Blackstone (BX) 8-K Blackstone Reports Second Quarter Results

Blackstone’s Second Quarter 2013 Earnings

July 18, 2013

Exhibit 99.2

Blackstone

1

Blackstone’s Second Quarter 2013 Highlights

Economic

Net

Income

(“ENI”)

more

than

tripled

to

$703

million

for

the

quarter,

or

$0.62

per

unit,

up

from

$212

million,

or

$0.19

per

unit

in

last

year’s

second

quarter.

•

Results

were

driven

by

strong

fund

performance,

which

led

to

an

over

five-fold

increase

in

Total

Performance

Fees.

Distributable

Earnings

(“DE”)

increased

73%

year-over-year

to

$338

million,

or

$0.28

per

common

unit,

compared

with

$195

million,

or

$0.17

per

common

unit,

in

the

year

ago

quarter.

•

Fund

activity

generated

$258

million

of

Realized

Performance

Fees,

up

almost

four

times

from

$68

million

in

second

quarter

2012,

bringing

the

year-to-date

amount

to

$577

million,

up

almost

seven

times from

$86

million

in

the

comparable

period

last

year.

GAAP

Net

Income

was

$211

million

for

the

quarter,

net

of

certain

non-cash

IPO

and

transaction

related

expenses

and

exclusive

of

net

income

attributable

to

non-controlling

interests,

mainly

inside

ownership.

Total

AUM

reached

a

record

$230

billion,

up

21%

year-over-year

with

double-digit

increases

across

all

investment

businesses,

through

a

combination

of

strong

inflows

and

carrying

value

appreciation.

•

Gross

inflows

totaled

$14

billion

in

the

second

quarter

and

$42

billion

over

the

last

twelve

months,

including

$40

billion,

or

94%,

from

purely

organic

growth

into

new

funds,

products

and

strategies.

•

Blackstone’s

funds

returned

$28

billion

(a)

of

capital

to

investors

over

the

last

twelve

months.

Blackstone

declared

a

second

quarter

distribution

of

$0.23

per

common

unit

payable

on

August

5,

2013,

bringing

the

year-to-date

distribution

to

$0.53

per

common

unit.

Announced

agreement

to

acquire

Strategic

Partners,

the

secondary

alternatives

business

of

Credit

Suisse,

with

$10

billion

of

AUM,

which

is

expected

to

close

in

the

third

quarter.

(a)

See

Appendix

-

Total

Assets

Under

Management

Flows

-

LTM

Total

AUM

Rollforward.

(b)

The definition of DE has been modified to exclude equity-based compensation expense, which will result

in

an

increase

to

both

DE

and

distributions

beginning

this

quarter

(b)

.

All prior periods have been recast to reflect this change retroactively. The impact for 2Q’13 is $11 million or $0.01 per common unit.

Blackstone

2

% Change

% Change

(Dollars in Thousands, Except per Unit Data)

2Q'12

2Q'13

vs. 2Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

525,759

$        

616,515

$        

17%

1,030,670

$     

1,137,398

$     

10%

Performance Fees

134,837

719,219

433%

520,593

1,323,218

154%

Investment Income

(16,264)

97,119

n/m

67,142

231,890

245%

Total Revenues

644,332

$        

1,432,853

$    

122%

1,618,405

$    

2,692,506

$    

66%

Total Expenses

422,615

713,461

69%

896,420

1,334,777

49%

Taxes

9,368

16,152

72%

18,419

26,183

42%

Economic Net Income (“ENI”)

212,349

$        

703,240

$        

231%

703,566

$        

1,331,546

$    

89%

ENI per Unit

(a)

0.19

$              

0.62

$              

226%

0.63

$              

1.17

$              

86%

GAAP Net Income (Loss)

(74,964)

$         

211,148

$        

n/m

(16,639)

$         

378,783

$        

n/m

Fee Related Earnings (“FRE”)

145,729

$        

168,434

$        

16%

292,657

$        

306,167

$        

5%

Distributable Earnings (“DE”)

195,213

$        

338,485

$        

73%

365,180

$        

729,397

$        

100%

DE per Common Unit

(b)

0.17

$              

0.28

$              

65%

0.32

$              

0.62

$              

94%

Total Assets Under Management

190,267,831

$

229,571,741

$

21%

190,267,831

$

229,571,741

$

21%

Fee-Earning Assets Under Management

157,646,521

$

176,338,947

$

12%

157,646,521

$

176,338,947

$

12%

Blackstone’s Second Quarter 2013 Earnings

(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 Common Units Outstanding.

n/m Not meaningful.

(Loss)

Blackstone

Walkdown of Financial Metrics

(Dollars in Thousands, Except per Unit Data)

3

2Q'13

YTD'13

Results

Per Unit

(a)

Results

Per Unit

(a)

Base Management Fees

425,674

$          

834,421

$          

Advisory Fees

120,734

187,754

Transaction and Other Fees, Net

66,464

104,438

Management Fee Offsets

(10,535)

(20,197)

Interest Income and Other Revenue

(7,274)

7,801

Compensation

(306,477)

(573,454)

Other Operating Expenses

(120,152)

(234,596)

Fee Related Earnings

168,434

$          

0.15

$                  

306,167

$          

0.27

$                  

Net Realized Incentive Fees

39,853

54,072

Net Realized Carried Interest

107,378

312,111

Net Realized Investment Income

56,055

90,345

Taxes and Related Payables

(44,220)

(56,368)

Equity-Based Compensation

10,985

23,070

Distributable Earnings

338,485

$          

0.28

$                  

729,397

$          

0.62

$                  

Net Unrealized Incentive Fees

1,274

64,551

Net Unrealized Carried Interest

283,882

365,757

Net Unrealized Investment Income

62,516

164,726

Add Back: Related Payables

28,068

30,185

Less: Equity-Based Compensation

(10,985)

(23,070)

Economic Net Income

703,240

$          

0.62

$                  

1,331,546

$       

1.17

$                  

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.) YTD’13 Fee Related Earnings per Unit and DE per Unit amounts equal the sum of the respective per unit amounts for 2013.

Blackstone

4

Summary Walkdown of GAAP to Non-GAAP Financial Metrics

GAAP

Economic Income

“EI”

Fee Related Earnings

“FRE”

Distributable Earnings

“DE”

Adjusted EBITDA

Income Before Provision for Taxes

+

IPO and Acquisition-Related Charges

–

Impact of Consolidated Funds

=

Economic Income

–

Net Performance Fees

–

Fund Investment Income

=

Fee Related Earnings

+

Net Realized Performance Fees

+

Realized Investment Income

–

Taxes and Related Payables

+   Equity-Based Compensation

=

Distributable Earnings

+

Interest, Taxes and Depreciation and Amortization

=

Adjusted EBITDA

(Dollars in Millions)

See

Appendix

–

Reconciliation

of

GAAP

to

Non-GAAP

Measures

for

details.

2Q’13

$567

YTD’13

$1,045

$418

$719

$168

$338

$856

$1,358

$306

$729

Blackstone

5

Private Equity

13.3%

YTD’13

increase

in

fund

carrying

value

(a)

$633 million

Net Accrued Performance Fees at 2Q’13

$187 million

2Q’13 Total Performance Fees

Economic

Income

for

the

quarter

was

up

substantially

year-over-year

driven

primarily

by

strong

investment

performance

across

the

funds,

resulting

in

increased

Performance

Fees

and

Investment

Income.

Overall

carrying

value

of

portfolio

assets

(a)

appreciated

5.4%

during

the

quarter

and

13.3%

year-to-date,

driven

by

private

investments

in

the

hospitality/leisure

and

energy

sectors

and

public

holdings.

Realization

activity

was

robust

with

$1.6

billion

during

the

quarter

and

$3.6

billion

year-to-date.

•

Second

quarter

activity

included

secondary

sales

in

Nielsen,

PBF

Energy

and

Travelport

at

an

average

2.6x

multiple of investment

(b)

.

•

Completed

the

IPO

of

SeaWorld,

resulting

in

a

quarter

end

valuation

of

3.0x

multiple

of

investment

(b)

.

Invested

and/or

committed

$1.6

billion

of

total

capital

for

the

quarter

and

$1.9

billion

year-to-date.

Raised

an

additional

$324

million

of

commitments

for

the

tactical

opportunities

investment

vehicles

during

the

quarter,

increasing

total

capital

commitments

for

this

strategy

to

$3.0

billion.

Announced

agreement

to

acquire

Strategic

Partners,

the

secondary

alternatives

business

of

Credit

Suisse,

with

$10

billion

of

AUM,

which

is

expected

to

close

in

the

third

quarter.

(a)

Core

Private

Equity

portfolio

(BCP,

BCOM

and

BEP),

Tactical

Opportunities

and

Other

Funds

(including

fee-paying

co-investment

funds).

(b)

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

% Change

% Change

(Dollars in Thousands)

2Q'12

2Q'13

vs. 2Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

105,430

$      

126,636

$      

20%

207,739

$      

240,263

$      

16%

Performance Fees

(59,112)

186,825

n/m

(21,128)

242,763

n/m

Investment Income (Loss)

(34,532)

42,674

n/m

(4,152)

98,547

n/m

Total Revenues

11,786

356,135

n/m

182,459

581,573

219%

Compensation

53,775

63,747

19%

106,322

123,950

17%

Performance Fee Compensation

(7,455)

88,988

n/m

(8,187)

121,853

n/m

Other Operating Expenses

30,521

32,178

5%

59,402

61,346

3%

Total Expenses

76,841

184,913

141%

157,537

307,149

95%

Economic Income (Loss)

(65,055)

$       

171,222

$      

n/m

24,922

$         

274,424

$      

n/m

Total AUM

46,633,552

$ 

53,287,294

$ 

14%

46,633,552

$ 

53,287,294

$ 

14%

Fee-Earning AUM

37,159,452

$ 

36,635,224

$ 

(1)%

37,159,452

$ 

36,635,224

$ 

(1)%

Blackstone

6

Real Estate

11.9%

YTD’13

increase

in

fund

carrying

value

(a)

$1.6 billion

Net Accrued Performance Fees at 2Q’13

$402 million

2Q’13 Total Performance Fees

Economic

Income

for

the

quarter

increased

88%

to

$371

million

driven

by

strong

fund

performance.

Overall

carrying

value

of

BREP

investments

(a)

appreciated

5.7%

for

the

quarter

and

11.9%

year-to-date,

driven

by

continued

positive

real

estate

operating

fundamentals

across

the

office,

hospitality

and

retail

portfolios.

Debt

Strategies

drawdown

funds

(b)

appreciated

3.8%

for

the

quarter

and

6.4%

year-to-date,

while

the

real

estate

hedge

funds

depreciated

0.4%

for

the

quarter

and

appreciated

3.7%

year-to-date.

Realization

activity

remained

strong

with

$2.1

billion

during

the

quarter

and

$3.0

billion

year-to-date.

•

Realized

Performance

Fees

totaled

$175

million

in

the

quarter

compared

to

$21

million

a

year

ago.

Invested

$2.3

billion

of

total

capital

with

an

additional

$2.1

billion

committed

but

not

yet

invested

at

quarter

end,

bringing

year-to-date

total

capital

invested

plus

quarter

end

commitments

to

$5.6

billion.

Initial

closing

for

the

latest

debt

strategies

drawdown

fund

with

$2.0

billion

of

total

commitments;

additional

closing

in

July

brings

total

available

capital

for

this

strategy

to

$3.5

billion.

Blackstone’s

first

ever

Asian

real

estate

fund

held

its

initial

closing

in

June

with

$1.5

billion

of

total

commitments.

Blackstone

Mortgage

Trust,

Inc.

(“BXMT”)

completed

a

secondary

offering

on

May

22,

2013,

raising

$660

million.

(a)

Blackstone

Real

Estate

Partners

(“BREP”)

portfolio

(including

fee-paying

co-investment

funds).

(b)

Excludes the Capital Trust drawdown funds.

(c)

Performance

Fees

included

$4.3

million

in

2Q’12

and

$37.6

million

in

YTD’12

due

to

the

impact

of

the

profit

allocation

“catch-up”

provisions

for

BREP

V

and

VI.

% Change

% Change

(Dollars in Thousands)

2Q'12

2Q'13

vs. 2Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

150,298

$      

153,823

$      

2%

305,728

$      

298,188

$      

(2)%

Performance Fees

(c)

164,289

402,276

145%

402,319

756,617

88%

Investment Income

24,011

49,213

105%

57,735

119,050

106%

Total Revenues

338,598

605,312

79%

765,782

1,173,855

53%

Compensation

76,576

73,792

(4)%

145,465

143,251

(2)%

Performance Fee Compensation

38,320

133,013

247%

100,442

250,691

150%

Other Operating Expenses

26,560

27,617

4%

55,484

56,079

1%

Total Expenses

141,456

234,422

66%

301,391

450,021

49%

Economic Income

197,142

$      

370,890

$      

88%

464,391

$      

723,834

$      

56%

Total AUM

50,225,950

$ 

63,919,906

$ 

27%

50,225,950

$ 

63,919,906

$ 

27%

Fee-Earning AUM

38,476,123

$ 

43,635,493

$ 

13%

38,476,123

$ 

43,635,493

$ 

13%

Blackstone

7

$26 billion

2Q’13 Incentive Fee-Earning AUM

(c)

Hedge Fund Solutions

Revenues

for

the

quarter

were

up

91%

year-over-year

to

$138

million

driven

by

an

increase

in

Fee-Earning

AUM

and

strong

investment

performance,

resulting

in

Economic

Income

up

174%

year-over-year

to

$71

million.

•

Incentive

Fees,

which

are

largely

realized

at

year

end,

increased

significantly

as

$24.8

billion,

or

96%

of

Incentive

Fee-Earning

AUM,

was

above

its

High

Water

Mark

and/or

Hurdle,

up

from

just

$8.8

billion,

or

41%

a

year

ago.

BAAM

Core

Composite

(a)

was

up

1.9%

for

the

quarter

and

6.6%

year-to-date

with

one-third

the

volatility

of

the

MSCI

ACW

TR Index

(b)

,

which

was

down

0.2%

and

up

6.4%

for

the

same

respective

periods.

Fee-Earning

AUM

grew

18%

year-over-year

to

a

record

$48

billion

driven

by

strong

fund

performance

and

$1.6

billion

of

net

inflows

during

the

quarter

bringing

the

year-to-date

total

to

$2.5

billion.

•

July

1

subscriptions

of

$199

million

are

not

included

in

quarter

end

Fee-Earning

AUM.

$1B / 4%

(a)

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

(b)

The MSCI All Country World Total Return Index is a stock market index consisting of 45 country indices including both developed and emerging markets reflecting the reinvestment of

gross dividends.

(c)

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

On a net of fees basis, the BAAM Core Composite was up 1.6% for the quarter and 6.0% year-to-date with one-third the volatility of the MSCI ACW Index.

% Change

% Change

(Dollars in Thousands)

2Q'12

2Q'13

vs. 2Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

84,490

$        

101,084

$     

20%

166,327

$     

194,856

$     

17%

Performance Fees

(9,806)

34,834

n/m

16,679

104,044

524%

Investment Income (Loss)

(2,707)

1,614

n/m

6,167

6,379

3%

Total Revenues

71,977

137,532

91%

189,173

305,279

61%

Compensation

34,559

36,844

7%

62,792

70,712

13%

Performance Fee Compensation

(3,165)

12,782

n/m

5,507

37,640

583%

Other Operating Expenses

14,506

16,535

14%

28,440

31,694

11%

Total Expenses

45,900

66,161

44%

96,739

140,046

45%

Economic Income

26,077

$        

71,371

$        

174%

92,434

$        

165,233

$     

79%

Total AUM

42,888,946

$

50,128,028

$

17%

42,888,946

$

50,128,028

$

17%

Fee-Earning AUM

40,161,179

$

47,572,465

$

18%

40,161,179

$

47,572,465

$

18%

Blackstone

8

Credit

$62 billion

2Q’13 Total AUM

Customized

Credit Strategies

(b)

Rescue

Lending

Funds

Mezzanine

Funds

Hedge Fund

Strategies

CLOs

Revenues

were

up

69%

year-over-year

primarily

driven

by

higher

Total

Performance

Fees

as

fund

valuations

continued

to

increase

across

the

platform.

•

Realized

Performance

Fees

were

$66

million

compared

to

$16

million

in

the

year

ago

period.

Total AUM grew 23% year-over-year to a record $62 billion driven by strong net inflows.

•

Net

inflows

included

new

fund

launches,

capital

raised

in

the

long-only

platform

and

additional

commitments

to

the

second

rescue

lending

fund.

Investment performance

(a)

in the credit strategies remained strong across the platform.

•

Hedge Fund Strategies were up 6.5% for the quarter and 12.9% year-to-date.

•

Mezzanine Funds were up 6.4% for the quarter and 15.7% year-to-date.

•

Rescue Lending Funds were up 4.8% for the quarter and 11.0% year-to-date.

Invested

$577

million

of

total

capital

with

an

additional

$213

million

committed

but

not

yet

invested

during

the

quarter,

bringing

year-to-date

total

capital

invested

and

committed

to

$1.1

billion.

The second rescue lending fund initiated its investment period with its first investment.

•

Quarter end commitments were $5.0 billion.

Totals may not add due to rounding.

(a)

Represents weighted average performance of the assets of the respective flagship funds within each strategy. Hedge Fund Strategies net returns were 5.0% for 2Q’13 and 9.8% YTD’13, Mezzanine Funds net

returns were 4.1% for 2Q’13 and 11.7% YTD’13 and Rescue Lending Funds net returns were 3.8% for 2Q’13 and 8.8% YTD’13.

(b)

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

% Change

% Change

(Dollars in Thousands)

2Q'12

2Q'13

vs. 2Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

90,354

$        

112,391

$     

24%

178,054

$     

212,932

$     

20%

Performance Fees

39,466

95,284

141%

122,723

219,794

79%

Investment Income

(Loss)

(3,518)

5,282

n/m

6,376

9,703

52%

Total Revenues

126,302

212,957

69%

307,153

442,429

44%

Compensation

42,845

55,941

31%

79,988

101,462

27%

Performance Fee Compensation

12,993

52,049

301%

52,443

116,543

122%

Other Operating Expenses

15,749

22,961

46%

32,845

43,923

34%

Total Expenses

71,587

130,951

83%

165,276

261,928

58%

Economic Income

54,715

$        

82,006

$        

50%

141,877

$     

180,501

$     

27%

Total AUM

50,519,383

$

62,236,513

$

23%

50,519,383

$

62,236,513

$

23%

Fee-Earning AUM

41,849,767

$

48,495,765

$

16%

41,849,767

$

48,495,765

$

16%

Blackstone

9

Revenues

for

the

quarter

were

up

26%

year-over-year,

due

to

increases

in

closed

deals

in

our

Restructuring

and

Park

Hill

businesses,

in

conjunction

with

revenue

from

the

recently

formed

Blackstone

Capital

Markets

business.

Restructuring

revenue

increased

year-over-year,

reflecting

the

business’s

fourth

highest

revenue

quarter

in

its

history,

driven

by

the

successful

completion

of

numerous

large

transactions.

Park

Hill’s

revenue

increased

year-over-year,

and

the

pipeline

remains

solid

as

challenging

fundraising

market

conditions

continue

to

drive

demand

for

alternative

asset

placement

services.

Blackstone

Advisory

Partners’

revenue

was

up

from

the

first

quarter,

but

decreased

slightly

year-over-year

as

advisory

activity

in

the

industry

generally

slowed.

Quarterly

revenue

included

Blackstone

Capital

Markets

which

acted

as

an

underwriter

or

arranger

for

13

deals,

including

the

SeaWorld

IPO,

the

BXMT

secondary

offering

and

the

Pinnacle

Foods

IPO

and

debt

refinancing.

Financial Advisory

% Change

% Change

(Dollars in Thousands)

2Q'12

2Q'13

vs. 2Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

95,187

$         

122,581

$      

29%

172,822

$      

191,159

$      

11%

Investment Income (Loss)

482

(1,664)

n/m

1,016

(1,789)

n/m

Total Revenues

95,669

120,917

26%

173,838

189,370

9%

Compensation

61,129

76,153

25%

129,089

134,079

4%

Other Operating Expenses

25,702

20,861

(19)%

46,388

41,554

(10)%

Total Expenses

86,831

97,014

12%

175,477

175,633

0%

Economic Income (Loss)

8,838

$           

23,903

$         

170%

(1,639)

$         

13,737

$         

n/m

Blackstone

10

Assets Under Management

Fee-Earning

AUM:

up

12%

year-over-year

to

a

record

$176

billion,

as

$35

billion

of

gross

inflows

and

$6

billion

of

market appreciation more than offset $22

billion of realizations and outflows.

•

Including commitments, not yet earning fees, Fee-Earning AUM was $193 billion, up 22% year-over-year.

Total

AUM:

increased

21%

year-over-year

to

a

record

$230

billion

driven

by

$42

billion

of

gross

inflows

and

$25

billion of market appreciation across all investment businesses.

Totals may not add due to rounding.

AUM does not yet include assets from the Strategic Partners acquisition, which is expected to add $10 billion of Total

AUM and $8 billion of Fee-Earning AUM in the third quarter.

Blackstone

11

2Q’13 Available Capital Summary

Achieved

record

level

of

committed

undrawn

capital

(“dry

powder”)

with

$38.5

billion

at

quarter

end.

$16.5

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

$138.1

billion

at

quarter

end,

including

$79.8

billion

($95.7

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 that 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 and other separately managed accounts.

(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.

$39 billion Dry Powder

(a)

Credit

Hedge

Fund

Solutions

Private

Equity

Real

Estate

$17 billion Not Yet Earning

Base Management Fees

(b)

$138 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

$21.1

$79.8

$37.2

$15.6

$9.9

$1.1

$11.9

$3.3

Blackstone

Unitholder Distribution

•

Includes

$0.01

per

common

unit

due

to

the

exclusion

of

equity-based

compensation

expense

in

the

revised

definition

of

DE

(a)

.

Declared

a

quarterly

distribution

of

$0.23

per

common

unit

to

record

holders

as

of

July

29,

2013;

payable

on

August

5,

2013.

Blackstone’s

base

quarterly

distribution

is

$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)

.

(a)

A

detailed

description

of

Blackstone’s

distribution

policy

and

the

revised

definition

of

Distributable

Earnings

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

Holdings

Partnership

unitholders.

Common

unitholders’

share

was

$24.7

million

for

2Q’13.

12

New Policy

% Change

(Dollars in Thousands, Except per Unit Data)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

vs. 2Q'12

169,967

$ 

195,213

$ 

196,448

$ 

562,337

$ 

390,912

$ 

338,485

$        

73%

Add: Other Payables Attributable to Common Unitholders

100

10,284

20,012

61,237

2,204

28,498

177%

DE before Certain Payables

(b)

170,067

205,497

216,460

623,574

393,116

366,983

79%

Percent to Common Unitholders

46%

47%

48%

51%

51%

51%

DE before Certain Payables Attributable to Common Unitholders

78,382

97,212

103,659

315,951

199,812

187,652

93%

Less: Other Payables Attributable to Common Unitholders

(100)

(10,284)

(20,012)

(61,237)

(2,204)

(28,498)

(177)%

DE Attributable to Common Unitholders

78,282

86,928

83,647

254,714

197,608

159,154

83%

DE per Common Unit

(c)

0.15

$       

0.17

$       

0.16

$       

0.45

$       

0.34

$       

0.28

$              

65%

Less: Retained Capital per Unit

(d)

(0.03)

$      

(0.03)

$      

(0.04)

$      

(0.11)

$      

(0.04)

$      

(0.05)

$            

(67)%

Net Cash Available for Distribution per Common Unit

(c)

0.12

$       

0.14

$       

0.12

$       

0.34

$       

0.30

$       

0.23

$              

64%

Actual Distribution per Common Unit

(c)

0.10

$       

0.10

$       

0.10

$       

0.42

$       

0.30

$       

0.23

$              

130%

Record Date

July 29, 2013

Payable Date

August 5, 2013

Earned $0.28 of Distributable Earnings per common unit during the second quarter, up 65% year-over-year.

Distributable Earnings (“DE”)

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)

2Q’13

Cash and Cash Equivalents

$

661

Treasury Cash Management Strategies

1,460

Liquid Investments

(b)

145

Illiquid Investments

(c)

2,318

Net Performance Fees

2,529

Total Net Value

$

7,113

Outstanding Bonds (at par)

(d)

$

1,635

A/A+

rated by S&P / Fitch

$1.1 billion

undrawn credit revolver with

July 2017 maturity

$2.3 billion

total cash and corporate

treasury investments

$6.31

Net Performance

Fees

Total Cash and

Treasury Investments

Private Equity

Real Estate

Other

Cash and Investments per DE unit

$2.06

Illiquids

$7.1 billion

Total Net Value

At

June

30,

2013,

Blackstone

had

$2.3

billion

in

total

cash

and

corporate

treasury

investments

and

$7.1

billion

of

total net value, or $6.31

per DE unit, up 37% from $4.61

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.

Blackstone

14

GAAP Statement of Operations

% Change

% Change

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

2Q'12

2Q'13

vs. 2Q'12

YTD'12

YTD'13

vs. YTD'12

Revenues

Management and Advisory Fees, Net

488,048

$        

578,723

$        

19%

959,724

$        

1,060,856

$     

11%

Performance Fees

Realized Carried Interest

55,929

183,288

228%

69,489

477,458

587%

Realized Incentive Fees

11,631

76,104

554%

16,910

99,845

490%

Unrealized Carried Interest

84,290

456,706

442%

383,086

634,053

66%

Unrealized Incentive Fees

(16,436)

938

n/m

50,699

106,736

111%

Total Performance Fees

135,414

717,036

430%

520,184

1,318,092

153%

Investment Income (Loss)

Realized

5,758

75,490

n/m

22,093

117,843

433%

Unrealized

(10,519)

56,570

n/m

62,307

162,800

161%

Total Investment Income (Loss)

(4,761)

132,060

n/m

84,400

280,643

233%

Interest and Dividend Revenue

9,267

13,814

49%

16,903

26,371

56%

Other

(765)

(1,163)

(52)%

(1,972)

981

n/m

Total Revenues

627,203

1,440,470

130%

1,579,239

2,686,943

70%

Expenses

Compensation and Benefits

Compensation

533,367

478,981

(10)%

1,028,622

930,411

(10)%

Performance Fee Compensation

Realized Carried Interest

7,898

75,910

861%

15,836

165,347

944%

Realized Incentive Fees

5,576

35,014

528%

9,828

45,522

363%

Unrealized Carried Interest

36,815

172,824

369%

121,359

268,296

121%

Unrealized Incentive Fees

(9,595)

3,084

n/m

3,183

47,562

n/m

Total Compensation and Benefits

574,061

765,813

33%

1,178,828

1,457,138

24%

General, Administrative and Other

135,737

117,365

(14)%

278,503

226,671

(19)%

Interest Expense

13,773

26,956

96%

28,291

54,018

91%

Fund Expenses

16,248

4,628

(72)%

37,990

12,036

(68)%

Total Expenses

739,819

914,762

24%

1,523,612

1,749,863

15%

Other Income

Net Gains from Fund Investment Activities

248,230

40,966

(83)%

536,372

108,176

(80)%

Income Before Provision for Taxes

135,614

$        

566,674

$        

318%

591,999

$        

1,045,256

$     

77%

Provision for Taxes

41,337

56,082

36%

80,090

107,075

34%

Net Income

94,277

$          

510,592

$        

442%

511,909

$        

938,181

$        

83%

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

(17,666)

22,366

n/m

36,594

84,682

131%

Net Income Attributable to Non-Controlling Interests in Consolidated Entities

239,934

27,944

(88)%

437,576

18,492

(96)%

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

(53,027)

249,134

n/m

54,378

456,224

739%

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

(74,964)

$         

211,148

$        

n/m

(16,639)

$         

378,783

$        

n/m

Net Income (Loss) per Common Unit, Basic and Diluted

(0.14)

$             

0.36

$               

n/m

(0.03)

$             

0.65

$               

n/m

Appendix

*

*

*

*

*

*

*

*

*

*

Blackstone

16

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)

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

YTD'12

YTD'13

Revenues

Management and Advisory Fees, Net

Base Management Fees

381,344

$          

398,088

$          

416,465

$          

408,747

$          

425,674

$           

776,850

$          

834,421

$          

Advisory Fees

93,372

59,951

128,248

67,020

120,734

169,218

187,754

Transaction and Other Fees, Net

(a)

49,453

45,126

94,069

37,974

66,464

87,924

104,438

Management Fee Offsets

(b)

(7,973)

(8,454)

(11,476)

(9,662)

(10,535)

(21,023)

(20,197)

Total Management and Advisory Fees, Net

516,196

494,711

627,306

504,079

602,337

1,012,969

1,106,416

Performance Fees

Realized Carried Interest

55,929

83,765

174,168

294,170

183,288

69,489

477,458

Realized Incentive Fees

11,692

11,620

272,873

24,727

74,867

16,971

99,594

Unrealized Carried Interest

84,290

403,465

207,639

177,347

456,706

383,086

634,053

Unrealized Incentive Fees

(17,074)

104,149

(184,507)

107,755

4,358

51,047

112,113

Total Performance Fees

134,837

602,999

470,173

603,999

719,219

520,593

1,323,218

Investment Income (Loss)

Realized

9,360

25,098

37,448

38,110

54,586

32,852

92,696

Unrealized

(25,624)

82,334

74,222

96,661

42,533

34,290

139,194

Total Investment Income (Loss)

(16,264)

107,432

111,670

134,771

97,119

67,142

231,890

Interest Income and Dividend Revenue

10,391

12,004

14,890

14,661

15,342

19,736

30,003

Other

(828)

2,477

4,707

2,143

(1,164)

(2,035)

979

Total Revenues

644,332

1,219,623

1,228,746

1,259,653

1,432,853

1,618,405

2,692,506

Expenses

Compensation

268,884

259,561

247,559

266,977

306,477

523,656

573,454

Performance Fee Compensation

Realized Carried Interest

7,899

22,023

58,573

89,437

75,910

15,837

165,347

Realized Incentive Fees

5,575

4,457

125,758

10,508

35,014

9,827

45,522

Unrealized Carried Interest

36,815

128,863

71,378

95,472

172,824

121,358

268,296

Unrealized Incentive Fees

(9,596)

44,254

(91,965)

44,478

3,084

3,183

47,562

Total Compensation and Benefits

309,577

459,158

411,303

506,872

593,309

673,861

1,100,181

Other Operating Expenses

113,038

127,456

131,430

114,444

120,152

222,559

234,596

Total Expenses

422,615

586,614

542,733

621,316

713,461

896,420

1,334,777

Economic Income

221,717

$          

633,009

$          

686,013

$          

638,337

$          

719,392

$           

721,985

$          

1,357,729

$      

Economic Net Income

212,349

$          

621,752

$          

669,981

$          

628,306

$          

703,240

$           

703,566

$          

1,331,546

$      

Fee Related Earnings

145,729

$          

135,052

$          

272,604

$          

137,733

$          

168,434

$           

292,657

$          

306,167

$          

Distributable Earnings

195,213

$          

196,448

$          

562,337

$          

390,912

$          

338,485

$           

365,180

$          

729,397

$          

Total Assets Under Management

190,267,831

$  

204,551,572

$  

210,219,960

$  

218,210,672

$  

229,571,741

$    

190,267,831

$  

229,571,741

$  

Fee-Earning Assets Under Management

157,646,521

$  

168,630,082

$  

167,880,440

$  

170,949,347

$  

176,338,947

$    

157,646,521

$  

176,338,947

$  

Weighted Average Fee-Earning AUM

156,426,744

$  

162,377,631

$  

168,328,454

$  

169,551,186

$  

173,706,678

$    

155,224,593

$  

172,372,395

$  

LP Capital Invested

2,403,623

$      

3,085,441

$      

5,690,474

$      

1,784,463

$      

3,634,404

$        

5,123,056

$      

5,418,867

$      

Total Capital Invested

2,525,648

$      

3,754,061

$      

6,200,755

$      

1,840,474

$      

3,757,591

$        

5,660,033

$      

5,598,065

$      

Blackstone

17

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)

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

YTD'12

YTD'13

Revenues

Management Fees, Net

Base Management Fees

87,475

$        

86,136

$        

89,194

$        

86,246

$        

86,621

$        

173,264

$        

172,867

$        

Transaction and Other Fees, Net

(a)

14,951

25,693

41,339

24,453

38,348

33,048

62,801

Management Fee Offsets

(b)

(672)

(767)

(705)

(480)

(1,950)

(4,454)

(2,430)

Total Management Fees, Net

101,754

111,062

129,828

110,219

123,019

201,858

233,238

Performance Fees

Realized Carried Interest

28,781

31,592

45,491

139,892

3,899

32,714

143,791

Unrealized Carried Interest

(87,893)

128,746

73,477

(83,954)

182,926

(53,842)

98,972

Total Performance Fees

(59,112)

160,338

118,968

55,938

186,825

(21,128)

242,763

Investment Income (Loss)

Realized

(6,195)

7,189

10,918

24,162

21,586

7,716

45,748

Unrealized

(28,337)

43,267

53,938

31,711

21,088

(11,868)

52,799

Total Investment Income (Loss)

(34,532)

50,456

64,856

55,873

42,674

(4,152)

98,547

Interest Income and Dividend Revenue

3,114

3,413

4,609

2,984

3,251

5,534

6,235

Other

562

1,650

420

424

366

347

790

Total Revenues

11,786

326,919

318,681

225,438

356,135

182,459

581,573

Expenses

Compensation

53,775

62,424

53,963

60,203

63,747

106,322

123,950

Performance Fee Compensation

Realized Carried Interest

804

1,048

1,507

16,246

877

1,124

17,123

Unrealized Carried Interest

(8,259)

43,228

24,638

16,619

88,111

(9,311)

104,730

Total Compensation and Benefits

46,320

106,700

80,108

93,068

152,735

98,135

245,803

Other Operating Expenses

30,521

30,944

40,499

29,168

32,178

59,402

61,346

Total Expenses

76,841

137,644

120,607

122,236

184,913

157,537

307,149

Economic Income (Loss)

(65,055)

$       

189,275

$      

198,074

$      

103,202

$      

171,222

$      

24,922

$          

274,424

$        

Total Assets Under Management

46,633,552

$

50,222,312

$

51,002,973

$

52,491,811

$

53,287,294

$

46,633,552

$  

53,287,294

$  

Fee-Earning Assets Under Management

37,159,452

$

38,505,497

$

37,050,167

$

36,785,770

$

36,635,224

$

37,159,452

$  

36,635,224

$  

Weighted Average Fee-Earning AUM

37,434,520

$

38,096,139

$

38,507,697

$

36,907,936

$

36,675,636

$

37,462,152

$  

36,865,792

$  

LP Capital Invested

102,899

$      

1,015,605

$   

1,461,987

$   

276,987

$      

749,290

$      

745,943

$        

1,026,277

$     

Total Capital Invested

108,977

$      

1,427,871

$   

1,860,738

$   

291,011

$      

780,339

$      

789,012

$        

1,071,350

$     

Blackstone

18

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)

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

YTD'12

YTD'13

Revenues

Management Fees, Net

Base Management Fees

127,817

$      

135,659

$      

140,044

$      

138,346

$      

137,000

$      

275,619

$      

275,346

$      

Transaction and Other Fees, Net

(a)

25,151

14,937

31,181

9,140

19,013

39,563

28,153

Management Fee Offsets

(b)

(5,357)

(6,034)

(8,591)

(7,286)

(6,312)

(13,984)

(13,598)

Total Management Fees, Net

147,611

144,562

162,634

140,200

149,701

301,198

289,901

Performance Fees

Realized Carried Interest

13,539

51,845

91,113

68,773

143,481

22,156

212,254

Realized Incentive Fees

7,766

4,879

13,012

3,092

31,102

7,765

34,194

Unrealized Carried Interest

144,510

207,695

110,059

280,076

259,972

366,010

540,048

Unrealized Incentive Fees

(1,526)

6,150

(12,657)

2,400

(32,279)

6,388

(29,879)

Total Performance Fees

164,289

270,569

201,527

354,341

402,276

402,319

756,617

Investment Income

Realized

9,067

10,324

18,099

9,534

18,577

16,879

28,111

Unrealized

14,944

33,676

16,343

60,303

30,636

40,856

90,939

Total Investment Income

24,011

44,000

34,442

69,837

49,213

57,735

119,050

Interest Income and Dividend Revenue

3,277

3,581

5,038

4,298

4,396

5,829

8,694

Other

(590)

1,941

252

(133)

(274)

(1,299)

(407)

Total Revenues

338,598

464,653

403,893

568,543

605,312

765,782

1,173,855

Expenses

Compensation

76,576

71,456

54,201

69,459

73,792

145,465

143,251

Performance Fee Compensation

Realized Carried Interest

3,401

19,822

35,118

25,863

55,005

7,478

80,868

Realized Incentive Fees

3,871

2,570

6,617

1,724

15,733

3,873

17,457

Unrealized Carried Interest

31,677

47,940

31,590

89,057

78,604

85,952

167,661

Unrealized Incentive Fees

(629)

2,876

(6,598)

1,034

(16,329)

3,139

(15,295)

Total Compensation and Benefits

114,896

144,664

120,928

187,137

206,805

245,907

393,942

Other Operating Expenses

26,560

31,284

36,946

28,462

27,617

55,484

56,079

Total Expenses

141,456

175,948

157,874

215,599

234,422

301,391

450,021

Economic Income

197,142

$      

288,705

$      

246,019

$      

352,944

$      

370,890

$      

464,391

$      

723,834

$      

Total Assets Under Management

50,225,950

$

53,546,023

$

56,695,645

$

59,475,215

$

63,919,906

$

50,225,950

$

63,919,906

$

Fee-Earning Assets Under Management

38,476,123

$

40,609,286

$

41,931,339

$

42,140,507

$

43,635,493

$

38,476,123

$

43,635,493

$

Weighted Average Fee-Earning AUM

36,882,087

$

38,947,049

$

40,164,238

$

41,682,661

$

42,523,604

$

36,270,050

$

42,109,834

$

LP Capital Invested

1,855,108

$   

1,342,811

$   

3,876,701

$   

1,175,775

$   

2,213,668

$   

2,998,663

$   

3,389,443

$   

Total Capital Invested

1,954,731

$   

1,397,249

$   

3,990,620

$   

1,202,736

$   

2,274,853

$   

3,127,614

$   

3,477,589

$   

Blackstone

19

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)

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

YTD'12

YTD'13

Revenues

Management Fees, Net

Base Management Fees

84,278

$        

87,334

$        

92,777

$        

92,791

$        

100,113

$      

166,099

$      

192,904

$      

Transaction and Other Fees, Net

(a)

65

4

27

4

61

157

65

Management Fee Offsets

(b)

(375)

(382)

(322)

(324)

(714)

(710)

(1,038)

Total Management Fees, Net

83,968

86,956

92,482

92,471

99,460

165,546

191,931

Performance Fees

Realized Incentive Fees

1,175

2,637

76,323

13,709

13,845

4,473

27,554

Unrealized Incentive Fees

(10,981)

36,635

(39,799)

55,501

20,989

12,206

76,490

Total Performance Fees

(9,806)

39,272

36,524

69,210

34,834

16,679

104,044

Investment Income (Loss)

Realized

929

637

5,201

852

13,668

1,432

14,520

Unrealized

(3,636)

5,199

(1,417)

3,913

(12,054)

4,735

(8,141)

Total Investment Income (Loss)

(2,707)

5,836

3,784

4,765

1,614

6,167

6,379

Interest Income and Dividend Revenue

495

540

718

1,216

1,878

881

3,094

Other

27

315

3,601

85

(254)

(100)

(169)

Total Revenues

71,977

132,919

137,109

167,747

137,532

189,173

305,279

Expenses

Compensation

34,559

28,826

28,113

33,868

36,844

62,792

70,712

Performance Fee Compensation

Realized Incentive Fees

(345)

1,062

20,985

5,022

5,116

1,033

10,138

Unrealized Incentive Fees

(2,820)

8,062

(11,219)

19,836

7,666

4,474

27,502

Total Compensation and Benefits

31,394

37,950

37,879

58,726

49,626

68,299

108,352

Other Operating Expenses

14,506

12,878

16,491

15,159

16,535

28,440

31,694

Total Expenses

45,900

50,828

54,370

73,885

66,161

96,739

140,046

Economic Income

26,077

$        

82,091

$        

82,739

$        

93,862

$        

71,371

$        

92,434

$        

165,233

$      

Total Assets Under Management

42,888,946

$

46,218,618

$

46,092,505

$

48,187,865

$

50,128,028

$

42,888,946

$

50,128,028

$

Fee-Earning Assets Under Management

40,161,179

$

43,601,541

$

43,478,791

$

45,585,454

$

47,572,465

$

40,161,179

$

47,572,465

$

Weighted Average Fee-Earning AUM

40,528,701

$

42,005,752

$

43,709,019

$

44,999,899

$

46,783,727

$

40,214,075

$

46,091,525

$

LP Capital Invested

-

$               

196,180

$      

-

$               

55,849

$        

118,323

$      

4,661

$          

174,172

$      

Total Capital Invested

-

$               

207,250

$      

-

$               

59,000

$        

125,000

$      

5,502

$          

184,000

$      

Blackstone

20

Credit

(a)

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

(b)

Primarily placement fees.

(Dollars in Thousands)

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

YTD'12

YTD'13

Revenues

Management Fees, Net

Base Management Fees

81,774

$        

88,959

$        

94,450

$        

91,364

$        

101,940

$      

161,868

$      

193,304

$      

Transaction and Other Fees, Net

(a)

9,184

4,486

21,480

4,374

9,002

14,909

13,376

Management Fee Offsets

(b)

(1,569)

(1,271)

(1,858)

(1,572)

(1,559)

(1,875)

(3,131)

Total Management Fees, Net

89,389

92,174

114,072

94,166

109,383

174,902

203,549

Performance Fees

Realized Carried Interest

13,609

328

37,564

85,505

35,908

14,619

121,413

Realized Incentive Fees

2,751

4,104

183,538

7,926

29,920

4,733

37,846

Unrealized Carried Interest

27,673

67,024

24,103

(18,775)

13,808

70,918

(4,967)

Unrealized Incentive Fees

(4,567)

61,364

(132,051)

49,854

15,648

32,453

65,502

Total Performance Fees

39,466

132,820

113,154

124,510

95,284

122,723

219,794

Investment Income (Loss)

Realized

5,638

6,697

2,593

3,328

901

6,321

4,229

Unrealized

(9,156)

(736)

5,450

1,093

4,381

55

5,474

Total Investment Income (Loss)

(3,518)

5,961

8,043

4,421

5,282

6,376

9,703

Interest Income and Dividend Revenue

1,752

2,673

2,480

4,547

4,071

4,177

8,618

Other

(787)

(678)

529

1,828

(1,063)

(1,025)

765

Total Revenues

126,302

232,950

238,278

229,472

212,957

307,153

442,429

Expenses

Compensation

42,845

50,236

51,853

45,521

55,941

79,988

101,462

Performance Fee Compensation

Realized Carried Interest

3,694

1,153

21,948

47,328

20,028

7,235

67,356

Realized Incentive Fees

2,049

825

98,156

3,762

14,165

4,921

17,927

Unrealized Carried Interest

13,397

37,695

15,150

(10,204)

6,109

44,717

(4,095)

Unrealized Incentive Fees

(6,147)

33,316

(74,148)

23,608

11,747

(4,430)

35,355

Total Compensation and Benefits

55,838

123,225

112,959

110,015

107,990

132,431

218,005

Other Operating Expenses

15,749

33,527

18,116

20,962

22,961

32,845

43,923

Total Expenses

71,587

156,752

131,075

130,977

130,951

165,276

261,928

Economic Income

54,715

$        

76,198

$        

107,203

$      

98,495

$        

82,006

$        

141,877

$      

180,501

$      

Total Assets Under Management

50,519,383

$

54,564,619

$

56,428,837

$

58,055,781

$

62,236,513

$

50,519,383

$

62,236,513

$

Fee-Earning Assets Under Management

41,849,767

$

45,913,758

$

45,420,143

$

46,437,616

$

48,495,765

$

41,849,767

$

48,495,765

$

Weighted Average Fee-Earning AUM

41,581,436

$

43,328,691

$

45,947,499

$

45,960,690

$

47,723,711

$

41,278,316

$

47,305,244

$

LP Capital Invested

445,616

$      

530,845

$      

351,786

$      

275,852

$      

553,123

$      

1,373,789

$   

828,975

$      

Total Capital Invested

461,940

$      

721,691

$      

349,397

$      

287,727

$      

577,399

$      

1,737,905

$   

865,126

$      

Blackstone

21

Financial Advisory

(Dollars in Thousands)

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

YTD'12

YTD'13

Revenues

Advisory Fees

93,372

$       

59,951

$       

128,248

$     

67,020

$       

120,734

$       

169,218

$     

187,754

$     

Transaction and Other Fees, Net

102

6

42

3

40

247

43

Total Advisory and Transaction Fees

93,474

59,957

128,290

67,023

120,774

169,465

187,797

Investment Income (Loss)

Realized

(79)

251

637

234

(146)

504

88

Unrealized

561

928

(92)

(359)

(1,518)

512

(1,877)

Total Investment Income (Loss)

482

1,179

545

(125)

(1,664)

1,016

(1,789)

Interest Income and Dividend Revenue

1,753

1,797

2,045

1,616

1,746

3,315

3,362

Other

(40)

(751)

(95)

(61)

61

42

-

Total Revenues

95,669

62,182

130,785

68,453

120,917

173,838

189,370

Expenses

Compensation

61,129

46,619

59,429

57,926

76,153

129,089

134,079

Total Compensation and Benefits

61,129

46,619

59,429

57,926

76,153

129,089

134,079

Other Operating Expenses

25,702

18,823

19,378

20,693

20,861

46,388

41,554

Total Expenses

86,831

65,442

78,807

78,619

97,014

175,477

175,633

Economic Income (Loss)

8,838

$         

(3,260)

$        

51,978

$       

(10,166)

$      

23,903

$         

(1,639)

$        

13,737

$       

Blackstone

22

Fee-Earning 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.

2Q’13 Fee-Earning AUM Rollforward

(Dollars in Millions)

LTM Fee-Earning AUM Rollforward

(Dollars in Millions)

Fee-Earning AUM: up $18.7

billion or 12% from a year ago driven mainly by continued strong inflows and market

appreciation totaling $40.7 billion, which more than offset $15.1 billion of realizations and $6.9 billion of outflows.

Private

Equity:

decreased

slightly

from

a

year

ago

despite

steady

inflows

into

our

tactical

opportunities

investment

vehicles due to $3.6 billion of realizations.

Real Estate: grew 13% during the past year driven by fundraising for several investment vehicles, the BXMT

acquisition and secondary offering, and fee-paying co-investment capital, partially offset by $3.1 billion of

realizations.

Hedge

Fund

Solutions:

continued

solid

growth

with

$1.6

billion

of

net

inflows

during

the

quarter,

bringing

the

last

twelve months to $3.4

billion of net inflows and $4.0 billion of market appreciation.

Credit: grew 16% or $6.6 billion during the past year primarily due to market appreciation, new fund launches,

capital raised across our long-only platform and capital deployed in our carry funds.

Private

Real

Hedge Fund

Private

Real

Hedge Fund

Equity

Estate

Solutions

Credit

Total

Equity

Estate

Solutions

Credit

Total

1Q'13

36,786

$    

42,141

$    

45,585

$    

46,438

$    

170,949

$  

2Q'12

37,159

$    

38,476

$    

40,161

$    

41,850

$    

157,647

$  

Inflows

(a)

805

2,815

2,713

4,635

10,968

Inflows

(a)

3,105

9,759

6,717

15,115

34,697

Outflows

(b)

-

(104)

(1,128)

(368)

(1,600)

Outflows

(b)

-

(1,531)

(3,342)

(2,029)

(6,901)

Realizations

(c)

(950)

(1,255)

-

(2,550)

(4,756)

Realizations

(c)

(3,639)

(3,136)

-

(8,340)

(15,115)

Net Inflows (Outflows)

(145)

1,455

1,585

1,718

4,613

Net Inflows (Outflows)

(533)

5,092

3,375

4,746

12,681

Market Activity

(d)

(5)

40

402

341

777

Market Activity

(d)

9

67

4,036

1,900

6,012

2Q'13

36,635

$    

43,635

$    

47,572

$    

48,496

$    

176,339

$  

2Q'13

36,635

$    

43,635

$    

47,572

$    

48,496

$    

176,339

$  

QoQ Inc (Dec)

(0)%

4%

4%

4%

3%

YoY Inc (Dec)

(1)%

13%

18%

16%

12%

Blackstone

23

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 $39.3 billion or 21% from a year ago driven by strong inflows and market appreciation across

Blackstone’s investment segments.

•

Realization

activity

continued

to

improve

and

the

funds

returned

$8.6

billion

to

investors

during

the

quarter

and $28.3 billion during the last twelve months.

Private Equity: up 14% over the last twelve months driven by fundraising and market appreciation, which more

than offset $5.8 billion of realizations.

Real Estate: grew 27% during the past year driven by fundraising from several investment vehicles, the BXMT

acquisition and secondary offering, co-investment capital and market appreciation, partially offset by $5.7 billion

of realizations.

Hedge

Fund

Solutions:

increased

17%

over

the

last

twelve

months

due

to

strong

net

inflows

and

$4.3

billion

of

market appreciation driven by solid returns.

Credit: grew 23% during the past year on top of significant realizations due to strong net inflows, new fund

launches and favorable market performance.

2Q’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

1Q'13

52,492

$    

59,475

$    

48,188

$    

58,056

$    

218,211

$  

2Q'12

46,634

$    

50,226

$    

42,889

$    

50,519

$    

190,268

$  

Inflows

(a)

525

4,505

2,644

6,487

14,162

Inflows

(a)

3,804

11,897

6,502

19,918

42,120

Outflows

(b)

(24)

(521)

(1,152)

(327)

(2,024)

Outflows

(b)

(483)

(754)

(3,541)

(2,260)

(7,038)

Realizations

(c)

(1,648)

(2,243)

-

(2,705)

(6,597)

Realizations

(c)

(5,845)

(5,731)

-

(9,671)

(21,246)

Net Inflows (Outflows)

(1,147)

1,741

1,492

3,455

5,541

Net Inflows (Outflows)

(2,524)

5,413

2,961

7,986

13,836

Market Activity

(d)

1,942

2,704

448

726

5,820

Market Activity

(d)

9,178

8,281

4,278

3,731

25,468

2Q'13

53,287

$    

63,920

$    

50,128

$    

62,237

$    

229,572

$  

2Q'13

53,287

$    

63,920

$    

50,128

$    

62,237

$    

229,572

$  

QoQ Increase

2%

7%

4%

7%

5%

YoY Increase

14%

27%

17%

23%

21%

Blackstone

24

Net Accrued Performance Fees and Carried Interest Status

(a)

(a)

Preliminary. Totals may not add due to rounding.

(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 2Q’13, $38 million of Net Accrued Performance Fees,

primarily attributable

to Real Estate, have been realized and included in Distributable

Earnings. 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 that

are currently not generating performance fees.

Blackstone had $2.5 billion of accrued performance fees, net of performance fee compensation, as of the end of the

second quarter.

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

$2.5 billion

Net Accrued Performance Fees at 2Q’13

$2.24 per unit

(c)

Net Accrued Performance Fees at 2Q’13

44% increase

in Net Accrued Performance Fees since 2Q’12

Carried Interest Status (excl. SBS)

(d)

Net Accrued Performance Fees

(b)

Remaining Capital

Gain to Cross Carry Threshold

(Dollars in Millions, Except per Unit Data)

1Q'13

2Q'13

Per Unit

(c)

Change vs. 1Q'13

(Dollars / Euros In Millions)

@ FMV

@ Cost

Amount

% Change in TEV

Private Equity

Private Equity

BCP IV Carried Interest

448

$              

500

$              

0.44

$             

52

$                        

BCP V

18,833

$      

14,827

$      

3,658

$       

9%

BCP VI Carried Interest

40

63

0.06

23

BEP Carried Interest

55

67

0.06

12

Real Estate

Tactical Opportunities Carried Interest

2

3

0.00

1

BREP Int'l II

1,121

€

1,129

€

996

€

23%

Total Private Equity

545

633

0.56

88

Real Estate

BREP V Carried Interest

490

552

0.49

62

BREP VI Carried Interest

681

740

0.66

59

BREP VII Carried Interest

133

189

0.17

56

BREP Int'l I Carried Interest

2

2

0.00

-

BREP Europe III Carried Interest

93

105

0.09

12

BREDS Carried Interest

20

22

0.02

2

BREDS Incentive Fees

7

7

0.01

-

Asia Platform Incentive Fees

20

18

0.02

(2)

Total Real Estate

1,446

1,635

1.45

189

Hedge Fund Solutions

Incentive Fees

60

67

0.06

7

Total Hedge Fund Solutions

60

67

0.06

7

Credit

Carried Interest

143

129

0.11

(14)

Incentive Fees

67

65

0.06

(2)

Total Credit

210

194

0.17

(16)

Total Blackstone

Carried Interest

2,107

2,372

2.10

265

Incentive Fees

154

157

0.14

3

Net Accrued Performance Fees

2,261

$           

2,529

$           

2.24

$             

268

$                     

Memo: Net Realized Performance Fees

45

$                 

38

$                 

0.03

$             

(7)

$                        

Blackstone

25

Investment Records as of June 30, 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

231,652

0.8x

10%

2,594,278

1.4x

2,825,930

1.3x

8%

6%

BCP IV (Nov 2002 / Dec 2005)

6,773,138

243,895

5,010,674

2.0x

47%

15,452,013

3.1x

20,462,687

2.7x

52%

37%

BCP V (Dec 2005 / Jan 2011)

21,035,415

1,562,756

20,315,852

1.3x

31%

5,931,630

1.3x

26,247,482

1.3x

4%

5%

BCP VI (Jan 2011 / Jan 2016)

15,174,021

10,792,868

4,382,051

1.3x

28%

44,011

1.3x

4,426,062

1.3x

25%

10%

BEP (Aug 2011 / Aug 2017)

2,426,693

1,412,175

1,237,088

2.1x

48%

39,384

1.3x

1,276,472

2.1x

35%

78%

Total Core Private Equity

53,734,200

$         

14,210,991

$

31,177,317

$

1.4x

33%

38,244,561

$

2.2x

69,421,878

$

1.7x

21%

15%

Tactical Opportunities

2,820,713

2,245,194

635,081

1.1x

9%

29,136

1.2x

664,217

1.1x

76%

9%

Other Funds and Co-Invest

1,129,896

315,948

279,748

0.4x

78%

-

n/a

279,748

0.4x

n/a

n/m

Total Private Equity

57,684,809

$         

16,772,133

$

32,092,146

$

1.4x

33%

38,273,697

$

2.2x

70,365,843

$

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

-

1,285,568

0.9x

-

3,022,040

2.4x

4,307,608

1.6x

72%

14%

BREP V (Dec 2005 / Feb 2007)

5,538,579

243,946

7,562,266

1.7x

-

2,411,318

1.7x

9,973,584

1.7x

41%

10%

BREP VI (Feb 2007 / Aug 2011)

11,057,598

757,813

15,320,217

1.6x

2%

2,916,868

2.1x

18,237,085

1.7x

33%

10%

BREP VII (Aug 2011 / Feb 2017)

13,394,287

7,339,227

8,188,411

1.3x

-

615,856

1.5x

8,804,267

1.3x

45%

31%

BREP Asia (June 2013 / Dec 2017)

1,077,728

1,001,355

96,400

1.0x

-

-

n/a

96,400

1.0x

n/a

n/a

Total Global Real Estate Funds

36,509,355

$         

9,342,341

$   

32,455,023

$

1.5x

1%

16,495,726

$

2.1x

48,950,749

$

1.7x

28%

16%

BREP Co-Investment (e)

4,864,914

-

6,511,227

1.5x

-

622,289

1.4x

7,133,516

1.5x

12%

13%

Euro

BREP Int'l (Jan 2001 / Sep 2005)

824,172

€

-

€

108,530

€

1.2x

-

1,231,355

€

2.2x

1,339,885

€

2.0x

26%

23%

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

1,627,954

80,849

1,227,536

1.0x

-

198,004

1.2x

1,425,540

1.0x

3%

(1)%

BREP Europe III (Jun 2008 / Dec 2013)

3,200,689

1,079,665

3,203,679

1.4x

-

77,034

1.4x

3,280,713

1.4x

45%

18%

Total Euro Funds

5,652,815

€

1,160,514

€

4,539,745

€

1.3x

-

1,506,393

€

1.9x

6,046,138

€

1.4x

24%

9%

Total Real Estate

48,502,370

$         

10,895,283

$

45,075,708

$

1.5x

0%

19,006,783

$

2.1x

64,082,491

$

1.6x

27%

15%

Debt Strategies Drawdown (f)

4,835,852

$           

2,236,071

$   

2,396,901

1.3x

-

1,884,309

$   

1.2x

4,281,210

$   

1.2x

16%

13%

Credit (g)

Mezzanine

6,120,000

$           

3,155,783

$   

2,888,258

$   

1.3x

-

3,661,626

$   

1.6x

6,549,884

$   

1.5x

n/a

20%

Rescue Lending

8,293,176

5,391,504

3,760,797

1.3x

-

1,456,572

1.1x

5,217,369

1.3x

n/a

15%

Total Credit

14,413,176

$         

8,547,287

$   

6,649,055

$   

1.3x

-

5,118,198

$   

1.4x

11,767,253

$

1.4x

$   

Blackstone

26

Investment Records as of June 30, 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)

Preliminary.

(b)

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.

(c)

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

divided by invested capital.

(d)

Net Internal Rate of Return (“IRR”) represents the annualized inception to June 30, 2013 IRR on total invested capital based

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

(e)

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.

(f)

Excludes Capital Trust drawdown funds.

(g)

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

period, was 1.8x and 1.4x, respectively.

Blackstone

Reconciliation of GAAP to Non-GAAP Measures

See notes following this reconciliation.

(Dollars in Thousands)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

YTD'12

YTD'13

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

58,325

$      

(74,964)

$    

128,824

$   

106,413

$   

167,635

$     

211,148

$     

(16,639)

$     

378,783

$     

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

107,405

(53,027)

183,431

169,918

207,090

249,134

54,378

456,224

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

197,643

239,934

(157,607)

(180,011)

(9,452)

27,944

437,576

18,492

Net Income (Loss) Attributable to Redeemable Non-Controlling

    Interests in Consolidated Entities

54,259

(17,666)

41,854

25,151

62,316

22,366

36,594

84,682

Net Income

417,632

$   

94,277

$      

196,502

$   

121,471

$   

427,589

$     

510,592

$     

511,909

$     

938,181

$     

Provision for Taxes

38,753

41,337

39,237

65,696

50,993

56,082

80,090

107,075

Income Before Provision for Taxes

456,385

$   

135,614

$   

235,739

$   

187,167

$   

478,582

$     

566,674

$     

591,999

$     

1,045,256

$ 

IPO and Acquisition-Related Charges

(a)

244,897

268,936

248,179

317,499

186,962

178,706

513,833

365,668

Amortization of Intangibles

(b)

50,888

39,435

33,338

26,487

25,657

24,322

90,323

49,979

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

    Consolidated Entities

(c)

(251,902)

(222,268)

115,753

154,860

(52,864)

(50,310)

(474,170)

(103,174)

Economic Income

500,268

$   

221,717

$   

633,009

$   

686,013

$   

638,337

$     

719,392

$     

721,985

$     

1,357,729

$ 

Taxes

(d)

(9,051)

(9,368)

(11,257)

(16,032)

(10,031)

(16,152)

(18,419)

(26,183)

Economic Net Income

491,217

$   

212,349

$   

621,752

$   

669,981

$   

628,306

$     

703,240

$     

703,566

$     

1,331,546

$ 

Taxes

(d)

9,051

9,368

11,257

16,032

10,031

16,152

18,419

26,183

Performance Fee Adjustment

(e)

(385,756)

(134,837)

(602,999)

(470,173)

(603,999)

(719,219)

(520,593)

(1,323,218)

Investment Income (Loss) Adjustment

(f)

(83,406)

16,264

(107,432)

(111,670)

(134,771)

(97,119)

(67,142)

(231,890)

Investment Income (Loss) - Blackstone's Treasury Cash Management Strategies

(g)

6,310

1,892

12,877

4,690

(1,729)

(21,452)

8,202

(23,181)

Performance Fee Compensation and Benefits Adjustment

(h)

109,512

40,693

199,597

163,744

239,895

286,832

150,205

526,727

Fee Related Earnings

146,928

$   

145,729

$   

135,052

$   

272,604

$   

137,733

$     

168,434

$     

292,657

$     

306,167

$     

Realized Performance Fees

(i)

6,649

54,147

68,905

262,710

218,952

147,231

60,796

366,183

Realized Investment Income

(j)

23,492

9,360

25,098

37,448

38,110

54,586

32,852

92,696

Adjustment Related to Realized Investment Income (Loss) -

    Blackstone's Treasury Cash Management Strategies

(k)

(5,897)

(1,280)

(8,251)

(6,444)

(3,820)

1,469

(7,177)

(2,351)

Taxes and Related Payables Including Payable Under Tax Receivable Agreement

(l)

(9,051)

(19,552)

(31,169)

(72,553)

(12,148)

(44,220)

(28,603)

(56,368)

Equity-Based Compensation

(m)

7,846

6,809

6,813

68,572

12,085

10,985

14,655

23,070

Distributable Earnings

169,967

$   

195,213

$   

196,448

$   

562,337

$   

390,912

$     

338,485

$     

365,180

$     

729,397

$     

Interest Expense

13,554

12,850

18,163

24,585

26,069

25,960

26,404

52,029

Taxes and Related Payables Including Payable Under Tax Receivable Agreement

(l)

9,051

19,552

31,169

72,553

12,148

44,220

28,603

56,368

Depreciation and Amortization

10,268

10,391

8,895

12,681

8,643

9,116

20,659

17,759

Adjusted EBITDA

202,840

$   

238,006

$   

254,675

$   

672,156

$   

437,772

$     

417,781

$     

440,846

$     

855,553

$     

27

Blackstone

Reconciliation of GAAP to Non-GAAP Measures

See notes following this reconciliation.

28

(Dollars in Thousands)

2008

2009

2010

2011

2012

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

(1,163,032)

$ 

(715,291)

$    

(370,028)

$    

(168,303)

$    

218,598

$      

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

(3,638,799)

(1,792,174)

(668,444)

(83,234)

407,727

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

(159,828)

(14,328)

343,498

7,953

99,959

Net Income (Loss) Attributable to Redeemable Non-Controlling

Interests in Consolidated Entities

(632,495)

131,097

87,651

(24,869)

103,598

Net Income (Loss)

(5,594,154)

$ 

(2,390,696)

$ 

(607,323)

$    

(268,453)

$    

829,882

$      

Provision (Benefit) for Taxes

(14,145)

99,230

84,669

345,711

185,023

Income (Loss) Before Provision (Benefit) for Taxes

(5,608,299)

$ 

(2,291,466)

$ 

(522,654)

$    

77,258

$        

1,014,905

$  

IPO and Acquisition-Related Charges

(a)

3,331,722

2,973,950

2,369,195

1,269,932

1,079,511

Amortization of Intangibles

(b)

153,237

158,048

165,378

220,865

150,148

Other Adjustments

999

-

-

-

-

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

Consolidated Entities

(c)

792,323

(116,769)

(431,149)

16,916

(203,557)

Economic Income (Loss)

(1,330,018)

$ 

723,763

$      

1,580,770

$  

1,584,971

$  

2,041,007

$  

Taxes

(d)

(43,457)

(51,086)

(28,932)

(45,763)

(45,708)

Economic Net Income (Loss)

(1,373,475)

$ 

672,677

$      

1,551,838

$  

1,539,208

$  

1,995,299

$  

Taxes

(d)

43,457

51,086

28,932

45,763

45,708

Performance Fee Adjustment

(e)

1,247,249

(240,131)

(926,289)

(1,174,526)

(1,593,765)

Investment Income (Loss)  Adjustment

(f)

756,611

(33,424)

(548,549)

(185,264)

(286,244)

-

12,367

15,277

4,600

25,769

Performance Fee Compensation and Benefits Adjustment

(h)

(202,717)

(1,079)

356,962

316,712

513,546

Fee Related Earnings

471,125

$      

461,496

$      

478,171

$      

546,493

$      

700,313

$      

Realized Performance Fees

(i)

34,016

49,160

233,347

128,409

392,411

Realized Investment Income (Loss)

(j)

(64,677)

29,544

46,915

102,575

95,398

Adjustment Related to Realized Investment Income -

Blackstone's Treasury Cash Management Strategies

(k)

-

(10,142)

(7,782)

(6,057)

(21,872)

Taxes and Related Payables Including Payable Under Tax Receivable Agreement

(l)

(43,457)

(51,086)

(48,867)

(74,696)

(132,325)

Equity-Based Compensation

(m)

64,288

66,789

68,900

84,626

90,040

Distributable Earnings

461,295

$      

545,761

$      

770,684

$      

781,350

$      

1,123,965

$  

Interest Expense

19,992

10,238

36,666

53,201

69,152

Taxes and Related Payables Including Payable Under Tax Receivable Agreement

(l)

43,457

51,086

48,867

74,696

132,325

Depreciation and Amortization

19,639

23,750

26,629

32,764

42,235

Adjusted EBITDA

544,383

$      

630,835

$      

882,846

$      

942,011

$      

1,367,677

$  

Investment Income - Blackstone's Treasury Cash Management Strategies

(g)

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 (Benefit) 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 (Benefit) for Taxes

and the Payable Under Tax Receivable Agreement.

(m)

Represents equity-based award expense included in Economic Income.

Blackstone

29

Blackstone

Walkdown of Financial Metrics

(a)

Represents the total segment amounts of the respective captions.

(b)

See Walkdown of Financial Metrics -

Calculation of Certain Non-GAAP Financial Metric Components for details.

(c)

Represents the current tax provision (benefit) calculated on Income (Loss) Before Provision (Benefit) for Taxes and the Payable Under Tax Receivable Agreement.

(d)

Represents equity-based award expense included in Economic Income.

(e)

Represents

tax-related

payables

including

the

Payable

Under

Tax

Receivable

Agreement.

30

(Dollars in Thousands)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

YTD'12

YTD'13

Base Management Fees

(a)

395,506

$    

381,344

$    

398,088

$    

416,465

$    

408,747

$    

425,674

$    

776,850

$    

834,421

$    

Advisory Fees

(a)

75,846

93,372

59,951

128,248

67,020

120,734

169,218

187,754

Transaction and Other Fees, Net

(a)

38,471

49,453

45,126

94,069

37,974

66,464

87,924

104,438

Management Fee Offsets

(a)

(13,050)

(7,973)

(8,454)

(11,476)

(9,662)

(10,535)

(21,023)

(20,197)

Interest Income and Other Revenue

(b)

14,448

11,455

27,358

24,287

15,075

(7,274)

25,903

7,801

Compensation

(a)

(254,772)

(268,884)

(259,561)

(247,559)

(266,977)

(306,477)

(523,656)

(573,454)

Other Operating Expenses

(a)

(109,521)

(113,038)

(127,456)

(131,430)

(114,444)

(120,152)

(222,559)

(234,596)

Fee Related Earnings

146,928

$    

145,729

$    

135,052

$    

272,604

$    

137,733

$    

168,434

$    

292,657

$    

306,167

$    

Net Realized Incentive Fees

(b)

1,027

6,117

7,163

147,115

14,219

39,853

7,144

54,072

Net Realized Carried Interest

(b)

5,622

48,030

61,742

115,595

204,733

107,378

53,652

312,111

Net Realized Investment Income

(b)

17,595

8,080

16,847

31,004

34,290

56,055

25,675

90,345

Taxes and Related Payables

(c)

(9,051)

(19,552)

(31,169)

(72,553)

(12,148)

(44,220)

(28,603)

(56,368)

Equity-Based Compensation

(d)

7,846

6,809

6,813

68,572

12,085

10,985

14,655

23,070

Distributable Earnings

169,967

$    

195,213

$    

196,448

$    

562,337

$    

390,912

$    

338,485

$    

365,180

$    

729,397

$    

Net Unrealized Incentive Fees

(b)

55,342

(7,478)

59,895

(92,542)

63,277

1,274

47,864

64,551

Net Unrealized Carried Interest

(b)

214,253

47,475

274,602

136,261

81,875

283,882

261,728

365,757

Net Unrealized Investment Income (Loss)

(b)

59,501

(26,236)

77,708

75,976

102,210

62,516

33,265

164,726

Add Back: Related Payables

(e)

-

10,184

19,912

56,521

2,117

28,068

10,184

30,185

Less: Equity-Based Compensation

(d)

(7,846)

(6,809)

(6,813)

(68,572)

(12,085)

(10,985)

(14,655)

(23,070)

Economic Net Income

491,217

$    

212,349

$    

621,752

$    

669,981

$    

628,306

$    

703,240

$    

703,566

$    

1,331,546

$

Blackstone

Walkdown of Financial Metrics

(a)

Represents the total segment amounts of the respective captions.

(b)

See Walkdown of Financial Metrics -

Calculation of Certain Non-GAAP Financial Metric Components for details.

(c)

Represents the current tax provision (benefit) calculated on Income (Loss) Before Provision (Benefit) for Taxes and the Payable Under Tax Receivable Agreement.

(d)

Represents equity-based award expense included in Economic Income.

(e)

Represents tax-related payables including the Payable Under Tax Receivable Agreement.

31

(Dollars in Thousands)

2008

2009

2010

2011

2012

Base Management Fees

(a)

1,041,718

$   

999,829

$      

1,069,471

$   

1,281,185

$   

1,591,403

$   

Advisory Fees

(a)

397,519

390,718

426,140

382,240

357,417

Transaction and Other Fees, Net

(a)

96,358

115,040

137,748

247,513

227,119

Management Fee Offsets

(a)

(16,437)

(17,161)

(2,313)

(33,393)

(40,953)

Interest Income and Other Revenue

(b)

42,609

41,955

50,755

50,859

77,548

Compensation

(a)

(771,426)

(769,856)

(859,114)

(960,569)

(1,030,776)

Other Operating Expenses

(a)

(319,216)

(299,029)

(344,516)

(421,342)

(481,445)

Fee Related Earnings

471,125

$      

461,496

$      

478,171

$      

546,493

$      

700,313

$      

Net Realized Incentive Fees

(b)

5,642

22,552

59,100

33,117

161,422

Net Realized Carried Interest

(b)

28,374

26,608

174,247

95,292

230,989

Net Realized Investment Income (Loss)

(b)

(64,677)

19,402

39,133

96,518

73,526

Taxes and Related Payables

(c)

(43,457)

(51,086)

(48,867)

(74,696)

(132,325)

Equity-Based Compensation

(d)

64,288

66,789

68,900

84,626

90,040

Distributable Earnings

461,295

$      

545,761

$      

770,684

$      

781,350

$      

1,123,965

$   

Net Unrealized Incentive Fees

(b)

(8,483)

21,922

44,318

(4,169)

15,217

Net Unrealized Carried Interest

(b)

(1,070,065)

170,128

291,662

733,574

672,591

Net Unrealized Investment Income (Loss)

(b)

(691,934)

1,655

494,139

84,146

186,949

Add Back: Related Payables

(e)

-

-

19,935

28,933

86,617

Less: Equity-Based Compensation

(d)

(64,288)

(66,789)

(68,900)

(84,626)

(90,040)

Economic Net Income (Loss)

(1,373,475)

$ 

672,677

$      

1,551,838

$   

1,539,208

$   

1,995,299

$   

Blackstone

Less: Investment Income (Loss) - Blackstone’s Treasury Cash 

Walkdown

of

Financial

Metrics

–

Calculation

of

Certain

Non-GAAP

Financial

Metric

Components

32

(Dollars in Thousands)

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

YTD'12

YTD'13

Interest Income and Dividend Revenue

9,345

$         

10,391

$       

12,004

$       

14,890

$       

14,661

$       

15,342

$       

19,736

$       

30,003

$       

Other Revenue

(1,207)

(828)

2,477

4,707

2,143

(1,164)

(2,035)

979

Strategies

(a)

6,310

1,892

12,877

4,690

(1,729)

(21,452)

8,202

(23,181)

Interest Income and Other Revenue

14,448

$       

11,455

$       

27,358

$       

24,287

$       

15,075

$       

(7,274)

$        

25,903

$       

7,801

$         

Realized Incentive Fees

5,279

11,692

11,620

272,873

24,727

74,867

16,971

99,594

Less: Realized Incentive Fee Compensation

(4,252)

(5,575)

(4,457)

(125,758)

(10,508)

(35,014)

(9,827)

(45,522)

Net Realized Incentive Fees

1,027

$         

6,117

$         

7,163

$         

147,115

$    

14,219

$       

39,853

$       

7,144

$         

54,072

$       

Realized Carried Interest

13,560

55,929

83,765

174,168

294,170

183,288

69,489

477,458

Less: Realized Carried Interest Compensation

(7,938)

(7,899)

(22,023)

(58,573)

(89,437)

(75,910)

(15,837)

(165,347)

Net Realized Carried Interest

5,622

$         

48,030

$       

61,742

$       

115,595

$    

204,733

$    

107,378

$    

53,652

$       

312,111

$    

Realized Investment Income

23,492

9,360

25,098

37,448

38,110

54,586

32,852

92,696

Adjustment Related to Realized Investment Income (Loss) -

Blackstone's Treasury Cash Management Strategies

(a)

(5,897)

(1,280)

(8,251)

(6,444)

(3,820)

1,469

(7,177)

(2,351)

Net Realized Investment Income

17,595

$       

8,080

$         

16,847

$       

31,004

$       

34,290

$       

56,055

$       

25,675

$       

90,345

$       

Equity-Based Compensation

(b)

7,846

$         

6,809

$         

6,813

$         

68,572

$       

12,085

$       

10,985

$       

14,655

$       

23,070

$       

Unrealized Incentive Fees

68,121

(17,074)

104,149

(184,507)

107,755

4,358

51,047

112,113

Less: Unrealized Incentive Fee Compensation

(12,779)

9,596

(44,254)

91,965

(44,478)

(3,084)

(3,183)

(47,562)

Net Unrealized Incentive Fees

55,342

$       

(7,478)

$        

59,895

$       

(92,542)

$     

63,277

$       

1,274

$         

47,864

$       

64,551

$       

Unrealized Carried Interest

298,796

84,290

403,465

207,639

177,347

456,706

383,086

634,053

Less: Unrealized Carried Interest Compensation

(84,543)

(36,815)

(128,863)

(71,378)

(95,472)

(172,824)

(121,358)

(268,296)

Net Unrealized Carried Interest

214,253

$    

47,475

$       

274,602

$    

136,261

$    

81,875

$       

283,882

$    

261,728

$    

365,757

$    

Unrealized Investment Income (Loss)

59,914

(25,624)

82,334

74,222

96,661

42,533

34,290

139,194

(a)

(6,310)

(1,892)

(12,877)

(4,690)

1,729

21,452

(8,202)

23,181

Less: Adjustment Related to Realized Investment Income (Loss) -

Blackstone's Treasury Cash Management Strategies           

(a)

5,897

1,280

8,251

6,444

3,820

(1,469)

7,177

2,351

Net Unrealized Investment Income (Loss)

59,501

$       

(26,236)

$     

77,708

$       

75,976

$       

102,210

$    

62,516

$       

33,265

$       

164,726

$    

Related Payables

(c)

-

$             

10,184

$       

19,912

$       

56,521

$       

2,117

$         

28,068

$       

10,184

$       

30,185

$       

(a)

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

(b)

Represents equity-based award expense included in Economic Income.

(c)

Represents tax-related payables including the Payable Under Tax Receivable Agreement.

Investment Income (Loss) - Blackstone’s Treasury Cash Management

Management Strategies

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

Blackstone

Walkdown

of

Financial

Metrics

–

Calculation

of

Certain

Non-GAAP

Financial

Metric

Components

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

33

(Dollars in Thousands)

2008

2009

2010

2011

2012

Interest Income and Dividend Revenue

29,014

$       

22,492

$       

36,096

$       

38,844

$       

46,630

$       

Other Revenue

13,595

7,096

(618)

7,415

5,149

(a)

-

12,367

15,277

4,600

25,769

Interest Income and Other Revenue

42,609

$       

41,955

$       

50,755

$       

50,859

$       

77,548

$       

Realized Incentive Fees

12,060

44,812

116,700

89,029

301,464

Less: Realized Incentive Fee Compensation

(6,418)

(22,260)

(57,600)

(55,912)

(140,042)

Net Realized Incentive Fees

5,642

$         

22,552

$       

59,100

$       

33,117

$       

161,422

$    

Realized Carried Interest

26,953

29,452

244,963

138,907

327,422

Less: Realized Carried Interest Compensation

1,421

(2,844)

(70,716)

(43,615)

(96,433)

Net Realized Carried Interest

28,374

$       

26,608

$       

174,247

$    

95,292

$       

230,989

$    

Realized Investment Income (Loss)

(64,677)

29,544

46,915

102,575

95,398

-

(10,142)

(7,782)

(6,057)

(21,872)

Net Realized Investment Income

(64,677)

$     

19,402

$       

39,133

$       

96,518

$       

73,526

$       

Equity

-Based Compensation

(b)

64,288

$       

66,789

$       

68,900

$       

84,626

$       

90,040

$       

Unrealized Incentive Fees

(11,935)

65,563

107,624

(24,928)

(29,311)

Less: Unrealized Incentive Fee Compensation

3,452

(43,641)

(63,306)

20,759

44,528

Net Unrealized Incentive Fees

(8,483)

$        

21,922

$       

44,318

$       

(4,169)

$        

15,217

$       

Unrealized Carried Interest

(1,274,327)

100,304

457,002

971,518

994,190

Less: Unrealized Carried Interest Compensation

204,262

69,824

(165,340)

(237,944)

(321,599)

Net Unrealized Carried Interest

(1,070,065)

$

170,128

$    

291,662

$    

733,574

$    

672,591

$    

Unrealized Investment Income (Loss)

(691,934)

3,880

501,634

82,689

190,846

-

(12,367)

(15,277)

(4,600)

(25,769)

-

10,142

7,782

6,057

21,872

Net Unrealized Investment Income (Loss)

(691,934)

$   

1,655

$         

494,139

$    

84,146

$       

186,949

$    

Related Payables

(c)

-

$             

-

$             

19,935

$       

28,933

$       

86,617

$       

(a)

(a)

(a)

Adjustment Related to Realized Investment Income - Blackstone's Treasury Cash Management Strategies

Less: Investment Loss - Blackstone's Treasury Cash Management Strategies  

(a)

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

(b)

Represents equity-based award expense included in Economic Income.

(c)

Represents tax-related payables including the Payable Under Tax Receivable Agreement.

Investment Income - Blackstone's Treasury Cash Management Strategies

Less: Adjustment Related to Realized Investment Income - Blackstone's Treasury Cash Management Strategies 

Blackstone

Unit Rollforward

34

(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.

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

YTD'12

YTD'13

Total GAAP Weighted-Average Common Units Outstanding - Basic

506,985,529

528,778,977

544,716,399

553,989,577

582,322,183

583,843,094

517,882,253

583,086,840

Adjustments:

Weighted-Average Unvested Deferred Restricted Common Units

10,404,029

-

2,207,204

2,430,014

3,377,716

2,919,959

-

3,148,837

Total GAAP Weighted-Average Common Units Outstanding - Diluted

517,389,558

528,778,977

546,923,603

556,419,591

585,699,899

586,763,053

517,882,253

586,235,677

Adjustments:

Weighted-Average Blackstone Holdings Partnership Units

602,817,069

591,155,160

586,762,611

581,202,276

557,463,170

555,224,714

596,986,114

556,337,696

Weighted-Average Unvested Deferred Restricted Common Units

-

4,820,609

-

-

-

-

7,612,319

-

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

1,141,987,767

1,122,480,686

1,142,573,373

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

1,142,576,555

1,122,067,386

1,142,576,555

Total Common Units Outstanding

(a)

510,868,415

525,464,110

537,299,585

568,600,922

573,275,746

576,466,264

525,464,110

576,466,264

Adjustments:

Blackstone Holdings Partnership Units

597,566,417

585,315,742

584,690,200

553,614,040

554,603,708

550,902,208

585,315,742

550,902,208

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

1,127,368,472

1,110,779,852

1,127,368,472

Definitions and Distribution Policy

35

Blackstone

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 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, excluding the expense of equity-based awards, (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.

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. 

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.

Blackstone

36