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

Blackstone’s Third Quarter 2013 Earnings

October 17, 2013

Exhibit�� 99.2

Blackstone

1

Economic

Net

Income

(“ENI”)

was

$640

million,

or

$0.56

per

unit,

for

the

quarter

and

$2.0

billion,

or

$1.72

per

unit,

year-to-date,

up

49%

compared

to

the

same

period

last

year,

reflecting

strong

growth

in

Fee Revenues

in

our

investing

and

advisory

businesses

and

favorable

year-to-date Performance Fees

across

all investing

businesses.

Distributable

Earnings

(“DE”)

increased

59%

year-over-year

to

$313

million,

or

$0.26

per

common

unit,

bringing

the

year-to-date

total

to

over

$1.0

billion,

or

$0.88

per

common

unit,

up

86%

year-over-year

as

an increased

pace

of

realizations

drove

higher

Performance

Fees

and

greater

Fee-Earning AUM

generated higher

Management

Fees.

GAAP

Net

Income

was

$171

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

$248

billion,

up

21%

year-over-year

with

double-digit

increases

across

all

investing

businesses,

through

a

combination

of

strong

inflows

and

appreciation.

Blackstone’s Third Quarter 2013 Highlights

Gross

inflows

totaled

$21

billion

in

the

third

quarter

and

$53

billion

over

the

last

twelve

months,

including

$9.1

billion

for

the

Strategic

Partners

acquisition.

Blackstone’s

funds

returned

$34

billion

(a)

of

capital

to

investors

over

the

last

twelve

months.

Blackstone

declared

a

third

quarter

distribution

of

$0.23

per

common

unit

payable

on

November

4,

2013,

bringing

the

year-to-date

distribution

to

$0.76

per

common

unit.

(a)        See Appendix - Total Assets Under Management Flows - LTM Total AUM Rollforward.

Blackstone

2

Blackstone’s Third 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.

% Change

% Change

(Dollars in Thousands, Except per Unit Data)

3Q'12

3Q'13

vs. 3Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

509,192

$        

581,678

$        

14%

1,539,862

$     

1,719,076

$     

12%

Performance Fees

602,999

544,936

(10)%

1,123,592

1,868,154

66%

Investment Income

107,432

99,172

(8)%

174,574

331,062

90%

Total Revenues

1,219,623

$    

1,225,786

$    

1%

2,838,028

$    

3,918,292

$    

38%

Total Expenses

586,614

570,763

(3)%

1,483,034

1,905,540

28%

Taxes

11,257

14,792

31%

29,676

40,975

38%

Economic Net Income (“ENI”)

621,752

$        

640,231

$        

3%

1,325,318

$    

1,971,777

$    

49%

ENI per Unit

(a)

0.55

$              

0.56

$              

2%

1.18

$              

1.72

$              

46%

GAAP Net Income

128,824

$        

171,164

$        

33%

112,185

$        

549,947

$        

390%

Fee Related Earnings (“FRE”)

135,052

$        

178,596

$        

32%

427,709

$        

484,763

$        

13%

Distributable Earnings (“DE”)

196,448

$        

312,673

$        

59%

561,628

$        

1,042,070

$    

86%

DE per Common Unit

(b)

0.16

$              

0.26

$              

63%

0.48

$              

0.88

$              

83%

Total Assets Under Management

204,551,572

$

248,064,888

$

21%

204,551,572

$

248,064,888

$

21%

Fee-Earning Assets Under Management

168,630,082

$

188,649,817

$

12%

168,630,082

$

188,649,817

$

12%

Blackstone

3

Walkdown of Financial Metrics

(Dollars in Thousands, Except per Unit Data)

3Q'13

YTD'13

Results

Per

Unit

(a)

Results

Per

Unit

(a)

Base Management Fees

437,294

$          

1,271,715

$       

Advisory Fees

83,602

271,356

Transaction and Other Fees, Net

42,806

147,244

Management Fee Offsets

(8,271)

(28,468)

Interest Income and Other Revenue

25,535

33,336

Compensation

(279,498)

(852,952)

Other Operating Expenses

(122,872)

(357,468)

Fee Related Earnings

178,596

$          

0.16

$                  

484,763

$          

$                  

Net Realized Incentive Fees

16,639

70,711

Net Realized Carried Interest

122,285

434,396

Net Realized Investment Income

18,164

108,509

Taxes and Related Payables

(31,756)

(88,124)

Equity-Based Compensation

8,745

31,815

Distributable Earnings

312,673

$          

0.26

$                  

1,042,070

$       

0.88

$                  

Net Unrealized Incentive Fees

29,908

94,459

Net Unrealized Carried Interest

207,711

573,468

Net Unrealized Investment Income

81,720

246,446

Add Back: Related Payables

16,964

47,149

Less: Equity-Based Compensation

(8,745)

(31,815)

Economic Net Income

640,231

$          

0.56

$                  

1,971,777

$       

1.72

$                  

0.43

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.

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.

(a)

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.   

3Q’13

$518

YTD’13

$1,564

$379

$655

$179

$313

$1,234

$2,013

$485

$1,042

Blackstone

5

Private Equity

17.4%

(a)

Core Private Equity portfolio (BCP, BCOM and BEP), Tactical Opportunities and Other Funds (including fee-paying co-investment funds). Excludes returns for Strategic Partners.

Total Revenues were up 44% to $732 million year-to-date on continued strong fund performance. 

Realized Performance Fees totaled $85 million in the third quarter, although declines in the value of certain publicly traded

investments in funds above their carry threshold led to a reduction in Unrealized Performance Fees.

•

On a year-to-date basis, Performance Fees remained strong, up 74%, resulting in Total Net Accrued Performance Fees of

$589 million at the end of  the quarter.

Overall carrying value of portfolio assets

(a)

appreciated 4.2% during the quarter and 17.4% year-to-date.

Realizations continued to gain momentum with proceeds of $2.5 billion during the quarter and $6.1 billion year-to-date,

bringing the last twelve months total to $8.0 billion.

Invested and/or committed $548 million of total capital for the quarter and $2.1 billion year-to-date.

Raised an additional $703 million of commitments for the tactical opportunities investment vehicles during the quarter,

increasing total capital commitments for this strategy to $3.7 billion.

Completed the acquisition of Strategic Partners, a premier secondary alternatives business, adding $9.1

billion of Total AUM

and $6.9 billion of Fee-Earning AUM to the Private Equity segment.

% Change

% Change

(Dollars in Thousands)

3Q'12

3Q'13

vs. 3Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

116,125

$        

116,005

$       

(0)%

323,864

$      

356,268

$      

10%

Performance Fees

160,338

(1,179)

n/m

139,210

241,584

74%

Investment Income

50,456

35,116

(30)%

46,304

133,663

189%

Total Revenues

326,919

149,942

(54)%

509,378

731,515

44%

Compensation

62,424

55,800

(11)%

168,746

179,750

7%

Performance Fee Compensation

44,276

(16,374)

n/m

36,089

105,479

192%

Other Operating Expenses

30,944

30,024

(3)%

90,346

91,370

1%

Total Expenses

137,644

69,450

(50)%

295,181

376,599

28%

Economic Income

189,275

$        

80,492

$         

(57)%

214,197

$      

354,916

$      

66%

Total AUM

50,222,312

$  

62,619,813

$ 

25%

50,222,312

$ 

62,619,813

$ 

25%

Fee-Earning AUM

38,505,497

$  

43,645,106

$ 

13%

38,505,497

$ 

43,645,106

$ 

13%

$85 million

3Q’13 Realized Performance Fees

$589 million

Net Accrued Performance Fees at 3Q’13

YTD’13

increase

in

fund

carrying

value

(a)

Blackstone

6

Real Estate

17.9%

YTD’13

increase

in

fund

carrying

value

(a)

$1.9 billion

Net Accrued Performance Fees at 3Q’13

$98 million

3Q’13 Realized Performance Fees

Total Revenues were up 49% to $1.8 billion year-to-date as Performance Fees and Investment Income rose sharply.

Higher revenues translated into strong Economic Income for the third quarter, up 43% to $414 million, and up 51% to $1.1

billion year-to-date compared to the same periods last year.

Overall

carrying

value

of

BREP

investments

(a)

appreciated

5.8%

for

the

quarter

and

17.9%

year-to-date,

driven

by strong

operating fundamentals across all sectors of the portfolio.

Debt

Strategies

drawdown

funds

(b)

appreciated

3.2%

for

the

quarter

and

8.4%

year-to-date,

while

the

real

estate hedge

funds appreciated 2.5% for the quarter and 7.3% year-to-date.

Realization activity remained strong with $1.6 billion of proceeds during the quarter and $4.6 billion year-to-date.

Invested $2.4 billion of total capital with an additional $2.5 billion committed at quarter end, bringing year-to-date total

capital invested plus committed to $8.4 billion, up from $6.3 billion in the same period last year.

Blackstone’s Asian real estate fund held a second closing, bringing total commitments to $1.8 billion and our latest

European fund held an initial close with $1.9 billion of total commitments.

(a)

Blackstone Real Estate Partners (“BREP”) portfolio (including fee-paying co-investment funds).

(b)

Excludes the Capital Trust drawdown funds.

% Change

% Change

(Dollars in Thousands)

3Q'12

3Q'13

vs. 3Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

150,084

$       

161,714

$     

8%

455,812

$     

459,902

$     

1%

Performance Fees

270,569

440,502

63%

672,888

1,197,119

78%

Investment Income

44,000

58,584

33%

101,735

177,634

75%

Total Revenues

464,653

660,800

42%

1,230,435

1,834,655

49%

Compensation

71,456

75,346

5%

216,921

218,597

1%

Performance Fee Compensation

73,208

140,799

92%

173,650

391,490

125%

Other Operating Expenses

31,284

30,614

(2)%

86,768

86,693

(0)%

Total Expenses

175,948

246,759

40%

477,339

696,780

46%

Economic Income

288,705

$       

414,041

$     

43%

753,096

$     

1,137,875

$  

51%

Total AUM

53,546,023

$ 

68,964,455

$

29%

53,546,023

$

68,964,455

$

29%

Fee-Earning AUM

40,609,286

$ 

44,715,985

$

10%

40,609,286

$

44,715,985

$

10%

Blackstone

7

Hedge Fund Solutions

(a)

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

On a net of fees basis, the BAAM Core Composite was up 1.7% for the quarter and 7.4% year-to-date.

(b)

Specialized Solutions includes long-only, ventures and strategic opportunities.

Total Revenues were up 40% to $451 million year-to-date driven by a combination of strong Fee Revenues up 18%

and Performance Fees up 148% as a record level of assets were generating Performance Fees.

•

$26.5 billion, or 97%, of Incentive Fee-Earning AUM, were above their High Water Mark and/or Hurdle, up

from $18.5 billion, or 77% a year ago, generating $139 million of Performance Fees year-to-date, generally

payable at year end.

BAAM Core Composite

was up 2.0% for the quarter and 8.3% year-to-date.

Fee-Earning

AUM

grew

17%

year-over-year

to

a

record

$50.8

billion

driven

by

fund

performance

and

$2.2

billion

of net inflows during the quarter bringing the year-to-date total to $4.7 billion.

•

BAAM launched its first alternative investment-focused ’40 Act mutual fund for the retail market (Blackstone

Alternative Multi-Manager Fund) on August 5, raising $1 billion of capital in the third quarter.

•

October 1 subscriptions of $325 million are not included in quarter end Fee-Earning AUM.

$53 billion

3Q’13 Total AUM

Individual Investor

Solutions

Customized

Commingled

Internal

% Change

% Change

(Dollars in Thousands)

3Q'12

3Q'13

vs. 3Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

87,811

$          

105,605

$      

20%

254,138

$      

300,461

$      

18%

Performance Fees

39,272

34,528

(12)%

55,951

138,572

148%

Investment Income

5,836

5,841

0%

12,003

12,220

2%

Total Revenues

132,919

145,974

10%

322,092

451,253

40%

Compensation

28,826

37,611

30%

91,618

108,323

18%

Performance Fee Compensation

9,124

12,131

33%

14,631

49,771

240%

Other Operating Expenses

12,878

19,575

52%

41,318

51,269

24%

Total Expenses

50,828

69,317

36%

147,567

209,363

42%

Economic Income

82,091

$          

76,657

$         

(7)%

174,525

$      

241,890

$      

39%

Total AUM

46,218,618

$  

53,162,174

$ 

15%

46,218,618

$ 

53,162,174

$ 

15%

Fee-Earning AUM

43,601,541

$  

50,829,734

$ 

17%

43,601,541

$ 

50,829,734

$ 

17%

$1.5

$7.5

$16.7

$1.5

$26.0

Specialized

Solutions

(a)

(b)

(b)

Blackstone

8

Credit

$63 billion

3Q’13 Total AUM

Customized

Credit Strategies

(b)

Rescue

Lending

Funds

Mezzanine

Funds

Hedge Fund

Strategies

CLOs

Total Revenues were up 16% to $624 million year-to-date driven by solid growth of 19% in Fee Revenues.

Total AUM grew 16% year-over-year to $63.3 billion driven by continued strong net inflows within the long-only

platform and new fund launches across several strategies.

Investment performance

(a)

remained favorable across the platform.

•

Hedge Fund Strategies were up 1.5% for the quarter and 14.4% year-to-date.

•

Mezzanine Funds were up 3.3% for the quarter and 20.4% year-to-date.

•

Rescue Lending Funds were up 5.6% for the quarter and 17.5% year-to-date.

Invested $287 million of total capital with an additional $179 million committed but not yet invested during the

quarter, bringing year-to-date total capital invested and committed to $1.4 billion.

Committed

capital

not

yet

paying

fees

of

$9.5

billion

at

quarter

end,

representing

significant

dry

powder

for

investment.

(a)

Represents weighted average performance of the assets of the respective flagship funds within each strategy. Hedge Fund Strategies net returns were 0.9% for 3Q’13 and 10.6% YTD’13, Mezzanine Funds net

returns were 1.7% for 3Q’13 and 14.5% YTD’13 and Rescue Lending Funds net returns were 4.3% for 3Q’13 and 13.5% YTD’13.

(b)

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

% Change

% Change

(Dollars in Thousands)

3Q'12

3Q'13

vs. 3Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

94,169

$          

111,283

$      

18%

272,223

$      

324,215

$      

19%

Performance Fees

132,820

71,085

(46)%

255,543

290,879

14%

Investment Income (Loss)

5,961

(546)

n/m

12,337

9,157

(26)%

Total Revenues

232,950

181,822

(22)%

540,103

624,251

16%

Compensation

50,236

53,250

6%

130,224

154,712

19%

Performance Fee Compensation

72,989

31,837

(56)%

125,432

148,380

18%

Other Operating Expenses

33,527

23,451

(30)%

66,372

67,374

2%

Total Expenses

156,752

108,538

(31)%

322,028

370,466

15%

Economic Income

76,198

$          

73,284

$         

(4)%

218,075

$      

253,785

$      

16%

Total AUM

54,564,619

$  

63,318,446

$ 

16%

54,564,619

$ 

63,318,446

$ 

16%

Fee-Earning AUM

45,913,758

$  

49,458,992

$ 

8%

45,913,758

$ 

49,458,992

$ 

8%

Totals may not add due to rounding.

$22.3

$7.7

$9.3

$4.6

$19.3

Blackstone

9

Financial Advisory

Total Revenues were up 40% for the quarter and 17% year-to-date compared to the same periods last year,

primarily due to an increase in activity in our Restructuring and Park Hill fund placement businesses.

Restructuring has maintained strong performance despite the improving economy, as the business was ranked #1

in

the

Thomson

Reuters

Restructuring

league

tables

for

worldwide

completed

transactions

for

the

first

nine

months of 2013.

Park

Hill’s

revenue

increased

year-over-year,

and

the

pipeline

remains

strong

as

challenging

fundraising

market

conditions continue to drive demand for alternative asset placement services.

Blackstone Advisory Partners revenue was up modestly year-over-year and down year-to-date as strategic advisory

and merger and acquisition activity globally remains soft.

% Change

% Change

(Dollars in Thousands)

3Q'12

3Q'13

vs. 3Q'12

YTD'12

YTD'13

vs. YTD'12

Fee Revenues

61,003

$         

87,071

$        

43%

233,825

$     

278,230

$     

19%

Investment Income (Loss)

1,179

177

(85)%

2,195

(1,612)

n/m

Total Revenues

62,182

87,248

40%

236,020

276,618

17%

Compensation

46,619

57,491

23%

175,708

191,570

9%

Other Operating Expenses

18,823

19,208

2%

65,211

60,762

(7)%

Total Expenses

65,442

76,699

17%

240,919

252,332

5%

Economic Income (Loss)

(3,260)

$         

10,549

$        

n/m

(4,899)

$        

24,286

$        

n/m

Blackstone

10

Assets Under Management

Fee-Earning

AUM:

up

12%

year-over-year

to

a

record

$189

billion,

as

$41

billion

of

gross

inflows

more

than

offset

$26

billion of realizations and outflows.

•

Including commitments, not yet earning fees, Fee-Earning AUM was $208 billion, up 23% year-over-year.

Total

AUM:

increased

21%

year-over-year

to

a

record

$248

billion

driven

by

$53

billion

of

gross

inflows

and

$25

billion

of market appreciation across all investment businesses.

Fee-Earning AUM by Segment

(Dollars in Billions)

$168.6

$176.3

$188.6

Total AUM by Segment

(Dollars in Billions)

$204.6

$229.6

$248.1

Credit

Hedge Fund

Solutions

Real

Estate

Private

Equity

Credit

Hedge Fund

Solutions

Real

Estate

Private

Equity

Totals may not add due to rounding.

$45.9

$43.6

$40.6

$38.5

$48.5

$47.6

$43.6

$36.6

$49.5

$50.8

$44.7

$43.6

$54.6

$46.2

$53.5

$50.2

$62.2

$50.1

$63.9

$53.3

$63.3

$53.2

$69.0

$62.6

3Q’12

2Q’13

3Q’13

3Q’12

2Q’13

3Q’13

3Q’13 Available Capital Summary

$19.2 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 $143.8 billion at quarter end, including $85.6 billion ($104.0 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.

$41

billion

Dry

Powder

(a)

Credit

Hedge

Fund

Solutions

Private

Equity

Real

Estate

$19 billion Not Yet Earning

Base

Management

Fees

(b)

$144 billion Performance

Fee

Eligible

AUM

(c)

Currently Earning

Performance Fees

Invested/Committed Not Yet

Earning Performance Fees

To Be Invested

Credit

Hedge Fund

Solutions

Real

Estate

Private

Equity

$9.7

$18.0

$0.9

$9.5

$0.8

$3.5

$38.4

$85.6

$12.8

$5.4

$19.7

11

Blackstone

Achieved

record

level

of

committed

undrawn

capital

(“dry

powder”)

with

$41.4

billion

at

quarter

end.

Blackstone

12

Unitholder Distribution

Earned $0.26 of Distributable Earnings per common unit during the third quarter, up 63% year-over-year.

Declared

a

quarterly

distribution

of

$0.23

per

common

unit

to

record

holders

as

of

October

28,

2013;

payable

on

November 4, 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 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

$17.2

million

for

3Q’13

and

$66.9

million

for

YTD’13.

New Policy

% Change

New Policy

% Change

(Dollars in Thousands, Except per Unit Data)

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

vs. 3Q'12

YTD'12

YTD'13

vs. YTD'12

Distributable Earnings (“DE”)

196,448

$ 

562,337

$ 

390,912

$ 

338,485

$ 

312,673

$   

59%

561,628

$ 

1,042,070

$

86%

Add: Other Payables Attributable to

Common Unitholders

20,012

61,237

2,204

28,498

17,694

(12)%

30,396

48,396

59%

DE before Certain Payables

(b)

216,460

623,574

393,116

366,983

330,367

53%

592,024

1,090,466

84%

Percent to Common Unitholders

48%

51%

51%

51%

52%

47%

51%

DE before Certain Payables Attributable to

Common Unitholders

103,659

315,951

199,812

187,652

170,216

64%

279,253

557,680

100%

Less: Other Payables Attributable to

Common Unitholders

(20,012)

(61,237)

(2,204)

(28,498)

(17,694)

12%

(30,396)

(48,396)

(59)%

DE Attributable to Common Unitholders

83,647

254,714

197,608

159,154

152,522

82%

248,857

509,284

105%

DE per Common Unit

(c)

0.16

$      

0.45

$      

0.34

$      

0.28

$      

0.26

$         

63%

0.48

$      

0.88

$         

83%

Less: Retained Capital per Unit

(d)

(0.04)

$     

(0.11)

$     

(0.04)

$     

(0.05)

$     

(0.03)

$        

25%

(0.10)

$     

(0.12)

$        

(20)%

Net Cash Available for Distribution per

Common Unit

(c)

0.12

$      

0.34

$      

0.30

$      

0.23

$      

0.23

$         

92%

0.38

$      

0.76

$         

100%

Actual Distribution per Common Unit

(c)

0.10

$      

0.42

$      

0.30

$      

0.23

$      

0.23

$         

130%

0.30

$      

0.76

$         

153%

Record Date

Oct 28, 2013

Payable Date

Nov 4, 2013

(a)        

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

3Q’13

Cash and Cash Equivalents

$

661

$

889

Treasury Cash Management

Strategies

1,460

1,137

Liquid

Investments

(b)

145

151

Illiquid

Investments

(c)

2,318

2,447

Net Performance Fees

2,529

2,769

Total Net Value

$

7,113

$

7,393

Outstanding

Bonds

(at

par)

(d)

$

1,635

$

1,635

A/A+

rated by S&P / Fitch

$1.1 billion

undrawn credit revolver with

July 2017 maturity

$2.2 billion

total cash, corporate treasury

and liquid investments

$6.51

Net Performance

Fees

Total Cash and

Treasury Investments

Private Equity

Real Estate

Other

Cash and Investments per DE unit

$2.16

Illiquids

$7.4 billion

Total Net Value

At September 30, 2013, Blackstone had $2.2 billion in total cash, corporate treasury and liquid investments and

$7.4

billion of total net value, or $6.51 per DE unit, up 15% from $5.66 a year ago.

Blackstone’s Net Performance Fees reached a record $2.8 billion at the end of the quarter, up 35% year-over-year

and over two times the amount from two years 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.

$1.92

$0.81

$1.12

$0.23

$2.44

Blackstone

14

GAAP Statement of Operations

% Change

% Change

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

3Q'12

3Q'13

vs. 3Q'12

YTD'12

YTD'13

vs. YTD'12

Revenues

Management and Advisory Fees, Net

469,109

$        

531,095

$        

13%

1,428,833

$     

1,591,951

$     

11%

Performance Fees

Realized Carried Interest

83,765

182,654

118%

153,254

660,112

331%

Realized Incentive Fees

11,588

30,884

167%

28,497

130,729

359%

Unrealized Carried Interest

403,465

290,052

(28)%

786,551

924,105

17%

Unrealized Incentive Fees

104,312

37,713

(64)%

155,011

144,449

(7)%

Total Performance Fees

603,130

541,303

(10)%

1,123,313

1,859,395

66%

Investment Income

Realized

18,559

19,507

5%

40,652

137,350

238%

Unrealized

119,599

100,341

(16)%

181,906

263,141

45%

Total Investment Income

138,158

119,848

(13)%

222,558

400,491

80%

Interest and Dividend Revenue

10,278

19,892

94%

27,181

46,263

70%

Other

2,415

4,707

95%

443

5,688

n/m

Total Revenues

1,223,090

1,216,845

(1)%

2,802,328

3,903,788

39%

Expenses

Compensation and Benefits

Compensation

503,295

465,631

(7)%

1,531,917

1,396,042

(9)%

Performance Fee Compensation

Realized Carried Interest

22,023

60,369

174%

37,860

225,716

496%

Realized Incentive Fees

4,457

14,599

228%

14,284

60,121

321%

Unrealized Carried Interest

128,863

82,341

(36)%

250,221

350,637

40%

Unrealized Incentive Fees

44,254

11,084

(75)%

47,437

58,646

24%

Total Compensation and Benefits

702,892

634,024

(10)%

1,881,719

2,091,162

11%

General, Administrative and Other

139,172

119,435

(14)%

417,675

346,106

(17)%

Interest Expense

19,074

26,268

38%

47,365

80,286

70%

Fund Expenses

(9,747)

6,678

n/m

28,243

18,714

(34)%

Total Expenses

851,391

786,405

(8)%

2,375,002

2,536,268

7%

Other Income (Loss)

Net Gains (Losses) from Fund Investment Activities

(135,960)

87,952

n/m

400,412

196,128

(51)%

Income Before Provision for Taxes

235,739

$        

518,392

$        

120%

827,738

$        

1,563,648

$     

89%

Provision for Taxes

39,237

57,477

46%

119,327

164,552

38%

Net Income

196,502

$        

460,915

$        

135%

708,411

$        

1,399,096

$     

97%

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

41,854

51,188

22%

78,447

135,870

73%

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

(157,607)

30,231

n/m

279,970

48,723

(83)%

Net Income Attributable to Non-Controlling Interests in Blackstone Holdings

183,431

208,332

14%

237,809

664,556

179%

Net Income Attributable to The Blackstone Group L.P. (“BX”)

128,824

$        

171,164

$        

33%

112,185

$        

549,947

$        

390%

Net Income per Common Unit, Basic

0.24

$               

0.29

$               

21%

0.21

$               

0.94

$               

348%

Net Income per Common Unit, Diluted

0.24

$               

0.29

$               

21%

0.21

$               

0.93

$               

343%

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)

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

YTD'12

YTD'13

Revenues

Management and Advisory Fees, Net

Base Management Fees

398,088

$         

416,465

$         

408,747

$         

425,674

$          

437,294

$          

1,174,938

$     

1,271,715

$     

Advisory Fees

59,951

128,248

67,020

120,734

83,602

229,169

271,356

Transaction

and

Other

Fees,

Net

(a)

45,126

94,069

37,974

66,464

42,806

133,050

147,244

Management

Fee

Offsets

(b)

(8,454)

(11,476)

(9,662)

(10,535)

(8,271)

(29,477)

(28,468)

Total Management and Advisory Fees, Net

494,711

627,306

504,079

602,337

555,431

1,507,680

1,661,847

Performance Fees

Realized Carried Interest

83,765

174,168

294,170

183,288

182,654

153,254

660,112

Realized Incentive Fees

11,620

272,873

24,727

74,867

31,238

28,591

130,832

Unrealized Carried Interest

403,465

207,639

177,347

456,706

290,052

786,551

924,105

Unrealized Incentive Fees

104,149

(184,507)

107,755

4,358

40,992

155,196

153,105

Total Performance Fees

602,999

470,173

603,999

719,219

544,936

1,123,592

1,868,154

Investment Income

Realized

25,098

37,448

38,110

54,586

11,492

57,950

104,188

Unrealized

82,334

74,222

96,661

42,533

87,680

116,624

226,874

Total Investment Income

107,432

111,670

134,771

97,119

99,172

174,574

331,062

Interest Income and Dividend Revenue

12,004

14,890

14,661

15,342

21,539

31,740

51,542

Other

2,477

4,707

2,143

(1,164)

4,708

442

5,687

Total Revenues

1,219,623

1,228,746

1,259,653

1,432,853

1,225,786

2,838,028

3,918,292

Expenses

Compensation

259,561

247,559

266,977

306,477

279,498

783,217

852,952

Performance Fee Compensation

Realized Carried Interest

22,023

58,573

89,437

75,910

60,369

37,860

225,716

Realized Incentive Fees

4,457

125,758

10,508

35,014

14,599

14,284

60,121

Unrealized Carried Interest

128,863

71,378

95,472

172,824

82,341

250,221

350,637

Unrealized Incentive Fees

44,254

(91,965)

44,478

3,084

11,084

47,437

58,646

Total Compensation and Benefits

459,158

411,303

506,872

593,309

447,891

1,133,019

1,548,072

Other Operating Expenses

127,456

131,430

114,444

120,152

122,872

350,015

357,468

Total Expenses

586,614

542,733

621,316

713,461

570,763

1,483,034

1,905,540

Economic Income

633,009

$         

686,013

$         

638,337

$         

719,392

$          

655,023

$          

1,354,994

$     

2,012,752

$     

Economic Net Income

621,752

$         

669,981

$         

628,306

$         

703,240

$          

640,231

$          

1,325,318

$     

1,971,777

$     

Fee Related Earnings

135,052

$         

272,604

$         

137,733

$         

168,434

$          

178,596

$          

427,709

$         

484,763

$         

Distributable Earnings

196,448

$         

562,337

$         

390,912

$         

338,485

$          

312,673

$          

561,628

$         

1,042,070

$     

Total Assets Under Management

204,551,572

$ 

210,219,960

$ 

218,210,672

$ 

229,571,741

$   

248,064,888

$   

204,551,572

$ 

248,064,888

$ 

Fee-Earning Assets Under Management

168,630,082

$ 

167,880,440

$ 

170,949,347

$ 

176,338,947

$   

188,649,817

$   

168,630,082

$ 

188,649,817

$ 

Weighted Average Fee-Earning AUM

162,377,631

$ 

168,328,454

$ 

169,551,186

$ 

173,706,678

$   

185,628,676

$   

157,608,079

$ 

182,031,703

$ 

LP Capital Invested

3,085,441

$     

5,690,474

$     

1,784,463

$     

3,634,404

$       

3,378,067

$       

8,208,497

$     

8,796,934

$     

Total Capital Invested

3,754,061

$     

6,200,755

$     

1,840,474

$     

3,757,591

$       

3,536,365

$       

9,414,094

$     

9,134,430

$     

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)

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

YTD'12

YTD'13

Revenues

Management Fees, Net

Base Management Fees

86,136

$        

89,194

$        

86,246

$        

86,621

$        

95,281

$        

259,400

$        

268,148

$        

Transaction and Other Fees, Net

(a)  

25,693

41,339

24,453

38,348

16,052

58,741

78,853

Management Fee Offsets

(b)

(767)

(705)

(480)

(1,950)

(2,080)

(5,221)

(4,510)

Total Management Fees, Net

111,062

129,828

110,219

123,019

109,253

312,920

342,491

Performance Fees

Realized Carried Interest

31,592

45,491

139,892

3,899

85,121

64,306

228,912

Unrealized Carried Interest

128,746

73,477

(83,954)

182,926

(86,300)

74,904

12,672

Total Performance Fees

160,338

118,968

55,938

186,825

(1,179)

139,210

241,584

Investment Income

Realized

7,189

10,918

24,162

21,586

11,495

14,905

57,243

Unrealized

43,267

53,938

31,711

21,088

23,621

31,399

76,420

Total Investment Income

50,456

64,856

55,873

42,674

35,116

46,304

133,663

Interest Income and Dividend Revenue

3,413

4,609

2,984

3,251

5,231

8,947

11,466

Other

1,650

420

424

366

1,521

1,997

2,311

Total Revenues

326,919

318,681

225,438

356,135

149,942

509,378

731,515

Expenses

Compensation

62,424

53,963

60,203

63,747

55,800

168,746

179,750

Performance Fee Compensation

Realized Carried Interest

1,048

1,507

16,246

877

19,824

2,172

36,947

Unrealized Carried Interest

43,228

24,638

16,619

88,111

(36,198)

33,917

68,532

Total Compensation and Benefits

106,700

80,108

93,068

152,735

39,426

204,835

285,229

Other Operating Expenses

30,944

40,499

29,168

32,178

30,024

90,346

91,370

Total Expenses

137,644

120,607

122,236

184,913

69,450

295,181

376,599

Economic Income

189,275

$      

198,074

$      

103,202

$      

171,222

$      

80,492

$        

214,197

$        

354,916

$        

Total Assets Under Management

50,222,312

$

51,002,973

$

52,491,811

$

53,287,294

$

62,619,813

$

50,222,312

$  

62,619,813

$  

Fee-Earning Assets Under Management

38,505,497

$

37,050,167

$

36,785,770

$

36,635,224

$

43,645,106

$

38,505,497

$  

43,645,106

$  

Weighted Average Fee-Earning AUM

38,096,139

$

38,507,697

$

36,907,936

$

36,675,636

$

43,886,763

$

37,745,618

$  

44,293,199

$  

LP Capital Invested

1,015,605

$   

1,461,987

$   

276,987

$      

749,290

$      

524,320

$      

1,761,548

$     

1,550,597

$     

Total Capital Invested

1,427,871

$   

1,860,738

$   

291,011

$      

780,339

$      

548,173

$      

2,216,883

$     

1,619,523

$     

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)

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

YTD'12

YTD'13

Revenues

Management Fees, Net

Base Management Fees

135,659

$      

140,044

$      

138,346

$      

137,000

$      

136,721

$      

411,278

$      

412,067

$      

Transaction

and

Other

Fees,

Net

(a)

14,937

31,181

9,140

19,013

19,205

54,500

47,358

Management

Fee

Offsets

(b)

(6,034)

(8,591)

(7,286)

(6,312)

(2,385)

(20,018)

(15,983)

Total Management Fees, Net

144,562

162,634

140,200

149,701

153,541

445,760

443,442

Performance Fees

Realized Carried Interest

51,845

91,113

68,773

143,481

93,878

74,001

306,132

Realized Incentive Fees

4,879

13,012

3,092

31,102

3,737

12,644

37,931

Unrealized Carried Interest

207,695

110,059

280,076

259,972

340,406

573,705

880,454

Unrealized Incentive Fees

6,150

(12,657)

2,400

(32,279)

2,481

12,538

(27,398)

Total Performance Fees

270,569

201,527

354,341

402,276

440,502

672,888

1,197,119

Investment Income

Realized

10,324

18,099

9,534

18,577

928

27,203

29,039

Unrealized

33,676

16,343

60,303

30,636

57,656

74,532

148,595

Total Investment Income

44,000

34,442

69,837

49,213

58,584

101,735

177,634

Interest Income and Dividend Revenue

3,581

5,038

4,298

4,396

6,060

9,410

14,754

Other

1,941

252

(133)

(274)

2,113

642

1,706

Total Revenues

464,653

403,893

568,543

605,312

660,800

1,230,435

1,834,655

Expenses

Compensation

71,456

54,201

69,459

73,792

75,346

216,921

218,597

Performance Fee Compensation

Realized Carried Interest

19,822

35,118

25,863

55,005

38,942

27,300

119,810

Realized Incentive Fees

2,570

6,617

1,724

15,733

1,919

6,443

19,376

Unrealized Carried Interest

47,940

31,590

89,057

78,604

99,323

133,892

266,984

Unrealized Incentive Fees

2,876

(6,598)

1,034

(16,329)

615

6,015

(14,680)

Total Compensation and Benefits

144,664

120,928

187,137

206,805

216,145

390,571

610,087

Other Operating Expenses

31,284

36,946

28,462

27,617

30,614

86,768

86,693

Total Expenses

175,948

157,874

215,599

234,422

246,759

477,339

696,780

Economic Income

288,705

$      

246,019

$      

352,944

$      

370,890

$      

414,041

$      

753,096

$      

1,137,875

$  

Total Assets Under Management

53,546,023

$

56,695,645

$

59,475,215

$

63,919,906

$

68,964,455

$

53,546,023

$

68,964,455

$

Fee-Earning Assets Under Management

40,609,286

$

41,931,339

$

42,140,507

$

43,635,493

$

44,715,985

$

40,609,286

$

44,715,985

$

Weighted Average Fee-Earning AUM

38,947,049

$

40,164,238

$

41,682,661

$

42,523,604

$

44,163,396

$

37,078,418

$

42,928,397

$

LP Capital Invested

1,342,811

$   

3,876,701

$   

1,175,775

$   

2,213,668

$   

2,365,224

$   

4,341,474

$   

5,754,667

$   

Total Capital Invested

1,397,249

$   

3,990,620

$   

1,202,736

$   

2,274,853

$   

2,438,725

$   

4,524,863

$   

5,916,314

$   

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)

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

YTD'12

YTD'13

Revenues

Management Fees, Net

Base Management Fees

87,334

$        

92,777

$        

92,791

$        

100,113

$      

103,392

$      

253,433

$      

296,296

$      

Transaction and Other Fees, Net

(a)

4

27

4

61

295

161

360

Management Fee Offsets

(b)

(382)

(322)

(324)

(714)

(1,200)

(1,092)

(2,238)

Total Management Fees, Net

86,956

92,482

92,471

99,460

102,487

252,502

294,418

Performance Fees

Realized Incentive Fees

2,637

76,323

13,709

13,845

5,320

7,110

32,874

Unrealized Incentive Fees

36,635

(39,799)

55,501

20,989

29,208

48,841

105,698

Total Performance Fees

39,272

36,524

69,210

34,834

34,528

55,951

138,572

Investment Income

Realized

637

5,201

852

13,668

(598)

2,069

13,922

Unrealized

5,199

(1,417)

3,913

(12,054)

6,439

9,934

(1,702)

Total Investment Income

5,836

3,784

4,765

1,614

5,841

12,003

12,220

Interest Income and Dividend Revenue

540

718

1,216

1,878

2,523

1,421

5,617

Other

315

3,601

85

(254)

595

215

426

Total Revenues

132,919

137,109

167,747

137,532

145,974

322,092

451,253

Expenses

Compensation

28,826

28,113

33,868

36,844

37,611

91,618

108,323

Performance Fee Compensation

Realized Incentive Fees

1,062

20,985

5,022

5,116

1,954

2,095

12,092

Unrealized Incentive Fees

8,062

(11,219)

19,836

7,666

10,177

12,536

37,679

Total Compensation and Benefits

37,950

37,879

58,726

49,626

49,742

106,249

158,094

Other Operating Expenses

12,878

16,491

15,159

16,535

19,575

41,318

51,269

Total Expenses

50,828

54,370

73,885

66,161

69,317

147,567

209,363

Economic Income

82,091

$        

82,739

$        

93,862

$        

71,371

$        

76,657

$        

174,525

$      

241,890

$      

Total Assets Under Management

46,218,618

$

46,092,505

$

48,187,865

$

50,128,028

$

53,162,174

$

46,218,618

$

53,162,174

$

Fee-Earning Assets Under Management

43,601,541

$

43,478,791

$

45,585,454

$

47,572,465

$

50,829,734

$

43,601,541

$

50,829,734

$

Weighted Average Fee-Earning AUM

42,005,752

$

43,709,019

$

44,999,899

$

46,783,727

$

48,933,335

$

41,016,254

$

47,203,844

$

LP Capital Invested

196,180

$      

-

$               

55,849

$        

118,323

$      

248,422

$      

200,841

$      

422,594

$      

Total Capital Invested

207,250

$      

-

$               

59,000

$        

125,000

$      

262,309

$      

212,752

$      

446,309

$      

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)

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

YTD'12

YTD'13

Revenues

Management Fees, Net

Base Management Fees

88,959

$        

94,450

$        

91,364

$        

101,940

$      

101,900

$      

250,827

$      

295,204

$      

4,486

21,480

4,374

9,002

7,058

19,395

20,434

(1,271)

(1,858)

(1,572)

(1,559)

(2,606)

(3,146)

(5,737)

Total Management Fees, Net

92,174

114,072

94,166

109,383

106,352

267,076

309,901

Performance Fees

Realized Carried Interest

328

37,564

85,505

35,908

3,655

14,947

125,068

Realized Incentive Fees

4,104

183,538

7,926

29,920

22,181

8,837

60,027

Unrealized Carried Interest

67,024

24,103

(18,775)

13,808

35,946

137,942

30,979

Unrealized Incentive Fees

61,364

(132,051)

49,854

15,648

9,303

93,817

74,805

Total Performance Fees

132,820

113,154

124,510

95,284

71,085

255,543

290,879

Investment Income (Loss)

Realized

6,697

2,593

3,328

901

496

13,018

4,725

Unrealized

(736)

5,450

1,093

4,381

(1,042)

(681)

4,432

Total Investment Income (Loss)

5,961

8,043

4,421

5,282

(546)

12,337

9,157

Interest Income and Dividend Revenue

2,673

2,480

4,547

4,071

5,288

6,850

13,906

Other

(678)

529

1,828

(1,063)

(357)

(1,703)

408

Total Revenues

232,950

238,278

229,472

212,957

181,822

540,103

624,251

Expenses

Compensation

50,236

51,853

45,521

55,941

53,250

130,224

154,712

Performance Fee Compensation

Realized Carried Interest

1,153

21,948

47,328

20,028

1,603

8,388

68,959

Realized Incentive Fees

825

98,156

3,762

14,165

10,726

5,746

28,653

Unrealized Carried Interest

37,695

15,150

(10,204)

6,109

19,216

82,412

15,121

Unrealized Incentive Fees

33,316

(74,148)

23,608

11,747

292

28,886

35,647

Total Compensation and Benefits

123,225

112,959

110,015

107,990

85,087

255,656

303,092

Other Operating Expenses

33,527

18,116

20,962

22,961

23,451

66,372

67,374

Total Expenses

156,752

131,075

130,977

130,951

108,538

322,028

370,466

Economic Income

76,198

$        

107,203

$      

98,495

$        

82,006

$        

73,284

$        

218,075

$      

253,785

$      

Total Assets Under Management

54,564,619

$

56,428,837

$

58,055,781

$

62,236,513

$

63,318,446

$

54,564,619

$

63,318,446

$

Fee-Earning Assets Under Management

45,913,758

$

45,420,143

$

46,437,616

$

48,495,765

$

49,458,992

$

45,913,758

$

49,458,992

$

Weighted Average Fee-Earning AUM

43,328,691

$

45,947,499

$

45,960,690

$

47,723,711

$

48,645,182

$

41,767,789

$

47,606,263

$

LP Capital Invested

530,845

$      

351,786

$      

275,852

$      

553,123

$      

240,101

$      

1,904,634

$   

1,069,076

$   

Total Capital Invested

721,691

$      

349,397

$      

287,727

$      

577,399

$      

287,158

$      

2,459,596

$   

1,152,284

$   

Transaction

and

Other

Fees,

Net

(a)

Management

Fee

Offsets

(b)

Blackstone

21

Financial Advisory

(Dollars in Thousands)

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

YTD'12

YTD'13

Revenues

Advisory Fees

59,951

$      

128,248

$    

67,020

$      

120,734

$      

83,602

$        

229,169

$    

271,356

$    

Transaction and Other Fees, Net

6

42

3

40

196

253

239

Total Advisory and Transaction Fees

59,957

128,290

67,023

120,774

83,798

229,422

271,595

Investment Income (Loss)

Realized

251

637

234

(146)

(829)

755

(741)

Unrealized

928

(92)

(359)

(1,518)

1,006

1,440

(871)

Total Investment Income (Loss)

1,179

545

(125)

(1,664)

177

2,195

(1,612)

Interest Income and Dividend Revenue

1,797

2,045

1,616

1,746

2,437

5,112

5,799

Other

(751)

(95)

(61)

61

836

(709)

836

Total Revenues

62,182

130,785

68,453

120,917

87,248

236,020

276,618

Expenses

Compensation

46,619

59,429

57,926

76,153

57,491

175,708

191,570

Total Compensation and Benefits

46,619

59,429

57,926

76,153

57,491

175,708

191,570

Other Operating Expenses

18,823

19,378

20,693

20,861

19,208

65,211

60,762

Total Expenses

65,442

78,807

78,619

97,014

76,699

240,919

252,332

Economic Income (Loss)

(3,260)

$       

51,978

$      

(10,166)

$     

23,903

$        

10,549

$        

(4,899)

$       

24,286

$      

Blackstone

22

Fee-Earning Assets Under Management Flows

Totals may not add due to rounding.

3Q’13 Fee-Earning AUM Rollforward

(Dollars in Millions)

LTM Fee-Earning AUM Rollforward

(Dollars in Millions)

Fee-Earning AUM: up $20.0 billion or 12% from a year ago driven mainly by continued strong inflows and market

appreciation totaling $46.5 billion, which more than offset $17.5 billion of realizations and $8.9 billion of outflows.

Private Equity: up $5.1 billion or 13% from a year ago driven by the acquisition of  Strategic Partners which added

$6.9

billion

of

Fee-Earning

AUM

in

the

current

quarter,

partially

offset

by

$4.2

billion

of

realizations.

Real Estate: grew 10% during the past year driven by fundraising for several investment vehicles, the BXMT

transaction and secondary offering, and fee-paying co-investment capital, partially offset by $5.8 billion of

realizations and outflows.

Hedge

Fund

Solutions:

continued

solid

growth

with

$2.2

billion

of

net

inflows

during

the

quarter,

bringing

the

last

twelve

months

to

$3.9

billion

of

net

inflows

and

$3.3

billion

of

market

appreciation.

Credit: up $3.5 billion or 8% during the past year primarily due to new fund launches, capital raised across our long-

only platform, capital invested in our carry funds and market appreciation.

(a)

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

(b)

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

(c)

Realizations: represent realizations from the disposition of assets.

(d)

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

Private

Real

Hedge Fund

Private

Real

Hedge Fund

Equity

Estate

Solutions

Credit

Total

Equity

Estate

Solutions

Credit

Total

2Q'13

36,635

$    

43,635

$    

47,572

$    

48,496

$    

176,339

$  

3Q'12

38,505

$    

40,609

$    

43,602

$    

45,914

$    

168,630

$  

Inflows

(a)

7,806

2,645

3,011

3,406

16,869

9,514

10,010

7,799

14,149

41,472

Outflows

(b)

(155)

(984)

(797)

(703)

(2,639)

(155)

(2,469)

(3,917)

(2,385)

(8,926)

Realizations

(c)

(660)

(541)

-

(2,381)

(3,582)

(4,236)

(3,297)

-

(9,976)

(17,509)

Net Inflows

6,991

1,120

2,214

322

10,648

5,123

4,244

3,882

1,788

15,038

Market

Activity

(d)

18

(40)

1,043

641

1,663

16

(138)

3,347

1,757

4,982

3Q'13

43,645

$    

44,716

$    

50,830

$    

49,459

$    

188,650

$  

3Q'13

43,645

$    

44,716

$    

50,830

$    

49,459

$    

188,650

$  

QoQ Increase

19%

2%

7%

2%

7%

YoY Increase

13%

10%

17%

8%

12%

Inflows

(a)

Outflows

(b)

Realizations

(c)

Net Inflows

Market Activity

(d)

Blackstone

23

Total Assets Under Management Flows

(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 $43.5 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 $34.2 billion during the last twelve months.

Private Equity: up 25% over the last twelve months driven by the acquisition of Strategic Partners, fundraising and

market appreciation, which more than offset $8.7 billion of realizations and outflows.

Real Estate: grew 29% during the past year driven by fundraising from several investment vehicles, the BXMT

transaction and secondary offering, co-investment capital and market appreciation, partially offset by $7.4 billion

of realizations and outflows.

Hedge Fund Solutions: increased 15% over the last twelve months due to strong net inflows and $3.6 billion of  

market appreciation driven by solid returns.

Credit: grew 16% during the past year due to strong net inflows, new fund launches and favorable market

performance.

3Q’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

2Q'13

53,287

$    

63,920

$    

50,128

$    

62,237

$    

229,572

$  

3Q'12

50,222

$    

53,546

$    

46,219

$    

54,565

$    

204,552

$  

Inflows

(a)

10,451

4,030

2,780

3,397

20,658

Inflows

(a)

12,600

13,614

7,515

19,212

52,941

Outflows

(b)

(177)

(99)

(831)

(792)

(1,899)

Outflows

(b)

(618)

(716)

(4,130)

(2,702)

(8,165)

(2,485)

(1,657)

-

(2,599)

(6,740)

(8,043)

(6,711)

-

(11,290)

(26,045)

Net Inflows

7,789

2,275

1,949

7

12,018

Net Inflows

3,939

6,188

3,385

5,219

18,731

Market Activity

(d)

1,544

2,770

1,086

1,075

6,475

Market Activity

(d)

8,458

9,231

3,559

3,535

24,782

3Q'13

62,620

$    

68,964

$    

53,162

$    

63,318

$    

248,065

$  

3Q'13

62,620

$    

68,964

$    

53,162

$    

63,318

$    

248,065

$  

QoQ Increase

18%

8%

6%

2%

8%

YoY Increase

25%

29%

15%

16%

21%

Totals may not add due to rounding.

Realizations

(c)

Realizations

(c)

Blackstone

24

(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 3Q’13, $64 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 $2.8 billion of accrued performance fees, net of performance fee compensation, as of the end of the

third quarter.

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

$2.8 billion

Net Accrued Performance Fees at 3Q’13

$2.44 per unit

(c)

Net Accrued Performance Fees at 3Q’13

35% increase

in Net Accrued Performance Fees since 3Q’12

Net

Accrued

Performance

Fees

and

Carried

Interest

Status

(a)

Carried Interest Status (excl. SBS)

(d)

Remaining Capital

Gain to Cross Carry Threshold

(Dollars in Millions, Except per Unit Data)

2Q'13

3Q'13

Per Unit

(c)

Change vs. 2Q'13

(Dollars / Euros In Millions)

@ FMV

@ Cost

Amount

% Change in TEV

Private Equity

Private Equity

BCP IV Carried Interest

500

$              

506

$              

0.45

$             

6

$                          

BCP V

19,215

$      

14,530

$      

3,234

$       

7%

BCP VI Carried Interest

63

15

0.01

(48)

BEP Carried Interest

67

62

0.05

(5)

Real Estate

Tactical Opportunities Carried Interest

3

5

0.00

2

BREP Int'l II

1,162

€

1,129

€

1,009

€

25%

SP V

-

1

0.00

1

Total Private Equity

633

589

0.52

(44)

Real Estate

BREP V Carried Interest

552

616

0.54

64

BREP VI Carried Interest

740

857

0.76

117

BREP VII Carried Interest

189

248

0.22

59

BREP Int'l I Carried Interest

2

2

0.00

0

BREP Europe III Carried Interest

105

128

0.11

23

BREDS Carried Interest

22

21

0.02

(1)

BREDS Incentive Fees

7

2

0.00

(5)

Asia Platform Incentive Fees

18

16

0.01

(2)

Total Real Estate

1,635

1,890

1.67

255

Hedge Fund Solutions

Incentive Fees

67

75

0.07

8

Total Hedge Fund Solutions

67

75

0.07

8

Credit

Carried Interest

129

143

0.13

14

Incentive Fees

65

72

0.06

7

Total Credit

194

215

0.19

21

Total Blackstone

Carried Interest

2,372

2,604

2.29

232

Incentive Fees

157

165

0.15

8

Net Accrued Performance Fees

2,529

$           

2,769

$           

2.44

$             

240

$                     

Memo: Net Realized Performance Fees

38

$                 

64

$                 

0.06

$             

26

$                       

Blackstone

25

Investment

Records

as

of

September

30,

2013

(a)

Notes on next page.

Committed

Available

Unrealized Investments

Realized Investments

Total Investments

Net IRRs (e)

(Dollars in Thousands, Except Where Noted)

Capital

Capital (b)

Value

MOIC (c)

% Public (d)

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 (Jun 2000 / Jun 2006)

2,137,330

199,298

236,534

0.8x

12%

2,594,278

1.4x

2,830,812

1.3x

8%

6%

BCP IV (Nov 2002 / Dec 2005)

6,773,138

239,535

4,923,637

2.1x

39%

15,921,587

3.1x

20,845,224

2.8x

50%

37%

BCP V (Dec 2005 / Jan 2011)

21,035,590

1,547,819

20,733,168

1.4x

31%

6,393,995

1.3x

27,127,163

1.4x

4%

5%

BCP VI (Jan 2011 / Jan 2016)

15,174,607

10,693,266

4,208,180

1.2x

21%

376,709

1.7x

4,584,889

1.3x

45%

8%

BEP (Aug 2011 / Aug 2017)

2,429,415

1,497,114

1,027,967

2.2x

48%

208,415

1.4x

1,236,382

2.0x

19%

57%

Tactical Opportunities

3,523,679

2,882,867

731,033

1.1x

7%

110,534

1.1x

841,567

1.1x

18%

13%

Strategic Partners

12,467,267

2,651,187

6,441,264

1.4x

8,836,356

1.4x

15,277,620

1.4x

n/a

14%

Other

Funds

and

Co-Invest

(f)

1,130,264

149,421

449,991

0.6x

60%

20,890

1.0x

470,881

0.6x

n/m

n/m

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

-

1,324,589

0.9x

-

3,019,302

2.4x

4,343,891

1.6x

72%

14%

BREP V (Dec 2005 / Feb 2007)

5,538,579

243,946

7,916,980

1.8x

-

2,415,921

1.7x

10,332,901

1.8x

41%

10%

BREP VI (Feb 2007 / Aug 2011)

11,056,740

679,208

16,124,116

1.7x

1%

2,996,023

2.1x

19,120,139

1.8x

32%

11%

BREP VII (Aug 2011 / Feb 2017)

13,403,431

7,144,655

8,700,115

1.4x

-

1,427,799

1.6x

10,127,914

1.4x

44%

30%

$    8,067,809

Euro

BREP Int'l (Jan 2001 / Sep 2005)

824,172

€

-

€

104,405

€

1.2x

-

1,235,480

€

2.2x

1,339,885

€

2.0x

25%

23%

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

1,627,954

80,575

1,271,454

1.1x

-

198,004

1.2x

1,469,458

1.1x

3%

-

BREP Europe III (Jun 2008 / Dec 2013)

3,203,646

676,744

3,673,034

1.4x

-

179,011

1.4x

3,852,045

1.4x

20%

17%

Total Euro Real Estate Funds

5,655,772

757,319

5,048,893

1.3x

-

1,612,495

1.9x

6,661,388

1.4x

24%

9%

BREP

Co-Investment

(g)

5,160,715

-

7,167,351

1.5x

-

683,569

1.5x

7,850,920

1.5x

12%

13%

BREP Asia (Jun 2013 / Dec 2017)

1,447,326

1,215,732

275,332

1.1x

-

-

n/a

275,332

1.1x

n/a

207%

BREDS I

2,838,485

482,622

2,085,338

1.4x

-

2,161,553

1.3x

4,246,891

1.3x

17%

13%

BREDS II

3,332,777

2,691,799

655,406

1.0x

-

-

n/a

655,406

1.0x

n/a

n/m

Total

BREDS

(h)

6,171,262

3,174,421

2,740,744

n/m

-

2,161,553

n/m

4,902,297

n/m

n/m

n/m

Credit

(i)

Mezzanine

6,120,000

$           

3,067,259

$   

3,043,168

$   

1.3x

-

3,662,048

$   

1.6x

6,705,216

$   

1.5x

n/a

19%

Rescue Lending

8,378,143

5,386,524

4,031,530

1.4x

-

1,456,572

1.1x

5,488,102

1.3x

n/a

15%

-

Total Core Private Equity

53,737,683

$         

14,177,032

$

31,129,486

$

1.4x

31%

39,678,229

$

2.2x

70,807,715

$

1.8x

21%

15%

Total Private Equity

70,858,893

$         

19,860,507

$

38,751,774

$

1.4x

31%

48,646,009

$

2.0x

87,397,783

$

1.7x

21%

15%

Total Global Real Estate Funds

35,439,913

$         

34,067,961

$

1.6x

1%

17,388,689

$

2.1x

51,456,650

$

1.7x

28%

16%

Total Real Estate

49,179,915

$         

10,308,193

$

48,289,209

$

1.5x

0%

20,107,182

$

2.1x

68,396,391

$

1.6x

27%

15%

Total Credit

14,498,143

$         

8,453,783

$   

7,074,698

$   

1.4x

5,118,620

$   

1.4x

12,193,318

$

1.4x

n/m

€

€

€

€

€

Blackstone

26

Investment

Records

as

of

September

30,

2013

–

Notes

Not meaningful.

Not applicable.

Preliminary.

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

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

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

divided by invested capital.

Strategic Partners is excluded from the total percent of unrealized value in public companies due to the nature of the

investments made from its funds.

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

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

Returns for Other Funds and Co-Invest are not meaningful as these funds have no or little realizations.

BREP Co-Investment represents co-investment capital raised for various BREP investments. The Net IRR reflected is calculated

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

and Carried Interest.

Excludes Capital Trust drawdown funds. Returns and MOICs for Total BREDS are not applicable or not meaningful as BREDS II

commenced its investment period in May 2013.

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

period, was 1.9x and 1.5x, respectively.

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

n/m

n/a

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

Reconciliation of GAAP to Non-GAAP Measures

See notes following this reconciliation.

Blackstone

27

(Dollars in Thousands)

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

YTD'12

YTD'13

Net Income Attributable to The Blackstone Group L.P.

128,824

$  

106,413

$  

167,635

$    

211,148

$    

171,164

$    

112,185

$    

549,947

$    

Net Income Attributable to Non-Controlling Interests in Blackstone Holdings

183,431

169,918

207,090

249,134

208,332

237,809

664,556

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

(157,607)

(180,011)

(9,452)

27,944

30,231

279,970

48,723

Net Income Attributable to Redeemable Non-Controlling

Interests in Consolidated Entities

41,854

25,151

62,316

22,366

51,188

78,447

135,870

Net Income

196,502

$  

121,471

$  

427,589

$    

510,592

$    

460,915

$    

708,411

$    

1,399,096

$

Provision for Taxes

39,237

65,696

50,993

56,082

57,477

119,327

164,552

Income Before Provision for Taxes

235,739

$  

187,167

$  

478,582

$    

566,674

$    

518,392

$    

827,738

$    

1,563,648

$

IPO and Acquisition-Related Charges

(a)

248,179

317,499

186,962

178,706

190,525

762,012

556,193

Amortization of Intangibles

(b)

33,338

26,487

25,657

24,322

27,525

123,661

77,504

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

Consolidated Entities

(c)

115,753

154,860

(52,864)

(50,310)

(81,419)

(358,417)

(184,593)

Economic Income

633,009

$  

686,013

$  

638,337

$    

719,392

$    

655,023

$    

1,354,994

$

2,012,752

$

Taxes

(d)

(11,257)

(16,032)

(10,031)

(16,152)

(14,792)

(29,676)

(40,975)

Economic Net Income

621,752

$  

669,981

$  

628,306

$    

703,240

$    

640,231

$    

1,325,318

$

1,971,777

$

Taxes

(d)

11,257

16,032

10,031

16,152

14,792

29,676

40,975

Performance Fee Adjustment

(e)

(602,999)

(470,173)

(603,999)

(719,219)

(544,936)

(1,123,592)

(1,868,154)

Investment Income (Loss) Adjustment

(f)

(107,432)

(111,670)

(134,771)

(97,119)

(99,172)

(174,574)

(331,062)

12,877

4,690

(1,729)

(21,452)

(712)

21,079

(23,893)

Performance Fee Compensation and Benefits Adjustment

(h)

199,597

163,744

239,895

286,832

168,393

349,802

695,120

Fee Related Earnings

135,052

$  

272,604

$  

137,733

$    

168,434

$    

178,596

$    

427,709

$    

484,763

$    

Realized Performance Fees

(i)

68,905

262,710

218,952

147,231

138,924

129,701

505,107

Realized Investment Income

(j)

25,098

37,448

38,110

54,586

11,492

57,950

104,188

Adjustment Related to Realized Investment Income (Loss) -

Blackstone's Treasury Cash Management Strategies

(k)

(8,251)

(6,444)

(3,820)

1,469

6,672

(15,428)

4,321

Taxes and Related Payables Including Payable Under Tax Receivable Agreement

(l)

(31,169)

(72,553)

(12,148)

(44,220)

(31,756)

(59,772)

(88,124)

Equity-Based Compensation

(m)

6,813

68,572

12,085

10,985

8,745

21,468

31,815

Distributable Earnings

196,448

$  

562,337

$  

390,912

$    

338,485

$    

312,673

$    

561,628

$    

1,042,070

$

Interest Expense

18,163

24,585

26,069

25,960

25,268

44,567

77,297

Taxes and Related Payables Including Payable Under Tax Receivable Agreement

(l)

31,169

72,553

12,148

44,220

31,756

59,772

88,124

Depreciation and Amortization

8,895

12,681

8,643

9,116

8,956

29,554

26,715

Adjusted EBITDA

254,675

$  

672,156

$  

437,772

$    

417,781

$    

378,653

$    

695,521

$    

1,234,206

$

Investment

Income

(Loss)

-

Blackstone's

Treasury

Cash

Management

Strategies

(g)

Blackstone

28

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 EI.

(Dollars in Thousands)

3Q'13

YTD'13

Interest Income and Dividend Revenue

21,539

$       

51,542

$       

Other Revenue

4,708

5,687

Investment Income (Loss) -

Blackstone's Treasury Cash Management Strategies

(a)

(712)

(23,893)

Interest Income and Other Revenue

25,535

$       

33,336

$       

Realized Incentive Fees

31,238

130,832

Less: Realized Incentive Fee Compensation

(14,599)

(60,121)

Net Realized Incentive Fees

16,639

$       

70,711

$       

Realized Carried Interest

182,654

660,112

Less: Realized Carried Interest Compensation

(60,369)

(225,716)

Net Realized Carried Interest

122,285

$    

434,396

$    

Realized Investment Income

11,492

104,188

(a)

6,672

4,321

Net Realized Investment Income

18,164

$       

108,509

$    

Equity-Based Compensation

(b)

8,745

$         

31,815

$       

Unrealized Incentive Fees

40,992

153,105

Less: Unrealized Incentive Fee Compensation

(11,084)

(58,646)

Net Unrealized Incentive Fees

29,908

$       

94,459

$       

Unrealized Carried Interest

290,052

924,105

Less: Unrealized Carried Interest Compensation

(82,341)

(350,637)

Net Unrealized Carried Interest

207,711

$    

573,468

$    

Unrealized Investment Income

87,680

226,874

(a)

712

23,893

(a)

(6,672)

(4,321)

Net Unrealized Investment Income

81,720

$       

246,446

$    

Related Payables

(c)

16,964

$       

47,149

$       

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

(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.

Blackstone

29

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

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

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

Walkdown of Financial Metrics – Calculation of Certain Non-GAAP Financial Metric Components

Blackstone

30

Unit Rollforward

(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.

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

YTD'12

YTD'13

Total

GAAP

Weighted-Average

Common

Units

Outstanding

-

Basic

544,716,399

553,989,577

582,322,183

583,843,094

589,643,844

526,892,258

585,296,526

Adjustments:

Weighted-Average Unvested Deferred Restricted Common Units

2,207,204

2,430,014

3,377,716

2,919,959

3,276,951

5,810,614

3,191,542

Total

GAAP

Weighted-Average

Common

Units

Outstanding

-

Diluted

546,923,603

556,419,591

585,699,899

586,763,053

592,920,795

532,702,872

588,488,068

Adjustments:

Weighted-Average Blackstone Holdings Partnership Units

586,762,611

581,202,276

557,463,170

555,224,714

551,916,623

593,555,609

554,857,282

Weighted-Average Economic Net Income Adjusted Units

1,133,686,214

1,137,621,867

1,143,163,069

1,141,987,767

1,144,837,418

1,126,258,481

1,143,345,350

Economic Net Income Adjusted Units, End of Period

1,133,637,141

1,143,019,281

1,143,893,134

1,142,576,555

1,145,675,305

1,133,637,141

1,145,675,305

Total

Common

Units

Outstanding

537,299,585

568,600,922

576,466,264

584,860,157

537,299,585

584,860,157

Adjustments:

Blackstone

Holdings

Partnership

Units

584,690,200

553,614,040

554,603,708

550,902,208

550,274,903

584,690,200

550,274,903

Distributable

Earnings

Units

Outstanding

1,121,989,785

1,122,214,962

1,127,879,454

1,127,368,472

1,135,135,060

1,121,989,785

1,135,135,060

(a)

(b)

573,275,746

Definitions and Distribution Policy

31

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. 

Blackstone

32

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.