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Total Segment Expenses were $1.1 billion for the full year 2009, an increase from $887.9 million for the full year 2008. Compensation and Benefits was $768.8 million for the full year 2009, an increase from $568.7 million for the full year 2008, reflecting a reduction in the reversals of performance fee related compensation accruals. Total Segment Expenses for the quarter totaled $372.6 million, up from $205.7 million for the fourth quarter of 2008. The largest component of segment expenses, Total Segment Compensation and Benefits, was $290.1 million for the fourth quarter of 2009, up from $107.6 million for the fourth quarter of 2008. The change from 2008 was driven by an increase in performance fee related compensation in the Private Equity, Credit and Marketable Alternatives and Real Estate segments. Base compensation was $216.4 million for the fourth quarter of 2009, up from $189.8 million for the fourth quarter of 2008.

GAAP results for the year ended December 31, 2009 included Revenues of $1.8 billion, compared to a negative $(349.4) million for the full year 2008, and Net Loss Attributable to The Blackstone Group L.P. of $(715.3) million, compared to a net loss of $(1.2) billion for the full year 2008. GAAP results for the fourth quarter of 2009 included Revenues of $725.3 million, up from a negative $(611.3) million for the fourth quarter of 2008. Net Loss Attributable to The Blackstone Group L.P. was $(143.3) million, compared to a net loss of $(415.2) million for the fourth quarter of 2008.

World equity and debt markets continued to improve in the second half of 2009 in anticipation of sustained economic recovery. The United States and several other developed economies returned to growth, and emerging economies grew more sharply. Despite tangible evidence of economic recovery, U.S. unemployment remains high and consumer credit trends remain weak.

Commercial real estate trends in the U.S. and Europe showed continued signs of stabilization. For office properties, vacancy rates appear to have stabilized, with some markets showing signs of decreasing vacancies. In hospitality, demand appears to have bottomed as well, although pricing remains pressured. RevPAR (Revenue Per Available Room), an important hospitality industry metric, continued to decline, but that decline clearly moderated in the fourth quarter of 2009.

Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, “It has been about 17 months since the collapse of Lehman Brothers and the full onset of the global financial crisis. Equity and debt markets globally have continued to heal from their lows about a year ago although there has been some recent turbulence in January and February, most companies have reduced expenses and inventory levels, the cost of borrowing has declined and the availability of credit is increasing selectively. We believe the worst is behind us, although a recovery in Western economies could be gradual and uneven. We see many opportunities to deploy our substantial available capital across each of our asset management businesses with attractive potential risk-return for our fund investors.”

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