Net

85,513

89,389

92,174

114,072

94,166

270,222

389,801

Performance Fees

Realized Carried Interest

1,010

13,609

328

37,564

85,505

71,039

137,006

Realized Incentive Fees

1,982

2,751

4,104

183,538

7,926

68,826

198,319

Unrealized Carried Interest

43,245

27,673

67,024

24,103

(18,775)

29,690

100,025

Unrealized Incentive Fees

37,020

(4,567)

61,364

(132,051)

49,854

(39,478)

(25,400)

Total Performance Fees

83,257

39,466

132,820

113,154

124,510

130,077

409,950

Investment Income (Loss)

Realized

683

5,638

6,697

2,593

3,328

10,747

18,256

Unrealized

9,211

(9,156)

(736)

5,450

1,093

3,971

(3,349)

Total Investment Income (Loss)

9,894

(3,518)

5,961

8,043

4,421

14,718

14,907

Interest Income and Dividend Revenue

2,425

1,752

2,673

2,480

4,547

5,341

11,452

Other

(238)

(787)

(678)

529

1,828

(1,189)

892

Total Revenues

180,851

126,302

232,950

238,278

229,472

419,169

827,002

Expenses

Compensation

37,143

42,845

50,236

51,853

45,521

136,182

190,455

Performance Fee Compensation

Realized Carried Interest

3,541

3,694

1,153

21,948

47,328

30,863

74,123

Realized Incentive Fees

2,872

2,049

825

98,156

3,762

50,152

104,792

Unrealized Carried Interest

31,320

13,397

37,695

15,150

(10,204)

30,820

56,038

Unrealized Incentive Fees

1,717

(6,147)

33,316

(74,148)

23,608

(48,051)

(23,371)

Total Compensation and Benefits

76,593

55,838

123,225

112,959

110,015

199,966

402,037

Other Operating Expenses

17,096

15,749

33,527

18,116

20,962

51,694

88,354

Total Expenses

93,689

71,587

156,752

131,075

130,977

251,660

490,391

Economic Income

87,162

$        

54,715

$        

76,198

$        

107,203

$      

98,495

$        

167,509

$      

336,611

$      

Total Assets Under Management

50,776,119

$

50,519,383

$

54,564,619

$

56,428,837

$

58,055,781

$

50,776,119

$

58,055,781

$

Fee-Earning Assets Under Management

41,746,577

$

41,849,767

$

45,913,758

$

45,420,143

$

46,437,616

$

41,746,577

$

46,437,616

$

Weighted Average Fee-Earning AUM

40,974,525

$

41,581,436

$

43,328,691

$

45,947,499

$

45,960,690

$

31,040,098

$

43,867,284

$

LP Capital Invested

928,173

$      

445,616

$      

530,845

$      

351,786

$      

275,852

$      

3,424,012

$   

1,604,099

$   

Total Capital Invested

1,275,965

$   

461,940

$      

721,691

$      

349,397

$      

287,727

$      

3,873,232

$   

1,820,755

$   

Transaction and Other Fees, Net

Management Fee Offsets

(a)

(b)

Blackstone

22

Financial Advisory

(Dollars in Thousands)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

1Q'12 LTM

1Q'13 LTM

Revenues

Advisory Fees

75,846

$         

93,372

$         

59,951

$         

128,248

$       

67,020

$         

387,834

$       

348,591

$       

Transaction and Other Fees, Net

145

102

6

42

3

460

153

Total Advisory and Transaction Fees

75,991

93,474

59,957

128,290

67,023

388,294

348,744

Investment Income (Loss)

Realized

583

(79)

251

637

234

1,080

1,043

Unrealized

(49)

561

928

(92)

(359)

(138)

1,038

Total Investment Income (Loss)

534

482

1,179

545

(125)

942

2,081

Interest Income and Dividend Revenue

1,562

1,753

1,797

2,045

1,616

6,675

7,211

Other

82

(40)

(751)

(95)

(61)

(687)

(947)

Total Revenues

78,169

95,669

62,182

130,785

68,453

395,224

357,089

Expenses

Compensation

67,960

61,129

46,619

59,429

57,926

262,316

225,103

Total Compensation and Benefits

67,960

61,129

46,619

59,429

57,926

262,316

225,103

Other Operating Expenses

20,686

25,702

18,823

19,378

20,693

84,693

84,596

Total Expenses

88,646

86,831

65,442

78,807

78,619

347,009

309,699

Economic Income (Loss)

(10,477)

$        

8,838

$           

(3,260)

$          

51,978

$         

(10,166)

$        

48,215

$         

47,390

$         

Blackstone

23

Fee-Earning Assets Under Management Flows

Fee-Earning AUM: up $14.7 billion or 9% from a year ago driven mainly by continued strong inflows and market

appreciation

totaling

$33.0

billion,

which

more

than

offset

$6.4

billion

of

outflows

and

$11.9

billion

of

realizations.

Private Equity: decreased slightly despite steady inflows into our tactical opportunities investment vehicles due to

$3.1 billion of realizations.

Real Estate: grew 15% during the past year driven by capital committed to our latest global fund, invested capital in

our

Debt

Strategies

funds

and

the

Capital

Trust

transaction

with

$2.2

billion

of

Fee-Earning

AUM.

Hedge Fund Solutions: continued its solid growth with $885 million of net inflows and $1.2 billion of market

appreciation

during

the

quarter,

bringing

the

last

twelve

months

to

$2.2

billion

of

net

inflows

and

$2.8

billion

of

market appreciation.

Credit: does not yet reflect capital committed to our second rescue lending fund, grew 11% during the past year

primarily due to organic inflows, new product launches and capital invested in our carry funds.

1Q’13 Fee-Earning AUM Rollforward

(Dollars in Millions)

LTM Fee-Earning AUM Rollforward

(Dollars in Millions)

Totals may not add due to rounding.

(a)

Inflows: include contributions, capital raised, other increases in available capital, purchases and acquisitions.

(b)

Outflows: represent redemptions, client withdrawals and other decreases in available capital.

(c)

Realizations: represent realizations from the disposition of

assets.

(d)

Market Activity: gains (losses) on portfolio investments and impact of foreign exchange rate fluctuations.

Private

Real

Hedge Fund

Private

Real

Hedge Fund

Equity

Estate

Solutions

Credit

Total

Equity

Estate

Solutions

Credit

Total

4Q'12

37,050

$     

41,931

$     

43,479

$     

45,420

$     

167,880

$   

1Q'12

37,324

$     

36,647

$     

40,544

$     

41,747

$     

156,261

$   

Inflows

(a)

470

752

1,209

3,903

6,334

Inflows

(a)

2,599

9,444

5,223

12,240

29,506

Outflows

(b)

-

(8)

(324)

(486)

(819)

Outflows

(b)

-

(1,488)

(2,988)

(1,936)

(6,413)

Realizations

(c)

(720)

(408)

-

(2,515)

(3,644)

Realizations

(c)

(3,144)

(2,328)

-

(6,474)

(11,946)

Net Inflows (Outflows)

(250)

336

885

901

1,872

Net Inflows (Outflows)

(545)

5,628

2,235

3,830

11,147

Market Activity

(d)

(15)

(127)

1,222

117

1,197

Market Activity

(d)

7

(135)

2,807

861

3,541

1Q'13

36,786

$     

42,141

$     

45,585

$     

46,438

$     

170,949

$  

1Q'13

36,786

$     

42,141

$     

45,585

$     

46,438

$     

170,949

$  

QoQ Inc (Dec)

(1)%

0%

5%

2%

2%

YoY Inc (Dec)

(1)%

15%

12%

11%

9%

Blackstone

24

Total Assets Under Management Flows

Totals may not add due to rounding.

(a)

Inflows: include contributions, capital raised, other increases in available capital, purchases and acquisitions.

(b)

Outflows: represent redemptions, client withdrawals and other decreases in available capital.

(c)

Realizations: represent realizations from the disposition of

assets.

(d)

Market Activity: gains (losses) on portfolio investments and impact of foreign exchange rate fluctuations.

Total AUM: up $28.1 billion or 15% from a year ago driven by strong net inflows and market appreciation across

Blackstone’s investment segments.

•

Realization

activity

continued

to

improve

and

our

funds

returned

$7.5

billion

to

our

investors

during

the

quarter and $23.3 billion during the last twelve months.

Private Equity: up 10% over the last twelve months driven by fundraising and market appreciation, which more

than offset $4.6 billion of realizations.

Real Estate: grew 23% during the past year driven by capital committed to our latest global fund, solid market

appreciation and the Capital Trust transaction adding $2.3 billion of Total AUM.

Hedge Fund Solutions: increased 11% over the last twelve months due to strong net inflows and $3.0 billion of

market appreciation driven by solid returns.

Credit: grew 14% during the past year on top of significant realizations due to strong net inflows, new fund

launches including the initial close of our second rescue lending fund and favorable market performance.

1Q’13 Total AUM Rollforward

(Dollars in Millions)

LTM Total AUM Rollforward

(Dollars in Millions)

Private

Real

Hedge Fund

Private

Real

Hedge Fund

Equity

Estate

Solutions

Credit

Total

Equity

Estate

Solutions

Credit

Total

4Q'12

51,003

$     

56,696

$     

46,093

$     

56,429

$     

210,220

$   

1Q'12

47,624

$     

48,323

$     

43,351

$     

50,776

$     

190,074

$   

Inflows

(a)

983

1,517

1,215

4,757

8,472

Inflows

(a)

4,138

9,338

5,088

15,051

33,616

Outflows

(b)

(385)

(56)

(422)

(611)

(1,474)

Outflows

(b)

(461)

(302)

(3,212)

(2,594)

(6,569)

Realizations

(c)

(1,961)

(1,022)

-

(3,049)

(6,032)

Realizations

(c)

(4,600)

(4,348)

-

(7,790)

(16,738)

Net Inflows (Outflows)

(1,364)

439

794

1,097

966

Net Inflows (Outflows)

(922)

4,689

1,876

4,667

10,309

Market Activity

(d)

2,853

2,340

1,302

530

7,024

Market Activity

(d)

5,790

6,464

2,961

2,613

17,828

1Q'13

52,492

$     

59,475

$     

48,188

$     

58,056

$     

218,211

$  

1Q'13

52,492

$     

59,475

$     

48,188

$     

58,056

$     

218,211

$  

QoQ Increase

3%

5%

5%

3%

4%

YoY Increase

10%

23%

11%

14%

15%

Blackstone

25

Net

Accrued

Performance

Fees

and

Carried

Interest

Status

(a)

(a)

Preliminary.  Totals may not add due to rounding.  See Additional 1Q’13 Information (page 14) for details on the Net Accrued Performance Fees change vs. 4Q’12.

(b)

Net Accrued Performance Fees are presented net of performance fee compensation and do not include clawback amounts, if any, which are disclosed in the 10-K/Q. As of 1Q’13, $45 million of Net Accrued Performance Fees,

primarily

attributable

to

Hedge

Fund

Solutions

and

Credit,

have

been

realized

and

included

in

DistributableEarnings.

When

these

fees

are

received,

the

receivable

will

be

reduced

without

further

impacting

Distributable

Earnings.

(c)

Per

Unit

calculations

are

based

on

quarter

end

Distributable

Earnings

Units

Outstanding

(see

Appendix

–

Unit

Rollforward).

(d)

Represents the required increase in equity at the fund level (excluding side-by-side investments) for funds with expired investment periods which are currently not generating performance fees.

Private Equity Net Accrued Performance Fees declined due mainly to $140 million of Realized Performance Fees.

Net Accrued Incentive Fees decreased due to prior year realizations being converted into cash in the first quarter.

BCP V and BREP Int’l II were below their respective carried interest thresholds as of quarter end.

$2.3 billion

Net Accrued Performance Fees at 1Q’13

$2.00

per unit

(c)

Net Accrued Performance Fees at 1Q’13

33% increase

in Net Accrued Performance Fees since 1Q’12

Carried Interest Status (excl. SBS)

(d)

Remaining Capital

Gain to Cross Carry Threshold

(Dollars in Millions, Except per Unit Data)

4Q'12

1Q'13

Per Unit

(c)

Change vs. 4Q'12

(Dollars / Euros In Millions)

@ FMV

@ Cost

Amount

% Change in TEV

Private Equity

Private Equity

BCP IV Carried Interest

582

$              

448

$              

0.40

$             

(134)

$                    

BCP V

19,310

$      

15,685

$      

4,155

$       

9%

BCP VI Carried Interest

22

40

0.04

18

BEP Carried Interest

38

55

0.05

17

Real Estate

Tactical Opportunities Carried Interest

2

2

0.00

-

BREP Int'l II

1,132

€

1,130

€

932

€

21%

Total Private Equity

644

545

0.48

(99)

Real Estate

BREP V Carried Interest

448

490

0.43

42

BREP VI Carried Interest

610

681

0.60

71

BREP VII Carried Interest

82

133

0.12

51

BREP Int'l I Carried Interest

2

2

0.00

0

BREP Europe III Carried Interest

74

93

0.08

19

BREDS Carried Interest

19

20

0.02

1

BREDS Incentive Fees

7

7

0.01

-

Asia Platform Incentive Fees

23

20

0.02

(3)

Total Real Estate

1,265

1,446

1.28

181

Hedge Fund Solutions

Incentive Fees

67

60

0.05

(7)

Total Hedge Fund Solutions

67

60

0.05

(7)

Credit

Carried Interest

144

143

0.13

(1)

Incentive Fees

118

67

0.06

(51)

Total Credit

262

210

0.19

(52)

Total Blackstone

Carried Interest

2,023

2,107

1.87

84

Incentive Fees

215

154

0.14

(61)

Net Accrued Performance Fees

2,238

$           

2,261

$           

2.00

$             

23

$                       

Memo: Net Realized Performance Fees

167

$              

45

$                 

0.04

$             

(122)

$                   

Blackstone

26

Investment Records as of March 31, 2013

(a)

Notes on next page.

Committed

Available

Unrealized Investments

Realized Investments

Total Investments

Net IRRs (d)

(Dollars in Thousands, Except Where Noted)

Capital

Capital (b)

Value

MOIC (c)

% Public

Value

MOIC (c)

Value

MOIC (c)

Realized

Total

Private Equity

BCP I (Oct 1987 / Oct 1993)

859,081

$              

-

$               

-

$               

n/a

-

1,741,738

$   

2.6x

1,741,738

$   

2.6x

19%

19%

BCP II (Oct 1993 / Aug 1997)

1,361,100

-

-

n/a

-

3,256,819

2.5x

3,256,819

2.5x

32%

32%

BCP III (Aug 1997 / Nov 2002)

3,967,422

-

-

n/a

-

9,184,688

2.3x

9,184,688

2.3x

14%

14%

BCOM (June 2000 / Jun 2006)

2,137,330

199,297

214,522

0.7x

8%

2,593,463

1.4x

2,807,985

1.3x

8%

6%

BCP IV (Nov 2002 / Dec 2005)

6,773,138

248,640

4,751,752

1.9x

48%

15,325,141

3.0x

20,076,893

2.7x

53%

37%

BCP V (Dec 2005 / Jan 2011)

21,020,878

1,362,492

20,816,848

1.3x

28%

4,453,770

1.2x

25,270,618

1.3x

2%

4%

BCP VI (Jan 2011 / Jan 2016)

15,173,929

11,183,807

3,815,948

1.2x

29%

35,972

1.3x

3,851,920

1.2x

22%

9%

BEP (Aug 2011 / Aug 2017)

2,426,375

1,428,861

1,108,026

2.0x

44%

32,546

1.2x

1,140,572

1.9x

34%

88%

Total Core Private Equity

53,719,253

$         

14,423,097

$

30,707,096

$

1.4x

31%

36,624,137

$

2.2x

67,331,233

$

1.7x

21%

15%

Tactical Opportunities

2,559,523

2,231,449

363,224

1.1x

-

9,161

1.3x

372,385

1.1x

n/m

14%

Other Funds and Co-Invest

1,062,606

324,694

328,701

n/a

73%

-

n/a

328,701

0.5x

n/a

n/m

Total Private Equity

57,341,382

$         

16,979,240

$

31,399,021

$

1.3x

31%

36,633,298

$

2.2x

68,032,319

$

1.7x

21%

15%

Real Estate

Dollar

Pre-BREP

140,714

-

-

n/a

-

345,190

2.5x

345,190

2.5x

33%

33%

BREP I (Sep 1994 / Oct 1996)

380,708

-

-

n/a

-

1,327,708

2.8x

1,327,708

2.8x

40%

40%

BREP II (Oct 1996 / Mar 1999)

1,198,339

-

-

n/a

-

2,531,613

2.1x

2,531,613

2.1x

19%

19%

BREP III (Apr 1999 / Apr 2003)

1,522,708

-

2,161

0.1x

-

3,325,133

2.4x

3,327,294

2.4x

22%

21%

BREP IV (Apr 2003 / Dec 2005)

2,198,694

-

1,174,534

0.8x

-

3,021,424

2.4x

4,195,958

1.5x

72%

13%

BREP V (Dec 2005 / Feb 2007)

5,538,579

243,946

7,275,478

1.7x

-

2,352,733

1.6x

9,628,211

1.7x

41%

9%

BREP VI (Feb 2007 / Aug 2011)

11,057,598

757,813

15,282,402

1.6x

3%

2,112,651

2.0x

17,395,053

1.6x

32%

10%

BREP VII (Aug 2011 / Feb 2017)

13,380,433

8,133,203

6,770,581

1.3x

-

530,631

1.5x

7,301,212

1.3x

47%

32%

Total Global Real Estate Funds

35,417,773

$         

9,134,962

$   

30,505,156

$

1.5x

1%

15,547,083

$

2.1x

46,052,239

$

1.6x

28%

16%

BREP Co-Investment (e)

4,188,092

505,000

5,632,582

1.5x

-

520,052

1.5x

6,152,634

1.5x

11%

12%

Euro

BREP Int'l (Jan 2001 / Sep 2005)

824,172

€

-

€

109,596

€

1.2x

-

1,230,290

€

2.2x

1,339,886

€

2.0x

26%

23%

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

1,627,954

81,767

1,242,339

1.0x

-

191,828

1.2x

1,434,167

1.0x

3%

(1)%

BREP Europe III (Jun 2008 / Dec 2013)

3,199,792

1,180,404

2,896,822

1.4x

-

23,412

2.0x

2,920,234

1.4x

39%

18%

Total Euro Funds

5,651,918

€

1,262,171

€

4,248,757

€

1.3x

-

1,445,530

€

2.0x

5,694,287

€

1.4x

24%

9%

Total Real Estate

46,728,739

$         

11,268,990

$

41,868,445

$

1.4x

1%

17,873,006

$

2.1x

59,741,451

$

1.6x

27%

15%

Debt Strategies Drawdown (f)

2,832,685

$           

690,939

$      

2,465,298

1.2x

-

1,371,755

$   

1.3x

3,837,053

$   

1.3x

16%

13%

Credit (g)

Mezzanine

6,120,000

$           

3,100,006

$   

3,608,948

$   

1.3x

-

2,632,565

$   

1.7x

6,241,513

$   

1.5x

n/a

20%

Rescue Lending

3,253,143

619,428

3,329,841

1.3x

-

1,456,563

1.1x

4,786,404

1.2x

n/a

15%

Total Credit

9,373,143

$           

3,719,434

$   

6,938,789

$   

1.3x

-

4,089,128

$   

1.4x

11,027,917

$

1.4x

Blackstone

27

Investment

Records

as

of

March

31,

2013

–

Notes

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

n/m

Not meaningful.

n/a

Not applicable.

(a)

(b)

(c)

(d)

(e)

(f)

(g)

Preliminary.

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

expired or recallable capital, less invested capital.  This amount is not reduced by outstanding commitments to investments.

Multiple of Invested Capital (“MOIC”) represents carrying value, before management fees, expenses and Carried Interest,

divided by invested capital.

Net Internal Rate of Return (“IRR”) represents the annualized inception to March 31, 2013 IRR on total invested capital based

on realized proceeds and unrealized value, as applicable, after management fees, expenses and Carried Interest.

BREP Co-Investment represents co-investment capital raised for various BREP investments.  The Net

IRR reflected is

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

fees, expenses and Carried Interest.

Excludes Capital Trust drawdown funds.

The Total Investments MOIC for Mezzanine and Rescue Lending Funds, excluding recycled capital during the investment period,

was 1.8x and 1.3x, respectively.

Blackstone

28

Reconciliation of GAAP to Non-GAAP Measures

Notes on next page.

(Dollars in Thousands)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

1Q'12 LTM

1Q'13 LTM

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

58,325

$     

(74,964)

$   

128,824

$  

106,413

$  

167,635

$    

(152,682)

$  

327,908

$    

Net Income (Loss) Attributable to Non-Controlling Interests in Blackstone Holdings

107,405

(53,027)

183,431

169,918

207,090

(82,545)

507,412

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

197,643

239,934

(157,607)

(180,011)

(9,452)

299,389

(107,136)

Net Income (Loss) Attributable to Redeemable Non-Controlling

Interests in Consolidated Entities

54,259

(17,666)

41,854

25,151

62,316

6,653

111,655

Net Income

417,632

$  

94,277

$     

196,502

$  

121,471

$  

427,589

$    

70,815

$      

839,839

$    

Provision for Taxes

38,753

41,337

39,237

65,696

50,993

345,614

197,263

Income Before Provision for Taxes

456,385

$  

135,614

$  

235,739

$  

187,167

$  

478,582

$    

416,429

$    

1,037,102

$

244,897

268,936

248,179

317,499

186,962

1,087,602

1,021,576

Amortization of Intangibles

(b)

50,888

39,435

33,338

26,487

25,657

227,579

124,917

(Income) Loss Associated with Non-Controlling Interests in (Income) Loss of

Consolidated Entities

(c)

(251,902)

(222,268)

115,753

154,860

(52,864)

(306,042)

(4,519)

Economic Income

500,268

$  

221,717

$  

633,009

$  

686,013

$  

638,337

$    

1,425,568

$

2,179,076

$

Taxes

(d)

(9,051)

(9,368)

(11,257)

(16,032)

(10,031)

(42,015)

(46,688)

Economic Net Income

491,217

$  

212,349

$  

621,752

$  

669,981

$  

628,306

$    

1,383,553

$

2,132,388

$

Taxes

(d)

9,051

9,368

11,257

16,032

10,031

42,015

46,688

Performance Fee Adjustment

(e)

(385,756)

(134,837)

(602,999)

(470,173)

(603,999)

(959,485)

(1,812,008)

Investment Income (Loss) Adjustment

(f)

(83,406)

16,264

(107,432)

(111,670)

(134,771)

(142,594)

(337,609)

(g)

6,310

1,892

12,877

4,690

(1,729)

9,608

17,730

Performance Fee Compensation and Benefits Adjustment

(h)

109,512

40,693

199,597

163,744

239,895

249,156

643,929

Fee Related Earnings

146,928

$  

145,729

$  

135,052

$  

272,604

$  

137,733

$    

582,253

$    

691,118

$    

Realized Performance Fees

(i)

6,649

54,147

68,905

262,710

218,952

54,001

604,714

Realized Investment Income

(j)

23,492

9,360

25,098

37,448

38,110

102,568

110,016

Adjustment Related to Realized Investment Income -

Blackstone's Treasury Cash Management Strategies

(k)

(5,897)

(1,280)

(8,251)

(6,444)

(3,820)

(10,944)

(19,795)

(l)

(9,051)

(19,552)

(31,169)

(72,553)

(12,148)

(70,948)

(135,422)

Distributable Earnings

162,121

$  

188,404

$  

189,635

$  

493,765

$  

378,827

$    

656,930

$    

1,250,631

$

Interest Expense

13,554

12,850

18,163

24,585

26,069

54,042

81,667

Taxes and Related Payables Including Payable Under Tax Receivable Agreement

(l)

9,051

19,552

31,169

72,553

12,148

70,948

135,422

Depreciation and Amortization

10,268

10,391

8,895

12,681

8,643

34,881

40,610

Adjusted EBITDA

194,994

$  

231,197

$  

247,862

$  

603,584

$  

425,687

$    

816,801

$    

1,508,330

$

(a)

Taxes and Related Payables Including Payable Under Tax Receivable Agreement

IPO  and  Acquisition-Related Charges

Investment Income (Loss) -

Blackstone's Treasury Cash Management Strategies

Blackstone

29

Reconciliation

of

GAAP

to

Non-GAAP

Measures

–

Notes

Note:

See Appendix –

Definitions and Distribution Policy.

(a)

This adjustment adds back to Income (Loss) Before Provision (Benefit) 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 (Benefit) 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 (Benefit) 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.

(d)

Taxes represent the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes.

(e)

This adjustment removes from EI the total segment amount of Performance Fees.

(f)

This adjustment removes from EI the total segment amount of Investment Income (Loss).

(g)

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 Fee Related Earnings.

(h)

This adjustment removes from expenses the compensation and benefit amounts related to Blackstone’s profit sharing plans related

to Performance Fees.

(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 attributable to Blackstone’s Treasury cash management strategies which

is a component of both Fee Related Earnings and Realized Investment Income (Loss).

(l)

Taxes and Related Payables Including Payable Under Tax Receivable Agreement represent the current tax provision (benefit)

calculated on Income (Loss) Before Provision for Taxes and the Payable Under Tax Receivable Agreement.

Blackstone

30

Walkdown

of

Financial

Metrics

–

Calculation

of

Certain

Non-GAAP

Financial

Metric

Components

(Dollars in Thousands)

1Q'13

1Q'13 LTM

Interest Income and Dividend Revenue

14,661

$       

51,946

$       

Other Revenue

2,143

8,499

Investment

Income

(Loss) -

Blackstone's

Treasury

Cash

Management

Strategies

(a)

(1,729)

17,730

Interest Income and Other Revenue

15,075

$       

78,175

$       

Realized Incentive Fees

24,727

320,912

Less: Realized Incentive Fee Compensation

(10,508)

(146,298)

Net Realized Incentive Fees

14,219

$       

174,614

$    

Realized Carried Interest

294,170

608,032

Less: Realized Carried Interest Compensation

(89,437)

(177,932)

Net Realized Carried Interest

204,733

$    

430,100

$    

Realized Investment Income

38,110

110,016

Adjustment

Related

to

Realized

Investment

Income

-

Blackstone's

Treasury

Cash

Management

Strategies

(a)

(3,820)

(19,795)

Net Realized Investment Income

34,290

$       

90,221

$       

Unrealized Incentive Fees

107,755

10,323

Less: Unrealized Incentive Fee Compensation

(44,478)

12,829

Net Unrealized Incentive Fees

63,277

$       

23,152

$       

Unrealized Carried Interest

177,347

872,741

Less: Unrealized Carried Interest Compensation

(95,472)

(332,528)

Net Unrealized Carried Interest

81,875

$       

540,213

$    

Unrealized Investment Income

96,661

227,593

Less:

Investment

Income

(Loss) -

Blackstone's

Treasury

Cash

Management

Strategies

(a)

1,729

(17,730)

Less:

Adjustment

Related

to

Realized

Investment

Income

-

Blackstone's

Treasury

Cash

Management

Strategies

(a)

3,820

19,795

Net Unrealized Investment Income

102,210

$    

229,658

$    

Related

Payables

(b)

2,117

$         

88,734

$       

(a)        See Appendix - Reconciliation of GAAP to Non-GAAP Measures for this adjustment.

(b)        Represents tax related payables including the Payable Under Tax Receivable Agreement.

Unless otherwise noted, all amounts are the respective captions from the Total Segment information.

Blackstone

31

Unit Rollforward

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

Total

GAAP

Weighted-Average

Common

Units

Outstanding

-

Basic

506,985,529

528,778,977

544,716,399

553,989,577

582,322,183

Adjustments:

Weighted-Average Unvested Deferred Restricted Common Units

10,404,029

-

2,207,204

2,430,014

3,377,716

Total

GAAP

Weighted-Average

Common

Units

Outstanding

-

Diluted

517,389,558

528,778,977

546,923,603

556,419,591

585,699,899

Adjustments:

Weighted-Average Blackstone Holdings Partnership Units

602,817,069

591,155,160

586,762,611

581,202,276

557,463,170

Weighted-Average Unvested Deferred Restricted Common Units

-

4,820,609

-

-

-

Weighted-Average Economic Net Income Adjusted Units

1,120,206,627

1,124,754,746

1,133,686,214

1,137,621,867

1,143,163,069

Economic Net Income Adjusted Units, End of Period

1,119,829,138

1,122,067,386

1,133,637,141

1,143,019,281

1,143,893,134

Total

Common

Units

Outstanding

(a)

510,868,415

525,464,110

537,299,585

568,600,922

573,275,746

Adjustments:

Blackstone Holdings Partnership Units

597,566,417

585,315,742

584,690,200

553,614,040

554,603,708

Distributable

Earnings

Units

Outstanding

(b)

1,108,434,832

1,110,779,852

1,121,989,785

1,122,214,962

1,127,879,454

(a)

Common Unitholders receive Tax Benefits from deductions taken by Blackstone’s corporate tax paying subsidiaries and bear responsibility for the deduction from Distributable 

Earnings of the Payable Under Tax Receivable Agreement and certain other tax-related payables.

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

Blackstone

32

Definitions and Distribution Policy

Distribution Policy. For 2013, Blackstone’s intention is to distribute to common unitholders each quarter substantially all of its Net Cash Available for Distribution to

Common Unitholders, subject to a minimum base quarterly distribution of $0.12 per unit. In circumstances in which the Net Cash Available for Distribution to Common

Unitholders

for

a

quarter

falls

short

of

the

amount

necessary

to

support

such

per

unit

distribution,

Blackstone

intends

to

correspondingly

reduce

subsequent

quarterly

distributions below the amounts supported by the Net Cash Available for Distribution to Common Unitholders by the amount of the shortfall, but not below $0.12 per

unit.

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

may

change

at

any

time,

including,

without

limitation,

to

reduce

the

quarterly

distribution

payable

to

common

unitholders

to

less

than

$0.12

per

unit

or

even

to

eliminate such distributions entirely.

•

Blackstone uses Economic Income, or “EI”, as a key measure of value creation, a benchmark of its performance and in making resource deployment and

compensation decisions across its five segments.  EI 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.  EI presents revenues and expenses on a basis that deconsolidates the investment funds

Blackstone manages. 

•

Economic Net Income, or “ENI”, represents EI adjusted to include current period taxes.  Taxes represent the current tax provision (benefit) calculated on Income

(Loss) Before Provision for Taxes. 

•

Blackstone uses Fee Related Earnings, or “FRE”, 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 FRE as a measure to assess

whether recurring revenue from its businesses is sufficient to adequately cover all of its operating expenses and generate profits.  FRE 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), and (b) other operating expenses. 

•

Distributable Earnings, or “DE”, 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.  DE is intended to show the amount of net realized earnings without the effects of the consolidation of the Blackstone Funds.  DE,

which is a component of ENI, 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) Taxes and Related Payables Including the Payable Under Tax Receivable Agreement.  DE is reconciled to Blackstone’s

Consolidated Statement of Operations.  

•

Blackstone uses Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization, or “Adjusted EBITDA”, as a measure of segment performance

and an indicator of its ability to cover recurring operating expenses.  Adjusted EBITDA equals DE before segment interest expense, segment depreciation

and amortization, and the taxes and related payables including the Payable Under Tax Receivable Agreement.

•

Net Cash Available for Distribution to Common Unitholders is The Blackstone Group L.P.’s share of Distributable Earnings, less realized investment gains and

returns of capital from investments and acquisitions, in excess of amounts determined by Blackstone’s 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 cash requirements such as tax-related payments, clawback obligations and distributions to

unitholders for any ensuing quarter.

Blackstone discloses the following financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally

accepted accounting principles in the United States of America (“non-GAAP”) in this presentation:

Blackstone

33

Forward-Looking Statements

This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and

Section 21E of the Securities Exchange Act of 1934 which reflect

Blackstone’s current views with respect to, among other things,

Blackstone’s 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, 2012, as such factors may be updated from time to time in its periodic filings with the Securities and Exchange

Commission, 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 presentation 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 presentation does not constitute an offer of any Blackstone

Fund.