Blackstone (BX) 8-K Blackstone Reports Record Full Year and Fourth Quarter 2013 Results

Blackstone’s Full Year and Fourth Quarter

2013 Earnings

January 30, 2014

Exhibit 99.2

Blackstone

1

“Our

record

results

in

2013

illustrate

how

our

long-

term

fund

structures

benefit

our

investors,

and

how

our

patient

approach

toward

improving

assets

can

ultimately

drive

better

earnings

growth

and

fund

performance.”

Stephen A. Schwarzman

Chairman and Founder

Blackstone

2

Blackstone’s Record Full Year and Fourth Quarter 2013 Earnings

Blackstone’s

record

$3.5

billion

of

Economic

Net

Income

(“ENI”)

was

driven

by

its

best

year

of

overall

investment performance.

•

ENI

was

$1.5

billion

($1.35/unit)

for

the

quarter

and

$3.5

billion

($3.07/unit)

for

the

full

year.

Full

year

Distributable

Earnings

(“DE”)

continued

to

accelerate

to

$1.9

billion

($1.56/unit),

up

66%.

•

Distributable

Earnings

were

$0.68/unit

for

the

fourth

quarter,

driven

by

Realized

Performance

Fees

and

Realized

Investment

Income

totaling

$694

million.

•

Fund

activity

generated

$1.4

billion

of

Realized

Performance

Fees,

up

126%

for

the

year.

•

Fee

Related

Earnings

rose

to

$745

million

driven

by

18%

growth

in

Fee-Earning

Assets

Under

Management.

GAAP

Net

Income

was

$621

million

for

the

quarter

and

$1.2

billion

for

the

year,

net

of

certain

non-cash

IPO

and

transaction

related

expenses

and

non-controlling

interests,

mainly

inside

ownership.

Total

Assets

Under

Management

(“AUM”)

reached

$266

billion,

up

26%

year-over-year

with

double-digit

increases

across

all

investing

businesses,

through

a

combination

of

strong

inflows

and

appreciation.

•

Gross

asset

inflows

totaled

$17

billion

in

the

fourth

quarter

and

$60

billion

for

the

year.

•

Blackstone’s

funds

returned

$38

billion

(a)

of

capital

to

investors

during

2013.

(a)

See

Total

Assets

Under

Management

–

FY’13

Total

AUM

Rollforward,

notes

(b)

and

(c) (see page 13).

Blackstone

3

Blackstone’s Record Full Year and Fourth 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)

4Q'12

4Q'13

vs. 4Q'12

FY'12

FY'13

vs. FY'12

Fee Revenues

646,903

$        

648,246

$        

0%

2,186,765

$     

2,367,322

$     

8%

Performance Fees

470,173

1,688,219

259%

1,593,765

3,556,373

123%

Investment Income

111,670

356,743

219%

286,244

687,805

140%

Total Revenues

1,228,746

$    

2,693,208

$    

119%

4,066,774

$    

6,611,500

$    

63%

Total Expenses

542,733

1,109,921

105%

2,025,767

3,015,461

49%

Taxes

16,032

41,189

157%

45,708

82,164

80%

Economic Net Income (“ENI”)

669,981

$        

1,542,098

$    

130%

1,995,299

$    

3,513,875

$    

76%

ENI per Unit

(a)

0.59

$              

1.35

$              

129%

1.77

$              

3.07

$              

73%

GAAP Net Income

106,413

$        

621,255

$        

484%

218,598

$        

1,171,202

$     

436%

Fee Related Earnings (“FRE”)

272,604

$        

260,706

$        

(4)%

700,313

$        

745,469

$        

6%

Distributable Earnings (“DE”)

562,337

$        

820,629

$        

46%

1,123,965

$    

1,862,699

$    

66%

DE per Common Unit

(b)

0.45

$              

0.68

$              

51%

0.93

$              

1.56

$              

68%

Distribution per Common Unit

0.42

$              

0.58

$              

38%

0.72

$              

1.34

$              

86%

Total Assets Under Management

210,219,960

$

265,757,630

$

26%

210,219,960

$

265,757,630

$

26%

Fee-Earning Assets Under Management

167,880,440

$

197,981,739

$

18%

167,880,440

$

197,981,739

$

18%

4

Patience Drives Sustainable Outperformance: “Compounding Effect”

Total Revenues and Economic Income

(Dollars in Millions)

Distributable Earnings: “DE”

(Dollars in Millions)

49%

CAGR

53%

Margin

Total Revenues

Economic Income

13%

CAGR

91%

CAGR

Net Realization Activity

Fee Related Earnings

$1,863

Gross Performance Fees and Investment Income

(Dollars in Millions)

Net Performance Fee Receivable

(Dollars in Millions)

(a)

CAGR = Compound Annual Growth Rate.

$724

$1,581

$1,585

$2,041

$3,596

$1,792

$3,141

$3,284

$6,612

2009

2010

2011

2012

2013

$1,863

$1,124

$781

$771

$546

$461

$478

$546

$700

$745

$84

$293

$235

$424

$1,117

2009

2010

2012

2013

2011

$274

$1,475

$1,360

$1,880

$4,244

2009

2010

2011

2012

2013

$749

$1,468

$2,238

$3,400

2010

2011

2012

2013

Blackstone

4

$4,067

Blackstone

5

Walkdown of Financial Metrics

(Dollars in Thousands, Except per Unit Data)

4Q'13

FY'13

Results

Per Unit

(a)

Results

Per Unit

(a)

Base Management Fees

469,092

$         

1,740,807

$     

Advisory Fees

139,158

410,514

Transaction and Other Fees, Net

59,733

206,977

Management Fee Offsets

(43,752)

(72,220)

Interest Income and Other Revenue

28,334

61,670

Compensation

(262,688)

(1,115,640)

Other Operating Expenses

(129,171)

(486,639)

Fee Related Earnings

260,706

$         

0.23

$               

745,469

$         

0.66

$               

Net Realized Incentive Fees

202,707

273,418

Net Realized Carried Interest

252,361

686,757

Net Realized Investment Income

75,156

183,665

Taxes and Related Payables

(68,610)

(156,734)

Equity-Based Compensation

98,309

130,124

Distributable Earnings

820,629

$         

0.68

$               

1,862,699

$     

1.56

$               

Net Unrealized Incentive Fees

(102,736)

(8,277)

Net Unrealized Carried Interest

617,825

1,191,293

Net Unrealized Investment Income

277,268

523,714

Add Back: Related Payables

27,421

74,570

Less: Equity-Based Compensation

(98,309)

(130,124)

Economic Net Income

1,542,098

$     

1.35

$               

3,513,875

$     

3.07

$               

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 (see page 31).

(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 (see page 32)). FY’13 Fee Related Earnings per Unit and DE per Unit amounts equal the sum of the respective per unit quarterly amounts for 2013.

Blackstone

6

Summary Walkdown of GAAP to Non-GAAP Financial Metrics

GAAP

Economic Income

“EI”

Fee Related Earnings

“FRE”

Distributable Earnings

“DE”

Income Before Provision for Taxes

+

IPO and Acquisition-Related Charges

–

Impact of Consolidated Funds

–

Net Performance Fees

–

Fund Investment Income

+

Net Realized Performance Fees

+

Realized Investment Income

–

Taxes and Related Payables

+   Equity-Based Compensation

=

Distributable Earnings

(Dollars in Millions)

4Q’13

FY’13

$821

=

Economic Income

$1,583

$3,596

=

Fee Related Earnings

$261

$745

$1,863

$1,585

$3,149

See Appendix – Reconciliation of GAAP to Non-GAAP Measures for details (see pages 29-30).

Blackstone

7

Private Equity

28.5%

FY’13

increase

in

fund

carrying

value

(b)

$330 million

FY’13 Realized Performance Fees

(a)

Corporate

Private

Equity

portfolio

includes BCP,

BCOM

and

BEP. Excludes

Tactical

Opportunities,

Other

Funds

(including

fee-paying

co-investment

funds) and

Strategic

Partners.

(b)

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

(c)

MOIC = Multiple of Invested Capital.

(d)

See Additional Disclosures (see page 18).

(e)

“IRR”

is the Internal Rate of Return and refers to Total Net IRR. On a gross basis, BCP IV’s IRR was 50%.

Blackstone

took

advantage

of

improving

equity

markets

to

harvest

gains

driving

Total

Revenues

to

$1.5

billion

and

Economic

Income

to

$715

million,

with

$3.5

billion

of

realizations

during

the

quarter

and

$9.6

billion

for

the year.

•

Completed

the

successful

IPOs

of

Merlin

and

Hilton

during

the

quarter,

creating

a

combined

$5.4

billion

of

public

market

capitalization

for

Blackstone’s

private

equity

investors,

bringing the total market capitalization

across all funds to $17.0

billion.

•

Announced

sales

of

Mivisa,

Apria

and

GeoSouthern

which

will

generate

$2.7

billion

of

proceeds

at

closing.

Strong

performance

by

the

Corporate

Private

Equity

(a)

funds

in 2013 drove Total Revenues up 76% on increased

Performance

Fees

and

Investment

Income.

•

Overall

carrying

value

of

portfolio

assets

(b)

appreciated

11.5%

during

the

quarter

and

28.5%

for

the

full

year.

•

BCP

V

appreciated

34.5%

during

2013

and

is

now

held

at

a

MOIC

(c)

of 1.5x with 46% of fund assets public

(d)

.

•

BCP

IV

appreciated

20.5%

during

2013

and

generated

a

37% net

IRR

(e)

and

a

MOIC

of

2.8x

since

inception.

Invested

and/or

committed

$3.4

billion

of

total

capital

for

the

quarter

and

$5.0

billion

for

the

year.

Fourth

quarter

commitments:

tactical

opportunities

$1.5

billion

($5.1

billion

total);

initial

close

on

latest

Strategic

Partners

secondary

fund

of

funds

with

$688

million

total; Total AUM for Private Equity increased to $65.7 billion.

$632 million

Net Accrued Performance Fees at 4Q’13

% Change

% Change

(Dollars in Thousands)

4Q'12

4Q'13

vs. 4Q'12

FY'12

FY'13

vs. FY'12

Fee Revenues

134,857

$         

123,044

$       

(9)%

458,721

$      

479,312

$      

4%

Performance Fees

118,968

486,641

309%

258,178

728,225

182%

Investment Income

64,856

116,112

79%

111,160

249,775

125%

Total Revenues

318,681

725,797

128%

828,059

1,457,312

76%

Compensation

53,963

56,370

4%

222,709

236,120

6%

Performance Fee Compensation

26,145

276,207

956%

62,234

381,686

513%

Other Operating Expenses

40,499

32,767

(19)%

130,845

124,137

(5)%

Total Expenses

120,607

365,344

203%

415,788

741,943

78%

Economic Income

198,074

$         

360,453

$      

82%

412,271

$      

715,369

$      

74%

Total AUM

51,002,973

$   

65,675,031

$ 

29%

51,002,973

$ 

65,675,031

$ 

29%

Fee-Earning AUM

37,050,167

$   

42,600,515

$ 

15%

37,050,167

$ 

42,600,515

$ 

15%

Blackstone

8

Real Estate

31.3%

FY’13

increase

in

fund

carrying

value

(a)

$533 million

FY’13 Realized Performance Fees

Revenues

were

up

96%

to

$3.2

billion

for

2013

generating

a

107%

increase

in

Economic

Income

to

$2.1

billion.

Overall

carrying

value

of

Real

Estate

Funds

(a)

appreciated

13.1%

for

the

quarter

and

31.3%

for

the

year.

•

Completed

the

successful

IPOs

of

Hilton,

Extended

Stay

and

Brixmor

during

the

fourth

quarter.

These

investments

represent

$18.7

billion

of

unrealized

equity

value

in

funds

and

fee-paying co-investments.

•

Attractive

pricing

resulted

in

opportunities

to

exit

assets

across

the

portfolio,

generating

record

Realized

Performance

Fees

of

$533

million,

driven

by

private sales

of

stabilized

office

buildings

in

the

U.S.

and

U.K.

Closed

on

a

record

$15.8

billion

of

new

capital

across

the Real

Estate

segment

during

the

year.

•

Fourth

quarter

commitments:

first

Asian

real

estate

fund

$1.5

billion

($3.2

billion

total);

fourth

European

fund

$3.9

billion

($5.6

billion

total)

as

both

approach

their

caps

of

$5.0

billion

and

$6.9

billion

(b)

, respectively.

•

BXMT,

the

commercial

mortgage

REIT,

has

continued

its

strong

growth

since

the

May

re-IPO,

completing

three

offerings

with

a

current

market

capitalization

of

over

$1

billion, up from $61 million at the end of 2012.

Invested

$10.2

billion

of

total

capital

with

an

additional

$1.4

billion

committed

at

year

end,

bringing

the

total

capital

invested

plus

committed

to

a record $11.6

billion

for

2013

as

the

investment

environment

remained

attractive

and

we

were

able

to

capitalize

on

our

unique

global

footprint.

$2.3 billion

Net Accrued Performance Fees at 4Q’13

% Change

% Change

(Dollars in Thousands)

4Q'12

4Q'13

vs. 4Q'12

FY'12

FY'13

vs. FY'12

Fee Revenues

167,924

$         

187,081

$      

11%

623,736

$      

646,983

$      

4%

Performance Fees

201,527

958,463

376%

874,415

2,155,582

147%

Investment Income

34,442

224,926

553%

136,177

402,560

196%

Total Revenues

403,893

1,370,470

239%

1,634,328

3,205,125

96%

Compensation

54,201

75,625

40%

271,122

294,222

9%

Performance Fee Compensation

66,727

333,047

399%

240,377

724,537

201%

Other Operating Expenses

36,946

29,698

(20)%

123,714

116,391

(6)%

Total Expenses

157,874

438,370

178%

635,213

1,135,150

79%

Economic Income

246,019

$         

932,100

$      

279%

999,115

$      

2,069,975

$   

107%

Total AUM

56,695,645

$   

79,410,788

$ 

40%

56,695,645

$ 

79,410,788

$ 

40%

Fee-Earning AUM

41,931,339

$   

50,792,803

$ 

21%

41,931,339

$ 

50,792,803

$ 

21%

$533 million

FY’13 Realized Performance Fees

$2.3 billion

Net Accrued Performance Fees at 4Q’13

(a)

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

(b)

The fourth European fund has a commitment cap of €5 billion ($6.9 billion at December 31, 2013).

Blackstone

9

Hedge Fund Solutions

(a)

BAAM’s Principal Solutions Composite, formerly known as BAAM’s Core Funds 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 Principal Solutions Composite was up 3.4% for the quarter and 11.4% for the full

year, with a Sharpe ratio of 4.3. On a net of fees basis, the equity long/short strategies were up between 16% and 21%.

Compelling

risk-adjusted

performance

and

new

product

innovation

drove

continued

strong

growth

and

market

share

gains

for

the

world’s

largest

discretionary

allocator

to

hedge

funds.

Record

Total

Revenues

of

$649

million

resulted

in

a

46%

increase

in

Economic

Income

to

$377

million

as strong

investment performance contributed to record assets,

Management

and

Performance

Fees.

BAAM’s

Principal

Solutions

Composite

(a)

was

up

gross

3.8%

for

the

quarter

and

12.8%

for

the

full

year,

with

a

low

volatility

portfolio

leading

to

a

Sharpe

ratio

of

4.7.

The

equity

long/short

strategies

(a)

were

up

between

19%

and

23% gross.

Fee-Earning

AUM

grew

22%

year-over-year

to

$52.9

billion;

January

1

subscriptions

of

$698

million

are

not

included

in

year

end

Fee-Earning

AUM.

$27.8

billion,

or

97%,

of

Incentive

Fee-Earning

AUM,

were

above

their

high

water

mark

and/or

hurdle,

up

from

$18.6

billion

and

78%

a

year

ago,

generating

$215

million

of

Performance

Fees

for

the

full

year.

BAAM’s

Strategic

Opportunities

platform

invested

approximately

$3.4

billion

in

new

special

situation

exposures.

Fourth

quarter

commitments:

BAAM’s

permanent

capital

vehicle

acquiring

general

partner

interests

in

hedge

funds

held

its

initial

close

of

$1.1

billion.

% Change

% Change

(Dollars in Thousands)

4Q'12

4Q'13

vs. 4Q'12

FY'12

FY'13

vs. FY'12

Fee Revenues

96,801

$           

114,389

$      

18%

350,939

$      

414,850

$      

18%

Performance Fees

36,524

76,881

110%

92,475

215,453

133%

Investment Income

3,784

6,087

61%

15,787

18,307

16%

Total Revenues

137,109

197,357

44%

459,201

648,610

41%

Compensation

28,113

28,147

0%

119,731

136,470

14%

Performance Fee Compensation

9,766

18,878

93%

24,397

68,649

181%

Other Operating Expenses

16,491

15,697

(5)%

57,809

66,966

16%

Total Expenses

54,370

62,722

15%

201,937

272,085

35%

Economic Income

82,739

$           

134,635

$      

63%

257,264

$      

376,525

$      

46%

Total AUM

46,092,505

$   

55,657,463

$ 

21%

46,092,505

$ 

55,657,463

$ 

21%

Fee-Earning AUM

43,478,791

$   

52,865,837

$ 

22%

43,478,791

$ 

52,865,837

$ 

22%

12.8%

FY’13 Composite Return

$27.8 billion

Incentive Fee-Earning AUM at 4Q’13

(97% of Total Eligible Incentive Fees)

$5.1 billion

FY’13 Fee-Earning Net Inflows

Blackstone

10

Credit

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

6.8%

for

4Q’13

and

18.2%

for

FY’13, Mezzanine Funds net returns were 2.8% for 4Q’13 and

17.9%

for

FY’13

and Rescue Lending Funds net returns were 9.8% for 4Q’13 and 24.3% for FY’13.

(b)

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

$65 billion

4Q’13 Total AUM

GSO’s

diversified

platform

drove

double-digit

annual

returns across its various

strategies against a challenging environment despite sustained low interest

rates and record level high yield issuance.

A

substantial

increase

in

Performance

Fees,

up

24%,

drove

Total

Revenues

to

$880

million

and

Economic

Income

to

a

record

$358

million

for

the

year.

Despite

realized

proceeds

in

carry

funds

of

$655

million

for

the

quarter

and

$3.2

billion

for

the

year,

Fee-Earning

AUM

grew

14%.

Total

AUM

grew

15%

year-over-year

to

$65.0

billion

due

to

robust

net inflows

throughout the year.

Closed

on

$1.8

billion

during

the

quarter

for

new

product

launches,

reflecting

the

continued

focus

on

growing

organically

by

leveraging

core credit

expertise.

Investment

Performance

(a)

Gross Returns

% Change

% Change

(Dollars in Thousands)

4Q'12

4Q'13

vs. 4Q'12

FY'12

FY'13

vs. FY'12

Fee Revenues

117,081

$         

80,873

$         

(31)%

389,304

$      

405,088

$      

4%

Performance Fees

113,154

166,234

47%

368,697

457,113

24%

Investment Income

8,043

8,892

11%

20,380

18,049

(11)%

Total Revenues

238,278

255,999

7%

778,381

880,250

13%

Compensation

51,853

31,802

(39)%

182,077

186,514

2%

Performance Fee Compensation

61,106

89,930

47%

186,538

238,310

28%

Other Operating Expenses

18,116

29,566

63%

84,488

96,940

15%

Total Expenses

131,075

151,298

15%

453,103

521,764

15%

Economic Income

107,203

$         

104,701

$      

(2)%

325,278

$      

358,486

$      

10%

Total AUM

56,428,837

$   

65,014,348

$ 

15%

56,428,837

$ 

65,014,348

$ 

15%

Fee-Earning AUM

45,420,143

$   

51,722,584

$ 

14%

45,420,143

$ 

51,722,584

$ 

14%

4Q'13

FY'13

Hedge Fund

   Strategies

8.5%

24.1%

Mezzanine

   Funds

3.9%

25.6%

Rescue

   Lending Funds

11.8%

33.1%

CLOs

Customized Credit

Strategies

(b)

Mezzanine

Funds

Rescue

Lending

Funds

Hedge Fund

Strategies

$20.6

$8.0

$9.4

$6.4

$20.7

Blackstone

11

Financial Advisory

% Change

% Change

(Dollars in Thousands)

4Q'12

4Q'13

vs. 4Q'12

FY'12

FY'13

vs. FY'12

Fee Revenues

130,240

$         

142,859

$      

10%

364,065

$      

421,089

$      

16%

Investment Income (Loss)

545

726

33%

2,740

(886)

n/m

Total Revenues

130,785

143,585

10%

366,805

420,203

15%

Compensation

59,429

70,744

19%

235,137

262,314

12%

Other Operating Expenses

19,378

21,443

11%

84,589

82,205

(3)%

Total Expenses

78,807

92,187

17%

319,726

344,519

8%

Economic Income

51,978

$           

51,398

$         

(1)%

47,079

$         

75,684

$         

61%

Full

year

revenues

were

up

15%

in

2013,

the

second

best

year

for

that

segment,

primarily

from

increased

activity

in

Restructuring, the Park Hill fund placement business and the impact of the first full year of earnings from

Blackstone Capital Markets, which was an active participant in increased public market activity for both equity and debt

issuances.

Blackstone

Capital

Markets

had

a

successful

first

year

as

it

acted

as

an

underwriter

or

arranger

on

26

deals,

including

the

IPOs

for

Brixmor,

Extended

Stay

and

Pinnacle

Foods,

the

IPO

and

secondary

offering

for

SeaWorld, and the IPO

and debt refinancing for Hilton.

Restructuring

had

its

second

best

year

of

revenue

despite

the

improving

economy

and

historically

low

default

rates,

as

the

business

diversified

its

client

base

and

advisory

roles

through

a

number

of

high profile

assignments and continued focus

on non-bankruptcy related assignments.

Park

Hill’s

double-digit

growth

in

placement

fee

revenue

is

a

key

indicator

of

the

value

to

alternative

managers

to

raise

capital

but

is

also

a

reflection

of

continued

positive

trends

in

institutional

commitments

to

alternatives.

Blackstone Advisory Partners revenue was down year-over-year, consistent with the 2013 industry trend of the lowest

announced merger and acquisition dollar volume since 2009, although a meaningful backlog of assignments existed at

year end.

Blackstone

12

Private

Equity

Real

Estate

Hedge

Fund

Solutions

Credit

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.

Fee-Earning AUM by Segment

(Dollars in Billions)

4Q’13 Fee-Earning AUM Rollforward

(Dollars in Millions)

FY’13 Fee-Earning AUM Rollforward

(Dollars in Millions)

Inflows: Strategic Partners (“SP”) acquisition $7.0B; Tactical 

Opportunities $2.7B.

Inflows: CLO launches raised $3.7B in long term funds; capital deployed 

in Mezzanine and Rescue Lending funds ($1.4B); capital raised in Hedge 

Fund Strategies ($1.6B), BDCs ($4.8B) and other vehicles ($3.9B).

Realizations: BCP V $2.6B (including Nielsen ($309M), SeaWorld ($196M),

Pinnacle ($157M)); BCP IV $744M including Vanguard ($286M), TDC

($135M) and TRW ($119M).

Inflows: first Asian fund $3.2B; fourth European fund $5.5B; 

co-investment across funds $1.6B, BXMT $715M and second debt 

strategies fund $1.3B.

Realizations: $6.9B returned to CLO investors; $1.9B returned 

across Mezzanine and Rescue Lending funds.

Net Inflows: $3.3B in customized funds; $1.1B in launch of 

1940 Act mutual fund; January 1, 2014 subscriptions of 

$698M.

Realizations: BREDS $2.1B; BREP VI $603M; BREP V $460M.

Fee-Earning Assets Under Management

Private

Real

Hedge Fund

Equity

Estate

Solutions

3Q'13

43,645

$    

44,716

$    

50,830

$    

49,459

$    

188,650

$  

Inflows

(a)

803

7,623

2,165

3,438

14,029

Outflows

(b)

(238)

(233)

(1,541)

(528)

(2,540)

Realizations

(c)

(1,695)

(1,445)

(185)

(1,425)

(4,750)

Net Inflows (Outflows)

(1,130)

5,945

440

1,485

6,739

Market Activity

(d)

86

132

1,596

778

2,592

4Q'13

42,601

$    

50,793

$    

52,866

$    

51,723

$    

197,982

$  

QoQ Increase (Decrease)

(2)%

14%

4%

5%

5%

Credit

Total

Private

Real

Hedge Fund

Equity

Estate

Solutions

4Q'12

37,050

$    

41,931

$    

43,479

$    

45,420

$    

167,880

$  

Inflows

(a)

9,884

13,836

9,098

15,382

48,200

Outflows

(b)

(393)

(1,330)

(3,627)

(2,085)

(7,434)

Realizations

(c)

(4,025)

(3,649)

(348)

(8,872)

(16,894)

Net Inflows

5,466

8,856

5,123

4,426

23,872

Market Activity

(d)

84

5

4,264

1,877

6,230

4Q'13

42,601

$    

50,793

$    

52,866

$    

51,723

$    

197,982

$  

YoY Increase

15%

21%

22%

14%

18%

Credit

Total

Blackstone

13

Private

Equity

Real

Estate

Hedge

Fund

Solutions

Credit

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 and the effect of changes in the definition of Total Assets Under Management.

(d)

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

Total AUM by Segment

(Dollars in Billions)

Total Assets Under Management

4Q’13 Total AUM Rollforward

(Dollars in Millions)

FY’13 Total AUM Rollforward

(Dollars in Millions)

Private

Real

Hedge Fund

Equity

Estate

Solutions

4Q'12

51,003

$     

56,696

$     

46,093

$     

56,429

$     

210,220

$   

Inflows

(a)

14,420

17,687

9,338

18,834

60,279

Outflows

(b)

(653)

(1,050)

(3,855)

(2,811)

(8,368)

Realizations

(c)

(9,584)

(8,298)

(448)

(11,196)

(29,526)

Net Inflows

4,183

8,339

5,035

4,828

22,384

Market Activity

(d)

10,489

14,376

4,530

3,758

33,153

4Q'13

65,675

$     

79,411

$     

55,657

$     

65,014

$     

265,758

$   

YoY Increase

29%

40%

21%

15%

26%

Credit

Total

Private

Real

Hedge Fund

Equity

Estate

Solutions

3Q'13

62,620

$     

68,964

$     

53,162

$     

63,318

$     

248,065

$   

Inflows

(a)

2,462

7,634

2,698

4,193

16,987

Outflows

(b)

(67)

(374)

(1,661)

(1,081)

(3,182)

Realizations

(c)

(3,490)

(3,376)

(237)

(2,843)

(9,946)

Net Inflows (Outflows)

(1,095)

3,884

801

269

3,859

Market Activity

(d)

4,150

6,562

1,695

1,427

13,834

4Q'13

65,675

$     

79,411

$     

55,657

$     

65,014

$     

265,758

$   

QoQ Increase

5%

15%

5%

3%

7%

Credit

Total

Market Activity: driven by successful IPOs of Hilton ($5.5B), Extended 

Stay ($697M) and Brixmor ($600M), as well as improving fundamentals of

Equity Office Properties ($1.0B) and Invitation Homes ($912M).

Market Activity: $4.1B of appreciation in customized and commingled 

funds; BAAM’s Principal Solutions Composite up 12.8% gross.

Market Activity: $1.5B of gains in Hedge Fund Strategies and business

development companies; $1.5B appreciation in carry funds.

Inflows: SP fund acquisition $9.4B, Tactical Opportunites $3.5B;

first close  of next SP fund $688M.

Market Activity: successful IPOs in BCP V of $3.7B (Hilton ($2.0B), 

Pinnacle($1.1B), SeaWorld($536M)) and BCP IV of $1.0B (Merlin); in 

total, publicportfolio appreciation of 49.5% created $6.6B of value.

Inflows in excess of Fee-Earning inflows: largely driven by commitments 

to Rescue Lending funds ($2.1B) and Mezzanine funds ($729M).

Inflows in excess of Fee-Earning inflows: $1.1B initial close of first

permanent capital vehicle acquiring general partner interests in hedge 

funds.

Blackstone

14

4Q’13 Available Capital Summary

Committed

undrawn

capital

(“dry

powder”)

reached

its

highest

level

of

$46.8

billion

at

year

end

on

strong

inflows that easily outpaced $15.3 billion of total capital deployed.

$20.8

billion

of

Total

AUM

was

not

yet

earning

Base

Management

Fees

at

year

end

due

largely

to

fund

structures

where

the

payment

of

Management

Fees

is

triggered

by

investment

of

capital

rather

than

commitment.

Performance

Fee

Eligible

AUM

(a)

was

$181.0

billion

at

year

end,

including

$112.1

billion

currently

earning

Performance Fees.

(a)

Represents invested and to be invested capital at fair value, including closed commitments for funds whose investment period has

not yet commenced, on which performance fees could be earned if

certain hurdles are met.

(b)

Represents (i) committed uninvested capital of the Private Equity and Real Estate drawdown funds, and (ii) committed uninvested capital for the Real Estate debt strategies drawdown funds, the Credit Mezzanine and Rescue Lending funds and

the Hedge Fund Solutions Strategic Alliance Fund and other separately managed accounts.

(c)

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

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

$47 billion Dry Powder

(b)

Credit

Hedge

Fund

Solutions

Private

Equity

Real

Estate

$21 billion Not Yet Earning

Base Management Fees

(c)

$181 billion Performance

Fee Eligible AUM

(a)

Currently Earning

Performance Fees

Invested/Committed Not Yet

Earning Performance Fees

To Be Invested

Credit

Hedge Fund

Solutions

Real

Estate

Private

Equity

Totals may not add due to rounding.

Blackstone

15

On

December

11,

2013,

S&P

upgraded

Blackstone

to

A+,

matching

Fitch’s

rating,

making

Blackstone

the

highest

rated alternative asset manager and one of the highest rated global financial services firms.

At

December

31,

2013,

Blackstone

had

$2.1

billion

in

total

cash,

corporate

treasury

and

liquid

investments

and

$8.3 billion of total net value, or $7.29 per DE unit, up 23% from $5.95 a year ago.

Blackstone’s

Net

Performance

Fees

were

$3.4

billion

at

the

end

of

2013,

up

52%

from

2012,

and

over

two

times

the

amount

from

2011,

reflecting

the

consistent

high

returns

of

a

diverse

set

of

funds

generating

Performance

Fees.

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.

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)

3Q’13

4Q’13

Cash and Cash Equivalents

$

889

$

832

Treasury Cash Management

Strategies

1,137

1,187

Liquid Investments

(b)

151

114

Illiquid Investments

(c)

2,447

2,741

Net Performance Fees

2,769

3,400

Total Net Value

$

7,393

$

8,274

Outstanding Bonds (at par)

(d)

$

1,635

$

1,635

A+/A+

rated by S&P and Fitch

$1.1 billion

undrawn credit revolver with

July 2017 maturity

$2.1 billion

total cash, corporate treasury

and liquid investments

$7.29

Cash and Investments per DE unit

Net Performance

Fees

Total Cash and

Treasury Investments

Illiquids

$8.3 billion

Total Net Value

Blackstone

16

Unitholder Distribution

(a)

Generated $1.56 of Distributable Earnings per common unit during

2013, up 68% year-over-year.

Declared a quarterly distribution of $0.58

per common unit to record holders as of February 10, 2014; payable on

February 18, 2014, bringing the full fiscal year distribution to

$1.34 per common unit, up 86% from 2012.

(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

(see

page

33).

(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

(see

page

32));

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

$58.8

million

for

4Q’13

and

$125.7

million

for

FY’13.

% Change

(Dollars in Thousands, Except per Unit Data)

1Q'13

2Q'13

3Q'13

4Q'13

FY'12

FY'13

vs. FY'12

Distributable Earnings (“DE”)

390,912

$  

338,485

$  

312,673

$    

820,629

$    

1,123,965

$ 

1,862,699

$ 

66%

Add: Other Payables Attributable to

   Common Unitholders

2,204

28,498

17,694

58,103

91,633

106,499

16%

DE before Certain Payables

(b)

393,116

366,983

330,367

878,732

1,215,598

1,969,198

62%

Percent to Common Unitholders

51%

51%

52%

52%

49%

51%

DE before Certain Payables Attributable to

   Common Unitholders

199,812

187,652

170,216

455,291

595,204

1,012,971

70%

Less: Other Payables Attributable to

   Common Unitholders

(2,204)

(28,498)

(17,694)

(58,103)

(91,633)

(106,499)

(16)%

DE Attributable to Common Unitholders

197,608

159,154

152,522

397,188

503,571

906,472

80%

DE per Common Unit

(c)

0.34

$       

0.28

$       

0.26

$          

0.68

$          

0.93

$          

1.56

$          

68%

Less: Retained Capital per Unit

(d)

(0.04)

$      

(0.05)

$      

(0.03)

$         

(0.10)

$         

(0.21)

$         

(0.22)

$         

(5)%

Net Cash Available for Distribution per

   Common Unit

(c)

0.30

$       

0.23

$       

0.23

$          

0.58

$          

0.72

$          

1.34

$          

86%

Actual Distribution per Common Unit

(c)

0.30

$       

0.23

$       

0.23

$          

0.58

$          

0.72

$          

1.34

$          

86%

Record Date

Feb 10, 2014

Payable Date

Feb 18, 2014

Blackstone

17

GAAP Statement of Operations

% Change

% Change

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

4Q'12

4Q'13

vs. 4Q'12

FY'12

FY'13

vs. FY'12

Revenues

Management and Advisory Fees, Net

601,860

$         

602,034

$         

0%

2,030,693

$      

2,193,985

$      

8%

Performance Fees

Realized Carried Interest

174,168

283,846

63%

327,422

943,958

188%

Realized Incentive Fees

273,304

334,109

22%

301,801

464,838

54%

Unrealized Carried Interest

207,639

1,233,905

494%

994,190

2,158,010

117%

Unrealized Incentive Fees

(185,372)

(167,198)

10%

(30,361)

(22,749)

25%

Total Performance Fees

469,739

1,684,662

259%

1,593,052

3,544,057

122%

Investment Income

Realized

53,311

51,294

(4)%

93,963

188,644

101%

Unrealized

74,325

348,523

369%

256,231

611,664

139%

Total Investment Income

127,636

399,817

213%

350,194

800,308

129%

Interest and Dividend Revenue

13,173

18,248

39%

40,354

64,511

60%

Other

4,705

4,619

(2)%

5,148

10,307

100%

Total Revenues

1,217,113

2,709,380

123%

4,019,441

6,613,168

65%

Expenses

Compensation and Benefits

Compensation

559,781

448,443

(20)%

2,091,698

1,844,485

(12)%

Performance Fee Compensation

Realized Carried Interest

58,573

31,485

(46)%

96,433

257,201

167%

Realized Incentive Fees

125,758

140,794

12%

140,042

200,915

43%

Unrealized Carried Interest

71,378

616,080

763%

321,599

966,717

201%

Unrealized Incentive Fees

(91,965)

(70,297)

24%

(44,528)

(11,651)

74%

Total Compensation and Benefits

723,525

1,166,505

61%

2,605,244

3,257,667

25%

General, Administrative and Other

131,063

128,336

(2)%

548,738

474,442

(14)%

Interest Expense

25,505

27,687

9%

72,870

107,973

48%

Fund Expenses

5,586

7,944

42%

33,829

26,658

(21)%

Total Expenses

885,679

1,330,472

50%

3,260,681

3,866,740

19%

Other Income (Loss)

Reversal of Tax Receivable Agreement Liability

-

20,469

n/m

-

20,469

n/m

Net Gains (Losses) from Fund Investment Activities

(144,267)

185,536

n/m

256,145

381,664

49%

Income Before Provision for Taxes

187,167

$         

1,584,913

$      

747%

1,014,905

$      

3,148,561

$      

210%

Provision for Taxes

65,696

91,090

39%

185,023

255,642

38%

Net Income

121,471

$         

1,493,823

$      

n/m

829,882

$         

2,892,919

$      

249%

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

25,151

47,445

89%

103,598

183,315

77%

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

(180,011)

149,834

n/m

99,959

198,557

99%

Net Income Attributable to Non-Controlling Interests in Blackstone Holdings

169,918

675,289

297%

407,727

1,339,845

229%

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

106,413

$         

621,255

$         

484%

218,598

$         

1,171,202

$      

436%

Net Income per Common Unit, Basic

0.19

$                 

1.05

$                 

453%

0.41

$                 

2.00

$                 

388%

Net Income per Common Unit, Diluted

0.19

$                 

1.04

$                 

447%

0.41

$                 

1.98

$                 

383%

Blackstone

18

Additional Disclosures

How much gain does BCP V need in order to cross its carry threshold, considering it had significant appreciation in 2013?

•

During 2013, BCP V appreciated 34.5% and returned $4.1 billion of capital to investors, resulting in $13.5 billion of

remaining invested capital

(a)

.

•

BCP V is comprised of two fund classes based on the timing of fund closings, BCP V “main fund”

($12.3 billion remaining

invested capital; $18.0

billion fair value; 1.5x MOIC) and BCP V-AC ($1.3 billion remaining invested; $2.2 billion fair

value; 1.7x MOIC) (see page 26).

•

Within these fund classes, the General Partner (“GP”) is subject to equalization such that (a) the GP accrues Performance

Fees when the total Performance Fees for the combined fund classes are positive, and (b) the GP realizes Performance

Fees so long as clawback obligations, if any, for the combined fund classes are fully satisfied.

–

BCP V-AC has crossed its hurdle.  Since the Performance Fees for the combined fund classes are positive, Blackstone

accrued $26 million of net Performance Fees in 4Q’13 (see page 26).

–

On a combined basis, BCP V currently needs a 3% increase in Total Enterprise Value (“TEV”), or $1.3 billion, to begin

the “catch-up”

phase of the 80/20 accrual of carry in favor of Blackstone as the GP.  A year ago, BCP V needed a 12%

increase in TEV (or $5.6 billion) to begin the carry catch-up phase.

What is the breakdown of the Hilton investment across Blackstone’s funds?

Why are Credit’s Fee Revenues down 31% year-over-year in 4Q’13?

•

During the quarter, Credit recorded a Management Fee Offset of $30 million related to Placement Fees reimbursed to

investors in certain drawdown funds from 2Q’11 to 3Q’13 and is not recurring.

(Dollars and Shares in Millions)

Shares Held

Cost Basis

(b)

BREP VI

346

$3,003

BCP V

202

1,755

BREP Co-Investment

161

1,382

BREP International II

43

371

Total Blackstone

752

$6,511

(a)

Remaining invested capital of $13.5 billion excludes Blackstone side-by-side  investments. Total capital  including side-by-side is $14 billion.

(b)

Reflects original equity investment at cost. Includes  Blackstone side-by-side investments.

Appendix

*

*

*

*

*

*

*

*

Blackstone

20

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)

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

FY'12

FY'13

Revenues

Management and Advisory Fees, Net

Base Management Fees

416,465

$          

408,747

$          

425,674

$           

437,294

$           

469,092

$           

1,591,403

$      

1,740,807

$      

Advisory Fees

128,248

67,020

120,734

83,602

139,158

357,417

410,514

Transaction and Other Fees, Net

(a)

94,069

37,974

66,464

42,806

59,733

227,119

206,977

Management Fee Offsets

(b)

(11,476)

(9,662)

(10,535)

(8,271)

(43,752)

(40,953)

(72,220)

Total Management and Advisory Fees, Net

627,306

504,079

602,337

555,431

624,231

2,134,986

2,286,078

Performance Fees

Realized Carried Interest

174,168

294,170

183,288

182,654

283,846

327,422

943,958

Realized Incentive Fees

272,873

24,727

74,867

31,238

343,501

301,464

474,333

Unrealized Carried Interest

207,639

177,347

456,706

290,052

1,233,905

994,190

2,158,010

Unrealized Incentive Fees

(184,507)

107,755

4,358

40,992

(173,033)

(29,311)

(19,928)

Total Performance Fees

470,173

603,999

719,219

544,936

1,688,219

1,593,765

3,556,373

Investment Income

Realized

37,448

38,110

54,586

11,492

66,283

95,398

170,471

Unrealized

74,222

96,661

42,533

87,680

290,460

190,846

517,334

Total Investment Income

111,670

134,771

97,119

99,172

356,743

286,244

687,805

Interest Income and Dividend Revenue

14,890

14,661

15,342

21,539

19,394

46,630

70,936

Other

4,707

2,143

(1,164)

4,708

4,621

5,149

10,308

Total Revenues

1,228,746

1,259,653

1,432,853

1,225,786

2,693,208

4,066,774

6,611,500

Expenses

Compensation

247,559

266,977

306,477

279,498

262,688

1,030,776

1,115,640

Performance Fee Compensation

Realized Carried Interest

58,573

89,437

75,910

60,369

31,485

96,433

257,201

Realized Incentive Fees

125,758

10,508

35,014

14,599

140,794

140,042

200,915

Unrealized Carried Interest

71,378

95,472

172,824

82,341

616,080

321,599

966,717

Unrealized Incentive Fees

(91,965)

44,478

3,084

11,084

(70,297)

(44,528)

(11,651)

Total Compensation and Benefits

411,303

506,872

593,309

447,891

980,750

1,544,322

2,528,822

Other Operating Expenses

131,430

114,444

120,152

122,872

129,171

481,445

486,639

Total Expenses

542,733

621,316

713,461

570,763

1,109,921

2,025,767

3,015,461

Economic Income

686,013

$          

638,337

$          

719,392

$           

655,023

$           

1,583,287

$        

2,041,007

$      

3,596,039

$      

Economic Net Income

669,981

$          

628,306

$          

703,240

$           

640,231

$           

1,542,098

$        

1,995,299

$      

3,513,875

$      

Fee Related Earnings

272,604

$          

137,733

$          

168,434

$           

178,596

$           

260,706

$           

700,313

$          

745,469

$          

Distributable Earnings

562,337

$          

390,912

$          

338,485

$           

312,673

$           

820,629

$           

1,123,965

$      

1,862,699

$      

Total Assets Under Management

210,219,960

$  

218,210,672

$  

229,571,741

$    

248,064,888

$    

265,757,630

$    

210,219,960

$  

265,757,630

$  

Fee-Earning Assets Under Management

167,880,440

$  

170,949,347

$  

176,338,947

$    

188,649,817

$    

197,981,739

$    

167,880,440

$  

197,981,739

$  

Weighted Average Fee-Earning AUM

168,328,454

$  

169,551,186

$  

173,706,678

$    

185,628,676

$    

196,309,547

$    

160,130,294

$  

186,133,604

$  

LP Capital Invested

5,690,474

$      

1,784,463

$      

3,634,404

$        

3,378,067

$        

5,382,770

$        

13,898,971

$    

14,179,704

$    

Total Capital Invested

6,200,755

$      

1,840,474

$      

3,757,591

$        

3,536,365

$        

6,115,856

$        

15,614,849

$    

15,250,286

$    

Blackstone

21

Private Equity

(a)

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

(b)

Primarily placement fees.

(Dollars in Thousands)

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

FY'12

FY'13

Revenues

Management Fees, Net

Base Management Fees

89,194

$        

86,246

$        

86,621

$        

95,281

$        

99,998

$        

348,594

$        

368,146

$        

Transaction and Other Fees, Net

(a)

41,339

24,453

38,348

16,052

18,135

100,080

96,988

Management Fee Offsets

(b)

(705)

(480)

(1,950)

(2,080)

(1,173)

(5,926)

(5,683)

Total Management Fees, Net

129,828

110,219

123,019

109,253

116,960

442,748

459,451

Performance Fees

Realized Carried Interest

45,491

139,892

3,899

85,121

101,081

109,797

329,993

Unrealized Carried Interest

73,477

(83,954)

182,926

(86,300)

385,560

148,381

398,232

Total Performance Fees

118,968

55,938

186,825

(1,179)

486,641

258,178

728,225

Investment Income

Realized

10,918

24,162

21,586

11,495

30,783

25,823

88,026

Unrealized

53,938

31,711

21,088

23,621

85,329

85,337

161,749

Total Investment Income

64,856

55,873

42,674

35,116

116,112

111,160

249,775

Interest Income and Dividend Revenue

4,609

2,984

3,251

5,231

4,136

13,556

15,602

Other

420

424

366

1,521

1,948

2,417

4,259

Total Revenues

318,681

225,438

356,135

149,942

725,797

828,059

1,457,312

Expenses

Compensation

53,963

60,203

63,747

55,800

56,370

222,709

236,120

Performance Fee Compensation

Realized Carried Interest

1,507

16,246

877

19,824

2,006

3,679

38,953

Unrealized Carried Interest

24,638

16,619

88,111

(36,198)

274,201

58,555

342,733

Total Compensation and Benefits

80,108

93,068

152,735

39,426

332,577

284,943

617,806

Other Operating Expenses

40,499

29,168

32,178

30,024

32,767

130,845

124,137

Total Expenses

120,607

122,236

184,913

69,450

365,344

415,788

741,943

Economic Income

198,074

$      

103,202

$      

171,222

$      

80,492

$        

360,453

$      

412,271

$        

715,369

$        

Total Assets Under Management

51,002,973

$

52,491,811

$

53,287,294

$

62,619,813

$

65,675,031

$

51,002,973

$  

65,675,031

$  

Fee-Earning Assets Under Management

37,050,167

$

36,785,770

$

36,635,224

$

43,645,106

$

42,600,515

$

37,050,167

$  

42,600,515

$  

Weighted Average Fee-Earning AUM

38,507,697

$

36,907,936

$

36,675,636

$

43,886,763

$

43,290,792

$

38,126,640

$  

43,977,145

$  

LP Capital Invested

1,461,987

$   

276,987

$      

749,290

$      

524,320

$      

1,017,985

$   

3,223,535

$     

2,568,582

$     

Total Capital Invested

1,860,738

$   

291,011

$      

780,339

$      

548,173

$      

1,330,606

$   

4,077,621

$     

2,950,129

$     

Blackstone

22

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)

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

FY'12

FY'13

Revenues

Management Fees, Net

Base Management Fees

140,044

$      

138,346

$      

137,000

$      

136,721

$      

153,115

$      

551,322

$      

565,182

$      

Transaction and Other Fees, Net

(a)

31,181

9,140

19,013

19,205

32,317

85,681

79,675

Management Fee Offsets

(b)

(8,591)

(7,286)

(6,312)

(2,385)

(6,838)

(28,609)

(22,821)

Total Management Fees, Net

162,634

140,200

149,701

153,541

178,594

608,394

622,036

Performance Fees

Realized Carried Interest

91,113

68,773

143,481

93,878

180,641

165,114

486,773

Realized Incentive Fees

13,012

3,092

31,102

3,737

7,931

25,656

45,862

Unrealized Carried Interest

110,059

280,076

259,972

340,406

771,246

683,764

1,651,700

Unrealized Incentive Fees

(12,657)

2,400

(32,279)

2,481

(1,355)

(119)

(28,753)

Total Performance Fees

201,527

354,341

402,276

440,502

958,463

874,415

2,155,582

Investment Income

Realized

18,099

9,534

18,577

928

23,320

45,302

52,359

Unrealized

16,343

60,303

30,636

57,656

201,606

90,875

350,201

Total Investment Income

34,442

69,837

49,213

58,584

224,926

136,177

402,560

Interest Income and Dividend Revenue

5,038

4,298

4,396

6,060

6,809

14,448

21,563

Other

252

(133)

(274)

2,113

1,678

894

3,384

Total Revenues

403,893

568,543

605,312

660,800

1,370,470

1,634,328

3,205,125

Expenses

Compensation

54,201

69,459

73,792

75,346

75,625

271,122

294,222

Performance Fee Compensation

Realized Carried Interest

35,118

25,863

55,005

38,942

29,027

62,418

148,837

Realized Incentive Fees

6,617

1,724

15,733

1,919

4,502

13,060

23,878

Unrealized Carried Interest

31,590

89,057

78,604

99,323

299,853

165,482

566,837

Unrealized Incentive Fees

(6,598)

1,034

(16,329)

615

(335)

(583)

(15,015)

Total Compensation and Benefits

120,928

187,137

206,805

216,145

408,672

511,499

1,018,759

Other Operating Expenses

36,946

28,462

27,617

30,614

29,698

123,714

116,391

Total Expenses

157,874

215,599

234,422

246,759

438,370

635,213

1,135,150

Economic Income

246,019

$      

352,944

$      

370,890

$      

414,041

$      

932,100

$      

999,115

$      

2,069,975

$  

Total Assets Under Management

56,695,645

$

59,475,215

$

63,919,906

$

68,964,455

$

79,410,788

$

56,695,645

$

79,410,788

$

Fee-Earning Assets Under Management

41,931,339

$

42,140,507

$

43,635,493

$

44,715,985

$

50,792,803

$

41,931,339

$

50,792,803

$

Weighted Average Fee-Earning AUM

40,164,238

$

41,682,661

$

42,523,604

$

44,163,396

$

50,568,609

$

37,730,563

$

45,326,937

$

LP Capital Invested

3,876,701

$   

1,175,775

$   

2,213,668

$   

2,365,224

$   

3,986,610

$   

8,218,175

$   

9,741,277

$   

Total Capital Invested

3,990,620

$   

1,202,736

$   

2,274,853

$   

2,438,725

$   

4,333,419

$   

8,515,483

$   

10,249,733

$

Blackstone

23

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)

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

FY'12

FY'13

Revenues

Management Fees, Net

Base Management Fees

92,777

$        

92,791

$        

100,113

$      

103,392

$      

113,025

$      

346,210

$      

409,321

$      

Transaction and Other Fees, Net

(a)

27

4

61

295

263

188

623

Management Fee Offsets

(b)

(322)

(324)

(714)

(1,200)

(1,149)

(1,414)

(3,387)

Total Management Fees, Net

92,482

92,471

99,460

102,487

112,139

344,984

406,557

Performance Fees

Realized Incentive Fees

76,323

13,709

13,845

5,320

174,861

83,433

207,735

Unrealized Incentive Fees

(39,799)

55,501

20,989

29,208

(97,980)

9,042

7,718

Total Performance Fees

36,524

69,210

34,834

34,528

76,881

92,475

215,453

Investment Income (Loss)

Realized

5,201

852

13,668

(598)

13,691

7,270

27,613

Unrealized

(1,417)

3,913

(12,054)

6,439

(7,604)

8,517

(9,306)

Total Investment Income

3,784

4,765

1,614

5,841

6,087

15,787

18,307

Interest Income and Dividend Revenue

718

1,216

1,878

2,523

1,988

2,139

7,605

Other

3,601

85

(254)

595

262

3,816

688

Total Revenues

137,109

167,747

137,532

145,974

197,357

459,201

648,610

Expenses

Compensation

28,113

33,868

36,844

37,611

28,147

119,731

136,470

Performance Fee Compensation

Realized Incentive Fees

20,985

5,022

5,116

1,954

53,701

23,080

65,793

Unrealized Incentive Fees

(11,219)

19,836

7,666

10,177

(34,823)

1,317

2,856

Total Compensation and Benefits

37,879

58,726

49,626

49,742

47,025

144,128

205,119

Other Operating Expenses

16,491

15,159

16,535

19,575

15,697

57,809

66,966

Total Expenses

54,370

73,885

66,161

69,317

62,722

201,937

272,085

Economic Income

82,739

$        

93,862

$        

71,371

$        

76,657

$        

134,635

$      

257,264

$      

376,525

$      

Total Assets Under Management

46,092,505

$

48,187,865

$

50,128,028

$

53,162,174

$

55,657,463

$

46,092,505

$

55,657,463

$

Fee-Earning Assets Under Management

43,478,791

$

45,585,454

$

47,572,465

$

50,829,734

$

52,865,837

$

43,478,791

$

52,865,837

$

Weighted Average Fee-Earning AUM

43,709,019

$

44,999,899

$

46,783,727

$

48,933,335

$

51,794,518

$

41,698,402

$

48,431,911

$

LP Capital Invested

-

$               

55,849

$        

118,323

$      

248,422

$      

8,681

$          

200,841

$      

431,275

$      

Total Capital Invested

-

$               

59,000

$        

125,000

$      

262,309

$      

8,681

$          

212,752

$      

454,990

$      

Blackstone

24

Credit

(a)

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

(b)

Primarily placement fees.

(Dollars in Thousands)

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

FY'12

FY'13

Revenues

Management Fees, Net

Base Management Fees

94,450

$        

91,364

$        

101,940

$      

101,900

$      

102,954

$      

345,277

$      

398,158

$      

Transaction and Other Fees, Net

(a)

21,480

4,374

9,002

7,058

8,152

40,875

28,586

Management Fee Offsets

(b)

(1,858)

(1,572)

(1,559)

(2,606)

(34,592)

(5,004)

(40,329)

Total Management Fees, Net

114,072

94,166

109,383

106,352

76,514

381,148

386,415

Performance Fees

Realized Carried Interest

37,564

85,505

35,908

3,655

2,124

52,511

127,192

Realized Incentive Fees

183,538

7,926

29,920

22,181

160,709

192,375

220,736

Unrealized Carried Interest

24,103

(18,775)

13,808

35,946

77,099

162,045

108,078

Unrealized Incentive Fees

(132,051)

49,854

15,648

9,303

(73,698)

(38,234)

1,107

Total Performance Fees

113,154

124,510

95,284

71,085

166,234

368,697

457,113

Investment Income (Loss)

Realized

2,593

3,328

901

496

(627)

15,611

4,098

Unrealized

5,450

1,093

4,381

(1,042)

9,519

4,769

13,951

Total Investment Income (Loss)

8,043

4,421

5,282

(546)

8,892

20,380

18,049

Interest Income and Dividend Revenue

2,480

4,547

4,071

5,288

4,240

9,330

18,146

Other

529

1,828

(1,063)

(357)

119

(1,174)

527

Total Revenues

238,278

229,472

212,957

181,822

255,999

778,381

880,250

Expenses

Compensation

51,853

45,521

55,941

53,250

31,802

182,077

186,514

Performance Fee Compensation

Realized Carried Interest

21,948

47,328

20,028

1,603

452

30,336

69,411

Realized Incentive Fees

98,156

3,762

14,165

10,726

82,591

103,902

111,244

Unrealized Carried Interest

15,150

(10,204)

6,109

19,216

42,026

97,562

57,147

Unrealized Incentive Fees

(74,148)

23,608

11,747

292

(35,139)

(45,262)

508

Total Compensation and Benefits

112,959

110,015

107,990

85,087

121,732

368,615

424,824

Other Operating Expenses

18,116

20,962

22,961

23,451

29,566

84,488

96,940

Total Expenses

131,075

130,977

130,951

108,538

151,298

453,103

521,764

Economic Income

107,203

$      

98,495

$        

82,006

$        

73,284

$        

104,701

$      

325,278

$      

358,486

$      

Total Assets Under Management

56,428,837

$

58,055,781

$

62,236,513

$

63,318,446

$

65,014,348

$

56,428,837

$

65,014,348

$

Fee-Earning Assets Under Management

45,420,143

$

46,437,616

$

48,495,765

$

49,458,992

$

51,722,584

$

45,420,143

$

51,722,584

$

Weighted Average Fee-Earning AUM

45,947,499

$

45,960,690

$

47,723,711

$

48,645,182

$

50,655,628

$

42,574,690

$

48,397,611

$

LP Capital Invested

351,786

$      

275,852

$      

553,123

$      

240,101

$      

369,494

$      

2,256,420

$   

1,438,570

$   

Total Capital Invested

349,397

$      

287,727

$      

577,399

$      

287,158

$      

443,150

$      

2,808,993

$   

1,595,434

$   

Blackstone

25

Financial Advisory

(Dollars in Thousands)

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

FY'12

FY'13

Revenues

Advisory Fees

128,248

$     

67,020

$       

120,734

$       

83,602

$         

139,158

$       

357,417

$     

410,514

$     

Transaction and Other Fees, Net

42

3

40

196

866

295

1,105

Total Advisory and Transaction Fees

128,290

67,023

120,774

83,798

140,024

357,712

411,619

Investment Income (Loss)

Realized

637

234

(146)

(829)

(884)

1,392

(1,625)

Unrealized

(92)

(359)

(1,518)

1,006

1,610

1,348

739

Total Investment Income (Loss)

545

(125)

(1,664)

177

726

2,740

(886)

Interest Income and Dividend Revenue

2,045

1,616

1,746

2,437

2,221

7,157

8,020

Other

(95)

(61)

61

836

614

(804)

1,450

Total Revenues

130,785

68,453

120,917

87,248

143,585

366,805

420,203

Expenses

Compensation

59,429

57,926

76,153

57,491

70,744

235,137

262,314

Total Compensation and Benefits

59,429

57,926

76,153

57,491

70,744

235,137

262,314

Other Operating Expenses

19,378

20,693

20,861

19,208

21,443

84,589

82,205

Total Expenses

78,807

78,619

97,014

76,699

92,187

319,726

344,519

Economic Income (Loss)

51,978

$       

(10,166)

$      

23,903

$         

10,549

$         

51,398

$         

47,079

$       

75,684

$       

Blackstone

26

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. Net Realized Performance Fees are included in Distributable

Earnings. When these

fees are received, the receivable is reduced without further impacting Distributable Earnings.

(c)

Per Unit calculations are based on quarter end Distributable Earnings Units Outstanding (see Appendix –

Unit Rollforward (see page 32)).

(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

$3.4

billion

of

accrued

performance

fees,

net

of

performance

fee

compensation

and

distributed

Realized Performance Fees, at the end of 2013.

$3.4 billion

Net Accrued Performance Fees at 4Q’13

$3.00 per unit

(c)

Net Accrued Performance Fees at 4Q’13

52% increase

in Net Accrued Performance Fees since 4Q’12

Carried Interest Status (excl. SBS)

(d)

Net Accrued Performance Fees

(b)

Remaining Capital

Gain to Cross Carry Threshold

Change vs.

% Change in

% Change in

(Dollars in Millions, Except per Unit Data)

3Q'13

4Q'13

Per Unit

(c)

3Q'13

(Dollars / Euros In Millions)

Fair

Value

Cost

Amount

TEV

Equity Value

Private Equity

Private Equity

BCP IV Carried Interest

506

$               

424

$               

0.37

$              

(82)

$                 

BCP V

17,968

$      

12,277

$      

1,596

$        

4%

9%

BCP V Carried Interest

-

26

0.02

26

BCP V-AC

2,203

1,264

(344)

(9)%

(16)%

BCP VI Carried Interest

15

108

0.10

93

BEP Carried Interest

62

65

0.06

3

Real Estate

Tactical Opportunities Carried Interest

5

8

0.01

3

BREP Int'l II

1,347

€

1,127

€

880

€

20%

65%

SP V Carried Interest

1

1

0.00

-

Total Private Equity

589

632

0.56

43

Real Estate

BREP V Carried Interest

616

603

0.53

(13)

BREP VI Carried Interest

857

1,264

1.11

407

BREP VII Carried Interest

248

293

0.26

45

BREP Int'l I Carried Interest

2

2

0.00

-

BREP Europe III Carried Interest

128

155

0.14

27

BREP Asia Carried Interest

-

4

0.00

4

BREDS Carried Interest

21

12

0.01

(9)

BREDS Incentive Fees

2

4

0.00

2

Asia Platform Incentive Fees

16

10

0.01

(6)

Total Real Estate

1,890

2,347

2.07

457

Hedge Fund Solutions

Incentive Fees

75

144

0.13

69

Total Hedge Fund Solutions

75

144

0.13

69

Credit

Carried Interest

143

173

0.15

30

Incentive Fees

72

104

0.09

32

Total Credit

215

277

0.24

62

Total Blackstone

Carried Interest

2,604

3,138

2.76

534

Incentive Fees

165

262

0.23

97

Net Accrued Performance Fees

2,769

$            

3,400

$            

3.00

$              

631

$               

Memo: Net Realized Performance Fees

64

$                 

261

$              

0.23

$             

197

$              

Blackstone

27

Investment Records as of December 31, 2013

(a)

Notes on next page.

Committed

Available

Unrealized Investments

Realized Investments

Total Investments

Net IRRs (d)

(Dollars in Thousands, Except Where Noted)

Capital

Capital (b)

Value

MOIC (c)

% Public

Value

MOIC (c)

Value

MOIC (c)

Realized

Total

Private Equity

BCP I (Oct 1987 / Oct 1993)

859,081

$              

-

$               

-

$               

n/a

-

1,741,738

$   

2.6x

1,741,738

$   

2.6x

19%

19%

BCP II (Oct 1993 / Aug 1997)

1,361,100

-

-

n/a

-

3,256,819

2.5x

3,256,819

2.5x

32%

32%

BCP III (Aug 1997 / Nov 2002)

3,967,422

-

-

n/a

-

9,184,688

2.3x

9,184,688

2.3x

14%

14%

BCOM (Jun 2000 / Jun 2006)

2,137,330

199,298

225,356

1.1x

-

2,619,040

1.4x

2,844,396

1.3x

7%

5%

BCP IV (Nov 2002 / Dec 2005)

6,773,138

234,535

4,122,422

2.1x

66%

17,167,004

3.1x

21,289,426

2.8x

46%

37%

BCP V (Dec 2005 / Jan 2011)

21,024,025

1,459,100

21,730,495

1.6x

46%

7,982,798

1.3x

29,713,293

1.5x

5%

7%

BCP VI (Jan 2011 / Jan 2017)

15,176,699

10,440,379

5,149,585

1.3x

25%

467,034

1.5x

5,616,619

1.4x

26%

11%

BEP (Aug 2011 / Aug 2017)

2,423,572

1,462,591

1,324,309

2.0x

59%

218,847

1.4x

1,543,156

1.9x

20%

55%

Total Corporate Private Equity

53,722,367

$         

13,795,903

$

32,552,167

$

1.6x

45%

42,637,968

$

2.1x

75,190,135

$

1.8x

20%

16%

Tactical Opportunities

4,906,599

3,623,819

1,419,729

1.1x

8%

112,200

1.1x

1,531,929

1.1x

18%

14%

Strategic Partners

13,078,843

3,328,622

5,964,811

1.6x

n/a

9,280,114

1.3x

15,244,925

1.4x

n/a

14%

Other Funds and Co-Invest (e)

1,210,951

150,858

518,118

0.6x

50%

20,890

1.0x

539,008

0.6x

n/m

n/m

Total Private Equity

72,918,760

$         

20,899,202

$

40,454,825

$

1.5x

42%

52,051,172

$

1.9x

92,505,997

$

1.7x

20%

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

-

1,394,262

1.0x

-

3,091,303

2.4x

4,485,565

1.6x

66%

14%

BREP V (Dec 2005 / Feb 2007)

5,538,579

243,946

7,144,648

1.8x

-

3,496,273

2.0x

10,640,921

1.8x

29%

10%

BREP VI (Feb 2007 / Aug 2011)

11,057,280

656,849

18,726,900

2.1x

62%

3,562,643

2.1x

22,289,543

2.1x

24%

14%

BREP VII (Aug 2011 / Feb 2017)

14,512,884

5,771,958

10,775,482

1.4x

3%

1,467,953

1.6x

12,243,435

1.4x

43%

30%

Total Global Real Estate Funds

36,549,906

$         

6,672,753

$   

38,043,453

$

1.7x

31%

19,147,816

$

2.1x

57,191,269

$

1.8x

27%

17%

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

80,188

1,464,376

1.2x

45%

198,004

1.2x

1,662,380

1.2x

3%

2%

BREP Europe III (Jun 2008 / Dec 2013)

3,203,848

633,457

3,590,801

1.5x

-

491,882

1.8x

4,082,683

1.5x

26%

17%

BREP Europe IV (Sep 2013 / Mar 2019)

4,138,214

3,699,039

482,005

1.0x

-

-

n/a

482,005

1.0x

n/a

4%

Total Euro Real Estate Funds

9,794,188

€

4,412,684

€

5,641,587

€

1.3x

12%

1,925,366

€

1.9x

7,566,953

€

1.4x

24%

10%

BREP Co-Investment (f)

5,160,385

$           

-

$               

8,424,422

$   

1.8x

69%

700,979

$      

1.5x

9,125,401

$   

1.8x

18%

17%

BREP Asia (Jun 2013 / Dec 2017)

3,247,727

2,695,256

669,067

1.1x

-

-

n/a

669,067

1.1x

n/a

56%

Total Real Estate

57,682,409

$         

15,432,082

$

54,719,266

$

1.6x

34%

22,319,606

$

2.1x

77,038,872

$

1.8x

26%

16%

BREDS I

2,840,704

$           

452,965

$      

1,759,288

$   

1.2x

-

2,346,502

$   

1.3x

4,105,790

$   

1.2x

15%

12%

BREDS II

3,334,676

2,247,733

1,132,398

1.0x

-

-

n/a

1,132,398

1.0x

n/a

11%

Total BREDS (g)

6,175,380

$           

2,700,698

$   

2,891,686

$   

1.1x

-

2,346,502

$   

1.3x

5,238,188

$   

1.2x

15%

12%

Credit (h)

Mezzanine

6,120,000

$           

3,047,070

$   

3,061,806

$   

1.3x

-

3,959,095

$   

1.6x

7,020,901

$   

1.5x

n/a

19%

Rescue Lending

8,378,143

5,313,337

4,249,064

1.5x

-

1,687,866

1.2x

5,936,930

1.4x

n/a

18%

Total Credit

14,498,143

$         

8,360,407

$   

7,310,870

$   

1.4x

-

5,646,961

$   

1.4x

12,957,831

$

1.4x

Blackstone

28

Investment

Records

as

of

December

31,

2013

–

Notes

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

n/m

Not meaningful.

n/a

Not applicable.

(a)

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 December 31, 2013 IRR on total invested capital

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

IRRs for BREP Europe IV, BREP Asia and BREDS II are calculated from commencement of their respective investment periods

which, being less than one year, are not annualized.

(e)

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

(f)

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.

(g)

Excludes Capital Trust drawdown funds.

(h)

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

period, was 1.9x and 1.5x, respectively.

Blackstone

29

Reconciliation of GAAP to Non-GAAP Measures

Notes on next page.

(Dollars in Thousands)

Net Income Attributable to The Blackstone Group L.P.

Net Income Attributable to Non-Controlling Interests in Blackstone Holdings

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

Net Income Attributable to Redeemable Non-Controlling

Interests in Consolidated Entities

Net Income

Provision for Taxes

Income Before Provision for Taxes

IPO

and

Acquisition-Related

Charges

(a)

Amortization

of

Intangibles

(b)

(Income)

Loss

Associated

with

Non-Controlling

Interests

in

(Income)

Loss

of

Economic Income

Taxes

(d)

Economic Net Income

Taxes

(d)

Performance

Fee

Adjustment

(e)

Investment

Income

(Loss)

Adjustment

(f)

Performance

Fee

Compensation

and

Benefits

Adjustment

(h)

Fee Related Earnings

Realized

Performance

Fees

(i)

Realized

Investment

Income

(j)

Adjustment

Related

to

Realized

Investment

Income

(Loss) -

Blackstone's

Treasury

Cash

Management

Strategies

(k)

Taxes

and

Related

Payables

Including

Payable

Under

Tax

Receivable

Agreement

(l)

Equity-Based

Compensation

(m)

Distributable Earnings

Interest Expense

Taxes

and

Related

Payables

Including

Payable

Under

Tax

Receivable

Agreement

(l)

Depreciation and Amortization

Adjusted EBITDA

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

FY'12

FY'13

106,413

$  

167,635

$    

211,148

$    

171,164

$    

621,255

$    

218,598

$    

1,171,202

$

169,918

207,090

249,134

208,332

675,289

407,727

1,339,845

(180,011)

(9,452)

27,944

30,231

149,834

99,959

198,557

25,151

62,316

22,366

51,188

47,445

103,598

183,315

121,471

$  

427,589

$    

510,592

$    

460,915

$    

1,493,823

$

829,882

$    

2,892,919

$

65,696

50,993

56,082

57,477

91,090

185,023

255,642

187,167

$  

478,582

$    

566,674

$    

518,392

$    

1,584,913

$

1,014,905

$

3,148,561

$

317,499

186,962

178,706

190,525

166,514

1,079,511

722,707

26,487

25,657

24,322

27,525

29,139

150,148

106,643

154,860

(52,864)

(50,310)

(81,419)

(197,279)

(203,557)

(381,872)

686,013

$  

638,337

$    

719,392

$    

655,023

$    

1,583,287

$

2,041,007

$

3,596,039

$

(16,032)

(10,031)

(16,152)

(14,792)

(41,189)

(45,708)

(82,164)

669,981

$  

628,306

$    

703,240

$    

640,231

$    

1,542,098

$

1,995,299

$

3,513,875

$

16,032

10,031

16,152

14,792

41,189

45,708

82,164

(470,173)

(603,999)

(719,219)

(544,936)

(1,688,219)

(1,593,765)

(3,556,373)

(111,670)

(134,771)

(97,119)

(99,172)

(356,743)

(286,244)

(687,805)

4,690

(1,729)

(21,452)

(712)

4,319

25,769

(19,574)

163,744

239,895

286,832

168,393

718,062

513,546

1,413,182

272,604

$  

137,733

$    

168,434

$    

178,596

$    

260,706

$    

700,313

$    

745,469

$    

262,710

218,952

147,231

138,924

455,068

392,411

960,175

37,448

38,110

54,586

11,492

66,283

95,398

170,471

(6,444)

(3,820)

1,469

6,672

8,873

(21,872)

13,194

(72,553)

(12,148)

(44,220)

(31,756)

(68,610)

(132,325)

(156,734)

68,572

12,085

10,985

8,745

98,309

90,040

130,124

562,337

$  

390,912

$    

338,485

$    

312,673

$    

820,629

$    

1,123,965

$

1,862,699

$

24,585

26,069

25,960

25,268

26,607

69,152

103,904

72,553

12,148

44,220

31,756

68,610

132,325

156,734

12,681

8,643

9,116

8,956

8,726

42,235

35,441

672,156

$  

437,772

$    

417,781

$    

378,653

$    

924,572

$    

1,367,677

$

2,158,778

$

Consolidated

Entities

(c)

Investment

Income

(Loss)

-

Blackstone’s

Treasury

Cash

Management

Strategies

(g)

Blackstone

30

Reconciliation

of

GAAP

to

Non-GAAP

Measures

–

Notes

Note:

See Appendix –

Definitions and Distribution Policy (see page 33).

(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.

Blackstone

31

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.

(a)

See Appendix -

Reconciliation of GAAP to Non-GAAP Measures for this adjustment (see pages 29-30).

(b)

Represents equity-based award expense included in Economic Income.

(c)

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

(Dollars in Thousands)

4Q'13

FY'13

Interest Income and Dividend Revenue

19,394

$       

70,936

$       

Other Revenue

4,621

10,308

Investment

Income

(Loss)

-

Blackstone's

Treasury

Cash

Management

Strategies

(a)

4,319

(19,574)

Interest Income and Other Revenue

28,334

$       

61,670

$       

Realized Incentive Fees

343,501

474,333

Less: Realized Incentive Fee Compensation

(140,794)

(200,915)

Net Realized Incentive Fees

202,707

$    

273,418

$    

Realized Carried Interest

283,846

943,958

Less: Realized Carried Interest Compensation

(31,485)

(257,201)

Net Realized Carried Interest

252,361

$    

686,757

$    

Realized Investment Income

66,283

170,471

Adjustment

Related

to

Realized

Investment

Income

(Loss)

-

Blackstone's

Treasury

Cash

Management

Strategies

(a)

8,873

13,194

Net Realized Investment Income

75,156

$       

183,665

$    

Equity-Based Compensation

(b)

98,309

$       

130,124

$    

Unrealized Incentive Fees

(173,033)

(19,928)

Less: Unrealized Incentive Fee Compensation

70,297

11,651

Net Unrealized Incentive Fees

(102,736)

$   

(8,277)

$        

Unrealized Carried Interest

1,233,905

2,158,010

Less: Unrealized Carried Interest Compensation

(616,080)

(966,717)

Net Unrealized Carried Interest

617,825

$    

1,191,293

$ 

Unrealized Investment Income

290,460

517,334

Less:

Investment

Income

(Loss)

-

Blackstone's

Treasury

Cash

Management

Strategies

(a)

(4,319)

19,574

Less:

Adjustment

Related

to

Realized

Investment

Income

(Loss)

-

Blackstone's

Treasury

Cash

Management

Strategies

(a)

(8,873)

(13,194)

Net Unrealized Investment Income

277,268

$    

523,714

$    

Related Payables

(c)

27,421

$       

74,570

$       

Blackstone

32

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

thePayable

Under

Tax

Receivable

Agreement

and

certain

other

tax-related

payables.

(b)

Excludes units which are not entitled to distributions.

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

FY'12

FY'13

Total GAAP Weighted-Average Common Units Outstanding -

Basic

553,989,577

582,322,183

583,843,094

589,643,844

592,129,570

533,703,606

587,018,828

Adjustments:

Weighted-Average Unvested Deferred Restricted Common Units

2,430,014

3,377,716

2,919,959

3,276,951

4,536,624

4,965,464

3,527,812

Total GAAP Weighted-Average Common Units Outstanding -

Diluted

556,419,591

585,699,899

586,763,053

592,920,795

596,666,194

538,669,070

590,546,640

Adjustments:

Weighted-Average Blackstone Holdings Partnership Units

581,202,276

557,463,170

555,224,714

551,916,623

549,773,866

590,446,577

553,579,525

Weighted-Average Economic Net Income Adjusted Units

1,137,621,867

1,143,163,069

1,141,987,767

1,144,837,418

1,146,440,060

1,129,115,647

1,144,126,165

Economic Net Income Adjusted Units, End of Period

1,143,019,281

1,143,893,134

1,142,576,555

1,145,675,305

1,150,867,868

1,143,019,281

1,150,867,868

Total Common Units Outstanding

(a)

568,600,922

573,275,746

576,466,264

584,860,157

588,165,949

568,600,922

588,165,949

Adjustments:

Blackstone Holdings Partnership Units

553,614,040

554,603,708

550,902,208

550,274,903

547,021,277

553,614,040

547,021,277

Distributable Earnings Units Outstanding

(b)

1,122,214,962

1,127,879,454

1,127,368,472

1,135,135,060

1,135,187,226

1,122,214,962

1,135,187,226

Blackstone

33

Definitions and Distribution Policy

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. 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

34

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.