Blackstone Group Inc - FORM 8-K - EX-99.1 - PRESS RELEASE

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Exhibit 99.1

LOGO

The Blackstone Group Reports Fourth Quarter and

Full Year 2010 Results

Economic Net Income (“ENI”) increased to $1.4 billion for the full year 2010, up 102% from $703 million for the full year 2009. ENI increased to $513 million for the fourth quarter of 2010, up 56% from $329 million for the fourth quarter of 2009.

Distributable Earnings were $702 million for the full year 2010, up 47% from $479 million in 2009; Distributable Earnings increased to $239 million for the fourth quarter of 2010, up 12% from $213 million in the fourth quarter of 2009.

GAAP Results Attributable to The Blackstone Group L.P. improved in 2010 with a net loss of $370 million, compared to a net loss of $715 million in 2009, in each case including net IPO and acquisition-related charges. GAAP Net Loss Attributable to The Blackstone Group L.P. was $11 million in the fourth quarter of 2010, compared to a net loss of $143 million in the fourth quarter of 2009.

Fee-Earning Assets Under Management increased 14% to $109.5 billion at December 31, 2010, from $96.1 billion at December 31, 2009 while Total Assets Under Management increased 30% to $128 billion at December 31, 2010.

Blackstone declares a quarterly distribution of $0.32 per common unit which brings full year distributions to $0.62 per common unit.

New York, February 3, 2011: The Blackstone Group L.P. (NYSE: BX) today reported its 2010 results.

Economic Net Income (“ENI”) was $1.4 billion for the full year 2010, an increase of $714.5 million compared to ENI for the full year 2009, more than double that of the prior year. The increase in ENI was driven principally by strong performance across the investment segments which produced $1.5 billion in Performance Fees and Investment Income, up from $273.6 million for the full year 2009. That strong performance continued through the fourth quarter where ENI was $512.7 million, up 56% from $329.4 million earned in the fourth quarter of 2009.

Blackstone’s Fee-Earning Assets Under Management and Total Assets Under Management showed strong growth, rising to a record $109.5 billion and $128.1 billion, respectively, driven both by net inflows and market appreciation. Blackstone committed nearly $10 billion in new investments across its diverse investment businesses in 2010 and had $30 billion of committed but uninvested capital or, “dry powder”, at the end of 2010.

The Blackstone Group® L.P.

345 Park Avenue

New York, NY 10154

212 583-5000

For the full year 2010, Total Segment Revenues were $3.1 billion, up 75% from 2009. The increase was driven by higher Performance Fees in the Real Estate and Credit and Marketable Alternatives segments and a sharp increase in Investment Income to $548.5 million, up from $33.4 million in the prior year due to increases in the carrying value of Blackstone’s capital invested in its own funds, particularly in the Real Estate and Private Equity segments.

Total Segment Expenses were $1.6 billion for the full year 2010, an increase from $1.1 billion for the full year 2009, driven largely by increased accruals for Performance Fee Compensation of $357.0 million for the full year. Compensation, excluding Performance Fee Compensation, was up 12% to $859.1 million. Blackstone’s non-compensation expenses were up 15% from full year 2009 driven mostly by fundraising and financing activities. Without these activities, non-compensation expenses were up 2%, reflecting Blackstone’s ongoing expense discipline and focus on operating leverage.

Net Fee Related Earnings from Operations were $442.3 million for the full year 2010, up from $410.4 million for the full year 2009. Net Fee Related Earnings from Operations for the full year increased principally as a result of increased Management and Advisory Fees which were up 10% year over year.

GAAP results for the year ended December 31, 2010 included Revenues of $3.1 billion, compared to $1.8 billion for the full year 2009, and Net Income (Loss) Attributable to The Blackstone Group L.P. of $(370.0) million, compared to a net loss of $715.3 million for the full year 2009. GAAP results for the fourth quarter of 2010 included Revenues of $1.1 billion, compared to $725.3 million for the fourth quarter of 2009, and Net Income (Loss) Attributable to The Blackstone Group L.P. of $(11.0) million, compared to a net loss of $143.3 million for the fourth quarter of 2009.

Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, “Blackstone exited 2010 in a stronger position than ever before, with all of our businesses experiencing higher levels of activity. The carrying values of our investment funds continued to increase sharply, driving our best quarterly earnings result in nearly four years. In 2010, we continued to provide our limited partner investors with best-in-class returns across all of our businesses, and our LPs entrusted us with nearly $18 billion in new capital. These inflows, combined with rising asset values, helped drive total assets under management to $128.1 billion as of year-end, up from $98.2 billion as of year-end 2009.”

The table below details Blackstone’s ENI, Net Fee Related Earnings from Operations, Distributable Earnings and Fee-Earning Assets Under Management as of, and for, the fourth quarters of 2010 and 2009, and for the full years 2010 and 2009. ENI, Total Segments includes unrealized gains (losses) and the direct compensation impact related to those gains/losses, but excludes IPO and acquisition-related charges.


	Quarter Ended December 31,				Variance						Year Ended December 31,				Variance
	2010		2009		$			%			2010		2009		$		%
	(Unaudited, Dollars in Thousands, Except Per Unit Amounts)
Economic Net Income, Total Segments	$	606,106	$	365,845	$	240,261			66	%	$	1,580,770	$	723,763	$	857,007		118	%
Provision for Income Taxes (a)		93,357		36,464		56,893			156	%		163,109		20,628		142,481		N/M

Economic Net Income, After Taxes	$	512,749	$	329,381	$	183,368			56	%	$	1,417,661	$	703,135	$	714,526		102	%

Economic Net Income, After Taxes per Adjusted Unit (b)	$	0.46	$	0.29	$	0.17			59	%	$	1.26	$	0.63	$	0.63		100	%

Net Fee Related Earnings from Operations	$	122,740	$	139,163	$	(16,423	)		-12	%	$	442,314	$	410,410	$	31,904		8	%

Distributable Earnings	$	239,197	$	212,834	$	26,363			12	%	$	701,784	$	478,972	$	222,812		47	%

Distributable Earnings per Common Unit (c)	$	0.20	$	0.19	$	0.01			5	%	$	0.62	$	0.44	$	0.18		41	%

Fee-Earning Assets Under Management:
Private Equity	$	24,188,555	$	24,521,394	$	(332,839	)		-1	%
Real Estate		26,814,714		23,708,057		3,106,657			13	%
Credit and Marketable Alternatives		58,496,953		47,867,546		10,629,407			22	%

Total Fee-Earning Assets Under Management	$	109,500,222	$	96,096,997	$	13,403,225			14	%

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

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

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

SEGMENT REVIEW

Private Equity

Private Equity had full year revenues of $828.4 million, compared with revenues of $775.2 million for the full year 2009, reflecting an increase in Investment Income to $168.6 million from $70.2 million in 2009.

Private Equity had Realized Performance Fees and Realized Investment Income of $172.2 million resulting from realizations in its BCP IV fund. BCP IV has a net realized internal rate of return of 52% since inception and has $5.6 billion of carrying value remaining.

The net return for Blackstone’s contributed Private Equity funds was 26.5% for the full year 2010 reflecting an improved operating environment and an increase in cash flows and operating results across the portfolio companies compared to the prior year. The net return for Blackstone’s contributed Private Equity funds was 1.4% in the fourth quarter of 2010. As of December 31, 2010, the unrealized value and cumulative realized proceeds, before carried interest, fees and expenses, of Blackstone’s contributed Private Equity funds represented 1.5 times investors’ original investments. Excluding funds which were still in their Investment Period, the value was 2.3 times investors’ original investments.

Economic Net Income was $485.5 million for the full year 2010, down from $490.4 million for the full year 2009, a result of lower Transaction Fees and Performance Fees.

BCP V closed its investment period on January 7, 2011, thereby commencing the investment period for BCP VI. BCP VI, which is a $14.7 billion fund as of that date, will begin recognizing fees on the fee-earning portion, which will be included in Fee-Earning Assets Under Management in the first quarter of 2011 and is not included in full year 2010 results. Fee-Earning Assets Under Management were down

slightly to $24.2 billion compared with $24.5 billion for 2009 due to the realization or exit of investments, primarily in BCP IV.

Dry powder for Private Equity, which is inclusive of amounts related to BCP VI, was $16.5 billion as of December 31, 2010. Limited Partner Capital Invested during the full year 2010 totaled $1.7 billion, an increase from $1.5 billion invested during the full year 2009. Blackstone had $1.9 billion of Limited Partner Capital committed to new or existing deals made by the segment’s Private Equity funds as of December 31, 2010.

Real Estate

Real Estate had full year revenues of $1.0 billion, compared with negative revenues of $13.6 million for the full year 2009. Improved operating performance across hospitality and office segments led to a rise in carrying values in the real estate portfolios which drove an increase in Performance Fees and Investment Income.

The net return for Blackstone’s contributed Real Estate carry funds was 81% for 2010, while the net returns for the Real Estate debt hedge funds was 18% for 2010. The net return for Blackstone’s contributed Real Estate carry funds was 19% for the fourth quarter of 2010, while the net returns for the Real Estate debt hedge funds was 2.9% for the fourth quarter of 2010. As of December 31, 2010, the unrealized value and cumulative realized proceeds, before carried interest, fees and expenses, of the Real Estate segment’s carry funds represented 1.4 times investors’ original investment. Excluding funds which were still in their Investment Period, the value was 1.6 times investors’ original investments.

ENI for the Real Estate segment was $639.5 million for the full year 2010 compared to a loss of $117.5 million for 2009.

Fee-Earning Assets Under Management were $26.8 billion compared with $23.7 billion for 2009, reflecting the continued fundraising of Blackstone’s Real Estate debt platform which reached $1.5 billion in Fee-Earning Assets Under Management, up 80% from the prior year, and the commencement of Blackstone’s management of the Merrill Lynch Asia assets which added $2.1 billion in Fee-Earning Assets Under Management.

Dry powder for Real Estate was $9.1 billion as of December 31, 2010. Limited Partner Capital Invested during 2010 was $4.1 billion, up from $884.2 million in 2009. Limited Partner Capital Invested during the fourth quarter of 2010 was $2.3 billion, up from $381.3 million during the fourth quarter of 2009. Blackstone’s Real Estate segment’s funds had committed $332.2 million of Limited Partner Capital to new transactions which had not yet closed as of December 31, 2010. This active investment pace has resulted in the segment’s BREP VI fund reaching approximately 70% invested or committed capital at the end of 2010. Accordingly, Blackstone expects to commence fundraising for its next real estate fund later in 2011.

Credit and Marketable Alternatives (CAMA)

CAMA segment revenues were up 34% to $845.4 million for the full year 2010 compared with revenues of $632.3 million for the full year 2009. The increase from 2009 was due to strong inflows across CAMA’s funds and asset classes. Strong fund performance drove sharp increases in Performance Fees, which more than doubled to $320.7 million, and an increase in Total Management Fees of 21% to $471.9 million.

The net core funds composite returns for Blackstone’s funds of hedge funds was 3.6% for the fourth quarter of 2010 and 8.5% for the full year 2010.

The net core funds returns in Blackstone’s credit-oriented business were 5.7% for the credit-oriented special situations hedge funds, 5.8% for the GSO legacy mezzanine debt drawdown funds and 6.1% for the GSO distressed drawdown funds for the fourth quarter of 2010. For the full year 2010, the net core funds returns in Blackstone’s credit-oriented business were 15.7% for the credit-oriented special situations hedge funds, 17.9% for the GSO legacy mezzanine debt drawdown funds and 35.9% for the GSO distressed drawdown funds.

ENI for the CAMA segment was also up 40% to $372.0 million for the full year 2010 compared to $265.2 million for the full year 2009 as the strong fund performance drove sharp increases in Management and Performance Fees for both the funds of hedge funds and credit-oriented businesses.

Fee-Earning Assets Under Management for the segment grew 22% to a record $58.5 billion from $47.9 billion in 2009. The increase from 2009 was principally due to net inflows and market appreciation across the segment and the April 1, 2010 acquisition of $3.5 billion in Fee-Earning Assets Under Management from Allied Capital’s Callidus unit.

As of December 31, 2010, 76% of the Fee-Earnings Assets Under Management in Blackstone’s funds of hedge funds which were eligible to earn performance fees were above their respective high water marks. As of December 31, 2010, 96% of the Fee-Earning Assets Under Management in Blackstone’s credit-oriented special situations hedge funds which were eligible to earn performance fees were above their respective high water marks.

Dry powder for CAMA was $4.5 billion as of December 31, 2010. Limited Partner Capital Invested in certain carry credit-oriented funds during the full year 2010 totaled $1.4 billion, up from $721.4 million for the full year 2009.

In January 2011, Blackstone separated its CAMA segment into two new segments: Hedge Fund Solutions and Credit Businesses. The Hedge Fund Solutions segment primarily manages funds of hedge funds and the Credit Businesses segment, which includes GSO Capital Partners, manages credit-oriented funds, collateralized loan obligation (“CLO”) and collateralized debt obligation (“CDO”) vehicles and debt-focused closed-end mutual funds. Blackstone will provide segment results under this structure commencing in the first quarter of 2011. Please see Exhibit 7 for selected financial information presented under this revised reporting structure.

Financial Advisory

Revenues were $431.9 million for the full year 2010, an increase from $397.6 million for the full year 2009. The increase in segment revenues was primarily driven by a nearly 300% increase in the fees earned by Blackstone’s fund placement businesses, which reflected the improving fundraising environment. Blackstone’s financial and strategic advisory business revenues increased, in a continuing difficult environment for transactions, up 5% in 2010. These increases were partially offset by a decrease in fees from Blackstone’s restructuring and reorganization business from the record year in 2009, but was still strong enough to be the second best year ever for this business.

ENI was $83.7 million for the full year 2010 compared to $85.7 million for the full year 2009 reflecting the cyclically balanced attributes of the segment.

CAPITAL AND LIQUIDITY

As of December 31, 2010, Blackstone had $588.6 million in cash, $1.1 billion invested in Blackstone’s Treasury cash management strategies, $285.2 million invested in liquid Blackstone funds and $1.6 billion invested in illiquid Blackstone funds. Long-term debt totaled $1 billion in borrowings from the 2010 and 2009 bond issuances. Blackstone has no borrowings outstanding against its $1 billion revolving credit facility.

DISTRIBUTION

The Blackstone Group L.P. has declared a quarterly distribution of $0.32 per common unit to record holders of common units at the close of business on March 15, 2011. This distribution will be paid on March 31, 2011.

For distributions related to fiscal 2010 and thereafter, Blackstone’s current intention is to distribute to its common unitholders substantially all of The Blackstone Group L.P.’s net after-tax share of its annual Distributable Earnings in excess of amounts determined by its general partner to be necessary or appropriate to provide for the conduct of its business, to make appropriate investments in its business and funds, to comply with applicable law, any of its debt instruments or other agreements, or to provide for future distributions to its unitholders for any ensuing quarter. Because Blackstone will not know what its Distributable Earnings will be for any fiscal year until the end of such year, Blackstone expects that its first three quarterly distributions in respect of any given year will be based on its anticipated annualized Net Fee Related Earnings. As such, the distributions for the first three quarters are expected to be smaller than the final quarterly distribution in respect of such year. For the fourth quarter of 2010 Blackstone will distribute the remaining Distributable Earnings for the year, which is expected to also include realized Performance Fees net of related compensation and realized net investment income.

In most years the aggregate amounts of Blackstone’s distributions to unitholders will not equal its Distributable Earnings for that year. Distributable Earnings will only be a starting point for the determination of the amount to be distributed to unitholders because as noted above, in determining the amount to be distributed Blackstone will subtract from Distributable Earnings any amounts determined by its general partner to be necessary or appropriate to provide for the conduct of its business, to make appropriate investments in its business and funds, to comply with applicable law, any of its debt instruments or other agreements, or to provide for future distributions to its unitholders for any ensuing quarter.

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

Because the wholly-owned subsidiaries of The Blackstone Group L.P. must pay taxes and make payments under the tax receivable agreements described in Blackstone’s Annual Report on Form 10-K, the amounts ultimately distributed by The Blackstone Group L.P. to its common unitholders in respect of fiscal 2010 and subsequent years are expected to be different, on a per unit basis, than the amounts distributed by the Blackstone Holdings partnerships to the Blackstone personnel and others who are limited partners of the Blackstone Holdings partnerships in respect of their Blackstone Holdings partnership units.

# # #

Blackstone will host a conference call on February 3, 2011 at 11:00 a.m. ET to discuss 2010 results. The conference call can be accessed by dialing (877) 391-6747 (U.S. domestic) or +1 (617) 597-9291

(international) pass code 14994355. Additionally, the conference call will be broadcast live over the internet and can be accessed by all interested parties through the Investor Relations section of The Blackstone Group’s website http://ir.blackstone.com. For those unable to listen to the live broadcast, a replay will be available on Blackstone’s website or by dialing (888) 286-8010 (U.S. domestic) or +1 (617) 801-6888 (international) conference ID number 26557432, beginning approximately two hours after the event. Blackstone will also post a short video of Blackstone Chairman, CEO and Co-Founder, Steve Schwarzman, conveying the highlights of the 2010 results on February 3, 2011 at 12:30 p.m. ET in the News & Views section of The Blackstone Group’s website http://www.blackstone.com/cps/rde/xchg/bxcom/hs/newsandviews.htm.

Blackstone expects to host conference calls to report its 2011 results as follows: first quarter results, April 21, 2011; second quarter results, July 21, 2011; third quarter results, October 20, 2011 and fourth quarter and full year results, February 2, 2012.

Investor Relations Contacts:

Joan Solotar

The Blackstone Group

Tel: +1 (212) 583-5068

solotar@blackstone.com

Weston Tucker

The Blackstone Group

Tel: +1 (212) 583-5231

tucker@blackstone.com

Media Relations Contact:

Peter Rose

The Blackstone Group

Tel: +1 (212) 583-5871

rose@blackstone.com

About The Blackstone Group

Blackstone is one of the world’s leading investment and advisory firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, the companies we advise and the broader global economy. We do this through the commitment of our extraordinary people and flexible capital. Our alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions, credit-oriented funds and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com.

Forward-Looking Statements

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which reflect Blackstone’s current views with respect to, among other things, Blackstone’s operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Blackstone believes these factors include but are not limited to those described under the section entitled “Risk Factors” in its Annual Report on Form 10-K for the fiscal year

ended December 31, 2010, as such factors may be updated from time to time in its periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the filings. Blackstone undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

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

THE BLACKSTONE GROUP L.P.

Exhibit 1a. Consolidated Statements of Operations

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


	Quarter Ended December 31,
	2010			2009
Revenues
Management and Advisory Fees	$	461,345		$	432,620

Performance Fees
Realized		194,780			68,488
Unrealized		258,809			141,666

Total Performance Fees		453,589			210,154

Investment Income
Realized		(336	)		36,764
Unrealized		160,313			32,433

Total Investment Income (a)		159,977			69,197

Interest and Dividend Revenue		10,296			11,556
Other		(1,192	)		1,819

Total Revenues		1,084,015			725,346

Expenses
Compensation and Benefits
Compensation		696,561			973,119
Performance Fee Compensation
Realized		72,734			24,088
Unrealized		70,615			49,673

Total Compensation and Benefits (b)		839,910			1,046,880
General, Administrative and Other (c)		124,505			115,056
Interest Expense (d)		14,596			6,640
Fund Expenses		10,730			1,425

Total Expenses		989,741			1,170,001

Other Income
Net Gains from Fund Investment Activities		104,369			79,341

Income (Loss) Before Provision for Taxes (e)		198,643			(365,314	)
Provision for Taxes		59,867			18,063

Net Income (Loss)		138,776			(383,377	)
Net Income Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		37,666			40,581
Net Income Attributable to Non-Controlling Interests in Consolidated Entities		25,496			19,122
Net Income (Loss) Attributable to Non-Controlling Interests in Blackstone Holdings		86,587			(299,830	)

Net Income (Loss) Attributable to The Blackstone Group L.P. (f)	$	(10,973	)	$	(143,250	)

Net Loss per Common Unit, Basic and Diluted
Common Units	$	(0.03	)

Common Units Entitled to Priority Distributions				$	(0.45	)

Common Units Not Entitled to Priority Distributions				$	(0.76	)


Net IPO and acquisition-related charges included above were:
(a) Investment Income	$	6,328		$	5,439
(b) Total Compensation and Benefits	$	839,910		$	1,046,880
Less: Compensation and Benefits - IPO and acquisition-related	$	459,326		$	756,827

Compensation - non-IPO and acquisition-related (*)	$	380,584		$	290,053

(c) General, Administrative and Other	$	43,627		$	38,559
(d) Interest Expense	$	1,519		$	915
(e) Total IPO and acquisition-related charges	$	498,144		$	790,862
(f) Total IPO and acquisition-related charges attributable to The Blackstone Group L.P., net of tax	$	176,117		$	218,195

(*)	Principally comprised of base pay, bonus, net carried interest allocations, benefits and non-IPO and acquisition-related equity-based compensation.

THE BLACKSTONE GROUP L.P.

Exhibit 1b. Consolidated Statements of Operations

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


	Year Ended December 31,
	2010			2009
Revenues
Management and Advisory Fees	$	1,584,748		$	1,482,226

Performance Fees
Realized		366,721			70,492
Unrealized		571,113			150,598

Total Performance Fees		937,834			221,090

Investment Income (Loss)
Realized		29,157			44,320
Unrealized		532,004			(3,716	)

Total Investment Income (a)		561,161			40,604

Interest and Dividend Revenue		36,218			22,680
Other		(619	)		7,099

Total Revenues		3,119,342			1,773,699

Expenses
Compensation and Benefits
Compensation		3,253,226			3,778,686
Performance Fee Compensation
Realized		128,316			25,102
Unrealized		228,647			(26,182	)

Total Compensation and Benefits (b)		3,610,189			3,777,606
General, Administrative and Other (c)		466,358			443,573
Interest Expense (d)		41,229			13,384
Fund Expenses		26,214			7,296

Total Expenses		4,143,990			4,241,859

Other Income
Net Gains from Fund Investment Activities		501,994			176,694

Income (Loss) Before Provision for Taxes (e)		(522,654	)		(2,291,466	)
Provision for Taxes		84,669			99,230

Net Income (Loss)		(607,323	)		(2,390,696	)
Net Income Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		84,837			131,097
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities		346,312			(14,328	)
Net Income (Loss) Attributable to Non-Controlling Interests in Blackstone Holdings		(668,444	)		(1,792,174	)

Net Income (Loss) Attributable to The Blackstone Group L.P. (f)	$	(370,028	)	$	(715,291	)

Net Loss per Common Unit, Basic and Diluted
Common Units	$	(1.02	)

Common Units Entitled to Priority Distributions				$	(2.46	)

Common Units Not Entitled to Priority Distributions				$	(3.71	)


Net IPO and acquisition-related charges included above were:
(a) Investment Income	$	31,113		$	38,168
(b) Total Compensation and Benefits	$	3,610,189		$	3,777,606
Less: Compensation and Benefits - IPO and acquisition-related	$	2,394,111		$	3,008,923

Compensation - non-IPO and acquisition-related (*)	$	1,216,078		$	768,683

(c) General, Administrative and Other	$	166,693		$	157,689
(d) Interest Expense	$	4,878		$	3,553
(e) Total IPO and acquisition-related charges	$	2,534,569		$	3,131,997
(f) Total IPO and acquisition-related charges attributable to The Blackstone Group L.P., net of tax	$	809,212		$	874,865

(*)	Principally comprised of base pay, bonus, net carried interest allocations, benefits and non-IPO and acquisition-related equity-based compensation.

THE BLACKSTONE GROUP L.P.

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

(Unaudited, Dollars in Thousands)

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


	Three Months Ended												Three Months Ended
	March 31, 2009			June 30, 2009			September 30, 2009		December 31, 2009		Full Year 2009		March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			Full Year 2010
Private Equity
Revenues
Management Fees
Base Management Fees	$	68,431		$	67,740		$	67,009	$	67,329	$	270,509	$	65,432		$	66,795		$	66,077		$	65,003		$	263,307
Transaction and Other Fees, Net *		10,328			15,145			18,368		42,495		86,336		31,972			16,367			13,348			10,556			72,243
Management Fee Offsets **		—			—			—		—		—		—			—			(91	)		(97	)		(188	)


Total Management Fees		78,759			82,885			85,377		109,824		356,845		97,404			83,162			79,334			75,462			335,362

Performance Fees
Realized		—			—			—		34,021		34,021		46,175			1,106			44,814			64,774			156,869
Unrealized		4,818			97,185			110,867		90,621		303,491		45,549			(24,020	)		45,499			84,466			151,494

Total Performance Fees		4,818			97,185			110,867		124,642		337,512		91,724			(22,914	)		90,313			149,240			308,363

Investment Income (Loss)
Realized		(344	)		102			8,794		28,416		36,968		(495	)		3,141			9,940			2,746			15,332
Unrealized		(15,165	)		17,118			18,640		12,676		33,269		84,684			17,275			30,491			20,838			153,288

Total Investment Income (Loss)		(15,509	)		17,220			27,434		41,092		70,237		84,189			20,416			40,431			23,584			168,620
Interest Income and Dividend Revenue		(152	)		824			2,553		4,531		7,756		3,428			2,728			3,802			4,086			14,044
Other		180			472			677		1,516		2,845		100			460			1,061			400			2,021

Total Revenues		68,096			198,586			226,908		281,605		775,195		276,845			83,852			214,941			252,772			828,410

Expenses
Compensation and Benefits
Compensation		36,848			40,667			42,011		61,740		181,266		46,910			46,612			47,552			38,271			179,345
Performance Fee Compensation
Realized		(6	)		(3	)		135		615		741		6,005			128			10,783			15,711			32,627
Unrealized		(41,966	)		13,599			27,755		20,919		20,307		6,344			(10,296	)		18,306			6,966			21,320

Total Compensation and Benefits		(5,124	)		54,263			69,901		83,274		202,314		59,259			36,444			76,641			60,948			233,292
Other Operating Expenses		20,108			20,553			21,318		20,492		82,471		24,431			28,677			26,359			30,122			109,589

Total Expenses		14,984			74,816			91,219		103,766		284,785		83,690			65,121			103,000			91,070			342,881

Economic Net Income	$	53,112		$	123,770		$	135,689	$	177,839	$	490,410	$	193,155		$	18,731		$	111,941		$	161,702		$	485,529

Net Fee Related Earnings from Operations	$	19,883		$	23,885		$	21,153	$	32,905	$	97,826	$	28,712		$	11,464		$	17,465		$	7,355		$	64,996

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

**	Primarily placement fees.

continued…

THE BLACKSTONE GROUP L.P.

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

(Unaudited, Dollars in Thousands)


	Three Months Ended															Three Months Ended
	March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			Full Year 2009			March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			Full Year 2010
Real Estate
Revenues
Management Fees
Base Management Fees	$	80,198		$	81,517		$	83,409		$	83,323		$	328,447		$	83,060		$	82,916		$	83,232		$	89,220		$	338,428
Transaction and Other Fees, Net *		3,140			2,879			3,347			16,472			25,838			1,942			2,979			8,538			46,455			59,914
Management Fee Offsets **		(1,193	)		(486	)		(415	)		(373	)		(2,467	)		(489	)		(110	)		(401	)		(71	)		(1,071	)

Total Management Fees		82,145			83,910			86,341			99,422			351,818			84,513			85,785			91,369			135,604			397,271

Performance Fees
Realized		646			4,590			(11,441	)		3,166			(3,039	)		5,948			16,319			5,010			13,011			40,288
Unrealized		(229,219	)		(51,960	)		23,608			5,391			(252,180	)		11,391			21,117			69,910			154,553			256,971

Total Performance Fees		(228,573	)		(47,370	)		12,167			8,557			(255,219	)		17,339			37,436			74,920			167,564			297,259

Investment Income (Loss)
Realized		1,397			1,345			(3,078	)		6,500			6,164			2,632			3,900			2,159			2,560			11,251
Unrealized		(67,239	)		(59,408	)		1,242			(219	)		(125,624	)		46,892			79,543			83,968			108,576			318,979

Total Investment Income (Loss)		(65,842	)		(58,063	)		(1,836	)		6,281			(119,460	)		49,524			83,443			86,127			111,136			330,230
Interest Income and Dividend Revenue		384			197			2,035			3,414			6,030			2,718			2,178			3,026			3,251			11,173
Other		(669	)		2,405			1,450			75			3,261			(1,876	)		(390	)		2,330			(400	)		(336	)

Total Revenues		(212,555	)		(18,921	)		100,157			117,749			(13,570	)		152,218			208,452			257,772			417,155			1,035,597

Expenses
Compensation and Benefits
Compensation		36,002			39,207			38,484			44,422			158,115			40,150			44,528			43,219			55,280			183,177
Performance Fee Compensation
Realized		2,138			(542	)		(1,690	)		3,600			3,506			1,524			8,895			1,806			3,619			15,844
Unrealized		(75,459	)		(45,489	)		5,721			1,246			(113,981	)		6,937			15,999			46,182			53,746			122,864

Total Compensation and Benefits		(37,319	)		(6,824	)		42,515			49,268			47,640			48,611			69,422			91,207			112,645			321,885
Other Operating Expenses		12,615			12,978			13,437			17,295			56,325			14,290			17,647			18,584			23,668			74,189

Total Expenses		(24,704	)		6,154			55,952			66,563			103,965			62,901			87,069			109,791			136,313			396,074

Economic Net Income	$	(187,851	)	$	(25,075	)	$	44,205		$	51,186		$	(117,535	)	$	89,317		$	121,383		$	147,981		$	280,842		$	639,523

Net Fee Related Earnings from Operations	$	30,513		$	32,867		$	33,376		$	38,431		$	135,187		$	29,825		$	24,743		$	39,853		$	52,457		$	146,878

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

**	Primarily placement fees.

continued…

THE BLACKSTONE GROUP L.P.

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

(Unaudited, Dollars in Thousands)


	Three Months Ended															Three Months Ended
	March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			Full Year 2009			March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			Full Year 2010
Credit and Marketable Alternatives
Revenues
Management Fees
Base Management Fees	$	96,503		$	96,293		$	105,430		$	102,647		$	400,873		$	103,479		$	113,203		$	120,125		$	130,929		$	467,736
Transaction and Other Fees, Net *		443			687			778			958			2,866			1,345			1,169			1,062			1,653			5,229
Management Fee Offsets **		(4,213	)		(4,365	)		(4,121	)		(1,995	)		(14,694	)		(689	)		(69	)		(182	)		(114	)		(1,054	)

Total Management Fees		92,733			92,615			102,087			101,610			389,045			104,135			114,303			121,005			132,468			471,911

Performance Fees
Realized		—			587			7,622			35,073			43,282			1,758			28,949			16,215			117,584			164,506
Unrealized		9,922			21,832			36,114			46,688			114,556			75,393			(17,835	)		77,336			21,267			156,161

Total Performance Fees		9,922			22,419			43,736			81,761			157,838			77,151			11,114			93,551			138,851			320,667

Investment Income (Loss)
Realized		(11,998	)		(4,268	)		1,953			(718	)		(15,031	)		2,983			8,729			1,708			6,098			19,518
Unrealized		8,090			29,049			29,976			28,901			96,016			19,715			(10,193	)		13,181			6,130			28,833

Total Investment Income (Loss)		(3,908	)		24,781			31,929			28,183			80,985			22,698			(1,464	)		14,889			12,228			48,351
Interest Income and Dividend Revenue		709			279			929			1,535			3,452			1,148			756			1,750			1,253			4,907
Other		(253	)		315			715			248			1,025			(542	)		(372	)		600			(77	)		(391	)

Total Revenues		99,203			140,409			179,396			213,337			632,345			204,590			124,337			231,795			284,723			845,445

Expenses
Compensation and Benefits
Compensation		53,707			49,304			54,365			40,741			198,117			49,085			53,370			53,280			62,908			218,643
Performance Fee Compensation
Realized		57			82			842			19,873			20,854			212			13,856			12,373			53,404			79,845
Unrealized		7,370			8,020			24,594			27,509			67,493			41,319			(6,595	)		39,835			9,903			84,462

Total Compensation and Benefits		61,134			57,406			79,801			88,123			286,464			90,616			60,631			105,488			126,215			382,950
Other Operating Expenses		23,645			16,461			18,123			22,432			80,661			19,575			24,520			22,057			24,314			90,466

Total Expenses		84,779			73,867			97,924			110,555			367,125			110,191			85,151			127,545			150,529			473,416

Economic Net Income	$	14,424		$	66,542		$	81,472		$	102,782		$	265,220		$	94,399		$	39,186		$	104,250		$	134,194		$	372,029

Net Fee Related Earnings from Operations	$	14,428		$	25,164		$	24,005		$	36,049		$	99,646		$	34,136		$	34,552		$	49,334		$	39,268		$	157,290

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

**	Primarily placement fees.

continued…

THE BLACKSTONE GROUP L.P.

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

(Unaudited, Dollars in Thousands)


	Three Months Ended														Three Months Ended
	March 31, 2009			June 30, 2009			September 30, 2009		December 31, 2009			Full Year 2009			March 31, 2010			June 30, 2010			September 30, 2010		December 31, 2010			Full Year 2010
Financial Advisory
Revenues
Advisory Fees	$	90,940		$	82,503		$	94,566	$	122,709		$	390,718		$	76,568		$	134,099		$	84,541	$	130,932		$	426,140
Transaction and Other Fees, Net		—			—			—		—			—			1			102			—		259			362

Total Advisory and Transaction Fees		90,940			82,503			94,566		122,709			390,718			76,569			134,201			84,541		131,191			426,502

Investment Income (Loss)
Realized		—			—			—		1,443			1,443			187			(49	)		469		207			814
Unrealized		—			—			476		(257	)		219			230			561			607		(864	)		534

Total Investment Income (Loss)		—			—			476		1,186			1,662			417			512			1,076		(657	)		1,348
Interest Income and Dividend Revenue		1,044			1,118			1,250		1,842			5,254			1,396			1,268			1,609		1,699			5,972
Other		(943	)		(122	)		1,051		(21	)		(35	)		(932	)		(342	)		477		(1,115	)		(1,912	)

Total Revenues		91,041			83,499			97,343		125,716			397,599			77,450			135,639			87,703		131,118			431,910

Expenses
Compensation and Benefits
Compensation		50,952			54,239			57,686		69,482			232,359			54,492			76,152			66,531		80,774			277,949

Total Compensation and Benefits		50,952			54,239			57,686		69,482			232,359			54,492			76,152			66,531		80,774			277,949
Other Operating Expenses		12,976			21,734			22,666		22,196			79,572			14,727			17,316			17,253		20,976			70,272

Total Expenses		63,928			75,973			80,352		91,678			311,931			69,219			93,468			83,784		101,750			348,221

Economic Net Income	$	27,113		$	7,526		$	16,991	$	34,038		$	85,668		$	8,231		$	42,171		$	3,919	$	29,368		$	83,689

Net Fee Related Earnings from Operations	$	24,694		$	4,874		$	16,405	$	31,778		$	77,751		$	6,072		$	37,156		$	6,262	$	23,660		$	73,150

continued…

THE BLACKSTONE GROUP L.P.

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

(Unaudited, Dollars in Thousands)


	Three Months Ended															Three Months Ended
	March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			Full Year 2009			March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			Full Year 2010
Economic Net Income Recap, Total Segments
Revenues
Management and Advisory Fees
Base Management Fees	$	245,132		$	245,550		$	255,848		$	253,299		$	999,829		$	251,971		$	262,914		$	269,434		$	285,152		$	1,069,471
Advisory Fees		90,940			82,503			94,566			122,709			390,718			76,568			134,099			84,541			130,932			426,140
Transaction and Other Fees, Net *		13,911			18,711			22,493			59,925			115,040			35,260			20,617			22,948			58,923			137,748
Management Fee Offsets **		(5,406	)		(4,851	)		(4,536	)		(2,368	)		(17,161	)		(1,178	)		(179	)		(674	)		(282	)		(2,313	)

Total Management and Advisory Fees		344,577			341,913			368,371			433,565			1,488,426			362,621			417,451			376,249			474,725			1,631,046

Performance Fees
Realized		646			5,177			(3,819	)		72,260			74,264			53,881			46,374			66,039			195,369			361,663
Unrealized		(214,479	)		67,057			170,589			142,700			165,867			132,333			(20,738	)		192,745			260,286			564,626

Total Performance Fees		(213,833	)		72,234			166,770			214,960			240,131			186,214			25,636			258,784			455,655			926,289

Investment Income (Loss)
Realized		(10,945	)		(2,821	)		7,669			35,641			29,544			5,307			15,721			14,276			11,611			46,915
Unrealized		(74,314	)		(13,241	)		50,334			41,101			3,880			151,521			87,186			128,247			134,680			501,634

Total Investment Income (Loss)		(85,259	)		(16,062	)		58,003			76,742			33,424			156,828			102,907			142,523			146,291			548,549
Interest Income and Dividend Revenue		1,985			2,418			6,767			11,322			22,492			8,690			6,930			10,187			10,289			36,096
Other		(1,685	)		3,070			3,893			1,818			7,096			(3,250	)		(644	)		4,468			(1,192	)		(618	)

Total Revenues		45,785			403,573			603,804			738,407			1,791,569			711,103			552,280			792,211			1,085,768			3,141,362

Expenses
Compensation and Benefits
Compensation		177,509			183,417			192,546			216,385			769,857			190,637			220,662			210,582			237,233			859,114
Performance Fee Compensation
Realized		2,189			(463	)		(713	)		24,088			25,101			7,741			22,879			24,962			72,734			128,316
Unrealized		(110,055	)		(23,870	)		58,070			49,674			(26,181	)		54,600			(892	)		104,323			70,615			228,646

Total Compensation and Benefits		69,643			159,084			249,903			290,147			768,777			252,978			242,649			339,867			380,582			1,216,076
Other Operating Expenses		69,344			71,726			75,544			82,415			299,029			73,023			88,160			84,253			99,080			344,516

Total Expenses		138,987			230,810			325,447			372,562			1,067,806			326,001			330,809			424,120			479,662			1,560,592

Total Economic Net Income (Loss)	$	(93,202	)	$	172,763		$	278,357		$	365,845		$	723,763		$	385,102		$	221,471		$	368,091		$	606,106		$	1,580,770

Total Net Fee Related Earnings from Operations	$	89,518		$	86,790		$	94,939		$	139,163		$	410,410		$	98,745		$	107,915		$	112,914		$	122,740		$	442,314

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

**	Primarily placement fees.

THE BLACKSTONE GROUP L.P.

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

(Dollars in Thousands)

The tables below reconcile Economic Net Income (Loss) to Net Fee Related Earnings from Operations.


	Three Months Ended															Three Months Ended
	March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			Full Year 2009			March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			Full Year 2010
Private Equity
Economic Net Income	$	53,112		$	123,770		$	135,689		$	177,839		$	490,410		$	193,155		$	18,731		$	111,941		$	161,702		$	485,529
Performance Fees Adjustment (a)		(4,818	)		(97,185	)		(110,867	)		(124,642	)		(337,512	)		(91,724	)		22,914			(90,313	)		(149,240	)		(308,363	)
Investment Income (Loss) Adjustment (b)		15,509			(17,220	)		(27,434	)		(41,092	)		(70,237	)		(84,189	)		(20,416	)		(40,431	)		(23,584	)		(168,620	)
Investment Income - Blackstone’s Treasury Cash Management Strategies (c)		—			—			—			5,510			5,510			1,650			2,278			5,052			(3,358	)		5,622
Performance Fee Compensation and Benefits Adjustment (d)		(41,972	)		13,596			27,890			21,534			21,048			12,349			(10,168	)		29,089			22,677			53,947
Taxes Payable (e)		(1,948	)		924			(4,125	)		(6,244	)		(11,393	)		(2,529	)		(1,875	)		2,127			(842	)		(3,119	)

Net Fee Related Earnings from Operations	$	19,883		$	23,885		$	21,153		$	32,905		$	97,826		$	28,712		$	11,464		$	17,465		$	7,355		$	64,996

Real Estate
Economic Net Income (Loss)	$	(187,851	)	$	(25,075	)	$	44,205		$	51,186		$	(117,535	)	$	89,317		$	121,383		$	147,981		$	280,842		$	639,523
Performance Fees Adjustment (a)		228,573			47,370			(12,167	)		(8,557	)		255,219			(17,339	)		(37,436	)		(74,920	)		(167,564	)		(297,259	)
Investment Income (Loss) Adjustment (b)		65,842			58,063			1,836			(6,281	)		119,460			(49,524	)		(83,443	)		(86,127	)		(111,136	)		(330,230	)
Investment Income - Blackstone’s Treasury Cash Management Strategies (c)		—			—			—			4,312			4,312			1,311			1,811			4,016			(2,669	)		4,469
Performance Fee Compensation and Benefits Adjustment (d)		(73,321	)		(46,031	)		4,031			4,846			(110,475	)		8,461			24,894			47,988			57,365			138,708
Taxes Payable (e)		(2,730	)		(1,460	)		(4,529	)		(7,075	)		(15,794	)		(2,401	)		(2,466	)		915			(4,381	)		(8,333	)

Net Fee Related Earnings from Operations	$	30,513		$	32,867		$	33,376		$	38,431		$	135,187		$	29,825		$	24,743		$	39,853		$	52,457		$	146,878

(a)	This adjustment removes from ENI the segment amount of Performance Fees.

(b)	This adjustment removes from ENI the segment amount of Investment Income (Loss).

(c)	This adjustment represents the realized and unrealized gain on Blackstone’s Treasury cash management strategies which are a component of Investment Income (Loss) but included in Net Fee Related Earnings.

(d)	This adjustment removes from expenses the compensation and benefit amounts related to Blackstone’s profit sharing plans related to Performance Fees.

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

continued...

THE BLACKSTONE GROUP L.P.

(Dollars in Thousands)


	Three Months Ended															Three Months Ended
	March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			Full Year 2009			March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			Full Year 2010
Credit and Marketable Alternatives
Economic Net Income	$	14,424		$	66,542		$	81,472		$	102,782		$	265,220		$	94,399		$	39,186		$	104,250		$	134,194		$	372,029
Performance Fees Adjustment (a)		(9,922	)		(22,419	)		(43,736	)		(81,761	)		(157,838	)		(77,151	)		(11,114	)		(93,551	)		(138,851	)		(320,667	)
Investment Income (Loss) Adjustment (b)		3,908			(24,781	)		(31,929	)		(28,183	)		(80,985	)		(22,698	)		1,464			(14,889	)		(12,228	)		(48,351	)
Investment Income - Blackstone’s Treasury Cash Management Strategies (c)		—			—			—			1,326			1,326			354			489			1,085			2,064			3,992
Performance Fee Compensation and Benefits Adjustment (d)		7,427			8,102			25,436			47,382			88,347			41,531			7,261			52,208			63,307			164,307
Taxes Payable (e)		(1,409	)		(2,280	)		(7,238	)		(5,497	)		(16,424	)		(2,299	)		(2,734	)		231			(9,218	)		(14,020	)

Net Fee Related Earnings from Operations	$	14,428		$	25,164		$	24,005		$	36,049		$	99,646		$	34,136		$	34,552		$	49,334		$	39,268		$	157,290

Financial Advisory
Economic Net Income	$	27,113		$	7,526		$	16,991		$	34,038		$	85,668		$	8,231		$	42,171		$	3,919		$	29,368		$	83,689
Investment Income (Loss) Adjustment (b)		—			—			(476	)		(1,186	)		(1,662	)		(417	)		(512	)		(1,076	)		657			(1,348	)
Investment Income - Blackstone’s Treasury Cash Management Strategies (c)		—			—			—			1,220			1,220			350			484			1,073			(713	)		1,194
Taxes Payable (e)		(2,419	)		(2,652	)		(110	)		(2,294	)		(7,475	)		(2,092	)		(4,987	)		2,346			(5,652	)		(10,385	)

Net Fee Related Earnings from Operations	$	24,694		$	4,874		$	16,405		$	31,778		$	77,751		$	6,072		$	37,156		$	6,262		$	23,660		$	73,150

(a)	This adjustment removes from ENI the segment amount of Performance Fees.

(b)	This adjustment removes from ENI the segment amount of Investment Income (Loss).

(c)	This adjustment represents the realized and unrealized gain on Blackstone’s Treasury cash management strategies which are a component of Investment Income (Loss) but included in Net Fee Related Earnings.

(d)	This adjustment removes from expenses the compensation and benefit amounts related to Blackstone’s profit sharing plans related to Performance Fees.

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

continued…

THE BLACKSTONE GROUP L.P.

(Unaudited, Dollars in Thousands)


	Three Months Ended															Three Months Ended
	March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			Full Year 2009			March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			Full Year 2010
Income (Loss) Before Provision (Benefit) for Taxes	$	(912,207	)	$	(586,986	)	$	(426,959	)	$	(365,314	)	$	(2,291,466	)	$	(227,671	)	$	(636,928	)	$	143,302		$	198,643		$	(522,654	)
IPO and Acquisition-Related Charges (a)		741,057			761,834			719,708			751,351			2,973,950			726,722			749,930			438,568			453,975			2,369,195
Amortization of Intangibles (b)		39,513			39,511			39,513			39,511			158,048			39,512			40,822			40,872			44,172			165,378
(Income) Loss Associated with Non-Controlling Interests in (Income) Loss of Consolidated Entities (c)		38,435			(41,596	)		(53,905	)		(59,703	)		(116,769	)		(153,461	)		67,647			(254,651	)		(90,684	)		(431,149	)

Total Segments
Total Segments, Economic Net Income (Loss)		(93,202	)		172,763			278,357			365,845			723,763			385,102			221,471			368,091			606,106			1,580,770
Performance Fees Adjustment (d)		213,833			(72,234	)		(166,770	)		(214,960	)		(240,131	)		(186,214	)		(25,636	)		(258,784	)		(455,655	)		(926,289	)
Investment Income (Loss) Adjustment (e)		85,259			16,062			(58,003	)		(76,742	)		(33,424	)		(156,828	)		(102,907	)		(142,523	)		(146,291	)		(548,549	)
Investment Income - Blackstone’s Treasury Cash Management Strategies (f)		—			—			—			12,368			12,368			3,665			5,062			11,226			(4,676	)		15,277
Performance Fee Compensation and Benefits Adjustment (g)		(107,866	)		(24,333	)		57,357			73,762			(1,080	)		62,341			21,987			129,285			143,349			356,962
Taxes Payable (h)		(8,506	)		(5,468	)		(16,002	)		(21,110	)		(51,086	)		(9,321	)		(12,062	)		5,619			(20,093	)		(35,857	)

Net Fee Related Earnings from Operations		89,518			86,790			94,939			139,163			410,410			98,745			107,915			112,914			122,740			442,314
Realized Performance Fees (i)		(1,543	)		5,637			(3,106	)		48,172			49,160			46,140			23,495			41,077			122,635			233,347
Realized Investment Income (Loss) (j)		(10,945	)		(2,821	)		7,669			35,641			29,544			5,307			15,721			14,276			11,611			46,915
Adjustment Related to Realized Investment Income - Blackstone’s Treasury Cash Management Strategies (k)		—			—			—			(10,142	)		(10,142	)		(1,264	)		512			(4,874	)		(2,156	)		(7,782	)
Other Payables Including Payable Under Tax Receivable Agreement		—			—			—			—			—			(232	)		(68	)		2,923			(15,633	)		(13,010	)

Distributable Earnings	$	77,030		$	89,606		$	99,502		$	212,834		$	478,972		$	148,696		$	147,575		$	166,316		$	239,197		$	701,784

Earnings Before Interest, Taxes and Depreciation and Amortization from Net Fee Related Earnings from Operations (l)	$	104,846		$	97,463		$	121,259		$	171,916		$	495,484		$	120,805		$	132,866		$	124,195		$	163,600		$	541,466

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

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

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

continued…

THE BLACKSTONE GROUP L.P.

(Unaudited, Dollars in Thousands)

(d)	This adjustment removes from ENI the total segment amount of Performance Fees.

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

(f)	This adjustment represents the realized and unrealized gain on Blackstone’s Treasury cash management strategies which are a component of Investment Income (Loss) but included in Net Fee Related Earnings.

(g)	This adjustment removes from expenses the compensation and benefit amounts related to Blackstone’s profit sharing plans related to Performance Fees.

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

(i)	Represents the adjustment for realized Performance Fees net of corresponding actual amounts due under Blackstone’s profit sharing plans related thereto.

(j)	Represents the adjustment for Blackstone’s Investment Income (Loss) - Realized.

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

(l)

Earnings Before Interest, Taxes and Depreciation and Amortization from Net Fee Related Earnings from Operations represents Net Fee Related Earnings from Operations adding back the implied cash taxes payable component from the Distributable Earnings reconciliation presented above, which is included in (i), and segment interest and depreciation and amortization. The cash taxes payable component of (i) was $8.5 million, $5.5 million, $16.0 million, $21.1 million, $9.3 million, $12.1 million, $(5.6) million and $20.1 million for the three months ended March 31, 2009, June 30, 2009, September 30, 2009, December 31, 2009, March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010, respectively. The cash taxes payable component of (i) was $35.9 million and $51.1 million for the years ended December 31, 2010 and 2009, respectively. Interest was $0.8 million, $(0.8) million, $4.4 million, $5.8 million, $6.3 million, $6.8 million, $10.3 million and $13.2 million for the three months ended March 31, 2009, June 30, 2009, September 30, 2009, December 31, 2009, March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010, respectively. Interest was $36.7 million and $10.2 million for the years ended December 31, 2010 and 2009, respectively. Depreciation and amortization was $6.0 million, $6.0 million, $5.9 million, $5.8 million, $6.4 million, $6.1 million, $6.6 million and $7.6 million for the three months ended March 31, 2009, June 30, 2009, September 30, 2009, December 31, 2009, March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010, respectively. Depreciation and amortization was $26.6 million and $23.7 million for the years ended December 31, 2010 and 2009, respectively.

THE BLACKSTONE GROUP L.P.

Exhibit 3. Distributable Earnings

(Dollars in Thousands)

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


	Three Months Ended December 31,						Year Ended December 31,
	2010			2009			2010			2009
Fee Related Earnings
Revenues
Total Management and Advisory Fees (a)	$	474,725		$	433,565		$	1,631,046		$	1,488,426
Interest and Dividend Revenue (a)		10,289			11,322			36,096			22,492
Other (a)		(1,192	)		1,818			(618	)		7,096
Investment Income - Blackstone’s Treasury Cash Management Strategies (b)		(4,676	)		12,368			15,277			12,368

Total Revenues		479,146			459,073			1,681,801			1,530,382

Expenses
Compensation and Benefits - Compensation (a)		237,233			216,385			859,114			769,857
Other Operating Expenses (a)		99,080			82,415			344,516			299,029
Cash Taxes (c)		20,093			21,110			35,857			51,086

Total Expenses		356,406			319,910			1,239,487			1,119,972

Net Fee Related Earnings from Operations		122,740			139,163			442,314			410,410

Performance Fees, Net of Compensation
Performance Fees - Realized (a)		195,369			72,260			361,663			74,264
Compensation and Benefits - Performance Fee
Compensation - Realized (a)		(72,734	)		(24,088	)		(128,316	)		(25,104	)

Total Performance Fees, Net of Compensation		122,635			48,172			233,347			49,160

Investment Income and Other
Investment Income (Loss) - Realized (a)		11,611			35,641			46,915			29,544
Adjustment Related to Realized Investment Income - Blackstone’s Treasury Cash Management Strategies (d)		(2,156	)		(10,142	)		(7,782	)		(10,142	)
Other Payables Including Payable Under Tax Receivable Agreement		(15,633	)		—			(13,010	)		—

Total Investment Income and Other		(6,178	)		25,499			26,123			19,402

Distributable Earnings	$	239,197		$	212,834		$	701,784		$	478,972

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

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

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

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

THE BLACKSTONE GROUP L.P.

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

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


	Three Months Ended December 31,				Year Ended December 31,
	2010		2009		2010		2009
Total GAAP Weighted-Average Common Units Outstanding - Basic and Diluted		389,804,253		313,124,952		364,021,369		288,990,187
Adjustments:
Weighted-Average Blackstone Holdings Partnership Units		712,339,304		786,954,773		736,772,290		812,377,553
Weighted-Average Unvested Deferred Restricted Common Units		23,709,846		19,781,821		25,828,413		22,453,412

Weighted-Average Economic Net Income Adjusted Units - Basic and Diluted		1,125,853,403		1,119,861,546		1,126,622,072		1,123,821,152

The following table provides a reconciliation of Blackstone’s Total GAAP Common Units Outstanding—Basic and Diluted to Economic Net Income Adjusted Units—Basic and Diluted.


	December 31,
	2010		2009
Total GAAP Common Units Outstanding - Basic and Diluted		420,631,857		319,939,772
Adjustments:
Blackstone Holdings Partnership Units		681,451,592		771,095,235
Unvested Deferred Restricted Common Units		27,968,577		35,939,305

Economic Net Income Adjusted Units - Basic and Diluted		1,130,052,026		1,126,974,312

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


	December 31,
	2010		2009
Total GAAP Common Units Outstanding (a)		420,631,857		324,688,930
Adjustments:
Blackstone Holdings Partnership Units		681,451,592		771,095,235

Distributable Earnings Units Outstanding		1,102,083,449		1,095,784,165

(a)	Common unit holders receive tax benefits from deductions taken by Blackstone’s corporate tax paying subsidiaries and bear responsibility for the deduction from Distributable Earnings of the Payable Under the Tax Receivable Agreement and certain other tax-related payables.

THE BLACKSTONE GROUP L.P.

Exhibit 5. Assets Under Management

(Dollars in Thousands)


	As of and for the Periods Ended December 31,
	2010		2009
Total Assets Under Management (End of Period)
Private Equity	$	29,319,136	$	24,758,992
Real Estate		33,165,124		20,391,334
CAMA		65,639,660		53,032,802

	$	128,123,920	$	98,183,128

Fee-Earning Assets Under Management (End of Period)
Private Equity	$	24,188,555	$	24,521,394
Real Estate		26,814,714		23,708,057
CAMA		58,496,953		47,867,546

	$	109,500,222	$	96,096,997

Weighted-Average Fee-Earning Assets Under Management (Three Months Ended)
Private Equity	$	24,261,703	$	24,680,613
Real Estate		25,186,050		23,846,532
CAMA		57,495,878		47,974,654

	$	106,943,631	$	96,501,799

Weighted-Average Fee-Earning Assets Under Management (Year Ended)
Private Equity	$	24,402,498	$	25,144,272
Real Estate		24,155,125		23,426,111
CAMA		53,534,845		45,893,845

	$	102,092,468	$	94,464,228

THE BLACKSTONE GROUP L.P.

Exhibit 6. Limited Partner Capital Invested Metrics

(Dollars in Thousands)


	As of and for the Periods Ended December 31,
	2010		2009
Limited Partner Capital Invested (Three Months Ended)
Private Equity	$	116,899	$	898,483
Real Estate (a)		2,314,891		381,348
CAMA (b)		294,574		313,596

	$	2,726,364	$	1,593,427

Limited Partner Capital Invested (Year Ended)
Private Equity	$	1,653,493	$	1,541,974
Real Estate (a)		4,072,527		884,151
CAMA (b)		1,407,993		721,401

	$	7,134,013	$	3,147,526

Fund Level Unrealized Value (c) (End of Period)
Private Equity
Cost	$	20,065,870	$	19,854,772

Unrealized Value	$	21,923,177	$	17,043,648

Real Estate (a)
Cost	$	16,121,104	$	12,173,699

Unrealized Value	$	18,698,405	$	7,070,274

CAMA (b)
Cost	$	3,681,137	$	3,077,283

Unrealized Value	$	4,267,377	$	3,247,280

(a)	Limited Partner Capital Invested and Fund Level Unrealized Value for the Real Estate segment represents activity related to funds raised by Blackstone.

(b)	Limited Partner Capital Invested and Fund Level Unrealized Value for the CAMA segment represents activity in Blackstone’s mezzanine and credit liquidity funds.

(c)

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

THE BLACKSTONE GROUP L.P.

Exhibit 7. Selected CAMA Financial Information

(Dollars in Thousands)

In January 2011, Blackstone separated its CAMA segment into two new segments: Hedge Fund Solutions and Credit Businesses. The Hedge Fund Solutions segment primarily manages funds of hedge funds and the Credit Businesses segment, which includes GSO Capital Partners, manages credit-oriented funds, collateralized loan obligation and collateralized debt obligation vehicles, separately managed accounts and debt-focused closed-end mutual funds. Blackstone will provide segment results under this structure commencing in the first quarter of 2011. The following presents selected CAMA financial information presented under this revised reporting structure.


	As of and for the Years Ended December 31,
	2010		2009
Total CAMA Revenues
Hedge Fund Solutions
Total Management Fees	$	276,015	$	229,578
Total Performance Fees		59,608		30,710
Total Investment Income		29,179		51,785
Other		1,966		1,298

Total Hedge Fund Solutions Revenues		366,768		313,371

Credit Businesses
Total Management Fees		195,896		159,467
Total Performance Fees		261,059		127,128
Total Investment Income		19,172		29,200
Other		2,550		3,179

Total Credit Businesses Revenues		478,677		318,974

	$	845,445	$	632,345

Total CAMA Expenses
Hedge Fund Solutions
Total Compensation and Benefits	$	117,086	$	99,719
Other Operating Expenses		51,360		43,166

Total Hedge Fund Solutions Expenses		168,446		142,885

Credit Businesses
Total Compensation and Benefits		265,864		186,745
Other Operating Expenses		39,106		37,495

Total Credit Businesses Expenses		304,970		224,240

	$	473,416	$	367,125

Total CAMA Economic Net Income
Hedge Fund Solutions	$	198,322	$	170,486
Credit Businesses		173,707		94,734

	$	372,029	$	265,220

Total CAMA Assets Under Management
Hedge Fund Solutions	$	34,587,292	$	28,799,326
Credit Businesses		31,052,368		24,233,476

	$	65,639,660	$	53,032,802

Total CAMA Fee-Earning Assets Under Management
Hedge Fund Solutions	$	33,159,795	$	27,451,309
Credit Businesses		25,337,158		20,416,237

	$	58,496,953	$	47,867,546

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