10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM                  TO                 

Commission File Number: 001-33551

The Blackstone Group L.P.

(Exact name of Registrant as specified in its charter)

Delaware	20-8875684
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

345 Park Avenue

New York, New York 10154

(Address of principal executive offices)(Zip Code)

(212) 583-5000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☒	Accelerated filer  ☐
Non-accelerated filer  ☐	Smaller reporting company  ☐
(Do not check if a smaller reporting company)	Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  ☒

The number of the Registrant’s voting common units representing limited partner interests outstanding as of August 2, 2018 was 667,149,651.

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS		5
	Unaudited Condensed Consolidated Financial Statements — June 30, 2018 and 2017:
	Condensed Consolidated Statements of Financial Condition as of June 30, 2018 and December  31, 2017		5
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June  30, 2018 and 2017		7
	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June  30, 2018 and 2017		8
	Condensed Consolidated Statements of Changes in Partners’ Capital for the Six Months Ended June 30, 2018 and 2017		9
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017		11
	Notes to Condensed Consolidated Financial Statements		14
ITEM 1A.	UNAUDITED SUPPLEMENTAL PRESENTATION OF STATEMENTS OF FINANCIAL CONDITION		65
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		67
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		137
ITEM 4.	CONTROLS AND PROCEDURES		141
PART II.	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS		142
ITEM 1A.	RISK FACTORS		142
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		142
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES		143
ITEM 4.	MINE SAFETY DISCLOSURES		143
ITEM 5.	OTHER INFORMATION		143
ITEM 6.	EXHIBITS		143
SIGNATURES			145

1

Forward-Looking Statements

This report 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 our current views with respect to, among other things, our operations, financial performance and unit repurchases and distribution activities. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “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. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 and in this report, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“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 report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Website and Social Media Disclosure

We use our website (www.blackstone.com), Facebook page (www.facebook.com/blackstone), Twitter (www.twitter.com/blackstone), LinkedIn (www.linkedin.com/company/blackstonegroup), Instagram (www.instagram.com/blackstone), SoundCloud (www.soundcloud.com/blackstone-300250613), PodBean (www.blackstone.podbean.com), Spotify (https://open.spotify.com/show/1PqaIgd12KgRN8rlijBhE7) and YouTube (www.youtube.com/user/blackstonegroup) accounts as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about Blackstone when you enroll your e-mail address by visiting the “Contact Us/Email Alerts” section of our website at http://ir.blackstone.com. The contents of our website, any alerts and social media channels are not, however, a part of this report.

In this report, references to “Blackstone,” the “Partnership,” “we,” “us” or “our” refer to The Blackstone Group L.P. and its consolidated subsidiaries. Unless the context otherwise requires, references in this report to the ownership of Mr. Stephen A. Schwarzman, our founder, and other Blackstone personnel include the ownership of personal planning vehicles and family members of these individuals.

“Blackstone Funds,” “our funds” and “our investment funds” refer to the private equity funds, real estate funds, funds of hedge funds, credit-focused funds, collateralized loan obligation (“CLO”), real estate investment trusts and registered investment companies that are managed by Blackstone. “Our carry funds” refers to the private equity funds, real estate funds and certain of the hedge fund solutions and credit-focused funds (with multi-year drawdown, commitment-based structures that only pay carry on the realization of an investment) that are managed by Blackstone. We refer to our general corporate private equity funds as Blackstone Capital Partners (“BCP”) funds, our energy-focused private equity funds as Blackstone Energy Partners (“BEP”) funds, our core private equity fund as Blackstone Core Equity Partners (“BCEP”), our opportunistic investment platform that invests globally across asset classes, industries and geographies as Blackstone Tactical Opportunities (“Tactical Opportunities”), our secondary private equity fund of funds business as Strategic Partners Fund Solutions (“Strategic Partners”), our infrastructure-focused funds as Blackstone Infrastructure Partners (“BIP”), our multi-asset investment program for eligible high net worth investors offering exposure to certain of our key illiquid investment strategies through a single commitment as Blackstone Total Alternatives Solution (“BTAS”) and our capital markets services business as Blackstone Capital Markets (“BXCM”). We refer to our real estate opportunistic funds as Blackstone Real Estate

2

Partners (“BREP”) funds and our real estate debt investment funds as Blackstone Real Estate Debt Strategies (“BREDS”) funds. We refer to our core+ real estate funds, which target substantially stabilized assets in prime markets, as Blackstone Property Partners (“BPP”) funds. We refer to our real estate investment trusts as “REITs”, to Blackstone Mortgage Trust, Inc., our NYSE-listed REIT, as “BXMT”, and to Blackstone Real Estate Income Trust, Inc., our non-exchange traded REIT, as “BREIT”. “Our hedge funds” refers to our funds of hedge funds, certain of our real estate debt investment funds, including a registered investment company, and certain other credit-focused funds which are managed by Blackstone. “BIS” refers to Blackstone Insurance Solutions, which partners with insurers to deliver bespoke, capital-efficient investments tailored to each insurer’s needs and risk profile.

“Assets Under Management” refers to the assets we manage. Our Assets Under Management equals the sum of:

(a) the fair value of the investments held by our carry funds and our side-by-side and co-investment entities managed by us, plus (1) the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods, or (2) for certain credit-oriented funds the amounts available to be borrowed under asset based credit facilities,

(b) the net asset value of (1) our hedge funds, real estate debt carry funds, open ended core+ real estate fund, certain co-investments managed by us, and our Hedge Fund Solutions carry and drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, and our non-exchange traded REIT,

(c) the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts,

(d) the amount of debt and equity outstanding for our CLOs during the reinvestment period,

(e) the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period,

(f) the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies, and

(g) the fair value of common stock, preferred stock, convertible debt, or similar instruments issued by BXMT.

Our carry funds are commitment-based drawdown structured funds that do not permit investors to redeem their interests at their election. Our funds of hedge funds, hedge funds, funds structured like hedge funds and other open ended funds in our Hedge Fund Solutions, Credit and Real Estate segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually or quarterly), typically with 30 to 95 days’ notice, depending on the fund and the liquidity profile of the underlying assets. Investment advisory agreements related to certain separately managed accounts in our Hedge Fund Solutions and Credit segments, excluding our BIS separately managed accounts, may generally be terminated by an investor on 30 to 90 days’ notice.

“Fee-Earning Assets Under Management” refers to the assets we manage on which we derive management fees and/or performance revenues. Our Fee-Earning Assets Under Management equals the sum of:

(a) for our Private Equity segment funds and Real Estate segment carry funds including certain real estate debt investment funds and certain of our Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund,

(b) for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund,

3

(c) the remaining invested capital or fair value of assets held in co-investment vehicles managed by us on which we receive fees,

(d) the net asset value of our funds of hedge funds, hedge funds, open ended core+ real estate fund, certain co-investments managed by us, certain registered investment companies, our non-exchange traded REIT, and certain of our Hedge Fund Solutions drawdown funds,

(e) the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts,

(f) the net proceeds received from equity offerings and accumulated core earnings of BXMT, subject to certain adjustments,

(g) the aggregate par amount of collateral assets, including principal cash, of our CLOs, and

(h) the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies.

Each of our segments may include certain Fee-Earning Assets Under Management on which we earn performance revenues but not management fees.

Our calculations of assets under management and fee-earning assets under management may differ from the calculations of other asset managers, and as a result this measure may not be comparable to similar measures presented by other asset managers. In addition, our calculation of assets under management includes commitments to, and the fair value of, invested capital in our funds from Blackstone and our personnel, regardless of whether such commitments or invested capital are subject to fees. Our definitions of assets under management and fee-earning assets under management are not based on any definition of assets under management and fee-earning assets under management that is set forth in the agreements governing the investment funds that we manage.

For our carry funds, total assets under management includes the fair value of the investments held, whereas fee-earning assets under management includes the amount of capital commitments, the remaining amount of invested capital at cost depending on whether the investment period has or has not expired or the fee terms of the fund. As such, fee-earning assets under management may be greater than total assets under management when the aggregate fair value of the remaining investments is less than the cost of those investments.

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

4

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE BLACKSTONE GROUP L.P.

Condensed Consolidated Statements of Financial Condition (Unaudited)

(Dollars in Thousands, Except Unit Data)

	June 30, 2018			December 31, 2017
Assets
Cash and Cash Equivalents	$	1,710,251		$	1,992,497
Cash Held by Blackstone Funds and Other		288,675			1,929,531
Investments (including assets pledged of $217,832 and $169,746 at June 30, 2018 and December 31, 2017, respectively)		22,008,182			24,434,049
Accounts Receivable		917,717			875,018
Due from Affiliates		2,015,949			2,028,137
Intangible Assets, Net		380,844			409,828
Goodwill		1,778,192			1,778,192
Other Assets		252,936			242,697
Deferred Tax Assets		722,551			725,970
Total Assets	$	30,075,297		$	34,415,919
Liabilities and Partners’ Capital
Loans Payable	$	10,195,403		$	14,815,436
Due to Affiliates		967,250			937,158
Accrued Compensation and Benefits		2,987,977			2,623,492
Securities Sold, Not Yet Purchased		155,780			154,380
Repurchase Agreements		182,489			118,840
Accounts Payable, Accrued Expenses and Other Liabilities		950,802			2,043,522
Total Liabilities		15,439,701			20,692,828
Commitments and Contingencies
Redeemable Non-Controlling Interests in Consolidated Entities		158,799			210,944
Partners’ Capital
The Blackstone Group L.P. Partners’ Capital
Partners’ Capital (common units: 673,544,082 issued and outstanding as of June 30, 2018; 659,526,093 issued and outstanding as of December 31, 2017)		7,105,225			6,668,511
Accumulated Other Comprehensive Loss		(57,876	)		(34,018	)
Total The Blackstone Group L.P. Partners’ Capital		7,047,349			6,634,493
Non-Controlling Interests in Consolidated Entities		3,492,621			3,253,148
Non-Controlling Interests in Blackstone Holdings		3,936,827			3,624,506
Total Partners’ Capital		14,476,797			13,512,147
Total Liabilities and Partners’ Capital	$	30,075,297		$	34,415,919

continued…

See notes to condensed consolidated financial statements.

5

THE BLACKSTONE GROUP L.P.

Condensed Consolidated Statements of Financial Condition (Unaudited)

(Dollars in Thousands)

The following presents the portion of the consolidated balances presented above attributable to consolidated Blackstone Funds which are variable interest entities. The following assets may only be used to settle obligations of these consolidated Blackstone Funds and these liabilities are only the obligations of these consolidated Blackstone Funds and they do not have recourse to the general credit of Blackstone.

	June 30, 2018		December 31, 2017
Assets
Cash Held by Blackstone Funds	$	286,045	$	1,580,296
Investments		8,601,714		12,948,653
Accounts Receivable		340,307		470,156
Due from Affiliates		24,360		46,112
Other Assets		3,141		5,189
Total Assets	$	9,255,567	$	15,050,406
Liabilities
Loans Payable	$	6,707,045	$	11,300,621
Due to Affiliates		100,306		86,393
Securities Sold, Not Yet Purchased		111,162		89,907
Repurchase Agreements		182,489		118,840
Accounts Payable, Accrued Expenses and Other Liabilities		396,224		1,562,534
Total Liabilities	$	7,497,226	$	13,158,295

See notes to condensed consolidated financial statements.

6

THE BLACKSTONE GROUP L.P.

Condensed Consolidated Statements of Operations (Unaudited)

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018			2017
Revenues
Management and Advisory Fees, Net	$	721,384	$	690,857		$	1,450,233		$	1,336,341
Incentive Fees		19,378		40,303			31,944			86,814
Investment Income (Loss)
Performance Allocations
Realized		503,376		602,662			773,016			1,714,567
Unrealized		440,351		95,532			1,068,440			(29,089	)
Principal Investments
Realized		129,197		125,058			171,342			376,402
Unrealized		103,468		7,275			215,242			(32,913	)
Total Investment Income		1,176,392		830,527			2,228,040			2,028,967
Interest and Dividend Revenue		40,073		33,703			75,458			62,198
Other		675,343		(59,664	)		616,026			(63,876	)
Total Revenues		2,632,570		1,535,726			4,401,701			3,450,444
Expenses
Compensation and Benefits
Compensation		427,479		367,203			816,882			718,792
Incentive Fee Compensation		9,743		21,032			16,405			43,497
Performance Allocations Compensation
Realized		186,398		195,738			298,460			562,216
Unrealized		189,991		86,910			444,426			94,443
Total Compensation and Benefits		813,611		670,883			1,576,173			1,418,948
General, Administrative and Other		145,828		119,552			272,541			228,938
Interest Expense		39,320		41,089			77,991			81,335
Fund Expenses		17,622		49,669			72,607			73,745
Total Expenses		1,016,381		881,193			1,999,312			1,802,966
Other Income
Net Gains from Fund Investment Activities		73,519		110,054			184,118			176,186
Income Before Provision for Taxes		1,689,708		764,587			2,586,507			1,823,664
Provision for Taxes		138,731		29,608			193,226			87,045
Net Income		1,550,977		734,979			2,393,281			1,736,619
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		905		991			(370	)		2,991
Net Income Attributable to Non-Controlling Interests in Consolidated Entities		129,078		112,944			284,577			251,629
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings		678,952		283,637			999,160			692,683
Net Income Attributable to The Blackstone Group L.P.	$	742,042	$	337,407		$	1,109,914		$	789,316
Net Income Per Common Unit
Common Units, Basic	$	1.09	$	0.51		$	1.64		$	1.19
Common Units, Diluted	$	1.09	$	0.50		$	1.63		$	1.18
Weighted-Average Common Units Outstanding
Common Units, Basic		681,794,492		664,681,299			678,156,936			662,820,839
Common Units, Diluted		682,010,610		1,200,006,339			1,210,727,948			1,199,756,390
Distributions Declared Per Common Unit	$	0.35	$	0.87		$	1.20		$	1.34

See notes to condensed consolidated financial statements.

7

THE BLACKSTONE GROUP L.P.

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in Thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018			2017
Net Income	$	1,550,977		$	734,979	$	2,393,281		$	1,736,619
Other Comprehensive Income (Loss), Net of Tax — Currency Translation Adjustment		(30,674	)		35,089		(26,248	)		46,593
Comprehensive Income		1,520,303			770,068		2,367,033			1,783,212
Less:
Comprehensive Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		905			991		(370	)		2,991
Comprehensive Income Attributable to Non-Controlling Interests in Consolidated Entities		129,077			140,311		282,187			282,814
Comprehensive Income Attributable to Non-Controlling Interests in Blackstone Holdings		678,952			283,637		999,160			692,683
Comprehensive Income Attributable to The Blackstone Group L.P.	$	711,369		$	345,129	$	1,086,056		$	804,724

See notes to condensed consolidated financial statements.

8

THE BLACKSTONE GROUP L.P.

Condensed Consolidated Statements of Changes in Partners’ Capital (Unaudited)

(Dollars in Thousands, Except Unit Data)

				The Blackstone Group L.P.
	Common Units			Partners’ Capital			Accumulated Other Compre- hensive Income (Loss)			Total			Non- Controlling Interests in Consolidated Entities			Non- Controlling Interests in Blackstone Holdings			Total Partners’ Capital			Redeemable Non- Controlling Interests in Consolidated Entities
Balance at December 31, 2017		659,526,093		$	6,668,511		$	(34,018	)	$	6,634,493		$	3,253,148		$	3,624,506		$	13,512,147		$	210,944
Transfer Out Due to Deconsolidation of Fund Entities		—			—			—			—			(197,091	)		—			(197,091	)		—
Net Income (Loss)		—			1,109,914			—			1,109,914			284,577			999,160			2,393,651			(370	)
Currency Translation Adjustment		—			—			(23,858	)		(23,858	)		(2,390	)		—			(26,248	)		—
Capital Contributions		—			—			—			—			424,132			—			424,132			1,100
Capital Distributions		—			(806,770	)		—			(806,770	)		(291,963	)		(682,564	)		(1,781,297	)		(52,875	)
Transfer of Non-Controlling Interests in Consolidated Entities		—			—			—			—			22,208			—			22,208			—
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders		—			10,922			—			10,922			—			—			10,922			—
Equity-Based Compensation		—			100,519			—			100,519			—			79,900			180,419			—
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units		3,032,372			(14,496	)		—			(14,496	)		—			(835	)		(15,331	)		—
Repurchase of Common Units and Blackstone Holdings Partnership Units		(2,200,000	)		(71,685	)		—			(71,685	)		—			—			(71,685	)		—
Change in The Blackstone Group L.P.’s Ownership Interest		—			835			—			835			—			(835	)		—			—
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units		12,434,878			82,505			—			82,505			—			(82,505	)		—			—
Issuance of Common Units		750,739			24,970			—			24,970			—			—			24,970			—
Balance at June 30, 2018		673,544,082		$	7,105,225		$	(57,876	)	$	7,047,349		$	3,492,621		$	3,936,827		$	14,476,797		$	158,799

continued…

See notes to condensed consolidated financial statements.

9

THE BLACKSTONE GROUP L.P.

Condensed Consolidated Statements of Changes in Partners’ Capital (Unaudited)

(Dollars in Thousands, Except Unit Data)

			The Blackstone Group L.P.
	Common Units		Partners’ Capital			Accumulated Other Compre- hensive Income (Loss)			Total			Non- Controlling Interests in Consolidated Entities			Non- Controlling Interests in Blackstone Holdings			Total Partners’ Capital			Redeemable Non- Controlling Interests in Consolidated Entities
Balance at December 31, 2016		643,459,542	$	6,521,531		$	(62,887	)	$	6,458,644		$	2,428,964		$	3,434,483		$	12,322,091		$	185,390
Net Income		—		789,316			—			789,316			251,629			692,683			1,733,628			2,991
Currency Translation Adjustment		—		—			15,408			15,408			31,185			—			46,593			—
Consolidation of a Fund Entity		—		—			—			—			387,006			—			387,006			—
Capital Contributions		—		(147	)		—			(147	)		375,308			—			375,161			21,353
Capital Distributions		—		(882,742	)		—			(882,742	)		(348,513	)		(754,398	)		(1,985,653	)		(19,034	)
Transfer of Non-Controlling Interests in Consolidated Entities		—		—			—			—			(2,408	)		—			(2,408	)		—
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders		—		7,286			—			7,286			—			—			7,286			—
Equity-Based Compensation		—		87,964			—			87,964			—			72,561			160,525			—
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units		3,775,544		(12,429	)		—			(12,429	)		—			(790	)		(13,219	)		—
Change in The Blackstone Group L.P.’s Ownership Interest		—		(13,821	)		—			(13,821	)		—			13,821			—			—
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units		6,566,308		43,520			—			43,520			—			(43,520	)		—			—
Balance at June 30, 2017		653,801,394	$	6,540,478		$	(47,479	)	$	6,492,999		$	3,123,171		$	3,414,840		$	13,031,010		$	190,700

See notes to condensed consolidated financial statements.

10

THE BLACKSTONE GROUP L.P.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in Thousands)

	Six Months Ended June 30,
	2018			2017
Operating Activities
Net Income	$	2,393,281		$	1,736,619
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities
Blackstone Funds Related
Net Realized Gains on Investments		(995,992	)		(2,284,430	)
Changes in Unrealized (Gains) Losses on Investments		(290,232	)		41,952
Non-Cash Performance Allocations		(1,068,440	)		29,089
Non-Cash Performance Allocations and Incentive Fee Compensation		757,064			700,156
Equity-Based Compensation Expense		208,994			179,729
Amortization of Intangibles		28,984			21,927
Other Non-Cash Amounts Included in Net Income		172,435			132,973
Cash Flows Due to Changes in Operating Assets and Liabilities
Cash Acquired with Consolidation of Fund Entity		31,422			13,822
Cash Relinquished with Deconsolidation of Fund Entities		(899,959	)		(33,566	)
Accounts Receivable		(8,030	)		191,454
Reverse Repurchase Agreements		—			118,495
Due from Affiliates		(330,468	)		(131,421	)
Other Assets		(29,640	)		9,772
Accrued Compensation and Benefits		(417,051	)		(621,807	)
Securities Sold, Not Yet Purchased		5,005			(73,633	)
Accounts Payable, Accrued Expenses and Other Liabilities		(476,348	)		(700,274	)
Repurchase Agreements		63,649			(14,713	)
Due to Affiliates		31,306			(26,290	)
Investments Purchased		(9,706,998	)		(7,991,469	)
Cash Proceeds from Sale of Investments		7,870,341			8,279,495
Net Cash Used in Operating Activities		(2,660,677	)		(422,120	)
Investing Activities
Purchase of Furniture, Equipment and Leasehold Improvements		(8,898	)		(13,663	)
Net Cash Used in Investing Activities		(8,898	)		(13,663	)

continued…

See notes to condensed consolidated financial statements.

11

THE BLACKSTONE GROUP L.P.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in Thousands)

	Six Months Ended June 30,
	2018			2017
Financing Activities
Distributions to Non-Controlling Interest Holders in Consolidated Entities	$	(338,849	)	$	(330,209	)
Contributions from Non-Controlling Interest Holders in Consolidated Entities		421,801			392,983
Payments Under Tax Receivable Agreement		—			(59,667	)
Net Settlement of Vested Common Units and Repurchase of Common and Blackstone Holdings Partnership Units		(87,016	)		(13,220	)
Proceeds from Loans Payable		3,218,399			2,550,559
Repayment and Repurchase of Loans Payable		(1,004,660	)		(127,464	)
Distributions to Unitholders		(1,489,334	)		(1,637,287	)
Net Cash Provided by Financing Activities		720,341			775,695
Effect of Exchange Rate Changes on Cash and Cash Equivalents, Cash Held by Blackstone Funds and Other, and Restricted Cash		11,671			72,188
Cash and Cash Equivalents, Cash Held by Blackstone Funds and Other, and Restricted Cash
Net Increase (Decrease)		(1,937,563	)		412,100
Beginning of Period		3,936,489			2,860,955
End of Period	$	1,998,926		$	3,273,055
Supplemental Disclosure of Cash Flows Information
Payments for Interest	$	84,040		$	77,111
Payments for Income Taxes	$	109,944		$	46,919
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Non-Cash Contributions from Non-Controlling Interest Holders	$	—		$	1,327
Non-Cash Distributions to Non-Controlling Interest Holders	$	(5,924	)	$	(37,339	)
Net Assets Related to the Consolidation of a Fund Entity	$	—		$	387,006
Transfer of Interests to Non-Controlling Interest Holders	$	22,208		$	(2,408	)
Change in The Blackstone Group L.P.’s Ownership Interest	$	835		$	(13,821	)
Net Settlement of Vested Common Units	$	100,861		$	62,631
Conversion of Blackstone Holdings Units to Common Units	$	82,505		$	43,520
Acquisition of Ownership Interests from Non-Controlling Interest Holders
Deferred Tax Asset	$	(74,130	)	$	(48,017	)
Due to Affiliates	$	63,208		$	40,731
Partners’ Capital	$	10,922		$	7,286
Issuance of Common Units	$	24,970		$	—

continued…

See notes to condensed consolidated financial statements.

12

THE BLACKSTONE GROUP L.P.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in Thousands)

The following table provides a reconciliation of Cash and Cash Equivalents, Cash Held by Blackstone Funds and Other, and Restricted Cash reported within the Condensed Consolidated Statements of Financial Condition:

	June 30, 2018		December 31, 2017
Cash and Cash Equivalents	$	1,710,251	$	1,992,497
Cash Held by Blackstone Funds and Other		288,675		1,929,531
Restricted Cash included in Other Assets		—		14,461
	$	1,998,926	$	3,936,489

See notes to condensed consolidated financial statements.

13

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

1. ORGANIZATION

The Blackstone Group L.P., together with its subsidiaries (“Blackstone” or the “Partnership”), is a leading global manager of private capital. The alternative asset management business includes the management of private equity funds, real estate funds, real estate investment trusts (“REITs”), funds of hedge funds, hedge funds, credit-focused funds, collateralized loan obligation (“CLO”) vehicles, separately managed accounts and registered investment companies (collectively referred to as the “Blackstone Funds”). Blackstone’s business is organized into four segments: private equity, real estate, hedge fund solutions and credit.

The Partnership was formed as a Delaware limited partnership on March 12, 2007. The Partnership is managed and operated by its general partner, Blackstone Group Management L.L.C., which is in turn wholly owned by Blackstone’s senior managing directors and controlled by one of Blackstone’s founders, Stephen A. Schwarzman (the “Founder”). The activities of the Partnership are conducted through its holding partnerships: Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. (collectively, “Blackstone Holdings”, “Blackstone Holdings Partnerships” or the “Holding Partnerships”). The Partnership, through its wholly owned subsidiaries, is the sole general partner in each of these Holding Partnerships.

Generally, holders of the limited partner interests in the Holding Partnerships may, four times each year, exchange their limited partnership interests (“Partnership Units”) for Blackstone common units, on a one-to-one basis, exchanging one Partnership Unit from each of the Holding Partnerships for one Blackstone common unit.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission.

The condensed consolidated financial statements include the accounts of the Partnership, its wholly owned or majority-owned subsidiaries, the consolidated entities which are considered to be variable interest entities and for which the Partnership is considered the primary beneficiary, and certain partnerships or similar entities which are not considered variable interest entities but in which the general partner is presumed to have control.

All intercompany balances and transactions have been eliminated in consolidation.

Restructurings within consolidated CLOs are treated as investment purchases or sales, as applicable, in the Condensed Consolidated Statements of Cash Flows.

14

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Consolidation

The Partnership consolidates all entities that it controls through a majority voting interest or otherwise, including those Blackstone Funds in which the general partner has a controlling financial interest. The Partnership has a controlling financial interest in Blackstone Holdings because the limited partners do not have the right to dissolve the partnerships or have substantive kick out rights or participating rights that would overcome the control held by the Partnership. Accordingly, the Partnership consolidates Blackstone Holdings and records non-controlling interests to reflect the economic interests of the limited partners of Blackstone Holdings.

In addition, the Partnership consolidates all variable interest entities (“VIE”) in which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which the Partnership holds a variable interest is a VIE and (b) whether the Partnership’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (for example, management and performance related fees), would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment.

The Partnership determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and continuously reconsiders that conclusion. In determining whether the Partnership is the primary beneficiary, Blackstone evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Partnership. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Partnership is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Partnership, affiliates of the Partnership or third parties) or amendments to the governing documents of the respective Blackstone Funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, the Partnership assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.

Assets of consolidated VIEs that can only be used to settle obligations of the consolidated VIE and liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of Blackstone are presented in a separate section in the Condensed Consolidated Statements of Financial Condition.

Blackstone’s other disclosures regarding VIEs are discussed in Note 9. “Variable Interest Entities”.

Revenue Recognition

Revenues primarily consist of management and advisory fees, incentive fees, investment income, interest and dividend revenue and other.

Management and advisory fees and incentive fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 18, “Segment Reporting” for a disaggregated presentation of revenues from contracts with customers.

15

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Investment Income represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments. Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by the Partnership. Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Management and Advisory Fees, Net — Management and Advisory Fees, Net are comprised of management fees, including base management fees, transaction and other fees and advisory fees net of management fee reductions and offsets.

The Partnership earns base management fees from limited partners of funds in each of its managed funds, at a fixed percentage of assets under management, net asset value, total assets, committed capital or invested capital. These customer contracts require the Partnership to provide investment management services, which represents a performance obligation that the Partnership satisfies over time. Management fees are a form of variable consideration because the fees the Partnership is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid.

Transaction, advisory and other fees (including monitoring fees) are principally fees charged to the limited partners of funds indirectly through the managed funds and portfolio companies. The investment advisory agreements generally require that the investment adviser reduce the amount of management fees payable by the limited partners to the Partnership (“management fee reductions”) by an amount equal to a portion of the transaction and other fees paid to the Partnership by the portfolio companies. The amount of the reduction varies by fund, the type of fee paid by the portfolio company and the previously incurred expenses of the fund. These fees and associated management fee reductions are a component of the transaction price for the Partnership’s performance obligation to provide investment management services to the limited partners of funds and are recognized as changes to the transaction price in the period in which they are charged and the services are performed.

Management fee offsets are reductions to management fees payable by the limited partners of the Blackstone Funds, which are based on the amount such limited partners reimburse the Blackstone Funds or the Partnership primarily for placement fees. Providing investment management services requires the Partnership to arrange for services on behalf of its customers. In those situations where the Partnership is acting as an agent on behalf of the limited partners of funds, it presents the cost of services as net against management fee revenue. In all other situations, the Partnership is primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements. As a result, the cost of those services is presented gross as Compensation or General, Administrative and Other expense, as appropriate, with any reimbursement from the limited partners of the funds recorded as Management and Advisory Fees, Net.

Accrued but unpaid Management and Advisory Fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts Receivable or Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Incentive Fees — Contractual fees earned based on the performance of Blackstone Funds (“Incentive Fees”) are a form of variable consideration in their contracts with customers to provide investment management services. Incentive Fees are earned based on fund performance during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each fund’s governing agreements. Incentive Fees will not be recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable

16

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

consideration is subsequently resolved. Incentive Fees are typically recognized as revenue when realized at the end of the measurement period. Once realized, such fees are not subject to clawback or reversal. Accrued but unpaid Incentive Fees charged directly to investors in Blackstone Funds as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Investment Income (Loss) — Investment Income (Loss) represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments.

In certain fund structures across private equity, real estate, hedge fund solutions and credit-focused funds (“carry funds”), Blackstone, through its subsidiaries, invests alongside its limited partners in a partnership and is entitled to its pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, Blackstone is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).

Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. At the end of each reporting period, the Partnership calculates the balance of accrued Performance Allocations (“Accrued Performance Allocations”) that would be due to the Partnership for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. Accrued Performance Allocations as of the reporting date are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Performance Allocations are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results. As such, the accrual for potential repayment of previously received Performance Allocations, which is a component of Due to Affiliates, represents all amounts previously distributed to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone carry funds if the Blackstone carry funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain funds, including certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability.

Principal Investments include the unrealized and realized gains and losses on the Partnership’s principal investments, including its investments in Blackstone Funds that are not consolidated and receive pro-rata allocations, its equity method investments, and other principal investments. Income (Loss) on Principal Investments

17

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

is realized when the Partnership redeems all or a portion of its investment or when the Partnership receives cash income, such as dividends or distributions. Unrealized Income (Loss) on Principal Investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest and Dividend Revenue — Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by Blackstone.

Other Revenue — Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Fair Value of Financial Instruments

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

• Level I — Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. The Partnership does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and a sale could reasonably impact the quoted price.

• Level II — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held within CLO vehicles, government and agency securities, less liquid and restricted equity securities, and certain over-the-counter derivatives where the fair value is based on observable inputs. Senior and subordinated notes issued by CLO vehicles are classified within Level II of the fair value hierarchy.

• Level III — Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership interests in private equity and real estate funds, credit-focused funds, distressed debt and non-investment grade residual interests in securitizations, certain corporate bonds and loans held within CLO vehicles, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given

18

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Transfers between levels of the fair value hierarchy are recognized at the beginning of the reporting period.

Level II Valuation Techniques

Financial instruments classified within Level II of the fair value hierarchy comprise debt instruments, including certain corporate loans and bonds held by Blackstone’s consolidated CLO vehicles and debt securities sold, not yet purchased. Certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.

The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:

• Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.

• Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit spreads.

• Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.

Level III Valuation Techniques

In the absence of observable market prices, Blackstone values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances, and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, real estate properties, certain funds of hedge funds and credit-focused investments.

Private Equity Investments — The fair values of private equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortization (“EBITDA”), the discounted cash flow method, public market or private transactions, valuations for comparable companies and other measures which, in many cases, are based on unaudited information at the time received. Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples.

19

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Real Estate Investments — The fair values of real estate investments are determined by considering projected operating cash flows, sales of comparable assets, if any, and replacement costs, among other measures. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rates (“cap rates”) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or assets (for example, multiplying a key performance metric of the investee company or asset, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to an exit EBITDA multiple or capitalization rate. Additionally, where applicable, projected distributable cash flow through debt maturity will be considered in support of the investment’s fair value.

Credit-Focused Investments — The fair values of credit-focused investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. For credit-focused investments that are not publicly traded or whose market prices are not readily available, Blackstone may utilize other valuation techniques, including the discounted cash flow method or a market approach. The discounted cash flow method projects the expected cash flows of the debt instrument based on contractual terms, and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly traded debt instruments issued by companies operating in similar industries as the subject investment, with similar leverage statistics and time to maturity.

The market approach is generally used to determine the enterprise value of the issuer of a credit investment, and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.

Level III Valuation Process

Investments classified within Level III of the fair value hierarchy are valued on a quarterly basis, taking into consideration factors including any changes in Blackstone’s weighted-average cost of capital assumptions, discounted cash flow projections and exit multiple assumptions, as well as any changes in economic and other relevant conditions, and valuation models are updated accordingly. The valuation process also includes a review by an independent valuation party, at least annually for all investments, and quarterly for certain investments, to corroborate the values determined by management. The valuations of Blackstone’s investments are reviewed quarterly by a valuation committee chaired by Blackstone’s Vice Chairman and includes senior heads of each of Blackstone’s businesses, as well as representatives of legal and finance. Each quarter, the valuations of Blackstone’s investments are also reviewed by the Audit Committee in a meeting attended by the chairman of the valuation committee. The valuations are further tested by comparison to actual sales prices obtained on disposition of the investments.

Investments, at Fair Value

The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing Guide, Investment Companies, and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. Such consolidated funds’ investments are reflected in Investments on the Condensed Consolidated Statements of Financial Condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of Net Gains

20

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

from Fund Investment Activities in the Condensed Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, at current market conditions (i.e., the exit price).

Blackstone’s principal investments are presented at fair value with unrealized appreciation or depreciation and realized gains and losses recognized in the Condensed Consolidated Statements of Operations within Investment Income (Loss).

For certain instruments, the Partnership has elected the fair value option. Such election is irrevocable and is applied on an investment by investment basis at initial recognition. The Partnership has applied the fair value option for certain loans and receivables and certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses recorded in net income. The methodology for measuring the fair value of such investments is consistent with the methodology applied to private equity, real estate, credit-focused and funds of hedge funds investments. Changes in the fair value of such instruments are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. Interest income on interest bearing loans and receivables and debt securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest and Dividend Revenue.

The Partnership has elected the fair value option for the assets of consolidated CLO vehicles. As permitted under GAAP, the Partnership measures the liabilities of consolidated CLO vehicles as (a) the sum of the fair value of the consolidated CLO assets and the carrying value of any non-financial assets held temporarily, less (b) the sum of the fair value of any beneficial interests retained by the Partnership (other than those that represent compensation for services) and the Partnership’s carrying value of any beneficial interests that represent compensation for services. As a result of this measurement alternative, there is no attribution of amounts to Non-Controlling Interests for consolidated CLO vehicles. Assets of the consolidated CLOs are presented within Investments within the Condensed Consolidated Statements of Financial Condition and Liabilities within Loans Payable for the amounts due to unaffiliated third parties and Due to Affiliates for the amounts held by non-consolidated affiliates. Changes in the fair value of consolidated CLO assets and liabilities and related interest, dividend and other income are presented within Net Gains from Fund Investment Activities. Expenses of consolidated CLO vehicles are presented in Fund Expenses.

The Partnership has elected the fair value option for certain proprietary investments that would otherwise have been accounted for using the equity method of accounting. The fair value of such investments is based on quoted prices in an active market or using the discounted cash flow method. Changes in fair value are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

Further disclosure on instruments for which the fair value option has been elected is presented in Note 7. “Fair Value Option”.

The investments of consolidated Blackstone Funds in funds of hedge funds (“Investee Funds”) are valued at net asset value (“NAV”) per share of the Investee Fund. In limited circumstances, the Partnership may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Partnership will estimate the fair value in good faith and in a manner that it reasonably chooses, in accordance with the requirements of GAAP.

Certain investments of Blackstone and of the consolidated Blackstone funds of hedge funds and credit-focused funds measure their investments in underlying funds at fair value using NAV per share without adjustment. The

21

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

terms of the investee’s investment generally provide for minimum holding periods or lock-ups, the institution of gates on redemptions or the suspension of redemptions or an ability to side pocket investments, at the discretion of the investee’s fund manager, and as a result, investments may not be redeemable at, or within three months of, the reporting date. A side pocket is used by hedge funds and funds of hedge funds to separate investments that may lack a readily ascertainable value, are illiquid or are subject to liquidity restriction. Redemptions are generally not permitted until the investments within a side pocket are liquidated or it is deemed that the conditions existing at the time that required the investment to be included in the side pocket no longer exist. As the timing of either of these events is uncertain, the timing at which the Partnership may redeem an investment held in a side pocket cannot be estimated. Further disclosure on instruments for which fair value is measured using NAV per share is presented in Note 5. “Net Asset Value as Fair Value”.

Security and loan transactions are recorded on a trade date basis.

Equity Method Investments

Investments in which the Partnership is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting except in cases where the fair value option has been elected. The Partnership has significant influence over all Blackstone Funds in which it invests but does not consolidate. Therefore, its investments in such Blackstone Funds, which include both a proportionate and disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), are accounted for under the equity method. Under the equity method of accounting, the Partnership’s share of earnings (losses) from equity method investments is included in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

In cases where the Partnership’s equity method investments provide for a disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), the Partnership’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period the Partnership calculates the Accrued Performance Allocations that would be due to the Partnership for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner, or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. The carrying amounts of equity method investments are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Compensation and Benefits

Compensation and Benefits — Compensation — Compensation and Benefits consists of (a) employee compensation, comprising salary and bonus, and benefits paid and payable to employees and senior managing

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

directors and (b) equity-based compensation associated with the grants of equity-based awards to employees and senior managing directors. Compensation cost relating to the issuance of equity-based awards to senior managing directors and employees is measured at fair value at the grant date, taking into consideration expected forfeitures, and expensed over the vesting period on a straight-line basis, except in the case of (a) equity-based awards that do not require future service, which are expensed immediately, and (b) certain awards to recipients that meet specified criteria making them eligible for retirement treatment (allowing such recipient to keep a percentage of those awards upon departure from Blackstone after becoming eligible for retirement), for which the expense for the portion of the award that would be retained in the event of retirement is either expensed immediately or amortized to the retirement date. Cash settled equity-based awards are classified as liabilities and are remeasured at the end of each reporting period.

Compensation and Benefits — Incentive Fee Compensation — Incentive Fee Compensation consists of compensation paid based on Incentive Fees.

Compensation and Benefits — Performance Allocations Compensation — Performance Allocation Compensation consists of compensation paid based on Performance Allocations (which may be distributed in cash or in-kind). Such compensation expense is subject to both positive and negative adjustments. Unlike Performance Allocations, compensation expense is based on the performance of individual investments held by a fund rather than on a fund by fund basis. These amounts may also include allocations of investment income from Blackstone’s principal investments, to senior managing directors and employees participating in certain profit sharing initiatives.

Repurchase Agreements

Securities sold under agreements to repurchase (“repurchase agreements”), comprised primarily of U.S. and non-U.S. government and agency securities are asset-backed securities and corporate debt and represent collateralized financing transactions. Such transactions are recorded in the Condensed Consolidated Statements of Financial Condition at their contractual amounts and include accrued interest. The carrying value of repurchase agreements approximates fair value.

The Partnership manages credit exposure arising from repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Partnership, in the event of a counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

The Partnership also pledges its financial instruments to counterparties to collateralize repurchase agreements. Financial instruments pledged that can be repledged, delivered or otherwise used by the counterparty are recorded in Investments in the Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to repurchase agreements are discussed in Note 10. “Repurchase Agreements”.

Blackstone does not offset assets and liabilities relating to repurchase agreements in its Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Securities Sold, Not Yet Purchased

Securities Sold, Not Yet Purchased consist of equity and debt securities that the Partnership has borrowed and sold. The Partnership is required to “cover” its short sale in the future by purchasing the security at prevailing

23

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

market prices and delivering it to the counterparty from which it borrowed the security. The Partnership is exposed to loss in the event that the price at which a security may have to be purchased to cover a short sale exceeds the price at which the borrowed security was sold short.

Securities Sold, Not Yet Purchased are recorded at fair value in the Condensed Consolidated Statements of Financial Condition.

Derivative Instruments

The Partnership recognizes all derivatives as assets or liabilities on its Condensed Consolidated Statements of Financial Condition at fair value. On the date the Partnership enters into a derivative contract, it designates and documents each derivative contract as one of the following: (a) a hedge of a recognized asset or liability (“fair value hedge”), (b) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), (c) a hedge of a net investment in a foreign operation, or (d) a derivative instrument not designated as a hedging instrument (“freestanding derivative”). For a fair value hedge, Blackstone records changes in the fair value of the derivative and, to the extent that it is highly effective, changes in the fair value of the hedged asset or liability attributable to the hedged risk, in current period earnings in General, Administrative and Other in the Condensed Consolidated Statements of Operations. Changes in the fair value of derivatives designated as hedging instruments caused by factors other than changes in the risk being hedged, which are excluded from the assessment of hedge effectiveness, are recognized in current period earnings. Gains or losses on a derivative instrument that is designated as, and is effective as, an economic hedge of a net investment in a foreign operation are reported in the cumulative translation adjustment section of other comprehensive income to the extent it is effective as a hedge. The ineffective portion of a net investment hedge is recognized in current period earnings.

The Partnership formally documents at inception its hedge relationships, including identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and the Partnership’s evaluation of effectiveness of its hedged transaction. At least monthly, the Partnership also formally assesses whether the derivative it designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in estimated fair values or cash flows of the hedged items using either the regression analysis or the dollar offset method. For net investment hedges, the Partnership uses a method based on changes in spot rates to measure effectiveness. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. The Partnership may also at any time remove a designation of a fair value hedge. The fair values of hedging derivative instruments are reflected within Other Assets in the Condensed Consolidated Statements of Financial Condition.

For freestanding derivative contracts, the Partnership presents changes in fair value in current period earnings. Changes in the fair value of derivative instruments held by consolidated Blackstone Funds are reflected in Net Gains from Fund Investment Activities or, where derivative instruments are held by the Partnership, within Investment Income (Loss) in the Condensed Consolidated Statements of Operations. The fair value of freestanding derivative assets of the consolidated Blackstone Funds are recorded within Investments, the fair value of freestanding derivative assets that are not part of the consolidated Blackstone Funds are recorded within Other Assets and the fair value of freestanding derivative liabilities are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.

The Partnership has elected to not offset derivative assets and liabilities or financial assets in its Condensed Consolidated Statements of Financial Condition, including cash, that may be received or paid as part of collateral

24

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

arrangements, even when an enforceable master netting agreement is in place that provides the Partnership, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

Blackstone’s other disclosures regarding derivative financial instruments are discussed in Note 6. “Derivative Financial Instruments”.

Blackstone’s disclosures regarding offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Affiliates

Blackstone considers its Founder, senior managing directors, employees, the Blackstone Funds and the Portfolio Companies to be affiliates.

Distributions

Distributions are reflected in the condensed consolidated financial statements when declared.

Recent Accounting Developments

In May 2014, the Financial Accounting Standards Board (“FASB”) issued amended guidance on revenue from contracts with customers. The new guidance was effective for Blackstone beginning January 1, 2018 and was adopted on a full retrospective basis. The guidance requires that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.

Blackstone has concluded that its Management and Advisory Fees and Incentive Fees are within the scope of the amended revenue recognition guidance. The adoption of the amended guidance did not have a material impact on the recognition of Management and Advisory Fees. For Incentive Fees, the amended guidance changes the presentation and delays the recognition of revenues compared to the prior accounting treatment. These amounts were previously recognized within Realized and Unrealized Performance Fees — Incentive Fees in the Condensed Consolidated Statements of Operations. Under the amended guidance, these amounts will be recognized separately within Incentive Fees. Blackstone recorded a net reduction to Partners’ Capital of $2.4 million and $1.9 million as of December 31, 2016 and December 31, 2017, respectively, as a result of adopting the amended guidance. For the three months ended June 30, 2017, the impact on Total Revenues, Net Income Attributable to The Blackstone Group L.P., Net Income Per Common Unit — Basic, and Net Income Per Common Unit — Diluted was a reduction of $13.6 million, $5.4 million, $0.01 per common unit, and $0.01 per common unit, respectively. For the six months ended June 30, 2017, the impact on Total Revenues, Net Income Attributable to The Blackstone Group L.P., Net Income Per Common Unit — Basic, and Net Income Per Common Unit — Diluted was a reduction of $39.6 million, $15.3 million, $0.02 per common unit, and $0.02 per common unit, respectively. Also, the reimbursement of certain costs incurred in the process of providing investment management services, primarily travel costs, that were previously presented net in the Condensed Consolidated Statements of Operations are presented gross under the amended guidance. For the three and six months ended June 30, 2017, these costs were

25

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

$4.3 million and $7.6 million, respectively, and are presented in General, Administrative and Other Expenses with the related reimbursement presented in Management and Advisory Fees, Net in the Condensed Consolidated Statements of Operations.

Blackstone has concluded that investments made alongside its limited partners in a partnership which entitle Blackstone to a pro-rata allocation and a disproportionate Performance Allocation represent equity method investments that are not in the scope of the amended revenue recognition guidance. Therefore, effective January 1, 2018, Blackstone amended the recognition and measurement of Performance Allocations. This accounting change will not change the timing or amount of revenue recognized related to Performance Allocation arrangements. These amounts were previously recognized within Realized and Unrealized Performance Fees – Carried Interest and Incentive Fees in the Condensed Consolidated Statements of Operations. Under the equity method of accounting Blackstone recognizes Performance Allocations within Investment Income along with the allocations proportionate to Blackstone’s ownership interests in the Blackstone Funds. Blackstone applied a retrospective application consistent with the requirements for presentation of a change in accounting principle.

In January 2016, the FASB issued amended guidance on the classification and measurement of financial instruments. The new guidance was effective for Blackstone beginning on January 1, 2018 and was adopted on a modified retrospective basis. However, changes to the accounting for equity securities without a readily determinable fair value will be applied prospectively as permitted under the guidance. This amended guidance did not have an impact on Blackstone’s financial statements as of and for the three and six months ended June 30, 2018.

In February 2016, the FASB issued amended guidance on the accounting for leases. The guidance requires the recognition of lease assets and lease liabilities for those leases classified as operating leases under previous GAAP. The guidance retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases under previous GAAP. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not changed significantly from previous GAAP.

For operating leases, a lessee is required to do the following: (a) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the Statement of Financial Condition, (b) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (c) classify all cash payments within operating activities in the statement of cash flows.

The guidance is effective for fiscal periods beginning after December 15, 2018. Early application is permitted. Blackstone is evaluating the impact of the amended guidance on the Condensed Consolidated Statement of Financial Condition. It is not expected to have a material impact on the Condensed Consolidated Statements of Operations or the Condensed Consolidated Statements of Cash Flows.

In November 2016, the FASB issued amended guidance on classification and presentation of restricted cash on the statement of cash flows. The new guidance was effective for Blackstone beginning on January 1, 2018 and was adopted on a retrospective basis. Under the new guidance, reporting entities are required to explain the changes in the combined total of restricted and unrestricted balances in the statement of cash flows. Therefore, amounts generally described as restricted cash or restricted cash equivalents (hereinafter referred to as “restricted cash”) should be combined with unrestricted cash and cash equivalents when reconciling the beginning and end of period

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

balances on the statement of cash flows. Reporting entities are also required to disclose how the statement of cash flows reconciles to the balance sheet in any situation in which the balance sheet includes more than one line item of cash, cash equivalents, and restricted cash. For the six months ended June 30, 2017 the new guidance resulted in a decrease in Net Cash Used in Operating Activities of $463.5 million, a decrease in Net Cash Provided by Investing Activities of $18.0 million, and an increase in Effect of Exchange Rate Changes on Cash and Cash Equivalents, Cash Held by Blackstone Funds, and Restricted Cash of $58.3 million. Additionally, the new guidance increased the December 31, 2016 Beginning of Period and June 30, 2017 End of Period balances by $1.0 billion and $1.5 billion, respectively, in the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2017.

3. INTANGIBLE ASSETS

Intangible Assets, Net consists of the following:

	June 30, 2018			December 31, 2017
Finite-Lived Intangible Assets / Contractual Rights	$	1,594,876		$	1,594,876
Accumulated Amortization		(1,214,032	)		(1,185,048	)
Intangible Assets, Net	$	380,844		$	409,828

Amortization expense associated with Blackstone’s intangible assets was $14.5 million and $29.0 million for the three and six month periods ended June 30, 2018, respectively, and $11.0 million and $21.9 million for the three and six month periods ended June 30, 2017, respectively.

Amortization of Intangible Assets held at June 30, 2018 is expected to be $57.9 million, $57.9 million, $57.9 million, $57.9 million, and $50.2 million for each of the years ending December 31, 2018, 2019, 2020, 2021 and 2022, respectively. Blackstone’s intangible assets as of June 30, 2018 are expected to amortize over a weighted-average period of 8.8 years.

4. INVESTMENTS

Investments consist of the following:

	June 30, 2018		December 31, 2017
Investments of Consolidated Blackstone Funds	$	8,608,565	$	12,954,121
Equity Method Investments
Partnership Investments		3,589,234		3,263,131
Accrued Performance Allocations		6,354,179		5,328,280
Corporate Treasury Investments		3,088,001		2,566,043
Other Investments		368,203		322,474
	$	22,008,182	$	24,434,049

Blackstone’s share of Investments of Consolidated Blackstone Funds totaled $373.5 million and $488.4 million at June 30, 2018 and December 31, 2017, respectively.

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Investments of Consolidated Blackstone Funds

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on investments held by the consolidated Blackstone Funds and a reconciliation to Other Income – Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018		2017
Realized Gains	$	52,236		$	51,777	$	34,378	$	107,685
Net Change in Unrealized Gains (Losses)		(22,278	)		19,483		74,963		(9,039	)
Realized and Net Change in Unrealized Gains from Consolidated Blackstone Funds		29,958			71,260		109,341		98,646
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds		43,561			38,794		74,777		77,540
Other Income — Net Gains from Fund Investment Activities	$	73,519		$	110,054	$	184,118	$	176,186

Equity Method Investments

Blackstone’s equity method investments include Partnership Investments, which represent the pro rata investments, and any associated Accrued Performance Allocations, in private equity funds, real estate funds, funds of hedge funds and credit-focused funds. Partnership Investments also includes the 40% non-controlling interest in Pátria Investments Limited and Pátria Investimentos Ltda. (collectively, “Pátria”).

Blackstone evaluates each of its equity method investments, excluding Accrued Performance Allocations, to determine if any were significant as defined by guidance from the United States Securities and Exchange Commission. As of and for the six months ended June 30, 2018 and 2017, no individual equity method investment held by Blackstone met the significance criteria. As such, Blackstone is not required to present separate financial statements for any of its equity method investments.

Partnership Investments

Blackstone recognized net gains related to its Partnership Investments accounted for under the equity method of $165.6 million and $124.1 million for the three months ended June 30, 2018 and 2017, respectively. The Partnership recognized net gains related to its equity method investments of $328.1 million and $292.6 million for the six months ended June 30, 2018 and 2017, respectively.

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Accrued Performance Allocations

Accrued Performance Allocations to the Partnership in respect of performance of certain Blackstone Funds were as follows:

	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total
Accrued Performance Allocations, December 31, 2017	$	1,916,971		$	2,859,307		$	13,802		$	538,200		$	5,328,280
Performance Allocations as a Result of Changes in Fund Fair Values		1,110,884			606,245			17,384			144,893			1,879,406
Foreign Exchange Loss		—			(37,950	)		—			—			(37,950	)
Fund Distributions		(217,712	)		(484,316	)		(7,081	)		(106,448	)		(815,557	)
Accrued Performance Allocations, June 30, 2018	$	2,810,143		$	2,943,286		$	24,105		$	576,645		$	6,354,179

Corporate Treasury Investments

The portion of corporate treasury investments included in Investments represents the Partnership’s investments into primarily fixed income securities, mutual fund interests, and other fund interests. These strategies are managed by a combination of Blackstone personnel and third party advisors. The following table presents the Realized and Net Change in Unrealized Gains (Losses) on these investments:

	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018			2017
Realized Gains (Losses)	$	4,774		$	2,252	$	7,113		$	(3,429	)
Net Change in Unrealized Gains (Losses)		(6,702	)		12,815		(14,896	)		43,295
	$(1,928)			$15,067		$(7,783)			$39,866

Other Investments

Other Investments consist primarily of proprietary investment securities held by Blackstone. Other investments includes equity investments without readily determinable fair values which have a carrying value of $24.5 million as of June 30, 2018. During the three months ended June 30, 2018, an investment which previously did not have a readily determinable fair value completed an initial public offering and is now carried at fair value with realized and unrealized gains or losses recorded within Investment Income on the Condensed Consolidated Statement of Operations. This event resulted in an unrealized gain of $50.0 million during the three and six months ended June 30, 2018. The following table presents Blackstone’s Realized and Net Change in Unrealized Gains in Other Investments:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Realized Gains	$	16,207	$	2,865	$	16,319	$	2,870
Net Change in Unrealized Gains		49,643		4,803		45,411		10,291
	$	65,850	$	7,668	$	61,730	$	13,161

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

5. NET ASSET VALUE AS FAIR VALUE

A summary of fair value by strategy type alongside the remaining unfunded commitments and ability to redeem such investments as of June 30, 2018 is presented below:

Strategy	Fair Value		Unfunded Commitments		Redemption Frequency (if currently eligible)			Redemption Notice Period
Diversified Instruments	$	209,697	$	131		(a	)		(a	)
Credit Driven		114,592		268		(b	)		(b	)
Equity		38,839		—		(c	)		(c	)
Commodities		1,806		—		(d	)		(d	)
	$	364,934	$	399

(a) Diversified Instruments include investments in funds that invest across multiple strategies. Investments representing 3% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 97% of investments in this category are redeemable as of the reporting date.

(b) The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. Investments representing 41% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 59% of investments in this category are redeemable as of the reporting date.

(c) The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. As of the reporting date, the investee fund manager had elected to side-pocket 8% of Blackstone’s investments in the category.

(d) The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date.

6. DERIVATIVE FINANCIAL INSTRUMENTS

Blackstone and the consolidated Blackstone Funds enter into derivative contracts in the normal course of business to achieve certain risk management objectives and for general investment purposes. Blackstone may enter into derivative contracts in order to hedge its interest rate risk exposure against the effects of interest rate changes. Additionally, Blackstone may also enter into derivative contracts in order to hedge its foreign currency risk exposure against the effects of a portion of its non-U.S. dollar denominated currency net investments. As a result of the use of derivative contracts, Blackstone and the consolidated Blackstone Funds are exposed to the risk that counterparties will fail to fulfill their contractual obligations. To mitigate such counterparty risk, Blackstone and the consolidated Blackstone Funds enter into contracts with certain major financial institutions, all of which have investment grade ratings. Counterparty credit risk is evaluated in determining the fair value of derivative instruments.

Net Investment Hedges

To manage the potential exposure from adverse changes in currency exchange rates arising from Blackstone’s net investment in foreign operations, during December 2014, Blackstone entered into several foreign currency

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

forward contracts to hedge a portion of the net investment in Blackstone’s non-U.S. dollar denominated foreign operations.

Blackstone uses foreign currency forward contracts to hedge portions of Blackstone’s net investments in foreign operations. The gains and losses due to change in fair value attributable to changes in spot exchange rates on foreign currency derivatives designated as net investment hedges were recognized in Other Comprehensive Income, Net of Tax — Currency Translation Adjustment. For the three months ended June 30, 2018 there was no resulting gain or loss. For the six months ended June 30, 2018 the resulting loss was $1.4 million.

Freestanding Derivatives

Freestanding derivatives are instruments that Blackstone and certain of the consolidated Blackstone Funds have entered into as part of their overall risk management and investment strategies. These derivative contracts are not designated as hedging instruments for accounting purposes. Such contracts may include interest rate swaps, foreign exchange contracts, equity swaps, options, futures and other derivative contracts.

The table below summarizes the aggregate notional amount and fair value of the derivative financial instruments. The notional amount represents the absolute value amount of all outstanding derivative contracts.

	June 30, 2018								December 31, 2017
	Assets				Liabilities				Assets				Liabilities
	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value
Net Investment Hedges
Foreign Currency Contracts	$	—	$	—	$	—	$	—	$	—	$	—	$	50,857	$	453
Freestanding Derivatives
Blackstone
Interest Rate Contracts		944,822		22,123		922,672		48,711		225,550		2,042		1,530,751		27,275
Foreign Currency Contracts		198,028		782		98,298		570		279,050		2,097		296,252		2,975
Credit Default Swaps		5,001		125		20,532		2,168		2,073		304		2,073		304
Investments of Consolidated Blackstone Funds
Foreign Currency Contracts		114,194		5,295		11,099		1,087		493,181		24,087		264,693		5,628
Credit Default Swaps		32,306		1,565		50,056		4,839		45,670		3,731		45,582		5,163
Total Return Swaps		25,325		488		—		—		25,645		526		—		—
		1,319,676		30,378		1,102,657		57,375		1,071,169		32,787		2,139,351		41,345
	$	1,319,676	$	30,378	$	1,102,657	$	57,375	$	1,071,169	$	32,787	$	2,190,208	$	41,798

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The table below summarizes the impact to the Condensed Consolidated Statements of Operations from derivative financial instruments:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net Investment Hedges — Foreign Currency Contracts
Hedge Ineffectiveness	$	—		$	(13	)	$	(8	)	$	(35	)
Freestanding Derivatives
Realized Gains (Losses)
Interest Rate Contracts	$	449		$	(3,007	)	$	2,070		$	(3,947	)
Foreign Currency Contracts		12,321			(6,663	)		8,238			(3,312	)
Credit Default Swaps		(107	)		268			(508	)		(1,658	)
Total Return Swaps		173			—			174			—
	$	12,836		$	(9,402	)	$	9,974		$	(8,917	)
Net Change in Unrealized Gains (Losses)
Interest Rate Contracts	$	37,261		$	(426	)	$	(39	)	$	(643	)
Foreign Currency Contracts		1,456			14,642			(2,272	)		12,682
Credit Default Swaps		615			1,214			488			3,161
Total Return Swaps		(5	)		—			52			—
	$	39,327		$	15,430		$	(1,771	)	$	15,200

As of June 30, 2018 and December 31, 2017, the Partnership had not designated any derivatives as cash flow hedges.

32

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

7. FAIR VALUE OPTION

The following table summarizes the financial instruments for which the fair value option has been elected:

	June 30, 2018		December 31, 2017
Assets
Loans and Receivables	$	346,603	$	239,659
Equity and Preferred Securities		502,095		475,485
Debt Securities		522,033		418,061
Assets of Consolidated CLO Vehicles
Corporate Loans		7,082,085		10,825,759
Corporate Bonds		—		690,125
Other		—		458
	$	8,452,816	$	12,649,547
Liabilities
Liabilities of Consolidated CLO Vehicles
Senior Secured Notes
Loans Payable	$	6,528,326	$	10,594,656
Due to Affiliates		3,269		996
Subordinated Notes
Loans Payable		175,900		703,164
Due to Affiliates		63,279		40,390
	$	6,770,774	$	11,339,206

The following tables presents the Realized and Net Change in Unrealized Gains (Losses) on financial instruments on which the fair value option was elected:

	Three Months Ended June 30,
	2018					2017
	Realized Gains		Net Change in Unrealized Gains (Losses)			Realized Gains (Losses)			Net Change in Unrealized Gains (Losses)
Assets
Equity and Preferred Securities	$	—	$	(2,095	)	$	1		$	7,116
Debt Securities		15		(2,878	)		—			—
Assets of Consolidated CLO Vehicles
Corporate Loans		1,074		(25,896	)		(543	)		25,084
Corporate Bonds		—		—			2,580			(927	)
Other		—		—			65			129
	$	1,089	$	(30,869	)	$	2,103		$	31,402
Liabilities
Liabilities of Consolidated CLO Vehicles —
Subordinated Notes	$	—	$	16,846		$	—		$	24,800

33

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	Six Months Ended June 30,
	2018						2017
	Realized Gains (Losses)			Net Change in Unrealized Gains (Losses)			Realized Gains		Net Change in Unrealized Gains (Losses)
Assets
Loans and Receivables	$	—		$	—		$	—	$	7,418
Equity and Preferred Securities		—			(1,867	)		1		20,225
Debt Securities		827			(2,297	)		—		—
Assets of Consolidated CLO Vehicles
Corporate Loans		(4,399	)		(7,046	)		1,329		13,695
Corporate Bonds		(24,056	)		9,693			8,214		(6,801	)
Other		—			6			65		129
	$	(27,628	)	$	(1,511	)	$	9,609	$	34,666
Liabilities
Liabilities of Consolidated CLO Vehicles —
Subordinated Notes	$	—		$	60,460		$	—	$	32,712

The following table presents information for those financial instruments for which the fair value option was elected:

	June 30, 2018							December 31, 2017
				For Financial Assets Past  Due (a)							For Financial Assets Past Due (a)
	Excess (Deficiency) of Fair Value Over Principal			Fair Value		Excess of Fair Value Over Principal		Excess (Deficiency) of Fair Value Over Principal			Fair Value		(Deficiency) of Fair Value Over Principal
Loans and Receivables	$	933		$	—	$	—	$	1,207		$	—	$	—
Debt Securities		(2,131	)		—		—		(372	)		—		—
Assets of Consolidated CLO Vehicles
Corporate Loans		(10,752	)		—		—		(13,495	)		57,778		(19,633	)
Corporate Bonds		—			—		—		(21,455	)		—		—
	$	(11,950	)	$	—	$	—	$	(34,115	)	$	57,778	$	(19,633	)

(a) Corporate Loans and Corporate Bonds within CLO assets are classified as past due if contractual payments are more than one day past due.

As of June 30, 2018 and December 31, 2017, no Loans and Receivables for which the fair value option was elected were past due or in non-accrual status. As of June 30, 2018 and December 31, 2017, no Corporate Bonds included within the Assets of Consolidated CLO Vehicles for which the fair value option was elected were past due or in non-accrual status.

34

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

8. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

The following tables summarize the valuation of the Partnership’s financial assets and liabilities by the fair value hierarchy:

	June 30, 2018
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents — Money Market Funds	$	538,418	$	—	$	—	$	—	$	538,418
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		86,463		86,463
Equity Securities		51,212		51,051		159,109		—		261,372
Partnership and LLC Interests		—		1,527		313,992		—		315,519
Debt Instruments		—		771,977		83,801		—		855,778
Freestanding Derivatives
Foreign Currency Contracts		—		5,295		—		—		5,295
Credit Default Swaps		—		1,565		—		—		1,565
Total Return Swaps		—		488		—		—		488
Assets of Consolidated CLO Vehicles —Corporate Loans		—		6,552,263		529,822		—		7,082,085
Total Investments of Consolidated Blackstone Funds		51,212		7,384,166		1,086,724		86,463		8,608,565
Corporate Treasury Investments
Equity Securities		309,131		—		—		—		309,131
Debt Instruments		—		2,491,430		28,221		—		2,519,651
Other		—		—		—		259,219		259,219
Total Corporate Treasury Investments		309,131		2,491,430		28,221		259,219		3,088,001
Other Investments		248,494		13,955		86,502		19,252		368,203
Total Investments		608,837		9,889,551		1,201,447		364,934		12,064,769
Accounts Receivable — Loans and Receivables		—		—		346,603		—		346,603
Other Assets
Freestanding Derivatives
Interest Rate Contracts		935		21,188		—		—		22,123
Foreign Currency Contracts		—		782		—		—		782
Credit Default Swaps		—		125		—		—		125
Total Other Assets		935		22,095		—		—		23,030
	$	1,148,190	$	9,911,646	$	1,548,050	$	364,934	$	12,972,820

35

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	June 30, 2018
	Level I		Level II		Level III		Total
Liabilities
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	6,528,326	$	—	$	6,528,326
Subordinated Notes (b)		—		175,900		—		175,900
Total Loans Payable		—		6,704,226		—		6,704,226
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		3,269		—		3,269
Subordinated Notes (b)		—		63,279		—		63,279
Total Due to Affiliates		—		66,548		—		66,548
Securities Sold, Not Yet Purchased		—		155,780		—		155,780
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a)
Foreign Currency Contracts		—		1,087		—		1,087
Credit Default Swaps		—		4,839		—		4,839
Total Liabilities of Consolidated Blackstone Funds		—		5,926		—		5,926
Freestanding Derivatives
Interest Rate Contracts		551		48,160		—		48,711
Foreign Currency Contracts		—		570		—		570
Credit Default Swaps		—		2,168		—		2,168
Total Freestanding Derivatives		551		50,898		—		51,449
Total Accounts Payable, Accrued Expenses and Other Liabilities		551		56,824		—		57,375
	$	551	$	6,983,378	$	—	$	6,983,929

36

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	December 31, 2017
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents — Money Market Funds	$	853,680	$	—	$	—	$	—	$	853,680
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		130,339		130,339
Equity Securities		67,443		44,026		131,867		—		243,336
Partnership and LLC Interests		—		2,549		331,448		—		333,997
Debt Instruments		—		643,608		58,155		—		701,763
Freestanding Derivatives
Foreign Currency Contracts		—		101		—		—		101
Credit Default Swaps		—		3,731		—		—		3,731
Total Return Swaps		—		526		—		—		526
Assets of Consolidated CLO Vehicles
Corporate Loans		—		10,318,316		507,443		—		10,825,759
Corporate Bonds		—		690,125		—		—		690,125
Freestanding Derivatives — Foreign Currency Contracts		—		23,986		—		—		23,986
Other		—		—		458		—		458
Total Investments of Consolidated Blackstone Funds		67,443		11,726,968		1,029,371		130,339		12,954,121
Corporate Treasury Investments
Equity Securities		282,866		—		—		—		282,866
Debt Instruments		—		1,943,654		24,249		—		1,967,903
Other		—		—		—		315,274		315,274
Total Corporate Treasury Investments		282,866		1,943,654		24,249		315,274		2,566,043
Other Investments		193,072		14,162		95,393		19,847		322,474
Total Investments		543,381		13,684,784		1,149,013		465,460		15,842,638
Accounts Receivable — Loans and Receivables		—		—		239,659		—		239,659
Other Assets
Freestanding Derivatives
Interest Rate Contracts		575		1,467		—		—		2,042
Foreign Currency Contracts		—		2,097		—		—		2,097
Credit Default Swaps		—		304		—		—		304
Total Other Assets		575		3,868		—		—		4,443
	$	1,397,636	$	13,688,652	$	1,388,672	$	465,460	$	16,940,420

37

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	December 31, 2017
	Level I		Level II		Level III		Total
Liabilities
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	10,594,656	$	—	$	10,594,656
Subordinated Notes (b)		—		703,164		—		703,164
Total Loans Payable		—		11,297,820		—		11,297,820
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		996		—		996
Subordinated Notes (b)		—		40,390		—		40,390
Total Due to Affiliates		—		41,386		—		41,386
Securities Sold, Not Yet Purchased		—		154,380		—		154,380
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a)
Foreign Currency Contracts		—		5,628		—		5,628
Credit Default Swaps		—		5,163		—		5,163
Total Liabilities of Consolidated Blackstone Funds		—		10,791		—		10,791
Freestanding Derivatives
Interest Rate Contracts		415		26,860		—		27,275
Foreign Currency Contracts		—		2,975		—		2,975
Credit Default Swaps		—		304		—		304
Total Freestanding Derivatives		415		30,139		—		30,554
Net Investment Hedges — Foreign Currency Contracts		—		453		—		453
Total Accounts Payable, Accrued Expenses and Other Liabilities		415		41,383		—		41,798
	$	415	$	11,534,969	$	—	$	11,535,384

(a) Pursuant to GAAP consolidation guidance, the Partnership is required to consolidate all VIEs in which it has been identified as the primary beneficiary, including certain CLO vehicles and other funds in which a consolidated entity of the Partnership, as the general partner of the fund, has a controlling financial interest. While the Partnership is required to consolidate certain funds, including CLO vehicles, for GAAP purposes, the Partnership has no ability to utilize the assets of these funds and there is no recourse to the Partnership for their liabilities since these are client assets and liabilities.

(b) Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.

The following table summarizes the fair value transfers between Level I and Level II for positions that existed as of June 30, 2018 and 2017, respectively:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Transfers from Level I into Level II (a)	$	—	$	762	$	—	$	762
Transfers from Level II into Level I (b)	$	—	$	—	$	447	$	—

38

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

(a) Transfers out of Level I represent those financial instruments for which restrictions exist and adjustments were made to an otherwise observable price to reflect fair value at the reporting date.

(b) Transfers into Level I represent those financial instruments for which an unadjusted quoted price in an active market became available for the identical asset.

The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of June 30, 2018:

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	118,659	Discounted Cash Flows		Discount Rate	7.1% - 25.7%	12.6%
					Revenue CAGR	-11.9% - 37.3%	7.1%
					Book Value Multiple	1.1x - 9.5x	8.3x
					Exit Capitalization Rate	5.0% - 11.4%	8.1%
					Exit Multiple - EBITDA	2.8x - 16.0x	10.2x
					Exit Multiple - NOI	8.8x - 12.8x	11.0x
					Exit Multiple - P/E	10.0x - 17.0x	14.2x
		1,477	Market Comparable Companies		Book Value Multiple	0.7x - 0.9x	0.8x
					Exit Multiple - EBITDA	8.0x	N/A
		28,049	Other		N/A	N/A	N/A
		10,870	Transaction Price		N/A	N/A	N/A
		54	Third Party Pricing		N/A	N/A	N/A
Partnership and LLC Interests		267,616	Discounted Cash Flows		Discount Rate	4.6% - 26.5%	9.9%
					Revenue CAGR	-2.1% - 45.5%	7.6%
					Book Value Multiple	8.5x - 9.3x	9.2x
					Exit Capitalization Rate	1.5% - 25.0%	5.9%
					Exit Multiple - EBITDA	0.1x - 28.6x	10.5x
					Exit Multiple - NOI	12.5x	N/A
		578	Market Comparable Companies		Book Value Multiple	1.0x	N/A
		27,668	Other		N/A	N/A	N/A
		543	Third Party Pricing		N/A	N/A	N/A
		17,587	Transaction Price		N/A	N/A	N/A
Debt Instruments		7,384	Discounted Cash Flows		Discount Rate	6.3% - 16.7%	9.5%
					Revenue CAGR	23.6%	N/A
					Exit Capitalization Rate	3.9%	N/A
		63,737	Third Party Pricing		N/A	N/A	N/A
		12,680	Transaction Price		N/A	N/A	N/A
Assets of Consolidated CLO Vehicles		37	Discounted Cash Flows		Discount Rate	8.0%	N/A
		529,785	Third Party Pricing		N/A	N/A	N/A
Total Investments of Consolidated Blackstone Funds		1,086,724

continued …

39

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Corporate Treasury Investments	$	11,070	Discounted Cash Flows		Discount Rate	0.7% - 6.0%	4.1%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20.0%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	30.0% - 70.0%	68.0%
					Reinvestment Rate	LIBOR + 350bps -	LIBOR + 391
						LIBOR + 400bps	bps
		17,151	Third Party Pricing		N/A	N/A	N/A
Loans and Receivables		217,709	Discounted Cash Flows		Discount Rate	5.8% - 10.2%	9.0%
		128,894	Transaction Price		N/A	N/A	N/A
Other Investments		61,105	Discounted Cash Flows		Discount Rate	0.7% - 8.9%	1.9%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20.0%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	70.0%	N/A
					Reinvestment Rate	LIBOR + 400 bps	N/A
		25,397	Transaction Price		N/A	N/A	N/A
	$	1,548,050

40

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of December 31, 2017:

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	91,753	Discounted Cash Flows		Discount Rate	7.1% - 31.4%	12.6%
					Revenue CAGR	1.0% - 49.4%	7.1%
					Exit Capitalization Rate	5.0% - 11.4%	8.5%
					Exit Multiple - EBITDA	4.0x - 16.0x	9.9x
					Exit Multiple - NOI	8.8x - 12.5x	10.5x
					Exit Multiple - P/E	9.5x - 17.0x	11.0x
		862	Market Comparable Companies		Book Value Multiple	0.8x - 0.9x	0.9x
					Exit Multiple - EBITDA	8.0x	N/A
		17,536	Other		N/A	N/A	N/A
		21,716	Transaction Price		N/A	N/A	N/A
Partnership and LLC Interests		293,744	Discounted Cash Flows		Discount Rate	4.6% - 26.5%	9.8%
					Revenue CAGR	-22.2% - 71.5%	8.4%
					Exit Capitalization Rate	3.1% - 10.0%	5.7%
					Exit Multiple - EBITDA	0.1x - 15.0x	8.6x
					Exit Multiple - NOI	12.5x	N/A
		530	Market Comparable Companies		Book Value Multiple	1.0x	N/A
		22,346	Other		N/A	N/A	N/A
		758	Third Party Pricing		N/A	N/A	N/A
		14,070	Transaction Price		N/A	N/A	N/A
Debt Instruments		6,122	Discounted Cash Flows		Discount Rate	6.6% - 18.4%	9.6%
					Revenue CAGR	7.7%	N/A
					Exit Capitalization Rate	8.3%	N/A
					Exit Multiple - NOI	12.0x	N/A
		50,136	Third Party Pricing		N/A	N/A	N/A
		1,897	Transaction Price		N/A	N/A	N/A
Assets of Consolidated CLO Vehicles		8,277	Market Comparable Companies		EBITDA Multiple	7.0x	N/A
		499,624	Third Party Pricing		N/A	N/A	N/A
Total Investments of Consolidated Blackstone Funds		1,029,371
Corporate Treasury Investments		8,886	Discounted Cash Flows		Discount Rate	5.1% - 6.3%	5.4%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	30.0% - 70.0%	68.1%
					Reinvestment Rate	LIBOR + 400 bps	N/A
		15,363	Third Party Pricing		N/A	N/A	N/A
Loans and Receivables		239,659	Discounted Cash Flows		Discount Rate	7.1% - 10.3%	8.8%
Other Investments		65,821	Discounted Cash Flows		Discount Rate	0.7% - 13.0%	2.2%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20.0%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	70.0%	N/A
					Reinvestment Rate	LIBOR + 400 bps -	LIBOR + 401
						LIBOR + 413 bps	bps
		29,572	Transaction Price		N/A	N/A	N/A
	$	1,388,672

41

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

N/A	Not applicable.
CAGR	Compound annual growth rate.
EBITDA	Earnings before interest, taxes, depreciation and amortization.
Exit Multiple	Ranges include the last twelve months EBITDA, forward EBITDA and price/earnings exit multiples.
NOI	Net operating income.
P/E	Price-earnings ratio.
Third Party Pricing	Third Party Pricing is generally determined on the basis of unadjusted prices between market participants provided by reputable dealers or pricing services.
Transaction Price	Includes recent acquisitions or transactions.
(a)	Unobservable inputs were weighted based on the fair value of the investments included in the range.

The significant unobservable inputs used in the fair value measurement of corporate treasury investments, debt instruments and other investments are discount rates, default rates, recovery rates, recovery lag, pre-payment rates and reinvestment rates. Increases (decreases) in any of the discount rates, default rates, recovery lag and pre-payment rates in isolation would result in a lower (higher) fair value measurement. Increases (decreases) in any of the recovery rates and reinvestment rates in isolation would result in a higher (lower) fair value measurement. Generally, a change in the assumption used for default rates may be accompanied by a directionally similar change in the assumption used for recovery lag and a directionally opposite change in the assumption used for recovery rates and pre-payment rates.

The significant unobservable inputs used in the fair value measurement of equity securities, partnership and limited liability company (“LLC”) interests, debt instruments, assets of consolidated CLO vehicles and loans and receivables are discount rates, exit capitalization rates, exit multiples, EBITDA multiples and revenue compound annual growth rates. Increases (decreases) in any of discount rates and exit capitalization rates in isolation can result in a lower (higher) fair value measurement. Increases (decreases) in any of exit multiples and revenue compound annual growth rates in isolation can result in a higher (lower) fair value measurement.

Since December 31, 2017, there have been no changes in valuation techniques within Level II and Level III that have had a material impact on the valuation of financial instruments.

The following tables summarize the changes in financial assets and liabilities measured at fair value for which the Partnership has used Level III inputs to determine fair value and does not include gains or losses that were reported in Level III in prior years or for instruments that were transferred out of Level III prior to the end of the respective reporting period. Total realized and unrealized gains and losses recorded for Level III investments are reported in either

42

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Investment Income (Loss) or Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations.

	Level III Financial Assets at Fair Value Three Months Ended June 30,
	2018												2017
	Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total			Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total
Balance, Beginning of Period	$	963,151		$	163,135		$	117,349		$	1,243,635		$	685,966		$	112,056		$	138,433		$	936,455
Transfer In Due to Consolidation and Acquisition		—			—			—			—			35,040			—			—			35,040
Transfer Out Due to Deconsolidation		—			—			—			—			(44,095	)		—			—			(44,095	)
Transfer In to Level III (b)		152,666			—			—			152,666			68,127			—			6,473			74,600
Transfer Out of Level III (b)		(117,217	)		—			(7,649	)		(124,866	)		(105,165	)		—			(11,930	)		(117,095	)
Purchases		203,223			294,258			15,327			512,808			112,405			268,222			9,155			389,782
Sales		(127,718	)		(110,508	)		(23,304	)		(261,530	)		(46,140	)		(75,342	)		(34,014	)		(155,496	)
Settlements		—			(5,634	)		(1	)		(5,635	)		—			(1,392	)		(993	)		(2,385	)
Changes in Gains Included in Earnings and Other Comprehensive Income		12,619			5,352			13,001			30,972			9,606			2,735			8,565			20,906
Balance, End of Period	$	1,086,724		$	346,603		$	114,723		$	1,548,050		$	715,744		$	306,279		$	115,689		$	1,137,712
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	146		$	5,353		$	(49	)	$	5,450		$	(2,163	)	$	2,735		$	123		$	695

43

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	Level III Financial Assets at Fair Value Six Months Ended June 30,
	2018												2017
	Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total			Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total
Balance, Beginning of Period	$	1,029,371		$	239,659		$	119,642		$	1,388,672		$	685,873		$	211,359		$	130,588		$	1,027,820
Transfer In Due to Consolidation and Acquisition		50,043			—			—			50,043			34,651			—			—			34,651
Transfer Out Due to Deconsolidation		(217,182	)		—			—			(217,182	)		(38,629	)		—			—			(38,629	)
Transfer In to Level III (b)		180,401			—			—			180,401			63,125			—			16,396			79,521
Transfer Out of Level III (b)		(141,104	)		—			(15,717	)		(156,821	)		(140,571	)		—			(18,010	)		(158,581	)
Purchases		408,823			370,921			19,812			799,556			219,248			337,705			21,603			578,556
Sales		(260,865	)		(263,703	)		(23,479	)		(548,047	)		(145,890	)		(251,502	)		(44,045	)		(441,437	)
Settlements		—			(9,317	)		(4	)		(9,321	)		—			(3,894	)		(1,093	)		(4,987	)
Changes in Gains Included in Earnings and Other Comprehensive Income		37,237			9,043			14,469			60,749			37,937			12,611			10,250			60,798
Balance, End of Period	$	1,086,724		$	346,603		$	114,723		$	1,548,050		$	715,744		$	306,279		$	115,689		$	1,137,712
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	19,265		$	9,044		$	(289	)	$	28,020		$	1,031		$	12,610		$	462		$	14,103

(a) Represents corporate treasury investments and Other Investments.

(b) Transfers in and out of Level III financial assets and liabilities were due to changes in the observability of inputs used in the valuation of such assets and liabilities.

There were no Level III financial liabilities as of and for the three and six months ended June 30, 2018 and 2017.

9. VARIABLE INTEREST ENTITIES

Pursuant to GAAP consolidation guidance, the Partnership consolidates certain VIEs in which it is determined that the Partnership is the primary beneficiary either directly or indirectly, through a consolidated entity or affiliate. VIEs include certain private equity, real estate, credit-focused or funds of hedge funds entities and CLO vehicles. The purpose of such VIEs is to provide strategy specific investment opportunities for investors in exchange for management and performance based fees. The investment strategies of the Blackstone Funds differ by product; however, the fundamental risks of the Blackstone Funds have similar characteristics, including loss of invested capital and loss of management fees and performance based fees. In Blackstone’s role as general partner, collateral manager or investment adviser, it generally considers itself the sponsor of the applicable Blackstone Fund. The Partnership does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs other than its own capital commitments.

44

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The assets of consolidated variable interest entities may only be used to settle obligations of these consolidated Blackstone Funds. In addition, there is no recourse to the Partnership for the consolidated VIEs’ liabilities including the liabilities of the consolidated CLO vehicles.

During the six months ended June 30, 2018, the Partnership’s ownership interest in certain CLO and other vehicles originated outside of the U.S. was diluted such that the Partnership determined that it was no longer the primary beneficiary of these VIEs and deconsolidated these vehicles. As of the date of deconsolidation, the Partnership’s Total Assets, Total Liabilities and Non-Controlling Interests in Consolidated Entities were reduced by $8.9 billion, $8.7 billion and $196.1 million, respectively. The Partnership will continue to receive management fees and Performance Allocations from these vehicles following the dilution of its ownership interest.

The Partnership holds variable interests in certain VIEs which are not consolidated as it is determined that the Partnership is not the primary beneficiary. The Partnership’s involvement with such entities is in the form of direct equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets recognized by Blackstone relating to non-consolidated entities, any amounts due to non-consolidated entities and any clawback obligation relating to previously distributed Performance Allocations. The assets and liabilities recognized in the Partnership’s Condensed Consolidated Statements of Financial Condition related to the Partnership’s interest in these non-consolidated VIEs and the Partnership’s maximum exposure to loss relating to non-consolidated VIEs were as follows:

	June 30, 2018		December 31, 2017
Investments	$	969,868	$	805,501
Accounts Receivable		—		15,760
Due from Affiliates		252,603		81,465
Total VIE Assets		1,222,471		902,726
Due to Affiliates		4,110		179
Potential Clawback Obligation		55,832		98,331
Maximum Exposure to Loss	$	1,282,413	$	1,001,236

10. REPURCHASE AGREEMENTS

At June 30, 2018, the Partnership pledged securities with a carrying value of $217.8 million and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.

At December 31, 2017, the Partnership pledged securities with a carrying value of $169.7 million and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.

45

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The following tables provide information regarding the Partnership’s Repurchase Agreements obligation by type of collateral pledged:

	June 30, 2018
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30 - 90 Days		Greater than 90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	48,796	$	109,116	$	24,577	$	182,489
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	182,489
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

	December 31, 2017
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30 - 90 Days		Greater than 90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	22,756	$	96,084	$	—	$	118,840
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	118,840
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

11. OFFSETTING OF ASSETS AND LIABILITIES

The following tables present the offsetting of assets and liabilities as of June 30, 2018:

	Gross and Net Amounts of Assets Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments (a)		Cash Collateral Received		Net Amount
Assets
Freestanding Derivatives	$	25,934	$	23,822	$	—	$	2,112

46

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	Gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments (a)		Cash Collateral Pledged		Net Amount
Liabilities
Freestanding Derivatives	$	57,375	$	43,943	$	6,811	$	6,621
Repurchase Agreements		182,489		182,489		—		—
	$	239,864	$	226,432	$	6,811	$	6,621

(a) Amounts presented are inclusive of both legally enforceable master netting agreements, and financial instruments received or pledged as collateral. Financial instruments received or pledged as collateral offset derivative counterparty risk exposure, but do not reduce net balance sheet exposure.

The following tables present the offsetting of assets and liabilities as of December 31, 2017:

	Gross and Net Amounts of Assets Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments		Cash Collateral Received		Net Amount
Assets
Freestanding Derivatives	$	8,801	$	3,279	$	—	$	5,522

	Gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments		Cash Collateral Pledged		Net Amount
Liabilities
Net Investment Hedges	$	453	$	—	$	—	$	453
Freestanding Derivatives		36,234		3,279		32,405		550
Repurchase Agreements		118,840		118,840		—		—
	$	155,527	$	122,119	$	32,405	$	1,003

Repurchase Agreements are presented separately on the Condensed Consolidated Statements of Financial Condition. Freestanding Derivative assets are included in Other Assets in the Condensed Consolidated Statements of Financial Condition. The following table presents the components of Other Assets:

	June 30, 2018		December 31, 2017
Furniture, Equipment and Leasehold Improvements, Net	$	122,318	$	126,566
Prepaid Expenses		90,687		78,723
Other Assets		16,901		32,965
Freestanding Derivatives		23,030		4,443
	$	252,936	$	242,697

Freestanding Derivative liabilities are included in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition and are not a significant component thereof.

47

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Notional Pooling Arrangement

Blackstone has a notional cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows for cash withdrawals based upon aggregate cash balances on deposit at the same financial institution. Cash withdrawals cannot exceed aggregate cash balances on deposit. The net balance of cash on deposit and overdrafts is used as a basis for calculating net interest expense or income. As of June 30, 2018, the aggregate cash balance on deposit relating to the cash pooling arrangement was $1.5 billion, which was offset with an accompanying overdraft of $1.5 billion.

12. BORROWINGS

The following table presents the general characteristics of each of our Notes, as well as their carrying value and fair value. The Notes are included in Loans Payable within the Condensed Consolidated Statements of Financial Condition. All of the Notes were issued at a discount. All of the Notes accrue interest from the Issue Date and all pay interest in arrears on a semi-annual basis or annual basis as indicated by the Interest Payment Dates.

	June 30, 2018				December 31, 2017
Senior Notes	Carrying Value		Fair Value (a)		Carrying Value		Fair Value (a)
5.875%, Due 3/15/2021	$	398,727	$	425,360	$	398,514	$	438,320
4.750%, Due 2/15/2023		394,645		418,840		394,137		434,200
2.000%, Due 5/19/2025		346,136		369,728		355,425		385,433
1.000%, Due 10/5/2026		691,478		677,906		709,871		711,440
3.150%, Due 10/2/2027		296,557		284,700		296,399		295,320
6.250%, Due 8/15/2042		238,119		294,700		238,019		328,200
5.000%, Due 6/15/2044		488,640		526,000		488,536		574,100
4.450%, Due 7/15/2045		343,981		337,260		343,925		372,575
4.000%, Due 10/2/2047		290,075		266,400		289,989		296,940
	$	3,488,358	$	3,600,894	$	3,514,815	$	3,836,528

(a) Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.

Included within Loans Payable and Due to Affiliates within the Condensed Consolidated Statements of Financial Condition are amounts due to holders of debt securities issued by Blackstone’s consolidated CLO vehicles. Borrowings through the consolidated CLO vehicles consisted of the following:

	June 30, 2018							December 31, 2017
	Borrowing Outstanding		Weighted- Average Interest Rate			Weighted- Average Remaining Maturity in Years		Borrowing Outstanding		Weighted- Average Interest Rate			Weighted- Average Remaining Maturity in Years
Senior Secured Notes	$	6,533,425		3.83	%		3.2	$	10,689,240		2.35	%		4.1
Subordinated Notes		331,735		(a	)		N/A		894,367		(a)			N/A
	$	6,865,160						$	11,583,607

(a) The Subordinated Notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the CLO vehicles.

48

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Senior Secured Notes and Subordinated Notes comprise the following amounts:

	June 30, 2018						December 31, 2017
	Fair Value		Amounts Due to Non- Consolidated Affiliates				Fair Value		Amounts Due to Non- Consolidated Affiliates
			Borrowing Outstanding		Fair Value				Borrowing Outstanding		Fair Value
Senior Secured Notes	$	6,531,595	$	3,250	$	3,269	$	10,595,652	$	1,000	$	996
Subordinated Notes		239,179		111,659		63,279		743,554		53,400		40,390
	$	6,770,774	$	114,909	$	66,548	$	11,339,206	$	54,400	$	41,386

The Loans Payable of the consolidated CLO vehicles are collateralized by assets held by each respective CLO vehicle and assets of one vehicle may not be used to satisfy the liabilities of another. As of June 30, 2018 and December 31, 2017, the fair value of the consolidated CLO assets was $7.5 billion and $13.4 billion, respectively. This collateral consisted of Cash, Corporate Loans, Corporate Bonds and other securities.

Scheduled principal payments for borrowings as of June 30, 2018 were as follows:

	Operating Borrowings		Blackstone Fund Facilities/CLO Vehicles		Total Borrowings
2018	$	—	$	2,819	$	2,819
2019		—		—		—
2020		—		—		—
2021		400,000		—		400,000
2022		—		—		—
Thereafter		3,151,560		6,865,160		10,016,720
	$	3,551,560	$	6,867,979	$	10,419,539

13. INCOME TAXES

Blackstone’s effective tax rate was 8.2% and 3.9% for the three months ended June 30, 2018 and 2017, respectively, and 7.5% and 4.8% for the six months ended June 30, 2018 and 2017, respectively. Blackstone’s income tax provision was $138.7 million and $29.6 million for the three months ended June 30, 2018 and 2017, respectively, and $193.2 million and $87.0 million for the six months ended June 30, 2018 and 2017, respectively.

The Blackstone Group L.P. and certain of its subsidiaries operate in the U.S. as partnerships for income tax purposes (partnerships generally are not subject to federal income taxes) and generally as corporate entities in non-U.S. jurisdictions. Blackstone’s effective tax rate for the three and six months ended June 30, 2018 and 2017 was substantially due to the fact that certain corporate subsidiaries are subject to federal, state, local and foreign income taxes (as applicable) and other subsidiaries are subject to New York City unincorporated business taxes.

49

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

14. NET INCOME PER COMMON UNIT

Basic and diluted net income per common unit for the three and six months ended June 30, 2018 and June 30, 2017 was calculated as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Net Income for Per Common Unit Calculation
Net Income Attributable to The Blackstone Group L.P., Basic	$	742,042	$	337,407	$	1,109,914	$	789,316
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units		—		260,488		858,727		624,716
Net Income Attributable to The Blackstone Group L.P., Diluted	$	742,042	$	597,895	$	1,968,641	$	1,414,032
Units Outstanding
Weighted-Average Common Units Outstanding, Basic		681,794,492		664,681,299		678,156,936		662,820,839
Weighted-Average Unvested Deferred Restricted Common Units		216,118		998,974		207,526		904,079
Weighted-Average Blackstone Holdings Partnership Units		—		534,326,066		532,363,486		536,031,472
Weighted-Average Common Units Outstanding, Diluted		682,010,610		1,200,006,339		1,210,727,948		1,199,756,390
Net Income Per Common Unit, Basic	$	1.09	$	0.51	$	1.64	$	1.19
Net Income Per Common Unit, Diluted	$	1.09	$	0.50	$	1.63	$	1.18
Distributions Declared Per Common Unit (a)	$	0.35	$	0.87	$	1.20	$	1.34

(a) Distributions declared reflects the calendar date of the declaration for each distribution.

The Weighted-Average Common Units Outstanding, Basic includes vested deferred restricted common units that have been earned for which issuance of the related common units is deferred until future periods.

The Partnership applies the treasury stock method to determine the dilutive weighted-average common units outstanding. The Partnership applies the “if-converted” method to the Blackstone Holdings Partnership Units to determine the dilutive weighted-average common units represented by the Blackstone Holdings Partnership Units.

In computing the dilutive effect that the exchange of Blackstone Holdings Partnership Units would have on net income per common unit, the Partnership considered that net income available to holders of common units would increase due to the elimination of non-controlling interests in Blackstone Holdings, inclusive of any tax impact. Because the hypothetical conversion may result in a different tax rate, the Blackstone Holdings Partnership Units are considered anti-dilutive in certain periods and dilutive in other periods.

50

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The following table summarizes the anti-dilutive securities for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Weighted-Average Blackstone Holdings Partnership Units		528,872,187		—		—		—

Unit Repurchase Program

On April 16, 2018, the Board of Directors of our general partner, Blackstone Group Management L.L.C., authorized the repurchase by Blackstone of up to $1.0 billion of Blackstone common units and Blackstone Holdings Partnership Units. Under the unit repurchase program, units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of units repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The unit repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

During the three and six months ended June 30, 2017, no units were repurchased. During the three and six months ended June 30, 2018, Blackstone repurchased 2.2 million Blackstone common units at a total cost of $71.7 million. As of June 30, 2018, the amount remaining available for repurchases under this program was $928.3 million.

15. EQUITY-BASED COMPENSATION

The Partnership has granted equity-based compensation awards to Blackstone’s senior managing directors, non-partner professionals, non-professionals and selected external advisers under the Partnership’s 2007 Equity Incentive Plan (the “Equity Plan”). The Equity Plan allows for the granting of options, unit appreciation rights or other unit-based awards (units, restricted units, restricted common units, deferred restricted common units, phantom restricted common units or other unit-based awards based in whole or in part on the fair value of the Blackstone common units or Blackstone Holdings Partnership Units) which may contain certain service or performance requirements. As of January 1, 2018, the Partnership had the ability to grant 172,155,134 units under the Equity Plan.

For the three and six months ended June 30, 2018, the Partnership recorded compensation expense of $116.8 million and $209.0 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $20.1 million and $34.5 million, respectively. For the three and six months ended June 30, 2017, the Partnership recorded compensation expense of $88.5 million and $179.7 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $22.7 million and $36.8 million, respectively. As of June 30, 2018, there was $793.8 million of estimated unrecognized compensation expense related to unvested awards. This cost is expected to be recognized over a weighted-average period of 4.0 years.

Total vested and unvested outstanding units, including Blackstone common units, Blackstone Holdings Partnership Units and deferred restricted common units, were 1,203,395,001 as of June 30, 2018. Total outstanding phantom units were 44,850 as of June 30, 2018.

51

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

A summary of the status of the Partnership’s unvested equity-based awards as of June 30, 2018 and of changes during the period January 1, 2018 through June 30, 2018 is presented below:

	Blackstone Holdings					The Blackstone Group L.P.
						Equity Settled Awards					Cash Settled Awards
Unvested Units	Partnership Units			Weighted- Average Grant Date Fair Value		Deferred Restricted Common Units and Options			Weighted- Average Grant Date Fair Value		Phantom Units			Weighted- Average Grant Date Fair Value
Balance, December 31, 2017		30,023,189		$	35.26		9,019,974		$	30.03		44,196		$	31.85
Granted		2,224,551			32.01		3,343,695			32.48		117			33.43
Vested		(2,161,371	)		36.27		(3,309,089	)		30.48		(151	)		32.99
Forfeited		(56,362	)		32.89		(213,508	)		30.34		—			—
Balance, June 30, 2018		30,030,007		$	34.95		8,841,072		$	30.76		44,162		$	32.24

Units Expected to Vest

The following unvested units, after expected forfeitures, as of June 30, 2018, are expected to vest:

	Units		Weighted-Average Service Period in Years
Blackstone Holdings Partnership Units		26,551,896		3.5
Deferred Restricted Blackstone Common Units		7,761,280		2.1
Total Equity-Based Awards		34,313,176		3.2
Phantom Units		37,120		2.4

16. RELATED PARTY TRANSACTIONS

Affiliate Receivables and Payables

Due from Affiliates and Due to Affiliates consisted of the following:

	June 30, 2018		December 31, 2017
Due from Affiliates
Advances Made on Behalf of Certain Non-Controlling Interest Holders and Blackstone Employees Principally for Investments in Blackstone Funds	$	413,095	$	410,877
Amounts Due from Portfolio Companies and Funds		514,064		587,955
Management Fees and Performance Allocations Due from Non-Consolidated Funds		547,235		594,484
Payments Made on Behalf of Non-Consolidated Entities		526,087		355,766
Investments Redeemed in Non-Consolidated Funds		14,355		77,943
Accrual for Potential Clawback of Previously Distributed Performance Allocations		1,113		1,112
	$	2,015,949	$	2,028,137

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	June 30, 2018		December 31, 2017
Due to Affiliates
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements	$	779,758	$	715,734
Distributions Received on Behalf of Certain Non-Controlling Interest Holders and Blackstone Employees		63,349		87,829
Distributions Received on Behalf of Blackstone Entities		4,373		38,789
Payments Made by Non-Consolidated Entities		51,050		51,249
Due to Note Holders of Consolidated CLO Vehicles		66,548		41,386
Accrual for Potential Repayment of Previously Received Performance Allocations		2,172		2,171
	$	967,250	$	937,158

Interests of the Founder, Senior Managing Directors, Employees and Other Related Parties

The Founder, senior managing directors, employees and certain other related parties invest on a discretionary basis in the consolidated Blackstone Funds both directly and through consolidated entities. These investments generally are subject to preferential management fee and performance allocation or incentive fee arrangements. As of June 30, 2018 and December 31, 2017, such investments aggregated $843.8 million and $813.2 million, respectively. Their share of the Net Income Attributable to Redeemable Non-Controlling and Non-Controlling Interests in Consolidated Entities aggregated $37.0 million and $20.0 million for the three months ended June 30, 2018 and 2017, respectively, and $65.8 million and $50.5 million for the six months ended June 30, 2018 and 2017, respectively.

Loans to Affiliates

Loans to affiliates consist of interest bearing advances to certain Blackstone individuals to finance their investments in certain Blackstone Funds. These loans earn interest at Blackstone’s cost of borrowing and such interest totaled $1.2 million and $1.1 million for the three months ended June 30, 2018 and 2017, respectively, and $2.5 million and $1.3 million for the six months ended June 30, 2018 and 2017, respectively.

Contingent Repayment Guarantee

Blackstone and its personnel who have received Performance Allocation distributions have guaranteed payment on a several basis (subject to a cap) to the carry funds of any clawback obligation with respect to the excess Performance Allocation allocated to the general partners of such funds and indirectly received thereby to the extent that either Blackstone or its personnel fails to fulfill its clawback obligation, if any. The Accrual for Potential Repayment of Previously Received Performance Allocations represents amounts previously paid to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone Funds if the carry funds were to be liquidated based on the fair value of their underlying investments as of June 30, 2018. See Note 17. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)”.

Aircraft and Other Services

In the normal course of business, Blackstone personnel make use of aircraft owned as personal assets by Stephen A. Schwarzman; an aircraft owned jointly as a personal asset by Hamilton E. James, Blackstone’s Executive Vice Chairman, and a Director of Blackstone, and another senior managing director; an aircraft owned as

53

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

a personal asset by Jonathan D. Gray, Blackstone’s President and Chief Operating Officer and a Director of Blackstone; and an aircraft owned jointly as a personal asset by Bennett J. Goodman, Co-Founder of GSO Capital and a Director of Blackstone, and another senior managing director (each such aircraft, “Personal Aircraft”). Mr. Schwarzman paid for his purchases of his Personal Aircraft himself. Mr. James paid for his interest in his jointly owned Personal Aircraft. Mr. Goodman paid for his interest in his jointly owned Personal Aircraft. Mr. Gray paid for his purchase of his Personal Aircraft himself. Mr. Schwarzman, Mr. James, Mr. Goodman and Mr. Gray respectively bear operating, personnel and maintenance costs associated with the operation of such Personal Aircraft. Payment by Blackstone for the use of the Personal Aircraft by Blackstone employees is made based on market rates.

In addition, on occasion, certain of Blackstone’s executive officers and employee directors and their families may make personal use of aircraft in which Blackstone owns a fractional interest, as well as other assets of Blackstone. Any such personal use of Blackstone assets is charged to the executive officer or employee director based on market rates and usage. Personal use of Blackstone resources is also reimbursed to Blackstone based on market rates.

The transactions described herein are not material to the Condensed Consolidated Financial Statements.

Tax Receivable Agreements

Blackstone used a portion of the proceeds from the IPO and the sale of non-voting common units to Beijing Wonderful Investments to purchase interests in the predecessor businesses from the predecessor owners. In addition, holders of Blackstone Holdings Partnership Units may exchange their Blackstone Holdings Partnership Units for Blackstone common units on a one-for-one basis. The purchase and subsequent exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Blackstone Holdings and therefore reduce the amount of tax that Blackstone’s wholly owned subsidiaries would otherwise be required to pay in the future.

One of the subsidiaries of the Partnership which is a corporate taxpayer has entered into tax receivable agreements with each of the predecessor owners and additional tax receivable agreements have been executed, and will continue to be executed, with newly-admitted senior managing directors and others who acquire Blackstone Holdings Partnership Units. The agreements provide for the payment by the corporate taxpayer to such owners of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the corporate taxpayers actually realize as a result of the aforementioned increases in tax basis and of certain other tax benefits related to entering into these tax receivable agreements. For purposes of the tax receivable agreements, cash savings in income tax will be computed by comparing the actual income tax liability of the corporate taxpayers to the amount of such taxes that the corporate taxpayers would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Blackstone Holdings as a result of the exchanges and had the corporate taxpayers not entered into the tax receivable agreements.

Assuming no future material changes in the relevant tax law and that the corporate taxpayers earn sufficient taxable income to realize the full tax benefit of the increased amortization of the assets, the expected future payments under the tax receivable agreements (which are taxable to the recipients) will aggregate $779.8 million over the next 15 years. The after-tax net present value of these estimated payments totals $282.8 million assuming a 15% discount rate and using Blackstone’s most recent projections relating to the estimated timing of the benefit to be received. Future payments under the tax receivable agreements in respect of subsequent exchanges would be in addition to these amounts. The payments under the tax receivable agreements are not conditioned upon continued ownership of Blackstone equity interests by the pre-IPO owners and the others mentioned above.

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Amounts related to the deferred tax asset resulting from the increase in tax basis from the exchange of Blackstone Holdings Partnership Units to Blackstone common units, the resulting remeasurement of net deferred tax assets at the Blackstone ownership percentage at the balance sheet date, the due to affiliates for the future payments resulting from the tax receivable agreements and resulting adjustment to partners’ capital are included as Acquisition of Ownership Interests from Non-Controlling Interest Holders in the Supplemental Disclosure of Non-Cash Investing and Financing Activities in the Condensed Consolidated Statements of Cash Flows.

Other

Blackstone does business with and on behalf of some of its Portfolio Companies; all such arrangements are on a negotiated basis.

Additionally, please see Note 17. “Commitments and Contingencies — Contingencies — Guarantees” for information regarding guarantees provided to a lending institution for certain loans held by employees.

17. COMMITMENTS AND CONTINGENCIES

Commitments

Investment Commitments

Blackstone had $2.4 billion of investment commitments as of June 30, 2018 representing general partner capital funding commitments to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. The consolidated Blackstone Funds had signed investment commitments of $545.2 million as of June 30, 2018 which includes $155.4 million of signed investment commitments for portfolio company acquisitions in the process of closing.

Contingencies

Guarantees

Certain of Blackstone’s consolidated real estate funds guarantee payments to third parties in connection with the on-going business activities and/or acquisitions of their Portfolio Companies. There is no direct recourse to the Partnership to fulfill such obligations. To the extent that underlying funds are required to fulfill guarantee obligations, the Partnership’s invested capital in such funds is at risk. Total investments at risk in respect of guarantees extended by consolidated real estate funds was $15.9 million as of June 30, 2018.

The Blackstone Holdings Partnerships provided guarantees to a lending institution for certain loans held by employees either for investment in Blackstone Funds or for members’ capital contributions to Blackstone Group International Partners LLP. The amount guaranteed as of June 30, 2018 was $185.7 million.

Litigation

From time to time, Blackstone is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, Blackstone does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial position or cash flows.

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Contingent Obligations (Clawback)

Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. The lives of the carry funds, including available contemplated extensions, for which a liability for potential clawback obligations has been recorded for financial reporting purposes, are currently anticipated to expire at various points through 2028. Further extensions of such terms may be implemented under given circumstances.

For financial reporting purposes, when applicable, the general partners record a liability for potential clawback obligations to the limited partners of some of the carry funds due to changes in the unrealized value of a fund’s remaining investments and where the fund’s general partner has previously received Performance Allocation distributions with respect to such fund’s realized investments.

The following table presents the clawback obligations by segment:

	June 30, 2018						December 31, 2017
Segment	Blackstone Holdings		Current and Former  Personnel		Total		Blackstone Holdings		Current and Former  Personnel		Total
Credit	$	1,059	$	1,113	$	2,172	$	1,059	$	1,112	$	2,171

For Private Equity, Real Estate, and certain Credit Funds, a portion of the Performance Allocations paid to current and former Blackstone personnel is held in segregated accounts in the event of a cash clawback obligation. These segregated accounts are not included in the Condensed Consolidated Financial Statements of the Partnership, except to the extent a portion of the assets held in the segregated accounts may be allocated to a consolidated Blackstone fund of hedge funds. At June 30, 2018, $696.5 million was held in segregated accounts for the purpose of meeting any clawback obligations of current and former personnel if such payments are required.

In the Credit segment, payment of Performance Allocations to the Partnership by the majority of the stressed/distressed, mezzanine and credit alpha strategies funds is substantially deferred under the terms of the partnership agreements. This deferral mitigates the need to hold funds in segregated accounts in the event of a cash clawback obligation.

If, at June 30, 2018, all of the investments held by our carry funds were deemed worthless, a possibility that management views as remote, the amount of Performance Allocations subject to potential clawback would be $6.5 billion, on an after-tax basis where applicable, of which Blackstone Holdings is potentially liable for $6.0 billion if current and former Blackstone personnel default on their share of the liability, a possibility that management also views as remote.

18. SEGMENT REPORTING

Blackstone transacts its primary business in the United States and substantially all of its revenues are generated domestically.

Blackstone conducts its alternative asset management businesses through four segments:

• Private Equity — Blackstone’s Private Equity segment primarily comprises its management of flagship corporate private equity funds, sector-focused corporate private equity funds, including energy-focused

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

funds, a core private equity fund, an opportunistic investment platform, a secondary private equity fund of funds business, a multi-asset investment program for eligible high net worth investors and a capital markets services business.

• Real Estate — Blackstone’s Real Estate segment primarily comprises its management of global, European-focused and Asian-focused opportunistic real estate funds, high yield real estate debt funds, liquid real estate debt funds, core+ real estate funds, a NYSE-listed REIT and a non-exchange traded REIT.

• Hedge Fund Solutions — Blackstone’s Hedge Fund Solutions segment is comprised principally of Blackstone Alternative Asset Management (“BAAM”), which manages a broad range of commingled and customized hedge fund of fund solutions and also includes investment platforms that seed new hedge fund businesses, purchase minority ownership interests in more established hedge funds, invest in special situation opportunities, create alternative solutions in regulated structures and trade directly.

• Credit — Blackstone’s Credit segment consists principally of GSO Capital Partners LP (“GSO”), which is organized into performing credit strategies (which include mezzanine lending funds, middle market direct lending funds and other performing credit strategies), distressed strategies (which include credit alpha strategies, stressed/distressed funds and energy strategies), long only strategies (which consist of CLOs, closed end funds, commingled funds and separately managed accounts), Harvest (which invests in publicly traded master limited partnerships holding primarily midstream energy assets in the U.S.), and Blackstone Insurance Solutions (which partners with insurers to deliver customizable and diversified portfolios of Blackstone products across asset classes, as well as the option for full management of insurance companies’ investment portfolios).

These business segments are differentiated by their various sources of income. The Private Equity, Real Estate, Hedge Fund Solutions and Credit segments primarily earn their income from management fees and investment returns on assets under management.

Blackstone uses Economic Income as a key measure of value creation, a benchmark of performance and in making resource deployment and compensation decisions across its four segments. Economic Income presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages, and excludes the amortization of intangibles and other activity referred to as “Transaction-Related Charges”. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. For segment reporting purposes, Performance Allocations and Incentive Fees are presented together and referred to collectively as Performance Revenues or Performance Compensation.

Senior management makes operating decisions and assesses the performance of each of Blackstone’s business segments based on financial and operating metrics and data that is presented without the consolidation of any of the Blackstone Funds that are consolidated into the Condensed Consolidated Financial Statements.

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The following tables presents the financial data for Blackstone’s four segments for the three months ended June 30, 2018 and 2017:

	Three Months Ended June 30, 2018
	Private Equity			Real Estate			Hedge  Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	195,521		$	249,680		$	129,553		$	118,161		$	692,915
Transaction, Advisory and Other Fees, Net		12,780			23,859			812			3,461			40,912
Management Fee Offsets		(4,351	)		(3,785	)		—			(2,697	)		(10,833	)
Total Management and Advisory Fees, Net		203,950			269,754			130,365			118,925			722,994
Performance Revenues
Realized Incentive Fees		—			11,394			6,887			1,223			19,504
Realized Performance Allocations		138,171			351,630			383			13,371			503,555
Unrealized Performance Allocations		498,274			(160,578	)		9,930			92,798			440,424
Total Performance Revenues		636,445			202,446			17,200			107,392			963,483
Principal Investment Income (Loss)
Realized		32,600			50,199			7,766			4,082			94,647
Unrealized		84,247			(28,044	)		(4,841	)		764			52,126
Total Principal Investment Income		116,847			22,155			2,925			4,846			146,773
Interest and Dividend Revenue		11,549			14,494			5,152			10,532			41,727
Other		26,667			30,457			17,619			19,673			94,416
Total Revenues		995,458			539,306			173,261			261,368			1,969,393
Expenses
Compensation		103,798			109,599			48,086			55,907			317,390
Performance Compensation
Realized Incentive Fees		—			5,820			4,155			(232	)		9,743
Realized Performance Allocations		68,513			109,233			937			7,715			186,398
Unrealized Performance Allocations		193,747			(51,370	)		2,772			44,842			189,991
Total Compensation and Benefits		366,058			173,282			55,950			108,232			703,522
Interest Expense		12,773			11,389			5,900			8,823			38,885
Other Operating Expenses		36,047			36,026			18,494			31,899			122,466
Total Expenses		414,878			220,697			80,344			148,954			864,873
Economic Income	$	580,580		$	318,609		$	92,917		$	112,414		$	1,104,520

58

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	Three Months Ended June 30, 2017
	Private Equity			Real Estate			Hedge  Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	177,684		$	227,865		$	128,698		$	137,121		$	671,368
Transaction, Advisory and Other Fees, Net		17,289			16,087			1,696			3,820			38,892
Management Fee Offsets		(3,753	)		(5,018	)		—			(4,653	)		(13,424	)
Total Management and Advisory Fees, Net		191,220			238,934			130,394			136,288			696,836
Performance Revenues
Realized Incentive Fees		—			4,878			6,548			28,877			40,303
Realized Performance Allocations		198,168			389,441			447			15,040			603,096
Unrealized Performance Allocations		9			89,688			14,849			(8,839	)		95,707
Total Performance Revenues		198,177			484,007			21,844			35,078			739,106
Principal Investment Income (Loss)
Realized		41,168			57,599			225			1,895			100,887
Unrealized		(25,892	)		(20,519	)		11,578			1,666			(33,167	)
Total Principal Investment Income		15,276			37,080			11,803			3,561			67,720
Interest and Dividend Revenue		7,922			14,493			4,674			6,614			33,703
Other		(16,124	)		(22,965	)		(10,720	)		(12,660	)		(62,469	)
Total Revenues		396,471			751,549			157,995			168,881			1,474,896
Expenses
Compensation		90,676			110,266			47,361			56,954			305,257
Performance Compensation
Realized Incentive Fees		—			2,711			4,097			14,224			21,032
Realized Performance Allocations		63,060			124,512			265			7,901			195,738
Unrealized Performance Allocations		22,219			64,254			5,968			(5,531	)		86,910
Total Compensation and Benefits		175,955			301,743			57,691			73,548			608,937
Interest Expense		10,728			14,787			6,688			8,091			40,294
Other Operating Expenses		28,592			33,379			16,318			27,549			105,838
Total Expenses		215,275			349,909			80,697			109,188			755,069
Economic Income	$	181,196		$	401,640		$	77,298		$	59,693		$	719,827

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The following table reconciles the Total Segments to Blackstone’s Income Before Provision for Taxes for the three months ended June 30, 2018 and 2017:

	Three Months Ended June 30, 2018
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)
Total Segments	$	1,969,393		$	864,873		$	—	$	1,104,520
Adjustments
Impact of Consolidation (b)		82,752			26,288			73,519		129,983
Amortization of Intangibles (c)		(387	)		14,486			—		(14,873	)
Intersegment Eliminations		(1,293	)		(1,293	)		—		—
Transaction-Related Charges (d)		582,105			112,027			—		470,078
Total Adjustments		663,177			151,508			73,519		585,188
Blackstone Consolidated	$	2,632,570		$	1,016,381		$	73,519	$	1,689,708
	Three Months Ended June 30, 2017
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)
Total Segments	$	1,474,896		$	755,069		$	—	$	719,827
Adjustments
Impact of Consolidation (b)		57,503			53,622			110,054		113,935
Amortization of Intangibles (c)		(387	)		10,957			—		(11,344	)
Intersegment Eliminations		(1,628	)		(1,628	)		—		—
Transaction-Related Charges (d)		5,342			63,173			—		(57,831	)
Total Adjustments		60,830			126,124			110,054		44,760
Blackstone Consolidated	$	1,535,726		$	881,193		$	110,054	$	764,587

(a) Represents Total Segments Economic Income reconciled to Blackstone Consolidated Income Before Provision for Taxes.

(b) The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(c) Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstone’s investment in Patria, which is accounted for under the equity method.

(d) Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate

60

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

actions. During the three months ended June 30, 2018, Transaction-Related Charges include $580.9 million of Other Revenues received upon the conclusion of Blackstone’s investment sub-advisory relationship with FS Investments’ funds.

The following tables present the financial data for Blackstone’s four segments as of and for the six months ended June 30, 2018 and 2017:

	June 30, 2018 and the Six Months Then Ended
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	378,482		$	476,206		$	258,781		$	286,602		$	1,400,071
Transaction, Advisory and Other Fees, Net		23,874			46,947			1,157			6,000			77,978
Management Fee Offsets		(7,544	)		(5,453	)		—			(6,014	)		(19,011	)
Total Management and Advisory Fees, Net		394,812			517,700			259,938			286,588			1,459,038
Performance Revenues
Realized Incentive Fees		—			15,769			15,058			1,243			32,070
Realized Performance Allocations		215,294			502,939			2,389			52,575			773,197
Unrealized Performance Allocations		895,590			65,864			14,991			92,318			1,068,763
Total Performance Revenues		1,110,884			584,572			32,438			146,136			1,874,030
Principal Investment Income (Loss)
Realized		38,938			64,889			8,406			11,107			123,340
Unrealized		101,615			(25,357	)		(4,401	)		(5,753	)		66,104
Total Principal Investment Income		140,553			39,532			4,005			5,354			189,444
Interest and Dividend Revenue		20,092			29,622			9,964			18,434			78,112
Other		10,259			8,960			7,331			6,972			33,522
Total Revenues		1,676,600			1,180,386			313,676			463,484			3,634,146
Expenses
Compensation		203,527			222,423			98,386			129,381			653,717
Performance Compensation
Realized Incentive Fees		—			8,030			8,189			186			16,405
Realized Performance Allocations		101,558			163,416			3,352			30,134			298,460
Unrealized Performance Allocations		372,549			27,800			4,958			39,119			444,426
Total Compensation and Benefits		677,634			421,669			114,885			198,820			1,413,008
Interest Expense		22,906			25,538			12,171			16,508			77,123
Other Operating Expenses		67,198			65,443			37,279			59,638			229,558
Total Expenses		767,738			512,650			164,335			274,966			1,719,689
Economic Income	$	908,862		$	667,736		$	149,341		$	188,518		$	1,914,457
Segment Assets	$	7,574,520		$	7,536,885		$	2,275,685		$	4,099,397		$	21,486,487

61

THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	Six Months Ended June 30, 2017
	Private Equity			Real Estate			Hedge  Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	354,390		$	425,744		$	257,166		$	277,026		$	1,314,326
Transaction, Advisory and Other Fees, Net		33,465			37,366			1,955			6,328			79,114
Management Fee Offsets		(15,943	)		(8,568	)		—			(22,512	)		(47,023	)
Total Management and Advisory Fees, Net		371,912			454,542			259,121			260,842			1,346,417
Performance Revenues
Realized Incentive Fees		—			7,760			20,635			58,419			86,814
Realized Performance Allocations		780,849			909,314			1,044			23,837			1,715,044
Unrealized Performance Allocations		(184,469	)		81,642			33,664			40,792			(28,371	)
Total Performance Revenues		596,380			998,716			55,343			123,048			1,773,487
Principal Investment Income (Loss)
Realized		122,462			177,178			(407	)		4,548			303,781
Unrealized		(66,414	)		(104,372	)		29,871			8,813			(132,102	)
Total Principal Investment Income		56,048			72,806			29,464			13,361			171,679
Interest and Dividend Revenue		14,583			26,587			8,671			12,358			62,199
Other		(17,924	)		(26,115	)		(12,330	)		(14,387	)		(70,756	)
Total Revenues		1,020,999			1,526,536			340,269			395,222			3,283,026
Expenses
Compensation		174,279			212,968			94,965			112,072			594,284
Performance Compensation
Realized Incentive Fees		—			4,044			11,111			28,342			43,497
Realized Performance Allocations		244,693			304,468			568			12,487			562,216
Unrealized Performance Allocations		(17,137	)		82,046			12,390			17,144			94,443
Total Compensation and Benefits		401,835			603,526			119,034			170,045			1,294,440
Interest Expense		21,155			29,422			13,231			15,936			79,744
Other Operating Expenses		56,353			64,243			32,697			49,007			202,300
Total Expenses		479,343			697,191			164,962			234,988			1,576,484
Economic Income	$	541,656		$	829,345		$	175,307		$	160,234		$	1,706,542

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The following table reconciles the Total Segments to Blackstone’s Income Before Provision for Taxes and Total Assets as of and for the six months ended June 30, 2018 and 2017:

	June 30, 2018 and the Six Months Then Ended
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)			Total Assets
Total Segments	$	3,634,146		$	1,719,689		$	—	$	1,914,457		$	21,486,487
Adjustments
Impact of Consolidation (b)		186,276			86,187			184,118		284,207			8,588,810
Amortization of Intangibles (c)		(774	)		28,972			—		(29,746	)		—
Intersegment Eliminations		(2,634	)		(2,634	)		—		—			—
Transaction-Related Charges (d)		584,687			167,098			—		417,589			—
Total Adjustments		767,555			279,623			184,118		672,050			8,588,810
Blackstone Consolidated	$	4,401,701		$	1,999,312		$	184,118	$	2,586,507		$	30,075,297

	Six Months Ended June 30, 2017
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)
Total Segments	$	3,283,026		$	1,576,484		$	—	$	1,706,542
Adjustments
Impact of Consolidation (b)		159,142			80,708			176,186		254,620
Amortization of Intangibles (c)		(774	)		21,914			—		(22,688	)
Intersegment Eliminations		(3,067	)		(3,067	)		—		—
Transaction-Related Charges (d)		12,117			126,927			—		(114,810	)
Total Adjustments		167,418			226,482			176,186		117,122
Blackstone Consolidated	$	3,450,444		$	1,802,966		$	176,186	$	1,823,664

(a) Represents Total Segments Economic Income reconciled to Blackstone Consolidated Income Before Provision for Taxes.

(b) The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(c) Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstone’s investment in Patria, which is accounted for under the equity method.

(d) Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate

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THE BLACKSTONE GROUP L.P.

Notes to Condensed Consolidated Financial Statements—Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

actions. During the six months ended June 30, 2018, Transaction-Related Charges include $580.9 million of Other Revenues received upon the conclusion of Blackstone’s investment sub-advisory relationship with FS Investments’ funds.

19. SUBSEQUENT EVENTS

There have been no events since June 30, 2018 that require recognition or disclosure in the Condensed Consolidated Financial Statements.

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ITEM 1A. UNAUDITED SUPPLEMENTAL PRESENTATION OF STATEMENTS OF FINANCIAL CONDITION

THE BLACKSTONE GROUP L.P.

Unaudited Consolidating Statements of Financial Condition

(Dollars in Thousands)

	June 30, 2018
	Consolidated Operating Partnerships			Consolidated Blackstone Funds (a)		Reclasses and Eliminations			Consolidated
Assets
Cash and Cash Equivalents	$	1,710,251		$	—	$	—		$	1,710,251
Cash Held by Blackstone Funds and Other		—			288,675		—			288,675
Investments		14,053,517			8,605,998		(651,333	)		22,008,182
Accounts Receivable		577,074			340,643		—			917,717
Due from Affiliates		2,014,267			25,534		(23,852	)		2,015,949
Intangible Assets, Net		380,844			—		—			380,844
Goodwill		1,778,192			—		—			1,778,192
Other Assets		249,791			3,145		—			252,936
Deferred Tax Assets		722,551			—		—			722,551
Total Assets	$	21,486,487		$	9,263,995	$	(675,185	)	$	30,075,297
Liabilities and Partners’ Capital
Loans Payable	$	3,488,358		$	6,707,045	$	—		$	10,195,403
Due to Affiliates		868,286			489,596		(390,632	)		967,250
Accrued Compensation and Benefits		2,987,977			—		—			2,987,977
Securities Sold, Not Yet Purchased		44,618			111,162		—			155,780
Repurchase Agreements		—			182,489		—			182,489
Accounts Payable, Accrued Expenses and Other Liabilities		554,194			396,608		—			950,802
Total Liabilities		7,943,433			7,886,900		(390,632	)		15,439,701
Redeemable Non-Controlling Interests in Consolidated Entities		22,503			136,296		—			158,799
Partners’ Capital
Partners’ Capital		7,105,225			284,553		(284,553	)		7,105,225
Accumulated Other Comprehensive Loss		(57,876	)		—		—			(57,876	)
Non-Controlling Interests in Consolidated Entities		2,536,375			956,246		—			3,492,621
Non-Controlling Interests in Blackstone Holdings		3,936,827			—		—			3,936,827
Total Partners’ Capital		13,520,551			1,240,799		(284,553	)		14,476,797
Total Liabilities and Partners’ Capital	$	21,486,487		$	9,263,995	$	(675,185	)	$	30,075,297

continued…

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THE BLACKSTONE GROUP L.P.

Unaudited Consolidating Statements of Financial Condition

(Dollars in Thousands)

	December 31, 2017
	Consolidated Operating Partnerships			Consolidated Blackstone Funds (a)		Reclasses and Eliminations			Consolidated
Assets
Cash and Cash Equivalents	$	1,992,497		$	—	$	—		$	1,992,497
Cash Held by Blackstone Funds and Other		345,668			1,583,863		—			1,929,531
Investments		12,087,525			13,093,670		(747,146	)		24,434,049
Accounts Receivable		404,071			470,947		—			875,018
Due from Affiliates		2,009,866			47,325		(29,054	)		2,028,137
Intangible Assets, Net		409,828			—		—			409,828
Goodwill		1,778,192			—		—			1,778,192
Other Assets		234,603			8,094		—			242,697
Deferred Tax Assets		725,970			—		—			725,970
Total Assets	$	19,988,220		$	15,203,899	$	(776,200	)	$	34,415,919
Liabilities and Partners’ Capital
Loans Payable	$	3,514,815		$	11,300,621	$	—		$	14,815,436
Due to Affiliates		852,123			339,138		(254,103	)		937,158
Accrued Compensation and Benefits		2,623,492			—		—			2,623,492
Securities Sold, Not Yet Purchased		64,473			89,907		—			154,380
Repurchase Agreements		—			118,840		—			118,840
Accounts Payable, Accrued Expenses and Other Liabilities		477,615			1,565,907		—			2,043,522
Total Liabilities		7,532,518			13,414,413		(254,103	)		20,692,828
Redeemable Non-Controlling Interests in Consolidated Entities		22,000			188,944		—			210,944
Partners’ Capital
Partners’ Capital		6,669,327			378,030		(378,846	)		6,668,511
Accumulated Other Comprehensive Income (Loss)		(34,836	)		—		818			(34,018	)
Non-Controlling Interests in Consolidated Entities		2,174,705			1,222,512		(144,069	)		3,253,148
Non-Controlling Interests in Blackstone Holdings		3,624,506			—		—			3,624,506
Total Partners’ Capital		12,433,702			1,600,542		(522,097	)		13,512,147
Total Liabilities and Partners’ Capital	$	19,988,220		$	15,203,899	$	(776,200	)	$	34,415,919

(a) The Consolidated Blackstone Funds consisted of the following:

Blackstone / GSO Global Dynamic Credit Feeder Fund (Cayman) LP

Blackstone / GSO Global Dynamic Credit Funding Designated Activity Company

Blackstone / GSO Global Dynamic Credit Master Fund

Blackstone / GSO Global Dynamic Credit USD Feeder Fund (Ireland)

Blackstone / GSO Loan Financing Limited*

Blackstone Real Estate Partners VI.C — ESH L.P.*

Blackstone Real Estate Special Situations Fund L.P.

Blackstone Real Estate Special Situations Offshore Fund Ltd.

Blackstone Strategic Alliance Fund L.P.

BSSF I AIV L.P.

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BTD CP Holdings LP

Collateralized loan obligation vehicles

GSO Legacy Associates 2 LLC*

GSO Legacy Associates LLC*

Mezzanine side-by-side investment vehicles

Private equity side-by-side investment vehicles

Real estate side-by-side investment vehicles

* Consolidated as of December 31, 2017 only.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with The Blackstone Group L.P.’s condensed consolidated financial statements and the related notes included within this Quarterly Report on Form 10-Q.

Our Business

Blackstone is one of the largest independent managers of private capital in the world. Our business is organized into four segments:

• Private Equity. We are a world leader in private equity investing, having managed seven general private equity funds, as well as three sector-focused funds, since we established this business in 1987. Our Private Equity segment includes our corporate private equity business, which consists of our flagship private equity funds (Blackstone Capital Partners (“BCP”) funds), our sector-focused private equity funds, including our energy-focused funds (Blackstone Energy Partners (“BEP”) funds), and our Asia-focused fund (Blackstone Capital Partners Asia (“BCP Asia”) fund). In addition, our Private Equity segment includes our core private equity fund, Blackstone Core Equity Partners (“BCEP”), our opportunistic investment platform that invests globally across asset classes, industries and geographies, Blackstone Tactical Opportunities (“Tactical Opportunities”), our secondary private equity fund of funds business, Strategic Partners Fund Solutions (“Strategic Partners”), our infrastructure-focused funds, Blackstone Infrastructure Partners (“BIP”), a multi-asset investment program for eligible high net worth investors offering exposure to certain of Blackstone’s key illiquid investment strategies through a single commitment, Blackstone Total Alternatives Solution (“BTAS”) and our capital markets services business, Blackstone Capital Markets (“BXCM”).

Our corporate private equity business pursues transactions throughout the world across a variety of transaction types, including large buyouts, mid-cap buyouts, buy and build platforms (which involve multiple acquisitions behind a single management team and platform) and growth equity/development projects (which involve significant minority investments in mature companies and greenfield development projects in energy and power). Tactical Opportunities invests globally across asset classes, industries and geographies, seeking to identify and execute on attractive, differentiated investment opportunities, leveraging the intellectual capital across our various businesses while continuously optimizing its approach in the face of ever changing market conditions. Strategic Partners focuses on delivering access to a range of opportunities, leveraging its proprietary database to acquire single fund interests or complex portfolios in an efficient and timely manner. BIP focuses on investments in core and core+ infrastructure in the energy, transportation, communications and water and waste sectors.

• Real Estate. Our Real Estate group is one of the largest real estate investment managers in the world. We operate as one globally integrated business, with investments in North America, Europe, Asia and Latin America. Our Real Estate investment team seeks to establish a differentiated view and capitalizes on our scale and proprietary information advantages to invest with conviction and generate attractive risk-adjusted returns for our investors over the long term.

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Our Blackstone Real Estate Partners (“BREP”) funds are geographically diversified and target a broad range of “opportunistic” real estate and real estate-related investments. The BREP funds include global funds as well as funds focused specifically on Europe or Asia investments. We seek to acquire high quality, well-located yet undermanaged assets at an attractive basis, address any property or business issues through active asset management and sell the assets once our business plan is accomplished. BREP has made significant investments in hotels, office buildings, shopping centers, residential and industrial assets, as well as a variety of real estate operating companies.

Our core+ real estate business, Blackstone Property Partners (“BPP”) has assembled a global portfolio of high quality core+ investments across the U.S., Europe and Asia. We manage several core+ real estate funds, which target substantially stabilized assets in prime markets with a focus on office, multifamily, industrial and retail assets.

BREIT, a non-exchange traded REIT, is focused on investing primarily in stabilized income-oriented commercial real estate in the U.S. and to a lesser extent, investing in real estate-related securities.

Our Blackstone Real Estate Debt Strategies (“BREDS”) vehicles target debt investment opportunities collateralized by commercial real estate in both public and private markets, primarily in the U.S. and Europe. BREDS’ scale and investment mandates enable it to provide a variety of lending and investment options including mezzanine loans, senior loans and liquid securities. The BREDS platform includes a number of high yield real estate debt funds, liquid real estate debt funds and BXMT, a NYSE-listed real estate investment trust (“REIT”).

• Hedge Fund Solutions. Blackstone’s Hedge Fund Solutions segment is comprised principally of Blackstone Alternative Asset Management (“BAAM”). BAAM is the world’s largest discretionary allocator to hedge funds, managing a broad range of commingled and customized fund solutions since its inception in 1990. The Hedge Fund Solutions segment also includes investment platforms that seed new hedge fund businesses, purchase minority ownership interests in more established hedge funds, invest in special situation opportunities, create alternative solutions in regulated structures and trade directly.

• Credit. Our credit segment consists principally of GSO Capital Partners LP (“GSO”) which was founded in 2005 and subsequently acquired by Blackstone in 2008. GSO is one of the largest leveraged finance-focused alternative asset managers in the world and is the largest manager of collateralized loan obligations (“CLOs”) globally. The investment portfolios of the funds we manage or sub-advise predominantly consist of loans and securities of non-investment grade companies spread across the capital structure including senior debt, subordinated debt, preferred stock and common equity.

The GSO business is organized into three overarching strategies: performing credit, distressed and long only. Our performing credit strategies include mezzanine lending funds, middle market direct lending funds, and other performing credit strategy funds. Our distressed strategies include credit alpha strategies, stressed/distressed funds and energy strategies. GSO’s long only strategies consist of CLOs, closed end funds, commingled funds and separately managed accounts.

In addition, our credit business includes our publicly traded master limited partnership (“MLP”) and investment platform, which are managed by Harvest. Harvest, which was founded in 2005 and subsequently acquired by Blackstone in 2017, primarily invests capital raised from institutional investors in separately managed accounts and pooled vehicles, investing in publicly traded MLPs holding primarily midstream energy assets in the U.S.

Our insurer-focused platform, BIS, delivers to insurers bespoke, capital-efficient investments and diversified portfolios of Blackstone products across asset classes tailored to their needs and risk profile.

We generate revenue from fees earned pursuant to contractual arrangements with funds, fund investors and fund portfolio companies (including management, transaction and monitoring fees), and from capital markets services. We invest in the funds we manage and we are entitled to a pro-rata share of the results of the fund (a

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“pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, we are entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”). In certain structures, we receive a contractual incentive fee from an investment fund in the event that specified cumulative investment returns are achieved (an “Incentive Fee”, and together with Performance Allocations, “Performance Revenues”). The composition of our revenues will vary based on market conditions and the cyclicality of the different businesses in which we operate. Net investment gains and investment income generated by the Blackstone Funds, principally private equity and real estate funds, are driven by value created by our operating and strategic initiatives as well as overall market conditions. Fair values are affected by changes in the fundamentals of the portfolio company, the portfolio company’s industry, the overall economy and other market conditions.

Business Environment

Blackstone’s businesses are materially affected by conditions in the financial markets and economic conditions in the U.S., Europe, Asia and, to a lesser extent, elsewhere in the world.

The second quarter of 2018 saw continued market volatility, driven by concerns over trade protectionism, rising interest rates and uneven global growth. While the CBOE Volatility Index declined 19% in the second quarter after peaking in February, the index is up 46% since the beginning of 2018. Strong U.S. economic growth and corporate earnings led the S&P 500 higher, up 3% in the second quarter, but a stronger U.S. dollar (with the U.S. dollar index up 5% in the second quarter) weighed on global market indices. While the MSCI World Index rose 1%, the MSCI World ex. U.S. index fell 2%, and the MSCI Europe and Asia indices declined 3% and 5%, respectively. Emerging market equities underperformed, with the MSCI Emerging Markets Index down 9% in the quarter.

While the global economy continues to reflect positive momentum, the growth cycle has become less synchronized with signs of slowing in Europe, Japan and China. In the U.S., the Bureau of Economic Analysis’ initial report on second quarter 2018 GDP indicated growth of 4.1%, the strongest quarter of growth since 2014, but with most economists expecting growth to slow in the second half of 2018. Monetary policy continues to tighten, and the U.S. Federal Reserve raised interest rates in June for the seventh time since December 2015, with the current target range set to 1.75-2.0%. Ten-year U.S. Treasury yields rose to 3.11% during the quarter before ending the quarter at 2.85%, furthering investor concerns over the potential negative impact to values of fixed income and longer duration assets. The Bloomberg Barclays U.S. Aggregate Bond Index was down 0.2%, U.S. investment grade corporates were down 1.0% and high yield corporates advanced 1.0% for the quarter. High yield spreads were largely flat for the quarter and issuance fell 24% year over year.

Global equity issuance for both initial public offerings and follow-on offerings remained strong, with the first half of the year marking the second consecutive first half to surpass $400 billion in volume. Global merger and acquisition volume for the first half of the year reached a record $2.5 trillion, up 61% year over year due to a significant increase in deals greater than $5 billion, which reached a record $1 trillion. Despite healthy deal activity during the first half of 2018, ongoing concerns over market volatility and trade and antitrust policy may adversely impact future global transaction activity.

Energy rallied sharply in the quarter, with the S&P 500 Energy Index up 13%. The Henry Hub Natural Gas spot price rose 7% and the price of crude oil increased, with West Texas Intermediate Crude up 14% to $74 per barrel. Oil and gas prices, however, remain well below historical averages. Spot prices for other commodities were mixed, with the Bloomberg Commodity Index flat during the quarter.

In the near term, most economists expect continued healthy economic growth and the continued normalization of monetary policy in the U.S. and to a lesser extent, Europe, although global trade tensions and rising geopolitical instability present ongoing concerns.

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Notable Transactions

On April 9, 2018, Blackstone concluded its investment sub-advisory relationship with FS Investments’ funds (the “FS Funds”), as previously announced. At March 31, 2018, the FS Funds represented $20.0 billion of Total Assets Under Management. Over time, we believe we will replace and ultimately overtake the prior level of revenue and earnings associated with our sub-advisory relationship with FS Investments. As part of the transaction, Blackstone received proceeds from FS Investments of $580.9 million which is recorded as Other Revenues within the Condensed Consolidated Statement of Operations for the three months ended June 30, 2018. This amount is characterized as a Transaction-Related Charge and therefore is not included in Economic Income, Fee Related Earnings, or Distributable Earnings for the three months ended June 30, 2018. Blackstone intends to distribute a portion of the after-tax proceeds to unitholders resulting in an anticipated incremental $0.30 per common unit and per Blackstone Holdings Partnership unit over the second, third and fourth quarters of 2018, of which $0.10 per common unit was distributed on August 6, 2018.

Organizational Structure

The simplified diagram below depicts our current organizational structure. The diagram does not depict all of our subsidiaries, including intermediate holding companies through which certain of the subsidiaries depicted are held.

Key Financial Measures and Indicators

We manage our business using key financial measures and indicators since we believe they measure the productivity of our investment activities. Our key financial measures and indicators are discussed below.

Revenues

Revenues primarily consist of management and advisory fees, incentive fees, investment income, interest and dividend revenue and other. Please refer to “Part I. Item 1. Business — Incentive Arrangements / Fee Structure” in our Annual Report on Form 10-K for the year ended December 31, 2017 and “— Critical Accounting Policies — Revenue Recognition” for additional information regarding the manner in which Base Management Fees and Incentive Fees are generated.

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Management and advisory fees and incentive fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 18. “Segment Reporting” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” for a disaggregated presentation of revenues from contracts with customers.

Investment Income represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments. Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by us. Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Management and Advisory Fees, Net — Management and Advisory Fees, Net are comprised of management fees, including base management fees, transaction and other fees and advisory fees net of management fee reductions and offsets.

The Partnership earns base management fees from limited partners of funds in each of its managed funds, at a fixed percentage of assets under management, net asset value, total assets, committed capital or invested capital. These customer contracts require the Partnership to provide investment management services, which represents a performance obligation that the Partnership satisfies over time. Management fees are a form of variable consideration because the fees the Partnership is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid.

Transaction, advisory and other fees (including monitoring fees) are principally fees charged to the limited partners of funds indirectly through the managed funds and portfolio companies. The investment advisory agreements generally require that the investment adviser reduce the amount of management fees payable by the limited partners to the Partnership (“management fee reductions”) by an amount equal to a portion of the transaction and other fees paid to the Partnership by the portfolio companies. The amount of the reduction varies by fund, the type of fee paid by the portfolio company and the previously incurred expenses of the fund. These fees and associated management fee reductions are a component of the transaction price for our performance obligation to provide investment management services to the limited partners of funds and are recognized as changes to the transaction price in the period in which they are charged and the services are performed.

Management fee offsets are reductions to management fees payable by the limited partners of the Blackstone Funds, which are based on the amount such limited partners reimburse the Blackstone Funds or the Partnership primarily for placement fees. Providing investment management services requires the Partnership to arrange for services on behalf of its customers. In those situations where we are acting as an agent on behalf of the limited partners of funds, it presents the cost of services as net against management fee revenue. In all other situations, the Partnership is primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements. As a result, the cost of those services is presented gross as Compensation or General, Administrative and Other expense, as appropriate, with any reimbursement from the limited partners of the funds recorded as Management and Advisory Fees, Net.

Accrued but unpaid Management and Advisory Fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts Receivable or Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Incentive Fees — Contractual fees earned based on the performance of Blackstone Funds (“Incentive Fees”) are a form of variable consideration in their contracts with customers to provide investment management services.

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Incentive Fees are earned based on fund performance during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each fund’s governing agreements. Incentive Fees will not be recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved. Incentive Fees are typically recognized as revenue when realized at the end of the measurement period. Once realized, such fees are not subject to clawback or reversal. Accrued but unpaid Incentive Fees charged directly to investors in Blackstone Funds as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Investment Income (Loss) — Investment Income (Loss) represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments.

In certain fund structures across private equity, real estate, hedge fund solutions and credit-focused funds (“carry funds”), Blackstone, through its subsidiaries, invests alongside its limited partners in a partnership and is entitled to its pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, Blackstone is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).

Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. At the end of each reporting period, the Partnership calculates the balance of accrued Performance Allocations (“Accrued Performance Allocations”) that would be due to the Partnership for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. Accrued Performance Allocations as of the reporting date are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Performance Allocations are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results. As such, the accrual for potential repayment of previously received Performance Allocations, which is a component of Due to Affiliates, represents all amounts previously distributed to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone carry funds if the Blackstone carry funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain funds, including certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability.

Principal Investments include the unrealized and realized gains and losses on the Partnership’s principal investments, including its investments in Blackstone Funds that are not consolidated and receive pro-rata allocations, its equity method investments, and other principal investments. Income (Loss) on Principal Investments is realized when the Partnership redeems all or a portion of its investment or when the Partnership receives cash

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income, such as dividends or distributions. Unrealized Income (Loss) on Principal Investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest and Dividend Revenue — Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by Blackstone.

Other Revenue — Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Expenses

Compensation and Benefits — Compensation — Compensation and Benefits consists of (a) employee compensation, comprising salary and bonus, and benefits paid and payable to employees and senior managing directors and (b) equity-based compensation associated with the grants of equity-based awards to employees and senior managing directors. Compensation cost relating to the issuance of equity-based awards to senior managing directors and employees is measured at fair value at the grant date, taking into consideration expected forfeitures, and expensed over the vesting period on a straight-line basis, except in the case of (a) equity-based awards that do not require future service, which are expensed immediately, and (b) certain awards to recipients that meet specified criteria making them eligible for retirement treatment (allowing such recipient to keep a percentage of those awards upon departure from Blackstone after becoming eligible for retirement), for which the expense for the portion of the award that would be retained in the event of retirement is either expensed immediately or amortized to the retirement date. Cash settled equity-based awards are classified as liabilities and are remeasured at the end of each reporting period.

Compensation and Benefits — Incentive Fee Compensation — Incentive Fee Compensation consists of compensation paid based on Incentive Fees.

Compensation and Benefits — Performance Allocations Compensation — Performance Allocation Compensation consists of compensation paid based on Performance Allocations (which may be distributed in cash or in-kind). Such compensation expense is subject to both positive and negative adjustments. Unlike Performance Allocations, compensation expense is based on the performance of individual investments held by a fund rather than on a fund by fund basis. These amounts may also include allocations of investment income from Blackstone’s principal investments, to senior managing directors and employees participating in certain profit sharing initiatives.

Other Operating Expenses — Other Operating Expenses represents general and administrative expenses including interest expense, occupancy and equipment expenses and other expenses, which consist principally of professional fees, public company costs, travel and related expenses, communications and information services and depreciation and amortization.

Fund Expenses — The expenses of our consolidated Blackstone Funds consist primarily of interest expense, professional fees and other third party expenses.

Non-Controlling Interests in Consolidated Entities

Non-Controlling Interests in Consolidated Entities represent the component of Partners’ Capital in consolidated Blackstone Funds held by third party investors and employees. The percentage interests held by third parties and employees is adjusted for general partner allocations and by subscriptions and redemptions in funds of hedge funds and certain credit-focused funds which occur during the reporting period. In addition, all non-controlling interests in consolidated Blackstone Funds are attributed a share of income (loss) arising from the respective funds and a share of other comprehensive income, if applicable. Income (Loss) is allocated to non-controlling interests in consolidated entities based on the relative ownership interests of third party investors and employees after considering any contractual arrangements that govern the allocation of income (loss) such as fees allocable to The Blackstone Group L.P.

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Redeemable Non-Controlling Interests in Consolidated Entities

Non-controlling interests related to funds of hedge funds are subject to annual, semi-annual or quarterly redemption by investors in these funds following the expiration of a specified period of time, or may be withdrawn subject to a redemption fee during the period when capital may not be withdrawn. As limited partners in these types of funds have been granted redemption rights, amounts relating to third party interests in such consolidated funds are presented as Redeemable Non-Controlling Interests in Consolidated Entities within the Condensed Consolidated Statements of Financial Condition. When redeemable amounts become legally payable to investors, they are classified as a liability and included in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition. For all consolidated funds in which redemption rights have not been granted, non-controlling interests are presented within Partners’ Capital in the Condensed Consolidated Statements of Financial Condition as Non-Controlling Interests in Consolidated Entities.

Non-Controlling Interests in Blackstone Holdings

Non-Controlling Interests in Blackstone Holdings represent the component of Partners’ Capital in the consolidated Blackstone Holdings Partnerships held by Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships.

Certain costs and expenses are borne directly by the Holdings Partnerships. Income (Loss), excluding those costs directly borne by and attributable to the Holdings Partnerships, is attributable to Non-Controlling Interests in Blackstone Holdings. This residual attribution is based on the year to date average percentage of Blackstone Holdings Partnership Units held by Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships.

Income Taxes

The Blackstone Holdings Partnerships and certain of their subsidiaries operate in the U.S. as partnerships for U.S. federal income tax purposes and generally as corporate entities in non-U.S. jurisdictions. Accordingly, these entities in some cases are subject to New York City unincorporated business taxes or non-U.S. income taxes. In addition, certain of the wholly owned subsidiaries of the Partnership and the Blackstone Holdings Partnerships will be subject to federal, state and local corporate income taxes at the entity level and the related tax provision attributable to the Partnership’s share of this income tax is reflected in the Condensed Consolidated Financial Statements.

Income taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis, using tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current and deferred tax liabilities are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.

Blackstone uses the flow-through method to account for investment tax credits. Under this method, the investment tax credits are recognized as a reduction to income tax expense.

Blackstone analyzes its tax filing positions in all of the U.S. federal, state, local and foreign tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. Blackstone records uncertain tax positions on the basis of a two-step process: (a) a determination is made whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (b) those tax positions that meet the more-likely-than-not threshold are recognized as the largest amount of tax benefit that is

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greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Blackstone recognizes accrued interest and penalties related to uncertain tax positions in General, Administrative, and Other expenses within the Condensed Consolidated Statements of Operations.

Certain past legislative proposals by members of the U.S. Congress would treat carried interest as not meeting the qualifying income requirements under the publicly traded partnership rules (after a transition period in the case of existing publicly traded partnerships). If similar legislation were enacted and applied to us, we would not qualify as a partnership for U.S. federal income tax purposes unless we held carried interest through corporations. If we were taxed as a corporation or held carried interest through taxable subsidiary corporations, our effective tax rate could increase significantly.

States and other jurisdictions have also considered legislation to increase taxes with respect to carried interest. For example, New Jersey recently enacted legislation which eliminates an exclusion from New Jersey source income (for non-residents) for carried interest and income from providing investment management services, which is not expected to materially affect our common unitholders, and authorizes a contingent 17% surtax on such management income for gross income tax and corporate income tax purposes. These carried interest provisions remain non-operative as they are dependent upon Connecticut, New York and Massachusetts enacting legislation with identical provisions. In addition, New York State has considered legislation, which could cause a non-resident of New York State who holds our common units to be subject to New York State income tax on carried interest earned by entities in which we hold an indirect interest, thereby requiring the non-resident to file a New York State income tax return reporting such carried interest income. As part of that same proposal, New York State also considered a state tax surcharge of 17% on carried interest in addition to the personal income tax. Similar proposals are under consideration in other jurisdictions such as California. Whether or when similar legislation will be enacted is unclear.

Finally, several state and local jurisdictions are evaluating ways to subject partnerships to entity level taxation through the imposition of state or local income, franchise or other forms of taxation or to increase the amount of such taxation. For example, although it would not affect us materially, Connecticut recently enacted an income tax on pass-through entities doing business in Connecticut, and states in which we do business may consider similar tax changes. These and other proposals have recently been under heightened consideration in light of U.S. federal income tax legislation, known as the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017 (the “Tax Reform Bill”).

Meaningfully quantifying the potential impact on Blackstone of this potential future legislation or any similar legislation is not possible at this time. Multiple versions of legislation in this area have been proposed over the last few years that have included significantly different provisions regarding effective dates and the treatment of invested capital, tiered entities and cross-border operations, among other matters. Depending upon what version of the legislation, if any, were enacted, the potential impact on a public company such as Blackstone in a given year could differ significantly and could be material. In addition, even if these legislative proposals would not themselves impose a tax on a publicly traded partnership such as Blackstone, they could force Blackstone and other publicly traded partnerships to restructure their operations so as to prevent disqualifying income from reaching the publicly traded partnership in amounts that would disqualify the partnership from treatment as a partnership for U.S. federal income tax purposes. Such a restructuring could result in more income being earned in corporate subsidiaries, thereby increasing corporate income tax liability indirectly borne by the publicly traded partnership. In addition, we, and our common unitholders, could be taxed on any such restructuring. The nature of any such restructuring would depend on the precise provisions of the legislation that was ultimately enacted, as well as the particular facts and circumstances of Blackstone’s operations at the time any such legislation were to take effect, making the task of predicting the amount of additional tax highly speculative.

The recently enacted Tax Reform Bill has resulted in fundamental changes to the Internal Revenue Code. Changes to U.S. tax laws resulting from the Tax Reform Bill, including reduction to the federal corporate income tax rate, partial limitation on the deductibility of business interest expense, and a longer three-year holding period requirement for carried interest to be treated as long-term capital gain could have a material effect on our business operations and our funds’ investment activities. These and other changes from the Tax Reform Bill — including

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limitations on the use, carryback and carryforward of net operating losses and changes relating to the scope and timing of U.S. taxation on earnings from international business operations — could also have a significant effect on the business of our portfolio companies. The exact impact of the Tax Reform Bill for future years is still unclear and difficult to quantify, but these changes could have a material adverse effect on our business, results of operations and financial condition. In addition, other changes could be enacted in the future to increase the corporate tax rate, limit further the deductibility of interest, subject carried interest to more onerous taxation or effect other changes that could have a material adverse effect on our business, results of operations and financial condition.

Congress, the Organization for Economic Co-operation and Development (“OECD”) and other government agencies in jurisdictions in which we and our affiliates invest or do business have maintained a focus on issues related to the taxation of multinational companies. The OECD, which represents a coalition of member countries, is contemplating changes to numerous long-standing tax principles through its base erosion and profit shifting (“BEPS”) project, which is focused on a number of issues, including the shifting of profits between affiliated entities in different tax jurisdictions, interest deductibility and eligibility for the benefits of double tax treaties. Several of the proposed measures are potentially relevant to some of our structures and could have an adverse tax impact on our funds, investors and/or our portfolio companies. Some member countries have been moving forward on the BEPS agenda but, because timing of implementation and the specific measures adopted will vary among participating states, significant uncertainty remains regarding the impact of BEPS proposals. If implemented, these proposals could result in a loss of tax treaty benefits and increased taxes on income from our investments.

A number of European jurisdictions have enacted taxes on financial transactions, and the European Commission has proposed legislation to harmonize these taxes under the so-called “enhanced cooperation procedure,” which provides for adoption of EU-level legislation applicable to some but not all EU Member States. These contemplated changes, if adopted by individual countries, could increase tax uncertainty and/or costs faced by us, our portfolio companies and our investors, change our business model and cause other adverse consequences. The timing or impact of these proposals is unclear at this point. In addition, tax laws, regulations and interpretations are subject to continual changes, which could adversely affect our structures or returns to our investors. For instance, various countries have adopted or proposed tax legislation that may adversely affect portfolio companies and investment structures in countries in which our funds have invested and may limit the benefits of additional investments in those countries.

In addition, legislation enacted in 2015 significantly changed the rules for U.S. federal income tax audits of partnerships. Such audits will be conducted at the partnership level, and unless a partnership qualifies for and affirmatively elects an alternative procedure, any adjustments to the amount of tax due (including interest and penalties) will be payable by the partnership. Under an elective alternative procedure, a partnership would issue information returns to persons who were partners in the audited year, who would then be required to take the adjustments into account in calculating their own tax liability, and the partnership would not be liable for the adjustments. If a partnership elects the alternative procedure for a given adjustment, the amount of taxes for which its partners would be liable would be increased by any applicable penalties and a special interest charge. There can be no assurance that we will be eligible to make such an election or that we will, in fact, make such an election for any given adjustment. If we do not or are not able to make such an election, then (a) our then-current common unitholders, in the aggregate, could indirectly bear income tax liabilities in excess of the aggregate amount of taxes that would have been due had we elected the alternative procedure, and (b) a given common unitholder may indirectly bear taxes attributable to income allocable to other common unitholders or former common unitholders, including taxes (as well as interest and penalties) with respect to periods prior to such holder’s ownership of common units. Amounts available for distribution to our common unitholders may be reduced as a result of our obligation to pay any taxes associated with an adjustment. Many issues with respect to, and the overall effect of, this legislation on us are uncertain, and common unitholders should consult their own tax advisors regarding all aspects of this legislation as it affects their particular circumstances.

Economic Income

Blackstone uses Economic Income as a key measure of value creation, a benchmark of performance and in making resource deployment and compensation decisions across its four segments. Economic Income presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages, and excludes the amortization of

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intangibles and other activity referred to as “Transaction-Related Charges”. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. For segment reporting purposes, Performance Allocations and Incentive Fees are presented together and referred to collectively as Performance Revenues or Performance Compensation. Economic Income, our principal segment measure, is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. See Note 18. “Segment Reporting” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements”.

Economic Net Income

Economic Net Income (“ENI”) represents Economic Income adjusted to include current period taxes. Current period taxes represent the total tax provision calculated under accounting principles generally accepted in the United States of America (“GAAP”) adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes and adjusted to exclude the tax impact of any divestitures. ENI is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. See “— Non-GAAP Financial Measures” for our reconciliation of Economic Net Income.

Fee Related Earnings

Blackstone uses Fee Related Earnings, which is derived from Economic Income, as a performance measure to assess its ability to generate profits from revenues that are not subject to future realization events. Fee Related Earnings represents Economic Income adjusted to exclude: (a) the income related to Performance Revenue and related Performance Compensation, (b) income earned from Blackstone’s investments in the Blackstone Funds, (c) net interest income (loss), (d) equity-based compensation, and (e) Other Revenue. Fee Related Earnings equals contractual fee revenues less (a) cash compensation expenses (which excludes Performance Compensation), and (b) Other Operating Expenses. Fee Related Earnings is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. See “— Non-GAAP Financial Measures” for our reconciliation of Fee Related Earnings.

Distributable Earnings

Distributable Earnings, which is derived from our 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. Distributable Earnings is intended to show the amount of net realized earnings without the effects of the consolidation of the Blackstone Funds. Distributable Earnings is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. See “— Non-GAAP Financial Measures” for our reconciliation of Distributable Earnings.

Distributable Earnings is the sum across all segments of: (a) Total Management, Advisory and Other Fees, Net, (b) Interest and Dividend Revenue, (c) Realized Incentive Fees, (d) Realized Performance Allocations, and (e) Realized Principal Investment Income (Loss); less (a) Compensation, excluding the expense of equity-based awards, (b) Realized Incentive Fee Compensation, (c) Realized Performance Allocations Compensation, (d) Interest Expense, (e) Other Operating Expenses, and (f) Taxes and Related Payables Under the Tax Receivable Agreement.

Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization

Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization (“Adjusted EBITDA”), is a supplemental measure and may be used to assess our ability to service our borrowings. Adjusted EBITDA represents Distributable Earnings plus the addition of (a) Interest Expense, (b) Taxes and Related Payables

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Including Payable Under Tax Receivable Agreement, and (c) Depreciation and Amortization. Adjusted EBITDA is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. See “— Non-GAAP Financial Measures” for our reconciliation of Adjusted EBITDA.

Summary Walkdown of GAAP to Non-GAAP Financial Measures

The relationship of our GAAP to non-GAAP financial measures is presented in the summary walkdown below. The summary walkdown shows how each non-GAAP financial measure is related to the other non-GAAP financial measures. This presentation is not meant to be a detailed calculation of each measure, but to show the relationship between the measures. For the calculation of each of these non-GAAP financial measures and a full reconciliation of Income Before Provision for Taxes to Distributable Earnings, please see “— Non-GAAP Financial Measures”.

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Operating Metrics

The alternative asset management business is a complex business that is primarily based on managing third party capital and does not require substantial capital investment to support rapid growth. However, there also can be volatility associated with its earnings and cash flows. Since our inception, we have developed and used various key operating metrics to assess and monitor the operating performance of our various alternative asset management businesses in order to monitor the effectiveness of our value creating strategies.

Assets Under Management. Assets Under Management refers to the assets we manage. Our Assets Under Management equals the sum of:

(a) the fair value of the investments held by our carry funds and our side-by-side and co-investment entities managed by us, plus (1) the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods, or (2) for certain credit-oriented funds the amounts available to be borrowed under asset based credit facilities,

(b) the net asset value of (1) our hedge funds, real estate debt carry funds, open ended core+ real estate fund, certain co-investments managed by us, and our Hedge Fund Solutions carry and drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, and our non-exchange traded REIT,

(c) the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts,

(d) the amount of debt and equity outstanding for our CLOs during the reinvestment period,

(e) the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period,

(f) the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies, and

(g) the fair value of common stock, preferred stock, convertible debt, or similar instruments issued by BXMT.

Our carry funds are commitment-based drawdown structured funds that do not permit investors to redeem their interests at their election. Our funds of hedge funds, hedge funds, funds structured like hedge funds and other open ended funds in our Hedge Fund Solutions, Credit and Real Estate segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually or quarterly), typically with 30 to 95 days’ notice, depending on the fund and the liquidity profile of the underlying assets. Investment advisory agreements related to certain separately managed accounts in our Hedge Fund Solutions and Credit segments, excluding our BIS separately managed accounts, may generally be terminated by an investor on 30 to 90 days’ notice.

Fee-Earning Assets Under Management. Fee-Earning Assets Under Management refers to the assets we manage on which we derive management fees and/or performance revenues. Our Fee-Earning Assets Under Management equals the sum of:

(a) for our Private Equity segment funds and Real Estate segment carry funds including certain real estate debt investment funds and certain of our Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund,

(b) for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund,

(c) the remaining invested capital or fair value of assets held in co-investment vehicles managed by us on which we receive fees,

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(d) the net asset value of our funds of hedge funds, hedge funds, open ended core+ real estate fund, certain co-investments managed by us, certain registered investment companies, our non-exchange traded REIT, and certain of our Hedge Fund Solutions drawdown funds,

(e) the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts,

(f) the net proceeds received from equity offerings and accumulated core earnings of BXMT, subject to certain adjustments,

(g) the aggregate par amount of collateral assets, including principal cash, of our CLOs, and

(h) the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies.

Each of our segments may include certain Fee-Earning Assets Under Management on which we earn performance revenues but not management fees.

Our calculations of assets under management and fee-earning assets under management may differ from the calculations of other asset managers, and as a result this measure may not be comparable to similar measures presented by other asset managers. In addition, our calculation of assets under management includes commitments to, and the fair value of, invested capital in our funds from Blackstone and our personnel, regardless of whether such commitments or invested capital are subject to fees. Our definitions of assets under management and fee-earning assets under management are not based on any definition of assets under management and fee-earning assets under management that is set forth in the agreements governing the investment funds that we manage.

For our carry funds, total assets under management includes the fair value of the investments held, whereas fee-earning assets under management includes the amount of capital commitments, the remaining amount of invested capital at cost depending on whether the investment period has or has not expired or the fee terms of the fund. As such, fee-earning assets under management may be greater than total assets under management when the aggregate fair value of the remaining investments is less than the cost of those investments.

Limited Partner Capital Invested. Limited Partner Capital Invested represents the amount of Limited Partner capital commitments which were invested by our carry and drawdown funds during each period presented, plus the capital invested through co-investments arranged by us that were made by limited partners in investments of our carry funds on which we receive management fees, Performance Allocations or Incentive Fees.

The amount of committed undrawn capital available for investment, including general partner and employee commitments, is known as dry powder and is an indicator of the capital we have available for future investments.

Consolidated Results of Operations

Following is a discussion of our consolidated results of operations for the three and six months ended June 30, 2018 and 2017. For a more detailed discussion of the factors that affected the results of our four business segments (which are presented on a basis that deconsolidates the investment funds we manage) in these periods, see “— Segment Analysis”.

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The following table sets forth information regarding our consolidated results of operations and certain key operating metrics for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended June 30,				2018 vs. 2017				Six Months Ended June 30,				2018 vs. 2017
	2018		2017		$		%		2018		2017		$		%
	(Dollars in Thousands)
Revenues
Management and Advisory Fees, Net	$	721,384	$	690,857	$	30,527		4%	$	1,450,233	$	1,336,341	$	113,892		9	%
Incentive Fees		19,378		40,303		(20,925)		-52%		31,944		86,814		(54,870)		-63	%
Investment Income (Loss)
Performance Allocations
Realized		503,376		602,662		(99,286)		-16%		773,016		1,714,567		(941,551)		-55	%
Unrealized		440,351		95,532		344,819		361%		1,068,440		(29,089)		1,097,529		N/M
Principal Investments
Realized		129,197		125,058		4,139		3%		171,342		376,402		(205,060)		-54	%
Unrealized		103,468		7,275		96,193		N/M		215,242		(32,913)		248,155		N/M
Total Investment Income		1,176,392		830,527		345,865		42%		2,228,040		2,028,967		199,073		10	%
Interest and Dividend Revenue		40,073		33,703		6,370		19%		75,458		62,198		13,260		21	%
Other		675,343		(59,664)		735,007		N/M		616,026		(63,876)		679,902		N/M
Total Revenues		2,632,570		1,535,726		1,096,844		71%		4,401,701		3,450,444		951,257		28	%
Expenses
Compensation and Benefits
Compensation		427,479		367,203		60,276		16%		816,882		718,792		98,090		14	%
Incentive Fee Compensation		9,743		21,032		(11,289)		-54%		16,405		43,497		(27,092)		-62	%
Performance Allocations Compensation
Realized		186,398		195,738		(9,340)		-5%		298,460		562,216		(263,756)		-47	%
Unrealized		189,991		86,910		103,081		119%		444,426		94,443		349,983		371	%
Total Compensation and Benefits		813,611		670,883		142,728		21%		1,576,173		1,418,948		157,225		11	%
General, Administrative and Other		145,828		119,552		26,276		22%		272,541		228,938		43,603		19	%
Interest Expense		39,320		41,089		(1,769)		-4%		77,991		81,335		(3,344)		-4	%
Fund Expenses		17,622		49,669		(32,047)		-65%		72,607		73,745		(1,138)		-2	%
Total Expenses		1,016,381		881,193		135,188		15%		1,999,312		1,802,966		196,346		11	%
Other Income
Net Gains from Fund Investment Activities		73,519		110,054		(36,535)		-33%		184,118		176,186		7,932		5	%
Income Before Provision for Taxes		1,689,708		764,587		925,121		121%		2,586,507		1,823,664		762,843		42	%
Provision for Taxes		138,731		29,608		109,123		369%		193,226		87,045		106,181		122	%
Net Income		1,550,977		734,979		815,998		111%		2,393,281		1,736,619		656,662		38	%
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		905		991		(86)		-9%		(370)		2,991		(3,361)		N/M
Net Income Attributable to Non-Controlling Interests in Consolidated Entities		129,078		112,944		16,134		14%		284,577		251,629		32,948		13	%
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings		678,952		283,637		395,315		139%		999,160		692,683		306,477		44	%
Net Income Attributable to The Blackstone Group L.P.	$	742,042	$	337,407	$	404,635		120%	$	1,109,914	$	789,316	$	320,598		41	%

N/M    Not meaningful.

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Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

Revenues

Revenues were $2.6 billion for the three months ended June 30, 2018, an increase of $1.1 billion compared to $1.5 billion for the three months ended June 30, 2017. The increase in Revenues was primarily attributable to increases of $735.0 million in Other Revenue, $345.9 million in Investment Income and $30.5 million in Management and Advisory Fees, Net, partially offset by a decrease of $20.9 million in Incentive Fees.

The increase in Other Revenue was primarily due to the proceeds received from the conclusion of our sub-advisory relationship with FS Investments’ funds and a foreign exchange gain on our euro denominated bonds.

The increase in Investment Income was primarily attributable to increase in our Private Equity and Credit segments of $539.8 million and $101.3 million, respectively, partially offset by a decrease in our Real Estate segment of $303.0 million. The increase in our Private Equity segment was primarily due to corporate private equity. Corporate private equity carrying value increased 9.5% in the three months ended June 30, 2018 compared to 2.8% in the three months ended June 30, 2017. The increase in our Credit segment was primarily attributable to higher returns in our performing credit strategies, and distressed strategies. The decrease in our Real Estate segment was primarily attributable to lower net appreciation of investment holdings in our BREP opportunistic funds compared to the comparable quarter in 2017. The carrying value of investments for our BREP opportunistic funds increased 2.7% compared to 5.4% in the comparable quarter in 2017.

The increase in Management and Advisory Fees, Net was primarily due to increases in our Real Estate and Private Equity segments of $30.8 million and $12.7 million, respectively, partially offset by a decrease in our Credit segment of $17.4 million. The increase in our Real Estate segment was primarily due to AUM growth in our core+ real estate funds and the launch of BREP Asia II in the fourth quarter of 2017. The increase in our Private Equity segment was primarily attributable to the launch of the third vintage of the Tactical Opportunities program. The decrease in our Credit segment was primarily attributable to the conclusion of our sub-advisory relationship with FS Investments, partially offset by the acquisition of Harvest.

The decrease in Incentive Fees was primarily attributable to a decrease in our Credit segment of $27.7 million, primarily due to the conclusion of our sub-advisory relationship with FS Investments.

Expenses

Expenses were $1.0 billion for the three months ended June 30, 2018, an increase of $135.2 million compared to $881.2 million for the three months ended June 30, 2017. The increase was primarily attributable to increases in Performance Allocations Compensation and Compensation, partially offset by a decrease in Fund Expenses. The increase of $93.7 million in Performance Allocations Compensation was primarily due to the increase in Investment Income. The increase of $60.3 million in Compensation was due to the increase in Management and Advisory Fees, Net, on which a portion of compensation is based, as well as investment in initiatives. The decrease of $32.0 million in Fund Expenses was due to a decrease of $28.9 million in our Credit segment primarily from the deconsolidation of certain CLO and other vehicles in 2018.

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

Revenues

Revenues were $4.4 billion for the six months ended June 30, 2018, an increase of $951.3 million compared to $3.5 billion for the six months ended June 30, 2017. The increase in Revenues was primarily attributable to increases of $679.9 million in Other Revenue, $199.1 million in Investment Income and $113.9 million in Management and Advisory Fees, Net, partially offset by a decrease of $54.9 million in Incentive Fees.

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The increase in Other Revenue was primarily due to the proceeds received from the conclusion of our sub-advisory relationship with FS Investments’ funds and a foreign exchange gain on our euro denominated bonds.

The increase in Investment Income was primarily attributable to increases in our Private Equity and Credit segments of $599.0 million and $72.3 million, respectively, partially offset by decreases in our Real Estate and Hedge Fund Solutions segments of $455.4 million and $42.8 million, respectively. The increase in our Private Equity segment was due to corporate private equity. Corporate private equity carrying value increased 16.4% in the six months ended June 30, 2018 compared to 9.3% in the six months ended June 30, 2017. The increase in our Credit segment was primarily attributable to higher returns in our performing credit strategies, and distressed strategies. The decrease in our Real Estate segment was primarily attributable to lower net appreciation of investment holdings in our BREP opportunistic funds compared to the comparable quarter in 2017. The carrying value of investments for our BREP opportunistic funds increased 6.0% compared to 10.5% in the comparable quarter in 2017. The decrease in our Hedge Fund Solutions segment was due to lower returns across the segment compared to the second quarter of 2017.

The increase in Management and Advisory Fees, Net was primarily due to increases in our Real Estate, Credit and Private Equity segments of $63.2 million, $25.7 million and $22.9 million, respectively. The increase in our Real Estate segment was primarily due to AUM growth in our core+ real estate funds and the launch of BREP Europe V in the fourth quarter of 2016 (and the corresponding expiration of its fee holiday in the second quarter of 2017) and the launch of BREP Asia II in the fourth quarter of 2017. The increase in our Credit segment was primarily attributable to the acquisition of Harvest and inclusion of our insurance solutions initiative, partially offset by the conclusion of our sub-advisory relationship with FS Investments. The increase in our Private Equity segment was primarily attributable to the launch of the third vintage of the Tactical Opportunities program and BCP Asia.    

The decrease in Incentive Fees was primarily attributable to a decrease in our Credit segment of $57.2 million. The decrease in our Credit segment was primarily attributable to the conclusion of our sub-advisory relationship with FS Investments.

Expenses    

Expenses were $2.0 billion for the six months ended June 30, 2018, an increase of $196.3 million compared to $1.8 billion for the six months ended June 30, 2017. The increase was primarily attributable to increases in Compensation and Performance Allocations Compensation, partially offset by a decrease in Incentive Fee Compensation. The increase of $98.1 million in Compensation was due to the increase in Management and Advisory Fees, Net, on which a portion of compensation is based, as well as investment in initiatives. The increase of $86.2 million in Performance Allocations Compensation was primarily due to the increase in Investment Income. The decrease of $27.1 million in Incentive Fee Compensation was primarily due to the decrease in Realized Incentive Fees in our Credit segment, on which a portion of Incentive Fee Compensation is based.

Other Income

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

Other Income was $73.5 million for the three months ended June 30, 2018, a decrease of $36.5 million compared to $110.1 million for the three months ended June 30, 2017. The decrease in Other Income was due to a decrease in Net Gains from Fund Investment Activities. The decrease in Other Income – Net Gain from Fund Investment Activities was principally driven by a decrease in our Credit segment of $42.2 million primarily from the deconsolidation of certain CLOs and other vehicles in 2018.

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

Other Income was $184.1 million for the six months ended June 30, 2018, an increase of $7.9 million compared to $176.2 million for the six months ended June 30, 2017. The increase in Other Income was due to an

83

increase in Net Gains from Fund Investment Activities. The increase in Other Income – Net Gain from Fund Investment Activities was principally driven by increases of $20.6 million in our Private Equity segment and $10.0 million in our Credit Segment, partially offset by a decrease of $16.8 million in our Real Estate segment. The increase in our Private Equity segment was primarily the result of a year over year net increase in the appreciation of investments. The increase in our Credit segment was primarily driven by newly launched CLOs and certain long only strategies. The decrease in our Real Estate segment was primarily the result of a year over year net decrease in the appreciation of investments across the Real Estate funds.

Provision for Taxes

The following table summarizes Blackstone’s tax position:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Income Before Provision for Taxes	$	1,689,708		$	764,587		$	2,586,507		$	1,823,664
Provision for Taxes	$	138,731		$	29,608		$	193,226		$	87,045
Effective Income Tax Rate		8.2	%		3.9	%		7.5	%		4.8	%

The following table reconciles the effective income tax rate to the U.S. federal statutory tax rate:

	Three Months Ended June 30,						2018 vs.			Six Months Ended June 30,						2018 vs.
	2018			2017			2017			2018			2017			2017
Statutory U.S. Federal Income Tax Rate		21.0	%		35.0	%		-14.0	%		21.0	%		35.0	%		-14.0	%
Income Passed Through to Common Unitholders and Non-Controlling Interest Holders (a)		-14.7	%		-29.0	%		14.3	%		-15.3	%		-29.7	%		14.4	%
State and Local Income Taxes		2.1	%		0.8	%		1.3	%		1.9	%		1.0	%		0.9	%
Other		-0.2	%		-2.9	%		2.7	%		-0.1	%		-1.5	%		1.4	%
Effective Income Tax Rate		8.2	%		3.9	%		4.3	%		7.5	%		4.8	%		2.7	%

(a) Includes income that is not taxable to the Partnership and its subsidiaries. Such income is directly taxable to the Partnership’s unitholders and the non-controlling interest holders.

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

Blackstone’s Provision for Taxes for the three months ended June 30, 2018 and 2017 was $138.7 million and $29.6 million, respectively. This resulted in an effective tax rate of 8.2% and 3.9%, respectively.

The Tax Reform Bill enacted in late 2017 reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The decrease in the effective tax rate from the rate reduction was offset by the corresponding reduction in the benefit for the exclusion of income passed through to common unitholders and non-controlling interest holders. In addition, the reduction in the federal corporate income tax rate reduced the benefit for the income tax rate differential between the U.S. and foreign jurisdictions on foreign income and the federal income tax benefit for state income taxes resulting in an overall increase in the effective tax rate for the three months ended June 30, 2018 compared to the three months ended June 30, 2017.

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

Blackstone’s Provision for Taxes for the six months ended June 30, 2018 and 2017 was $193.2 million and $87.0 million, respectively. This resulted in an effective tax rate of 7.5% and 4.8%, respectively.

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The Tax Reform Bill enacted in late 2017 reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The decrease in the effective tax rate from the rate reduction was offset by the corresponding reduction in the benefit for the exclusion of income passed through to common unitholders and non-controlling interest holders. In addition, the reduction in the federal corporate income tax rate reduced the benefit for the income tax rate differential between the U.S. and foreign jurisdictions on foreign income and the federal income tax benefit for state income taxes resulting in an overall increase in the effective tax rate for the six months ended June 30, 2018 compared to the six months ended June 30, 2017.

All factors are expected to impact the effective tax rate for future years.

Additional information regarding our income taxes can be found in Note 13. “Income Taxes” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Non-Controlling Interests in Consolidated Entities

The Net Income Attributable to Redeemable Non-Controlling Interests in Consolidated Entities and Net Income Attributable to Non-Controlling Interests in Consolidated Entities is attributable to the consolidated Blackstone Funds. The amounts of these items vary directly with the performance of the consolidated Blackstone Funds and largely eliminate the amount of Other Income — Net Gains from Fund Investment Activities from the Net Income Attributable to The Blackstone Group L.P.

Net Income Attributable to Non-Controlling Interests in Blackstone Holdings is derived from the Income Before Provision for Taxes, excluding the Net Gains from Fund Investment Activities and the percentage allocation of the income between Blackstone Holdings and The Blackstone Group L.P. after considering any contractual arrangements that govern the allocation of income such as fees allocable to The Blackstone Group L.P.

For the three months ended June 30, 2018 and 2017, the Net Income Before Taxes allocated to Blackstone Holdings was 43.9% and 45.0%, respectively. For the six months ended June 30, 2018 and 2017, the net income before taxes allocated to Blackstone Holdings was 44.1% and 45.2%, respectively. The decreases of 1.1% in the three month period and 1.1% in the six month period were primarily due to conversions of Blackstone Holdings Partnership Units to Blackstone common units and the vesting of common units.

The Other Income — Reduction of Tax Receivable Agreement Liability was entirely allocated to The Blackstone Group L.P.

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Operating Metrics

The following graphs and tables summarize the Fee-Earning Assets Under Management by Segment and Total Assets Under Management by Segment, followed by a rollforward of activity for the three and six months ended June 30, 2018 and 2017. For a description of how Assets Under Management and Fee-Earning Assets Under Management are determined, please see “— Key Financial Measures and Indicators — Operating Metrics — Assets Under Management and Fee-Earning Assets Under Management”:

Note: Totals may not add due to rounding.

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	Three Months Ended
	June 30, 2018															June 30, 2017
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total			Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total
	(Dollars in Thousands)
Fee-Earning Assets Under Management
Balance, Beginning of Period	$	72,398,415		$	87,284,578		$	73,570,498		$	111,397,306		$	344,650,797		$	68,227,286		$	71,904,741		$	68,812,528		$	71,270,996		$	280,215,551
Inflows, including Commitments (a)		7,057,401			5,937,991			2,379,116			5,579,039			20,953,547			2,219,991			3,376,228			1,805,294			4,946,453			12,347,966
Outflows, including Distributions (b)		(617,880	)		(1,381,867	)		(4,355,699	)		(21,548,439	)		(27,903,885	)		(1,114,755	)		(98,811	)		(3,330,068	)		(929,653	)		(5,473,287	)
Realizations (c)		(1,000,261	)		(2,459,391	)		(100,122	)		(1,414,399	)		(4,974,173	)		(1,400,348	)		(2,371,349	)		(176,568	)		(3,276,948	)		(7,225,213	)
Net Inflows (Outflows)		5,439,260			2,096,733			(2,076,705	)		(17,383,799	)		(11,924,511	)		(295,112	)		906,068			(1,701,342	)		739,852			(350,534	)
Market Appreciation (Depreciation) (d)(f)		208,022			(604,810	)		395,497			253,150			251,859			97,496			899,434			713,278			359,286			2,069,494
Balance, End of Period	$	78,045,697		$	88,776,501		$	71,889,290		$	94,266,657		$	332,978,145		$	68,029,670		$	73,710,243		$	67,824,464		$	72,370,134		$	281,934,511
Increase (Decrease)	$	5,647,282		$	1,491,923		$	(1,681,208	)	$	(17,130,649	)	$	(11,672,652	)	$	(197,616	)	$	1,805,502		$	(988,064	)	$	1,099,138		$	1,718,960
Increase (Decrease)		8	%		2	%		-2	%		-15	%		-3	%		-0	%		3	%		-1	%		2	%		1	%
	Six Months Ended
	June 30, 2018															June 30, 2017
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total			Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total
	(Dollars in Thousands)
Fee-Earning Assets Under Management
Balance, Beginning of Period	$	70,140,883		$	83,984,824		$	69,914,061		$	111,304,230		$	335,343,998		$	69,110,457		$	72,030,054		$	66,987,553		$	68,964,608		$	277,092,672
Inflows, including Commitments (a)		10,461,715			9,488,268			6,195,502			11,131,172			37,276,657			3,329,520			5,501,521			4,988,598			10,392,598			24,212,237
Outflows, including Distributions (b)		(1,087,275	)		(1,592,458	)		(5,258,000	)		(23,593,109	)		(31,530,842	)		(1,119,448	)		(195,323	)		(5,599,328	)		(1,740,847	)		(8,654,946	)
Realizations (c)		(1,736,535	)		(3,953,617	)		(155,877	)		(3,408,975	)		(9,255,004	)		(3,563,368	)		(5,151,011	)		(623,692	)		(6,073,764	)		(15,411,835	)
Net Inflows (Outflows)		7,637,905			3,942,193			781,625			(15,870,912	)		(3,509,189	)		(1,353,296	)		155,187			(1,234,422	)		2,577,987			145,456
Market Appreciation (Depreciation) (d)(g)		266,909			849,484			1,193,604			(1,166,661	)		1,143,336			272,509			1,525,002			2,071,333			827,539			4,696,383
Balance, End of Period	$	78,045,697		$	88,776,501		$	71,889,290		$	94,266,657		$	332,978,145		$	68,029,670		$	73,710,243		$	67,824,464		$	72,370,134		$	281,934,511
Increase (Decrease)	$	7,904,814		$	4,791,677		$	1,975,229		$	(17,037,573	)	$	(2,365,853	)	$	(1,080,787	)	$	1,680,189		$	836,911		$	3,405,526		$	4,841,839
Increase (Decrease)		11	%		6	%		3	%		-15	%		-1	%		-2	%		2	%		1	%		5	%		2	%
Annualized Base Management Fee Rate (e)		1.00	%		1.12	%		0.72	%		0.50	%		0.83	%		1.04	%		1.24	%		0.76	%		0.76	%		0.95	%

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	Three Months Ended
	June 30, 2018															June 30, 2017
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total			Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total
	(Dollars in Thousands)
Total Assets Under Management
Balance, Beginning of Period	$	111,414,214		$	119,575,884		$	78,657,551		$	139,966,177		$	449,613,826		$	99,707,057		$	102,070,930		$	73,303,381		$	93,115,549		$	368,196,917
Inflows, including Commitments (a)		6,282,722			5,124,391			2,995,023			5,687,114			20,089,250			1,731,553			3,199,773			1,968,985			5,171,173			12,071,484
Outflows, including Distributions (b)		(401,296	)		(1,002,502	)		(4,544,409	)		(21,647,826	)		(27,596,033	)		(287,123	)		(867,119	)		(3,360,854	)		(1,135,777	)		(5,650,873	)
Realizations (c)		(2,058,727	)		(4,326,910	)		(126,015	)		(1,791,552	)		(8,303,204	)		(2,795,612	)		(4,564,380	)		(185,929	)		(3,550,374	)		(11,096,295	)
Net Inflows (Outflows)		3,822,699			(205,021	)		(1,675,401	)		(17,752,264	)		(15,809,987	)		(1,351,182	)		(2,231,726	)		(1,577,798	)		485,022			(4,675,684	)
Market Appreciation (d)(h)		4,287,605			29,110			420,928			845,174			5,582,817			1,663,841			4,195,083			750,861			925,263			7,535,048
Balance, End of Period	$	119,524,518		$	119,399,973		$	77,403,078		$	123,059,087		$	439,386,656		$	100,019,716		$	104,034,287		$	72,476,444		$	94,525,834		$	371,056,281
Increase (Decrease)	$	8,110,304		$	(175,911	)	$	(1,254,473	)	$	(16,907,090	)	$	(10,227,170	)	$	312,659		$	1,963,357		$	(826,937	)	$	1,410,285		$	2,859,364
Increase (Decrease)		7	%		-0	%		-2	%		-12	%		-2	%		0	%		2	%		-1	%		2	%		1	%
	Six Months Ended
	June 30, 2018															June 30, 2017
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total			Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total
	(Dollars in Thousands)
Total Assets Under Management
Balance, Beginning of Period	$	105,560,576		$	115,340,363		$	75,090,834		$	138,136,470		$	434,128,243		$	100,189,994		$	101,963,652		$	71,119,718		$	93,280,101		$	366,553,465
Inflows, including Commitments (a)		9,817,185			8,747,267			6,935,637			12,768,519			38,268,608			4,355,225			6,529,257			5,609,665			9,534,387			26,028,534
Outflows, including Distributions (b)		(779,956	)		(1,150,663	)		(5,671,098	)		(23,608,043	)		(31,209,760	)		(509,999	)		(1,077,244	)		(5,862,592	)		(3,222,969	)		(10,672,804	)
Realizations (c)		(3,100,511	)		(6,993,625	)		(182,087	)		(4,283,836	)		(14,560,059	)		(8,962,912	)		(11,249,184	)		(689,120	)		(6,812,909	)		(27,714,125	)
Net Inflows (Outflows)		5,936,718			602,979			1,082,452			(15,123,360	)		(7,501,211	)		(5,117,686	)		(5,797,171	)		(942,047	)		(501,491	)		(12,358,395	)
Market Appreciation (d)(i)		8,027,224			3,456,631			1,229,792			45,977			12,759,624			4,947,408			7,867,806			2,298,773			1,747,224			16,861,211
Balance, End of Period	$	119,524,518		$	119,399,973		$	77,403,078		$	123,059,087		$	439,386,656		$	100,019,716		$	104,034,287		$	72,476,444		$	94,525,834		$	371,056,281
Increase (Decrease)	$	13,963,942		$	4,059,610		$	2,312,244		$	(15,077,383	)	$	5,258,413		$	(170,278	)	$	2,070,635		$	1,356,726		$	1,245,733		$	4,502,816
Increase (Decrease)		13	%		4	%		3	%		-11	%		1	%		-0	%		2	%		2	%		1	%		1	%

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(a) Inflows represent contributions in our hedge funds and closed-end mutual funds, increases in available capital for our carry funds (capital raises, recallable capital and increased side-by-side commitments) and CLOs, increases in the capital we manage pursuant to separately managed account programs, allocations from multi-asset products to other strategies and acquisitions.

(b) Outflows represent redemptions in our hedge funds and closed-end mutual funds, client withdrawals from our separately managed account programs and decreases in available capital for our carry funds (expired capital, expense drawdowns and decreased side-by-side commitments).

(c) Realizations represent realizations from the disposition of assets or capital returned to investors from CLOs.

(d) Market appreciation (depreciation) includes realized and unrealized gains (losses) on portfolio investments and the impact of foreign exchange rate fluctuations.

(e) Represents the annualized current quarter’s Base Management Fee divided by period end Fee-Earning Assets Under Management.

(f) For the three months ended June 30, 2018, the impact to Fee-Earning Assets Under Management due to foreign exchange rate fluctuations was $(1.3) billion, $(697.4) million and $(2.0) billion for the Real Estate, Credit and Total segments, respectively. For the three months ended June 30, 2017, such impact was $(1.0) million, $544.1 million, $673.7 million and $1.2 billion for the Private Equity, Real Estate, Credit and Total segments, respectively.

(g) For the six months ended June 30, 2018, the impact to Fee-Earning Assets Under Management due to foreign exchange rate fluctuations was $(711.4) million, $(300.5) million and $(1.0) billion for the Real Estate, Credit and Total segments, respectively. For the six months ended June 30, 2017, such impact was $1.2 million, $819.6 million, $834.5 million and $1.7 billion for the Private Equity, Real Estate, Credit and Total segments, respectively.

(h) For the three months ended June 30, 2018, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(743.3) million, $(2.7) billion, $(882.7) million and $(4.3) billion for the Private Equity, Real Estate, Credit and Total segments, respectively. For the three months ended June 30, 2017, such impact was $363.9 million, $1.2 billion, $866.6 million and $2.4 billion for the Private Equity, Real Estate, Credit and Total segments, respectively.

(i) For the six months ended June 30, 2018, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(270.2) million, $(1.5) billion, $(439.9) million and $(2.2) billion for the Private Equity, Real Estate, Credit and Total segments, respectively. For the six months ended June 30, 2017, such impact was $606.0 million, $1.7 billion, $1.1 billion and $3.4 billion for the Private Equity, Real Estate, Credit and Total segments, respectively.

Fee-Earning Assets Under Management

Fee-Earning Assets Under Management were $333.0 billion at June 30, 2018, a decrease of $11.7 billion, compared to $344.7 billion at March 31, 2018. The net decrease was due to:

• Outflows of $27.9 billion primarily attributable to:

• $21.5 billion in our Credit segment driven by the conclusion of our sub-advisory relationship with FS Investment. The remaining outflows were mainly related to certain long only and MLP strategies,

• $4.4 billion in our Hedge Fund Solutions segment, reflecting investors’ liquidity needs and certain strategic shifts in their programs, primarily driven by outflows of $2.2 billion from customized solutions, $1.4 billion from commingled products and $675.1 million from individual investor and specialized solutions, and

• $1.4 billion in our Real Estate segment primarily driven by $787.0 million of uninvested capital at the close of a BPP separately managed account’s investment period and $513.5 million of redemptions from the BREDS liquids funds.

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• Realizations of $5.0 billion primarily driven by:

• $2.5 billion in our Real Estate segment driven by $1.1 billion from BREP opportunistic funds and co-investment, $1.0 billion from BREDS and $360.5 million from core+ real estate funds,

• $1.4 billion in our Credit segment driven by $574.7 million of capital returned to investors from CLOs that are post their re-investment periods, $376.7 million of realizations from distressed strategies, and $268.1 million of realizations from mezzanine funds, and

• $1.0 billion in our Private Equity segment driven by $465.7 million from Tactical Opportunities, $371.7 million from Strategic Partners and $162.8 million from corporate private equity.

Offsetting these decreases were:

• Inflows of $21.0 billion related to:

• $7.1 billion in our Private Equity segment driven by $4.5 billion from BIP, $1.2 billion from Tactical Opportunities, $742.5 million from core private equity, $616.8 million from corporate private equity and $140.0 million from Strategic Partners,

• $5.6 billion in our Credit segment driven by $4.4 billion from certain long only and MLP strategies, $2.1 billion of capital raised from new CLO launches and CLO refinancings, $912.6 million from our distressed strategies, $484.0 million from BIS and $424.1 million from mezzanine funds, partially offset by $2.8 billion of allocations from insurance multi-asset products to other strategies,

• $5.9 billion in our Real Estate segment driven by $2.7 billion from BREDS, $1.5 billion from BPP U.S. and co-investment, $749.7 million from BREIT, $624.4 million from BPP Europe and co-investment and $271.6 million from BREP opportunistic funds and co-investment, and

• $2.4 billion in our Hedge Fund Solutions segment driven by growth of $1.2 billion in customized solutions, $814.6 million in individual investor and specialized solutions and $398.3 million in commingled products.

• Market appreciation of $251.9 million due to:

• $395.5 million appreciation in our Hedge Fund Solutions segment driven by returns from BAAM’s Principal Solutions Composite of 1.5% gross (1.3% net),

• $253.2 million appreciation in our Credit segment driven by $950.5 million of appreciation from market activity ($1.4 billion from long only and MLP strategies, offset by $411.4 million from BIS) and foreign exchange depreciation of $697.4 million mainly related to CLOs and mezzanine funds,

• $208.0 million appreciation in our Private Equity segment driven by Strategic Partners, and

• Partially offset by $604.8 million depreciation in our Real Estate segment driven by $542.6 million of depreciation from BREP opportunistic funds and co-investment, all of which was from foreign exchange depreciation and $180.5 million of depreciation from core+ real estate funds ($801.4 million from foreign exchange depreciation offset by $620.9 million from market appreciation).

BAAM had net inflows of $2.3 billion from July 1 through August 1, 2018.

Fee-Earning Assets Under Management were $333.0 billion at June 30, 2018, a decrease of $2.4 billion, compared to $335.3 billion at December 31, 2017. The net decrease was due to:

• Outflows of $31.5 billion primarily attributable to:

• $23.6 billion in our Credit segment driven by the conclusion of our sub-advisory relationship with FS Investment. The remaining outflows were mainly related to certain long only and MLP strategies,

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• $5.3 billion in our Hedge Fund Solutions segment, reflecting investors’ liquidity needs and certain strategic shifts in their programs, driven by outflows of $2.5 billion from customized solutions, $1.5 billion from commingled products and $1.3 billion from individual investor and specialized solutions,

• $1.6 billion in our Real Estate segment primarily driven by $787.0 million of uninvested capital at the close of a BPP separately managed account’s investment period and $689.9 million of redemptions from the BREDS liquids funds, and

• $1.1 billion in our Private Equity segment driven by reductions of $575.1 million from Tactical Opportunities and $512.2 million from multi-asset products.

• Realizations of $9.3 billion primarily driven by:

• $4.0 billion in our Real Estate segment driven by $1.8 billion from BREP opportunistic funds and co-investment, $1.5 billion from BREDS and $582.4 million from core+ real estate funds,

• $3.4 billion in our Credit segment driven by $1.4 billion of realizations from distressed strategies, $1.1 billion of capital returned to investors from CLOs that are post their re-investment periods and $495.6 million of realizations from mezzanine funds, and

• $1.7 billion in our Private Equity segment driven by $842.6 million from Strategic Partners, $642.3 million from Tactical Opportunities and $251.6 million from corporate private equity.

Offsetting these decreases were:

• Inflows of $37.3 billion related to:

• $11.1 billion in our Credit segment driven by $6.2 billion from certain long only and MLP strategies, $3.8 billion of capital raised from new CLO launches and CLO refinancings, $2.0 billion from BIS and $1.5 billion from our distressed strategies, partially offset by $3.1 billion of allocation from insurance multi-asset products to other strategies,

• $10.5 billion in our Private Equity segment driven by $4.5 billion from BIP, $2.9 billion from Tactical Opportunities, $916.1 million from multi-asset products, $846.8 million from corporate private equity, $742.5 million from core private equity and $574.8 million from Strategic Partners,

• $9.5 billion in our Real Estate segment driven by $3.1 billion from BREDS, $1.8 billion from BPP U.S. and co-investment, $1.6 billion from BREP opportunistic funds and co-investment, $1.4 billion from BPP Europe and co-investment and $1.4 billion from BREIT, and

• $6.2 billion in our Hedge Fund Solutions segment driven by growth of $3.0 billion in customized solutions, $2.4 billion in individual investor and specialized solutions and $822.1 million in commingled products.

• Market appreciation of $1.1 billion due to:

• $1.2 billion in our Hedge Fund Solutions segment driven by returns from BAAM’s Principal Solutions Composite of 2.7% gross (2.3% net),

• $849.5 million appreciation in our Real Estate segment primarily driven by $910.1 million of appreciation from core+ real estate funds ($1.4 billion from market appreciation offset by $452.9 million from foreign exchange depreciation) and $217.2 million of market appreciation from BREDS, offset by $258.5 million of foreign exchange depreciation from BREP opportunistic funds and co-investment, and

• Partially offset by $1.2 billion depreciation in our Credit segment driven by $966.2 million of market activity depreciation from BIS and $300.5 million of foreign exchange depreciation, mainly related to CLOs.

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Total Assets Under Management

Total Assets Under Management were $439.4 billion at June 30, 2018, a decrease of $10.2 billion, compared to $449.6 billion at March 31, 2018. The net decrease was due to:

• Outflows of $27.6 billion primarily attributable to:

• $21.6 billion in our Credit segment driven by the conclusion of our sub-advisory relationship with FS Investment. The remaining outflows were mainly related to certain long only and MLP strategies,

• $4.5 billion in our Hedge Fund Solutions segment, reflecting investors’ liquidity needs and certain strategic shifts in their programs, driven by outflows of $2.3 billion from customized solutions, $1.5 billion from commingled products and $779.0 million from individual investor and specialized solutions, and

• $1.0 billion in our Real Estate segment driven by redemptions from the BREDS liquid funds and a release of reserves from BREDS drawdown funds.

• Realizations of $8.3 billion primarily driven by:

• $4.3 billion in our Real Estate segment driven by $3.2 billion from BREP opportunistic funds and co-investment, $693.8 million from BREDS and $397.9 million from core+ real estate funds,

• $2.1 billion in our Private Equity segment driven by continued disposition activity across the segment, mainly related to $862.5 million from corporate private equity, $706.4 million from Tactical Opportunities and $489.8 million from Strategic Partners, and

• $1.8 billion in our Credit segment driven by $574.7 million from capital returned to investors from CLOs that are post their re-investment periods, $554.7 million from our distressed strategies and $465.6 million from our mezzanine strategies.

Total Assets Under Management realizations in our Private Equity and Real Estate segments generally represent the total proceeds and typically exceed the Fee-Earning Assets Under Management realizations which generally represent only the invested capital.

Offsetting these decreases were:

• Inflows of $20.0 billion related to:

• $6.3 billion in our Private Equity segment driven by $4.6 billion from BIP, $1.0 billion from Tactical Opportunities, $569.2 million from corporate private equity and $128.5 million from Strategic Partners,

• $5.7 billion in our Credit segment driven by $4.6 billion from certain long only and MLP strategies, $2.1 billion of capital raised from CLO launches and CLO refinancings, $982.4 million from distressed strategies, $484.2 million from BIS, $301.5 million from mezzanine funds, partially offset by $2.8 billion of allocations from insurance multi-asset products to other strategies,

• $5.1 billion in our Real Estate segment driven by $2.1 billion from BREDS, $1.5 billion from BPP U.S. and co-investment, $749.7 million from BREIT, $331.1 million from BPP Europe and co-investment and $200.3 million from the close of the second Asian opportunistic fund, and

• $3.0 billion in our Hedge Fund Solutions segment driven by growth of $1.4 billion in individual investor and specialized solutions, $1.2 billion in customized solutions and $423.0 million in commingled products.

• Market appreciation of $5.6 billion due to:

• $4.3 billion in our Private Equity segment driven by carrying value increase in corporate private equity, Strategic Partners and Tactical Opportunities of 9.5%, 5.8% and 2.1%, respectively, which included $743.3 million of foreign exchange depreciation across the segment,

• $845.2 million in our Credit segment driven by $1.2 billion of appreciation from certain long only and MLP strategies ($1.4 billion from market appreciation offset by $235.0 million from foreign

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exchange depreciation), offset by $411.4 million of depreciation from BIS, all of which was from market activity, and

• $420.9 million in our Hedge Fund Solutions segment driven by reasons noted above in Fee-Earning Assets Under Management.

Total Assets Under Management market appreciation (depreciation) in our Private Equity and Real Estate segments generally represents the change in fair value of the investments held and typically exceeds the Fee-Earning Assets Under Management market appreciation (depreciation).    

Total Assets Under Management were $439.4 billion at June 30, 2018, an increase of $5.3 billion, compared to $434.1 billion at December 31, 2017. The net increase was due to:

• Inflows of $38.3 billion related to:

• $12.8 billion in our Credit segment driven by $6.5 billion from certain long only and MLP strategies, $3.9 billion of capital raised from CLO launches and CLO refinancings, $3.0 billion from distressed strategies, $2.0 billion from BIS and $358.7 million from mezzanine funds, partially offset by $3.1 billion of allocations from insurance multi-asset products to other strategies,

• $9.8 billion in our Private Equity segment driven by $4.6 billion from BIP, $2.9 billion from Tactical Opportunities, $967.4 million from corporate private equity, $914.5 million from Strategic Partners and $415.6 million from multi-asset products,

• $8.7 billion in our Real Estate segment driven by $2.5 billion from BREDS, $2.0 billion from BPP U.S. and co-investment, $1.4 billion from BREIT, $1.2 billion from the close of the second Asian opportunistic fund and $1.0 billion from BPP Europe and co-investment, and

• $6.9 billion in our Hedge Fund Solutions segment driven by growth of $3.1 billion in individual investor and specialized solutions, $3.0 billion in customized solutions and $853.4 million in commingled products.

• Market appreciation of $12.8 billion due to:

• $8.0 billion in our Private Equity segment driven by carrying value increase in corporate private equity, Strategic Partners and Tactical Opportunities of 16.4%, 13.5% and 7.3%, respectively, which included $270.2 million of foreign exchange depreciation across the segment,

• $3.5 billion in our Real Estate segment driven by carrying value increases in our opportunistic and core+ real estate funds of 6.0% and 5.7%, respectively, which includes $1.5 billion of foreign exchange depreciation across the segment, and

• $1.2 billion in our Hedge Fund Solutions segment driven by reasons noted above in Fee-Earning Assets Under Management.

Offsetting these increases were:

• Outflows of $31.2 billion primarily attributable to:

• $23.6 billion in our Credit segment driven by the conclusion of our sub-advisory relationship with FS Investment. The remaining outflows were mainly related to certain long only and MLP strategies,

• $5.7 billion in our Hedge Fund Solutions segment, reflecting investors’ liquidity needs and certain strategic shifts in their programs, driven by outflows of $2.5 billion from customized solutions, $1.6 billion from individual investors and specialized solutions and $1.5 billion from commingled products, and

• $1.2 billion in our Real Estate segment driven by redemptions from the BREDS liquids funds and a release of reserves from BREDS drawdown funds.

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• Realizations of $14.6 billion primarily driven by:

• $7.0 billion in our Real Estate segment driven by $5.2 billion from BREP opportunistic funds and co-investment, $1.2 billion from BREDS and $654.4 million from core+ real estate funds,

• $4.3 billion in our Credit segment driven by $1.9 billion from our distressed strategies, $1.1 billion from capital returned to investors from CLOs that are post their re-investment periods and $846.5 million from our mezzanine strategies, and

• $3.1 billion in our Private Equity segment driven by continued disposition activity across the segment, mainly related to $1.2 billion from corporate private equity, $955.6 million from Strategic Partners and $927.9 million from Tactical Opportunities.

Limited Partner Capital Invested

The following presents the limited partner capital invested for each of the respective three month periods:

Note: Totals may not add due to rounding.

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2018		2017		2018
	(Dollars in Thousands)
Limited Partner Capital Invested
Private Equity	$	3,846,841	$	2,356,960	$	8,583,229	$	5,658,909
Real Estate		2,371,918		4,538,154		4,962,337		8,792,355
Hedge Fund Solutions (a)		89,985		112,753		211,842		868,571
Credit		1,490,880		1,018,831		3,752,146		2,030,192
	$	7,799,624	$	8,026,698	$	17,509,554	$	17,350,027

(a) Limited Partner Capital Invested for the Hedge Fund Solutions segment has been updated for an adjustment applicable to the three months ended March 31, 2017.

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The following presents the dry powder as of quarter end of each period:

Note: Totals may not add due to rounding.

(a) Represents illiquid drawdown funds only; excludes marketable vehicles; includes both Fee-Earning (third party) capital and general partner and employee commitments that do not earn fees. Amounts are reduced by outstanding commitments to invest, but for which capital has not been called.

	June 30,
	2017		2018
	(Dollars in Thousands)
Dry Powder Available for Investment
Private Equity	$	37,503,446	$	36,425,713
Real Estate		31,678,807		26,545,329
Hedge Fund Solutions		3,838,039		3,501,849
Credit		16,995,736		21,844,231
	$	90,016,028	$	88,317,122

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Net Accrued Performance Revenues

The following table presents the Accrued Performance Revenues, net of performance compensation, of the Blackstone Funds as of June 30, 2018 and 2017. Net Accrued Performance Revenues presented do not include clawback amounts, if any, which are disclosed in Note 17. “Commitments and Contingencies — Contingencies —Contingent Obligations (Clawback)” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing. The Net Accrued Performance Revenues as of each reporting date is principally unrealized; if realized, such amount can be a significant component of Distributable Earnings.

	June 30,
	2018		2017
	(Dollars in Millions)
Private Equity
BCP IV	$	99	$	86
BCP V		87		68
BCP VI		911		579
BCP VII		94		—
BEP I		142		89
BEP II		50		12
Tactical Opportunities		152		117
Strategic Partners		91		46
BTAS		30		27
Other		1		4
Total Private Equity (a)		1,657		1,028
Real Estate
BREP IV		14		8
BREP V		159		238
BREP VI		132		229
BREP VII		592		544
BREP VIII		317		211
BREP Europe III		33		169
BREP Europe IV		211		367
BREP Europe V		61		—
BREP Asia I		110		76
BPP		194		118
BREIT		10		3
BREDS		29		21
BTAS		31		—
Total Real Estate (a)		1,893		1,984
Hedge Fund Solutions		23		29
Credit		299		216
Total Blackstone Net Accrued Performance Revenues	$	3,872	$	3,257

(a) Private Equity and Real Estate include Co-Investments, as applicable.

Net Accrued Performance Revenues receivable was increased by net Performance Revenues of $2.3 billion for the six months ended June 30, 2018 and decreased by net realized distributions of $1.7 billion for the six months ended June 30, 2018.

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Performance Revenue Eligible Assets Under Management

The following represents our Performance Revenue Eligible Assets Under Management as of June 30, 2018:

Note: Totals may not add due to rounding.

(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 Revenue could be earned if certain hurdles are met.

(b) Represents dry powder exclusive of non-revenue earning general partner and employee commitments.

Investment Record

Fund returns information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of The Blackstone Group L.P. and is also not necessarily indicative of the future performance of any particular fund. An investment in The Blackstone Group L.P. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

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The following table presents the investment record of our significant drawdown funds from inception through June 30, 2018:

					Unrealized Investments							Realized Investments				Total Investments				Net IRRs (c)
Fund (Investment Period Beginning Date / Ending Date)	Committed Capital		Available Capital (a)		Value		MOIC (b)		% Public			Value		MOIC (b)		Value		MOIC (b)		Realized			Total
	(Dollars in Thousands, Except Where Noted)
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		24,575		17,086		1.3x		—			2,953,649		1.4x		2,970,735		1.4x		7	%		6	%
BCP IV (Nov 2002 / Dec 2005)		6,773,182		207,524		872,299		0.9x		50	%		20,677,725		3.2x		21,550,024		2.9x		42	%		36	%
BCP V (Dec 2005 / Jan 2011)		21,022,164		1,052,763		2,256,568		1.1x		30	%		36,189,148		2.0x		38,445,716		1.9x		9	%		8	%
BCP VI (Jan 2011 / May 2016)		15,190,523		1,800,629		17,512,669		1.8x		32	%		8,990,744		2.1x		26,503,413		1.9x		23	%		15	%
BEP I (Aug 2011 / Feb 2015)		2,436,904		168,684		2,947,107		1.7x		36	%		1,416,870		2.0x		4,363,977		1.8x		29	%		15	%
BEP II (Feb 2015 / Feb 2021)		4,874,208		1,698,584		2,884,607		1.4x		—			65,371		2.9x		2,949,978		1.4x		N/M			15	%
BCP VII (May 2016 / May 2022)		18,494,651		12,230,285		5,644,440		1.4x		—			311,717		1.2x		5,956,157		1.4x		N/M			17	%
BCP Asia (Dec 2017 / Dec 2023) (d)		2,369,469		2,208,544		13,992		N/A		—			—		N/A		13,992		N/A		N/A			N/M
Total Corporate Private Equity	$	79,486,034	$	19,391,588	$	32,148,768		1.5x		24	%	$	84,788,469		2.2x	$	116,937,237		2.0x		17	%		15	%
Tactical Opportunities	$	18,427,737	$	8,426,505	$	9,781,454		1.2x		10	%	$	5,287,948		1.7x	$	15,069,402		1.4x		26	%		12	%
Tactical Opportunities Co-Investment and Other		5,119,604		1,409,243		3,670,283		1.2x		2	%		1,198,810		1.6x		4,869,093		1.3x		N/A			18	%
Strategic Partners I-V and Co-Investment (e)		11,913,113		1,796,921		2,020,522		N/M		—			15,588,672		N/M		17,609,194		1.5x		N/A			13	%
Strategic Partners VI LBO, RE and SMA (e)		7,402,171		2,070,236		3,500,627		N/M		—			2,739,347		N/M		6,239,974		1.5x		N/A			21	%
Strategic Partners VII (e)		7,669,970		2,334,958		4,876,510		N/M		—			350,751		N/M		5,227,261		1.3x		N/A			54	%
Strategic Partners RA II (e)		1,806,807		1,446,595		262,612		N/M		—			12,940		N/M		275,552		1.2x		N/A			24	%
BCEP (Jan 2017 / Jan 2021) (f)		4,755,620		2,605,464		2,214,439		1.0x		—			—		N/A		2,214,439		1.0x		N/A			3	%
Other Funds and Co-Investment (g)		1,621,936		442,069		68,639		0.9x		22	%		637,161		0.9x		705,800		0.9x		N/M			N/M
Real Estate
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		—			2,531,614		2.1x		2,531,614		2.1x		19	%		19	%
BREP III (Apr 1999 / Apr 2003)		1,522,708		—		—		N/A		—			3,330,406		2.4x		3,330,406		2.4x		21	%		21	%
BREP IV (Apr 2003 / Dec 2005)		2,198,694		—		313,328		0.4x		30	%		4,259,530		2.2x		4,572,858		1.7x		35	%		12	%
BREP V (Dec 2005 / Feb 2007)		5,539,418		—		1,181,187		2.3x		31	%		12,230,080		2.3x		13,411,267		2.3x		12	%		11	%
BREP VI (Feb 2007 / Aug 2011)		11,060,444		556,530		1,554,579		1.6x		3	%		25,908,690		2.6x		27,463,269		2.5x		14	%		13	%
BREP VII (Aug 2011 / Apr 2015)		13,495,034		2,058,135		11,964,442		1.7x		19	%		16,641,294		2.1x		28,605,736		1.9x		29	%		18	%
BREP VIII (Apr 2015 / Oct 2020)		16,419,603		8,407,055		11,023,120		1.4x		2	%		4,003,140		1.5x		15,026,260		1.4x		27	%		17	%
Total Global BREP	$	51,955,662	$	11,021,720	$	26,036,656		1.5x		11	%	$	70,577,652		2.3x	$	96,614,308		2.0x		19	%		16	%
BREP Int’l (Jan 2001 / Sep 2005)	€	824,172	€	—	€	—		N/A		—		€	1,369,016		2.1x	€	1,369,016		2.1x		23	%		23	%
BREP Int’l II (Sep 2005 / Jun 2008) (h)		1,629,748		—		140,384		0.5x		—			2,294,647		2.0x		2,435,031		1.7x		10	%		8	%
BREP Europe III (Jun 2008 / Sep 2013)		3,205,167		463,758		1,154,882		1.3x		—			5,199,477		2.5x		6,354,359		2.2x		21	%		16	%
BREP Europe IV (Sep 2013 / Dec 2016)		6,709,145		1,333,963		4,903,348		1.5x		10	%		6,316,424		2.0x		11,219,772		1.8x		25	%		18	%
BREP Europe V (Dec 2016 / Jun 2022)		7,855,686		4,256,899		4,164,195		1.2x		4	%		14,155		N/M		4,178,350		1.2x		N/M			19	%
Total Euro BREP	€	20,223,918	€	6,054,620	€	10,362,809		1.3x		7	%	€	15,193,719		2.1x	€	25,556,528		1.7x		17	%		14	%
BREP Asia I (Jun 2013 / Dec 2017)	$	5,096,522	$	1,881,675	$	4,253,540		1.4x		—		$	2,508,819		1.8x	$	6,762,359		1.5x		23	%		16	%
BREP Asia II (Dec 2017 / Jun 2023)		7,105,707		7,008,667		262,033		N/M		—			—		N/M		262,033		N/M		N/M			N/M
BREP Co-Investment (i)		6,892,347		146,573		2,098,516		1.7x		51	%		11,800,844		2.1x		13,899,360		2.1x		16	%		16	%
Total BREP	$	95,817,573	$	27,054,144	$	44,954,095		1.4x		11	%	$	104,310,222		2.2x	$	149,264,317		1.9x		19	%		16	%
BPP (j)	$	25,307,653	$	2,882,693	$	25,930,125		1.2x		—		$	2,678,843		N/A	$	28,608,968		1.2x		N/M			12	%
BREDS (k)	$	13,247,759	$	4,600,992	$	2,966,415		1.1x		—		$	9,474,771		1.3x	$	12,441,186		1.3x		12	%		11	%

98

					Unrealized Investments						Realized Investments				Total Investments				Net IRRs (c)
Fund (Investment Period Beginning Date / Ending Date)	Committed Capital		Available Capital (a)		Value		MOIC (b)		% Public		Value		MOIC (b)		Value		MOIC (b)		Realized		Total
	(Dollars in Thousands, Except Where Noted)
Hedge Fund Solutions
BSCH (Dec 2013 / Jun 2020) (l)	$	3,298,575	$	2,356,290	$	973,480		1.0x		—	$	256,301		N/A	$	1,229,781		1.3x		N/A		6	%
BSCH Co-Investment		276,000		164,877		102,280		0.9x		—		24,167		N/A		126,447		1.1x		N/A		9	%
Total Hedge Fund Solutions	$	3,574,575	$	2,521,167	$	1,075,760		1.0x		—	$	280,468		N/A	$	1,356,228		1.3x		N/A		6	%
Credit (m)
Mezzanine I (Jul 2007 / Oct 2011)	$	2,000,000	$	97,114	$	45,909		0.8x		—	$	4,770,221		1.6x	$	4,816,130		1.6x		N/A		17	%
Mezzanine II (Nov 2011 / Nov 2016)		4,120,000		1,146,274		2,535,690		1.1x		—		4,100,043		1.6x		6,635,733		1.4x		N/A		13	%
Mezzanine III (Sep 2016 / Sep 2021)		6,639,133		3,457,539		2,547,038		1.1x		—		636,892		1.5x		3,183,930		1.2x		N/A		13	%
Stressed / Distressed Investing I (Sep 2009 / May 2013)		3,253,143		175,000		417,641		0.7x		—		5,568,943		1.5x		5,986,584		1.4x		N/A		11	%
Stressed / Distressed Investing II (Jun 2013 / Jun 2018)		5,125,000		648,283		2,846,622		1.1x		—		2,968,264		1.4x		5,814,886		1.2x		N/A		13	%
Stressed / Distressed Investing III (Dec 2017 / Dec 2022)		7,356,380		6,329,287		769,329		1.1x		—		23,341		N/A		792,670		1.1x		N/A		N/A
Energy Select Opportunities (Nov 2015 / Nov 2018)		2,856,867		1,108,540		1,875,069		1.2x		—		415,064		1.7x		2,290,133		1.2x		N/A		19	%
Euro
European Senior Debt Fund (Feb 2015 / Feb 2019)	€	1,964,689	€	1,560,617	€	1,811,098		1.0x		—	€	656,896		1.5x	€	2,467,994		1.1x		N/A		11	%
Total Credit	$	33,616,933	$	14,784,215	$	13,151,845		1.1x		—	$	19,235,263		1.5x	$	32,387,108		1.3x		N/A		14	%

The returns 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) Available Capital represents total investable capital commitments, including side-by-side, adjusted for certain expenses and expired or recallable capital and may include leverage, less invested capital. This amount is not reduced by outstanding commitments to investments.

(b) Multiple of Invested Capital (“MOIC”) represents carrying value, before management fees, expenses and carried interest, divided by invested capital.

(c) Net Internal Rate of Return (“IRR”) represents the annualized inception to June 30, 2018 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and carried interest.

(d) Includes foreign currency gain or loss on invested undrawn capital, if any.

(e) Realizations are treated as return of capital until fully recovered and therefore unrealized and realized MOICs are not meaningful.

(f) BCEP, or Blackstone Core Equity Partners, is a core private equity fund which invests with a more modest risk profile and longer hold period.

(g) Returns for Other Funds and Co-Investment are not meaningful as these funds have limited transaction activity.

(h) The 10% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP International II performance reflects a 9% Realized Net IRR and a 6% Total Net IRR.

(i) 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.

(j) BPP represents the core+ real estate funds which invest with a more modest risk profile and lower leverage. Excludes BREIT.

(k) Excludes Capital Trust drawdown funds.

(l) BSCH, or Blackstone Strategic Capital Holdings, is a permanent capital vehicle focused on acquiring strategic minority positions in alternative asset managers.

(m) Funds presented represent the flagship credit drawdown funds only. The Total Credit Net IRR is the combined IRR of the eight credit drawdown funds presented.

99

Segment Analysis

Discussed below is our Economic Income for each of our segments. This information is reflected in the manner utilized by our senior management to make operating decisions, assess performance and allocate resources. References to “our” sectors or investments may also refer to portfolio companies and investments of the underlying funds that we manage.

For segment reporting purposes, revenues and expenses are presented on a basis that deconsolidates the investment funds we manage. As a result, segment revenues are greater than those presented on a consolidated GAAP basis because fund management fees recognized in certain segments are received from the Blackstone Funds and eliminated in consolidation when presented on a consolidated GAAP basis. Furthermore, segment expenses are lower than related amounts presented on a consolidated GAAP basis due to the exclusion of fund expenses that are paid by Limited Partners and the elimination of non-controlling interests.

Private Equity

The following table presents the results of operations for our Private Equity segment:

	Three Months Ended June 30,						2018 vs. 2017						Six Months Ended June 30,						2018 vs. 2017
	2018			2017			$			%			2018			2017			$			%
	(Dollars in Thousands)
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	195,521		$	177,684		$	17,837			10	%	$	378,482		$	354,390		$	24,092			7	%
Transaction, Advisory and Other Fees, Net		12,780			17,289			(4,509	)		-26	%		23,874			33,465			(9,591	)		-29	%
Management Fee Offsets		(4,351	)		(3,753	)		(598	)		16	%		(7,544	)		(15,943	)		8,399			-53	%
Total Management and Advisory Fees, Net		203,950			191,220			12,730			7	%		394,812			371,912			22,900			6	%
Performance Revenues
Realized Performance Allocations		138,171			198,168			(59,997	)		-30	%		215,294			780,849			(565,555	)		-72	%
Unrealized Performance Allocations		498,274			9			498,265			N/M			895,590			(184,469	)		1,080,059			N/M
Total Performance Revenues		636,445			198,177			438,268			221	%		1,110,884			596,380			514,504			86	%
Principal Investment Income (Loss)
Realized		32,600			41,168			(8,568	)		-21	%		38,938			122,462			(83,524	)		-68	%
Unrealized		84,247			(25,892	)		110,139			N/M			101,615			(66,414	)		168,029			N/M
Total Principal Investment Income		116,847			15,276			101,571			665	%		140,553			56,048			84,505			151	%
Interest and Dividend Revenue		11,549			7,922			3,627			46	%		20,092			14,583			5,509			38	%
Other		26,667			(16,124	)		42,791			N/M			10,259			(17,924	)		28,183			N/M
Total Revenues		995,458			396,471			598,987			151	%		1,676,600			1,020,999			655,601			64	%
Expenses
Compensation		103,798			90,676			13,122			14	%		203,527			174,279			29,248			17	%
Performance Compensation
Realized Performance Allocations		68,513			63,060			5,453			9	%		101,558			244,693			(143,135	)		-58	%
Unrealized Performance Allocations		193,747			22,219			171,528			772	%		372,549			(17,137	)		389,686			N/M
Total Compensation and Benefits		366,058			175,955			190,103			108	%		677,634			401,835			275,799			69	%
Interest Expense		12,773			10,728			2,045			19	%		22,906			21,155			1,751			8	%
Other Operating Expenses		36,047			28,592			7,455			26	%		67,198			56,353			10,845			19	%
Total Expenses		414,878			215,275			199,603			93	%		767,738			479,343			288,395			60	%
Economic Income	$	580,580		$	181,196		$	399,384			220	%	$	908,862		$	541,656		$	367,206			68	%

N/M Not meaningful.

100

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

Revenues

Revenues were $995.5 million for the three months ended June 30, 2018, an increase of $599.0 million compared to $396.5 million for the three months ended June 30, 2017. The increase in Revenues was primarily attributable to increases of $438.3 million in Performance Revenues and $101.6 million in Principal Investment Income.

Revenues in our Private Equity segment in the second quarter of 2018 were higher compared to the second quarter of 2017, primarily driven by increased Performance Revenues largely due to positive performance in our corporate private equity investments, particularly in energy and technology. The market environment continues to be generally characterized by high prices and as a result, the market for new investments remains challenging. Nonetheless, in the second quarter of 2018 we deployed $2.6 billion and committed an additional $1.9 billion of capital across the segment. U.S. tax reform is expected to have a neutral to slightly positive impact for our U.S. private equity investments. Realizations of $2.1 billion in the quarter were driven by activity across our corporate private equity funds, Tactical Opportunities and Strategic Partners, although volatility could be a factor in fewer realizations going forward. Although we and our portfolio companies are operating against a backdrop of continuing economic strength and improving fundamentals that we expect will benefit our businesses, interest rates are expected to continue to rise throughout 2018 and will likely increase the cost of debt financing for us and our portfolio companies. Revenues in the Private Equity segment would likely be negatively impacted if pressure on wages and other inputs and higher tariffs increasingly pressure profit margins. Revenues in our Private Equity segment would also likely be negatively impacted from rising interest rates, a stronger U.S. dollar and higher inflation, although such impact may be meaningfully mitigated if occurring against a backdrop of corresponding economic growth. See “Item 1A. Risk Factors — Risks Related to Our Business — Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our investment funds and reducing the ability of our investment funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.” in our Annual Report on Form 10-K for the year ended December 31, 2017.

Performance Revenues were $636.4 million for the three months ended June 30, 2018, an increase of $438.3 million compared to $198.2 million for the three months ended June 30, 2017, driven by corporate private equity. Corporate private equity carrying value increased 9.5% in the three months ended June 30, 2018 compared to 2.8% in the three months ended June 30, 2017.

Principal Investment Income was $116.8 million for the three months ended June 30, 2018, an increase of $101.6 million compared to $15.3 million for the three months ended June 30, 2017, primarily driven by an increase in the appreciation of our investment holdings.

Expenses

Expenses were $414.9 million for the three months ended June 30, 2018, an increase of $199.6 million compared to $215.3 million for the three months ended June 30, 2017. The increase was primarily attributable to an increase of $190.1 million in Total Compensation and Benefits. The increase in Total Compensation and Benefits was primarily due to an increase of $177.0 million in Performance Compensation. Performance Compensation increased as a result of the increase in Performance Revenues.

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

Revenues

Revenues were $1.7 billion for the six months ended June 30, 2018, an increase of $655.6 million compared to $1.0 billion for the six months ended June 30, 2017. The increase in Revenues was primarily attributable to increases of $514.5 million in Performance Revenues, $84.5 million in Principal Investment Income and $22.9 million in Total Management and Advisory Fees, Net.

101

Performance Revenues were $1.1 billion for the six months ended June 30, 2018, an increase of $514.5 million, compared to $596.4 million for the six months ended June 30, 2017, driven by corporate private equity. Corporate private equity carrying value increased 16.4% in the six months ended June 30, 2018 compared to 9.3% in the six months ended June 30, 2017.

Principal Investment Income was $140.6 million for the six months ended June 30, 2018, an increase of $84.5 million, compared to $56.0 million for the six months ended June 30, 2017. The increase was due to an increase in the appreciation of our investment holdings.

Total Management and Advisory Fees, Net were $394.8 million for the six months ended June 30, 2018, an increase of $22.9 million compared to $371.9 million for the six months ended June 30, 2017, primarily driven by an increase in Base Management Fees. Base Management Fees were $378.5 million for the six months ended June 30, 2018, an increase of $24.1 million compared to $354.4 million for the six months ended June 30, 2017, primarily due to the launch of the third vintage of the Tactical Opportunities program and BCP Asia.

Expenses

Expenses were $767.7 million for the six months ended June 30, 2018, an increase of $288.4 million compared to $479.3 million for the six months ended June 30, 2017. The increase was primarily attributable to an increase of $275.8 million in Total Compensation and Benefits. The increase in Total Compensation and Benefits was primarily due to increases of $246.6 million in Performance Compensation and $29.2 million in Compensation. Performance Compensation increased as a result of the increase in Performance Revenues. Compensation increased primarily due to the increase in Management and Advisory Fees, Net, on which a portion of compensation is based, as well as investment in initiatives.

Fund Returns

Fund returns information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of The Blackstone Group L.P. and is also not necessarily indicative of the future performance of any particular fund. An investment in The Blackstone Group L.P. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

102

The following table presents the internal rates of return of our significant private equity funds:

	Three Months Ended June 30,												Six Months Ended June 30,												June 30, 2018 Inception to Date
	2018						2017						2018						2017						Realized						Total
Fund (a)	Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net
BCP IV		24	%		21	%		1	%		1	%		16	%		14	%		-1	%		-1	%		56	%		42	%		50	%		36	%
BCP V		14	%		11	%		2	%		1	%		12	%		9	%		5	%		4	%		11	%		9	%		10	%		8	%
BCP VI		8	%		7	%		4	%		3	%		16	%		13	%		13	%		11	%		29	%		23	%		20	%		15	%
BCP VII		8	%		5	%		N/M			N/M			20	%		12	%		N/M			N/M			N/M			N/M			36	%		17	%
BEP I		19	%		16	%		-2	%		-2	%		19	%		16	%		8	%		7	%		37	%		29	%		19	%		15	%
BEP II		8	%		5	%		2	%		—			18	%		11	%		13	%		8	%		N/M			N/M			29	%		15	%
BCOM		-2	%		-2	%		-17	%		-17	%		2	%		1	%		-14	%		-14	%		13	%		7	%		13	%		6	%
Tactical Opportunities		2	%		2	%		5	%		4	%		8	%		6	%		8	%		14	%		28	%		26	%		15	%		12	%
Tactical Opportunities Co-Investment and Other		8	%		5	%		6	%		5	%		12	%		10	%		10	%		6	%		N/A			N/A			20	%		18	%
Strategic Partners I-V and Co-Investment (b)		2	%		1	%		2	%		1	%		4	%		3	%		4	%		3	%		N/A			N/A			16	%		13	%
Strategic Partners VI
LBO, RE and SMA (b)		6	%		5	%		3	%		2	%		12	%		11	%		8	%		6	%		N/A			N/A			26	%		21	%
Strategic Partners VII (b)		9	%		8	%		N/M			N/M			21	%		18	%		N/M			N/M			N/A			N/A			67	%		54	%

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) Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and carried interest allocations.

(b) Realizations are treated as return of capital until fully recovered and therefore inception to date realized returns are not applicable.

The corporate private equity funds within the Private Equity segment have five funds with closed investment periods: BCP IV, BCP V, BCP VI, BCOM and BEP I. As of June 30, 2018, BCP IV was above its carried interest threshold (i.e., the preferred return payable to its limited partners before the general partner is eligible to receive carried interest) and would still be above its carried interest threshold even if all remaining investments were valued at zero. BCP V is comprised of two fund classes based on the timings of fund closings, the BCP V “main fund” and BCP V-AC fund. Within these fund classes, the general partner is subject to equalization such that (a) the general partner accrues carried interest when the respective carried interest for either fund class is positive and (b) the general partner realizes carried interest so long as clawback obligations, if any, for either of the respective fund classes are fully satisfied. During the quarter, both fund classes in aggregate were above their respective carried interest thresholds. BCP VI is currently above its carried interest threshold. BCOM is currently above its carried interest threshold and has generated inception to date positive returns. We are entitled to retain previously realized carried interest up to 20% of BCOM’s net gains. As a result, Performance Revenues are recognized from BCOM on current period gains and losses. BEP I is currently above its carried interest threshold.

103

Real Estate

The following table presents the results of operations for our Real Estate segment:

	Three Months Ended June 30,						2018 vs. 2017						Six Months Ended June 30,						2018 vs. 2017
	2018			2017			$			%			2018			2017			$			%
	(Dollars in Thousands)
Revenues
Management Fees, Net
Base Management Fees	$	249,680		$	227,865		$	21,815			10	%	$	476,206		$	425,744		$	50,462			12	%
Transaction and Other Fees, Net		23,859			16,087			7,772			48	%		46,947			37,366			9,581			26	%
Management Fee Offsets		(3,785	)		(5,018	)		1,233			-25	%		(5,453	)		(8,568	)		3,115			-36	%
Total Management Fees, Net		269,754			238,934			30,820			13	%		517,700			454,542			63,158			14	%
Performance Revenues
Realized Incentive Fees		11,394			4,878			6,516			134	%		15,769			7,760			8,009			103	%
Realized Performance Allocations		351,630			389,441			(37,811	)		-10	%		502,939			909,314			(406,375	)		-45	%
Unrealized Performance Allocations		(160,578	)		89,688			(250,266	)		N/M			65,864			81,642			(15,778	)		-19	%
Total Performance Revenues		202,446			484,007			(281,561	)		-58	%		584,572			998,716			(414,144	)		-41	%
Principal Investment Income (Loss)
Realized		50,199			57,599			(7,400	)		-13	%		64,889			177,178			(112,289	)		-63	%
Unrealized		(28,044	)		(20,519	)		(7,525	)		37	%		(25,357	)		(104,372	)		79,015			-76	%
Total Principal Investment Income		22,155			37,080			(14,925	)		-40	%		39,532			72,806			(33,274	)		-46	%
Interest and Dividend Revenue		14,494			14,493			1			0	%		29,622			26,587			3,035			11	%
Other		30,457			(22,965	)		53,422			N/M			8,960			(26,115	)		35,075			N/M
Total Revenues		539,306			751,549			(212,243	)		-28	%		1,180,386			1,526,536			(346,150	)		-23	%
Expenses
Compensation		109,599			110,266			(667	)		-1	%		222,423			212,968			9,455			4	%
Performance Compensation
Realized Incentive Fees		5,820			2,711			3,109			115	%		8,030			4,044			3,986			99	%
Realized Performance Allocations		109,233			124,512			(15,279	)		-12	%		163,416			304,468			(141,052	)		-46	%
Unrealized Performance Allocations		(51,370	)		64,254			(115,624	)		N/M			27,800			82,046			(54,246	)		-66	%
Total Compensation and Benefits		173,282			301,743			(128,461	)		-43	%		421,669			603,526			(181,857	)		-30	%
Interest Expense		11,389			14,787			(3,398	)		-23	%		25,538			29,422			(3,884	)		-13	%
Other Operating Expenses		36,026			33,379			2,647			8	%		65,443			64,243			1,200			2	%
Total Expenses		220,697			349,909			(129,212	)		-37	%		512,650			697,191			(184,541	)		-26	%
Economic Income	$	318,609		$	401,640		$	(83,031	)		-21	%	$	667,736		$	829,345		$	(161,609	)		-19	%

N/M Not meaningful.

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Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

Revenues

Revenues were $539.3 million for the three months ended June 30, 2018, a decrease of $212.2 million compared to $751.5 million for the three months ended June 30, 2017. The decrease in Revenues was primarily attributable to decreases of $281.6 million in Performance Revenues and $14.9 million in Principal Investment Income, partially offset by increases $53.4 million in Other Revenue and $30.8 million in Total Management Fees, Net.

Revenues in our Real Estate segment in the second quarter of 2018 were lower compared to the second quarter of 2017, primarily driven by lower Performance Revenues resulting from lower appreciation in our real estate opportunistic funds compared to the first quarter of 2017. Overall, operating trends in our Real Estate portfolio remain stable and supply-demand fundamentals remain positive in most markets, although we see decelerating growth in certain sectors, notably retail. As a result of less distress and rising asset values compared to prior years in the United States, the opportunistic investment environment continues to be challenging. Nonetheless, our Real Estate funds deployed $4.6 billion and committed an additional $6.0 billion of capital in the quarter, including in six large public company transactions. Volatility could be a factor in fewer realizations going forward, although our Real Estate funds had $4.3 billion of realizations in the second quarter. Overall, we believe U.S. tax reform will have a neutral to slightly positive impact for our real estate investments. Although we are operating against a backdrop of continuing economic strength and improving fundamentals that we expect will benefit our businesses, interest rates are expected to continue to rise throughout 2018 and will likely increase the cost of debt financing for our real estate businesses and assets. Revenues in our Real Estate segment would likely be negatively impacted if pressure on wages and other inputs increasingly pressure profit margins. Revenues in our Real Estate segment would also likely be negatively impacted from rising interest rates, a stronger U.S. dollar and higher inflation, although such impact may be meaningfully mitigated if occurring against a backdrop of economic strength and improving fundamentals. See “Item 1A. Risk Factors — Risks Related to Our Business — Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our investment funds and reducing the ability of our investment funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.” in our Annual Report on Form 10-K for the year ended December 31, 2017.

Performance Revenues were $202.4 million for the three months ended June 30, 2018, a decrease of $281.6 million compared to $484.0 million for the three months ended June 30, 2017. The decrease in Performance Revenues was due to lower net appreciation of investment holdings in our BREP opportunistic funds compared to the comparable quarter in 2017. For the three months ended June 30, 2018, the carrying value of investments for our BREP opportunistic funds increased 2.7% compared to 5.4% in the comparable 2017 quarter.

Principal Investment Income was $22.2 million for the three months ended June 30, 2018, a decrease of $14.9 million compared to $37.1 million for the three months ended June 30, 2017. The decrease in Principal Investment Income was primarily due to lower net appreciation of the Partnership’s principal investments.

Other Revenue was $30.5 million for the three months ended June 30, 2018, and increase of $53.4 million compared to $(23.0) million for the three months ended June 30, 2017, primarily due to foreign exchange gain on our euro denominated bonds.

Total Management Fees, Net were $269.8 million for the three months ended June 30, 2018, an increase of $30.8 million compared to $238.9 million for the three months ended June 30, 2017, driven primarily by an increase in Base Management Fees. Base Management Fees were $249.7 million for the three months ended June 30, 2018, an increase of $21.8 million compared to $227.9 million for the three months ended June 30, 2017, primarily due to AUM growth in our core+ real estate funds and the launch of BREP Asia II in the fourth quarter of 2017.

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Expenses

Expenses were $220.7 million for the three months ended June 30, 2018, a decrease of $129.2 million compared to $349.9 million for the three months ended June 30, 2017. The decrease was primarily attributable to a decrease in Performance Compensation of $127.8 million. Performance Compensation decreased as a result of the decrease in Performance Revenues.

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

Revenues

Revenues were $1.2 billion for the six months ended June 30, 2018, a decrease of $346.2 million compared to $1.5 billion for the six months ended June 30, 2017. The decrease in Revenues was primarily attributable to decreases of $414.1 million in Performance Revenues and $33.3 million in Principal Investment Income, partially offset by an increase of $63.2 million in Total Management Fees, Net.

Performance Revenues were $584.6 million for the six months ended June 30, 2018, a decrease of $414.1 million compared to $998.7 million for the six months ended June 30, 2017. Performance Revenues decreased due to the lower net appreciation of investment holdings in our BREP opportunistic funds compared to the comparable quarter in 2017. For the six months ended June 30, 2018, the carrying value of investments for our BREP opportunistic funds increased 6.0% compared to 10.5% for the comparable 2017 period.

Principal Investment Income was $39.5 million for the six months ended June 30, 2018, a decrease of $33.3 million compared to $72.8 million for the six months ended June 30, 2017, primarily due to lower net appreciation of the Partnership’s principal investments.

Total Management Fees, Net were $517.7 million for the six months ended June 30, 2018, an increase of $63.2 million compared to $454.5 million for the six months ended June 30, 2017, primarily driven by an increase in Base Management Fees. Base Management Fees were $476.2 million for the six months ended June 30, 2018, an increase of $50.5 million compared to $425.7 million for the six months ended June 30, 2017, primarily due to growth in our core+ real estate funds, the launch of BREP Europe V in the fourth quarter of 2016 (and the corresponding expiration of its fee holiday in the second quarter of 2017) and the launch of BREP Asia II in the fourth quarter of 2017.

The Annualized Base Management Fee Rate decreased from 1.24% at June 30, 2017 to 1.12% at June 30, 2018. The decrease was principally due growth in several core+ funds, some of which include Base Management Fee holidays.

Expenses

Expenses were $512.7 million for the six months ended June 30, 2018, a decrease of $184.5 million compared to $697.2 million for the six months ended June 30, 2017. The decrease was primarily attributable to a decrease of $181.9 million in Total Compensation and Benefits. The decrease in Total Compensation and Benefits was attributable to a decrease of $191.3 million in Performance Compensation, partially offset by an increase of $9.5 million in Compensation. Performance Compensation decreased as a result of the decrease in Performance Revenues. The increase in Compensation was primarily due to the increase in Total Management Fees, Net, on which a portion of compensation is based.

Fund Returns

Fund return information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of The Blackstone Group L.P.

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and is also not necessarily indicative of the future performance of any particular fund. An investment in The Blackstone Group L.P. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

The following table presents the internal rates of return, except where noted, of our significant real estate funds:

	Three Months Ended June 30,												Six Months Ended June 30,												June 30, 2018 Inception to Date
	2018						2017						2018						2017						Realized						Total
Fund (a)	Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net
BREP IV		7	%		5	%		3	%		2	%		8	%		6	%		1	%		1	%		58	%		35	%		22	%		12	%
BREP V		5	%		5	%		3	%		2	%		6	%		5	%		4	%		3	%		15	%		12	%		14	%		11	%
BREP VI		2	%		1	%		9	%		7	%		1	%		1	%		11	%		9	%		18	%		14	%		17	%		13	%
BREP VII		1	%		1	%		3	%		2	%		5	%		4	%		7	%		6	%		40	%		29	%		25	%		18	%
BREP VIII		4	%		3	%		6	%		5	%		9	%		6	%		13	%		9	%		41	%		27	%		26	%		17	%
BREP International II (b)(c)		9	%		8	%		12	%		11	%		14	%		12	%		7	%		6	%		12	%		10	%		9	%		8	%
BREP Europe III (b)		-1	%		-1	%		6	%		5	%		1	%		—			14	%		11	%		31	%		21	%		24	%		16	%
BREP Europe IV (b)		6	%		5	%		8	%		7	%		11	%		9	%		22	%		18	%		35	%		25	%		25	%		18	%
BREP Europe V (b)		6	%		4	%		N/M			N/M			12	%		8	%		N/M			N/M			N/M			N/M			34	%		19	%
BREP Asia I		1	%		—			8	%		6	%		4	%		3	%		15	%		11	%		32	%		23	%		23	%		16	%
BREP Asia II		N/M			N/M			N/A			N/A			N/M			N/M			N/A			N/A			N/M			N/M			N/M			N/M
BREP Co-Investment (d)		4	%		3	%		6	%		5	%		3	%		2	%		8	%		7	%		18	%		16	%		18	%		16	%
BPP (e)		2	%		2	%		3	%		3	%		6	%		5	%		6	%		5	%		N/M			N/M			14	%		12	%
BREDS Drawdown		1	%		—			3	%		3	%		5	%		4	%		8	%		6	%		16	%		12	%		15	%		11	%
BREDS Liquid (f)		3	%		2	%		4	%		3	%		5	%		4	%		7	%		6	%		N/A			N/A			11	%		8	%

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) Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and performance revenues.

(b) Euro-based internal rates of return.

(c) The 10% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP International II Performance reflects a 9% Realized Net IRR and a 6% Total Net IRR.

(d) Excludes fully realized co-investments prior to Blackstone’s IPO.

(e) BPP represents the core+ real estate funds which invest with a more modest risk profile and lower leverage. Excludes BREIT.

(f) BREDS Liquid represents BREDS funds that invest in liquid real estate debt securities, except funds in liquidation and insurance mandates with specific investment objectives. Effective June 30, 2018, the returns presented represent summarized asset-weighted gross and net rates of return. Inception to Date returns are presented on an annualized basis. Prior periods have been updated to reflect such rates of return.

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The following table presents the carried interest status of our real estate carry funds with expired investment periods which are currently not generating performance revenues as of June 30, 2018:

	Gain to Cross Carried Interest Threshold (a)
Fully Invested Funds	Amount		% Change in Total Enterprise Value (b)			% Change in Equity Value
	(Amounts in Millions)
BREP International II (Sep 2005 / Jun 2008)	€	869		154	%		656	%

(a) The general partner of each fund is allocated carried interest when the annualized returns, net of management fees and expenses, exceed the preferred return as dictated by the fund agreements. The preferred return is calculated for each limited partner individually. The Gain to Cross Carried Interest Threshold represents the increase in equity at the fund level (excluding our side-by-side investments) that is required for the general partner to begin accruing carried interest, assuming the gain is earned pro-rata across the fund’s investments and is achieved at the reporting date. However, since gains are not earned pro-rata, it is possible that certain investors may exceed the carried interest threshold with smaller percentage increases in Equity Value.

(b) Total Enterprise Value is the respective fund’s pro-rata ownership of the privately held portfolio companies’ Enterprise Value.

The Real Estate segment has three funds in their investment period, which were above their respective carried interest thresholds as of June 30, 2018: BREP VIII, BREP Europe V and BREDS III.

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Hedge Fund Solutions

The following table presents the results of operations for our Hedge Fund Solutions segment:

	Three Months Ended June 30,						2018 vs. 2017						Six Months Ended June 30,						2018 vs. 2017
	2018			2017			$			%			2018			2017			$			%
	(Dollars in Thousands)
Revenues
Management Fees, Net
Base Management Fees	$	129,553		$	128,698		$	855			1	%	$	258,781		$	257,166		$	1,615			1	%
Transaction and Other Fees, Net		812			1,696			(884	)		-52	%		1,157			1,955			(798	)		-41	%
Total Management Fees, Net		130,365			130,394			(29	)		-0	%		259,938			259,121			817			0	%
Performance Revenues
Realized Incentive Fees		6,887			6,548			339			5	%		15,058			20,635			(5,577	)		-27	%
Realized Performance Allocations		383			447			(64	)		-14	%		2,389			1,044			1,345			129	%
Unrealized Performance Allocations		9,930			14,849			(4,919	)		-33	%		14,991			33,664			(18,673	)		-55	%
Total Performance Revenues		17,200			21,844			(4,644	)		-21	%		32,438			55,343			(22,905	)		-41	%
Principal Investment Income (Loss)
Realized		7,766			225			7,541			N/M			8,406			(407	)		8,813			N/M
Unrealized		(4,841	)		11,578			(16,419	)		N/M			(4,401	)		29,871			(34,272	)		N/M
Total Principal Investment Income		2,925			11,803			(8,878	)		-75	%		4,005			29,464			(25,459	)		-86	%
Interest and Dividend Revenue		5,152			4,674			478			10	%		9,964			8,671			1,293			15	%
Other		17,619			(10,720	)		28,339			N/M			7,331			(12,330	)		19,661			N/M
Total Revenues		173,261			157,995			15,266			10	%		313,676			340,269			(26,593	)		-8	%
Expenses
Compensation		48,086			47,361			725			2	%		98,386			94,965			3,421			4	%
Performance Compensation
Realized Incentive Fees		4,155			4,097			58			1	%		8,189			11,111			(2,922	)		-26	%
Realized Performance Allocations		937			265			672			254	%		3,352			568			2,784			490	%
Unrealized Performance Allocations		2,772			5,968			(3,196	)		-54	%		4,958			12,390			(7,432	)		-60	%
Total Compensation and Benefits		55,950			57,691			(1,741	)		-3	%		114,885			119,034			(4,149	)		-3	%
Interest Expense		5,900			6,688			(788	)		-12	%		12,171			13,231			(1,060	)		-8	%
Other Operating Expenses		18,494			16,318			2,176			13	%		37,279			32,697			4,582			14	%
Total Expenses		80,344			80,697			(353	)		-0	%		164,335			164,962			(627	)		-0	%
Economic Income	$	92,917		$	77,298		$	15,619			20	%	$	149,341		$	175,307		$	(25,966	)		-15	%

N/M Not meaningful.

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

Revenues

Revenues were $173.3 million for the three months ended June 30, 2018, an increase of $15.3 million compared to $158.0 million for the three months ended June 30, 2017. The increase in Revenues was primarily attributable to an increase of $28.3 million in Other Revenue, partially offset by a decrease of $8.9 million in Principal Investment Income.

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Revenues in our Hedge Fund Solutions segment in the second quarter of 2018 increased compared to the second quarter of 2017 primarily driven by an increase in Other Revenue largely due to foreign exchange gain in Blackstone’s euro denominated bonds. Although we are operating against a backdrop of continuing economic strength and improving fundamentals that we expect will benefit our businesses, interest rates are expected to rise throughout 2018 and will likely increase our cost of debt financing. Hedge Fund Solutions revenues would likely be negatively impacted if we failed to anticipate a significant or sustained decline in global, regional or sector asset prices, global market conditions deteriorated, or liquidity needs, performance or other reasons caused investors to withdraw assets. See “Item 1A. Risk Factors — Risks Related to Our Business — Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our investment funds and reducing the ability of our investment funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition” and “— Hedge fund investments are subject to numerous additional risks.” in our Annual Report on Form 10-K for the year ended December 31, 2017. The segment operates multiple business lines, manages strategies that are both long and short asset classes and generates a majority of its revenue through management fees, all of which we believe provide a level of downside protection to Hedge Fund Solutions revenues. Over time we anticipate an increasing change in the mix of our product offerings to products whose performance-based fees represent a more significant proportion of the fees than has historically been the case for such products.

Other Revenue was $17.6 million for the three months ended June 30, 2018, an increase of $28.3 million compared to $(10.7) million for the three months ended June 30, 2017. The increase was primarily due to foreign exchange gain on our euro denominated bonds.

Principal Investment Income was $2.9 million for the three months ended June 30, 2018, a decrease of $8.9 million compared to $11.8 million for the three months ended June 30, 2017. The decrease was primarily due to lower returns in investments of which Blackstone owns a share compared to the second quarter of 2017.

Expenses

Expenses were $80.3 million for the three months ended June 30, 2018, relatively stable compared to $80.7 million for the three months ended June 30, 2017.

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

Revenues

Revenues were $313.7 million for the six months ended June 30, 2018, a decrease of $26.6 million compared to $340.3 million for the six months ended June 30, 2017. The decrease in Revenues was primarily attributable to decreases of $22.9 million in Performance Revenues and $25.5 million in Principal Investment Income, partially offset by an increase of $19.7 million in Other Revenue.

Performance Revenues were $32.4 million for the six months ended June 30, 2018, a decrease of $22.9 million compared to $55.3 million for the six months ended June 30, 2017. The decrease was primarily driven by lower returns across a number of strategies, including customized solutions, commingled products, individual investor solutions and specialized solutions compared to the second quarter of 2017.

Principal Investment Income was $4.0 million for the six months ended June 30, 2018, a decrease of $25.5 million compared to $29.5 million for the six months ended June 30, 2017. The decrease was primarily due to lower returns in investments of which Blackstone owns a share compared to the second quarter of 2017.

Other Revenue was $7.3 million for the six months ended June 30, 2018, an increase of $19.7 million compared to $(12.3) million for the six months ended June 30, 2017. The increase was primarily due to foreign exchange gain on our euro denominated bonds.

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Expenses

Expenses were $164.3 million for the six months ended June 30, 2018, relatively stable compared to $165.0 million for the six months ended June 30, 2017.

Operating Metrics

The following table presents information regarding our Incentive Fee-Earning Assets Under Management:

	Fee-Earning Assets Under Management Eligible for Incentive Fees				Estimated % Above High Water Mark / Benchmark (a)
	As of June 30,				As of June 30,
	2017		2018		2017			2018
	(Dollars in Thousands)
BAAM-Managed Funds (b)	$	38,778,670	$	42,720,613		84	%		87	%

(a) Estimated % Above High Water Mark/Benchmark represents the percentage of Fee-Earning Assets Under Management Eligible for Incentive Fees that as of the dates presented would earn incentive fees when the applicable BAAM-managed fund has positive investment performance relative to a benchmark, where applicable. Incremental positive performance in the applicable Blackstone Funds may cause additional assets to reach their respective High Water Mark or clear a benchmark return, thereby resulting in an increase in Estimated % Above High Water Mark/Benchmark.

(b) For the BAAM-managed funds, at June 30, 2018 the incremental appreciation needed for the 13% of Fee-Earning Assets Under Management below their respective High Water Marks/Benchmarks to reach their respective High Water Marks/Benchmarks was $393.1 million, a decrease of $11.2 million, compared to $404.3 million at June 30, 2017. Of the Fee-Earning Assets Under Management below their respective High Water Marks/Benchmarks as of June 30, 2018, 67% were within 5% of reaching their respective High Water Mark.

Composite Returns

Composite returns information is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The composite returns information reflected in this discussion and analysis is not indicative of the financial performance of The Blackstone Group L.P. and is also not necessarily indicative of the future results of any particular fund. An investment in The Blackstone Group L.P. is not an investment in any of our funds or composites. There can be no assurance that any of our funds or composites or our other existing and future funds or composites will achieve similar returns.

The following table presents the return information of the BAAM Principal Solutions Composite:

	Three Months Ended June 30,												Six Months Ended June 30,												Average Annual Returns (a)
																									Periods Ended June 30, 2018
	2018						2017						2018						2017						One Year						Three Year						Five Year						Historical
Composite	Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net
BAAM Principal Solutions Composite (b)		1	%		1	%		1	%		1	%		3	%		2	%		4	%		4	%		7	%		6	%		5	%		4	%		6	%		5	%		7	%		6	%

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

(a) Composite returns present a summarized asset-weighted return measure to evaluate the overall performance of the applicable class of Blackstone Funds.

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(b) BAAM’s Principal Solutions (“BPS”) Composite covers the period from January 2000 to present, although BAAM’s inception date is September 1990. The BPS Composite includes only BAAM-managed commingled and customized multi-manager funds and accounts. None of the other platforms/strategies managed through the Blackstone Hedge Fund Solutions Group are included in the composite (except for investments by BPS funds/accounts directly into those platforms/strategies). BAAM-managed funds in liquidation and non-fee-paying assets (in the case of net returns) are excluded from the composite. The historical return is from January 1, 2000.

112

Credit

The following table presents the results of operations for our Credit segment:

	Three Months Ended June 30,						2018 vs. 2017						Six Months Ended June 30,						2018 vs. 2017
	2018			2017			$			%			2018			2017			$			%
	(Dollars in Thousands)
Revenues
Management Fees, Net
Base Management Fees	$	118,161		$	137,121		$	(18,960	)		-14	%	$	286,602		$	277,026		$	9,576			3	%
Transaction and Other Fees, Net		3,461			3,820			(359	)		-9	%		6,000			6,328			(328	)		-5	%
Management Fee Offsets		(2,697	)		(4,653	)		1,956			-42	%		(6,014	)		(22,512	)		16,498			-73	%
Total Management Fees, Net		118,925			136,288			(17,363	)		-13	%		286,588			260,842			25,746			10	%
Performance Revenues
Realized Incentive Fees		1,223			28,877			(27,654	)		-96	%		1,243			58,419			(57,176	)		-98	%
Realized Performance Allocations		13,371			15,040			(1,669	)		-11	%		52,575			23,837			28,738			121	%
Unrealized Performance Allocations		92,798			(8,839	)		101,637			N/M			92,318			40,792			51,526			126	%
Total Performance Revenues		107,392			35,078			72,314			206	%		146,136			123,048			23,088			19	%
Principal Investment Income (Loss)
Realized		4,082			1,895			2,187			115	%		11,107			4,548			6,559			144	%
Unrealized		764			1,666			(902	)		-54	%		(5,753	)		8,813			(14,566	)		N/M
Total Principal Investment Income		4,846			3,561			1,285			36	%		5,354			13,361			(8,007	)		-60	%
Interest and Dividend Revenue		10,532			6,614			3,918			59	%		18,434			12,358			6,076			49	%
Other		19,673			(12,660	)		32,333			N/M			6,972			(14,387	)		21,359			N/M
Total Revenues		261,368			168,881			92,487			55	%		463,484			395,222			68,262			17	%
Expenses
Compensation		55,907			56,954			(1,047	)		-2	%		129,381			112,072			17,309			15	%
Performance Compensation
Realized Incentive Fees		(232	)		14,224			(14,456	)		N/M			186			28,342			(28,156	)		-99	%
Realized Performance Allocations		7,715			7,901			(186	)		-2	%		30,134			12,487			17,647			141	%
Unrealized Performance Allocations		44,842			(5,531	)		50,373			N/M			39,119			17,144			21,975			128	%
Total Compensation and Benefits		108,232			73,548			34,684			47	%		198,820			170,045			28,775			17	%
Interest Expense		8,823			8,091			732			9	%		16,508			15,936			572			4	%
Other Operating Expenses		31,899			27,549			4,350			16	%		59,638			49,007			10,631			22	%
Total Expenses		148,954			109,188			39,766			36	%		274,966			234,988			39,978			17	%
Economic Income	$	112,414		$	59,693		$	52,721			88	%	$	188,518		$	160,234		$	28,284			18	%

N/M Not meaningful.

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

Revenues

Revenues were $261.4 million for the three months ended June 30, 2018, an increase of $92.5 million compared to $168.9 million for the three months ended June 30, 2017. This change was primarily attributable to

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increases of $72.3 million in Performance Revenues and $32.3 million in Other Revenue, partially offset by a decrease of $17.4 million in Total Management Fees, Net.

Revenues in our Credit segment in the second quarter of 2018 were higher compared to the second quarter of 2017, primarily driven by higher Performance Revenues as a result of higher appreciation in the Performing Credit and Distressed Strategies, partially offset by the conclusion of our investment sub-advisory relationship with FS Investments. While the conclusion of the relationship with FS Investments will adversely affect revenues in the near term, we believe we will replace and ultimately overtake the prior level of revenue associated with such sub-advisory relationship. Despite the relatively low interest rate environment, the investment pace of our Credit funds remained active, with $2.4 billion of capital deployed or committed during the second quarter. We believe the impact of U.S. tax reform is a net positive for our Credit segment’s U.S.-based portfolio companies with the exception of highly levered companies where the new limits on interest expense deductibility may offset the law’s other benefits. While interest rates are expected to continue to rise in the course of 2018 and could adversely affect Revenues in our Credit segment, we believe our current portfolio is somewhat insulated because much of our debt portfolio is floating rate, short duration and/or held to maturity. Moreover, such increases are expected to be against a backdrop of continuing economic strength and improving fundamentals, and the rise in interest rates may create investment opportunities. Our Credit segment revenues may, however, be negatively impacted by our failure to accurately assess and react to risk; a sustained period of depressed energy and commodity prices; and weakened market fundamentals that may lead to, among other things, ratings downgrades. See “Item 1A. Risk Factors — Risks Related to Our Business — Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our investment funds and reducing the ability of our investment funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.” in our Annual Report on Form 10-K for the year ended December 31, 2017.

Performance Revenues were $107.4 million for the three months ended June 30, 2018, an increase of $72.3 million compared to $35.1 million for the three months ended June 30, 2017. This change was primarily attributable to higher returns in our performing credit strategies and distressed strategies, partially offset by the conclusion of our sub-advisory relationship with FS Investments.

Other Revenue was $19.7 million for the three months ended June 30, 2018, an increase of $32.3 million compared to $(12.7) million for the three months ended June 30, 2017, primarily due to foreign exchange gain on our euro denominated bonds.

Total Management Fees, Net were $118.9 million for the three months ended June 30, 2018, a decrease of $17.4 million compared to $136.3 million for the three months ended June 30, 2017. The decrease was primarily attributable to an increase in Base Management Fees. Base Management Fees were $118.2 million for the three months ended June 30, 2018, a decrease of $19.0 million compared to $137.1 million for the three months ended June 30, 2017, primarily due to the conclusion of our sub-advisory relationship with FS Investments, partially offset by the acquisition of Harvest.

Expenses

Expenses were $149.0 million for the three months ended June 30, 2018, an increase of $39.8 million compared to $109.2 million for the three months ended June 30, 2017. The increase in expenses was primarily attributable to increases of $35.7 million in Performance Compensation and $4.3 million in Other Operating Expenses. The increase in Performance Compensation was due to the increase in Performance Revenues. The increase in Other Operating Expenses was primarily due to an increase in business development and communication and information services, partially offset by a decrease in professional fees.

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Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

Revenues

Revenues were $463.5 million for the six months ended June 30, 2018, an increase of $68.3 million compared to $395.2 million for the six months ended June 30, 2017. This change was primarily attributable to increases of $25.7 million in Total Management Fees, Net, $23.1 in Performance Revenues, and $21.4 million in Other Revenue, partially offset by a decrease of $8.0 million in Principal Investment Income.

Total Management Fees, Net were $286.6 million for the six months ended June 30, 2018, an increase of $25.7 million compared to $260.8 million for the six months ended June 30, 2017. The increase was primarily attributable to the addition of management fees as a result of the acquisition of Harvest and the inclusion of BIS, partially offset by the conclusion of our sub-advisory relationship with FS Investments.

The Annualized Base Management Fee Rate decreased from 0.76% at June 30, 2017 to 0.50% at June 30, 2018. The decrease was principally due to the inclusion of our insurance solutions initiative and the related fee ramp-up period in the first quarter of 2018.

Performance Revenues were $146.1 million for the six months ended June 30, 2018, an increase of $23.1 million compared to $123.0 million for the six months ended June 30, 2017. This change was primarily attributable to higher returns in our performing credit strategies and distressed strategies, partially offset by the conclusion of our sub-advisory relationship with FS Investments.

Other Revenue was $7.0 million for the six months ended June 30, 2018, an increase of $21.4 million compared to $(14.4) million for the six months ended June 30, 2017, primarily due to foreign exchange gain on our euro denominated bonds.

Principal Investment Income was $5.4 million for the six months ended June 30, 2018, a decrease of $8.0 million compared to $13.4 million for the six months ended June 30, 2017, primarily due to the unrealized investment losses in Blackstone’s investments in GSO funds, as well as our long only funds.

Expenses

Expenses were $275.0 million for the six months ended June 30, 2018, an increase of $40.0 million compared to $235.0 million for the six months ended June 30, 2017. The increase in expenses was primarily attributable to increases of $17.3 million in Compensation, $11.5 million in Performance Compensation and $10.6 million in Other Operating Expenses. The increase in Compensation was due to the increase in Management Fees, Net, on which a portion of compensation is based, as well as investment in initiatives. The increase in Performance Compensation was due to the increase in Performance Revenues. The increase in Other Operating Expenses was primarily due to an increase in business development and communication and information services.

Fund Returns

Fund return information for our significant businesses is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of The Blackstone Group L.P. and is also not necessarily indicative of the future results of any particular fund. An investment in The Blackstone Group L.P. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

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The following table presents combined internal rates of return of the segment’s performing credit and distressed strategies funds:

	Three Months Ended June 30,												Six Months Ended June 30,												June 30, 2018 Inception to Date
	2018						2017						2018						2017
Composite (a)	Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net
Performing Credit Strategies (b)		5	%		4	%		2	%		—			8	%		6	%		5	%		3	%		15	%		9	%
Distressed Strategies (c)		4	%		3	%		-1	%		-2	%		3	%		2	%		2	%		—			11	%		7	%

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

(a) Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and performance revenues, net of tax advances.

(b) Performing Credit Strategies include mezzanine lending funds, BDCs and other performing credit strategy funds. Performing Credit Strategies’ returns represent the IRR of the combined cash flows of the fee-earning funds exceeding $100 million of fair value at each respective quarter end excluding the Blackstone Funds that were contributed to GSO as part of Blackstone’s acquisition of GSO in March 2008. The inception to date returns are from July 16, 2007.

(c) Distressed Strategies include stressed/distressed funds, credit alpha strategies and energy strategies. Distressed Strategies’ returns represent the IRR of the combined cash flows of the fee-earning funds exceeding $100 million of fair value at each respective quarter end. The inception to date returns are from August 1, 2005.

As of June 30, 2018, there was $14.9 billion of Performance Revenue eligible assets under management invested in Credit strategies that were above the hurdle necessary to generate Incentive Fees or carried interest. This represented 37% of the total Performance Revenue eligible assets at fair value across all Credit strategies.

Non-GAAP Financial Measures

The following tables set forth the calculations of the non-GAAP financial measures used by management when assessing the performance of our business. These non-GAAP financial measures are presented without the consolidation of any Blackstone Funds that are consolidated into the Condensed Consolidated Financial Statements. Consequently, all non-GAAP financial measures exclude the assets, liabilities and operating results related to the Blackstone Funds. See “— Key Financial Measures and Indicators” for our definitions of Economic Income, Economic Net Income, Fee Related Earnings, Distributable Earnings and Adjusted EBITDA.

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The following table calculates Blackstone’s Fee Related Earnings, Distributable Earnings and Economic Net Income:

(a) Represents the total segment amounts of the respective captions. See Note 18. “Segment Reporting” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

(b) Detail on this amount is included in the table below.

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The following table calculates the components of Fee Related Earnings, Distributable Earnings and Economic Net Income in the above table identified by note (b):

(a) Represents the total segment amounts of the respective captions. See Note 18. “Segment Reporting” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

(b) Represents the equity-based compensation expense component of Compensation.

(c) Represents the total equity-based compensation expense component of Realized Incentive Fees Compensation and Realized Performance Allocations Compensation.

(d) Taxes and Related Payables represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes and to exclude the tax impact on any divestitures and the Payable Under Tax Receivable Agreement.

(e) Represents tax-related payables including the Payable Under Tax Receivable Agreement, which is a component of Taxes and Related Payables.

(f) Represents all equity-based compensation expenses included in Economic Income. This excludes all transaction-related equity-based charges.

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The following table is a reconciliation of Net Income Attributable to The Blackstone Group L.P. to Economic Income, of Economic Income to Economic Net Income, of Economic Net Income to Fee Related Earnings, of Fee Related Earnings to Distributable Earnings and of Distributable Earnings to Adjusted EBITDA:

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(a) This adjustment removes Transaction-Related Charges. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. The consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gain or losses associated with these corporate actions.

(b) This adjustment reverses the effect of consolidating the Blackstone Funds and the elimination of non-controlling interests in the Blackstone consolidated operating partnerships.

(c) Taxes represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes and adjusted to exclude the tax impact on any divestitures.

(d) This adjustment removes total segment Performance Revenues.

(e) This adjustment removes total segment Principal Investment Income (Loss).

(f) This adjustment removes total segment Other Revenues.

(g) This adjustment removes total segment Interest and Dividend Revenue less total segment Interest Expense.

(h) This adjustment removes the total segment amount of Performance Compensation, comprised of Incentive Fee Compensation and Performance Allocations Compensation.

(i) This adjustment removes the component of total segment Compensation that is equity-based.

(j) This adjustment adds the total segment amounts or Realized Incentive Fees and Realized Performance Allocations, net of realized Performance Compensation.

(k) This adjustment adds the total segment amount of Realized Principal Investment Income.

(l) Taxes and Related Payables Including Payable Under Tax Receivable Agreement represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes and to exclude the tax impact on any divestitures and the Payable Under Tax Receivable Agreement.

(m) This adjustment adds back the total segment amount of Interest Expense.

Liquidity and Capital Resources

General

Blackstone’s business model derives revenue primarily from third party assets under management. Blackstone is not a capital or balance sheet intensive business and targets operating expense levels such that total management and advisory fees exceed total operating expenses each period. As a result, we require limited capital resources to support the working capital or operating needs of our businesses. We draw primarily on the long-term committed capital of our limited partner investors to fund the investment requirements of the Blackstone Funds and use our own realizations and cash flows to invest in growth initiatives, make commitments to our own funds, where our minimum general partner commitments are generally less than 5% of the limited partner commitments of a fund, and pay distributions to unitholders.

Fluctuations in our statement of financial condition result primarily from activities of the Blackstone Funds which are consolidated as well as business transactions, such as the issuance of senior notes described below. The majority economic ownership interests of the Blackstone Funds are reflected as Redeemable Non-Controlling Interests in Consolidated Entities and Non-Controlling Interests in Consolidated Entities in the Condensed Consolidated Financial Statements. The consolidation of these Blackstone Funds has no net effect on the Partnership’s Net Income or Partners’ Capital. Additionally, fluctuations in our statement of financial condition also include appreciation or depreciation in Blackstone investments in the Blackstone Funds, additional investments and redemptions of such interests in the Blackstone Funds and the collection of receivables related to management and advisory fees.

Total assets were $30.1 billion as of June 30, 2018, a decrease of $4.3 billion from December 31, 2017. The decrease in total assets was principally due to a decrease of $8.9 billion from the deconsolidation of CLOs and other fund entities, partially offset by an increase of $2.7 billion from the launch of new consolidated CLOs.

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Total liabilities were $15.4 billion as of June 30, 2018, a decrease of $5.3 billion from December 31, 2017. The decrease in total liabilities was primarily due to a decrease of $8.7 billion from the deconsolidation of CLOs and other fund entities, partially offset by an increase of $2.7 billion from the launch of new consolidated CLOs.

The deconsolidation of the CLOs and fund vehicles was the result of the dilution of Blackstone’s ownership interests in these vehicles during the six months ended June 30, 2018. As a result of the dilution, Blackstone determined that it was no longer the primary beneficiary of these VIEs under GAAP guidance and deconsolidated these vehicles. See Note 9. “Variable Interest Entities” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Sources and Uses of Liquidity

We have multiple sources of liquidity to meet our capital needs, including annual cash flows, accumulated earnings in the businesses, the proceeds from our issuances of senior notes, liquid investments we hold on our balance sheet for our own use and access to our $1.5 billion committed revolving credit facility. As of June 30, 2018, Blackstone had $1.7 billion in cash and cash equivalents, $3.5 billion invested in corporate treasury investments, $2.0 billion invested in Blackstone Funds and other investments, against $3.6 billion in borrowings from our bond issuances, and no borrowings outstanding under our revolving credit facility.

In addition to the cash we received from our debt offerings and availability under our committed revolving credit facility, we expect to receive (a) cash generated from operating activities, (b) carried interest and incentive fee realizations, and (c) realizations on the carry and hedge fund investments that we make. The amounts received from these three sources in particular may vary substantially from year to year and quarter to quarter depending on the frequency and size of realization events or net returns experienced by our investment funds. Our available capital could be adversely affected if there are prolonged periods of few substantial realizations from our investment funds accompanied by substantial capital calls for new investments from those investment funds. Therefore, Blackstone’s commitments to our funds are taken into consideration when managing our overall liquidity and cash position.

We expect that our primary liquidity needs will be cash to (a) provide capital to facilitate the growth of our existing businesses which principally includes funding our general partner and co-investment commitments to our funds, (b) provide capital to facilitate our expansion into new businesses that are complementary, (c) pay operating expenses, including cash compensation to our employees and other obligations as they arise, (d) fund modest capital expenditures, (e) repay borrowings and related interest costs, (f) pay income taxes, (g) repurchase our common units and Blackstone Holdings partnership units, and (h) make distributions to our unitholders and the holders of Blackstone Holdings Partnership Units. Our own capital commitments to our funds, the funds we invest in and our investment strategies as of June 30, 2018 consisted of the following:

	Blackstone and General Partner				Senior Managing Directors and Certain Other Professionals (a)
Fund	Original Commitment		Remaining Commitment		Original Commitment		Remaining Commitment
	(Dollars in Thousands)
Private Equity
BCP V	$	629,356	$	30,730	$	—	$	—
BCP VI		719,718		107,468		250,000		37,330
BCP VII		500,000		387,552		225,000		174,398
BEP I		50,000		4,703		—		—
BEP II		80,000		45,198		26,667		15,066
BCEP		120,000		66,408		18,992		10,405
BCP Asia		40,000		40,000		13,333		13,333
Tactical Opportunities		367,752		192,011		105,251		64,004
Strategic Partners		409,738		235,881		58,627		30,951
BIP		112,333		112,333		—		—
Other (b)		248,592		26,328		—		—

continued…

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	Blackstone and General Partner				Senior Managing Directors and Certain Other Professionals (a)
Fund	Original Commitment		Remaining Commitment		Original Commitment		Remaining Commitment
	(Dollars in Thousands)
Real Estate
BREP VI	$	750,000	$	36,809	$	150,000	$	12,270
BREP VII		300,000		45,290		100,000		15,097
BREP VIII		300,000		153,463		100,000		51,154
BREP Europe III		100,000		13,231		35,000		4,631
BREP Europe IV		130,000		23,842		43,333		7,947
BREP Europe V		150,000		83,124		43,333		24,014
BREP Asia I		50,000		16,063		16,667		5,354
BREP Asia II		71,061		68,423		23,687		22,808
BREDS II		50,000		6,227		16,667		2,076
BREDS III		50,000		30,769		16,667		10,256
Other (b)		151,917		27,925		—		—
Hedge Fund Solutions
Strategic Alliance		50,000		2,033		—		—
Strategic Alliance II		50,000		1,482		—		—
Strategic Alliance III		22,000		19,769		—		—
Strategic Holdings LP		156,748		110,261		—		—
Other (b)		3,320		1,905		—		—
Credit
Capital Opportunities Fund II LP		120,000		34,439		110,527		31,720
Capital Opportunities Fund III LP		130,783		98,654		30,431		23,210
GSO Euro Senior Debt Fund LP		63,000		28,070		57,194		25,483
BMezz II		17,692		160		—		—
GSO Capital Solutions		50,000		6,398		27,666		3,540
GSO Capital Solutions II		125,000		59,718		120,534		57,584
GSO Capital Solutions III		151,000		146,130		30,542		29,570
GSO Energy Select Opportunities Fund		80,000		43,324		74,747		40,479
GSO Credit Alpha Fund LP		52,102		7,815		50,285		7,543
Other (b)		136,141		51,926		35,830		11,044
Other
Treasury		233,855		72,100		—		—
	$	6,822,108	$	2,437,962	$	1,780,980	$	731,267

(a) For some of the general partner commitments shown in the table above, we require our senior managing directors and certain other professionals to fund a portion of the commitment even though the ultimate obligation to fund the aggregate commitment is ours pursuant to the governing agreements of the respective funds. The amounts of the aggregate applicable general partner original and remaining commitment are shown in the table above. In addition, certain senior managing directors and other professionals are required to fund a de minimis amount of the commitment in the other private equity, real estate and credit-focused carry funds. We expect our commitments to be drawn down over time and to be funded by available cash and cash generated from operations and realizations. Taking into account prevailing market conditions and both the liquidity and cash or liquid investment balances, we believe that the sources of liquidity described above will be more than sufficient to fund our working capital requirements.

(b) Represents capital commitments to a number of other funds in each respective segment.

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As of June 30, 2018, Blackstone Holdings Finance Co. L.L.C. (the “Issuer”), an indirect subsidiary of the Partnership, had issued and outstanding the following senior notes (collectively the “Notes”):

Senior Notes (a)	Aggregate Principal Amount (Dollars/Euros in Thousands)
5.875%, Due 3/15/2021	$	400,000
4.750%, Due 2/15/2023	$	400,000
2.000%, Due 5/19/2025	€	300,000
1.000%, Due 10/5/2026	€	600,000
3.150%, Due 10/2/2027	$	300,000
6.250%, Due 8/15/2042	$	250,000
5.000%, Due 6/15/2044	$	500,000
4.450%, Due 7/15/2045	$	350,000
4.000%, Due 10/2/2047	$	300,000

(a) The Notes are unsecured and unsubordinated obligations of the Issuer and are fully and unconditionally guaranteed, jointly and severally, by The Blackstone Group L.P. and each of the Blackstone Holdings Partnerships. The Notes contain customary covenants and financial restrictions that, among other things, limit the Issuer and the guarantors’ ability, subject to certain exceptions, to incur indebtedness secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets. The Notes also contain customary events of default. All or a portion of the Notes may be redeemed at our option, in whole or in part, at any time and from time to time, prior to their stated maturity, at the make-whole redemption price set forth in the Notes. If a change of control repurchase event occurs, the Notes are subject to repurchase at the repurchase price as set forth in the Notes.

Blackstone, through indirect subsidiaries, has a $1.5 billion unsecured revolving credit facility (the “Credit Facility”) with Citibank, N.A., as Administrative Agent with a maturity date of August 31, 2021. Borrowings may also be made in U.K. sterling, euros, Swiss francs or Japanese yen, in each case subject to certain sub-limits. The Credit Facility contains customary representations, covenants and events of default. Financial covenants consist of a maximum net leverage ratio and a requirement to keep a minimum amount of fee-earning assets under management, each tested quarterly.

On April 16, 2018, the Board of Directors of our general partner, Blackstone Group Management L.L.C., authorized the repurchase of up to $1.0 billion of Blackstone common units and Blackstone Holdings Partnership Units. Under the unit repurchase program, units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of units repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The unit repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

During the three and six months ended June 30, 2018, we repurchased 2.2 million Blackstone common units as part of the unit repurchase program at a total cost of $71.7 million. As of June 30, 2018, the amount remaining available for repurchases under the program was $928.3 million.

Distributions

Our intention is to distribute quarterly to common unitholders approximately 85% of The Blackstone Group L.P.’s share of Distributable Earnings, subject to adjustment by 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. The amount to be distributed could also be adjusted upward in any one quarter.

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All of the foregoing is subject to the qualification that the declaration and payment of any distributions are at the sole discretion of our general partner and our general partner may change our distribution policy at any time, including, without limitation, to reduce the quarterly distribution payable to our common unitholders or even to eliminate such distributions entirely.

Because the subsidiaries of The Blackstone Group L.P. must pay taxes and make payments under the tax receivable agreements, the amounts ultimately distributed by The Blackstone Group L.P. to its common unitholders in respect of each fiscal year are generally expected to be less, 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.

The following graph shows fiscal quarterly and annual per common unitholder distributions for 2017 and 2018. Distributions are declared and paid in the quarter subsequent to the quarter in which they are earned.

With respect to the second quarter of fiscal year 2018, we have paid to common unitholders a distribution of $0.58 per common unit, aggregating $0.93 per common unit in respect of the six months ended June 30, 2018. With respect to fiscal year 2017, we paid common unitholders aggregate distributions of $2.70 per common unit.

In addition, Blackstone intends to distribute a portion of the after-tax proceeds from the conclusion of its sub-advisory relationship with FS Investments, resulting in an anticipated incremental $0.30 per common unit over the second, third and fourth quarters of 2018, of which $0.10 per common unit was distributed on August 6. 2018.

Leverage

We may under certain circumstances use leverage opportunistically and over time to create the most efficient capital structure for Blackstone and our public common unitholders. In addition to the borrowings from our bond issuances and our revolving credit facility, we may use reverse repurchase agreements, repurchase agreements and securities sold, not yet purchased. All of these positions are held in a separately managed portfolio. Reverse repurchase agreements are entered into primarily to take advantage of opportunistic yields otherwise absent in the overnight markets and also to use the collateral received to cover securities sold, not yet purchased. Repurchase

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agreements are entered into primarily to opportunistically yield higher spreads on purchased securities. The balances held in these financial instruments fluctuate based on Blackstone’s liquidity needs, market conditions and investment risk profiles.

Generally our funds in our private equity segment, our opportunistic real estate funds, funds of hedge funds and certain credit-focused funds have not utilized substantial leverage at the fund level other than for (a) short-term borrowings between the date of an investment and the receipt of capital from the investing fund’s investors, and (b) long-term borrowings for certain investments in aggregate amounts which are generally 1% to 25% of the capital commitments of the respective fund. Our carry funds make direct or indirect investments in companies that utilize leverage in their capital structure. The degree of leverage employed varies among portfolio companies.

Certain of our Real Estate debt hedge funds, Hedge Fund Solutions funds and credit-focused funds use leverage in order to obtain additional market exposure, enhance returns on invested capital and/or to bridge short-term cash needs. The forms of leverage primarily employed by these funds include purchasing securities on margin, utilizing collateralized financing and using derivative instruments.

The following table presents information regarding these financial instruments in our Condensed Consolidated Statements of Financial Condition:

	Repurchase Agreements		Securities Sold, Not  Yet Purchased
	(Dollars in Millions)
Balance, June 30, 2018	$	182.5	$	155.8
Balance, December 31, 2017	$	118.8	$	154.4
Six Months Ended June 30, 2018
Average Daily Balance	$	152.1	$	153.4
Maximum Daily Balance	$	189.7	$	174.7

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Contractual Obligations, Commitments and Contingencies

The following table sets forth information relating to our contractual obligations as of June 30, 2018 on a consolidated basis and on a basis deconsolidating the Blackstone Funds:

Contractual Obligations	July 1, 2018 to December 31, 2018			2019-2020			2021-2022			Thereafter			Total
	(Dollars in Thousands)
Operating Lease Obligations (a)	$	39,275		$	142,824		$	155,189		$	344,234		$	681,522
Purchase Obligations		17,738			21,852			1,957			—			41,547
Blackstone Issued Notes and Revolving Credit Facility (b)		—			—			400,000			3,151,560			3,551,560
Interest on Blackstone Issued Notes and Revolving Credit Facility (c)		67,088			268,342			233,092			1,614,048			2,182,570
Blackstone Funds and CLO Vehicles Debt Obligations Payable (d)		2,819			—			—			6,865,160			6,867,979
Interest on Blackstone Funds and CLO Vehicles Debt Obligations Payable (e)		125,235			500,734			500,734			1,841,871			2,968,574
Blackstone Funds Capital Commitments to Investee Funds (f)		545,210			—			—			—			545,210
Due to Certain Non-Controlling Interest Holders in Connection with Tax Receivable Agreements (g)		—			153,953			136,473			498,876			789,302
Unrecognized Tax Benefits, Including Interest and Penalties (h)		2,684			—			—			—			2,684
Blackstone Operating Entities Capital Commitments to Blackstone Funds and Other (i)		2,437,962			—			—			—			2,437,962
Consolidated Contractual Obligations		3,238,011			1,087,705			1,427,445			14,315,749			20,068,910
Blackstone Funds and CLO Vehicles Debt Obligations Payable (d)		(2,819	)		—			—			(6,865,160	)		(6,867,979	)
Interest on Blackstone Funds and CLO Vehicles Debt Obligations Payable (e)		(125,235	)		(500,734	)		(500,734	)		(1,841,871	)		(2,968,574	)
Blackstone Funds Capital Commitments to Investee Funds (f)		(545,210	)		—			—			—			(545,210	)
Blackstone Operating Entities Contractual Obligations	$	2,564,747		$	586,971		$	926,711		$	5,608,718		$	9,687,147

(a) We lease our primary office space and certain office equipment under agreements that expire through 2030. In connection with certain office space lease agreements, we are responsible for escalation payments. The contractual obligation table above includes only guaranteed minimum lease payments for such leases and does not project potential escalation or other lease-related payments. These leases are classified as operating leases for financial statement purposes and as such are not recorded as liabilities on the Condensed Consolidated Statements of Financial Condition. The amounts are presented net of contractual sublease commitments.

(b) Represents the principal amount due on the senior notes we issued. As of June 30, 2018, we had no outstanding borrowings under our revolver.

(c) Represents interest to be paid over the maturity of our senior notes and borrowings under our revolving credit facility which has been calculated assuming no pre-payments are made and debt is held until its final maturity date. These amounts exclude commitment fees for unutilized borrowings under our revolver.

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(d) These obligations are those of the Blackstone Funds including the consolidated CLO vehicles.

(e) Represents interest to be paid over the maturity of the related consolidated Blackstone Funds’ and CLO vehicles’ debt obligations which has been calculated assuming no pre-payments will be made and debt will be held until its final maturity date. The future interest payments are calculated using variable rates in effect as of June 30, 2018, at spreads to market rates pursuant to the financing agreements, and range from 2.9% to 8.7%. The majority of the borrowings are due on demand and for purposes of this schedule are assumed to mature within one year. Interest on the majority of these borrowings rolls over into the principal balance at each reset date.

(f) These obligations represent commitments of the consolidated Blackstone Funds to make capital contributions to investee funds and portfolio companies. These amounts are generally due on demand and are therefore presented in the less than one year category.

(g) Represents obligations by the Partnership’s corporate subsidiary to make payments under the Tax Receivable Agreements to certain non-controlling interest holders for the tax savings realized from the taxable purchases of their interests in connection with the reorganization at the time of Blackstone’s IPO in 2007 and subsequent purchases. The obligation represents the amount of the payments currently expected to be made, which are dependent on the tax savings actually realized as determined annually without discounting for the timing of the payments. As required by GAAP, the amount of the obligation included in the Condensed Consolidated Financial Statements and shown in Note 16. “Related Party Transactions” (see “Part I. Item 1. Financial Statements”) differs to reflect the net present value of the payments due to certain non-controlling interest holders.

(h) The total represents gross unrecognized tax benefits of $1.2 million and interest and penalties of $1.5 million. In addition, Blackstone is not able to make a reasonably reliable estimate of the timing of payments in individual years in connection with gross unrecognized benefits of $16.6 million and interest of $1.5 million; therefore, such amounts are not included in the above contractual obligations table.

(i) These obligations represent commitments by us to provide general partner capital funding to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. These amounts are generally due on demand and are therefore presented in the less than one year category; however, a substantial amount of the capital commitments are expected to be called over the next three years. We expect to continue to make these general partner capital commitments as we raise additional amounts for our investment funds over time.

Guarantees

Blackstone and certain of its consolidated funds provide financial guarantees. The amounts and nature of these guarantees are described in Note 17. “Commitments and Contingencies — Contingencies — Guarantees” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Indemnifications

In many of its service contracts, Blackstone agrees to indemnify the third party service provider under certain circumstances. The terms of the indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined and has not been included in the table above or recorded in our Condensed Consolidated Financial Statements as of June 30, 2018.

Clawback Obligations

Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. The lives of the carry funds, including available contemplated extensions, for which a

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liability for potential clawback obligations has been recorded for financial reporting purposes, are currently anticipated to expire at various points through 2028. Further extensions of such terms may be implemented under given circumstances.

For financial reporting purposes, when applicable, the general partners record a liability for potential clawback obligations to the limited partners of some of the carry funds due to changes in the unrealized value of a fund’s remaining investments and where the fund’s general partner has previously received Performance Allocation distributions with respect to such fund’s realized investments.

As of June 30, 2018, the total clawback obligations were $2.2 million, of which $1.1 million related to Blackstone Holdings and $1.1 million related to current and former Blackstone personnel. If, at June 30, 2018, all of the investments held by our carry funds were deemed worthless, a possibility that management views as remote, the amount of Performance Allocations subject to potential clawback would be $6.5 billion, on an after-tax basis where applicable, of which Blackstone Holdings is potentially liable for $6.0 billion if current and former Blackstone personnel default on their share of the liability, a possibility that management also views as remote. See Note 16. “Related Party Transactions” and Note 17. “Commitments and Contingencies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Critical Accounting Policies

We prepare our Condensed Consolidated Financial Statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates and/or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our condensed consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and/or judgments, however, are often subjective. Actual results may be affected negatively based on changing circumstances. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. We believe the following critical accounting policies could potentially produce materially different results if we were to change underlying assumptions, estimates and/or judgments. See Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Principles of Consolidation

The Partnership consolidates all entities that it controls through a majority voting interest or otherwise, including those Blackstone Funds in which the general partner has a controlling financial interest. The Partnership has a controlling financial interest in Blackstone Holdings because the limited partners do not have the right to dissolve the partnerships or have substantive kick out rights or participating rights that would overcome the control held by the Partnership. Accordingly, the Partnership consolidates Blackstone Holdings and records non-controlling interests to reflect the economic interests of the limited partners of Blackstone Holdings.

In addition, the Partnership consolidates all variable interest entities (“VIE”) in which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which the Partnership holds a variable interest is a VIE and (b) whether the Partnership’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (for example, management and performance related fees), would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment.

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The Partnership determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and continuously reconsiders that conclusion. In determining whether the Partnership is the primary beneficiary, Blackstone evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Partnership. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Partnership is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Partnership, affiliates of the Partnership or third parties) or amendments to the governing documents of the respective Blackstone Funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, the Partnership assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.

Assets of consolidated VIEs that can only be used to settle obligations of the consolidated VIE and liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of Blackstone are presented in a separate section in the Condensed Consolidated Statements of Financial Condition.

Revenue Recognition

Revenues primarily consist of management and advisory fees, incentive fees, investment income, interest and dividend revenue and other. Please refer to “Part I. Item 1. Business – Incentive Arrangements / Fee Structure” in our Annual Report on Form 10-K for the year ended December 31, 2017 for additional information regarding the manner in which Base Management Fees and Incentive Fees are generated.

Management and advisory fees and incentive fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 18. “Segment Reporting” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” for a disaggregated presentation of revenues from contracts with customers.

Investment Income represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments. Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by us. Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Management and Advisory Fees, Net — Management and Advisory Fees, Net are comprised of management fees, including base management fees, transaction and other fees and advisory fees net of management fee reductions and offsets.

The Partnership earns base management fees from limited partners of funds in each of its managed funds, at a fixed percentage of assets under management, net asset value, total assets, committed capital or invested capital. These customer contracts require the Partnership to provide investment management services, which represents a performance obligation that the Partnership satisfies over time. Management fees are a form of variable consideration because the fees the Partnership is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid. The range of management fee rates and the calculation base from which they are earned, generally, are as follows:

On private equity, real estate, and certain of our hedge fund solutions and credit-focused funds:

• 0.25% to 1.75% of committed capital or invested capital during the investment period,

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• 0.25% to 1.50% of invested capital, committed capital and investment fair value subsequent to the investment period for private equity and real estate funds, and

• 0.75% to 1.50% of invested capital or net asset value subsequent to the investment period for certain of our hedge fund solutions and credit-focused funds.

On real estate, credit and MLP-focused funds structured like hedge funds:

• 0.50% to 1.50% of net asset value.

On credit and MLP-focused separately managed accounts:

• 0.25% to 1.50% of net asset value or total assets.

On real estate separately managed accounts:

• 0.50% to 2.00% of invested capital, net operating income or net asset value.

On funds of hedge funds, certain hedge funds and separately managed accounts invested in hedge funds:

• 0.50% to 1.25% of net asset value.

On CLO vehicles:

• 0.40% to 0.65% of the aggregate par amount of collateral assets, including principal cash.

On credit-focused registered and non-registered investment companies:

• 0.35% to 1.50% of total assets or net asset value.

The investment adviser of BXMT receives annual management fees based upon 1.50% of BXMT’s net proceeds received from equity offerings and accumulated “core earnings” (which is generally equal to its GAAP net income excluding certain non-cash and other items), subject to certain adjustments. The investment adviser of our non-exchange traded REIT receives a management fee of 1.25% per annum of net asset value, payable monthly.

Transaction, advisory and other fees (including monitoring fees) are principally fees charged to the limited partners of funds indirectly through the managed funds and portfolio companies. The investment advisory agreements generally require that the investment adviser reduce the amount of management fees payable by the limited partners to the Partnership (“management fee reductions”) by an amount equal to a portion of the transaction and other fees paid to the Partnership by the portfolio companies. The amount of the reduction varies by fund, the type of fee paid by the portfolio company and the previously incurred expenses of the fund. These fees and associated management fee reductions are a component of the transaction price for our performance obligation to provide investment management services to the limited partners of funds and are recognized as changes to the transaction price in the period in which they are charged and the services are performed.

Management fee offsets are reductions to management fees payable by the limited partners of the Blackstone Funds, which are based on the amount such limited partners reimburse the Blackstone Funds or the Partnership primarily for placement fees. Providing investment management services requires the Partnership to arrange for services on behalf of its customers. In those situations where we are acting as an agent on behalf of the limited partners of funds, it presents the cost of services as net against management fee revenue. In all other situations, the Partnership is primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements. As a result, the cost of those services is presented gross as Compensation or General, Administrative and Other expense, as appropriate, with any reimbursement from the limited partners of the funds recorded as Management and Advisory Fees, Net.

Accrued but unpaid Management and Advisory Fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts Receivable or Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

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Incentive Fees — Contractual fees earned based on the performance of Blackstone Funds (“Incentive Fees”) are a form of variable consideration in their contracts with customers to provide investment management services. Incentive Fees are earned based on fund performance during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each fund’s governing agreements. Incentive Fees will not be recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved. Incentive Fees are typically recognized as revenue when realized at the end of the measurement period. Once realized, such fees are not subject to clawback or reversal. Accrued but unpaid Incentive Fees charged directly to investors in Blackstone Funds as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Investment Income (Loss) — Investment Income (Loss) represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments.

In certain fund structures across private equity, real estate, hedge fund solutions and credit-focused funds (“carry funds”), Blackstone, through its subsidiaries, invests alongside its limited partners in a partnership and is entitled to its pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, Blackstone is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).

Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. At the end of each reporting period, the Partnership calculates the balance of Accrued Performance Allocations that would be due to the Partnership for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. Accrued Performance Allocations as of the reporting date are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Performance Allocations are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results. As such, the accrual for potential repayment of previously received Performance Allocations, which is a component of Due to Affiliates, represents all amounts previously distributed to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone carry funds if the Blackstone carry funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain funds, including certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability.

Principal Investments include the unrealized and realized gains and losses on the Partnership’s principal investments, including its investments in Blackstone Funds that are not consolidated and receive pro-rata

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allocations, its equity method investments, and other principal investments. Income (Loss) on Principal Investments is realized when the Partnership redeems all or a portion of its investment or when the Partnership receives cash income, such as dividends or distributions. Unrealized Income (Loss) on Principal Investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest and Dividend Revenue — Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by Blackstone.

Other Revenue — Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Expenses

Our expenses include compensation and benefits expense and general and administrative expenses. Our accounting policies related thereto are as follows:

Compensation and Benefits — Compensation — Compensation and Benefits consists of (a) employee compensation, comprising salary and bonus, and benefits paid and payable to employees and senior managing directors and (b) equity-based compensation associated with the grants of equity-based awards to employees and senior managing directors. Compensation cost relating to the issuance of equity-based awards to senior managing directors and employees is measured at fair value at the grant date, taking into consideration expected forfeitures, and expensed over the vesting period on a straight-line basis, except in the case of (a) equity-based awards that do not require future service, which are expensed immediately and (b) certain awards to recipients that meet specified criteria making them eligible for retirement treatment (allowing such recipient to keep a percentage of those awards upon departure from Blackstone after becoming eligible for retirement), for which the expense for the portion of the award that would be retained in the event of retirement is either expensed immediately or amortized to the retirement date. Cash settled equity-based awards are classified as liabilities and are remeasured at the end of each reporting period.

Compensation and Benefits — Incentive Fee Compensation — Incentive Fee Compensation consists of compensation paid based on Incentive Fees.

Compensation and Benefits — Performance Allocations Compensation — Performance Allocation Compensation consists of compensation paid based on Performance Allocations (which may be distributed in cash or in-kind). Such compensation expense is subject to both positive and negative adjustments. Unlike Performance Allocations, compensation expense is based on the performance of individual investments held by a fund rather than on a fund by fund basis. These amounts may also include allocations of investment income from Blackstone’s principal investments, to senior managing directors and employees participating in certain profit sharing initiatives.

Other Operating Expenses — Other Operating Expenses represents general and administrative expenses including interest expense, occupancy and equipment expenses and other expenses, which consist principally of professional fees, public company costs, travel and related expenses, communications and information services and depreciation and amortization.

Fund Expenses — The expenses of our consolidated Blackstone Funds consist primarily of interest expense, professional fees and other third party expenses.

Fair Value of Financial Instruments

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a

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number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

• Level I — Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. The Partnership does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and a sale could reasonably impact the quoted price.

• Level II — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held within CLO vehicles, government and agency securities, less liquid and restricted equity securities, and certain over-the-counter derivatives where the fair value is based on observable inputs. Senior and subordinated notes issued by CLO vehicles are classified within Level II of the fair value hierarchy.

• Level III — Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership interests in private equity and real estate funds, credit-focused funds, distressed debt and non-investment grade residual interests in securitizations, certain corporate bonds and loans held within CLO vehicles, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Transfers between levels of the fair value hierarchy are recognized at the beginning of the reporting period.

Level II Valuation Techniques

Financial instruments classified within Level II of the fair value hierarchy comprise debt instruments, including certain corporate loans and bonds held by Blackstone’s consolidated CLO vehicles and debt securities sold, not yet purchased. Certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.

The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:

• Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.

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• Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit spreads.

• Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.

Level III Valuation Techniques

In the absence of observable market prices, Blackstone values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances, and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, real estate properties, certain funds of hedge funds and credit-focused investments.

Private Equity Investments — The fair values of private equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortization (“EBITDA”), the discounted cash flow method, public market or private transactions, valuations for comparable companies and other measures which, in many cases, are based on unaudited information at the time received. Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples.

Real Estate Investments — The fair values of real estate investments are determined by considering projected operating cash flows, sales of comparable assets, if any, and replacement costs, among other measures. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rates (“cap rates”) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or assets (for example, multiplying a key performance metric of the investee company or asset, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to an exit EBITDA multiple or capitalization rate. Additionally, where applicable, projected distributable cash flow through debt maturity will be considered in support of the investment’s fair value.

Credit-Focused Investments — The fair values of credit-focused investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. For credit-focused investments that are not publicly traded or whose market prices are not readily available, Blackstone may utilize other valuation techniques, including the discounted cash flow method or a market approach. The discounted cash flow method projects the expected cash flows of the debt instrument based on contractual terms, and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly traded debt instruments issued by companies operating in similar industries as the subject investment, with similar leverage statistics and time to maturity.

The market approach is generally used to determine the enterprise value of the issuer of a credit investment, and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.

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Level III Valuation Process

Investments classified within Level III of the fair value hierarchy are valued on a quarterly basis, taking into consideration factors including any changes in Blackstone’s weighted-average cost of capital assumptions, discounted cash flow projections and exit multiple assumptions, as well as any changes in economic and other relevant conditions, and valuation models are updated accordingly. The valuation process also includes a review by an independent valuation party, at least annually for all investments, and quarterly for certain investments, to corroborate the values determined by management. The valuations of Blackstone’s investments are reviewed quarterly by a valuation committee chaired by Blackstone’s Vice Chairman and includes senior heads of each of Blackstone’s businesses, as well as representatives of legal and finance. Each quarter, the valuations of Blackstone’s investments are also reviewed by the Audit Committee in a meeting attended by the chairman of the valuation committee. The valuations are further tested by comparison to actual sales prices obtained on disposition of the investments.

Investments, at Fair Value

The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing Guide, Investment Companies, and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. Such consolidated funds’ investments are reflected in Investments on the Condensed Consolidated Statements of Financial Condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, at current market conditions (i.e., the exit price).

Blackstone’s principal investments are presented at fair value with unrealized appreciation or depreciation and realized gains and losses recognized in the Condensed Consolidated Statements of Operations within Investment Income (Loss).

For certain instruments, the Partnership has elected the fair value option. Such election is irrevocable and is applied on an investment by investment basis at initial recognition. The Partnership has applied the fair value option for certain loans and receivables and certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses recorded in net income. The methodology for measuring the fair value of such investments is consistent with the methodology applied to private equity, real estate, credit-focused and funds of hedge funds investments. Changes in the fair value of such instruments are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. Interest income on interest bearing loans and receivables and debt securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest and Dividend Revenue.

The Partnership has elected the fair value option for the assets of consolidated CLO vehicles. As permitted under GAAP, the Partnership measures the liabilities of consolidated CLO vehicles as (a) the sum of the fair value of the consolidated CLO assets and the carrying value of any non-financial assets held temporarily, less (b) the sum of the fair value of any beneficial interests retained by the Partnership (other than those that represent compensation for services) and the Partnership’s carrying value of any beneficial interests that represent compensation for services. As a result of this measurement alternative, there is no attribution of amounts to Non-Controlling Interests for consolidated CLO vehicles. Assets of the consolidated CLOs are presented within Investments within the Condensed Consolidated Statements of Financial Condition and Liabilities within Loans Payable for the amounts due to unaffiliated third parties and Due to Affiliates for the amounts held by non-consolidated affiliates. Changes in the fair value of consolidated CLO assets and liabilities and related interest, dividend and other income are presented within Net Gains from Fund Investment Activities. Expenses of consolidated CLO vehicles are presented in Fund Expenses.

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The Partnership has elected the fair value option for certain proprietary investments that would otherwise have been accounted for using the equity method of accounting. The fair value of such investments is based on quoted prices in an active market or using the discounted cash flow method. Changes in fair value are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

Further disclosure on instruments for which the fair value option has been elected is presented in Note 7. “Fair Value Option” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

The investments of consolidated Blackstone Funds in funds of hedge funds (“Investee Funds”) are valued at net asset value (“NAV”) per share of the Investee Fund. In limited circumstances, the Partnership may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Partnership will estimate the fair value in good faith and in a manner that it reasonably chooses, in accordance with the requirements of GAAP.

Certain investments of Blackstone and of the consolidated Blackstone funds of hedge funds and credit-focused funds measure their investments in underlying funds at fair value using NAV per share without adjustment. The terms of the investee’s investment generally provide for minimum holding periods or lock-ups, the institution of gates on redemptions or the suspension of redemptions or an ability to side pocket investments, at the discretion of the investee’s fund manager, and as a result, investments may not be redeemable at, or within three months of, the reporting date. A side pocket is used by hedge funds and funds of hedge funds to separate investments that may lack a readily ascertainable value, are illiquid or are subject to liquidity restriction. Redemptions are generally not permitted until the investments within a side pocket are liquidated or it is deemed that the conditions existing at the time that required the investment to be included in the side pocket no longer exist. As the timing of either of these events is uncertain, the timing at which the Partnership may redeem an investment held in a side pocket cannot be estimated. Further disclosure on instruments for which fair value is measured using NAV per share is presented in Note 5. “Net Asset Value as Fair Value” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Intangibles and Goodwill

Blackstone’s intangible assets consist of contractual rights to earn future fee income, including management and advisory fees, Incentive Fees and Performance Allocations. Identifiable finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from three to twenty years, reflecting the contractual lives of such assets. Amortization expense is included within General, Administrative and Other in the Condensed Consolidated Statements of Operations. The Partnership does not hold any indefinite-lived intangible assets. Intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.

Goodwill comprises goodwill arising from the contribution and reorganization of the Partnership’s predecessor entities in 2007 immediately prior to its IPO, the acquisition of GSO in 2008 and the acquisition of Strategic Partners in 2013 and the acquisition of Harvest in 2017. Goodwill is reviewed for impairment at least annually utilizing a qualitative or quantitative approach, and more frequently if circumstances indicate impairment may have occurred. The impairment testing for goodwill under the qualitative approach is based first on a qualitative assessment to determine if it is more likely than not that the fair value of Blackstone’s operating segments is less than their respective carrying values. The operating segment is the reporting level for testing the impairment of goodwill. If it is determined that it is more likely than not that an operating segment’s fair value is less than its carrying value or when the quantitative approach is used, a two-step quantitative assessment is performed to (a) calculate the fair value of the operating segment and compare it to its carrying value, and (b) if the carrying value exceeds its fair value, to measure an impairment loss.

Senior management has organized the firm into four operating segments. All of the components in each segment have similar economic characteristics and senior management makes key operating decisions based on the

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performance of each segment. Therefore, we believe that operating segment is the appropriate reporting level for testing the impairment of goodwill.

The carrying value of goodwill was $1.8 billion as of June 30, 2018 and December 31, 2017. At June 30, 2018 and December 31, 2017, we determined that there was no evidence of goodwill impairment.

Off-Balance Sheet Arrangements

In the normal course of business, we enter into various off-balance sheet arrangements including sponsoring and owning limited or general partner interests in consolidated and non-consolidated funds, entering into derivative transactions, entering into operating leases and entering into guarantee arrangements. We also have ongoing capital commitment arrangements with certain of our consolidated and non-consolidated drawdown funds. We do not have any off-balance sheet arrangements that would require us to fund losses or guarantee target returns to investors in our funds.

Further disclosure on our off-balance sheet arrangements is presented in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing as follows:

• Note 6. “Derivative Financial Instruments”,

• Note 9. “Variable Interest Entities”, and

• Note 17. “Commitments and Contingencies — Commitments — Investment Commitments” and “— Contingencies — Guarantees”.

Recent Accounting Developments

Information regarding recent accounting developments and their impact on Blackstone can be found in Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our predominant exposure to market risk is related to our role as general partner or investment adviser to the Blackstone Funds and the sensitivities to movements in the fair value of their investments, including the effect on management fees, performance revenues and investment income.

Although the Blackstone Funds share many common themes, each of our alternative asset management operations runs its own investment and risk management processes, subject to our overall risk tolerance and philosophy:

• The investment process of our carry funds involves a detailed analysis of potential investments, and asset management teams are assigned to oversee the operations, strategic development, financing and capital deployment decisions of each portfolio investment. Key investment decisions are subject to approval by the applicable investment committee, which is comprised of Blackstone senior managing directors and senior management.

• In our capacity as adviser to certain funds in our Hedge Fund Solutions and Credit segments, we continuously monitor a variety of markets for attractive trading opportunities, applying a number of traditional and customized risk management metrics to analyze risk related to specific assets or portfolios. In addition, we perform extensive credit and cash flow analyses of borrowers, credit-based assets and underlying hedge fund managers, and have extensive asset management teams that monitor covenant compliance by, and relevant financial data of, borrowers and other obligors, asset pool performance statistics, tracking of cash payments relating to investments and ongoing analysis of the credit status of investments.

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Effect on Fund Management Fees

Our management fees are based on (a) third parties’ capital commitments to a Blackstone Fund, (b) third parties’ capital invested in a Blackstone Fund or (c) the net asset value, or NAV, of a Blackstone Fund, as described in our Condensed Consolidated Financial Statements. Management fees will only be directly affected by short-term changes in market conditions to the extent they are based on NAV or represent permanent impairments of value. These management fees will be increased (or reduced) in direct proportion to the effect of changes in the fair value of our investments in the related funds. The proportion of our management fees that are based on NAV is dependent on the number and types of Blackstone Funds in existence and the current stage of each fund’s life cycle. For the six months ended June 30, 2018 and June 30, 2017, the percentages of our fund management fees based on the NAV of the applicable funds or separately managed accounts, were as follows:

	Six Months Ended June 30,
	2018			2017
Fund Management Fees Based on the NAV of the Applicable Funds or Separately Managed Accounts		36	%		33	%

Market Risk

The Blackstone Funds hold investments which are reported at fair value. Based on the fair value as of June 30, 2018 and June 30, 2017, we estimate that a 10% decline in fair value of the investments would result in the following declines in Management Fees, Performance Revenues, Net of Related Compensation Expense and Investment Income:

	June 30,
	2018						2017
	Management Fees (a)		Performance Revenues, Net of Related Compensation Expense (b)		Investment Income (b)		Management Fees (a)		Performance Revenues, Net of Related Compensation Expense (b)		Investment Income (b)
	(Dollars in Thousands)
10% Decline in Fair Value of the Investments	$	81,847	$	1,398,609	$	194,951	$	90,486	$	1,211,590	$	173,568

(a) Represents the annualized effect of the 10% decline.

(b) Represents the reporting date effect of the 10% decline.

Total Assets Under Management, excluding undrawn capital commitments and the amount of capital raised for our CLOs, by segment, and the percentage amount classified as Level III investments as defined within the fair value standards of GAAP, are as follows:

	June 30, 2018
	Total Assets Under Management, Excluding Undrawn Capital Commitments and the Amount of Capital Raised for CLOs		Percentage Amount Classified as Level III Investments
	(Dollars in Thousands)
Private Equity	$	66,163,644		67	%
Real Estate	$	85,022,062		83	%
Credit	$	74,267,341		33	%

The fair value of our investments and securities can vary significantly based on a number of factors that take into consideration the diversity of the Blackstone Funds’ investment portfolio and on a number of factors and inputs such as similar transactions, financial metrics, and industry comparatives, among others. See “Part I. Item 1A. Risk

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Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017. Also see “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — Investments, at Fair Value”. We believe these fair value amounts should be utilized with caution as our intent and strategy is to hold investments and securities until prevailing market conditions are beneficial for investment sales.

Investors in all of our carry funds (and certain of our credit-focused funds and funds of hedge funds) make capital commitments to those funds that we are entitled to call from those investors at any time during prescribed periods. We depend on investors fulfilling their commitments when we call capital from them in order for those funds to consummate investments and otherwise pay their related obligations when due, including management fees. We have not had investors fail to honor capital calls to any meaningful extent and any investor that did not fund a capital call would be subject to having a significant amount of its existing investment forfeited in that fund; however, if investors were to fail to satisfy a significant amount of capital calls for any particular fund or funds, those funds could be materially and adversely affected.

Exchange Rate Risk

The Blackstone Funds hold investments that are denominated in non-U.S. dollar currencies that may be affected by movements in the rate of exchange between the U.S. dollar and non-U.S. dollar currencies. Additionally, a portion of our management fees are denominated in non-U.S. dollar currencies. We estimate that as of June 30, 2018 and June 30, 2017, a 10% decline in the rate of exchange of all foreign currencies against the U.S. dollar would result in the following declines in Management Fees, Performance Revenues, Net of Related Compensation Expense and Investment Income:

	June 30,
	2018						2017
	Management Fees (a)		Performance Revenues, Net of Related Compensation Expense (b)		Investment Income (b)		Management Fees (a)		Performance Revenues, Net of Related Compensation Expense (b)		Investment Income (b)
	(Dollars in Thousands)
10% Decline in the Rate of Exchange of All Foreign Currencies Against the U.S. Dollar	$	19,067	$	324,948	$	31,021	$	10,790	$	299,715	$	29,360

(a) Represents the annualized effect of the 10% decline.

(b) Represents the reporting date effect of the 10% decline.

Interest Rate Risk

Blackstone has debt obligations payable that accrue interest at variable rates. Interest rate changes may therefore affect the amount of our interest payments, future earnings and cash flows. Based on our debt obligations payable as of June 30, 2018 and June 30, 2017, we estimate that interest expense relating to variable rates would increase on an annual basis, in the event interest rates were to increase by one percentage point, as follows:

	June 30,
	2018		2017
	(Dollars in Thousands)
Annualized Increase in Interest Expense Due to a One Percentage Point Increase in Interest Rates	$	28	$	28

Blackstone has a diversified portfolio of liquid assets to meet the liquidity needs of various businesses. This portfolio includes cash, open ended money market mutual funds, open ended bond mutual funds, marketable

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investment securities, freestanding derivative contracts, repurchase and reverse repurchase agreements and other investments. If interest rates were to increase by one percentage point, we estimate that our annualized investment income would decrease, offset by an estimated increase in interest income on an annual basis from interest on floating rate assets, as follows:

	June 30,
	2018					2017
	Annualized Decrease in Investment Income			Annualized Increase in Interest Income from Floating Rate Assets		Annualized Decrease in Investment Income			Annualized Increase in Interest Income from Floating Rate Assets
	(Dollars in Thousands)
One Percentage Point Increase in Interest Rates	$	22,267	(a)	$	23,892	$	33,166	(a)	$	23,769

(a) As of June 30, 2018 and 2017, this represents 0.4% and 0.7% of our portfolio of liquid assets, respectively.

Blackstone has U.S. dollar and non-U.S. dollar based interest rate derivatives whose future cash flows and present value may be affected by movement in their respective underlying yield curves. We estimate that as of June 30, 2018, a one percentage increase parallel shift in global yield curves would result in the following impact on Other Revenue:

	June 30,
	2018		2017
	(Dollars in Thousands)
Annualized Increase in Other Revenue Due to a One Percentage Point Increase in Interest Rates	$	19,413	$	—	(a)

(a) Blackstone held no interest rate risk derivatives as of June 30, 2017 which impact Other Revenue.

Credit Risk

Certain Blackstone Funds and the Investee Funds are subject to certain inherent risks through their investments.

Our portfolio of liquid assets contain certain credit risks including, but not limited to, exposure to uninsured deposits with financial institutions, unsecured corporate bonds and mortgage-backed securities. These exposures are actively monitored on a continuous basis and positions are reallocated based on changes in risk profile, market or economic conditions.

We estimate that our annualized investment income would decrease, if credit spreads were to increase by one percentage point, as follows:

	June 30,
	2018		2017
	(Dollars in Thousands)
Decrease in Annualized Investment Income Due to a One Percentage Point Increase in Credit Spreads (a)	$	36,437	$	48,103

(a) As of June 30, 2018 and 2017, this represents 0.7% and 1.0% of our portfolio of liquid assets, respectively.

Certain of our entities hold derivative instruments that contain an element of risk in the event that the counterparties may be unable to meet the terms of such agreements. We minimize our risk exposure by limiting the counterparties with which we enter into contracts to banks and investment banks that meet established credit and capital guidelines. We do not expect any counterparty to default on its obligations and therefore do not expect to incur any loss due to counterparty default.

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ITEM 4. CONTROLS AND PROCEDURES

We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are effective at the reasonable assurance level to accomplish their objectives of ensuring that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

No change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during our most recent quarter, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We may from time to time be involved in litigation and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us. See “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017. We are not currently subject to any pending judicial, administrative or arbitration proceedings that we expect to have a material impact on our consolidated financial statements. However, given the inherent unpredictability of these types of proceedings and the potentially large and/or indeterminate amounts that could be sought, an adverse outcome in certain matters could have a material effect on Blackstone’s financial results in any particular period.

ITEM 1A. RISK FACTORS

For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 and in our subsequently filed Quarterly Reports on Form 10-Q, all of which are accessible on the Securities and Exchange Commission’s website at www.sec.gov.

See “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Environment” in this report for a discussion of the conditions in the financial markets and economic conditions affecting our businesses. This discussion updates, and should be read together with, the risk factor entitled “Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our investment funds and reducing the ability of our investment funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.” in our Annual Report on Form 10-K for the year ended December 31, 2017.

The risks described in our Annual Report on Form 10-K and in our subsequently filed Quarterly Reports on Form 10-Q are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth information regarding repurchases of our common units during the quarter ended June 30, 2018.

Period	Total Number of Units Purchased		Average Price Paid per Unit		Total Number of Units Purchased as Part of Publicly Announced Plans or Programs (a)		Approximate Dollar Value of Units that May Yet Be Purchased Under the Program (Dollars in Thousands) (a)
Apr. 1 — Apr. 30, 2018		—	$	—		—	$	1,000,000
May 1 — May 31, 2018		217,390	$	31.68		217,390	$	993,113
Jun. 1 — Jun. 30, 2018		1,982,610	$	32.68		1,982,610	$	928,315
		2,200,000				2,200,000

(a) On April 16, 2018, the Board of Directors of our general partner, Blackstone Group Management L.L.C., authorized the repurchase of up to $1.0 billion of Blackstone common units and Blackstone Holdings Partnership Units. Under the unit repurchase program, units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of units repurchased will depend on a variety of factors, including legal requirements, price and economic and market

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conditions. The unit repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date. See “Part I. Item 1. Financial Statements — Notes to Condensed Consolidated Financial Statements – Note 14. Net Income Per Common Unit” and “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources — Sources and Uses of Liquidity” for further information regarding this unit repurchase program.

As permitted by our policies and procedures governing transactions in our securities by our directors, executive officers and other employees, from time to time some of these persons may establish plans or arrangements complying with Rule 10b5-1 under the Exchange Act, and similar plans and arrangements relating to our common units and Blackstone Holdings Partnership Units.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number	Exhibit Description
10.1*	Form of Aircraft Dry Lease Agreement between GH4 Partners LLC and Blackstone Administrative Services Partnership L.P.
10.2*	Form of Aircraft Dry Lease Agreement between XB Partners LLC and Blackstone Administrative Services Partnership L.P.
10.3*	Form of Aircraft Dry Lease Agreement between GBBX Associates LLC, WLBX LLC and Blackstone Administrative Services Partnership L.P.
31.1*	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a).
31.2*	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a).
32.1*	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section  906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2*	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section  906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith.

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The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 8, 2018

The Blackstone Group L.P.
By:	Blackstone Group Management L.L.C., its General Partner
	/s/ Michael S. Chae
Name:	Michael S. Chae
Title:	Chief Financial Officer
	(Principal Financial Officer and Authorized Signatory)

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EX-10.1

Exhibit 10.1

FORM OF AIRCRAFT DRY LEASE AGREEMENT

THIS AIRCRAFT DRY LEASE AGREEMENT (this “Agreement”) is made and entered into the ___ day of _____________, _____ (the “Effective Date”) between GH4 Partners LLC, a Delaware limited liability company (“Lessor”) and Blackstone Administrative Services Partnership L.P., a Delaware limited partnership (“Lessee”) (collectively the “Parties”).

W I T N E S S E T H:

WHEREAS, Lessor owns a 2012 Bombardier Inc. model BD-700-1A10 (Global 6000) aircraft, manufacturer’s serial number 9519 aircraft, with FAA Registration number N898MJ, as described more fully in Section 1.1 below; and

WHEREAS, Lessor desires to dry lease the Aircraft to Lessee from time to time on a non-exclusive periodic basis; and Lessee desires to dry lease the Aircraft from Lessor from time to time.

NOW, THEREFORE, in consideration of the promises and the mutual covenants and undertakings herein contained, the Parties hereto do hereby agree as follows:

ARTICLE 1: LEASE AND TERM

1.1.  Lease. Lessor hereby agrees to dry lease to Lessee, from time to time, and Lessee hereby agrees to dry lease from Lessor, from time to time, one (1) 2012 Bombardier Inc. model BD-700-1A10 (Global 6000) aircraft, manufacturer’s serial number 9519 aircraft, with FAA Registration number N898MJ (the “Airframe”), equipped with two (2) Rolls-Royce Deutschland Ltd & Co KG model BR710A2-20 engines bearing manufacturer’s serial numbers 22167 and 22166 (the “Engines”), together with all components, accessions, systems, appliances, parts, instruments, accessories, furnishings, and any manufacturer’s or third-party warranties, any manufacturer service programs in connection with the Aircraft and other equipment installed thereon or attached thereto on the date hereof, all specified avionics, equipment, spare parts and loose equipment and all logs, weight and balance documents, wiring diagrams, manuals and other records and documentation pertaining to the operation and maintenance of such aircraft in Lessor’s possession or under its control (“Aircraft Documentation”) (the foregoing, together with the Airframe and Engines, collectively, the “Aircraft”) to Lessee hereunder. Changes to the U.S. registration mark of the Aircraft shall have no effect on this Agreement.

1.2.  Term and Rental Periods. The Term of this Agreement (“Term”) shall commence on the Effective Date and shall be effective until ___________________. Lessee may dry lease the Aircraft pursuant to this Agreement for specific periods of time during the Term (“Rental Periods”). No Rental Period shall be for more than thirty (30) days.

ARTICLE 2: RENTAL AND EXPENSES

2.1.  Rental Payment. Lessee agrees to pay to Lessor an hourly rental fee for occupied business flight hours at a rental rate of ________________ ($_______) per flight hour (prorated for fractions) of operation during each Rental Period (the “Rental Payment”). The hourly

rental fee may be adjusted by mutual agreement during the Term based on fair market pricing. Such rental fees include delays, detours, cancellations caused by weather, routing, maintenance or other similar occurrences during each Rental Period, except that Lessor, at its sole discretion, may reduce the rental fees in the event of such occurrences. In addition, Lessee shall pay a two-hour minimum rental fee per flying day during a Rental Period, except for (i) short positioning flights the night before or (ii) when flying time exceeds two hours, in which case only the actual flying time will be charged. There shall be no minimum daily charge for nonflying days during a Rental Period.

2.2.  Positioning, Repositioning. Lessee shall be responsible for accepting the Aircraft from Lessor, and returning the Aircraft to Lessor at Teterboro Airport (“Home Base”), or other airport agreed between the Parties. Lessee may commence or return the Aircraft at locations other than Home Base. However, in such circumstances, the Rental Period shall include positioning flights from Home Base or repositioning flights back from Home Base and positioning/repositioning flights that are of equal or lesser distance than flights to/from Home Base. If position/repositioning would exceed the distance to from/to Home Base, the Rental Payment shall be reduced pro-rata for that excess distance. Two hour minimums shall not apply to positioning flights.

2.3.  Lessee Reimbursement for Fuel and Incidental Charges. Lessee shall be responsible for fuel and incidental charges for any flight hours during the Rental Period (“Incidental Charges”). Such Incidental Charges include but are not limited to hangaring and tie down charges away from the Home Base, landing fees, federal excise taxes, airport taxes or similar charges, customs, immigration and similar charges related to international flights; and any additional insurance premiums required for specific flights during the Rental Period. In the event any such charges are inadvertently made to Lessor by service providers, Lessee shall promptly reimburse Lessor for such costs. Lessor shall instruct service providers to invoice Lessee in the future.

2.4.  Lessor Reimbursement for Certain Charges. Lessor has incorporated the cost for maintenance and repairs into the Rental Payment. In the event any charges for maintenance are paid directly by Lessee, Lessor shall promptly reimburse Lessee for such cost, or deduct as an offset against Rental Payments such costs.

2.5.  Invoicing and Payment. Lessor will send Lessee invoices for such payments as are due under this Article for each Rental Period, using the form attached as Appendix A or other form at Lessor’s discretion. Lessee shall make payment by check or money order payable to “GH4 Partners LLC” payable upon receipt, or shall wire transfer funds to the address specified on the invoice.

2.6.  Calculation of Hours of Operation. For purposes of Rental Payments, hours of operation for each Rental Period shall be calculated from the time the Aircraft takes off to the time it lands.

2.7.  Taxes. All payments, including specifically Rental Payments made by Lessee hereunder, shall be made free and clear of, and without deduction for, any taxes, levies, imposts,

BLACKSTONE DRY LEASE - PAGE 2 OF 9

duties, charges, fees, deductions, withholdings, restrictions or conditions now or hereafter imposed by any governmental or taxing authority. Taxes which the Lessee may incur while operating the Aircraft include, but are not limited to: fuel excise taxes, airport taxes, sales and use taxes, over flight fees or taxes, and customs duties, or other foreign taxes relating to international travel, which may be included on Lessor’s invoices to Lessee. Notwithstanding the foregoing, Lessee shall only be liable for taxes on lease payments and not on the value of the Aircraft.

2.8.  Procedure to Request Rental of Aircraft. Lessee shall make requests for rental of the Aircraft to Lessor either orally or in writing. Requests should be made as far in advance as possible before the intended commencement of the Rental Period.

2.9.  Availability. Lessor is making the Aircraft available to Lessee for dry lease on an “as available” basis only, and makes no guarantee or warranty with regard to Aircraft availability. Lessor will, in good faith, attempt to make the Aircraft available when it is not otherwise being used by Lessor, another lessee, or is unavailable for maintenance or other reasons.

2.10.  Non-availability or Delay Due to Unanticipated Causes. Lessor shall promptly notify Lessee in writing if the Aircraft cannot be delivered for a Rental Period due to an unanticipated delay, such as weather or mechanical related delays. Lessor shall not be responsible for any loss, injury, damage, delay, or cancellation, or any consequential or incidental damages or costs incurred by Lessee caused by such delay or cancellation.

ARTICLE 3: OPERATION OF AIRCRAFT BY LESSEE

3.1.  Operational Control. During each Rental Period, Lessee is and shall be the sole operator of the Aircraft and has sole operational control of the Aircraft and Lessee has possession, command and control of the Aircraft. During each Rental Period, Lessee is responsible for operating the Aircraft in accordance and compliance with all laws, ordinances and regulations relating to the possession, use, operation, or maintenance of the Aircraft, including, but not limited to, Part 91 of the Federal Aviation Regulations (“FAR”).

3.2.  Selection of Flight Crew. Lessee shall select and hire its own flight crew provided that the pilots shall be professionally trained and qualified, shall be familiar with and licensed to operate the Aircraft, and shall have current medical certificates, and recurrent training.

3.3.  Care and Use. Lessee shall use and operate the Aircraft in a careful and proper manner. Lessee shall operate the Aircraft in accordance with the flight manual and all manufacturer’s suggested operating procedures. Lessee shall not operate, use, or maintain the Aircraft in violation of any airworthiness certificate, license, or registration relating to the Aircraft, or contrary to any law or regulation.

3.4.  Limits of Operations. Lessee expressly warrants and agrees that it shall not operate the Aircraft outside the geographic limits set forth in the Insurance Policies (defined below), or otherwise operate the Aircraft in a way that would violate or compromise the Insurance Policies. Lessee shall use the Aircraft only for and on account of its business, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo in air commerce for

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compensation or hire (except in accordance with the provisions of FAR 91.501), or for any illegal purpose.

3.5.  Documentation. Lessee shall complete required flight logs, maintenance logs, or other recording entries required by the FAR during any Rental Period.

3.6.  Maintenance and Repair. Lessor, at its own cost and expense, will promptly repair or replace all parts, appliances, components, instruments, accessories, and furnishings that are installed in or attached to the Aircraft (herein called “Parts”) that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair, or permanently rendered unfit for use for any reason whatsoever during a Rental Period. Further, Lessor shall reimburse Lessee for any mechanics liens or other costs incurred by Lessee associated with non-routine repairs or maintenance made during a Rental Period, provided that: (1) such repairs shall be made by an FAA approved repair facility; and (2) Lessor shall approve in advance such repairs or maintenance. Lessee covenants to repair any damage beyond ordinary wear and tear caused by Lessee’s use of the Aircraft.

3.7.  Right to Inspect. Lessor and its authorized representatives shall, at all reasonable times, have the right to enter the premises where the Aircraft may be located for the purpose of inspecting and examining the Aircraft, its condition, use and operation, and the books and records of Lessee relating thereto to ensure Lessee’s compliance with its obligations under this Agreement. Notwithstanding the foregoing rights, Lessor has no duty to inspect and shall not incur any liability or obligation by reason of not making any such inspection.

ARTICLE 4: INSURANCE AND LIABILITY

4.1.  Primary Liability and Property Damage Insurance. Lessor shall maintain in effect, at its own expense, third party Aircraft liability insurance, passenger legal liability insurance, and property damage liability insurance during the Term in such amounts as are customary for similarly situated aircraft. Each liability policy shall be primary without right of contribution from any other insurance that is carried by Lessee, and expressly shall provide that all the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.

4.2.  Insurance Against Physical Damage. Lessor shall maintain in effect, at its own expense, all-risk ground and flight Aircraft hull insurance covering the Aircraft. Any such insurance shall be during the Term for an amount customary for a similar aircraft.

4.3.  Lessee As Named Insured. All insurance policies carried by Lessor in accordance with this Article (the “Insurance Policies”) shall name Lessee as a named insured, excepting that with respect to hull insurance, Lessee shall not be a loss payee.

4.4.  Deductible. Any Insurance Policy carried by Lessor in accordance with this Article may be subject to a deductible amount which is customary under policies insuring similar aircraft similarly situated. Lessor warrants and agrees that in the event of an insurable claim, Lessor will bear the costs up the deductible amount.

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4.5.  Additional Insurance for Lessee. Lessee may, at its discretion, obtain additional insurance covering its operation of the Aircraft.

4.6.  Certificate of Insurance. Upon request, Lessor shall deliver to Lessee a certificate of insurance evidencing the insurance required to be maintained by Lessor under this Article.

4.7.  Mutual Waiver of Liability Claims. Except as specifically set forth in this Agreement, Lessor and Lessee each hereby agree that each shall hold harmless the other Party, and the other Party’s respective officers, directors, agents, employees, servants, attorneys, insurers, coinsurers, reinsurers, indemnitors, parents, subsidiaries, affiliates, predecessors, successors, and assigns from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses, including reasonable legal fees and expenses, of whatsoever kind and nature including, without limitation, personal injury or death (“Liabilities”), that could be asserted by that Party against the other Party directly or indirectly (including but not limited to claims raised against that Party by any third-party, employee, agent, or other person or entity not a party to the Agreement) arising out of the lease, sublease, possession, rental, use, condition, operation, transportation, return, storage or disposition of the Aircraft or any part thereof (including, without limitation, Liabilities in any way relating to or arising out of latent or other defects, whether or not discoverable by a Party or any other person, injury to persons or property, or strict liability in tort), provided, however, that neither Party shall be required to hold harmless the other Party for Liabilities resulting from the gross negligence or willful misconduct of the other Party.

ARTICLE 5: WARRANTIES AND DISCLAIMERS

5.1.  Lessor’s Warranty. Lessor warrants that (1) the Aircraft shall be delivered to Lessee in airworthy condition; (2) the Aircraft is properly registered in accordance with U.S. law; and (3) Lessor is a citizen of the United States of America as set forth in 49 U.S.C. Section 40102(15) and the regulations thereunder.

5.2.  Lessor’s Disclaimer of Warranties. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS, AND LESSEE EXPRESSLY WAIVES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, WORKMANSHIP, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF.

5.3.  Lessee’s Representation Regarding Selection. Lessee represents and warrants that: (1) it has selected the Aircraft based on its own judgment and disclaims any reliance upon statements or representations not part of this Agreement; and (2) that the Aircraft is of a size, design and capacity selected by Lessee and is suitable for Lessee’s intended use.

BLACKSTONE DRY LEASE - PAGE 5 OF 9

5.4.  Lessee Warranty Regarding Operation. Lessee represents and warrants that it shall only operate the Aircraft under the terms, conditions, and restrictions, as set forth in this Agreement.

ARTICLE 6: MISCELLANEOUS

6.1.  Title. Title to the Aircraft shall remain vested in Lessor during the Agreement Term and the Aircraft shall be registered at the FAA in the name of Lessor. Lessee shall have no right, title or interest in or to the Aircraft except as expressly provided herein and shall take no action that would impair the continued registration of the Aircraft at the FAA in the name of Lessor. Lessee shall not file or record this Agreement with the FAA. Lessee shall do or cause to be done any and all acts and things which may be required to perfect and preserve the interest and title of Lessor to the Aircraft within any jurisdiction in which Lessee may operate the Aircraft, and Lessee shall also do or cause to be done any and all acts and things which may be required under the terms of any other agreement, treaty, convention, pact or by any practice, customs or understanding involving any country or state in which Lessee may operate, as may be necessary or helpful, or as Lessor may reasonably request, to perfect and preserve the rights of Lessor within the jurisdiction of any such country or state.

6.2.  Liens. Except as provided herein, Lessee will not directly or indirectly create, incur, assume or suffer to exist any liens on or with respect to (1) the Aircraft or any part thereof; (2) Lessor’s title thereto; or (3) any interest of Lessor therein. Lessee will promptly, at its own expense, take such action as may be necessary to discharge any such lien. Lessee may incur the following liens: (i) the respective rights of Lessor and Lessee as herein provided; (ii) liens created by Lessor; (iii) liens for taxes either not yet due or being contested by Lessee in good faith; and (iv) inchoate materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or other like liens arising in the ordinary course of business of Lessee, or Parties acting on behalf of Lessee insofar as such actions relate to the Aircraft and are not inconsistent with this Agreement, not delinquent, and for the payment of which adequate reserves have been provided.

6.3.  Defaults.

(a)  Each of the following events shall constitute an “Event of Default” hereunder (whatever the reason for such event of default and whether it shall be voluntary or involuntary, or come about or be effected by operation of law, or be pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) if Lessee shall fail to pay when due any sum under this Agreement and such failure shall continue for a period of three business days after oral, facsimile, electronic mail or written notice has been given by Lessor to Lessee; (2) if Lessee shall fail to perform any covenant or agreement contained herein, and such failure shall continue for a period of fifteen (15) calendar days after notice thereof shall have been given in writing; (3) if any representation or warranty made by Lessee in this Agreement or any agreement, document or certificate delivered by the Lessee in connection herewith is or shall become incorrect in any material respect; (4) if Lessee shall operate the Aircraft in violation of any applicable law, regulation, rule or order of any governmental authority having jurisdiction thereof or shall operate the Aircraft

BLACKSTONE DRY LEASE - PAGE 6 OF 9

when the insurance required hereunder shall not be in effect; (5) if any proceedings shall be commenced under any bankruptcy, insolvency, reorganization, readjustment of debt, receivership or liquidation law or statute of any jurisdiction; or (6) if any such proceedings shall be instituted against either Party and shall not be withdrawn or terminated within thirty (30) calendar days after their commencement.

(b)  Upon the occurrence of any Event of Default Lessor may, at its option, exercise any or all remedies available at law or in equity, including, without limitation, any or all of the following remedies, as Lessor in its sole discretion shall elect: (1) by notice in writing to terminate this Agreement immediately, whereupon all rights of the Lessee to the use or possession of the Aircraft or any part thereof shall absolutely cease and terminate but Lessee shall remain liable as hereinafter provided; and thereupon Lessee, if so requested by Lessor, shall at its expense promptly return the Aircraft and Aircraft Documentation as required by this Agreement or Lessor, at its option, may enter upon the premises where the Aircraft or Aircraft Documentation are located and take immediate possession of and remove the same by summary proceedings or otherwise. Lessee specifically authorizes Lessor’s entry upon any premises where the Aircraft or Aircraft Documentation may be located for the purpose of, and waives any cause of action it may have arising from, a peaceful retaking of the Aircraft or Aircraft Documentation; or (2) perform or cause to be performed any obligation, covenant or agreement of Lessee hereunder. Lessee agrees to pay all costs and expenses incurred by Lessor for such performance and acknowledges that such performance by Lessor shall not be deemed to cure said Event of Default.

(c)  Lessee shall be liable for all costs, charges and expenses, including reasonable legal fees and disbursements, incurred by Lessor by reason of the occurrence of any Event of Default or the exercise of Lessor’s remedies with respect thereto. No remedy referred to herein is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity. Lessor shall not be deemed to have waived any default, Event of Default or right hereunder unless the same is acknowledged in writing by duly authorized representative of Lessor. No waiver by Lessor of any default or Event of Default hereunder shall in any way be, or be construed to be, a waiver of any future or subsequent default or Event of Default. The failure or delay of Lessor in exercising any rights granted it hereunder upon any occurrence of any such right upon the continuation or recurrence of any such contingencies or similar contingencies, and any single or partial exercise of any particular right by Lessor shall not exhaust the same or constitute a waiver of any other right provided herein.

6.4  Successors and Assigns. This Agreement shall be binding upon Lessor, Lessee, and their respective successors and assigns, except that Lessee may not assign or transfer any of its rights hereunder except with the prior written consent of Lessor. Subject to the foregoing, this Agreement shall inure to the benefit of Lessor and Lessee and their respective successors and assigns.

6.5.  Notices. All notices and other communications under this Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by delivery in person, by facsimile or electronic mail (with a simultaneous

BLACKSTONE DRY LEASE - PAGE 7 OF 9

confirmation copy sent by first class mail properly addressed and postage prepaid), or by a reputable overnight courier service, addressed as follows:

If to Lessor:	GH4 Partners LLC
	c/o Ayco
	321 Broadway
	Saratoga Springs, NY 12866
	Attn:
	Telephone:
	Facsimile:
	Email:
If to Lessee:	Blackstone Administrative Services Partnership, LP
	345 Park Avenue, 44th Floor
	New York, NY 10154
	Attn:
	Telephone:
	Facsimile:
	Email:

or at such other address as either Party may designate in writing. Any notice hereunder shall be effective upon delivery.

6.6.  Entire Agreement. This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement between the Parties pertaining to the subject matter of this Agreement and supersede all prior and contemporaneous understandings, including any prior written agreements of the Parties pertaining to the matters hereof.     

6.7.  Severability. If any provision of this Agreement is found to be prohibited or unenforceable in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in one jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, each Party hereto hereby waives any provision of law that renders any provision hereof prohibited or unenforceable in any respect.

6.8.  Amendments and Modifications. The terms of this Agreement shall not be waived, varied, contradicted, explained, amended or changed in any other manner except by an instrument in writing, executed by both Parties.

6.9.  Choice of Law. This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of New York (disregarding any Conflict of Laws rule which might result in the application of the laws of any other jurisdiction), including all matters of construction, validity, and performance.

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6.10.  Force Majeure. No Party shall be liable for any failure to perform its obligations in connection with any action described in this Agreement, if such failure results from any act of God, riot, war, civil unrest, flood, earthquake, or other cause beyond such Party’s reasonable control (including any mechanical, electronic, or communications failure, but excluding failure caused by a Party’s financial condition or negligence).

6.11.  Execution. This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument. Signatures transmitted by facsimile, .pdf, or any other electronic means shall constitute original signatures.    

ARTICLE 7: TRUTH IN LEASING

7.1.  Representation Regarding Maintenance. DURING THE LAST TWELVE MONTHS THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED IN ACCORDANCE WITH THE PROVISIONS OF FEDERAL AVIATION REGULATION PART 91.409. LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT COMPLIES WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS CONTAINED IN THE ABOVE LISTED FEDERAL AVIATION REGULATION FOR LESSEE’S USE OF THE AIRCRAFT UNDER THIS LEASE.

7.2.  Representation Regarding Operational Control. LESSEE, WHOSE NAME AND ADDRESS APPEAR HEREIN, IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THE LEASE. LESSEE HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH THE FEDERAL AVIATION REGULATIONS APPLICABLE TO THE AIRCRAFT.

7.3.  Information from FAA. LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONS CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE, OR AIR CARRIER DISTRICT OFFICE.

7.4.  FAA Notification: in accordance with FAR 91.23. The Parties certify and shall take the following actions upon execution of this Agreement: (1) a true copy of this Agreement shall be placed aboard the Aircraft and carried thereon at all times and made available for inspection upon request by an appropriately constituted identified representative of the Administrator of the FAA; (2) a copy of this Agreement will be mailed to the FAA Aircraft Registration Branch, Attn: Technical Section, P.O. Box 25724, Oklahoma City, OK 73125 within 24 hours of execution; and (3) the FAA will be notified at least 48 hours prior to the first flight of the Aircraft under this Agreement.

(Signature page follows)

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in their names and on their behalf by their duly authorized representatives, effective as of the Effective Date.

GH4 Partners LLC

As Lessor

By:

Name:

Title:

Blackstone Administrative Services Partnership, LP

As Lessee

By:

Name:

Title:

Signature Page

Aircraft Dry Lease Agreement

APPENDIX A

GH4 Partners LLC

INVOICE

To      ______________________

          ______________________

          ______________________

Date: _______

Payable: Payable upon receipt
Ref Contract:    Aircraft Dry Lease Agreement between GH4 Partners LLC and Blackstone Administrative Services Partnership, LP (“Lease”) dated _______________________.
Rental Period:    _________ to ________
Description                                                                                                       Amount ______________________________________________________________________
1. Rental Payment	$_________
rental fee ($ _________ per flight hour of operation)
2. Other Costs: (see paragraphs 2.3 and 2.7 of Lease)	$_________
Description                                                              Cost
New Jersey Sales Tax (currently __________) ______
____________________________________________
____________________________________________
____________________________________________
_______________________________________________________________________
TOTAL THIS INVOICE	$_________

Appendix A

Aircraft Dry Lease Agreement

EX-10.2

Exhibit 10.2

FORM OF AIRCRAFT DRY LEASE AGREEMENT

THIS AIRCRAFT DRY LEASE AGREEMENT (this “Agreement”) is made and entered into effective as of _________________________ (the “Effective Date”) between XB Partners LLC, a Delaware limited liability company (“Lessor”) and Blackstone Administrative Services Partnership L.P., a Delaware limited partnership (“Lessee”) (collectively the “Parties”).

W I T N E S S E T H:

WHEREAS, Lessor owns a 2005 Bombardier model CL-600-2B16 (Challenger 604) aircraft, manufacturer’s serial number 5631 aircraft, with FAA Registration number N345XB, as described more fully in Section 1.1 below; and

WHEREAS, Lessor desires to dry lease the Aircraft to Lessee from time to time on a non-exclusive periodic basis; and Lessee desires to dry lease the Aircraft from Lessor from time to time.

NOW, THEREFORE, in consideration of the promises and the mutual covenants and undertakings herein contained, the Parties hereto do hereby agree as follows:

ARTICLE 1: LEASE AND TERM

1.1.  Lease. Lessor hereby agrees to dry lease to Lessee, from time to time, and Lessee hereby agrees to dry lease from Lessor, from time to time, one (1) 2005 Bombardier model CL-600-2B16 (Challenger 604) aircraft, manufacturer’s serial number 5631 aircraft, with FAA Registration number N345XB (the “Airframe”), equipped with two (2) GE model CF34-3B engines bearing manufacturer’s serial numbers SNE950434 and SNE950433 (the “Engines”), together with all components, accessions, systems, appliances, parts, instruments, accessories, furnishings, and any manufacturer’s or third-party warranties, any manufacturer service programs in connection with the Aircraft and other equipment installed thereon or attached thereto on the date hereof, all specified avionics, equipment, spare parts and loose equipment and all logs, weight and balance documents, wiring diagrams, manuals and other records and documentation pertaining to the operation and maintenance of such aircraft in Lessor’s possession or under its control (the foregoing, together with the Airframe and Engines, collectively, the “Aircraft”) to Lessee hereunder. Changes to the U.S. registration mark of the Aircraft shall have no effect on this Agreement.

1.2.  Term and Rental Periods. The Term of this Agreement (“Term”) shall commence on the Effective Date and shall be effective until the last calendar day of the fifth month following the Effective Date. Lessee may dry lease the Aircraft pursuant to this Agreement for specific periods of time during the Term (“Rental Periods”). No Rental Period shall be for more than thirty (30) days.

ARTICLE 2: RENTAL AND EXPENSES

2.1.  Rental Payment. Lessee agrees to pay to Lessor an hourly rental fee for occupied business flight hours at a rental rate of ___________________ ($__________) per flight hour (prorated for fractions) of operation during each Rental Period (the “Rental Payment”). The

hourly rental fee may be adjusted by mutual agreement during the Term based on fair market pricing. Such rental fees include delays, detours, cancellations caused by weather, routing, maintenance or other similar occurrences during each Rental Period, except that Lessor, at its sole discretion, may reduce the rental fees in the event of such occurrences. Lessee shall not be subject to any daily minimum Rental Payment on any day during the Rental Period.

2.2.  Positioning, Repositioning. Lessor has incorporated the estimated cost of positioning/repositioning flights into the Rental Payment, and any positioning/repositioning flights will not be part of the Rental Period and will be invoiced to Lessor’s account, even if Lessee commences or ends its Rental Period at a point other than at Teterboro Airport (“Home Base”).

2.3.  Lessee Reimbursement for Fuel and Incidental Charges. Lessee shall be responsible for fuel and incidental charges on occupied business flight hours during the Rental Period. Such Incidental Charges include but are not limited to hangaring and tie down charges away from the Home Base, landing fees, federal excise taxes, airport taxes or similar charges, customs, immigration and similar charges related to international flights; and any additional insurance premiums required for specific flights during the Rental Period. In the event any such charges are inadvertently made to Lessor by service providers, Lessee shall promptly reimburse Lessor for such costs. Lessor shall instruct service providers to invoice Lessee in the future.

2.4.  Lessor Reimbursement for Certain Charges. Lessor has incorporated the cost for maintenance and repairs into the Rental Payment. In the event any charges for maintenance are paid directly by Lessee, Lessor shall promptly reimburse Lessee for such cost, or deduct as an offset against Rental Payments such costs.

2.5.  Invoicing and Payment. Lessor will send Lessee invoices for such payments as are due under this Article for each Rental Period, using the form attached as Appendix A or other form at Lessor’s discretion. Lessee shall make payment by check or money order payable to “XB Partners LLC” payable upon receipt, or shall wire transfer funds to the address specified on the invoice.

2.6.  Calculation of Hours of Operation. For purposes of Rental Payments, hours of operation for each Rental Period shall be calculated (1) from the time the Aircraft takes off to the time it lands.

2.7.  Taxes. All payments, including specifically Rental Payments made by Lessee hereunder, shall be made free and clear of, and without deduction for, any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, restrictions or conditions now or hereafter imposed by any governmental or taxing authority. Taxes which the Lessee may incur while operating the Aircraft include, but are not limited to: fuel excise taxes, airport taxes, sales and use taxes, over flight fees or taxes, and customs duties, or other foreign taxes relating to international travel. Notwithstanding the foregoing, Lessee shall only be liable for taxes on lease payments and not on the value of the Aircraft.

BLACKSTONE DRY LEASE - PAGE 2 OF 9

2.8.  Procedure to Request Rental of Aircraft. Lessee shall make requests for rental of the Aircraft to Lessor either orally or in writing. Requests should be made as far in advance as possible before the intended commencement of the Rental Period.

2.9.  Availability. Lessor is making the Aircraft available to Lessee for dry lease on an “as available” basis only, and makes no guarantee or warranty with regard to Aircraft availability. Lessor will, in good faith, attempt to make the Aircraft available when it is not otherwise being used by Lessor, another lessee, or is unavailable for maintenance or other reasons.

2.10.  Non-availability or Delay Due to Unanticipated Causes. Lessor shall promptly notify Lessee in writing if the Aircraft cannot be delivered for a Rental Period due to an unanticipated delay, such as weather or mechanical related delays. Lessor shall not be responsible for any loss, injury, damage, delay, or cancellation, or any consequential or incidental damages or costs incurred by Lessee caused by such delay or cancellation.

ARTICLE 3: OPERATION OF AIRCRAFT BY LESSEE

3.1.  Operational Control. During each Rental Period, Lessee is and shall be the sole operator of the Aircraft and has sole operational control of the Aircraft. During each Rental Period, Lessee is responsible for operating the Aircraft in accordance and compliance with all laws, ordinances and regulations relating to the possession, use, operation, or maintenance of the Aircraft, including, but not limited to, Part 91 of the Federal Aviation Regulations (“FAR”).

3.2.  Selection of Flight Crew. Lessee shall select and hire its own flight crew provided that the pilots shall be professionally trained and qualified, shall be familiar with and licensed to operate the Aircraft, and shall have current medical certificates, and recurrent training.

3.3.  Care and Use. Lessee shall use and operate the Aircraft in a careful and proper manner. Lessee shall operate the Aircraft in accordance with the flight manual and all manufacturer’s suggested operating procedures. Lessee shall not operate, use, or maintain the Aircraft in violation of any airworthiness certificate, license, or registration relating to the Aircraft, or contrary to any law or regulation.

3.4.  Limits of Operations. Lessee expressly warrants and agrees that it shall not operate the Aircraft outside the geographic limits set forth in the Insurance Policies (defined below), or otherwise operate the Aircraft in a way that would violate or compromise the Insurance Policies. Lessee shall use the Aircraft only for and on account of its business, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo in air commerce for compensation or hire (except in accordance with the provisions of FAR 91.501), or for any illegal purpose.

3.5.  Documentation. Lessee shall complete required flight logs, maintenance logs, or other recording entries required by the FAR during any Rental Period.

3.6.  Maintenance and Repair. Lessor, at its own cost and expense, will promptly repair or replace all parts, appliances, components, instruments, accessories, and furnishings that are installed in or attached to the Aircraft (herein called “Parts”) that may from time to time become

BLACKSTONE DRY LEASE - PAGE 3 OF 9

worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair, or permanently rendered unfit for use for any reason whatsoever during a Rental Period. Further, Lessor shall reimburse Lessee for any mechanics liens or other costs incurred by Lessee associated with non-routine repairs or maintenance made during a Rental Period, provided that: (1) such repairs shall be made by an FAA approved repair facility; and (2) Lessor shall approve in advance such repairs or maintenance. Lessee covenants to repair any damage beyond ordinary wear and tear caused by Lessee’s use of the Aircraft.

3.7.  Right to Inspect. Lessor and its authorized representatives shall, at all reasonable times, have the right to enter the premises where the Aircraft may be located for the purpose of inspecting and examining the Aircraft, its condition, use and operation, and the books and records of Lessee relating thereto to ensure Lessee’s compliance with its obligations under this Lease. Notwithstanding the foregoing rights, Lessor has no duty to inspect and shall not incur any liability or obligation by reason of not making any such inspection.

ARTICLE 4: INSURANCE AND LIABILITY

4.1.  Primary Liability and Property Damage Insurance. Lessor shall maintain in effect, at its own expense, third party Aircraft liability insurance, passenger legal liability insurance, and property damage liability insurance during the Term in such amounts as are customary for similarly situated aircraft. Each liability policy shall be primary without right of contribution from any other insurance that is carried by Lessee, and expressly shall provide that all the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.

4.2.  Insurance Against Physical Damage. Lessor shall maintain in effect, at its own expense, all-risk ground and flight Aircraft hull insurance covering the Aircraft. Any such insurance shall be during the Term for an amount customary for a similar aircraft.

4.3.  Lessee As Named Insured. All insurance policies carried by Lessor in accordance with this Article (the “Insurance Policies”) shall name Lessee as a named insured.

4.4.  Deductible. Any Insurance Policy carried by Lessor in accordance with this Article may be subject to a deductible amount which is customary under policies insuring similar aircraft similarly situated. Lessor warrants and agrees that in the event of an insurable claim, Lessor will bear the costs up to the deductible amount.

4.5.  Additional Insurance for Lessee. Lessee may, at its discretion, obtain additional insurance covering its operation of the Aircraft.

4.6.  Certificate of Insurance. Upon request, Lessor shall deliver to Lessee a certificate of insurance evidencing the insurance required to be maintained by Lessor under this Article.

4.7.  Mutual Waiver of Liability Claims. Except as specifically set forth in this Agreement, Lessor and Lessee each hereby agree that each shall hold harmless the other Party, and the other Party’s respective officers, directors, agents, employees, servants, attorneys, insurers, coinsurers, reinsurers, indemnitors, parents, subsidiaries, affiliates, predecessors,

BLACKSTONE DRY LEASE - PAGE 4 OF 9

successors, and assigns from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses, including reasonable legal fees and expenses, of whatsoever kind and nature including, without limitation, personal injury or death (“Liabilities”), that could be asserted by that Party against the other Party directly or indirectly (including but not limited to claims raised against that Party by any third-party, employee, agent, or other person or entity not a party to the Agreement) arising out of the lease, sublease, possession, rental, use, condition, operation, transportation, return, storage or disposition of the Aircraft or any part thereof (including, without limitation, Liabilities in any way relating to or arising out of latent or other defects, whether or not discoverable by a Party or any other person, injury to persons or property, or strict liability in tort), provided, however, that neither Party shall be required to hold harmless the other Party for Liabilities resulting from the gross negligence or willful misconduct of the other Party.

ARTICLE 5: WARRANTIES AND DISCLAIMERS

5.1.  Lessor’s Warranty. Lessor warrants that (1) the Aircraft shall be delivered to Lessee in airworthy condition; (2) the Aircraft is properly registered in accordance with U.S. law; and (3) Lessor is a citizen of the United States of America as set forth in 49 U.S.C. Section 40102(15) and the regulations thereunder.

5.2.  Lessor’s Disclaimer of Warranties. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS, AND LESSEE EXPRESSLY WAIVES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, WORKMANSHIP, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF.

5.3.  Lessee’s Representation Regarding Selection. Lessee represents and warrants that: (1) it has selected the Aircraft based on its own judgment and disclaims any reliance upon statements or representations not part of this Agreement; and (2) that the Aircraft is of a size, design and capacity selected by Lessee and is suitable for Lessee’s intended use.

5.4.  Lessee Warranty Regarding Operation. Lessee represents and warrants that it shall only operate the Aircraft under the terms, conditions, and restrictions, as set forth in this Agreement.

ARTICLE 6: MISCELLANEOUS

6.1.  Title. Title to the Aircraft shall remain vested in Lessor during the Lease Term and the Aircraft shall be registered at the FAA in the name of Lessor. Lessee shall have no right, title or interest in or to the Aircraft except as expressly provided herein and shall take no action that would impair the continued registration of the Aircraft at the FAA in the name of Lessor. Lessee

BLACKSTONE DRY LEASE - PAGE 5 OF 9

shall not file or record this Agreement with the FAA. Lessee shall do or cause to be done any and all acts and things which may be required to perfect and preserve the interest and title of Lessor to the Aircraft within any jurisdiction in which Lessee may operate the Aircraft, and Lessee shall also do or cause to be done any and all acts and things which may be required under the terms of any other agreement, treaty, convention, pact or by any practice, customs or understanding involving any country or state in which Lessee may operate, as may be necessary or helpful, or as Lessor may reasonably request, to perfect and preserve the rights of Lessor within the jurisdiction of any such country or state.

6.2.  Liens. Except as provided herein, Lessee will not directly or indirectly create, incur, assume or suffer to exist any liens on or with respect to (1) the Aircraft or any part thereof; (2) Lessor’s title thereto; or (3) any interest of Lessor therein. Lessee will promptly, at its own expense, take such action as may be necessary to discharge any such lien. Lessee may incur the following liens: (i) the respective rights of Lessor and Lessee as herein provided; (ii) liens created by Lessor; (iii) liens for taxes either not yet due or being contested by Lessee in good faith; and (iv) inchoate materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or other like liens arising in the ordinary course of business of Lessee, or Parties acting on behalf of Lessee insofar as such actions relate to the Aircraft and are not inconsistent with this Agreement, not delinquent, and for the payment of which adequate reserves have been provided.

6.3.  Defaults.

(a)  Each of the following events shall constitute an “Event of Default” hereunder (whatever the reason for such event of default and whether it shall be voluntary or involuntary, or come about or be effected by operation of law, or be pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) if Lessee shall fail to pay when due any sum under this Agreement and such failure shall continue for a period of three business days after oral, facsimile, electronic mail or written notice has been given by Lessor to Lessee; (2) if Lessee shall fail to perform any covenant or agreement contained herein, and such failure shall continue for a period of fifteen (15) calendar days after notice thereof shall have been given in writing; (3) if any representation or warranty made by Lessee in this Agreement or any agreement, document or certificate delivered by the Lessee in connection herewith is or shall become incorrect in any material respect; (4) if Lessee shall operate the Aircraft in violation of any applicable law, regulation, rule or order of any governmental authority having jurisdiction thereof or shall operate the Aircraft when the insurance required hereunder shall not be in effect; (5) if any proceedings shall be commenced under any bankruptcy, insolvency, reorganization, readjustment of debt, receivership or liquidation law or statute of any jurisdiction; or (6) if any such proceedings shall be instituted against either Party and shall not be withdrawn or terminated within thirty (30) calendar days after their commencement.

(b)  Upon the occurrence of any Event of Default Lessor may, at its option, exercise any or all remedies available at law or in equity, including, without limitation, any or all of the following remedies, as Lessor in its sole discretion shall elect: (1) by notice in writing to terminate this Agreement immediately, whereupon all rights of the Lessee to the use or possession of the Aircraft or any part thereof shall absolutely cease and terminate but Lessee

BLACKSTONE DRY LEASE - PAGE 6 OF 9

shall remain liable as hereinafter provided; and thereupon Lessee, if so requested by Lessor, shall at its expense promptly return the Aircraft and Aircraft Documentation as required by this Agreement or Lessor, at its option, may enter upon the premises where the Aircraft or Aircraft Documentation are located and take immediate possession of and remove the same by summary proceedings or otherwise. Lessee specifically authorizes Lessor’s entry upon any premises where the Aircraft or Aircraft Documentation may be located for the purpose of, and waives any cause of action it may have arising from, a peaceful retaking of the Aircraft or Aircraft Documentation; or (2) perform or cause to be performed any obligation, covenant or agreement of Lessee hereunder. Lessee agrees to pay all costs and expenses incurred by Lessor for such performance and acknowledges that such performance by Lessor shall not be deemed to cure said Event of Default.

(c)  Lessee shall be liable for all costs, charges and expenses, including reasonable legal fees and disbursements, incurred by Lessor by reason of the occurrence of any Event of Default or the exercise of Lessor’s remedies with respect thereto. No remedy referred to herein is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity. Lessor shall not be deemed to have waived any default, Event of Default or right hereunder unless the same is acknowledged in writing by duly authorized representative of Lessor. No waiver by Lessor of any default or Event of Default hereunder shall in any way be, or be construed to be, a waiver of any future or subsequent default or Event of Default. The failure or delay of Lessor in exercising any rights granted it hereunder upon any occurrence of any such right upon the continuation or recurrence of any such contingencies or similar contingencies, and any single or partial exercise of any particular right by Lessor shall not exhaust the same or constitute a waiver of any other right provided herein.

6.4  Successors and Assigns. This Agreement shall be binding upon Lessor, Lessee, and their respective successors and assigns, except that Lessee may not assign or transfer any of its rights hereunder except with the prior written consent of Lessor. Subject to the foregoing, this Lease shall inure to the benefit of Lessor and Lessee and their respective successors and assigns.

6.5.  Notices. All notices and other communications under this Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by delivery in person, by facsimile or electronic mail (with a simultaneous confirmation copy sent by first class mail properly addressed and postage prepaid), or by a reputable overnight courier service, addressed as follows:

If to Lessor:	XB Partners LLC
	Corporate Trust Center
	1209 Orange Street
	Wilmington, Delaware 19801
	Attn:
	Telephone:
	Facsimile:
	Email:

BLACKSTONE DRY LEASE - PAGE 7 OF 9

If to Lessee:	Blackstone Administrative Services Partnership, LP
	345 Park Avenue, 44th Floor
	New York, NY 10154
	Attn:
	Telephone:
	Facsimile:
	Email:

or at such other address as either Party may designate in writing. Any notice hereunder shall be effective upon delivery.

6.6.  Entire Agreement. This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement between the Parties pertaining to the subject matter of this Agreement and supersede all prior and contemporaneous understandings, including any prior written agreements of the Parties pertaining to the matters hereof.     

6.7.  Severability. If any provision of this Agreement is found to be prohibited or unenforceable in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in one jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, each Party hereto hereby waives any provision of law that renders any provision hereof prohibited or unenforceable in any respect.

6.8.  Amendments and Modifications. The terms of this Agreement shall not be waived, varied, contradicted, explained, amended or changed in any other manner except by an instrument in writing, executed by both Parties.

6.9.  Choice of Law. This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of New York (disregarding any Conflict of Laws rule which might result in the application of the laws of any other jurisdiction), including all matters of construction, validity, and performance.

6.10.  Force Majeure. No Party shall be liable for any failure to perform its obligations in connection with any action described in this Agreement, if such failure results from any act of God, riot, war, civil unrest, flood, earthquake, or other cause beyond such Party’s reasonable control (including any mechanical, electronic, or communications failure, but excluding failure caused by a Party’s financial condition or negligence).

6.11.  Execution. This Lease may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument. Signatures transmitted by facsimile, .pdf, or any other electronic means shall constitute original signatures.    

ARTICLE 7: TRUTH IN LEASING

7.1.  Representation Regarding Maintenance. DURING THE LAST TWELVE MONTHS THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER

BLACKSTONE DRY LEASE - PAGE 8 OF 9

FEDERAL AVIATION REGULATION PART 91 AND UNDER PART 135 (AS OF 15 MARCH 2013). LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT COMPLIES WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS CONTAINED IN THE ABOVE LISTED FEDERAL AVIATION REGULATION FOR LESSEE’S USE OF THE AIRCRAFT UNDER THIS LEASE.

7.2.  Representation Regarding Operational Control. LESSEE, WHOSE NAME AND ADDRESS APPEAR HEREIN, IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THE LEASE. LESSEE HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH THE FEDERAL AVIATION REGULATIONS APPLICABLE TO THE AIRCRAFT.

7.3.  Information from FAA. LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONS CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE, OR AIR CARRIER DISTRICT OFFICE.

7.4.  FAA Notification: in accordance with FAR 91.23. The Parties shall take the following actions upon execution of this Agreement: (1) a copy of this Agreement shall be placed aboard the Aircraft; (2) a copy of this agreement will be mailed to the FAA Aircraft Registration Branch, Attn: Technical Section, P.O. Box 25724, Oklahoma City, OK 73125 within 24 hours of execution; and (3) the FAA will be notified at least 48 hours prior to the first flight of any aircraft under this Agreement.

(Signature page follows)

BLACKSTONE DRY LEASE - PAGE 9 OF 9

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in their names and on their behalf by their duly authorized officers, effective as of the Effective Date.

XB Partners LLC

As Lessor

By:

Name:

Title:

Blackstone Administrative Services Partnership, LP

As Lessee

By:

Name:

Title:

Signature Page

Aircraft Dry Lease Agreement

Blackstone – XB Partners

APPENDIX A

XB Partners LLC

INVOICE

To      ______________________

          ______________________

          ______________________

Date: _______      

Payable: Payable upon receipt
Ref Contract:         Aircraft Dry Lease Agreement between XB Partners LLC and Blackstone Administrative Services Partnership, LP (“Lease”) dated ____________________.
Rental Period:    _________ to ________
Description                                                                                                       Amount ______________________________________________________________________
1. Rental Payment	$_________
rental fee ($ _________ per flight hour of operation)
2. Other Costs: (see paragraph 2.3 of Lease)	$_________
Description                                                      Cost
____________________________________________
____________________________________________
____________________________________________
____________________________________________
_______________________________________________________________________
TOTAL THIS INVOICE	$_________

EX-10.3

Exhibit 10.3

FORM OF AIRCRAFT DRY LEASE AGREEMENT

THIS AIRCRAFT DRY LEASE AGREEMENT (this “Agreement”) is made and entered effective as of ______________________ (the “Effective Date”) between GBBX Associates LLC, a Delaware limited liability company, WLBX LLC, Delaware limited liability company, together as (“Lessor”) and Blackstone Administrative Services Partnership L.P., a Delaware limited partnership (“Lessee”) (collectively the “Parties”).

W I T N E S S E T H:

WHEREAS, Lessor owns a 2010 Bombardier model CL-600-2B16 (Challenger 605) aircraft, manufacturer’s serial number 5852 aircraft, with FAA Registration number N267DW, as described more fully in Section 1.1 below; and

WHEREAS, Lessor desires to dry lease the Aircraft to Lessee from time to time on a non-exclusive periodic basis; and Lessee desires to dry lease the Aircraft from Lessor from time to time.

NOW, THEREFORE, in consideration of the promises and the mutual covenants and undertakings herein contained, the Parties hereto do hereby agree as follows:

ARTICLE 1: LEASE AND TERM

1.1.  Lease. Lessor hereby agrees to dry lease to Lessee, from time to time, and Lessee hereby agrees to dry lease from Lessor, from time to time, one (1) 2010 Bombardier model CL-600-2B16 (Challenger 605) aircraft, manufacturer’s serial number 5852 aircraft, with FAA Registration number N267DW (the “Airframe”), equipped with two (2) GE model CF34-3B engines bearing manufacturer’s serial numbers SN-950934 and SN-950935 (the “Engines”), together with all components, accessions, systems, appliances, parts, instruments, accessories, furnishings, and any manufacturer’s or third-party warranties, any manufacturer service programs in connection with the Aircraft and other equipment installed thereon or attached thereto on the date hereof, all specified avionics, equipment, spare parts and loose equipment and all logs, weight and balance documents, wiring diagrams, manuals and other records and documentation pertaining to the operation and maintenance of such aircraft in Lessor’s possession or under its control (the foregoing, together with the Airframe and Engines, collectively, the “Aircraft”) to Lessee hereunder. Changes to the U.S. registration mark of the Aircraft shall have no effect on this Agreement.

1.2.  Term and Rental Periods. The Term of this Agreement (“Term”) shall commence on the Effective Date and shall be effective until the last calendar day of the fifth month following the Effective Date. Lessee may dry lease the Aircraft pursuant to this Agreement for specific periods of time during the Term (“Rental Periods”). No Rental Period shall be for more than thirty (30) days.

ARTICLE 2: RENTAL AND EXPENSES

2.1.  Rental Payment. Lessee agrees to pay to Lessor an hourly rental fee for occupied business flight hours at a rental rate of ______________________ ($_________) per flight hour

(prorated for fractions) of operation during each Rental Period (the “Rental Payment”). The hourly rental fee may be adjusted by mutual agreement during the Term based on fair market pricing. Such rental fees include delays, detours, cancellations caused by weather, routing, maintenance or other similar occurrences during each Rental Period, except that Lessor, at its sole discretion, may reduce the rental fees in the event of such occurrences. Lessee shall not be subject to any daily minimum Rental Payment on any day during the Rental Period.

2.2.  Positioning, Repositioning. Lessor has incorporated the estimated cost of positioning/repositioning flights into the Rental Payment, and any positioning/repositioning flights will not be part of the Rental Period and will be invoiced to Lessor’s account, even if Lessee commences or ends its Rental Period at a point other than at Teterboro Airport (“Home Base”).

2.3.  Lessee Reimbursement for Fuel and Incidental Charges. Lessee shall be responsible for fuel and incidental charges on occupied business flight hours during the Rental Period. Such Incidental Charges include but are not limited to hangaring and tie down charges away from the Home Base, landing fees, federal excise taxes, airport taxes or similar charges, customs, immigration and similar charges related to international flights; and any additional insurance premiums required for specific flights during the Rental Period. In the event any such charges are inadvertently made to Lessor by service providers, Lessee shall promptly reimburse Lessor for such costs. Lessor shall instruct service providers to invoice Lessee in the future.

2.4.  Lessor Reimbursement for Certain Charges. Lessor has incorporated the cost for maintenance and repairs into the Rental Payment. In the event any charges for maintenance are paid directly by Lessee, Lessor shall promptly reimburse Lessee for such cost, or deduct as an offset against Rental Payments such costs.    

2.5.  Invoicing and Payment. Lessor will send Lessee invoices for such payments as are due under this Article for each Rental Period, using the form attached as Appendix A or other form at Lessor’s discretion. Lessee shall make payment by check or money order payable to “GBBX Associates LLC, WLBX LLC” payable upon receipt, or shall wire transfer funds to the address specified on the invoice.

2.6.  Calculation of Hours of Operation. For purposes of Rental Payments, hours of operation for each Rental Period shall be calculated (1) from the time the Aircraft takes off to the time it lands.

2.7.  Taxes. All payments, including specifically Rental Payments made by Lessee hereunder, shall be made free and clear of, and without deduction for, any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, restrictions or conditions now or hereafter imposed by any governmental or taxing authority. Taxes which the Lessee may incur while operating the Aircraft include, but are not limited to: fuel excise taxes, airport taxes, sales and use taxes, over flight fees or taxes, and customs duties, or other foreign taxes relating to international travel. Notwithstanding the foregoing, Lessee shall only be liable for taxes on lease payments and not on the value of the Aircraft.

BLACKSTONE DRY LEASE - PAGE 2 OF 9

2.8.  Procedure to Request Rental of Aircraft. Lessee shall make requests for rental of the Aircraft to Lessor either orally or in writing. Requests should be made as far in advance as possible before the intended commencement of the Rental Period.

2.9.  Availability. Lessor is making the Aircraft available to Lessee for dry lease on an “as available” basis only, and makes no guarantee or warranty with regard to Aircraft availability. Lessor will, in good faith, attempt to make the Aircraft available when it is not otherwise being used by Lessor, another lessee, or is unavailable for maintenance or other reasons.

2.10.  Non-availability or Delay Due to Unanticipated Causes. Lessor shall promptly notify Lessee in writing if the Aircraft cannot be delivered for a Rental Period due to an unanticipated delay, such as weather or mechanical related delays. Lessor shall not be responsible for any loss, injury, damage, delay, or cancellation, or any consequential or incidental damages or costs incurred by Lessee caused by such delay or cancellation.

ARTICLE 3: OPERATION OF AIRCRAFT BY LESSEE

3.1.  Operational Control. During each Rental Period, Lessee is and shall be the sole operator of the Aircraft and has sole operational control of the Aircraft. During each Rental Period, Lessee is responsible for operating the Aircraft in accordance and compliance with all laws, ordinances and regulations relating to the possession, use, operation, or maintenance of the Aircraft, including, but not limited to, Part 91 of the Federal Aviation Regulations (“FAR”).

3.2.  Selection of Flight Crew. Lessee shall select and hire its own flight crew provided that the pilots shall be professionally trained and qualified, shall be familiar with and licensed to operate the Aircraft, and shall have current medical certificates, and recurrent training.

3.3.  Care and Use. Lessee shall use and operate the Aircraft in a careful and proper manner. Lessee shall operate the Aircraft in accordance with the flight manual and all manufacturer’s suggested operating procedures. Lessee shall not operate, use, or maintain the Aircraft in violation of any airworthiness certificate, license, or registration relating to the Aircraft, or contrary to any law or regulation.

3.4.  Limits of Operations. Lessee expressly warrants and agrees that it shall not operate the Aircraft outside the geographic limits set forth in the Insurance Policies (defined below), or otherwise operate the Aircraft in a way that would violate or compromise the Insurance Policies. Lessee shall use the Aircraft only for and on account of its business, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo in air commerce for compensation or hire (except in accordance with the provisions of FAR 91.501), or for any illegal purpose.

3.5.  Documentation. Lessee shall complete required flight logs, maintenance logs, or other recording entries required by the FAR during any Rental Period.

3.6.  Maintenance and Repair. Lessor, at its own cost and expense, will promptly repair or replace all parts, appliances, components, instruments, accessories, and furnishings that are installed in or attached to the Aircraft (herein called “Parts”) that may from time to time become

BLACKSTONE DRY LEASE - PAGE 3 OF 9

worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair, or permanently rendered unfit for use for any reason whatsoever during a Rental Period. Further, Lessor shall reimburse Lessee for any mechanics liens or other costs incurred by Lessee associated with non-routine repairs or maintenance made during a Rental Period, provided that: (1) such repairs shall be made by an FAA approved repair facility; and (2) Lessor shall approve in advance such repairs or maintenance. Lessee covenants to repair any damage beyond ordinary wear and tear caused by Lessee’s use of the Aircraft.

3.7.  Right to Inspect. Lessor and its authorized representatives shall, at all reasonable times, have the right to enter the premises where the Aircraft may be located for the purpose of inspecting and examining the Aircraft, its condition, use and operation, and the books and records of Lessee relating thereto to ensure Lessee’s compliance with its obligations under this Lease. Notwithstanding the foregoing rights, Lessor has no duty to inspect and shall not incur any liability or obligation by reason of not making any such inspection.

ARTICLE 4: INSURANCE AND LIABILITY

4.1.  Primary Liability and Property Damage Insurance. Lessor shall maintain in effect, at its own expense, third party Aircraft liability insurance, passenger legal liability insurance, and property damage liability insurance during the Term in such amounts as are customary for similarly situated aircraft. Each liability policy shall be primary without right of contribution from any other insurance that is carried by Lessee, and expressly shall provide that all the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.

4.2.  Insurance Against Physical Damage. Lessor shall maintain in effect, at its own expense, all-risk ground and flight Aircraft hull insurance covering the Aircraft. Any such insurance shall be during the Term for an amount customary for a similar aircraft.

4.3.  Lessee As Named Insured. All insurance policies carried by Lessor in accordance with this Article (the “Insurance Policies”) shall name Lessee as a named insured.

4.4.  Deductible. Any Insurance Policy carried by Lessor in accordance with this Article may be subject to a deductible amount which is customary under policies insuring similar aircraft similarly situated. Lessor warrants and agrees that in the event of an insurable claim, Lessor will bear the costs up to the deductible amount.

4.5.  Additional Insurance for Lessee. Lessee may, at its discretion, obtain additional insurance covering its operation of the Aircraft.

4.6.  Certificate of Insurance. Upon request, Lessor shall deliver to Lessee a certificate of insurance evidencing the insurance required to be maintained by Lessor under this Article.

4.7.  Mutual Waiver of Liability Claims. Except as specifically set forth in this Agreement, Lessor and Lessee each hereby agree that each shall hold harmless the other Party, and the other Party’s respective officers, directors, agents, employees, servants, attorneys, insurers, coinsurers, reinsurers, indemnitors, parents, subsidiaries, affiliates, predecessors,

BLACKSTONE DRY LEASE - PAGE 4 OF 9

successors, and assigns from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses, including reasonable legal fees and expenses, of whatsoever kind and nature including, without limitation, personal injury or death (“Liabilities”), that could be asserted by that Party against the other Party directly or indirectly (including but not limited to claims raised against that Party by any third-party, employee, agent, or other person or entity not a party to the Agreement) arising out of the lease, sublease, possession, rental, use, condition, operation, transportation, return, storage or disposition of the Aircraft or any part thereof (including, without limitation, Liabilities in any way relating to or arising out of latent or other defects, whether or not discoverable by a Party or any other person, injury to persons or property, or strict liability in tort), provided, however, that neither Party shall be required to hold harmless the other Party for Liabilities resulting from the gross negligence or willful misconduct of the other Party.

ARTICLE 5: WARRANTIES AND DISCLAIMERS

5.1.  Lessor’s Warranty. Lessor warrants that (1) the Aircraft shall be delivered to Lessee in airworthy condition; (2) the Aircraft is properly registered in accordance with U.S. law; and (3) Lessor is a citizen of the United States of America as set forth in 49 U.S.C Section 40102(15) and the regulations thereunder.

5.2.  Lessor’s Disclaimer of Warranties. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS, AND LESSEE EXPRESSLY WAIVES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, WORKMANSHIP, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF.

5.3.  Lessee’s Representation Regarding Selection. Lessee represents and warrants that: (1) it has selected the Aircraft based on its own judgment and disclaims any reliance upon statements or representations not part of this Agreement; and (2) that the Aircraft is of a size, design and capacity selected by Lessee and is suitable for Lessee’s intended use.

5.4.  Lessee Warranty Regarding Operation. Lessee represents and warrants that it shall only operate the Aircraft under the terms, conditions, and restrictions, as set forth in this Agreement.

ARTICLE 6: MISCELLANEOUS

6.1.  Title. Title to the Aircraft shall remain vested in Lessor during the Lease Term and the Aircraft shall be registered at the FAA in the name of Lessor. Lessee shall have no right, title or interest in or to the Aircraft except as expressly provided herein and shall take no action that would impair the continued registration of the Aircraft at the FAA in the name of Lessor. Lessee

BLACKSTONE DRY LEASE - PAGE 5 OF 9

shall not file or record this Agreement with the FAA. Lessee shall do or cause to be done any and all acts and things which may be required to perfect and preserve the interest and title of Lessor to the Aircraft within any jurisdiction in which Lessee may operate the Aircraft, and Lessee shall also do or cause to be done any and all acts and things which may be required under the terms of any other agreement, treaty, convention, pact or by any practice, customs or understanding involving any country or state in which Lessee may operate, as may be necessary or helpful, or as Lessor may reasonably request, to perfect and preserve the rights of Lessor within the jurisdiction of any such country or state.

6.2.  Liens. Except as provided herein, Lessee will not directly or indirectly create, incur, assume or suffer to exist any liens on or with respect to (1) the Aircraft or any part thereof; (2) Lessor’s title thereto; or (3) any interest of Lessor therein. Lessee will promptly, at its own expense, take such action as may be necessary to discharge any such lien. Lessee may incur the following liens: (i) the respective rights of Lessor and Lessee as herein provided; (ii) liens created by Lessor; (iii) liens for taxes either not yet due or being contested by Lessee in good faith; and (iv) inchoate materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or other like liens arising in the ordinary course of business of Lessee, or Parties acting on behalf of Lessee insofar as such actions relate to the Aircraft and are not inconsistent with this Agreement, not delinquent, and for the payment of which adequate reserves have been provided.

6.3.  Defaults.

(a)  Each of the following events shall constitute an “Event of Default” hereunder (whatever the reason for such event of default and whether it shall be voluntary or involuntary, or come about or be effected by operation of law, or be pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) if Lessee shall fail to pay when due any sum under this Agreement and such failure shall continue for a period of three business days after oral, facsimile, electronic mail or written notice has been given by Lessor to Lessee; (2) if Lessee shall fail to perform any covenant or agreement contained herein, and such failure shall continue for a period of fifteen (15) calendar days after notice thereof shall have been given in writing; (3) if any representation or warranty made by Lessee in this Agreement or any agreement, document or certificate delivered by the Lessee in connection herewith is or shall become incorrect in any material respect; (4) if Lessee shall operate the Aircraft in violation of any applicable law, regulation, rule or order of any governmental authority having jurisdiction thereof or shall operate the Aircraft when the insurance required hereunder shall not be in effect; (5) if any proceedings shall be commenced under any bankruptcy, insolvency, reorganization, readjustment of debt, receivership or liquidation law or statute of any jurisdiction; or (6) if any such proceedings shall be instituted against either Party and shall not be withdrawn or terminated within thirty (30) calendar days after their commencement.

(b)  Upon the occurrence of any Event of Default Lessor may, at its option, exercise any or all remedies available at law or in equity, including, without limitation, any or all of the following remedies, as Lessor in its sole discretion shall elect: (1) by notice in writing to terminate this Agreement immediately, whereupon all rights of the Lessee to the use or possession of the Aircraft or any part thereof shall absolutely cease and terminate but Lessee

BLACKSTONE DRY LEASE - PAGE 6 OF 9

shall remain liable as hereinafter provided; and thereupon Lessee, if so requested by Lessor, shall at its expense promptly return the Aircraft and Aircraft Documentation as required by this Agreement or Lessor, at its option, may enter upon the premises where the Aircraft or Aircraft Documentation are located and take immediate possession of and remove the same by summary proceedings or otherwise. Lessee specifically authorizes Lessor’s entry upon any premises where the Aircraft or Aircraft Documentation may be located for the purpose of, and waives any cause of action it may have arising from, a peaceful retaking of the Aircraft or Aircraft Documentation; or (2) perform or cause to be performed any obligation, covenant or agreement of Lessee hereunder. Lessee agrees to pay all costs and expenses incurred by Lessor for such performance and acknowledges that such performance by Lessor shall not be deemed to cure said Event of Default.

(c)  Lessee shall be liable for all costs, charges and expenses, including reasonable legal fees and disbursements, incurred by Lessor by reason of the occurrence of any Event of Default or the exercise of Lessor’s remedies with respect thereto. No remedy referred to herein is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity. Lessor shall not be deemed to have waived any default, Event of Default or right hereunder unless the same is acknowledged in writing by duly authorized representative of Lessor. No waiver by Lessor of any default or Event of Default hereunder shall in any way be, or be construed to be, a waiver of any future or subsequent default or Event of Default. The failure or delay of Lessor in exercising any rights granted it hereunder upon any occurrence of any such right upon the continuation or recurrence of any such contingencies or similar contingencies, and any single or partial exercise of any particular right by Lessor shall not exhaust the same or constitute a waiver of any other right provided herein.

6.4  Successors and Assigns. This Agreement shall be binding upon Lessor, Lessee, and their respective successors and assigns, except that Lessee may not assign or transfer any of its rights hereunder except with the prior written consent of Lessor. Subject to the foregoing, this Lease shall inure to the benefit of Lessor and Lessee and their respective successors and assigns.

6.5.  Notices. All notices and other communications under this Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by delivery in person, by facsimile or electronic mail (with a simultaneous confirmation copy sent by first class mail properly addressed and postage prepaid), or by a reputable overnight courier service, addressed as follows:

If to Lessor:	GBBX Associates
	WLBX LLC
	321 Broadway
	Saratoga Springs, NY 12866
	Attn:
	Telephone:
	Facsimile:
	Email:

BLACKSTONE DRY LEASE - PAGE 7 OF 9

If to Lessee:	Blackstone Administrative Services Partnership, LP
	345 Park Avenue, 44th Floor
	New York, NY 10154
	Attn:
	Telephone:
	Facsimile:
	Email:

or at such other address as either Party may designate in writing. Any notice hereunder shall be effective upon delivery.

6.6.  Entire Agreement. This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement between the Parties pertaining to the subject matter of this Agreement and supersede all prior and contemporaneous understandings, including any prior written agreements of the Parties pertaining to the matters hereof.     

6.7.  Severability. If any provision of this Agreement is found to be prohibited or unenforceable in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in one jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, each Party hereto hereby waives any provision of law that renders any provision hereof prohibited or unenforceable in any respect.

6.8.  Amendments and Modifications. The terms of this Agreement shall not be waived, varied, contradicted, explained, amended or changed in any other manner except by an instrument in writing, executed by both Parties.

6.9.  Choice of Law. This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of New York (disregarding any Conflict of Laws rule which might result in the application of the laws of any other jurisdiction), including all matters of construction, validity, and performance.

6.10.  Force Majeure. No Party shall be liable for any failure to perform its obligations in connection with any action described in this Agreement, if such failure results from any act of God, riot, war, civil unrest, flood, earthquake, or other cause beyond such Party’s reasonable control (including any mechanical, electronic, or communications failure, but excluding failure caused by a Party’s financial condition or negligence).

6.11.  Execution. This Lease may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument. Signatures transmitted by facsimile, .pdf, or any other electronic means shall constitute original signatures.    

ARTICLE 7: TRUTH IN LEASING

BLACKSTONE DRY LEASE - PAGE 8 OF 9

7.1.  Representation Regarding Maintenance. DURING THE LAST TWELVE MONTHS THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER FEDERAL AVIATION REGULATION PART 91 AND UNDER PART 135 (AS OF 15 MARCH 2013). LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT COMPLIES WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS CONTAINED IN THE ABOVE LISTED FEDERAL AVIATION REGULATION FOR LESSEE’S USE OF THE AIRCRAFT UNDER THIS LEASE.

7.2.  Representation Regarding Operational Control. LESSEE, WHOSE NAME AND ADDRESS APPEAR HEREIN, IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THE LEASE. LESSEE HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH THE FEDERAL AVIATION REGULATIONS APPLICABLE TO THE AIRCRAFT.

7.3.  Information from FAA. LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONS CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE, OR AIR CARRIER DISTRICT OFFICE.

7.4.  FAA Notification: in accordance with FAR 91.23. The Parties shall take the following actions upon execution of this Agreement: (1) a copy of this Agreement shall be placed aboard the Aircraft; (2) a copy of this agreement will be mailed to the FAA Aircraft Registration Branch, Attn: Technical Section, P.O. Box 25724, Oklahoma City, OK 73125 within 24 hours of execution; and (3) the FAA will be notified at least 48 hours prior to the first flight of any aircraft under this Agreement.

(Signature page follows)

BLACKSTONE DRY LEASE - PAGE 9 OF 9

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in their names and on their behalf by their duly authorized officers, effective as of the Effective Date.

GBBX Associates LLC

WLBX LLC

As Lessor

By:

Name:

Title:

Blackstone Administrative Services Partnership, LP

As Lessee

By:

Name:

Title:

Signature Page

Aircraft Dry Lease Agreement

Blackstone – GBBX/WLBX

APPENDIX A

GBBX Associates LLC

WLBX LLC

INVOICE

To      ______________________

          ______________________

          ______________________

Date: _________      

Payable: Payable upon receipt

Ref Contract: Aircraft Dry Lease Agreement between GBBX Associates LLC, WLBX LLC, and Blackstone Administrative Services Partnership, LP (“Lease”) dated ________________.

Rental Period:    _________ to ________
Description                                                                                                       Amount
1. Rental Payment	$_________
rental fee ($ _________ per flight hour of operation)
2. Other Costs: (see paragraph 2.3 of Lease)	$_________
Description                                                              Cost
____________________________________________
____________________________________________
____________________________________________
____________________________________________
TOTAL THIS INVOICE	$_________

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Stephen A. Schwarzman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 of The Blackstone Group L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 8, 2018

/s/ Stephen A. Schwarzman

Stephen A. Schwarzman

Chief Executive Officer

of Blackstone Group Management L.L.C.

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Michael S. Chae, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 of The Blackstone Group L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 8, 2018

/s/ Michael S. Chae

Michael S. Chae

Chief Financial Officer

of Blackstone Group Management L.L.C.

EX-32.1

Exhibit 32.1

Certification of the Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of The Blackstone Group L.P. (the “Partnership”) on Form 10-Q for the quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen A. Schwarzman, Chief Executive Officer of Blackstone Group Management L.L.C., the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: August 8, 2018

/s/ Stephen A. Schwarzman

Stephen A. Schwarzman

Chief Executive Officer

of Blackstone Group Management L.L.C.

* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

Certification of the Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of The Blackstone Group L.P. (the “Partnership”) on Form 10-Q for the quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael S. Chae, Chief Financial Officer of Blackstone Group Management L.L.C., the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: August 8, 2018

/s/ Michael S. Chae

Michael S. Chae

Chief Financial Officer

of Blackstone Group Management L.L.C.

* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 02, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	BX
Entity Registrant Name	BLACKSTONE GROUP L.P.
Entity Central Index Key	0001393818
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		667,149,651

XML

Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Assets
Cash and Cash Equivalents	$ 1,710,251	$ 1,992,497
Cash Held by Blackstone Funds and Other	288,675	1,929,531
Investments (including assets pledged of $217,832 and $169,746 at June 30, 2018 and December 31, 2017, respectively)	22,008,182	24,434,049
Accounts Receivable	917,717	875,018
Due from Affiliates	2,015,949	2,028,137
Intangible Assets, Net	380,844	409,828
Goodwill	1,778,192	1,778,192
Other Assets	252,936	242,697
Deferred Tax Assets	722,551	725,970
Total Assets	30,075,297	34,415,919
Liabilities and Partners' Capital
Loans Payable	10,195,403	14,815,436
Due to Affiliates	967,250	937,158
Accrued Compensation and Benefits	2,987,977	2,623,492
Securities Sold, Not Yet Purchased	155,780	154,380
Repurchase Agreements	182,489	118,840
Accounts Payable, Accrued Expenses and Other Liabilities	950,802	2,043,522
Total Liabilities	15,439,701	20,692,828
Commitments and Contingencies
Redeemable Non-Controlling Interests in Consolidated Entities	158,799	210,944
The Blackstone Group L.P. Partners' Capital
Partners' Capital (common units: 673,544,082 issued and outstanding as of June 30, 2018; 659,526,093 issued and outstanding as of December 31, 2017)	7,105,225	6,668,511
Accumulated Other Comprehensive Loss	(57,876)	(34,018)
Total The Blackstone Group L.P. Partners' Capital	7,047,349	6,634,493
Non-Controlling Interests in Consolidated Entities	3,492,621	3,253,148
Non-Controlling Interests in Blackstone Holdings	3,936,827	3,624,506
Total Partners' Capital	14,476,797	13,512,147
Total Liabilities and Partners' Capital	$ 30,075,297	$ 34,415,919

XML

Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Investments assets pledged	$ 217,832	$ 169,746
Partners' Capital, common units: issued	673,544,082	659,526,093
Partners' Capital, common units: outstanding	673,544,082	659,526,093
Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	$ 9,255,567	$ 15,050,406
Liabilities	7,497,226	13,158,295
Consolidated Blackstone Funds | Repurchase Agreements | Variable Interest Entity, Primary Beneficiary
Liabilities	182,489	118,840
Consolidated Blackstone Funds | Loans Payable | Variable Interest Entity, Primary Beneficiary
Liabilities	6,707,045	11,300,621
Securities Sold, Not Yet Purchased | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Liabilities	111,162	89,907
Investments | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	8,601,714	12,948,653
Accounts Receivable | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	340,307	470,156
Cash Held by Funds and Other | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	286,045	1,580,296
Due from Affiliates | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	24,360	46,112
Other Assets | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	3,141	5,189
Due to Affiliates | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Liabilities	100,306	86,393
Accounts Payable, Accrued Expenses and Other Liabilities | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Liabilities	$ 396,224	$ 1,562,534

XML

Consolidated Statements of Operations - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues
Performance Fees Realized - Incentive Fees		$ 19,378	$ 40,303	$ 31,944	$ 86,814
Performance Allocations
Realized		503,376	602,662	773,016	1,714,567
Unrealized		440,351	95,532	1,068,440	(29,089)
Principal Investments
Realized		129,197	125,058	171,342	376,402
Unrealized		103,468	7,275	215,242	(32,913)
Total Investment Income		1,176,392	830,527	2,228,040	2,028,967
Interest and Dividend Revenue		40,073	33,703	75,458	62,198
Other		675,343	(59,664)	616,026	(63,876)
Total Revenues		2,632,570	1,535,726	4,401,701	3,450,444
Expenses
Compensation and Benefits Compensation		427,479	367,203	816,882	718,792
Incentive Fee Compensation		9,743	21,032	16,405	43,497
Performance Allocations Compensation
Realized		186,398	195,738	298,460	562,216
Unrealized		189,991	86,910	444,426	94,443
Total Compensation and Benefits		813,611	670,883	1,576,173	1,418,948
General, Administrative and Other		145,828	119,552	272,541	228,938
Interest Expense		39,320	41,089	77,991	81,335
Fund Expenses		17,622	49,669	72,607	73,745
Total Expenses		1,016,381	881,193	1,999,312	1,802,966
Other Income
Net Gains from Fund Investment Activities		73,519	110,054	184,118	176,186
Income Before Provision for Taxes		1,689,708	764,587	2,586,507	1,823,664
Provision for Taxes		138,731	29,608	193,226	87,045
Net Income		1,550,977	734,979	2,393,281	1,736,619
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		905	991	(370)	2,991
Net Income Attributable to Non-Controlling Interests in Consolidated Entities		129,078	112,944	284,577	251,629
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings		678,952	283,637	999,160	692,683
Net Income Attributable to The Blackstone Group L.P.		$ 742,042	$ 337,407	$ 1,109,914	$ 789,316
Net Income Per Common Unit
Common Units, Basic		$ 1.09	$ 0.51	$ 1.64	$ 1.19
Common Units, Diluted		$ 1.09	$ 0.50	$ 1.63	$ 1.18
Weighted-Average Common Units Outstanding
Common Units, Basic		681,794,492	664,681,299	678,156,936	662,820,839
Common Units, Diluted		682,010,610	1,200,006,339	1,210,727,948	1,199,756,390
Distributions Declared Per Common Unit	[1]	$ 0.35	$ 0.87	$ 1.20	$ 1.34
Investment Advice
Revenues
Management and Advisory Fees, Net		$ 721,384	$ 690,857	$ 1,450,233	$ 1,336,341

[1] Distributions declared reflects the calendar date of the declaration for each distribution.

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net Income	$ 1,550,977	$ 734,979	$ 2,393,281	$ 1,736,619
Other Comprehensive Income (Loss), Net of Tax - Currency Translation Adjustment	(30,674)	35,089	(26,248)	46,593
Comprehensive Income	1,520,303	770,068	2,367,033	1,783,212
Less: Comprehensive Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities	905	991	(370)	2,991
Comprehensive Income Attributable to Non-Controlling Interests in Consolidated Entities	129,077	140,311	282,187	282,814
Comprehensive Income Attributable to Non-Controlling Interests in Blackstone Holdings	678,952	283,637	999,160	692,683
Comprehensive Income Attributable to The Blackstone Group L.P.	$ 711,369	$ 345,129	$ 1,086,056	$ 804,724

XML

Consolidated Statement of Changes in Partners' Capital - USD ($) $ in Thousands	Total	Common Units	Accumulated Other Comprehensive (Loss)	Parent	Noncontrolling Interest Consolidated Entities	Noncontrolling Interest Blackstone Holdings
Beginning Balance at Dec. 31, 2016	$ 12,322,091	$ 6,521,531	$ (62,887)	$ 6,458,644	$ 2,428,964	$ 3,434,483
Beginning Balance, Units at Dec. 31, 2016		643,459,542
Net Income	1,733,628	$ 789,316		789,316	251,629	692,683
Currency Translation Adjustment	46,593		15,408	15,408	31,185
Consolidation of a Fund Entity	387,006				387,006
Capital Contributions	375,161	(147)		(147)	375,308
Capital Distributions	(1,985,653)	(882,742)		(882,742)	(348,513)	(754,398)
Transfer of Non-Controlling Interests in Consolidated Entities	(2,408)				(2,408)
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders	7,286	7,286		7,286
Equity-Based Compensation	160,525	87,964		87,964		72,561
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units	(13,219)	$ (12,429)		(12,429)		(790)
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units, Units		3,775,544
Change in The Blackstone Group L.P.'s Ownership Interest	13,821	$ (13,821)		(13,821)		13,821
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units		$ 43,520		43,520		(43,520)
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units, Units		6,566,308
Ending Balance at Jun. 30, 2017	13,031,010	$ 6,540,478	(47,479)	6,492,999	3,123,171	3,414,840
Ending Balance, Units at Jun. 30, 2017		653,801,394
Beginning Balance at Dec. 31, 2016	185,390
Net Income	2,991
Capital Contributions	21,353
Capital Distributions	(19,034)
Ending Balance at Jun. 30, 2017	190,700
Beginning Balance at Dec. 31, 2017	13,512,147	$ 6,668,511	(34,018)	6,634,493	3,253,148	3,624,506
Beginning Balance, Units at Dec. 31, 2017		659,526,093
Transfer Out Due to Deconsolidation of Fund Entities	(197,091)				(197,091)
Net Income	2,393,651	$ 1,109,914		1,109,914	284,577	999,160
Currency Translation Adjustment	(26,248)		(23,858)	(23,858)	(2,390)
Capital Contributions	424,132				424,132
Capital Distributions	(1,781,297)	(806,770)		(806,770)	(291,963)	(682,564)
Transfer of Non-Controlling Interests in Consolidated Entities	22,208				22,208
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders	10,922	10,922		10,922
Equity-Based Compensation	180,419	100,519		100,519		79,900
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units	(15,331)	$ (14,496)		(14,496)		(835)
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units, Units		3,032,372
Repurchase of Common Units and Blackstone Holdings Partnership Units	(71,685)	$ (71,685)		(71,685)
Repurchase of Common Units and Blackstone Holdings Partnership Units, Units		(2,200,000)
Change in The Blackstone Group L.P.'s Ownership Interest	(835)	$ 835		835		(835)
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units		$ 82,505		82,505		(82,505)
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units, Units		12,434,878
Issuance of Common Units, Units		750,739
Ending Balance at Jun. 30, 2018	14,476,797	$ 7,105,225	$ (57,876)	7,047,349	$ 3,492,621	$ 3,936,827
Ending Balance, Units at Jun. 30, 2018		673,544,082
Beginning Balance at Dec. 31, 2017	210,944
Net Income	(370)
Capital Contributions	1,100
Capital Distributions	(52,875)
Ending Balance at Jun. 30, 2018	158,799
Issuance of Common Units	$ 24,970	$ 24,970		$ 24,970

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating Activities
Net Income	$ 2,393,281	$ 1,736,619
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities Blackstone Funds Related
Net Realized Gains on Investments	(995,992)	(2,284,430)
Changes in Unrealized (Gains) Losses on Investments	(290,232)	41,952
Non-Cash Performance Allocations	(1,068,440)	29,089
Non-Cash Performance Allocations and Incentive Fee Compensation	757,064	700,156
Equity-Based Compensation Expense	208,994	179,729
Amortization of Intangibles	28,984	21,927
Other Non-Cash Amounts Included in Net Income	172,435	132,973
Cash Flows Due to Changes in Operating Assets and Liabilities
Cash Acquired with Consolidation of Fund Entity	31,422	13,822
Cash Relinquished with Deconsolidation of Fund Entities	(899,959)	(33,566)
Accounts Receivable	(8,030)	191,454
Reverse Repurchase Agreements		118,495
Due from Affiliates	(330,468)	(131,421)
Other Assets	(29,640)	9,772
Accrued Compensation and Benefits	(417,051)	(621,807)
Securities Sold, Not Yet Purchased	5,005	(73,633)
Accounts Payable, Accrued Expenses and Other Liabilities	(476,348)	(700,274)
Repurchase Agreements	63,649	(14,713)
Due to Affiliates	31,306	(26,290)
Investments Purchased	(9,706,998)	(7,991,469)
Cash Proceeds from Sale of Investments	7,870,341	8,279,495
Net Cash Used in Operating Activities	(2,660,677)	(422,120)
Investing Activities
Purchase of Furniture, Equipment and Leasehold Improvements	(8,898)	(13,663)
Net Cash Used in Investing Activities	(8,898)	(13,663)
Financing Activities
Distributions to Non-Controlling Interest Holders in Consolidated Entities	(338,849)	(330,209)
Contributions from Non-Controlling Interest Holders in Consolidated Entities	421,801	392,983
Payments Under Tax Receivable Agreement		(59,667)
Net Settlement of Vested Common Units and Repurchase of Common and Blackstone Holdings Partnership Units	(87,016)	(13,220)
Proceeds from Loans Payable	3,218,399	2,550,559
Repayment and Repurchase of Loans Payable	(1,004,660)	(127,464)
Distributions to Unitholders	(1,489,334)	(1,637,287)
Net Cash Provided by Financing Activities	720,341	775,695
Effect of Exchange Rate Changes on Cash and Cash Equivalents, Cash Held by Blackstone Funds and Other, and Restricted Cash	11,671	72,188
Cash and Cash Equivalents, Cash Held by Blackstone Funds and Other, and Restricted Cash
Net Increase (Decrease)	(1,937,563)	412,100
Beginning of Period	3,936,489	2,860,955
End of Period	1,998,926	3,273,055
Supplemental Disclosure of Cash Flows Information
Payments for Interest	84,040	77,111
Payments for Income Taxes	109,944	46,919
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Non-Cash Contributions from Non-Controlling Interest Holders		1,327
Non-Cash Distributions to Non-Controlling Interest Holders	(5,924)	(37,339)
Net Assets Related to the Consolidation of a Fund Entity		387,006
Transfer of Interests to Non-Controlling Interest Holders	22,208	(2,408)
Change in The Blackstone Group L.P.'s Ownership Interest	835	(13,821)
Net Settlement of Vested Common Units	100,861	62,631
Conversion of Blackstone Holdings Units to Common Units	82,505	43,520
Acquisition of Ownership Interests from Non-Controlling Interest Holders Deferred Tax Asset	(74,130)	(48,017)
Due to Affiliates	63,208	40,731
Partners' Capital	10,922	$ 7,286
Issuance of Common Units	$ 24,970

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Consolidated Statements of Cash Flows (Parenthetical) $ in Thousands	Dec. 31, 2017 USD ($)
Cash and Cash Equivalents	$ 1,992,497
Cash Held by Blackstone Funds and Other	1,929,531
Restricted Cash included in Other Assets	14,461
Cash and Cash Equivalents, Cash Held by Blackstone Funds and Other, and Restricted Cash	$ 3,936,489

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ORGANIZATION

6 Months Ended

Jun. 30, 2018

ORGANIZATION

1. ORGANIZATION

The Blackstone Group L.P., together with its subsidiaries (“Blackstone” or the “Partnership”), is a leading global manager of private capital. The alternative asset management business includes the management of private equity funds, real estate funds, real estate investment trusts (“REITs”), funds of hedge funds, hedge funds, credit-focused funds, collateralized loan obligation (“CLO”) vehicles, separately managed accounts and registered investment companies (collectively referred to as the “Blackstone Funds”). Blackstone’s business is organized into four segments: private equity, real estate, hedge fund solutions and credit.

The Partnership was formed as a Delaware limited partnership on March 12, 2007. The Partnership is managed and operated by its general partner, Blackstone Group Management L.L.C., which is in turn wholly owned by Blackstone’s senior managing directors and controlled by one of Blackstone’s founders, Stephen A. Schwarzman (the “Founder”). The activities of the Partnership are conducted through its holding partnerships: Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. (collectively, “Blackstone Holdings”, “Blackstone Holdings Partnerships” or the “Holding Partnerships”). The Partnership, through its wholly owned subsidiaries, is the sole general partner in each of these Holding Partnerships.

Generally, holders of the limited partner interests in the Holding Partnerships may, four times each year, exchange their limited partnership interests (“Partnership Units”) for Blackstone common units, on a one-to-one basis, exchanging one Partnership Unit from each of the Holding Partnerships for one Blackstone common unit.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission.

The condensed consolidated financial statements include the accounts of the Partnership, its wholly owned or majority-owned subsidiaries, the consolidated entities which are considered to be variable interest entities and for which the Partnership is considered the primary beneficiary, and certain partnerships or similar entities which are not considered variable interest entities but in which the general partner is presumed to have control.

All intercompany balances and transactions have been eliminated in consolidation.

Restructurings within consolidated CLOs are treated as investment purchases or sales, as applicable, in the Condensed Consolidated Statements of Cash Flows.

Consolidation

The Partnership consolidates all entities that it controls through a majority voting interest or otherwise, including those Blackstone Funds in which the general partner has a controlling financial interest. The Partnership has a controlling financial interest in Blackstone Holdings because the limited partners do not have the right to dissolve the partnerships or have substantive kick out rights or participating rights that would overcome the control held by the Partnership. Accordingly, the Partnership consolidates Blackstone Holdings and records non-controlling interests to reflect the economic interests of the limited partners of Blackstone Holdings.

In addition, the Partnership consolidates all variable interest entities (“VIE”) in which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which the Partnership holds a variable interest is a VIE and (b) whether the Partnership’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (for example, management and performance related fees), would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment.

The Partnership determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and continuously reconsiders that conclusion. In determining whether the Partnership is the primary beneficiary, Blackstone evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Partnership. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Partnership is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Partnership, affiliates of the Partnership or third parties) or amendments to the governing documents of the respective Blackstone Funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, the Partnership assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.

Assets of consolidated VIEs that can only be used to settle obligations of the consolidated VIE and liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of Blackstone are presented in a separate section in the Condensed Consolidated Statements of Financial Condition.

Blackstone’s other disclosures regarding VIEs are discussed in Note 9. “Variable Interest Entities”.

Revenue Recognition

Revenues primarily consist of management and advisory fees, incentive fees, investment income, interest and dividend revenue and other.

Management and advisory fees and incentive fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 18, “Segment Reporting” for a disaggregated presentation of revenues from contracts with customers.

Investment Income represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments. Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by the Partnership. Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Management and Advisory Fees, Net — Management and Advisory Fees, Net are comprised of management fees, including base management fees, transaction and other fees and advisory fees net of management fee reductions and offsets.

The Partnership earns base management fees from limited partners of funds in each of its managed funds, at a fixed percentage of assets under management, net asset value, total assets, committed capital or invested capital. These customer contracts require the Partnership to provide investment management services, which represents a performance obligation that the Partnership satisfies over time. Management fees are a form of variable consideration because the fees the Partnership is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid.

Transaction, advisory and other fees (including monitoring fees) are principally fees charged to the limited partners of funds indirectly through the managed funds and portfolio companies. The investment advisory agreements generally require that the investment adviser reduce the amount of management fees payable by the limited partners to the Partnership (“management fee reductions”) by an amount equal to a portion of the transaction and other fees paid to the Partnership by the portfolio companies. The amount of the reduction varies by fund, the type of fee paid by the portfolio company and the previously incurred expenses of the fund. These fees and associated management fee reductions are a component of the transaction price for the Partnership’s performance obligation to provide investment management services to the limited partners of funds and are recognized as changes to the transaction price in the period in which they are charged and the services are performed.

Management fee offsets are reductions to management fees payable by the limited partners of the Blackstone Funds, which are based on the amount such limited partners reimburse the Blackstone Funds or the Partnership primarily for placement fees. Providing investment management services requires the Partnership to arrange for services on behalf of its customers. In those situations where the Partnership is acting as an agent on behalf of the limited partners of funds, it presents the cost of services as net against management fee revenue. In all other situations, the Partnership is primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements. As a result, the cost of those services is presented gross as Compensation or General, Administrative and Other expense, as appropriate, with any reimbursement from the limited partners of the funds recorded as Management and Advisory Fees, Net.

Accrued but unpaid Management and Advisory Fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts Receivable or Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Incentive Fees — Contractual fees earned based on the performance of Blackstone Funds (“Incentive Fees”) are a form of variable consideration in their contracts with customers to provide investment management services. Incentive Fees are earned based on fund performance during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each fund’s governing agreements. Incentive Fees will not be recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved. Incentive Fees are typically recognized as revenue when realized at the end of the measurement period. Once realized, such fees are not subject to clawback or reversal. Accrued but unpaid Incentive Fees charged directly to investors in Blackstone Funds as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Investment Income (Loss) — Investment Income (Loss) represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments.

In certain fund structures across private equity, real estate, hedge fund solutions and credit-focused funds (“carry funds”), Blackstone, through its subsidiaries, invests alongside its limited partners in a partnership and is entitled to its pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, Blackstone is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).

Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. At the end of each reporting period, the Partnership calculates the balance of accrued Performance Allocations (“Accrued Performance Allocations”) that would be due to the Partnership for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. Accrued Performance Allocations as of the reporting date are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Performance Allocations are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results. As such, the accrual for potential repayment of previously received Performance Allocations, which is a component of Due to Affiliates, represents all amounts previously distributed to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone carry funds if the Blackstone carry funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain funds, including certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability.

Principal Investments include the unrealized and realized gains and losses on the Partnership’s principal investments, including its investments in Blackstone Funds that are not consolidated and receive pro-rata allocations, its equity method investments, and other principal investments. Income (Loss) on Principal Investments is realized when the Partnership redeems all or a portion of its investment or when the Partnership receives cash income, such as dividends or distributions. Unrealized Income (Loss) on Principal Investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest and Dividend Revenue — Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by Blackstone.

Other Revenue — Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Fair Value of Financial Instruments

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

• Level I — Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. The Partnership does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and a sale could reasonably impact the quoted price.

• Level II — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held within CLO vehicles, government and agency securities, less liquid and restricted equity securities, and certain over-the-counter derivatives where the fair value is based on observable inputs. Senior and subordinated notes issued by CLO vehicles are classified within Level II of the fair value hierarchy.

• Level III — Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership interests in private equity and real estate funds, credit-focused funds, distressed debt and non-investment grade residual interests in securitizations, certain corporate bonds and loans held within CLO vehicles, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Transfers between levels of the fair value hierarchy are recognized at the beginning of the reporting period.

Level II Valuation Techniques

Financial instruments classified within Level II of the fair value hierarchy comprise debt instruments, including certain corporate loans and bonds held by Blackstone’s consolidated CLO vehicles and debt securities sold, not yet purchased. Certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.

The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:

• Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.

• Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit spreads.

• Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.

Level III Valuation Techniques

In the absence of observable market prices, Blackstone values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances, and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, real estate properties, certain funds of hedge funds and credit-focused investments.

Private Equity Investments — The fair values of private equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortization (“EBITDA”), the discounted cash flow method, public market or private transactions, valuations for comparable companies and other measures which, in many cases, are based on unaudited information at the time received. Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples.

Real Estate Investments — The fair values of real estate investments are determined by considering projected operating cash flows, sales of comparable assets, if any, and replacement costs, among other measures. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rates (“cap rates”) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or assets (for example, multiplying a key performance metric of the investee company or asset, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to an exit EBITDA multiple or capitalization rate. Additionally, where applicable, projected distributable cash flow through debt maturity will be considered in support of the investment’s fair value.

Credit-Focused Investments — The fair values of credit-focused investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. For credit-focused investments that are not publicly traded or whose market prices are not readily available, Blackstone may utilize other valuation techniques, including the discounted cash flow method or a market approach. The discounted cash flow method projects the expected cash flows of the debt instrument based on contractual terms, and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly traded debt instruments issued by companies operating in similar industries as the subject investment, with similar leverage statistics and time to maturity.

The market approach is generally used to determine the enterprise value of the issuer of a credit investment, and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.

Level III Valuation Process

Investments classified within Level III of the fair value hierarchy are valued on a quarterly basis, taking into consideration factors including any changes in Blackstone’s weighted-average cost of capital assumptions, discounted cash flow projections and exit multiple assumptions, as well as any changes in economic and other relevant conditions, and valuation models are updated accordingly. The valuation process also includes a review by an independent valuation party, at least annually for all investments, and quarterly for certain investments, to corroborate the values determined by management. The valuations of Blackstone’s investments are reviewed quarterly by a valuation committee chaired by Blackstone’s Vice Chairman and includes senior heads of each of Blackstone’s businesses, as well as representatives of legal and finance. Each quarter, the valuations of Blackstone’s investments are also reviewed by the Audit Committee in a meeting attended by the chairman of the valuation committee. The valuations are further tested by comparison to actual sales prices obtained on disposition of the investments.

Investments, at Fair Value

The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing Guide, Investment Companies, and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. Such consolidated funds’ investments are reflected in Investments on the Condensed Consolidated Statements of Financial Condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, at current market conditions (i.e., the exit price).

Blackstone’s principal investments are presented at fair value with unrealized appreciation or depreciation and realized gains and losses recognized in the Condensed Consolidated Statements of Operations within Investment Income (Loss).

For certain instruments, the Partnership has elected the fair value option. Such election is irrevocable and is applied on an investment by investment basis at initial recognition. The Partnership has applied the fair value option for certain loans and receivables and certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses recorded in net income. The methodology for measuring the fair value of such investments is consistent with the methodology applied to private equity, real estate, credit-focused and funds of hedge funds investments. Changes in the fair value of such instruments are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. Interest income on interest bearing loans and receivables and debt securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest and Dividend Revenue.

The Partnership has elected the fair value option for the assets of consolidated CLO vehicles. As permitted under GAAP, the Partnership measures the liabilities of consolidated CLO vehicles as (a) the sum of the fair value of the consolidated CLO assets and the carrying value of any non-financial assets held temporarily, less (b) the sum of the fair value of any beneficial interests retained by the Partnership (other than those that represent compensation for services) and the Partnership’s carrying value of any beneficial interests that represent compensation for services. As a result of this measurement alternative, there is no attribution of amounts to Non-Controlling Interests for consolidated CLO vehicles. Assets of the consolidated CLOs are presented within Investments within the Condensed Consolidated Statements of Financial Condition and Liabilities within Loans Payable for the amounts due to unaffiliated third parties and Due to Affiliates for the amounts held by non-consolidated affiliates. Changes in the fair value of consolidated CLO assets and liabilities and related interest, dividend and other income are presented within Net Gains from Fund Investment Activities. Expenses of consolidated CLO vehicles are presented in Fund Expenses.

The Partnership has elected the fair value option for certain proprietary investments that would otherwise have been accounted for using the equity method of accounting. The fair value of such investments is based on quoted prices in an active market or using the discounted cash flow method. Changes in fair value are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

Further disclosure on instruments for which the fair value option has been elected is presented in Note 7. “Fair Value Option”.

The investments of consolidated Blackstone Funds in funds of hedge funds (“Investee Funds”) are valued at net asset value (“NAV”) per share of the Investee Fund. In limited circumstances, the Partnership may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Partnership will estimate the fair value in good faith and in a manner that it reasonably chooses, in accordance with the requirements of GAAP.

Certain investments of Blackstone and of the consolidated Blackstone funds of hedge funds and credit-focused funds measure their investments in underlying funds at fair value using NAV per share without adjustment. The terms of the investee’s investment generally provide for minimum holding periods or lock-ups, the institution of gates on redemptions or the suspension of redemptions or an ability to side pocket investments, at the discretion of the investee’s fund manager, and as a result, investments may not be redeemable at, or within three months of, the reporting date. A side pocket is used by hedge funds and funds of hedge funds to separate investments that may lack a readily ascertainable value, are illiquid or are subject to liquidity restriction. Redemptions are generally not permitted until the investments within a side pocket are liquidated or it is deemed that the conditions existing at the time that required the investment to be included in the side pocket no longer exist. As the timing of either of these events is uncertain, the timing at which the Partnership may redeem an investment held in a side pocket cannot be estimated. Further disclosure on instruments for which fair value is measured using NAV per share is presented in Note 5. “Net Asset Value as Fair Value”.

Security and loan transactions are recorded on a trade date basis.

Equity Method Investments

Investments in which the Partnership is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting except in cases where the fair value option has been elected. The Partnership has significant influence over all Blackstone Funds in which it invests but does not consolidate. Therefore, its investments in such Blackstone Funds, which include both a proportionate and disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), are accounted for under the equity method. Under the equity method of accounting, the Partnership’s share of earnings (losses) from equity method investments is included in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

In cases where the Partnership’s equity method investments provide for a disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), the Partnership’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period the Partnership calculates the Accrued Performance Allocations that would be due to the Partnership for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner, or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. The carrying amounts of equity method investments are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Compensation and Benefits

Compensation and Benefits — Compensation — Compensation and Benefits consists of (a) employee compensation, comprising salary and bonus, and benefits paid and payable to employees and senior managing directors and (b) equity-based compensation associated with the grants of equity-based awards to employees and senior managing directors. Compensation cost relating to the issuance of equity-based awards to senior managing directors and employees is measured at fair value at the grant date, taking into consideration expected forfeitures, and expensed over the vesting period on a straight-line basis, except in the case of (a) equity-based awards that do not require future service, which are expensed immediately, and (b) certain awards to recipients that meet specified criteria making them eligible for retirement treatment (allowing such recipient to keep a percentage of those awards upon departure from Blackstone after becoming eligible for retirement), for which the expense for the portion of the award that would be retained in the event of retirement is either expensed immediately or amortized to the retirement date. Cash settled equity-based awards are classified as liabilities and are remeasured at the end of each reporting period.

Compensation and Benefits — Incentive Fee Compensation — Incentive Fee Compensation consists of compensation paid based on Incentive Fees.

Compensation and Benefits — Performance Allocations Compensation — Performance Allocation Compensation consists of compensation paid based on Performance Allocations (which may be distributed in cash or in-kind). Such compensation expense is subject to both positive and negative adjustments. Unlike Performance Allocations, compensation expense is based on the performance of individual investments held by a fund rather than on a fund by fund basis. These amounts may also include allocations of investment income from Blackstone’s principal investments, to senior managing directors and employees participating in certain profit sharing initiatives.

Repurchase Agreements

Securities sold under agreements to repurchase (“repurchase agreements”), comprised primarily of U.S. and non-U.S. government and agency securities are asset-backed securities and corporate debt and represent collateralized financing transactions. Such transactions are recorded in the Condensed Consolidated Statements of Financial Condition at their contractual amounts and include accrued interest. The carrying value of repurchase agreements approximates fair value.

The Partnership manages credit exposure arising from repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Partnership, in the event of a counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

The Partnership also pledges its financial instruments to counterparties to collateralize repurchase agreements. Financial instruments pledged that can be repledged, delivered or otherwise used by the counterparty are recorded in Investments in the Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to repurchase agreements are discussed in Note 10. “Repurchase Agreements”.

Blackstone does not offset assets and liabilities relating to repurchase agreements in its Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Securities Sold, Not Yet Purchased

Securities Sold, Not Yet Purchased consist of equity and debt securities that the Partnership has borrowed and sold. The Partnership is required to “cover” its short sale in the future by purchasing the security at prevailing market prices and delivering it to the counterparty from which it borrowed the security. The Partnership is exposed to loss in the event that the price at which a security may have to be purchased to cover a short sale exceeds the price at which the borrowed security was sold short.

Securities Sold, Not Yet Purchased are recorded at fair value in the Condensed Consolidated Statements of Financial Condition.

Derivative Instruments

The Partnership recognizes all derivatives as assets or liabilities on its Condensed Consolidated Statements of Financial Condition at fair value. On the date the Partnership enters into a derivative contract, it designates and documents each derivative contract as one of the following: (a) a hedge of a recognized asset or liability (“fair value hedge”), (b) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), (c) a hedge of a net investment in a foreign operation, or (d) a derivative instrument not designated as a hedging instrument (“freestanding derivative”). For a fair value hedge, Blackstone records changes in the fair value of the derivative and, to the extent that it is highly effective, changes in the fair value of the hedged asset or liability attributable to the hedged risk, in current period earnings in General, Administrative and Other in the Condensed Consolidated Statements of Operations. Changes in the fair value of derivatives designated as hedging instruments caused by factors other than changes in the risk being hedged, which are excluded from the assessment of hedge effectiveness, are recognized in current period earnings. Gains or losses on a derivative instrument that is designated as, and is effective as, an economic hedge of a net investment in a foreign operation are reported in the cumulative translation adjustment section of other comprehensive income to the extent it is effective as a hedge. The ineffective portion of a net investment hedge is recognized in current period earnings.

The Partnership formally documents at inception its hedge relationships, including identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and the Partnership’s evaluation of effectiveness of its hedged transaction. At least monthly, the Partnership also formally assesses whether the derivative it designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in estimated fair values or cash flows of the hedged items using either the regression analysis or the dollar offset method. For net investment hedges, the Partnership uses a method based on changes in spot rates to measure effectiveness. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. The Partnership may also at any time remove a designation of a fair value hedge. The fair values of hedging derivative instruments are reflected within Other Assets in the Condensed Consolidated Statements of Financial Condition.

For freestanding derivative contracts, the Partnership presents changes in fair value in current period earnings. Changes in the fair value of derivative instruments held by consolidated Blackstone Funds are reflected in Net Gains from Fund Investment Activities or, where derivative instruments are held by the Partnership, within Investment Income (Loss) in the Condensed Consolidated Statements of Operations. The fair value of freestanding derivative assets of the consolidated Blackstone Funds are recorded within Investments, the fair value of freestanding derivative assets that are not part of the consolidated Blackstone Funds are recorded within Other Assets and the fair value of freestanding derivative liabilities are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.

The Partnership has elected to not offset derivative assets and liabilities or financial assets in its Condensed Consolidated Statements of Financial Condition, including cash, that may be received or paid as part of collateral arrangements, even when an enforceable master netting agreement is in place that provides the Partnership, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

Blackstone’s other disclosures regarding derivative financial instruments are discussed in Note 6. “Derivative Financial Instruments”.

Blackstone’s disclosures regarding offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Affiliates

Blackstone considers its Founder, senior managing directors, employees, the Blackstone Funds and the Portfolio Companies to be affiliates.

Distributions

Distributions are reflected in the condensed consolidated financial statements when declared.

Recent Accounting Developments

In May 2014, the Financial Accounting Standards Board (“FASB”) issued amended guidance on revenue from contracts with customers. The new guidance was effective for Blackstone beginning January 1, 2018 and was adopted on a full retrospective basis. The guidance requires that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.

Blackstone has concluded that its Management and Advisory Fees and Incentive Fees are within the scope of the amended revenue recognition guidance. The adoption of the amended guidance did not have a material impact on the recognition of Management and Advisory Fees. For Incentive Fees, the amended guidance changes the presentation and delays the recognition of revenues compared to the prior accounting treatment. These amounts were previously recognized within Realized and Unrealized Performance Fees — Incentive Fees in the Condensed Consolidated Statements of Operations. Under the amended guidance, these amounts will be recognized separately within Incentive Fees. Blackstone recorded a net reduction to Partners’ Capital of $2.4 million and $1.9 million as of December 31, 2016 and December 31, 2017, respectively, as a result of adopting the amended guidance. For the three months ended June 30, 2017, the impact on Total Revenues, Net Income Attributable to The Blackstone Group L.P., Net Income Per Common Unit — Basic, and Net Income Per Common Unit — Diluted was a reduction of $13.6 million, $5.4 million, $0.01 per common unit, and $0.01 per common unit, respectively. For the six months ended June 30, 2017, the impact on Total Revenues, Net Income Attributable to The Blackstone Group L.P., Net Income Per Common Unit — Basic, and Net Income Per Common Unit — Diluted was a reduction of $39.6 million, $15.3 million, $0.02 per common unit, and $0.02 per common unit, respectively. Also, the reimbursement of certain costs incurred in the process of providing investment management services, primarily travel costs, that were previously presented net in the Condensed Consolidated Statements of Operations are presented gross under the amended guidance. For the three and six months ended June 30, 2017, these costs were $4.3 million and $7.6 million, respectively, and are presented in General, Administrative and Other Expenses with the related reimbursement presented in Management and Advisory Fees, Net in the Condensed Consolidated Statements of Operations.

Blackstone has concluded that investments made alongside its limited partners in a partnership which entitle Blackstone to a pro-rata allocation and a disproportionate Performance Allocation represent equity method investments that are not in the scope of the amended revenue recognition guidance. Therefore, effective January 1, 2018, Blackstone amended the recognition and measurement of Performance Allocations. This accounting change will not change the timing or amount of revenue recognized related to Performance Allocation arrangements. These amounts were previously recognized within Realized and Unrealized Performance Fees – Carried Interest and Incentive Fees in the Condensed Consolidated Statements of Operations. Under the equity method of accounting Blackstone recognizes Performance Allocations within Investment Income along with the allocations proportionate to Blackstone’s ownership interests in the Blackstone Funds. Blackstone applied a retrospective application consistent with the requirements for presentation of a change in accounting principle.

In January 2016, the FASB issued amended guidance on the classification and measurement of financial instruments. The new guidance was effective for Blackstone beginning on January 1, 2018 and was adopted on a modified retrospective basis. However, changes to the accounting for equity securities without a readily determinable fair value will be applied prospectively as permitted under the guidance. This amended guidance did not have an impact on Blackstone’s financial statements as of and for the three and six months ended June 30, 2018.

In February 2016, the FASB issued amended guidance on the accounting for leases. The guidance requires the recognition of lease assets and lease liabilities for those leases classified as operating leases under previous GAAP. The guidance retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases under previous GAAP. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not changed significantly from previous GAAP.

For operating leases, a lessee is required to do the following: (a) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the Statement of Financial Condition, (b) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (c) classify all cash payments within operating activities in the statement of cash flows.

The guidance is effective for fiscal periods beginning after December 15, 2018. Early application is permitted. Blackstone is evaluating the impact of the amended guidance on the Condensed Consolidated Statement of Financial Condition. It is not expected to have a material impact on the Condensed Consolidated Statements of Operations or the Condensed Consolidated Statements of Cash Flows.

In November 2016, the FASB issued amended guidance on classification and presentation of restricted cash on the statement of cash flows. The new guidance was effective for Blackstone beginning on January 1, 2018 and was adopted on a retrospective basis. Under the new guidance, reporting entities are required to explain the changes in the combined total of restricted and unrestricted balances in the statement of cash flows. Therefore, amounts generally described as restricted cash or restricted cash equivalents (hereinafter referred to as “restricted cash”) should be combined with unrestricted cash and cash equivalents when reconciling the beginning and end of period balances on the statement of cash flows. Reporting entities are also required to disclose how the statement of cash flows reconciles to the balance sheet in any situation in which the balance sheet includes more than one line item of cash, cash equivalents, and restricted cash. For the six months ended June 30, 2017 the new guidance resulted in a decrease in Net Cash Used in Operating Activities of $463.5 million, a decrease in Net Cash Provided by Investing Activities of $18.0 million, and an increase in Effect of Exchange Rate Changes on Cash and Cash Equivalents, Cash Held by Blackstone Funds, and Restricted Cash of $58.3 million. Additionally, the new guidance increased the December 31, 2016 Beginning of Period and June 30, 2017 End of Period balances by $1.0 billion and $1.5 billion, respectively, in the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2017.

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INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2018

INTANGIBLE ASSETS

3. INTANGIBLE ASSETS

Intangible Assets, Net consists of the following:

	June 30, 2018			December 31, 2017
Finite-Lived Intangible Assets / Contractual Rights	$	1,594,876		$	1,594,876
Accumulated Amortization		(1,214,032	)		(1,185,048	)
Intangible Assets, Net	$	380,844		$	409,828

Amortization expense associated with Blackstone’s intangible assets was $14.5 million and $29.0 million for the three and six month periods ended June 30, 2018, respectively, and $11.0 million and $21.9 million for the three and six month periods ended June 30, 2017, respectively.

Amortization of Intangible Assets held at June 30, 2018 is expected to be $57.9 million, $57.9 million, $57.9 million, $57.9 million, and $50.2 million for each of the years ending December 31, 2018, 2019, 2020, 2021 and 2022, respectively. Blackstone’s intangible assets as of June 30, 2018 are expected to amortize over a weighted-average period of 8.8 years.

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INVESTMENTS

6 Months Ended

Jun. 30, 2018

INVESTMENTS

4. INVESTMENTS

Investments consist of the following:

	June 30, 2018		December 31, 2017
Investments of Consolidated Blackstone Funds	$	8,608,565	$	12,954,121
Equity Method Investments
Partnership Investments		3,589,234		3,263,131
Accrued Performance Allocations		6,354,179		5,328,280
Corporate Treasury Investments		3,088,001		2,566,043
Other Investments		368,203		322,474
	$	22,008,182	$	24,434,049

Blackstone’s share of Investments of Consolidated Blackstone Funds totaled $373.5 million and $488.4 million at June 30, 2018 and December 31, 2017, respectively.

Investments of Consolidated Blackstone Funds

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on investments held by the consolidated Blackstone Funds and a reconciliation to Other Income – Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018		2017
Realized Gains	$	52,236		$	51,777	$	34,378	$	107,685
Net Change in Unrealized Gains (Losses)		(22,278	)		19,483		74,963		(9,039	)
Realized and Net Change in Unrealized Gains from Consolidated Blackstone Funds		29,958			71,260		109,341		98,646
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds		43,561			38,794		74,777		77,540
Other Income — Net Gains from Fund Investment Activities	$	73,519		$	110,054	$	184,118	$	176,186

Equity Method Investments

Blackstone’s equity method investments include Partnership Investments, which represent the pro rata investments, and any associated Accrued Performance Allocations, in private equity funds, real estate funds, funds of hedge funds and credit-focused funds. Partnership Investments also includes the 40% non-controlling interest in Pátria Investments Limited and Pátria Investimentos Ltda. (collectively, “Pátria”).

Blackstone evaluates each of its equity method investments, excluding Accrued Performance Allocations, to determine if any were significant as defined by guidance from the United States Securities and Exchange Commission. As of and for the six months ended June 30, 2018 and 2017, no individual equity method investment held by Blackstone met the significance criteria. As such, Blackstone is not required to present separate financial statements for any of its equity method investments.

Partnership Investments

Blackstone recognized net gains related to its Partnership Investments accounted for under the equity method of $165.6 million and $124.1 million for the three months ended June 30, 2018 and 2017, respectively. The Partnership recognized net gains related to its equity method investments of $328.1 million and $292.6 million for the six months ended June 30, 2018 and 2017, respectively.

Accrued Performance Allocations

Accrued Performance Allocations to the Partnership in respect of performance of certain Blackstone Funds were as follows:

	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total
Accrued Performance Allocations, December 31, 2017	$	1,916,971		$	2,859,307		$	13,802		$	538,200		$	5,328,280
Performance Allocations as a Result of Changes in Fund Fair Values		1,110,884			606,245			17,384			144,893			1,879,406
Foreign Exchange Loss		—			(37,950	)		—			—			(37,950	)
Fund Distributions		(217,712	)		(484,316	)		(7,081	)		(106,448	)		(815,557	)
Accrued Performance Allocations, June 30, 2018	$	2,810,143		$	2,943,286		$	24,105		$	576,645		$	6,354,179

Corporate Treasury Investments

The portion of corporate treasury investments included in Investments represents the Partnership’s investments into primarily fixed income securities, mutual fund interests, and other fund interests. These strategies are managed by a combination of Blackstone personnel and third party advisors. The following table presents the Realized and Net Change in Unrealized Gains (Losses) on these investments:

	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018			2017
Realized Gains (Losses)	$	4,774		$	2,252	$	7,113		$	(3,429	)
Net Change in Unrealized Gains (Losses)		(6,702	)		12,815		(14,896	)		43,295
	$(1,928)			$15,067		$(7,783)			$39,866

Other Investments

Other Investments consist primarily of proprietary investment securities held by Blackstone. Other investments includes equity investments without readily determinable fair values which have a carrying value of $24.5 million as of June 30, 2018. During the three months ended June 30, 2018, an investment which previously did not have a readily determinable fair value completed an initial public offering and is now carried at fair value with realized and unrealized gains or losses recorded within Investment Income on the Condensed Consolidated Statement of Operations. This event resulted in an unrealized gain of $50.0 million during the three and six months ended June 30, 2018. The following table presents Blackstone’s Realized and Net Change in Unrealized Gains in Other Investments:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Realized Gains	$	16,207	$	2,865	$	16,319	$	2,870
Net Change in Unrealized Gains		49,643		4,803		45,411		10,291
	$	65,850	$	7,668	$	61,730	$	13,161

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NET ASSET VALUE AS FAIR VALUE

6 Months Ended

Jun. 30, 2018

NET ASSET VALUE AS FAIR VALUE

5. NET ASSET VALUE AS FAIR VALUE

A summary of fair value by strategy type alongside the remaining unfunded commitments and ability to redeem such investments as of June 30, 2018 is presented below:

Strategy	Fair Value		Unfunded Commitments		Redemption Frequency (if currently eligible)			Redemption Notice Period
Diversified Instruments	$	209,697	$	131		(a	)		(a	)
Credit Driven		114,592		268		(b	)		(b	)
Equity		38,839		—		(c	)		(c	)
Commodities		1,806		—		(d	)		(d	)
	$	364,934	$	399

(a) Diversified Instruments include investments in funds that invest across multiple strategies. Investments representing 3% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 97% of investments in this category are redeemable as of the reporting date.

(b) The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. Investments representing 41% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 59% of investments in this category are redeemable as of the reporting date.

(c) The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. As of the reporting date, the investee fund manager had elected to side-pocket 8% of Blackstone’s investments in the category.

(d) The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date.

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DERIVATIVE FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2018

DERIVATIVE FINANCIAL INSTRUMENTS

6. DERIVATIVE FINANCIAL INSTRUMENTS

Blackstone and the consolidated Blackstone Funds enter into derivative contracts in the normal course of business to achieve certain risk management objectives and for general investment purposes. Blackstone may enter into derivative contracts in order to hedge its interest rate risk exposure against the effects of interest rate changes. Additionally, Blackstone may also enter into derivative contracts in order to hedge its foreign currency risk exposure against the effects of a portion of its non-U.S. dollar denominated currency net investments. As a result of the use of derivative contracts, Blackstone and the consolidated Blackstone Funds are exposed to the risk that counterparties will fail to fulfill their contractual obligations. To mitigate such counterparty risk, Blackstone and the consolidated Blackstone Funds enter into contracts with certain major financial institutions, all of which have investment grade ratings. Counterparty credit risk is evaluated in determining the fair value of derivative instruments.

Net Investment Hedges

To manage the potential exposure from adverse changes in currency exchange rates arising from Blackstone’s net investment in foreign operations, during December 2014, Blackstone entered into several foreign currency forward contracts to hedge a portion of the net investment in Blackstone’s non-U.S. dollar denominated foreign operations.

Blackstone uses foreign currency forward contracts to hedge portions of Blackstone’s net investments in foreign operations. The gains and losses due to change in fair value attributable to changes in spot exchange rates on foreign currency derivatives designated as net investment hedges were recognized in Other Comprehensive Income, Net of Tax — Currency Translation Adjustment. For the three months ended June 30, 2018 there was no resulting gain or loss. For the six months ended June 30, 2018 the resulting loss was $1.4 million.

Freestanding Derivatives

Freestanding derivatives are instruments that Blackstone and certain of the consolidated Blackstone Funds have entered into as part of their overall risk management and investment strategies. These derivative contracts are not designated as hedging instruments for accounting purposes. Such contracts may include interest rate swaps, foreign exchange contracts, equity swaps, options, futures and other derivative contracts.

The table below summarizes the aggregate notional amount and fair value of the derivative financial instruments. The notional amount represents the absolute value amount of all outstanding derivative contracts.

	June 30, 2018								December 31, 2017
	Assets				Liabilities				Assets				Liabilities
	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value
Net Investment Hedges
Foreign Currency Contracts	$	—	$	—	$	—	$	—	$	—	$	—	$	50,857	$	453
Freestanding Derivatives
Blackstone
Interest Rate Contracts		944,822		22,123		922,672		48,711		225,550		2,042		1,530,751		27,275
Foreign Currency Contracts		198,028		782		98,298		570		279,050		2,097		296,252		2,975
Credit Default Swaps		5,001		125		20,532		2,168		2,073		304		2,073		304
Investments of Consolidated Blackstone Funds
Foreign Currency Contracts		114,194		5,295		11,099		1,087		493,181		24,087		264,693		5,628
Credit Default Swaps		32,306		1,565		50,056		4,839		45,670		3,731		45,582		5,163
Total Return Swaps		25,325		488		—		—		25,645		526		—		—
		1,319,676		30,378		1,102,657		57,375		1,071,169		32,787		2,139,351		41,345
	$	1,319,676	$	30,378	$	1,102,657	$	57,375	$	1,071,169	$	32,787	$	2,190,208	$	41,798

The table below summarizes the impact to the Condensed Consolidated Statements of Operations from derivative financial instruments:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net Investment Hedges — Foreign Currency Contracts
Hedge Ineffectiveness	$	—		$	(13	)	$	(8	)	$	(35	)
Freestanding Derivatives
Realized Gains (Losses)
Interest Rate Contracts	$	449		$	(3,007	)	$	2,070		$	(3,947	)
Foreign Currency Contracts		12,321			(6,663	)		8,238			(3,312	)
Credit Default Swaps		(107	)		268			(508	)		(1,658	)
Total Return Swaps		173			—			174			—
	$	12,836		$	(9,402	)	$	9,974		$	(8,917	)
Net Change in Unrealized Gains (Losses)
Interest Rate Contracts	$	37,261		$	(426	)	$	(39	)	$	(643	)
Foreign Currency Contracts		1,456			14,642			(2,272	)		12,682
Credit Default Swaps		615			1,214			488			3,161
Total Return Swaps		(5	)		—			52			—
	$	39,327		$	15,430		$	(1,771	)	$	15,200

As of June 30, 2018 and December 31, 2017, the Partnership had not designated any derivatives as cash flow hedges.

XML

FAIR VALUE OPTION

6 Months Ended

Jun. 30, 2018

FAIR VALUE OPTION

7. FAIR VALUE OPTION

The following table summarizes the financial instruments for which the fair value option has been elected:

	June 30, 2018		December 31, 2017
Assets
Loans and Receivables	$	346,603	$	239,659
Equity and Preferred Securities		502,095		475,485
Debt Securities		522,033		418,061
Assets of Consolidated CLO Vehicles
Corporate Loans		7,082,085		10,825,759
Corporate Bonds		—		690,125
Other		—		458
	$	8,452,816	$	12,649,547
Liabilities
Liabilities of Consolidated CLO Vehicles
Senior Secured Notes
Loans Payable	$	6,528,326	$	10,594,656
Due to Affiliates		3,269		996
Subordinated Notes
Loans Payable		175,900		703,164
Due to Affiliates		63,279		40,390
	$	6,770,774	$	11,339,206

The following tables presents the Realized and Net Change in Unrealized Gains (Losses) on financial instruments on which the fair value option was elected:

	Three Months Ended June 30,
	2018					2017
	Realized Gains		Net Change in Unrealized Gains (Losses)			Realized Gains (Losses)			Net Change in Unrealized Gains (Losses)
Assets
Equity and Preferred Securities	$	—	$	(2,095	)	$	1		$	7,116
Debt Securities		15		(2,878	)		—			—
Assets of Consolidated CLO Vehicles
Corporate Loans		1,074		(25,896	)		(543	)		25,084
Corporate Bonds		—		—			2,580			(927	)
Other		—		—			65			129
	$	1,089	$	(30,869	)	$	2,103		$	31,402
Liabilities
Liabilities of Consolidated CLO Vehicles —
Subordinated Notes	$	—	$	16,846		$	—		$	24,800

	Six Months Ended June 30,
	2018						2017
	Realized Gains (Losses)			Net Change in Unrealized Gains (Losses)			Realized Gains		Net Change in Unrealized Gains (Losses)
Assets
Loans and Receivables	$	—		$	—		$	—	$	7,418
Equity and Preferred Securities		—			(1,867	)		1		20,225
Debt Securities		827			(2,297	)		—		—
Assets of Consolidated CLO Vehicles
Corporate Loans		(4,399	)		(7,046	)		1,329		13,695
Corporate Bonds		(24,056	)		9,693			8,214		(6,801	)
Other		—			6			65		129
	$	(27,628	)	$	(1,511	)	$	9,609	$	34,666
Liabilities
Liabilities of Consolidated CLO Vehicles —
Subordinated Notes	$	—		$	60,460		$	—	$	32,712

The following table presents information for those financial instruments for which the fair value option was elected:

	June 30, 2018							December 31, 2017
				For Financial Assets Past  Due (a)							For Financial Assets Past Due (a)
	Excess (Deficiency) of Fair Value Over Principal			Fair Value		Excess of Fair Value Over Principal		Excess (Deficiency) of Fair Value Over Principal			Fair Value		(Deficiency) of Fair Value Over Principal
Loans and Receivables	$	933		$	—	$	—	$	1,207		$	—	$	—
Debt Securities		(2,131	)		—		—		(372	)		—		—
Assets of Consolidated CLO Vehicles
Corporate Loans		(10,752	)		—		—		(13,495	)		57,778		(19,633	)
Corporate Bonds		—			—		—		(21,455	)		—		—
	$	(11,950	)	$	—	$	—	$	(34,115	)	$	57,778	$	(19,633	)

(a) Corporate Loans and Corporate Bonds within CLO assets are classified as past due if contractual payments are more than one day past due.

As of June 30, 2018 and December 31, 2017, no Loans and Receivables for which the fair value option was elected were past due or in non-accrual status. As of June 30, 2018 and December 31, 2017, no Corporate Bonds included within the Assets of Consolidated CLO Vehicles for which the fair value option was elected were past due or in non-accrual status.

XML

FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2018

FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

8. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

The following tables summarize the valuation of the Partnership’s financial assets and liabilities by the fair value hierarchy:

	June 30, 2018
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents — Money Market Funds	$	538,418	$	—	$	—	$	—	$	538,418
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		86,463		86,463
Equity Securities		51,212		51,051		159,109		—		261,372
Partnership and LLC Interests		—		1,527		313,992		—		315,519
Debt Instruments		—		771,977		83,801		—		855,778
Freestanding Derivatives
Foreign Currency Contracts		—		5,295		—		—		5,295
Credit Default Swaps		—		1,565		—		—		1,565
Total Return Swaps		—		488		—		—		488
Assets of Consolidated CLO Vehicles —Corporate Loans		—		6,552,263		529,822		—		7,082,085
Total Investments of Consolidated Blackstone Funds		51,212		7,384,166		1,086,724		86,463		8,608,565
Corporate Treasury Investments
Equity Securities		309,131		—		—		—		309,131
Debt Instruments		—		2,491,430		28,221		—		2,519,651
Other		—		—		—		259,219		259,219
Total Corporate Treasury Investments		309,131		2,491,430		28,221		259,219		3,088,001
Other Investments		248,494		13,955		86,502		19,252		368,203
Total Investments		608,837		9,889,551		1,201,447		364,934		12,064,769
Accounts Receivable — Loans and Receivables		—		—		346,603		—		346,603
Other Assets
Freestanding Derivatives
Interest Rate Contracts		935		21,188		—		—		22,123
Foreign Currency Contracts		—		782		—		—		782
Credit Default Swaps		—		125		—		—		125
Total Other Assets		935		22,095		—		—		23,030
	$	1,148,190	$	9,911,646	$	1,548,050	$	364,934	$	12,972,820

	June 30, 2018
	Level I		Level II		Level III		Total
Liabilities
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	6,528,326	$	—	$	6,528,326
Subordinated Notes (b)		—		175,900		—		175,900
Total Loans Payable		—		6,704,226		—		6,704,226
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		3,269		—		3,269
Subordinated Notes (b)		—		63,279		—		63,279
Total Due to Affiliates		—		66,548		—		66,548
Securities Sold, Not Yet Purchased		—		155,780		—		155,780
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a)
Foreign Currency Contracts		—		1,087		—		1,087
Credit Default Swaps		—		4,839		—		4,839
Total Liabilities of Consolidated Blackstone Funds		—		5,926		—		5,926
Freestanding Derivatives
Interest Rate Contracts		551		48,160		—		48,711
Foreign Currency Contracts		—		570		—		570
Credit Default Swaps		—		2,168		—		2,168
Total Freestanding Derivatives		551		50,898		—		51,449
Total Accounts Payable, Accrued Expenses and Other Liabilities		551		56,824		—		57,375
	$	551	$	6,983,378	$	—	$	6,983,929

	December 31, 2017
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents — Money Market Funds	$	853,680	$	—	$	—	$	—	$	853,680
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		130,339		130,339
Equity Securities		67,443		44,026		131,867		—		243,336
Partnership and LLC Interests		—		2,549		331,448		—		333,997
Debt Instruments		—		643,608		58,155		—		701,763
Freestanding Derivatives
Foreign Currency Contracts		—		101		—		—		101
Credit Default Swaps		—		3,731		—		—		3,731
Total Return Swaps		—		526		—		—		526
Assets of Consolidated CLO Vehicles
Corporate Loans		—		10,318,316		507,443		—		10,825,759
Corporate Bonds		—		690,125		—		—		690,125
Freestanding Derivatives — Foreign Currency Contracts		—		23,986		—		—		23,986
Other		—		—		458		—		458
Total Investments of Consolidated Blackstone Funds		67,443		11,726,968		1,029,371		130,339		12,954,121
Corporate Treasury Investments
Equity Securities		282,866		—		—		—		282,866
Debt Instruments		—		1,943,654		24,249		—		1,967,903
Other		—		—		—		315,274		315,274
Total Corporate Treasury Investments		282,866		1,943,654		24,249		315,274		2,566,043
Other Investments		193,072		14,162		95,393		19,847		322,474
Total Investments		543,381		13,684,784		1,149,013		465,460		15,842,638
Accounts Receivable — Loans and Receivables		—		—		239,659		—		239,659
Other Assets
Freestanding Derivatives
Interest Rate Contracts		575		1,467		—		—		2,042
Foreign Currency Contracts		—		2,097		—		—		2,097
Credit Default Swaps		—		304		—		—		304
Total Other Assets		575		3,868		—		—		4,443
	$	1,397,636	$	13,688,652	$	1,388,672	$	465,460	$	16,940,420

	December 31, 2017
	Level I		Level II		Level III		Total
Liabilities
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	10,594,656	$	—	$	10,594,656
Subordinated Notes (b)		—		703,164		—		703,164
Total Loans Payable		—		11,297,820		—		11,297,820
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		996		—		996
Subordinated Notes (b)		—		40,390		—		40,390
Total Due to Affiliates		—		41,386		—		41,386
Securities Sold, Not Yet Purchased		—		154,380		—		154,380
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a)
Foreign Currency Contracts		—		5,628		—		5,628
Credit Default Swaps		—		5,163		—		5,163
Total Liabilities of Consolidated Blackstone Funds		—		10,791		—		10,791
Freestanding Derivatives
Interest Rate Contracts		415		26,860		—		27,275
Foreign Currency Contracts		—		2,975		—		2,975
Credit Default Swaps		—		304		—		304
Total Freestanding Derivatives		415		30,139		—		30,554
Net Investment Hedges — Foreign Currency Contracts		—		453		—		453
Total Accounts Payable, Accrued Expenses and Other Liabilities		415		41,383		—		41,798
	$	415	$	11,534,969	$	—	$	11,535,384

(a) Pursuant to GAAP consolidation guidance, the Partnership is required to consolidate all VIEs in which it has been identified as the primary beneficiary, including certain CLO vehicles and other funds in which a consolidated entity of the Partnership, as the general partner of the fund, has a controlling financial interest. While the Partnership is required to consolidate certain funds, including CLO vehicles, for GAAP purposes, the Partnership has no ability to utilize the assets of these funds and there is no recourse to the Partnership for their liabilities since these are client assets and liabilities.

(b) Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.

The following table summarizes the fair value transfers between Level I and Level II for positions that existed as of June 30, 2018 and 2017, respectively:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Transfers from Level I into Level II (a)	$	—	$	762	$	—	$	762
Transfers from Level II into Level I (b)	$	—	$	—	$	447	$	—

(a) Transfers out of Level I represent those financial instruments for which restrictions exist and adjustments were made to an otherwise observable price to reflect fair value at the reporting date.

(b) Transfers into Level I represent those financial instruments for which an unadjusted quoted price in an active market became available for the identical asset.

The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of June 30, 2018:

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	118,659	Discounted Cash Flows		Discount Rate	7.1% - 25.7%	12.6%
					Revenue CAGR	-11.9% - 37.3%	7.1%
					Book Value Multiple	1.1x - 9.5x	8.3x
					Exit Capitalization Rate	5.0% - 11.4%	8.1%
					Exit Multiple - EBITDA	2.8x - 16.0x	10.2x
					Exit Multiple - NOI	8.8x - 12.8x	11.0x
					Exit Multiple - P/E	10.0x - 17.0x	14.2x
		1,477	Market Comparable Companies		Book Value Multiple	0.7x - 0.9x	0.8x
					Exit Multiple - EBITDA	8.0x	N/A
		28,049	Other		N/A	N/A	N/A
		10,870	Transaction Price		N/A	N/A	N/A
		54	Third Party Pricing		N/A	N/A	N/A
Partnership and LLC Interests		267,616	Discounted Cash Flows		Discount Rate	4.6% - 26.5%	9.9%
					Revenue CAGR	-2.1% - 45.5%	7.6%
					Book Value Multiple	8.5x - 9.3x	9.2x
					Exit Capitalization Rate	1.5% - 25.0%	5.9%
					Exit Multiple - EBITDA	0.1x - 28.6x	10.5x
					Exit Multiple - NOI	12.5x	N/A
		578	Market Comparable Companies		Book Value Multiple	1.0x	N/A
		27,668	Other		N/A	N/A	N/A
		543	Third Party Pricing		N/A	N/A	N/A
		17,587	Transaction Price		N/A	N/A	N/A
Debt Instruments		7,384	Discounted Cash Flows		Discount Rate	6.3% - 16.7%	9.5%
					Revenue CAGR	23.6%	N/A
					Exit Capitalization Rate	3.9%	N/A
		63,737	Third Party Pricing		N/A	N/A	N/A
		12,680	Transaction Price		N/A	N/A	N/A
Assets of Consolidated CLO Vehicles		37	Discounted Cash Flows		Discount Rate	8.0%	N/A
		529,785	Third Party Pricing		N/A	N/A	N/A
Total Investments of Consolidated Blackstone Funds		1,086,724

continued …

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Corporate Treasury Investments	$	11,070	Discounted Cash Flows		Discount Rate	0.7% - 6.0%	4.1%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20.0%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	30.0% - 70.0%	68.0%
					Reinvestment Rate	LIBOR + 350bps -	LIBOR + 391
						LIBOR + 400bps	bps
		17,151	Third Party Pricing		N/A	N/A	N/A
Loans and Receivables		217,709	Discounted Cash Flows		Discount Rate	5.8% - 10.2%	9.0%
		128,894	Transaction Price		N/A	N/A	N/A
Other Investments		61,105	Discounted Cash Flows		Discount Rate	0.7% - 8.9%	1.9%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20.0%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	70.0%	N/A
					Reinvestment Rate	LIBOR + 400 bps	N/A
		25,397	Transaction Price		N/A	N/A	N/A
	$	1,548,050

The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of December 31, 2017:

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	91,753	Discounted Cash Flows		Discount Rate	7.1% - 31.4%	12.6%
					Revenue CAGR	1.0% - 49.4%	7.1%
					Exit Capitalization Rate	5.0% - 11.4%	8.5%
					Exit Multiple - EBITDA	4.0x - 16.0x	9.9x
					Exit Multiple - NOI	8.8x - 12.5x	10.5x
					Exit Multiple - P/E	9.5x - 17.0x	11.0x
		862	Market Comparable Companies		Book Value Multiple	0.8x - 0.9x	0.9x
					Exit Multiple - EBITDA	8.0x	N/A
		17,536	Other		N/A	N/A	N/A
		21,716	Transaction Price		N/A	N/A	N/A
Partnership and LLC Interests		293,744	Discounted Cash Flows		Discount Rate	4.6% - 26.5%	9.8%
					Revenue CAGR	-22.2% - 71.5%	8.4%
					Exit Capitalization Rate	3.1% - 10.0%	5.7%
					Exit Multiple - EBITDA	0.1x - 15.0x	8.6x
					Exit Multiple - NOI	12.5x	N/A
		530	Market Comparable Companies		Book Value Multiple	1.0x	N/A
		22,346	Other		N/A	N/A	N/A
		758	Third Party Pricing		N/A	N/A	N/A
		14,070	Transaction Price		N/A	N/A	N/A
Debt Instruments		6,122	Discounted Cash Flows		Discount Rate	6.6% - 18.4%	9.6%
					Revenue CAGR	7.7%	N/A
					Exit Capitalization Rate	8.3%	N/A
					Exit Multiple - NOI	12.0x	N/A
		50,136	Third Party Pricing		N/A	N/A	N/A
		1,897	Transaction Price		N/A	N/A	N/A
Assets of Consolidated CLO Vehicles		8,277	Market Comparable Companies		EBITDA Multiple	7.0x	N/A
		499,624	Third Party Pricing		N/A	N/A	N/A
Total Investments of Consolidated Blackstone Funds		1,029,371
Corporate Treasury Investments		8,886	Discounted Cash Flows		Discount Rate	5.1% - 6.3%	5.4%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	30.0% - 70.0%	68.1%
					Reinvestment Rate	LIBOR + 400 bps	N/A
		15,363	Third Party Pricing		N/A	N/A	N/A
Loans and Receivables		239,659	Discounted Cash Flows		Discount Rate	7.1% - 10.3%	8.8%
Other Investments		65,821	Discounted Cash Flows		Discount Rate	0.7% - 13.0%	2.2%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20.0%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	70.0%	N/A
					Reinvestment Rate	LIBOR + 400 bps -	LIBOR + 401
						LIBOR + 413 bps	bps
		29,572	Transaction Price		N/A	N/A	N/A
	$	1,388,672

N/A	Not applicable.
CAGR	Compound annual growth rate.
EBITDA	Earnings before interest, taxes, depreciation and amortization.
Exit Multiple	Ranges include the last twelve months EBITDA, forward EBITDA and price/earnings exit multiples.
NOI	Net operating income.
P/E	Price-earnings ratio.
Third Party Pricing	Third Party Pricing is generally determined on the basis of unadjusted prices between market participants provided by reputable dealers or pricing services.
Transaction Price	Includes recent acquisitions or transactions.
(a)	Unobservable inputs were weighted based on the fair value of the investments included in the range.

The significant unobservable inputs used in the fair value measurement of corporate treasury investments, debt instruments and other investments are discount rates, default rates, recovery rates, recovery lag, pre-payment rates and reinvestment rates. Increases (decreases) in any of the discount rates, default rates, recovery lag and pre-paymentrates in isolation would result in a lower (higher) fair value measurement. Increases (decreases) in any of the recovery rates and reinvestment rates in isolation would result in a higher (lower) fair value measurement. Generally, a change in the assumption used for default rates may be accompanied by a directionally similar change in the assumption used for recovery lag and a directionally opposite change in the assumption used for recovery rates and pre-payment rates.

The significant unobservable inputs used in the fair value measurement of equity securities, partnership and limited liability company (“LLC”) interests, debt instruments, assets of consolidated CLO vehicles and loans and receivables are discount rates, exit capitalization rates, exit multiples, EBITDA multiples and revenue compound annual growth rates. Increases (decreases) in any of discount rates and exit capitalization rates in isolation can result in a lower (higher) fair value measurement. Increases (decreases) in any of exit multiples and revenue compound annual growth rates in isolation can result in a higher (lower) fair value measurement.

Since December 31, 2017, there have been no changes in valuation techniques within Level II and Level III that have had a material impact on the valuation of financial instruments.

The following tables summarize the changes in financial assets and liabilities measured at fair value for which the Partnership has used Level III inputs to determine fair value and does not include gains or losses that were reported in Level III in prior years or for instruments that were transferred out of Level III prior to the end of the respective reporting period. Total realized and unrealized gains and losses recorded for Level III investments are reported in either Investment Income (Loss) or Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations.

	Level III Financial Assets at Fair Value Three Months Ended June 30,
	2018												2017
	Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total			Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total
Balance, Beginning of Period	$	963,151		$	163,135		$	117,349		$	1,243,635		$	685,966		$	112,056		$	138,433		$	936,455
Transfer In Due to Consolidation and Acquisition		—			—			—			—			35,040			—			—			35,040
Transfer Out Due to Deconsolidation		—			—			—			—			(44,095	)		—			—			(44,095	)
Transfer In to Level III (b)		152,666			—			—			152,666			68,127			—			6,473			74,600
Transfer Out of Level III (b)		(117,217	)		—			(7,649	)		(124,866	)		(105,165	)		—			(11,930	)		(117,095	)
Purchases		203,223			294,258			15,327			512,808			112,405			268,222			9,155			389,782
Sales		(127,718	)		(110,508	)		(23,304	)		(261,530	)		(46,140	)		(75,342	)		(34,014	)		(155,496	)
Settlements		—			(5,634	)		(1	)		(5,635	)		—			(1,392	)		(993	)		(2,385	)
Changes in Gains Included in Earnings and Other Comprehensive Income		12,619			5,352			13,001			30,972			9,606			2,735			8,565			20,906
Balance, End of Period	$	1,086,724		$	346,603		$	114,723		$	1,548,050		$	715,744		$	306,279		$	115,689		$	1,137,712
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	146		$	5,353		$	(49	)	$	5,450		$	(2,163	)	$	2,735		$	123		$	695

	Level III Financial Assets at Fair Value Six Months Ended June 30,
	2018												2017
	Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total			Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total
Balance, Beginning of Period	$	1,029,371		$	239,659		$	119,642		$	1,388,672		$	685,873		$	211,359		$	130,588		$	1,027,820
Transfer In Due to Consolidation and Acquisition		50,043			—			—			50,043			34,651			—			—			34,651
Transfer Out Due to Deconsolidation		(217,182	)		—			—			(217,182	)		(38,629	)		—			—			(38,629	)
Transfer In to Level III (b)		180,401			—			—			180,401			63,125			—			16,396			79,521
Transfer Out of Level III (b)		(141,104	)		—			(15,717	)		(156,821	)		(140,571	)		—			(18,010	)		(158,581	)
Purchases		408,823			370,921			19,812			799,556			219,248			337,705			21,603			578,556
Sales		(260,865	)		(263,703	)		(23,479	)		(548,047	)		(145,890	)		(251,502	)		(44,045	)		(441,437	)
Settlements		—			(9,317	)		(4	)		(9,321	)		—			(3,894	)		(1,093	)		(4,987	)
Changes in Gains Included in Earnings and Other Comprehensive Income		37,237			9,043			14,469			60,749			37,937			12,611			10,250			60,798
Balance, End of Period	$	1,086,724		$	346,603		$	114,723		$	1,548,050		$	715,744		$	306,279		$	115,689		$	1,137,712
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	19,265		$	9,044		$	(289	)	$	28,020		$	1,031		$	12,610		$	462		$	14,103

(a) Represents corporate treasury investments and Other Investments.

(b) Transfers in and out of Level III financial assets and liabilities were due to changes in the observability of inputs used in the valuation of such assets and liabilities.

There were no Level III financial liabilities as of and for the three and six months ended June 30, 2018 and 2017.

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VARIABLE INTEREST ENTITIES

6 Months Ended

Jun. 30, 2018

VARIABLE INTEREST ENTITIES

9. VARIABLE INTEREST ENTITIES

Pursuant to GAAP consolidation guidance, the Partnership consolidates certain VIEs in which it is determined that the Partnership is the primary beneficiary either directly or indirectly, through a consolidated entity or affiliate. VIEs include certain private equity, real estate, credit-focused or funds of hedge funds entities and CLO vehicles. The purpose of such VIEs is to provide strategy specific investment opportunities for investors in exchange for management and performance based fees. The investment strategies of the Blackstone Funds differ by product; however, the fundamental risks of the Blackstone Funds have similar characteristics, including loss of invested capital and loss of management fees and performance based fees. In Blackstone’s role as general partner, collateral manager or investment adviser, it generally considers itself the sponsor of the applicable Blackstone Fund. The Partnership does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs other than its own capital commitments.

The assets of consolidated variable interest entities may only be used to settle obligations of these consolidated Blackstone Funds. In addition, there is no recourse to the Partnership for the consolidated VIEs’ liabilities including the liabilities of the consolidated CLO vehicles.

During the six months ended June 30, 2018, the Partnership’s ownership interest in certain CLO and other vehicles originated outside of the U.S. was diluted such that the Partnership determined that it was no longer the primary beneficiary of these VIEs and deconsolidated these vehicles. As of the date of deconsolidation, the Partnership’s Total Assets, Total Liabilities and Non-Controlling Interests in Consolidated Entities were reduced by $8.9 billion, $8.7 billion and $196.1 million, respectively. The Partnership will continue to receive management fees and Performance Allocations from these vehicles following the dilution of its ownership interest.

The Partnership holds variable interests in certain VIEs which are not consolidated as it is determined that the Partnership is not the primary beneficiary. The Partnership’s involvement with such entities is in the form of direct equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets recognized by Blackstone relating to non-consolidated entities, any amounts due to non-consolidated entities and any clawback obligation relating to previously distributed Performance Allocations. The assets and liabilities recognized in the Partnership’s Condensed Consolidated Statements of Financial Condition related to the Partnership’s interest in these non-consolidated VIEs and the Partnership’s maximum exposure to loss relating to non-consolidated VIEs were as follows:

	June 30, 2018		December 31, 2017
Investments	$	969,868	$	805,501
Accounts Receivable		—		15,760
Due from Affiliates		252,603		81,465
Total VIE Assets		1,222,471		902,726
Due to Affiliates		4,110		179
Potential Clawback Obligation		55,832		98,331
Maximum Exposure to Loss	$	1,282,413	$	1,001,236

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REPURCHASE AGREEMENTS

6 Months Ended

Jun. 30, 2018

REPURCHASE AGREEMENTS

10. REPURCHASE AGREEMENTS

At June 30, 2018, the Partnership pledged securities with a carrying value of $217.8 million and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.

At December 31, 2017, the Partnership pledged securities with a carrying value of $169.7 million and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.

The following tables provide information regarding the Partnership’s Repurchase Agreements obligation by type of collateral pledged:

	June 30, 2018
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30 - 90 Days		Greater than 90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	48,796	$	109,116	$	24,577	$	182,489
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	182,489
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

	December 31, 2017
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30 - 90 Days		Greater than 90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	22,756	$	96,084	$	—	$	118,840
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	118,840
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

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OFFSETTING OF ASSETS AND LIABILITIES

6 Months Ended

Jun. 30, 2018

OFFSETTING OF ASSETS AND LIABILITIES

11. OFFSETTING OF ASSETS AND LIABILITIES

The following tables present the offsetting of assets and liabilities as of June 30, 2018:

	Gross and Net Amounts of Assets Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments (a)		Cash Collateral Received		Net Amount
Assets
Freestanding Derivatives	$	25,934	$	23,822	$	—	$	2,112

	Gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments (a)		Cash Collateral Pledged		Net Amount
Liabilities
Freestanding Derivatives	$	57,375	$	43,943	$	6,811	$	6,621
Repurchase Agreements		182,489		182,489		—		—
	$	239,864	$	226,432	$	6,811	$	6,621

(a) Amounts presented are inclusive of both legally enforceable master netting agreements, and financial instruments received or pledged as collateral. Financial instruments received or pledged as collateral offset derivative counterparty risk exposure, but do not reduce net balance sheet exposure.

The following tables present the offsetting of assets and liabilities as of December 31, 2017:

	Gross and Net Amounts of Assets Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments		Cash Collateral Received		Net Amount
Assets
Freestanding Derivatives	$	8,801	$	3,279	$	—	$	5,522

	Gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments		Cash Collateral Pledged		Net Amount
Liabilities
Net Investment Hedges	$	453	$	—	$	—	$	453
Freestanding Derivatives		36,234		3,279		32,405		550
Repurchase Agreements		118,840		118,840		—		—
	$	155,527	$	122,119	$	32,405	$	1,003

Repurchase Agreements are presented separately on the Condensed Consolidated Statements of Financial Condition. Freestanding Derivative assets are included in Other Assets in the Condensed Consolidated Statements of Financial Condition. The following table presents the components of Other Assets:

	June 30, 2018		December 31, 2017
Furniture, Equipment and Leasehold Improvements, Net	$	122,318	$	126,566
Prepaid Expenses		90,687		78,723
Other Assets		16,901		32,965
Freestanding Derivatives		23,030		4,443
	$	252,936	$	242,697

Freestanding Derivative liabilities are included in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition and are not a significant component thereof.

Notional Pooling Arrangement

Blackstone has a notional cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows for cash withdrawals based upon aggregate cash balances on deposit at the same financial institution. Cash withdrawals cannot exceed aggregate cash balances on deposit. The net balance of cash on deposit and overdrafts is used as a basis for calculating net interest expense or income. As of June 30, 2018, the aggregate cash balance on deposit relating to the cash pooling arrangement was $1.5 billion, which was offset with an accompanying overdraft of $1.5 billion.

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BORROWINGS

6 Months Ended

Jun. 30, 2018

BORROWINGS

12. BORROWINGS

The following table presents the general characteristics of each of our Notes, as well as their carrying value and fair value. The Notes are included in Loans Payable within the Condensed Consolidated Statements of Financial Condition. All of the Notes were issued at a discount. All of the Notes accrue interest from the Issue Date and all pay interest in arrears on a semi-annual basis or annual basis as indicated by the Interest Payment Dates.

	June 30, 2018				December 31, 2017
Senior Notes	Carrying Value		Fair Value (a)		Carrying Value		Fair Value (a)
5.875%, Due 3/15/2021	$	398,727	$	425,360	$	398,514	$	438,320
4.750%, Due 2/15/2023		394,645		418,840		394,137		434,200
2.000%, Due 5/19/2025		346,136		369,728		355,425		385,433
1.000%, Due 10/5/2026		691,478		677,906		709,871		711,440
3.150%, Due 10/2/2027		296,557		284,700		296,399		295,320
6.250%, Due 8/15/2042		238,119		294,700		238,019		328,200
5.000%, Due 6/15/2044		488,640		526,000		488,536		574,100
4.450%, Due 7/15/2045		343,981		337,260		343,925		372,575
4.000%, Due 10/2/2047		290,075		266,400		289,989		296,940
	$	3,488,358	$	3,600,894	$	3,514,815	$	3,836,528

(a) Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.

Included within Loans Payable and Due to Affiliates within the Condensed Consolidated Statements of Financial Condition are amounts due to holders of debt securities issued by Blackstone’s consolidated CLO vehicles. Borrowings through the consolidated CLO vehicles consisted of the following:

	June 30, 2018							December 31, 2017
	Borrowing Outstanding		Weighted- Average Interest Rate			Weighted- Average Remaining Maturity in Years		Borrowing Outstanding		Weighted- Average Interest Rate			Weighted- Average Remaining Maturity in Years
Senior Secured Notes	$	6,533,425		3.83	%		3.2	$	10,689,240		2.35	%		4.1
Subordinated Notes		331,735		(a	)		N/A		894,367		(a)			N/A
	$	6,865,160						$	11,583,607

(a) The Subordinated Notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the CLO vehicles.

Senior Secured Notes and Subordinated Notes comprise the following amounts:

	June 30, 2018						December 31, 2017
	Fair Value		Amounts Due to Non- Consolidated Affiliates				Fair Value		Amounts Due to Non- Consolidated Affiliates
			Borrowing Outstanding		Fair Value				Borrowing Outstanding		Fair Value
Senior Secured Notes	$	6,531,595	$	3,250	$	3,269	$	10,595,652	$	1,000	$	996
Subordinated Notes		239,179		111,659		63,279		743,554		53,400		40,390
	$	6,770,774	$	114,909	$	66,548	$	11,339,206	$	54,400	$	41,386

The Loans Payable of the consolidated CLO vehicles are collateralized by assets held by each respective CLO vehicle and assets of one vehicle may not be used to satisfy the liabilities of another. As of June 30, 2018 and December 31, 2017, the fair value of the consolidated CLO assets was $7.5 billion and $13.4 billion, respectively. This collateral consisted of Cash, Corporate Loans, Corporate Bonds and other securities.

Scheduled principal payments for borrowings as of June 30, 2018 were as follows:

	Operating Borrowings		Blackstone Fund Facilities/CLO Vehicles		Total Borrowings
2018	$	—	$	2,819	$	2,819
2019		—		—		—
2020		—		—		—
2021		400,000		—		400,000
2022		—		—		—
Thereafter		3,151,560		6,865,160		10,016,720
	$	3,551,560	$	6,867,979	$	10,419,539

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INCOME TAXES

6 Months Ended

Jun. 30, 2018

INCOME TAXES

13. INCOME TAXES

Blackstone’s effective tax rate was 8.2% and 3.9% for the three months ended June 30, 2018 and 2017, respectively, and 7.5% and 4.8% for the six months ended June 30, 2018 and 2017, respectively. Blackstone’s income tax provision was $138.7 million and $29.6 million for the three months ended June 30, 2018 and 2017, respectively, and $193.2 million and $87.0 million for the six months ended June 30, 2018 and 2017, respectively.

The Blackstone Group L.P. and certain of its subsidiaries operate in the U.S. as partnerships for income tax purposes (partnerships generally are not subject to federal income taxes) and generally as corporate entities in non-U.S. jurisdictions. Blackstone’s effective tax rate for the three and six months ended June 30, 2018 and 2017 was substantially due to the fact that certain corporate subsidiaries are subject to federal, state, local and foreign income taxes (as applicable) and other subsidiaries are subject to New York City unincorporated business taxes.

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NET INCOME PER COMMON UNIT

6 Months Ended

Jun. 30, 2018

NET INCOME PER COMMON UNIT

14. NET INCOME PER COMMON UNIT

Basic and diluted net income per common unit for the three and six months ended June 30, 2018 and June 30, 2017 was calculated as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Net Income for Per Common Unit Calculation
Net Income Attributable to The Blackstone Group L.P., Basic	$	742,042	$	337,407	$	1,109,914	$	789,316
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units		—		260,488		858,727		624,716
Net Income Attributable to The Blackstone Group L.P., Diluted	$	742,042	$	597,895	$	1,968,641	$	1,414,032
Units Outstanding
Weighted-Average Common Units Outstanding, Basic		681,794,492		664,681,299		678,156,936		662,820,839
Weighted-Average Unvested Deferred Restricted Common Units		216,118		998,974		207,526		904,079
Weighted-Average Blackstone Holdings Partnership Units		—		534,326,066		532,363,486		536,031,472
Weighted-Average Common Units Outstanding, Diluted		682,010,610		1,200,006,339		1,210,727,948		1,199,756,390
Net Income Per Common Unit, Basic	$	1.09	$	0.51	$	1.64	$	1.19
Net Income Per Common Unit, Diluted	$	1.09	$	0.50	$	1.63	$	1.18
Distributions Declared Per Common Unit (a)	$	0.35	$	0.87	$	1.20	$	1.34

(a) Distributions declared reflects the calendar date of the declaration for each distribution.

The Weighted-Average Common Units Outstanding, Basic includes vested deferred restricted common units that have been earned for which issuance of the related common units is deferred until future periods.

The Partnership applies the treasury stock method to determine the dilutive weighted-average common units outstanding. The Partnership applies the “if-converted” method to the Blackstone Holdings Partnership Units to determine the dilutive weighted-average common units represented by the Blackstone Holdings Partnership Units.

In computing the dilutive effect that the exchange of Blackstone Holdings Partnership Units would have on net income per common unit, the Partnership considered that net income available to holders of common units would increase due to the elimination of non-controlling interests in Blackstone Holdings, inclusive of any tax impact. Because the hypothetical conversion may result in a different tax rate, the Blackstone Holdings Partnership Units are considered anti-dilutive in certain periods and dilutive in other periods.

The following table summarizes the anti-dilutive securities for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Weighted-Average Blackstone Holdings Partnership Units		528,872,187		—		—		—

Unit Repurchase Program

On April 16, 2018, the Board of Directors of our general partner, Blackstone Group Management L.L.C., authorized the repurchase by Blackstone of up to $1.0 billion of Blackstone common units and Blackstone Holdings Partnership Units. Under the unit repurchase program, units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of units repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The unit repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

During the three and six months ended June 30, 2017, no units were repurchased. During the three and six months ended June 30, 2018, Blackstone repurchased 2.2 million Blackstone common units at a total cost of $71.7 million. As of June 30, 2018, the amount remaining available for repurchases under this program was $928.3 million.

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EQUITY-BASED COMPENSATION

6 Months Ended

Jun. 30, 2018

EQUITY-BASED COMPENSATION

15. EQUITY-BASED COMPENSATION

The Partnership has granted equity-based compensation awards to Blackstone’s senior managing directors, non-partner professionals, non-professionals and selected external advisers under the Partnership’s 2007 Equity Incentive Plan (the “Equity Plan”). The Equity Plan allows for the granting of options, unit appreciation rights or other unit-based awards (units, restricted units, restricted common units, deferred restricted common units, phantom restricted common units or other unit-based awards based in whole or in part on the fair value of the Blackstone common units or Blackstone Holdings Partnership Units) which may contain certain service or performance requirements. As of January 1, 2018, the Partnership had the ability to grant 172,155,134 units under the Equity Plan.

For the three and six months ended June 30, 2018, the Partnership recorded compensation expense of $116.8 million and $209.0 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $20.1 million and $34.5 million, respectively. For the three and six months ended June 30, 2017, the Partnership recorded compensation expense of $88.5 million and $179.7 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $22.7 million and $36.8 million, respectively. As of June 30, 2018, there was $793.8 million of estimated unrecognized compensation expense related to unvested awards. This cost is expected to be recognized over a weighted-average period of 4.0 years.

Total vested and unvested outstanding units, including Blackstone common units, Blackstone Holdings Partnership Units and deferred restricted common units, were 1,203,395,001 as of June 30, 2018. Total outstanding phantom units were 44,850 as of June 30, 2018.

A summary of the status of the Partnership’s unvested equity-based awards as of June 30, 2018 and of changes during the period January 1, 2018 through June 30, 2018 is presented below:

	Blackstone Holdings					The Blackstone Group L.P.
						Equity Settled Awards					Cash Settled Awards
Unvested Units	Partnership Units			Weighted- Average Grant Date Fair Value		Deferred Restricted Common Units and Options			Weighted- Average Grant Date Fair Value		Phantom Units			Weighted- Average Grant Date Fair Value
Balance, December 31, 2017		30,023,189		$	35.26		9,019,974		$	30.03		44,196		$	31.85
Granted		2,224,551			32.01		3,343,695			32.48		117			33.43
Vested		(2,161,371	)		36.27		(3,309,089	)		30.48		(151	)		32.99
Forfeited		(56,362	)		32.89		(213,508	)		30.34		—			—
Balance, June 30, 2018		30,030,007		$	34.95		8,841,072		$	30.76		44,162		$	32.24

Units Expected to Vest

The following unvested units, after expected forfeitures, as of June 30, 2018, are expected to vest:

	Units		Weighted-Average Service Period in Years
Blackstone Holdings Partnership Units		26,551,896		3.5
Deferred Restricted Blackstone Common Units		7,761,280		2.1
Total Equity-Based Awards		34,313,176		3.2
Phantom Units		37,120		2.4

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2018

RELATED PARTY TRANSACTIONS

16. RELATED PARTY TRANSACTIONS

Affiliate Receivables and Payables

Due from Affiliates and Due to Affiliates consisted of the following:

	June 30, 2018		December 31, 2017
Due from Affiliates
Advances Made on Behalf of Certain Non-Controlling Interest Holders and Blackstone Employees Principally for Investments in Blackstone Funds	$	413,095	$	410,877
Amounts Due from Portfolio Companies and Funds		514,064		587,955
Management Fees and Performance Allocations Due from Non-Consolidated Funds		547,235		594,484
Payments Made on Behalf of Non-Consolidated Entities		526,087		355,766
Investments Redeemed in Non-Consolidated Funds		14,355		77,943
Accrual for Potential Clawback of Previously Distributed Performance Allocations		1,113		1,112
	$	2,015,949	$	2,028,137

	June 30, 2018		December 31, 2017
Due to Affiliates
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements	$	779,758	$	715,734
Distributions Received on Behalf of Certain Non-Controlling Interest Holders and Blackstone Employees		63,349		87,829
Distributions Received on Behalf of Blackstone Entities		4,373		38,789
Payments Made by Non-Consolidated Entities		51,050		51,249
Due to Note Holders of Consolidated CLO Vehicles		66,548		41,386
Accrual for Potential Repayment of Previously Received Performance Allocations		2,172		2,171
	$	967,250	$	937,158

Interests of the Founder, Senior Managing Directors, Employees and Other Related Parties

The Founder, senior managing directors, employees and certain other related parties invest on a discretionary basis in the consolidated Blackstone Funds both directly and through consolidated entities. These investments generally are subject to preferential management fee and performance allocation or incentive fee arrangements. As of June 30, 2018 and December 31, 2017, such investments aggregated $843.8 million and $813.2 million, respectively. Their share of the Net Income Attributable to Redeemable Non-Controlling and Non-Controlling Interests in Consolidated Entities aggregated $37.0 million and $20.0 million for the three months ended June 30, 2018 and 2017, respectively, and $65.8 million and $50.5 million for the six months ended June 30, 2018 and 2017, respectively.

Loans to Affiliates

Loans to affiliates consist of interest bearing advances to certain Blackstone individuals to finance their investments in certain Blackstone Funds. These loans earn interest at Blackstone’s cost of borrowing and such interest totaled $1.2 million and $1.1 million for the three months ended June 30, 2018 and 2017, respectively, and $2.5 million and $1.3 million for the six months ended June 30, 2018 and 2017, respectively.

Contingent Repayment Guarantee

Blackstone and its personnel who have received Performance Allocation distributions have guaranteed payment on a several basis (subject to a cap) to the carry funds of any clawback obligation with respect to the excess Performance Allocation allocated to the general partners of such funds and indirectly received thereby to the extent that either Blackstone or its personnel fails to fulfill its clawback obligation, if any. The Accrual for Potential Repayment of Previously Received Performance Allocations represents amounts previously paid to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone Funds if the carry funds were to be liquidated based on the fair value of their underlying investments as of June 30, 2018. See Note 17. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)”.

Aircraft and Other Services

In the normal course of business, Blackstone personnel make use of aircraft owned as personal assets by Stephen A. Schwarzman; an aircraft owned jointly as a personal asset by Hamilton E. James, Blackstone’s Executive Vice Chairman, and a Director of Blackstone, and another senior managing director; an aircraft owned as a personal asset by Jonathan D. Gray, Blackstone’s President and Chief Operating Officer and a Director of Blackstone; and an aircraft owned jointly as a personal asset by Bennett J. Goodman, Co-Founder of GSO Capital and a Director of Blackstone, and another senior managing director (each such aircraft, “Personal Aircraft”). Mr. Schwarzman paid for his purchases of his Personal Aircraft himself. Mr. James paid for his interest in his jointly owned Personal Aircraft. Mr. Goodman paid for his interest in his jointly owned Personal Aircraft. Mr. Gray paid for his purchase of his Personal Aircraft himself. Mr. Schwarzman, Mr. James, Mr. Goodman and Mr. Gray respectively bear operating, personnel and maintenance costs associated with the operation of such Personal Aircraft. Payment by Blackstone for the use of the Personal Aircraft by Blackstone employees is made based on market rates.

In addition, on occasion, certain of Blackstone’s executive officers and employee directors and their families may make personal use of aircraft in which Blackstone owns a fractional interest, as well as other assets of Blackstone. Any such personal use of Blackstone assets is charged to the executive officer or employee director based on market rates and usage. Personal use of Blackstone resources is also reimbursed to Blackstone based on market rates.

The transactions described herein are not material to the Condensed Consolidated Financial Statements.

Tax Receivable Agreements

Blackstone used a portion of the proceeds from the IPO and the sale of non-voting common units to Beijing Wonderful Investments to purchase interests in the predecessor businesses from the predecessor owners. In addition, holders of Blackstone Holdings Partnership Units may exchange their Blackstone Holdings Partnership Units for Blackstone common units on a one-for-one basis. The purchase and subsequent exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Blackstone Holdings and therefore reduce the amount of tax that Blackstone’s wholly owned subsidiaries would otherwise be required to pay in the future.

One of the subsidiaries of the Partnership which is a corporate taxpayer has entered into tax receivable agreements with each of the predecessor owners and additional tax receivable agreements have been executed, and will continue to be executed, with newly-admitted senior managing directors and others who acquire Blackstone Holdings Partnership Units. The agreements provide for the payment by the corporate taxpayer to such owners of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the corporate taxpayers actually realize as a result of the aforementioned increases in tax basis and of certain other tax benefits related to entering into these tax receivable agreements. For purposes of the tax receivable agreements, cash savings in income tax will be computed by comparing the actual income tax liability of the corporate taxpayers to the amount of such taxes that the corporate taxpayers would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Blackstone Holdings as a result of the exchanges and had the corporate taxpayers not entered into the tax receivable agreements.

Assuming no future material changes in the relevant tax law and that the corporate taxpayers earn sufficient taxable income to realize the full tax benefit of the increased amortization of the assets, the expected future payments under the tax receivable agreements (which are taxable to the recipients) will aggregate $779.8 million over the next 15 years. The after-tax net present value of these estimated payments totals $282.8 million assuming a 15% discount rate and using Blackstone’s most recent projections relating to the estimated timing of the benefit to be received. Future payments under the tax receivable agreements in respect of subsequent exchanges would be in addition to these amounts. The payments under the tax receivable agreements are not conditioned upon continued ownership of Blackstone equity interests by the pre-IPO owners and the others mentioned above.

Amounts related to the deferred tax asset resulting from the increase in tax basis from the exchange of Blackstone Holdings Partnership Units to Blackstone common units, the resulting remeasurement of net deferred tax assets at the Blackstone ownership percentage at the balance sheet date, the due to affiliates for the future payments resulting from the tax receivable agreements and resulting adjustment to partners’ capital are included as Acquisition of Ownership Interests from Non-ControllingInterest Holders in the Supplemental Disclosure of Non-Cash Investing and Financing Activities in the Condensed Consolidated Statements of Cash Flows.

Other

Blackstone does business with and on behalf of some of its Portfolio Companies; all such arrangements are on a negotiated basis.

Additionally, please see Note 17. “Commitments and Contingencies — Contingencies — Guarantees” for information regarding guarantees provided to a lending institution for certain loans held by employees.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2018

COMMITMENTS AND CONTINGENCIES

17. COMMITMENTS AND CONTINGENCIES

Commitments

Investment Commitments

Blackstone had $2.4 billion of investment commitments as of June 30, 2018 representing general partner capital funding commitments to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. The consolidated Blackstone Funds had signed investment commitments of $545.2 million as of June 30, 2018 which includes $155.4 million of signed investment commitments for portfolio company acquisitions in the process of closing.

Contingencies

Guarantees

Certain of Blackstone’s consolidated real estate funds guarantee payments to third parties in connection with the on-going business activities and/or acquisitions of their Portfolio Companies. There is no direct recourse to the Partnership to fulfill such obligations. To the extent that underlying funds are required to fulfill guarantee obligations, the Partnership’s invested capital in such funds is at risk. Total investments at risk in respect of guarantees extended by consolidated real estate funds was $15.9 million as of June 30, 2018.

The Blackstone Holdings Partnerships provided guarantees to a lending institution for certain loans held by employees either for investment in Blackstone Funds or for members’ capital contributions to Blackstone Group International Partners LLP. The amount guaranteed as of June 30, 2018 was $185.7 million.

Litigation

From time to time, Blackstone is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, Blackstone does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial position or cash flows.

Contingent Obligations (Clawback)

Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. The lives of the carry funds, including available contemplated extensions, for which a liability for potential clawback obligations has been recorded for financial reporting purposes, are currently anticipated to expire at various points through 2028. Further extensions of such terms may be implemented under given circumstances.

For financial reporting purposes, when applicable, the general partners record a liability for potential clawback obligations to the limited partners of some of the carry funds due to changes in the unrealized value of a fund’s remaining investments and where the fund’s general partner has previously received Performance Allocation distributions with respect to such fund’s realized investments.

The following table presents the clawback obligations by segment:

	June 30, 2018						December 31, 2017
Segment	Blackstone Holdings		Current and Former  Personnel		Total		Blackstone Holdings		Current and Former  Personnel		Total
Credit	$	1,059	$	1,113	$	2,172	$	1,059	$	1,112	$	2,171

For Private Equity, Real Estate, and certain Credit Funds, a portion of the Performance Allocations paid to current and former Blackstone personnel is held in segregated accounts in the event of a cash clawback obligation. These segregated accounts are not included in the Condensed Consolidated Financial Statements of the Partnership, except to the extent a portion of the assets held in the segregated accounts may be allocated to a consolidated Blackstone fund of hedge funds. At June 30, 2018, $696.5 million was held in segregated accounts for the purpose of meeting any clawback obligations of current and former personnel if such payments are required.

In the Credit segment, payment of Performance Allocations to the Partnership by the majority of the stressed/distressed, mezzanine and credit alpha strategies funds is substantially deferred under the terms of the partnership agreements. This deferral mitigates the need to hold funds in segregated accounts in the event of a cash clawback obligation.

If, at June 30, 2018, all of the investments held by our carry funds were deemed worthless, a possibility that management views as remote, the amount of Performance Allocations subject to potential clawback would be $6.5 billion, on an after-tax basis where applicable, of which Blackstone Holdings is potentially liable for $6.0 billion if current and former Blackstone personnel default on their share of the liability, a possibility that management also views as remote.

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SEGMENT REPORTING

6 Months Ended

Jun. 30, 2018

SEGMENT REPORTING

18. SEGMENT REPORTING

Blackstone transacts its primary business in the United States and substantially all of its revenues are generated domestically.

Blackstone conducts its alternative asset management businesses through four segments:

• Private Equity — Blackstone’s Private Equity segment primarily comprises its management of flagship corporate private equity funds, sector-focused corporate private equity funds, including energy-focused funds, a core private equity fund, an opportunistic investment platform, a secondary private equity fund of funds business, a multi-asset investment program for eligible high net worth investors and a capital markets services business.

• Real Estate — Blackstone’s Real Estate segment primarily comprises its management of global, European-focused and Asian-focused opportunistic real estate funds, high yield real estate debt funds, liquid real estate debt funds, core+ real estate funds, a NYSE-listed REIT and a non-exchange traded REIT.

• Hedge Fund Solutions — Blackstone’s Hedge Fund Solutions segment is comprised principally of Blackstone Alternative Asset Management (“BAAM”), which manages a broad range of commingled and customized hedge fund of fund solutions and also includes investment platforms that seed new hedge fund businesses, purchase minority ownership interests in more established hedge funds, invest in special situation opportunities, create alternative solutions in regulated structures and trade directly.

• Credit — Blackstone’s Credit segment consists principally of GSO Capital Partners LP (“GSO”), which is organized into performing credit strategies (which include mezzanine lending funds, middle market direct lending funds and other performing credit strategies), distressed strategies (which include credit alpha strategies, stressed/distressed funds and energy strategies), long only strategies (which consist of CLOs, closed end funds, commingled funds and separately managed accounts), Harvest (which invests in publicly traded master limited partnerships holding primarily midstream energy assets in the U.S.), and Blackstone Insurance Solutions (which partners with insurers to deliver customizable and diversified portfolios of Blackstone products across asset classes, as well as the option for full management of insurance companies’ investment portfolios).

These business segments are differentiated by their various sources of income. The Private Equity, Real Estate, Hedge Fund Solutions and Credit segments primarily earn their income from management fees and investment returns on assets under management.

Blackstone uses Economic Income as a key measure of value creation, a benchmark of performance and in making resource deployment and compensation decisions across its four segments. Economic Income presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages, and excludes the amortization of intangibles and other activity referred to as “Transaction-Related Charges”. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. For segment reporting purposes, Performance Allocations and Incentive Fees are presented together and referred to collectively as Performance Revenues or Performance Compensation.

Senior management makes operating decisions and assesses the performance of each of Blackstone’s business segments based on financial and operating metrics and data that is presented without the consolidation of any of the Blackstone Funds that are consolidated into the Condensed Consolidated Financial Statements.

The following tables presents the financial data for Blackstone’s four segments for the three months ended June 30, 2018 and 2017:

	Three Months Ended June 30, 2018
	Private Equity			Real Estate			Hedge  Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	195,521		$	249,680		$	129,553		$	118,161		$	692,915
Transaction, Advisory and Other Fees, Net		12,780			23,859			812			3,461			40,912
Management Fee Offsets		(4,351	)		(3,785	)		—			(2,697	)		(10,833	)
Total Management and Advisory Fees, Net		203,950			269,754			130,365			118,925			722,994
Performance Revenues
Realized Incentive Fees		—			11,394			6,887			1,223			19,504
Realized Performance Allocations		138,171			351,630			383			13,371			503,555
Unrealized Performance Allocations		498,274			(160,578	)		9,930			92,798			440,424
Total Performance Revenues		636,445			202,446			17,200			107,392			963,483
Principal Investment Income (Loss)
Realized		32,600			50,199			7,766			4,082			94,647
Unrealized		84,247			(28,044	)		(4,841	)		764			52,126
Total Principal Investment Income		116,847			22,155			2,925			4,846			146,773
Interest and Dividend Revenue		11,549			14,494			5,152			10,532			41,727
Other		26,667			30,457			17,619			19,673			94,416
Total Revenues		995,458			539,306			173,261			261,368			1,969,393
Expenses
Compensation		103,798			109,599			48,086			55,907			317,390
Performance Compensation
Realized Incentive Fees		—			5,820			4,155			(232	)		9,743
Realized Performance Allocations		68,513			109,233			937			7,715			186,398
Unrealized Performance Allocations		193,747			(51,370	)		2,772			44,842			189,991
Total Compensation and Benefits		366,058			173,282			55,950			108,232			703,522
Interest Expense		12,773			11,389			5,900			8,823			38,885
Other Operating Expenses		36,047			36,026			18,494			31,899			122,466
Total Expenses		414,878			220,697			80,344			148,954			864,873
Economic Income	$	580,580		$	318,609		$	92,917		$	112,414		$	1,104,520

	Three Months Ended June 30, 2017
	Private Equity			Real Estate			Hedge  Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	177,684		$	227,865		$	128,698		$	137,121		$	671,368
Transaction, Advisory and Other Fees, Net		17,289			16,087			1,696			3,820			38,892
Management Fee Offsets		(3,753	)		(5,018	)		—			(4,653	)		(13,424	)
Total Management and Advisory Fees, Net		191,220			238,934			130,394			136,288			696,836
Performance Revenues
Realized Incentive Fees		—			4,878			6,548			28,877			40,303
Realized Performance Allocations		198,168			389,441			447			15,040			603,096
Unrealized Performance Allocations		9			89,688			14,849			(8,839	)		95,707
Total Performance Revenues		198,177			484,007			21,844			35,078			739,106
Principal Investment Income (Loss)
Realized		41,168			57,599			225			1,895			100,887
Unrealized		(25,892	)		(20,519	)		11,578			1,666			(33,167	)
Total Principal Investment Income		15,276			37,080			11,803			3,561			67,720
Interest and Dividend Revenue		7,922			14,493			4,674			6,614			33,703
Other		(16,124	)		(22,965	)		(10,720	)		(12,660	)		(62,469	)
Total Revenues		396,471			751,549			157,995			168,881			1,474,896
Expenses
Compensation		90,676			110,266			47,361			56,954			305,257
Performance Compensation
Realized Incentive Fees		—			2,711			4,097			14,224			21,032
Realized Performance Allocations		63,060			124,512			265			7,901			195,738
Unrealized Performance Allocations		22,219			64,254			5,968			(5,531	)		86,910
Total Compensation and Benefits		175,955			301,743			57,691			73,548			608,937
Interest Expense		10,728			14,787			6,688			8,091			40,294
Other Operating Expenses		28,592			33,379			16,318			27,549			105,838
Total Expenses		215,275			349,909			80,697			109,188			755,069
Economic Income	$	181,196		$	401,640		$	77,298		$	59,693		$	719,827

The following table reconciles the Total Segments to Blackstone’s Income Before Provision for Taxes for the three months ended June 30, 2018 and 2017:

	Three Months Ended June 30, 2018
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)
Total Segments	$	1,969,393		$	864,873		$	—	$	1,104,520
Adjustments
Impact of Consolidation (b)		82,752			26,288			73,519		129,983
Amortization of Intangibles (c)		(387	)		14,486			—		(14,873	)
Intersegment Eliminations		(1,293	)		(1,293	)		—		—
Transaction-Related Charges (d)		582,105			112,027			—		470,078
Total Adjustments		663,177			151,508			73,519		585,188
Blackstone Consolidated	$	2,632,570		$	1,016,381		$	73,519	$	1,689,708
	Three Months Ended June 30, 2017
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)
Total Segments	$	1,474,896		$	755,069		$	—	$	719,827
Adjustments
Impact of Consolidation (b)		57,503			53,622			110,054		113,935
Amortization of Intangibles (c)		(387	)		10,957			—		(11,344	)
Intersegment Eliminations		(1,628	)		(1,628	)		—		—
Transaction-Related Charges (d)		5,342			63,173			—		(57,831	)
Total Adjustments		60,830			126,124			110,054		44,760
Blackstone Consolidated	$	1,535,726		$	881,193		$	110,054	$	764,587

(a) Represents Total Segments Economic Income reconciled to Blackstone Consolidated Income Before Provision for Taxes.

(b) The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(c) Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstone’s investment in Patria, which is accounted for under the equity method.

(d) Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. During the three months ended June 30, 2018, Transaction-Related Charges include $580.9 million of Other Revenues received upon the conclusion of Blackstone’s investment sub-advisory relationship with FS Investments’ funds.

The following tables present the financial data for Blackstone’s four segments as of and for the six months ended June 30, 2018 and 2017:

	June 30, 2018 and the Six Months Then Ended
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	378,482		$	476,206		$	258,781		$	286,602		$	1,400,071
Transaction, Advisory and Other Fees, Net		23,874			46,947			1,157			6,000			77,978
Management Fee Offsets		(7,544	)		(5,453	)		—			(6,014	)		(19,011	)
Total Management and Advisory Fees, Net		394,812			517,700			259,938			286,588			1,459,038
Performance Revenues
Realized Incentive Fees		—			15,769			15,058			1,243			32,070
Realized Performance Allocations		215,294			502,939			2,389			52,575			773,197
Unrealized Performance Allocations		895,590			65,864			14,991			92,318			1,068,763
Total Performance Revenues		1,110,884			584,572			32,438			146,136			1,874,030
Principal Investment Income (Loss)
Realized		38,938			64,889			8,406			11,107			123,340
Unrealized		101,615			(25,357	)		(4,401	)		(5,753	)		66,104
Total Principal Investment Income		140,553			39,532			4,005			5,354			189,444
Interest and Dividend Revenue		20,092			29,622			9,964			18,434			78,112
Other		10,259			8,960			7,331			6,972			33,522
Total Revenues		1,676,600			1,180,386			313,676			463,484			3,634,146
Expenses
Compensation		203,527			222,423			98,386			129,381			653,717
Performance Compensation
Realized Incentive Fees		—			8,030			8,189			186			16,405
Realized Performance Allocations		101,558			163,416			3,352			30,134			298,460
Unrealized Performance Allocations		372,549			27,800			4,958			39,119			444,426
Total Compensation and Benefits		677,634			421,669			114,885			198,820			1,413,008
Interest Expense		22,906			25,538			12,171			16,508			77,123
Other Operating Expenses		67,198			65,443			37,279			59,638			229,558
Total Expenses		767,738			512,650			164,335			274,966			1,719,689
Economic Income	$	908,862		$	667,736		$	149,341		$	188,518		$	1,914,457
Segment Assets	$	7,574,520		$	7,536,885		$	2,275,685		$	4,099,397		$	21,486,487

	Six Months Ended June 30, 2017
	Private Equity			Real Estate			Hedge  Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	354,390		$	425,744		$	257,166		$	277,026		$	1,314,326
Transaction, Advisory and Other Fees, Net		33,465			37,366			1,955			6,328			79,114
Management Fee Offsets		(15,943	)		(8,568	)		—			(22,512	)		(47,023	)
Total Management and Advisory Fees, Net		371,912			454,542			259,121			260,842			1,346,417
Performance Revenues
Realized Incentive Fees		—			7,760			20,635			58,419			86,814
Realized Performance Allocations		780,849			909,314			1,044			23,837			1,715,044
Unrealized Performance Allocations		(184,469	)		81,642			33,664			40,792			(28,371	)
Total Performance Revenues		596,380			998,716			55,343			123,048			1,773,487
Principal Investment Income (Loss)
Realized		122,462			177,178			(407	)		4,548			303,781
Unrealized		(66,414	)		(104,372	)		29,871			8,813			(132,102	)
Total Principal Investment Income		56,048			72,806			29,464			13,361			171,679
Interest and Dividend Revenue		14,583			26,587			8,671			12,358			62,199
Other		(17,924	)		(26,115	)		(12,330	)		(14,387	)		(70,756	)
Total Revenues		1,020,999			1,526,536			340,269			395,222			3,283,026
Expenses
Compensation		174,279			212,968			94,965			112,072			594,284
Performance Compensation
Realized Incentive Fees		—			4,044			11,111			28,342			43,497
Realized Performance Allocations		244,693			304,468			568			12,487			562,216
Unrealized Performance Allocations		(17,137	)		82,046			12,390			17,144			94,443
Total Compensation and Benefits		401,835			603,526			119,034			170,045			1,294,440
Interest Expense		21,155			29,422			13,231			15,936			79,744
Other Operating Expenses		56,353			64,243			32,697			49,007			202,300
Total Expenses		479,343			697,191			164,962			234,988			1,576,484
Economic Income	$	541,656		$	829,345		$	175,307		$	160,234		$	1,706,542

The following table reconciles the Total Segments to Blackstone’s Income Before Provision for Taxes and Total Assets as of and for the six months ended June 30, 2018 and 2017:

	June 30, 2018 and the Six Months Then Ended
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)			Total Assets
Total Segments	$	3,634,146		$	1,719,689		$	—	$	1,914,457		$	21,486,487
Adjustments
Impact of Consolidation (b)		186,276			86,187			184,118		284,207			8,588,810
Amortization of Intangibles (c)		(774	)		28,972			—		(29,746	)		—
Intersegment Eliminations		(2,634	)		(2,634	)		—		—			—
Transaction-Related Charges (d)		584,687			167,098			—		417,589			—
Total Adjustments		767,555			279,623			184,118		672,050			8,588,810
Blackstone Consolidated	$	4,401,701		$	1,999,312		$	184,118	$	2,586,507		$	30,075,297

	Six Months Ended June 30, 2017
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)
Total Segments	$	3,283,026		$	1,576,484		$	—	$	1,706,542
Adjustments
Impact of Consolidation (b)		159,142			80,708			176,186		254,620
Amortization of Intangibles (c)		(774	)		21,914			—		(22,688	)
Intersegment Eliminations		(3,067	)		(3,067	)		—		—
Transaction-Related Charges (d)		12,117			126,927			—		(114,810	)
Total Adjustments		167,418			226,482			176,186		117,122
Blackstone Consolidated	$	3,450,444		$	1,802,966		$	176,186	$	1,823,664

(a) Represents Total Segments Economic Income reconciled to Blackstone Consolidated Income Before Provision for Taxes.

(b) The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(c) Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstone’s investment in Patria, which is accounted for under the equity method.

(d) Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. During the six months ended June 30, 2018, Transaction-Related Charges include $580.9 million of Other Revenues received upon the conclusion of Blackstone’s investment sub-advisory relationship with FS Investments’ funds.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2018

SUBSEQUENT EVENTS

19. SUBSEQUENT EVENTS

There have been no events since June 30, 2018 that require recognition or disclosure in the Condensed Consolidated Financial Statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2018

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission.

The condensed consolidated financial statements include the accounts of the Partnership, its wholly owned or majority-owned subsidiaries, the consolidated entities which are considered to be variable interest entities and for which the Partnership is considered the primary beneficiary, and certain partnerships or similar entities which are not considered variable interest entities but in which the general partner is presumed to have control.

All intercompany balances and transactions have been eliminated in consolidation.

Restructurings within consolidated CLOs are treated as investment purchases or sales, as applicable, in the Condensed Consolidated Statements of Cash Flows.

Consolidation

Consolidation

The Partnership consolidates all entities that it controls through a majority voting interest or otherwise, including those Blackstone Funds in which the general partner has a controlling financial interest. The Partnership has a controlling financial interest in Blackstone Holdings because the limited partners do not have the right to dissolve the partnerships or have substantive kick out rights or participating rights that would overcome the control held by the Partnership. Accordingly, the Partnership consolidates Blackstone Holdings and records non-controlling interests to reflect the economic interests of the limited partners of Blackstone Holdings.

In addition, the Partnership consolidates all variable interest entities (“VIE”) in which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which the Partnership holds a variable interest is a VIE and (b) whether the Partnership’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (for example, management and performance related fees), would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment.

The Partnership determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and continuously reconsiders that conclusion. In determining whether the Partnership is the primary beneficiary, Blackstone evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Partnership. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Partnership is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Partnership, affiliates of the Partnership or third parties) or amendments to the governing documents of the respective Blackstone Funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, the Partnership assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.

Assets of consolidated VIEs that can only be used to settle obligations of the consolidated VIE and liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of Blackstone are presented in a separate section in the Condensed Consolidated Statements of Financial Condition.

Blackstone’s other disclosures regarding VIEs are discussed in Note 9. “Variable Interest Entities”.

Revenue Recognition

Revenue Recognition

Revenues primarily consist of management and advisory fees, incentive fees, investment income, interest and dividend revenue and other.

Management and advisory fees and incentive fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 18, “Segment Reporting” for a disaggregated presentation of revenues from contracts with customers.

Investment Income represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments. Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by the Partnership. Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Management and Advisory Fees, Net — Management and Advisory Fees, Net are comprised of management fees, including base management fees, transaction and other fees and advisory fees net of management fee reductions and offsets.

The Partnership earns base management fees from limited partners of funds in each of its managed funds, at a fixed percentage of assets under management, net asset value, total assets, committed capital or invested capital. These customer contracts require the Partnership to provide investment management services, which represents a performance obligation that the Partnership satisfies over time. Management fees are a form of variable consideration because the fees the Partnership is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid.

Transaction, advisory and other fees (including monitoring fees) are principally fees charged to the limited partners of funds indirectly through the managed funds and portfolio companies. The investment advisory agreements generally require that the investment adviser reduce the amount of management fees payable by the limited partners to the Partnership (“management fee reductions”) by an amount equal to a portion of the transaction and other fees paid to the Partnership by the portfolio companies. The amount of the reduction varies by fund, the type of fee paid by the portfolio company and the previously incurred expenses of the fund. These fees and associated management fee reductions are a component of the transaction price for the Partnership’s performance obligation to provide investment management services to the limited partners of funds and are recognized as changes to the transaction price in the period in which they are charged and the services are performed.

Management fee offsets are reductions to management fees payable by the limited partners of the Blackstone Funds, which are based on the amount such limited partners reimburse the Blackstone Funds or the Partnership primarily for placement fees. Providing investment management services requires the Partnership to arrange for services on behalf of its customers. In those situations where the Partnership is acting as an agent on behalf of the limited partners of funds, it presents the cost of services as net against management fee revenue. In all other situations, the Partnership is primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements. As a result, the cost of those services is presented gross as Compensation or General, Administrative and Other expense, as appropriate, with any reimbursement from the limited partners of the funds recorded as Management and Advisory Fees, Net.

Accrued but unpaid Management and Advisory Fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts Receivable or Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Incentive Fees — Contractual fees earned based on the performance of Blackstone Funds (“Incentive Fees”) are a form of variable consideration in their contracts with customers to provide investment management services. Incentive Fees are earned based on fund performance during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each fund’s governing agreements. Incentive Fees will not be recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved. Incentive Fees are typically recognized as revenue when realized at the end of the measurement period. Once realized, such fees are not subject to clawback or reversal. Accrued but unpaid Incentive Fees charged directly to investors in Blackstone Funds as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Investment Income (Loss) — Investment Income (Loss) represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments.

In certain fund structures across private equity, real estate, hedge fund solutions and credit-focused funds (“carry funds”), Blackstone, through its subsidiaries, invests alongside its limited partners in a partnership and is entitled to its pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, Blackstone is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).

Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. At the end of each reporting period, the Partnership calculates the balance of accrued Performance Allocations (“Accrued Performance Allocations”) that would be due to the Partnership for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. Accrued Performance Allocations as of the reporting date are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Performance Allocations are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results. As such, the accrual for potential repayment of previously received Performance Allocations, which is a component of Due to Affiliates, represents all amounts previously distributed to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone carry funds if the Blackstone carry funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain funds, including certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability.

Principal Investments include the unrealized and realized gains and losses on the Partnership’s principal investments, including its investments in Blackstone Funds that are not consolidated and receive pro-rata allocations, its equity method investments, and other principal investments. Income (Loss) on Principal Investments is realized when the Partnership redeems all or a portion of its investment or when the Partnership receives cash income, such as dividends or distributions. Unrealized Income (Loss) on Principal Investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest and Dividend Revenue — Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by Blackstone.

Other Revenue — Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

• Level I — Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. The Partnership does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and a sale could reasonably impact the quoted price.

• Level II — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held within CLO vehicles, government and agency securities, less liquid and restricted equity securities, and certain over-the-counter derivatives where the fair value is based on observable inputs. Senior and subordinated notes issued by CLO vehicles are classified within Level II of the fair value hierarchy.

• Level III — Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership interests in private equity and real estate funds, credit-focused funds, distressed debt and non-investment grade residual interests in securitizations, certain corporate bonds and loans held within CLO vehicles, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Transfers between levels of the fair value hierarchy are recognized at the beginning of the reporting period.

Level II Valuation Techniques

Financial instruments classified within Level II of the fair value hierarchy comprise debt instruments, including certain corporate loans and bonds held by Blackstone’s consolidated CLO vehicles and debt securities sold, not yet purchased. Certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.

The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:

• Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.

• Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit spreads.

• Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.

Level III Valuation Techniques

In the absence of observable market prices, Blackstone values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances, and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, real estate properties, certain funds of hedge funds and credit-focused investments.

Private Equity Investments — The fair values of private equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortization (“EBITDA”), the discounted cash flow method, public market or private transactions, valuations for comparable companies and other measures which, in many cases, are based on unaudited information at the time received. Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples.

Real Estate Investments — The fair values of real estate investments are determined by considering projected operating cash flows, sales of comparable assets, if any, and replacement costs, among other measures. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rates (“cap rates”) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or assets (for example, multiplying a key performance metric of the investee company or asset, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to an exit EBITDA multiple or capitalization rate. Additionally, where applicable, projected distributable cash flow through debt maturity will be considered in support of the investment’s fair value.

Credit-Focused Investments — The fair values of credit-focused investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. For credit-focused investments that are not publicly traded or whose market prices are not readily available, Blackstone may utilize other valuation techniques, including the discounted cash flow method or a market approach. The discounted cash flow method projects the expected cash flows of the debt instrument based on contractual terms, and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly traded debt instruments issued by companies operating in similar industries as the subject investment, with similar leverage statistics and time to maturity.

The market approach is generally used to determine the enterprise value of the issuer of a credit investment, and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.

Level III Valuation Process

Investments classified within Level III of the fair value hierarchy are valued on a quarterly basis, taking into consideration factors including any changes in Blackstone’s weighted-average cost of capital assumptions, discounted cash flow projections and exit multiple assumptions, as well as any changes in economic and other relevant conditions, and valuation models are updated accordingly. The valuation process also includes a review by an independent valuation party, at least annually for all investments, and quarterly for certain investments, to corroborate the values determined by management. The valuations of Blackstone’s investments are reviewed quarterly by a valuation committee chaired by Blackstone’s Vice Chairman and includes senior heads of each of Blackstone’s businesses, as well as representatives of legal and finance. Each quarter, the valuations of Blackstone’s investments are also reviewed by the Audit Committee in a meeting attended by the chairman of the valuation committee. The valuations are further tested by comparison to actual sales prices obtained on disposition of the investments.

Investments, at Fair Value

Investments, at Fair Value

The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing Guide, Investment Companies, and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. Such consolidated funds’ investments are reflected in Investments on the Condensed Consolidated Statements of Financial Condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, at current market conditions (i.e., the exit price).

Blackstone’s principal investments are presented at fair value with unrealized appreciation or depreciation and realized gains and losses recognized in the Condensed Consolidated Statements of Operations within Investment Income (Loss).

For certain instruments, the Partnership has elected the fair value option. Such election is irrevocable and is applied on an investment by investment basis at initial recognition. The Partnership has applied the fair value option for certain loans and receivables and certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses recorded in net income. The methodology for measuring the fair value of such investments is consistent with the methodology applied to private equity, real estate, credit-focused and funds of hedge funds investments. Changes in the fair value of such instruments are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. Interest income on interest bearing loans and receivables and debt securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest and Dividend Revenue.

The Partnership has elected the fair value option for the assets of consolidated CLO vehicles. As permitted under GAAP, the Partnership measures the liabilities of consolidated CLO vehicles as (a) the sum of the fair value of the consolidated CLO assets and the carrying value of any non-financial assets held temporarily, less (b) the sum of the fair value of any beneficial interests retained by the Partnership (other than those that represent compensation for services) and the Partnership’s carrying value of any beneficial interests that represent compensation for services. As a result of this measurement alternative, there is no attribution of amounts to Non-Controlling Interests for consolidated CLO vehicles. Assets of the consolidated CLOs are presented within Investments within the Condensed Consolidated Statements of Financial Condition and Liabilities within Loans Payable for the amounts due to unaffiliated third parties and Due to Affiliates for the amounts held by non-consolidated affiliates. Changes in the fair value of consolidated CLO assets and liabilities and related interest, dividend and other income are presented within Net Gains from Fund Investment Activities. Expenses of consolidated CLO vehicles are presented in Fund Expenses.

The Partnership has elected the fair value option for certain proprietary investments that would otherwise have been accounted for using the equity method of accounting. The fair value of such investments is based on quoted prices in an active market or using the discounted cash flow method. Changes in fair value are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

Further disclosure on instruments for which the fair value option has been elected is presented in Note 7. “Fair Value Option”.

The investments of consolidated Blackstone Funds in funds of hedge funds (“Investee Funds”) are valued at net asset value (“NAV”) per share of the Investee Fund. In limited circumstances, the Partnership may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Partnership will estimate the fair value in good faith and in a manner that it reasonably chooses, in accordance with the requirements of GAAP.

Certain investments of Blackstone and of the consolidated Blackstone funds of hedge funds and credit-focused funds measure their investments in underlying funds at fair value using NAV per share without adjustment. The terms of the investee’s investment generally provide for minimum holding periods or lock-ups, the institution of gates on redemptions or the suspension of redemptions or an ability to side pocket investments, at the discretion of the investee’s fund manager, and as a result, investments may not be redeemable at, or within three months of, the reporting date. A side pocket is used by hedge funds and funds of hedge funds to separate investments that may lack a readily ascertainable value, are illiquid or are subject to liquidity restriction. Redemptions are generally not permitted until the investments within a side pocket are liquidated or it is deemed that the conditions existing at the time that required the investment to be included in the side pocket no longer exist. As the timing of either of these events is uncertain, the timing at which the Partnership may redeem an investment held in a side pocket cannot be estimated. Further disclosure on instruments for which fair value is measured using NAV per share is presented in Note 5. “Net Asset Value as Fair Value”.

Security and loan transactions are recorded on a trade date basis.

Equity Method Investments

Equity Method Investments

Investments in which the Partnership is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting except in cases where the fair value option has been elected. The Partnership has significant influence over all Blackstone Funds in which it invests but does not consolidate. Therefore, its investments in such Blackstone Funds, which include both a proportionate and disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), are accounted for under the equity method. Under the equity method of accounting, the Partnership’s share of earnings (losses) from equity method investments is included in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

In cases where the Partnership’s equity method investments provide for a disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), the Partnership’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period the Partnership calculates the Accrued Performance Allocations that would be due to the Partnership for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner, or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. The carrying amounts of equity method investments are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Compensation and Benefits

Compensation and Benefits

Compensation and Benefits — Compensation — Compensation and Benefits consists of (a) employee compensation, comprising salary and bonus, and benefits paid and payable to employees and senior managing directors and (b) equity-based compensation associated with the grants of equity-based awards to employees and senior managing directors. Compensation cost relating to the issuance of equity-based awards to senior managing directors and employees is measured at fair value at the grant date, taking into consideration expected forfeitures, and expensed over the vesting period on a straight-line basis, except in the case of (a) equity-based awards that do not require future service, which are expensed immediately, and (b) certain awards to recipients that meet specified criteria making them eligible for retirement treatment (allowing such recipient to keep a percentage of those awards upon departure from Blackstone after becoming eligible for retirement), for which the expense for the portion of the award that would be retained in the event of retirement is either expensed immediately or amortized to the retirement date. Cash settled equity-based awards are classified as liabilities and are remeasured at the end of each reporting period.

Compensation and Benefits — Incentive Fee Compensation — Incentive Fee Compensation consists of compensation paid based on Incentive Fees.

Compensation and Benefits — Performance Allocations Compensation — Performance Allocation Compensation consists of compensation paid based on Performance Allocations (which may be distributed in cash or in-kind). Such compensation expense is subject to both positive and negative adjustments. Unlike Performance Allocations, compensation expense is based on the performance of individual investments held by a fund rather than on a fund by fund basis. These amounts may also include allocations of investment income from Blackstone’s principal investments, to senior managing directors and employees participating in certain profit sharing initiatives.

Repurchase Agreements

Repurchase Agreements

Securities sold under agreements to repurchase (“repurchase agreements”), comprised primarily of U.S. and non-U.S. government and agency securities are asset-backed securities and corporate debt and represent collateralized financing transactions. Such transactions are recorded in the Condensed Consolidated Statements of Financial Condition at their contractual amounts and include accrued interest. The carrying value of repurchase agreements approximates fair value.

The Partnership manages credit exposure arising from repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Partnership, in the event of a counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

The Partnership also pledges its financial instruments to counterparties to collateralize repurchase agreements. Financial instruments pledged that can be repledged, delivered or otherwise used by the counterparty are recorded in Investments in the Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to repurchase agreements are discussed in Note 10. “Repurchase Agreements”.

Blackstone does not offset assets and liabilities relating to repurchase agreements in its Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Securities Sold, Not Yet Purchased

Securities Sold, Not Yet Purchased

Securities Sold, Not Yet Purchased consist of equity and debt securities that the Partnership has borrowed and sold. The Partnership is required to “cover” its short sale in the future by purchasing the security at prevailing market prices and delivering it to the counterparty from which it borrowed the security. The Partnership is exposed to loss in the event that the price at which a security may have to be purchased to cover a short sale exceeds the price at which the borrowed security was sold short.

Securities Sold, Not Yet Purchased are recorded at fair value in the Condensed Consolidated Statements of Financial Condition.

Derivative Instruments

Derivative Instruments

The Partnership recognizes all derivatives as assets or liabilities on its Condensed Consolidated Statements of Financial Condition at fair value. On the date the Partnership enters into a derivative contract, it designates and documents each derivative contract as one of the following: (a) a hedge of a recognized asset or liability (“fair value hedge”), (b) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), (c) a hedge of a net investment in a foreign operation, or (d) a derivative instrument not designated as a hedging instrument (“freestanding derivative”). For a fair value hedge, Blackstone records changes in the fair value of the derivative and, to the extent that it is highly effective, changes in the fair value of the hedged asset or liability attributable to the hedged risk, in current period earnings in General, Administrative and Other in the Condensed Consolidated Statements of Operations. Changes in the fair value of derivatives designated as hedging instruments caused by factors other than changes in the risk being hedged, which are excluded from the assessment of hedge effectiveness, are recognized in current period earnings. Gains or losses on a derivative instrument that is designated as, and is effective as, an economic hedge of a net investment in a foreign operation are reported in the cumulative translation adjustment section of other comprehensive income to the extent it is effective as a hedge. The ineffective portion of a net investment hedge is recognized in current period earnings.

The Partnership formally documents at inception its hedge relationships, including identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and the Partnership’s evaluation of effectiveness of its hedged transaction. At least monthly, the Partnership also formally assesses whether the derivative it designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in estimated fair values or cash flows of the hedged items using either the regression analysis or the dollar offset method. For net investment hedges, the Partnership uses a method based on changes in spot rates to measure effectiveness. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. The Partnership may also at any time remove a designation of a fair value hedge. The fair values of hedging derivative instruments are reflected within Other Assets in the Condensed Consolidated Statements of Financial Condition.

For freestanding derivative contracts, the Partnership presents changes in fair value in current period earnings. Changes in the fair value of derivative instruments held by consolidated Blackstone Funds are reflected in Net Gains from Fund Investment Activities or, where derivative instruments are held by the Partnership, within Investment Income (Loss) in the Condensed Consolidated Statements of Operations. The fair value of freestanding derivative assets of the consolidated Blackstone Funds are recorded within Investments, the fair value of freestanding derivative assets that are not part of the consolidated Blackstone Funds are recorded within Other Assets and the fair value of freestanding derivative liabilities are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.

The Partnership has elected to not offset derivative assets and liabilities or financial assets in its Condensed Consolidated Statements of Financial Condition, including cash, that may be received or paid as part of collateral arrangements, even when an enforceable master netting agreement is in place that provides the Partnership, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

Blackstone’s other disclosures regarding derivative financial instruments are discussed in Note 6. “Derivative Financial Instruments”.

Blackstone’s disclosures regarding offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Affiliates

Affiliates

Blackstone considers its Founder, senior managing directors, employees, the Blackstone Funds and the Portfolio Companies to be affiliates.

Distributions

Distributions

Distributions are reflected in the condensed consolidated financial statements when declared.

Recent Accounting Developments

Recent Accounting Developments

In May 2014, the Financial Accounting Standards Board (“FASB”) issued amended guidance on revenue from contracts with customers. The new guidance was effective for Blackstone beginning January 1, 2018 and was adopted on a full retrospective basis. The guidance requires that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.

Blackstone has concluded that its Management and Advisory Fees and Incentive Fees are within the scope of the amended revenue recognition guidance. The adoption of the amended guidance did not have a material impact on the recognition of Management and Advisory Fees. For Incentive Fees, the amended guidance changes the presentation and delays the recognition of revenues compared to the prior accounting treatment. These amounts were previously recognized within Realized and Unrealized Performance Fees — Incentive Fees in the Condensed Consolidated Statements of Operations. Under the amended guidance, these amounts will be recognized separately within Incentive Fees. Blackstone recorded a net reduction to Partners’ Capital of $2.4 million and $1.9 million as of December 31, 2016 and December 31, 2017, respectively, as a result of adopting the amended guidance. For the three months ended June 30, 2017, the impact on Total Revenues, Net Income Attributable to The Blackstone Group L.P., Net Income Per Common Unit — Basic, and Net Income Per Common Unit — Diluted was a reduction of $13.6 million, $5.4 million, $0.01 per common unit, and $0.01 per common unit, respectively. For the six months ended June 30, 2017, the impact on Total Revenues, Net Income Attributable to The Blackstone Group L.P., Net Income Per Common Unit — Basic, and Net Income Per Common Unit — Diluted was a reduction of $39.6 million, $15.3 million, $0.02 per common unit, and $0.02 per common unit, respectively. Also, the reimbursement of certain costs incurred in the process of providing investment management services, primarily travel costs, that were previously presented net in the Condensed Consolidated Statements of Operations are presented gross under the amended guidance. For the three and six months ended June 30, 2017, these costs were $4.3 million and $7.6 million, respectively, and are presented in General, Administrative and Other Expenses with the related reimbursement presented in Management and Advisory Fees, Net in the Condensed Consolidated Statements of Operations.

Blackstone has concluded that investments made alongside its limited partners in a partnership which entitle Blackstone to a pro-rata allocation and a disproportionate Performance Allocation represent equity method investments that are not in the scope of the amended revenue recognition guidance. Therefore, effective January 1, 2018, Blackstone amended the recognition and measurement of Performance Allocations. This accounting change will not change the timing or amount of revenue recognized related to Performance Allocation arrangements. These amounts were previously recognized within Realized and Unrealized Performance Fees – Carried Interest and Incentive Fees in the Condensed Consolidated Statements of Operations. Under the equity method of accounting Blackstone recognizes Performance Allocations within Investment Income along with the allocations proportionate to Blackstone’s ownership interests in the Blackstone Funds. Blackstone applied a retrospective application consistent with the requirements for presentation of a change in accounting principle.

In January 2016, the FASB issued amended guidance on the classification and measurement of financial instruments. The new guidance was effective for Blackstone beginning on January 1, 2018 and was adopted on a modified retrospective basis. However, changes to the accounting for equity securities without a readily determinable fair value will be applied prospectively as permitted under the guidance. This amended guidance did not have an impact on Blackstone’s financial statements as of and for the three and six months ended June 30, 2018.

In February 2016, the FASB issued amended guidance on the accounting for leases. The guidance requires the recognition of lease assets and lease liabilities for those leases classified as operating leases under previous GAAP. The guidance retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases under previous GAAP. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not changed significantly from previous GAAP.

For operating leases, a lessee is required to do the following: (a) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the Statement of Financial Condition, (b) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (c) classify all cash payments within operating activities in the statement of cash flows.

The guidance is effective for fiscal periods beginning after December 15, 2018. Early application is permitted. Blackstone is evaluating the impact of the amended guidance on the Condensed Consolidated Statement of Financial Condition. It is not expected to have a material impact on the Condensed Consolidated Statements of Operations or the Condensed Consolidated Statements of Cash Flows.

In November 2016, the FASB issued amended guidance on classification and presentation of restricted cash on the statement of cash flows. The new guidance was effective for Blackstone beginning on January 1, 2018 and was adopted on a retrospective basis. Under the new guidance, reporting entities are required to explain the changes in the combined total of restricted and unrestricted balances in the statement of cash flows. Therefore, amounts generally described as restricted cash or restricted cash equivalents (hereinafter referred to as “restricted cash”) should be combined with unrestricted cash and cash equivalents when reconciling the beginning and end of period balances on the statement of cash flows. Reporting entities are also required to disclose how the statement of cash flows reconciles to the balance sheet in any situation in which the balance sheet includes more than one line item of cash, cash equivalents, and restricted cash. For the six months ended June 30, 2017 the new guidance resulted in a decrease in Net Cash Used in Operating Activities of $463.5 million, a decrease in Net Cash Provided by Investing Activities of $18.0 million, and an increase in Effect of Exchange Rate Changes on Cash and Cash Equivalents, Cash Held by Blackstone Funds, and Restricted Cash of $58.3 million. Additionally, the new guidance increased the December 31, 2016 Beginning of Period and June 30, 2017 End of Period balances by $1.0 billion and $1.5 billion, respectively, in the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2017.

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INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2018

Intangible Assets, Net

Intangible Assets, Net consists of the following:

	June 30, 2018			December 31, 2017
Finite-Lived Intangible Assets / Contractual Rights	$	1,594,876		$	1,594,876
Accumulated Amortization		(1,214,032	)		(1,185,048	)
Intangible Assets, Net	$	380,844		$	409,828

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INVESTMENTS (Tables)

6 Months Ended

Jun. 30, 2018

Investments

Investments consist of the following:

	June 30, 2018		December 31, 2017
Investments of Consolidated Blackstone Funds	$	8,608,565	$	12,954,121
Equity Method Investments
Partnership Investments		3,589,234		3,263,131
Accrued Performance Allocations		6,354,179		5,328,280
Corporate Treasury Investments		3,088,001		2,566,043
Other Investments		368,203		322,474
	$	22,008,182	$	24,434,049

Reconciliation of Realized and Net Change in Unrealized Gains (Losses) to Other Income (Loss) - Net Gains (Losses) from Fund Investment Activities in Consolidated Statements of Operations

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on investments held by the consolidated Blackstone Funds and a reconciliation to Other Income – Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018		2017
Realized Gains	$	52,236		$	51,777	$	34,378	$	107,685
Net Change in Unrealized Gains (Losses)		(22,278	)		19,483		74,963		(9,039	)
Realized and Net Change in Unrealized Gains from Consolidated Blackstone Funds		29,958			71,260		109,341		98,646
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds		43,561			38,794		74,777		77,540
Other Income — Net Gains from Fund Investment Activities	$	73,519		$	110,054	$	184,118	$	176,186

Performance Fees Allocated to Funds

Accrued Performance Allocations to the Partnership in respect of performance of certain Blackstone Funds were as follows:

	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total
Accrued Performance Allocations, December 31, 2017	$	1,916,971		$	2,859,307		$	13,802		$	538,200		$	5,328,280
Performance Allocations as a Result of Changes in Fund Fair Values		1,110,884			606,245			17,384			144,893			1,879,406
Foreign Exchange Loss		—			(37,950	)		—			—			(37,950	)
Fund Distributions		(217,712	)		(484,316	)		(7,081	)		(106,448	)		(815,557	)
Accrued Performance Allocations, June 30, 2018	$	2,810,143		$	2,943,286		$	24,105		$	576,645		$	6,354,179

Realized and Net Change in Unrealized Gains (Losses) on Investments

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on these investments:

	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018			2017
Realized Gains (Losses)	$	4,774		$	2,252	$	7,113		$	(3,429	)
Net Change in Unrealized Gains (Losses)		(6,702	)		12,815		(14,896	)		43,295
	$(1,928)			$15,067		$(7,783)			$39,866

Realized and Net Change in Unrealized Gains, Other Investments

he following table presents Blackstone’s Realized and Net Change in Unrealized Gains in Other Investments:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Realized Gains	$	16,207	$	2,865	$	16,319	$	2,870
Net Change in Unrealized Gains		49,643		4,803		45,411		10,291
	$	65,850	$	7,668	$	61,730	$	13,161

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NET ASSET VALUE AS FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2018

Summary of Fair Value by Strategy Type Alongside Consolidated Funds of Hedge Funds' Remaining Unfunded Commitments and Ability to Redeem Such Investments

A summary of fair value by strategy type alongside the remaining unfunded commitments and ability to redeem such investments as of June 30, 2018 is presented below:

Strategy	Fair Value		Unfunded Commitments		Redemption Frequency (if currently eligible)			Redemption Notice Period
Diversified Instruments	$	209,697	$	131		(a	)		(a	)
Credit Driven		114,592		268		(b	)		(b	)
Equity		38,839		—		(c	)		(c	)
Commodities		1,806		—		(d	)		(d	)
	$	364,934	$	399

(a) Diversified Instruments include investments in funds that invest across multiple strategies. Investments representing 3% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 97% of investments in this category are redeemable as of the reporting date.

(b) The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. Investments representing 41% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 59% of investments in this category are redeemable as of the reporting date.

(c) The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. As of the reporting date, the investee fund manager had elected to side-pocket 8% of Blackstone’s investments in the category.

(d) The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date.

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2018

Summary of Aggregate Notional Amount and Fair Value of Derivative Financial Instruments

The table below summarizes the aggregate notional amount and fair value of the derivative financial instruments. The notional amount represents the absolute value amount of all outstanding derivative contracts.

	June 30, 2018								December 31, 2017
	Assets				Liabilities				Assets				Liabilities
	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value
Net Investment Hedges
Foreign Currency Contracts	$	—	$	—	$	—	$	—	$	—	$	—	$	50,857	$	453
Freestanding Derivatives
Blackstone
Interest Rate Contracts		944,822		22,123		922,672		48,711		225,550		2,042		1,530,751		27,275
Foreign Currency Contracts		198,028		782		98,298		570		279,050		2,097		296,252		2,975
Credit Default Swaps		5,001		125		20,532		2,168		2,073		304		2,073		304
Investments of Consolidated Blackstone Funds
Foreign Currency Contracts		114,194		5,295		11,099		1,087		493,181		24,087		264,693		5,628
Credit Default Swaps		32,306		1,565		50,056		4,839		45,670		3,731		45,582		5,163
Total Return Swaps		25,325		488		—		—		25,645		526		—		—
		1,319,676		30,378		1,102,657		57,375		1,071,169		32,787		2,139,351		41,345
	$	1,319,676	$	30,378	$	1,102,657	$	57,375	$	1,071,169	$	32,787	$	2,190,208	$	41,798

Summary of Impact of Derivative Financial Instruments to Consolidated Statements of Operations

The table below summarizes the impact to the Condensed Consolidated Statements of Operations from derivative financial instruments:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net Investment Hedges — Foreign Currency Contracts
Hedge Ineffectiveness	$	—		$	(13	)	$	(8	)	$	(35	)
Freestanding Derivatives
Realized Gains (Losses)
Interest Rate Contracts	$	449		$	(3,007	)	$	2,070		$	(3,947	)
Foreign Currency Contracts		12,321			(6,663	)		8,238			(3,312	)
Credit Default Swaps		(107	)		268			(508	)		(1,658	)
Total Return Swaps		173			—			174			—
	$	12,836		$	(9,402	)	$	9,974		$	(8,917	)
Net Change in Unrealized Gains (Losses)
Interest Rate Contracts	$	37,261		$	(426	)	$	(39	)	$	(643	)
Foreign Currency Contracts		1,456			14,642			(2,272	)		12,682
Credit Default Swaps		615			1,214			488			3,161
Total Return Swaps		(5	)		—			52			—
	$	39,327		$	15,430		$	(1,771	)	$	15,200

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FAIR VALUE OPTION (Tables)

6 Months Ended

Jun. 30, 2018

Summary of Financial Instruments for Which Fair Value Option Has Been Elected

The following table summarizes the financial instruments for which the fair value option has been elected:

	June 30, 2018		December 31, 2017
Assets
Loans and Receivables	$	346,603	$	239,659
Equity and Preferred Securities		502,095		475,485
Debt Securities		522,033		418,061
Assets of Consolidated CLO Vehicles
Corporate Loans		7,082,085		10,825,759
Corporate Bonds		—		690,125
Other		—		458
	$	8,452,816	$	12,649,547
Liabilities
Liabilities of Consolidated CLO Vehicles
Senior Secured Notes
Loans Payable	$	6,528,326	$	10,594,656
Due to Affiliates		3,269		996
Subordinated Notes
Loans Payable		175,900		703,164
Due to Affiliates		63,279		40,390
	$	6,770,774	$	11,339,206

Realized and Net Change in Unrealized Gains (Losses) on Financial Instruments on Financial Instruments on Which Fair Value Option was Elected

The following tables presents the Realized and Net Change in Unrealized Gains (Losses) on financial instruments on which the fair value option was elected:

	Three Months Ended June 30,
	2018					2017
	Realized Gains		Net Change in Unrealized Gains (Losses)			Realized Gains (Losses)			Net Change in Unrealized Gains (Losses)
Assets
Equity and Preferred Securities	$	—	$	(2,095	)	$	1		$	7,116
Debt Securities		15		(2,878	)		—			—
Assets of Consolidated CLO Vehicles
Corporate Loans		1,074		(25,896	)		(543	)		25,084
Corporate Bonds		—		—			2,580			(927	)
Other		—		—			65			129
	$	1,089	$	(30,869	)	$	2,103		$	31,402
Liabilities
Liabilities of Consolidated CLO Vehicles —
Subordinated Notes	$	—	$	16,846		$	—		$	24,800

	Six Months Ended June 30,
	2018						2017
	Realized Gains (Losses)			Net Change in Unrealized Gains (Losses)			Realized Gains		Net Change in Unrealized Gains (Losses)
Assets
Loans and Receivables	$	—		$	—		$	—	$	7,418
Equity and Preferred Securities		—			(1,867	)		1		20,225
Debt Securities		827			(2,297	)		—		—
Assets of Consolidated CLO Vehicles
Corporate Loans		(4,399	)		(7,046	)		1,329		13,695
Corporate Bonds		(24,056	)		9,693			8,214		(6,801	)
Other		—			6			65		129
	$	(27,628	)	$	(1,511	)	$	9,609	$	34,666
Liabilities
Liabilities of Consolidated CLO Vehicles —
Subordinated Notes	$	—		$	60,460		$	—	$	32,712

Information for Financial Instruments on Which Fair Value Option was Elected

The following table presents information for those financial instruments for which the fair value option was elected:

	June 30, 2018							December 31, 2017
				For Financial Assets Past  Due (a)							For Financial Assets Past Due (a)
	Excess (Deficiency) of Fair Value Over Principal			Fair Value		Excess of Fair Value Over Principal		Excess (Deficiency) of Fair Value Over Principal			Fair Value		(Deficiency) of Fair Value Over Principal
Loans and Receivables	$	933		$	—	$	—	$	1,207		$	—	$	—
Debt Securities		(2,131	)		—		—		(372	)		—		—
Assets of Consolidated CLO Vehicles
Corporate Loans		(10,752	)		—		—		(13,495	)		57,778		(19,633	)
Corporate Bonds		—			—		—		(21,455	)		—		—
	$	(11,950	)	$	—	$	—	$	(34,115	)	$	57,778	$	(19,633	)

(a) Corporate Loans and Corporate Bonds within CLO assets are classified as past due if contractual payments are more than one day past due.

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FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2018

Financial Assets and Liabilities at Fair Value

The following tables summarize the valuation of the Partnership’s financial assets and liabilities by the fair value hierarchy:

	June 30, 2018
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents — Money Market Funds	$	538,418	$	—	$	—	$	—	$	538,418
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		86,463		86,463
Equity Securities		51,212		51,051		159,109		—		261,372
Partnership and LLC Interests		—		1,527		313,992		—		315,519
Debt Instruments		—		771,977		83,801		—		855,778
Freestanding Derivatives
Foreign Currency Contracts		—		5,295		—		—		5,295
Credit Default Swaps		—		1,565		—		—		1,565
Total Return Swaps		—		488		—		—		488
Assets of Consolidated CLO Vehicles —Corporate Loans		—		6,552,263		529,822		—		7,082,085
Total Investments of Consolidated Blackstone Funds		51,212		7,384,166		1,086,724		86,463		8,608,565
Corporate Treasury Investments
Equity Securities		309,131		—		—		—		309,131
Debt Instruments		—		2,491,430		28,221		—		2,519,651
Other		—		—		—		259,219		259,219
Total Corporate Treasury Investments		309,131		2,491,430		28,221		259,219		3,088,001
Other Investments		248,494		13,955		86,502		19,252		368,203
Total Investments		608,837		9,889,551		1,201,447		364,934		12,064,769
Accounts Receivable — Loans and Receivables		—		—		346,603		—		346,603
Other Assets
Freestanding Derivatives
Interest Rate Contracts		935		21,188		—		—		22,123
Foreign Currency Contracts		—		782		—		—		782
Credit Default Swaps		—		125		—		—		125
Total Other Assets		935		22,095		—		—		23,030
	$	1,148,190	$	9,911,646	$	1,548,050	$	364,934	$	12,972,820

	June 30, 2018
	Level I		Level II		Level III		Total
Liabilities
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	6,528,326	$	—	$	6,528,326
Subordinated Notes (b)		—		175,900		—		175,900
Total Loans Payable		—		6,704,226		—		6,704,226
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		3,269		—		3,269
Subordinated Notes (b)		—		63,279		—		63,279
Total Due to Affiliates		—		66,548		—		66,548
Securities Sold, Not Yet Purchased		—		155,780		—		155,780
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a)
Foreign Currency Contracts		—		1,087		—		1,087
Credit Default Swaps		—		4,839		—		4,839
Total Liabilities of Consolidated Blackstone Funds		—		5,926		—		5,926
Freestanding Derivatives
Interest Rate Contracts		551		48,160		—		48,711
Foreign Currency Contracts		—		570		—		570
Credit Default Swaps		—		2,168		—		2,168
Total Freestanding Derivatives		551		50,898		—		51,449
Total Accounts Payable, Accrued Expenses and Other Liabilities		551		56,824		—		57,375
	$	551	$	6,983,378	$	—	$	6,983,929

	December 31, 2017
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents — Money Market Funds	$	853,680	$	—	$	—	$	—	$	853,680
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		130,339		130,339
Equity Securities		67,443		44,026		131,867		—		243,336
Partnership and LLC Interests		—		2,549		331,448		—		333,997
Debt Instruments		—		643,608		58,155		—		701,763
Freestanding Derivatives
Foreign Currency Contracts		—		101		—		—		101
Credit Default Swaps		—		3,731		—		—		3,731
Total Return Swaps		—		526		—		—		526
Assets of Consolidated CLO Vehicles
Corporate Loans		—		10,318,316		507,443		—		10,825,759
Corporate Bonds		—		690,125		—		—		690,125
Freestanding Derivatives — Foreign Currency Contracts		—		23,986		—		—		23,986
Other		—		—		458		—		458
Total Investments of Consolidated Blackstone Funds		67,443		11,726,968		1,029,371		130,339		12,954,121
Corporate Treasury Investments
Equity Securities		282,866		—		—		—		282,866
Debt Instruments		—		1,943,654		24,249		—		1,967,903
Other		—		—		—		315,274		315,274
Total Corporate Treasury Investments		282,866		1,943,654		24,249		315,274		2,566,043
Other Investments		193,072		14,162		95,393		19,847		322,474
Total Investments		543,381		13,684,784		1,149,013		465,460		15,842,638
Accounts Receivable — Loans and Receivables		—		—		239,659		—		239,659
Other Assets
Freestanding Derivatives
Interest Rate Contracts		575		1,467		—		—		2,042
Foreign Currency Contracts		—		2,097		—		—		2,097
Credit Default Swaps		—		304		—		—		304
Total Other Assets		575		3,868		—		—		4,443
	$	1,397,636	$	13,688,652	$	1,388,672	$	465,460	$	16,940,420

	December 31, 2017
	Level I		Level II		Level III		Total
Liabilities
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	10,594,656	$	—	$	10,594,656
Subordinated Notes (b)		—		703,164		—		703,164
Total Loans Payable		—		11,297,820		—		11,297,820
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		996		—		996
Subordinated Notes (b)		—		40,390		—		40,390
Total Due to Affiliates		—		41,386		—		41,386
Securities Sold, Not Yet Purchased		—		154,380		—		154,380
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a)
Foreign Currency Contracts		—		5,628		—		5,628
Credit Default Swaps		—		5,163		—		5,163
Total Liabilities of Consolidated Blackstone Funds		—		10,791		—		10,791
Freestanding Derivatives
Interest Rate Contracts		415		26,860		—		27,275
Foreign Currency Contracts		—		2,975		—		2,975
Credit Default Swaps		—		304		—		304
Total Freestanding Derivatives		415		30,139		—		30,554
Net Investment Hedges — Foreign Currency Contracts		—		453		—		453
Total Accounts Payable, Accrued Expenses and Other Liabilities		415		41,383		—		41,798
	$	415	$	11,534,969	$	—	$	11,535,384

(a) Pursuant to GAAP consolidation guidance, the Partnership is required to consolidate all VIEs in which it has been identified as the primary beneficiary, including certain CLO vehicles and other funds in which a consolidated entity of the Partnership, as the general partner of the fund, has a controlling financial interest. While the Partnership is required to consolidate certain funds, including CLO vehicles, for GAAP purposes, the Partnership has no ability to utilize the assets of these funds and there is no recourse to the Partnership for their liabilities since these are client assets and liabilities.

(b) Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.

Summary of Fair Value Transfers Between Level I and Level II

The following table summarizes the fair value transfers between Level I and Level II for positions that existed as of June 30, 2018 and 2017, respectively:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Transfers from Level I into Level II (a)	$	—	$	762	$	—	$	762
Transfers from Level II into Level I (b)	$	—	$	—	$	447	$	—

(a) Transfers out of Level I represent those financial instruments for which restrictions exist and adjustments were made to an otherwise observable price to reflect fair value at the reporting date.

(b) Transfers into Level I represent those financial instruments for which an unadjusted quoted price in an active market became available for the identical asset.

Summary of Quantitative Inputs and Assumptions for Items Categorized in Level III of Fair Value Hierarchy

The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of June 30, 2018:

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	118,659	Discounted Cash Flows		Discount Rate	7.1% - 25.7%	12.6%
					Revenue CAGR	-11.9% - 37.3%	7.1%
					Book Value Multiple	1.1x - 9.5x	8.3x
					Exit Capitalization Rate	5.0% - 11.4%	8.1%
					Exit Multiple - EBITDA	2.8x - 16.0x	10.2x
					Exit Multiple - NOI	8.8x - 12.8x	11.0x
					Exit Multiple - P/E	10.0x - 17.0x	14.2x
		1,477	Market Comparable Companies		Book Value Multiple	0.7x - 0.9x	0.8x
					Exit Multiple - EBITDA	8.0x	N/A
		28,049	Other		N/A	N/A	N/A
		10,870	Transaction Price		N/A	N/A	N/A
		54	Third Party Pricing		N/A	N/A	N/A
Partnership and LLC Interests		267,616	Discounted Cash Flows		Discount Rate	4.6% - 26.5%	9.9%
					Revenue CAGR	-2.1% - 45.5%	7.6%
					Book Value Multiple	8.5x - 9.3x	9.2x
					Exit Capitalization Rate	1.5% - 25.0%	5.9%
					Exit Multiple - EBITDA	0.1x - 28.6x	10.5x
					Exit Multiple - NOI	12.5x	N/A
		578	Market Comparable Companies		Book Value Multiple	1.0x	N/A
		27,668	Other		N/A	N/A	N/A
		543	Third Party Pricing		N/A	N/A	N/A
		17,587	Transaction Price		N/A	N/A	N/A
Debt Instruments		7,384	Discounted Cash Flows		Discount Rate	6.3% - 16.7%	9.5%
					Revenue CAGR	23.6%	N/A
					Exit Capitalization Rate	3.9%	N/A
		63,737	Third Party Pricing		N/A	N/A	N/A
		12,680	Transaction Price		N/A	N/A	N/A
Assets of Consolidated CLO Vehicles		37	Discounted Cash Flows		Discount Rate	8.0%	N/A
		529,785	Third Party Pricing		N/A	N/A	N/A
Total Investments of Consolidated Blackstone Funds		1,086,724

continued …

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Corporate Treasury Investments	$	11,070	Discounted Cash Flows		Discount Rate	0.7% - 6.0%	4.1%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20.0%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	30.0% - 70.0%	68.0%
					Reinvestment Rate	LIBOR + 350bps -	LIBOR + 391
						LIBOR + 400bps	bps
		17,151	Third Party Pricing		N/A	N/A	N/A
Loans and Receivables		217,709	Discounted Cash Flows		Discount Rate	5.8% - 10.2%	9.0%
		128,894	Transaction Price		N/A	N/A	N/A
Other Investments		61,105	Discounted Cash Flows		Discount Rate	0.7% - 8.9%	1.9%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20.0%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	70.0%	N/A
					Reinvestment Rate	LIBOR + 400 bps	N/A
		25,397	Transaction Price		N/A	N/A	N/A
	$	1,548,050

The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of December 31, 2017:

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	91,753	Discounted Cash Flows		Discount Rate	7.1% - 31.4%	12.6%
					Revenue CAGR	1.0% - 49.4%	7.1%
					Exit Capitalization Rate	5.0% - 11.4%	8.5%
					Exit Multiple - EBITDA	4.0x - 16.0x	9.9x
					Exit Multiple - NOI	8.8x - 12.5x	10.5x
					Exit Multiple - P/E	9.5x - 17.0x	11.0x
		862	Market Comparable Companies		Book Value Multiple	0.8x - 0.9x	0.9x
					Exit Multiple - EBITDA	8.0x	N/A
		17,536	Other		N/A	N/A	N/A
		21,716	Transaction Price		N/A	N/A	N/A
Partnership and LLC Interests		293,744	Discounted Cash Flows		Discount Rate	4.6% - 26.5%	9.8%
					Revenue CAGR	-22.2% - 71.5%	8.4%
					Exit Capitalization Rate	3.1% - 10.0%	5.7%
					Exit Multiple - EBITDA	0.1x - 15.0x	8.6x
					Exit Multiple - NOI	12.5x	N/A
		530	Market Comparable Companies		Book Value Multiple	1.0x	N/A
		22,346	Other		N/A	N/A	N/A
		758	Third Party Pricing		N/A	N/A	N/A
		14,070	Transaction Price		N/A	N/A	N/A
Debt Instruments		6,122	Discounted Cash Flows		Discount Rate	6.6% - 18.4%	9.6%
					Revenue CAGR	7.7%	N/A
					Exit Capitalization Rate	8.3%	N/A
					Exit Multiple - NOI	12.0x	N/A
		50,136	Third Party Pricing		N/A	N/A	N/A
		1,897	Transaction Price		N/A	N/A	N/A
Assets of Consolidated CLO Vehicles		8,277	Market Comparable Companies		EBITDA Multiple	7.0x	N/A
		499,624	Third Party Pricing		N/A	N/A	N/A
Total Investments of Consolidated Blackstone Funds		1,029,371
Corporate Treasury Investments		8,886	Discounted Cash Flows		Discount Rate	5.1% - 6.3%	5.4%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	30.0% - 70.0%	68.1%
					Reinvestment Rate	LIBOR + 400 bps	N/A
		15,363	Third Party Pricing		N/A	N/A	N/A
Loans and Receivables		239,659	Discounted Cash Flows		Discount Rate	7.1% - 10.3%	8.8%
Other Investments		65,821	Discounted Cash Flows		Discount Rate	0.7% - 13.0%	2.2%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20.0%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	70.0%	N/A
					Reinvestment Rate	LIBOR + 400 bps -	LIBOR + 401
						LIBOR + 413 bps	bps
		29,572	Transaction Price		N/A	N/A	N/A
	$	1,388,672

N/A	Not applicable.
CAGR	Compound annual growth rate.
EBITDA	Earnings before interest, taxes, depreciation and amortization.
Exit Multiple	Ranges include the last twelve months EBITDA, forward EBITDA and price/earnings exit multiples.
NOI	Net operating income.
P/E	Price-earnings ratio.
Third Party Pricing	Third Party Pricing is generally determined on the basis of unadjusted prices between market participants provided by reputable dealers or pricing services.
Transaction Price	Includes recent acquisitions or transactions.
(a)	Unobservable inputs were weighted based on the fair value of the investments included in the range.

Summary of Changes in Financial Assets Measured at Fair Value for Which Level III Inputs Were Used

The following tables summarize the changes in financial assets and liabilities measured at fair value for which the Partnership has used Level III inputs to determine fair value and does not include gains or losses that were reported in Level III in prior years or for instruments that were transferred out of Level III prior to the end of the respective reporting period. Total realized and unrealized gains and losses recorded for Level III investments are reported in either Investment Income (Loss) or Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations.

	Level III Financial Assets at Fair Value Three Months Ended June 30,
	2018												2017
	Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total			Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total
Balance, Beginning of Period	$	963,151		$	163,135		$	117,349		$	1,243,635		$	685,966		$	112,056		$	138,433		$	936,455
Transfer In Due to Consolidation and Acquisition		—			—			—			—			35,040			—			—			35,040
Transfer Out Due to Deconsolidation		—			—			—			—			(44,095	)		—			—			(44,095	)
Transfer In to Level III (b)		152,666			—			—			152,666			68,127			—			6,473			74,600
Transfer Out of Level III (b)		(117,217	)		—			(7,649	)		(124,866	)		(105,165	)		—			(11,930	)		(117,095	)
Purchases		203,223			294,258			15,327			512,808			112,405			268,222			9,155			389,782
Sales		(127,718	)		(110,508	)		(23,304	)		(261,530	)		(46,140	)		(75,342	)		(34,014	)		(155,496	)
Settlements		—			(5,634	)		(1	)		(5,635	)		—			(1,392	)		(993	)		(2,385	)
Changes in Gains Included in Earnings and Other Comprehensive Income		12,619			5,352			13,001			30,972			9,606			2,735			8,565			20,906
Balance, End of Period	$	1,086,724		$	346,603		$	114,723		$	1,548,050		$	715,744		$	306,279		$	115,689		$	1,137,712
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	146		$	5,353		$	(49	)	$	5,450		$	(2,163	)	$	2,735		$	123		$	695

	Level III Financial Assets at Fair Value Six Months Ended June 30,
	2018												2017
	Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total			Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total
Balance, Beginning of Period	$	1,029,371		$	239,659		$	119,642		$	1,388,672		$	685,873		$	211,359		$	130,588		$	1,027,820
Transfer In Due to Consolidation and Acquisition		50,043			—			—			50,043			34,651			—			—			34,651
Transfer Out Due to Deconsolidation		(217,182	)		—			—			(217,182	)		(38,629	)		—			—			(38,629	)
Transfer In to Level III (b)		180,401			—			—			180,401			63,125			—			16,396			79,521
Transfer Out of Level III (b)		(141,104	)		—			(15,717	)		(156,821	)		(140,571	)		—			(18,010	)		(158,581	)
Purchases		408,823			370,921			19,812			799,556			219,248			337,705			21,603			578,556
Sales		(260,865	)		(263,703	)		(23,479	)		(548,047	)		(145,890	)		(251,502	)		(44,045	)		(441,437	)
Settlements		—			(9,317	)		(4	)		(9,321	)		—			(3,894	)		(1,093	)		(4,987	)
Changes in Gains Included in Earnings and Other Comprehensive Income		37,237			9,043			14,469			60,749			37,937			12,611			10,250			60,798
Balance, End of Period	$	1,086,724		$	346,603		$	114,723		$	1,548,050		$	715,744		$	306,279		$	115,689		$	1,137,712
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	19,265		$	9,044		$	(289	)	$	28,020		$	1,031		$	12,610		$	462		$	14,103

(a) Represents corporate treasury investments and Other Investments.

(b) Transfers in and out of Level III financial assets and liabilities were due to changes in the observability of inputs used in the valuation of such assets and liabilities.

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VARIABLE INTEREST ENTITIES (Tables)

6 Months Ended

Jun. 30, 2018

Assets and Liabilities Related to Interest in Non-Consolidated VIEs and Maximum Exposure to Loss

The assets and liabilities recognized in the Partnership’s Condensed Consolidated Statements of Financial Condition related to the Partnership’s interest in these non-consolidated VIEs and the Partnership’s maximum exposure to loss relating to non-consolidated VIEs were as follows:

	June 30, 2018		December 31, 2017
Investments	$	969,868	$	805,501
Accounts Receivable		—		15,760
Due from Affiliates		252,603		81,465
Total VIE Assets		1,222,471		902,726
Due to Affiliates		4,110		179
Potential Clawback Obligation		55,832		98,331
Maximum Exposure to Loss	$	1,282,413	$	1,001,236

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REPURCHASE AGREEMENTS (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Repurchase Agreements Obligation by Type of Collateral Pledged

The following tables provide information regarding the Partnership’s Repurchase Agreements obligation by type of collateral pledged:

	June 30, 2018
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30 - 90 Days		Greater than 90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	48,796	$	109,116	$	24,577	$	182,489
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	182,489
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

	December 31, 2017
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30 - 90 Days		Greater than 90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	22,756	$	96,084	$	—	$	118,840
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	118,840
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

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OFFSETTING OF ASSETS AND LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2018

Offsetting of Assets

The following tables present the offsetting of assets and liabilities as of June 30, 2018:

	Gross and Net Amounts of Assets Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments (a)		Cash Collateral Received		Net Amount
Assets
Freestanding Derivatives	$	25,934	$	23,822	$	—	$	2,112

The following tables present the offsetting of assets and liabilities as of December 31, 2017:

	Gross and Net Amounts of Assets Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments		Cash Collateral Received		Net Amount
Assets
Freestanding Derivatives	$	8,801	$	3,279	$	—	$	5,522

Offsetting of Liabilities

The following tables present the offsetting of assets and liabilities as of June 30, 2018:

	Gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments (a)		Cash Collateral Pledged		Net Amount
Liabilities
Freestanding Derivatives	$	57,375	$	43,943	$	6,811	$	6,621
Repurchase Agreements		182,489		182,489		—		—
	$	239,864	$	226,432	$	6,811	$	6,621

The following tables present the offsetting of assets and liabilities as of December 31, 2017:

	Gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition		Gross Amounts Not Offset in the Statement of Financial Condition
			Financial Instruments		Cash Collateral Pledged		Net Amount
Liabilities
Net Investment Hedges	$	453	$	—	$	—	$	453
Freestanding Derivatives		36,234		3,279		32,405		550
Repurchase Agreements		118,840		118,840		—		—
	$	155,527	$	122,119	$	32,405	$	1,003

Components of Other Assets

The following table presents the components of Other Assets:

	June 30, 2018		December 31, 2017
Furniture, Equipment and Leasehold Improvements, Net	$	122,318	$	126,566
Prepaid Expenses		90,687		78,723
Other Assets		16,901		32,965
Freestanding Derivatives		23,030		4,443
	$	252,936	$	242,697

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BORROWINGS (Tables)

6 Months Ended

Jun. 30, 2018

Carrying Value and Fair Value of Blackstone Issued Notes

The following table presents the general characteristics of each of our Notes, as well as their carrying value and fair value. The Notes are included in Loans Payable within the Condensed Consolidated Statements of Financial Condition. All of the Notes were issued at a discount. All of the Notes accrue interest from the Issue Date and all pay interest in arrears on a semi-annual basis or annual basis as indicated by the Interest Payment Dates.

	June 30, 2018				December 31, 2017
Senior Notes	Carrying Value		Fair Value (a)		Carrying Value		Fair Value (a)
5.875%, Due 3/15/2021	$	398,727	$	425,360	$	398,514	$	438,320
4.750%, Due 2/15/2023		394,645		418,840		394,137		434,200
2.000%, Due 5/19/2025		346,136		369,728		355,425		385,433
1.000%, Due 10/5/2026		691,478		677,906		709,871		711,440
3.150%, Due 10/2/2027		296,557		284,700		296,399		295,320
6.250%, Due 8/15/2042		238,119		294,700		238,019		328,200
5.000%, Due 6/15/2044		488,640		526,000		488,536		574,100
4.450%, Due 7/15/2045		343,981		337,260		343,925		372,575
4.000%, Due 10/2/2047		290,075		266,400		289,989		296,940
	$	3,488,358	$	3,600,894	$	3,514,815	$	3,836,528

(a) Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.

Partnership's Borrowings Through Consolidated CLO Vehicles

Borrowings through the consolidated CLO vehicles consisted of the following:

	June 30, 2018							December 31, 2017
	Borrowing Outstanding		Weighted- Average Interest Rate			Weighted- Average Remaining Maturity in Years		Borrowing Outstanding		Weighted- Average Interest Rate			Weighted- Average Remaining Maturity in Years
Senior Secured Notes	$	6,533,425		3.83	%		3.2	$	10,689,240		2.35	%		4.1
Subordinated Notes		331,735		(a	)		N/A		894,367		(a)			N/A
	$	6,865,160						$	11,583,607

(a) The Subordinated Notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the CLO vehicles.

Components of Senior Secured Notes and Subordinated Notes

Senior Secured Notes and Subordinated Notes comprise the following amounts:

	June 30, 2018						December 31, 2017
	Fair Value		Amounts Due to Non- Consolidated Affiliates				Fair Value		Amounts Due to Non- Consolidated Affiliates
			Borrowing Outstanding		Fair Value				Borrowing Outstanding		Fair Value
Senior Secured Notes	$	6,531,595	$	3,250	$	3,269	$	10,595,652	$	1,000	$	996
Subordinated Notes		239,179		111,659		63,279		743,554		53,400		40,390
	$	6,770,774	$	114,909	$	66,548	$	11,339,206	$	54,400	$	41,386

Scheduled Principal Payments for Borrowings

Scheduled principal payments for borrowings as of June 30, 2018 were as follows:

	Operating Borrowings		Blackstone Fund Facilities/CLO Vehicles		Total Borrowings
2018	$	—	$	2,819	$	2,819
2019		—		—		—
2020		—		—		—
2021		400,000		—		400,000
2022		—		—		—
Thereafter		3,151,560		6,865,160		10,016,720
	$	3,551,560	$	6,867,979	$	10,419,539

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NET INCOME PER COMMON UNIT (Tables)

6 Months Ended

Jun. 30, 2018

Basic and Diluted Net Income Per Common Unit

Basic and diluted net income per common unit for the three and six months ended June 30, 2018 and June 30, 2017 was calculated as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Net Income for Per Common Unit Calculation
Net Income Attributable to The Blackstone Group L.P., Basic	$	742,042	$	337,407	$	1,109,914	$	789,316
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units		—		260,488		858,727		624,716
Net Income Attributable to The Blackstone Group L.P., Diluted	$	742,042	$	597,895	$	1,968,641	$	1,414,032
Units Outstanding
Weighted-Average Common Units Outstanding, Basic		681,794,492		664,681,299		678,156,936		662,820,839
Weighted-Average Unvested Deferred Restricted Common Units		216,118		998,974		207,526		904,079
Weighted-Average Blackstone Holdings Partnership Units		—		534,326,066		532,363,486		536,031,472
Weighted-Average Common Units Outstanding, Diluted		682,010,610		1,200,006,339		1,210,727,948		1,199,756,390
Net Income Per Common Unit, Basic	$	1.09	$	0.51	$	1.64	$	1.19
Net Income Per Common Unit, Diluted	$	1.09	$	0.50	$	1.63	$	1.18
Distributions Declared Per Common Unit (a)	$	0.35	$	0.87	$	1.20	$	1.34

(a) Distributions declared reflects the calendar date of the declaration for each distribution.

Summary of Anti-Dilutive Securities

The following table summarizes the anti-dilutive securities for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Weighted-Average Blackstone Holdings Partnership Units		528,872,187		—		—		—

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EQUITY-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2018

Summary of Status of Partnership's Unvested Equity-Based Awards

A summary of the status of the Partnership’s unvested equity-based awards as of June 30, 2018 and of changes during the period January 1, 2018 through June 30, 2018 is presented below:

	Blackstone Holdings					The Blackstone Group L.P.
						Equity Settled Awards					Cash Settled Awards
Unvested Units	Partnership Units			Weighted- Average Grant Date Fair Value		Deferred Restricted Common Units and Options			Weighted- Average Grant Date Fair Value		Phantom Units			Weighted- Average Grant Date Fair Value
Balance, December 31, 2017		30,023,189		$	35.26		9,019,974		$	30.03		44,196		$	31.85
Granted		2,224,551			32.01		3,343,695			32.48		117			33.43
Vested		(2,161,371	)		36.27		(3,309,089	)		30.48		(151	)		32.99
Forfeited		(56,362	)		32.89		(213,508	)		30.34		—			—
Balance, June 30, 2018		30,030,007		$	34.95		8,841,072		$	30.76		44,162		$	32.24

Unvested Units, After Expected Forfeitures

The following unvested units, after expected forfeitures, as of June 30, 2018, are expected to vest:

	Units		Weighted-Average Service Period in Years
Blackstone Holdings Partnership Units		26,551,896		3.5
Deferred Restricted Blackstone Common Units		7,761,280		2.1
Total Equity-Based Awards		34,313,176		3.2
Phantom Units		37,120		2.4

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RELATED PARTY TRANSACTIONS (Tables)

6 Months Ended

Jun. 30, 2018

Due from Affiliates and Due to Affiliates

Due from Affiliates and Due to Affiliates consisted of the following:

	June 30, 2018		December 31, 2017
Due from Affiliates
Advances Made on Behalf of Certain Non-Controlling Interest Holders and Blackstone Employees Principally for Investments in Blackstone Funds	$	413,095	$	410,877
Amounts Due from Portfolio Companies and Funds		514,064		587,955
Management Fees and Performance Allocations Due from Non-Consolidated Funds		547,235		594,484
Payments Made on Behalf of Non-Consolidated Entities		526,087		355,766
Investments Redeemed in Non-Consolidated Funds		14,355		77,943
Accrual for Potential Clawback of Previously Distributed Performance Allocations		1,113		1,112
	$	2,015,949	$	2,028,137

	June 30, 2018		December 31, 2017
Due to Affiliates
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements	$	779,758	$	715,734
Distributions Received on Behalf of Certain Non-Controlling Interest Holders and Blackstone Employees		63,349		87,829
Distributions Received on Behalf of Blackstone Entities		4,373		38,789
Payments Made by Non-Consolidated Entities		51,050		51,249
Due to Note Holders of Consolidated CLO Vehicles		66,548		41,386
Accrual for Potential Repayment of Previously Received Performance Allocations		2,172		2,171
	$	967,250	$	937,158

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COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Jun. 30, 2018

Clawback Obligations by Segment

The following table presents the clawback obligations by segment:

	June 30, 2018						December 31, 2017
Segment	Blackstone Holdings		Current and Former  Personnel		Total		Blackstone Holdings		Current and Former  Personnel		Total
Credit	$	1,059	$	1,113	$	2,172	$	1,059	$	1,112	$	2,171

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SEGMENT REPORTING (Tables)

6 Months Ended

Jun. 30, 2018

Financial Data of Segments

The following tables presents the financial data for Blackstone’s four segments for the three months ended June 30, 2018 and 2017:

	Three Months Ended June 30, 2018
	Private Equity			Real Estate			Hedge  Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	195,521		$	249,680		$	129,553		$	118,161		$	692,915
Transaction, Advisory and Other Fees, Net		12,780			23,859			812			3,461			40,912
Management Fee Offsets		(4,351	)		(3,785	)		—			(2,697	)		(10,833	)
Total Management and Advisory Fees, Net		203,950			269,754			130,365			118,925			722,994
Performance Revenues
Realized Incentive Fees		—			11,394			6,887			1,223			19,504
Realized Performance Allocations		138,171			351,630			383			13,371			503,555
Unrealized Performance Allocations		498,274			(160,578	)		9,930			92,798			440,424
Total Performance Revenues		636,445			202,446			17,200			107,392			963,483
Principal Investment Income (Loss)
Realized		32,600			50,199			7,766			4,082			94,647
Unrealized		84,247			(28,044	)		(4,841	)		764			52,126
Total Principal Investment Income		116,847			22,155			2,925			4,846			146,773
Interest and Dividend Revenue		11,549			14,494			5,152			10,532			41,727
Other		26,667			30,457			17,619			19,673			94,416
Total Revenues		995,458			539,306			173,261			261,368			1,969,393
Expenses
Compensation		103,798			109,599			48,086			55,907			317,390
Performance Compensation
Realized Incentive Fees		—			5,820			4,155			(232	)		9,743
Realized Performance Allocations		68,513			109,233			937			7,715			186,398
Unrealized Performance Allocations		193,747			(51,370	)		2,772			44,842			189,991
Total Compensation and Benefits		366,058			173,282			55,950			108,232			703,522
Interest Expense		12,773			11,389			5,900			8,823			38,885
Other Operating Expenses		36,047			36,026			18,494			31,899			122,466
Total Expenses		414,878			220,697			80,344			148,954			864,873
Economic Income	$	580,580		$	318,609		$	92,917		$	112,414		$	1,104,520

	Three Months Ended June 30, 2017
	Private Equity			Real Estate			Hedge  Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	177,684		$	227,865		$	128,698		$	137,121		$	671,368
Transaction, Advisory and Other Fees, Net		17,289			16,087			1,696			3,820			38,892
Management Fee Offsets		(3,753	)		(5,018	)		—			(4,653	)		(13,424	)
Total Management and Advisory Fees, Net		191,220			238,934			130,394			136,288			696,836
Performance Revenues
Realized Incentive Fees		—			4,878			6,548			28,877			40,303
Realized Performance Allocations		198,168			389,441			447			15,040			603,096
Unrealized Performance Allocations		9			89,688			14,849			(8,839	)		95,707
Total Performance Revenues		198,177			484,007			21,844			35,078			739,106
Principal Investment Income (Loss)
Realized		41,168			57,599			225			1,895			100,887
Unrealized		(25,892	)		(20,519	)		11,578			1,666			(33,167	)
Total Principal Investment Income		15,276			37,080			11,803			3,561			67,720
Interest and Dividend Revenue		7,922			14,493			4,674			6,614			33,703
Other		(16,124	)		(22,965	)		(10,720	)		(12,660	)		(62,469	)
Total Revenues		396,471			751,549			157,995			168,881			1,474,896
Expenses
Compensation		90,676			110,266			47,361			56,954			305,257
Performance Compensation
Realized Incentive Fees		—			2,711			4,097			14,224			21,032
Realized Performance Allocations		63,060			124,512			265			7,901			195,738
Unrealized Performance Allocations		22,219			64,254			5,968			(5,531	)		86,910
Total Compensation and Benefits		175,955			301,743			57,691			73,548			608,937
Interest Expense		10,728			14,787			6,688			8,091			40,294
Other Operating Expenses		28,592			33,379			16,318			27,549			105,838
Total Expenses		215,275			349,909			80,697			109,188			755,069
Economic Income	$	181,196		$	401,640		$	77,298		$	59,693		$	719,827

The following tables present the financial data for Blackstone’s four segments as of and for the six months ended June 30, 2018 and 2017:

	June 30, 2018 and the Six Months Then Ended
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	378,482		$	476,206		$	258,781		$	286,602		$	1,400,071
Transaction, Advisory and Other Fees, Net		23,874			46,947			1,157			6,000			77,978
Management Fee Offsets		(7,544	)		(5,453	)		—			(6,014	)		(19,011	)
Total Management and Advisory Fees, Net		394,812			517,700			259,938			286,588			1,459,038
Performance Revenues
Realized Incentive Fees		—			15,769			15,058			1,243			32,070
Realized Performance Allocations		215,294			502,939			2,389			52,575			773,197
Unrealized Performance Allocations		895,590			65,864			14,991			92,318			1,068,763
Total Performance Revenues		1,110,884			584,572			32,438			146,136			1,874,030
Principal Investment Income (Loss)
Realized		38,938			64,889			8,406			11,107			123,340
Unrealized		101,615			(25,357	)		(4,401	)		(5,753	)		66,104
Total Principal Investment Income		140,553			39,532			4,005			5,354			189,444
Interest and Dividend Revenue		20,092			29,622			9,964			18,434			78,112
Other		10,259			8,960			7,331			6,972			33,522
Total Revenues		1,676,600			1,180,386			313,676			463,484			3,634,146
Expenses
Compensation		203,527			222,423			98,386			129,381			653,717
Performance Compensation
Realized Incentive Fees		—			8,030			8,189			186			16,405
Realized Performance Allocations		101,558			163,416			3,352			30,134			298,460
Unrealized Performance Allocations		372,549			27,800			4,958			39,119			444,426
Total Compensation and Benefits		677,634			421,669			114,885			198,820			1,413,008
Interest Expense		22,906			25,538			12,171			16,508			77,123
Other Operating Expenses		67,198			65,443			37,279			59,638			229,558
Total Expenses		767,738			512,650			164,335			274,966			1,719,689
Economic Income	$	908,862		$	667,736		$	149,341		$	188,518		$	1,914,457
Segment Assets	$	7,574,520		$	7,536,885		$	2,275,685		$	4,099,397		$	21,486,487

	Six Months Ended June 30, 2017
	Private Equity			Real Estate			Hedge  Fund Solutions			Credit			Total Segments
Revenues
Management and Advisory Fees, Net
Base Management Fees	$	354,390		$	425,744		$	257,166		$	277,026		$	1,314,326
Transaction, Advisory and Other Fees, Net		33,465			37,366			1,955			6,328			79,114
Management Fee Offsets		(15,943	)		(8,568	)		—			(22,512	)		(47,023	)
Total Management and Advisory Fees, Net		371,912			454,542			259,121			260,842			1,346,417
Performance Revenues
Realized Incentive Fees		—			7,760			20,635			58,419			86,814
Realized Performance Allocations		780,849			909,314			1,044			23,837			1,715,044
Unrealized Performance Allocations		(184,469	)		81,642			33,664			40,792			(28,371	)
Total Performance Revenues		596,380			998,716			55,343			123,048			1,773,487
Principal Investment Income (Loss)
Realized		122,462			177,178			(407	)		4,548			303,781
Unrealized		(66,414	)		(104,372	)		29,871			8,813			(132,102	)
Total Principal Investment Income		56,048			72,806			29,464			13,361			171,679
Interest and Dividend Revenue		14,583			26,587			8,671			12,358			62,199
Other		(17,924	)		(26,115	)		(12,330	)		(14,387	)		(70,756	)
Total Revenues		1,020,999			1,526,536			340,269			395,222			3,283,026
Expenses
Compensation		174,279			212,968			94,965			112,072			594,284
Performance Compensation
Realized Incentive Fees		—			4,044			11,111			28,342			43,497
Realized Performance Allocations		244,693			304,468			568			12,487			562,216
Unrealized Performance Allocations		(17,137	)		82,046			12,390			17,144			94,443
Total Compensation and Benefits		401,835			603,526			119,034			170,045			1,294,440
Interest Expense		21,155			29,422			13,231			15,936			79,744
Other Operating Expenses		56,353			64,243			32,697			49,007			202,300
Total Expenses		479,343			697,191			164,962			234,988			1,576,484
Economic Income	$	541,656		$	829,345		$	175,307		$	160,234		$	1,706,542

Reconciliation of Total Segments to Income (Loss) Before Provision for Taxes

The following table reconciles the Total Segments to Blackstone’s Income Before Provision for Taxes for the three months ended June 30, 2018 and 2017:

	Three Months Ended June 30, 2018
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)
Total Segments	$	1,969,393		$	864,873		$	—	$	1,104,520
Adjustments
Impact of Consolidation (b)		82,752			26,288			73,519		129,983
Amortization of Intangibles (c)		(387	)		14,486			—		(14,873	)
Intersegment Eliminations		(1,293	)		(1,293	)		—		—
Transaction-Related Charges (d)		582,105			112,027			—		470,078
Total Adjustments		663,177			151,508			73,519		585,188
Blackstone Consolidated	$	2,632,570		$	1,016,381		$	73,519	$	1,689,708
	Three Months Ended June 30, 2017
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)
Total Segments	$	1,474,896		$	755,069		$	—	$	719,827
Adjustments
Impact of Consolidation (b)		57,503			53,622			110,054		113,935
Amortization of Intangibles (c)		(387	)		10,957			—		(11,344	)
Intersegment Eliminations		(1,628	)		(1,628	)		—		—
Transaction-Related Charges (d)		5,342			63,173			—		(57,831	)
Total Adjustments		60,830			126,124			110,054		44,760
Blackstone Consolidated	$	1,535,726		$	881,193		$	110,054	$	764,587

(a) Represents Total Segments Economic Income reconciled to Blackstone Consolidated Income Before Provision for Taxes.

(b) The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(c) Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstone’s investment in Patria, which is accounted for under the equity method.

(d) Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. During the three months ended June 30, 2018, Transaction-Related Charges include $580.9 million of Other Revenues received upon the conclusion of Blackstone’s investment sub-advisory relationship with FS Investments’ funds.

Reconciliation of Total Assets

The following table reconciles the Total Segments to Blackstone’s Income Before Provision for Taxes and Total Assets as of and for the six months ended June 30, 2018 and 2017:

	June 30, 2018 and the Six Months Then Ended
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)			Total Assets
Total Segments	$	3,634,146		$	1,719,689		$	—	$	1,914,457		$	21,486,487
Adjustments
Impact of Consolidation (b)		186,276			86,187			184,118		284,207			8,588,810
Amortization of Intangibles (c)		(774	)		28,972			—		(29,746	)		—
Intersegment Eliminations		(2,634	)		(2,634	)		—		—			—
Transaction-Related Charges (d)		584,687			167,098			—		417,589			—
Total Adjustments		767,555			279,623			184,118		672,050			8,588,810
Blackstone Consolidated	$	4,401,701		$	1,999,312		$	184,118	$	2,586,507		$	30,075,297

	Six Months Ended June 30, 2017
	Revenues			Expenses			Other Income		Economic Income / Income Before Provision for Taxes (a)
Total Segments	$	3,283,026		$	1,576,484		$	—	$	1,706,542
Adjustments
Impact of Consolidation (b)		159,142			80,708			176,186		254,620
Amortization of Intangibles (c)		(774	)		21,914			—		(22,688	)
Intersegment Eliminations		(3,067	)		(3,067	)		—		—
Transaction-Related Charges (d)		12,117			126,927			—		(114,810	)
Total Adjustments		167,418			226,482			176,186		117,122
Blackstone Consolidated	$	3,450,444		$	1,802,966		$	176,186	$	1,823,664

(a) Represents Total Segments Economic Income reconciled to Blackstone Consolidated Income Before Provision for Taxes.

(b) The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(c) Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstone’s investment in Patria, which is accounted for under the equity method.

(d) Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. During the six months ended June 30, 2018, Transaction-Related Charges include $580.9 million of Other Revenues received upon the conclusion of Blackstone’s investment sub-advisory relationship with FS Investments’ funds.

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Organization - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018 Segment Person
Organization [Line Items]
Number of business segments | Segment	4
Number of Blackstone founders managing the Partnership | Person	1
Partnership Unit to Blackstone Common Unit ratio	100.00%

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Summary Of Significant Accounting Policies [Line Items]
Partners capital	$ 7,047,349		$ 7,047,349		$ 6,634,493
Total revenues	2,632,570	$ 1,535,726	4,401,701	$ 3,450,444
Net income attributable to The Blackstone Group L.P.	$ 742,042	$ 337,407	$ 1,109,914	$ 789,316
Common Units, Basic	$ 1.09	$ 0.51	$ 1.64	$ 1.19
Common Units, Diluted	$ 1.09	$ 0.50	$ 1.63	$ 1.18
Net Cash provided (used) by/in Operating Activities			$ (2,660,677)	$ (422,120)
Net Cash provided (used) by/in Investing Activities			(8,898)	(13,663)
Effect of Exchange Rate Changes on Cash and Cash Equivalents, Cash Held by Blackstone Funds, and Restricted Cash			11,671	72,188
Cash and Cash Equivalents, Cash Held by Blackstone Funds and Other, and Restricted Cash	$ 1,998,926	$ 3,273,055	$ 1,998,926	3,273,055	3,936,489	$ 2,860,955
Accounting Standards Update 2014-09 [Member]
Summary Of Significant Accounting Policies [Line Items]
Partners capital					$ 1,900	2,400
Total revenues		(13,600)		(39,600)
Net income attributable to The Blackstone Group L.P.		$ (5,400)		$ (15,300)
Common Units, Basic		$ 0.01		$ 0.02
Common Units, Diluted		$ 0.01		$ 0.02
Accounting Standards Update 2014-09 [Member] | General and Administrative Expense [Member] | Management Service
Summary Of Significant Accounting Policies [Line Items]
Cost of investment management services		$ 4,300		$ 7,600
Accounting Standards Update 2016-18 [Member]
Summary Of Significant Accounting Policies [Line Items]
Net Cash provided (used) by/in Operating Activities				(463,500)
Net Cash provided (used) by/in Investing Activities				(18,000)
Effect of Exchange Rate Changes on Cash and Cash Equivalents, Cash Held by Blackstone Funds, and Restricted Cash				58,300
Cash and Cash Equivalents, Cash Held by Blackstone Funds and Other, and Restricted Cash		$ 1,500,000		$ 1,500,000		$ 1,000,000

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Intangible Assets, Net (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets / Contractual Rights	$ 1,594,876	$ 1,594,876
Accumulated Amortization	(1,214,032)	(1,185,048)
Intangible Assets, Net	$ 380,844	$ 409,828

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Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Intangible Assets [Line Items]
Amortization Expense	$ 14,500	$ 11,000	$ 28,984	$ 21,927
Expected amortization of intangibles, 2018	57,900		57,900
Expected amortization of intangibles, 2019	57,900		57,900
Expected amortization of intangibles, 2020	57,900		57,900
Expected amortization of intangibles, 2021	57,900		57,900
Expected amortization of intangibles, 2022	$ 50,200		$ 50,200
Intangible assets expected to amortize over a weighted-average period			8 years 9 months 18 days

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Investments (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Schedule of Investments [Line Items]
Investments	$ 22,008,182	$ 24,434,049
Partnership Investments
Schedule of Investments [Line Items]
Investments	3,589,234	3,263,131
Accrued Performance Allocations
Schedule of Investments [Line Items]
Investments	6,354,179	5,328,280
Other Investments
Schedule of Investments [Line Items]
Investments	368,203	322,474
Consolidated Blackstone Funds
Schedule of Investments [Line Items]
Investments	8,608,565	12,954,121
Corporate Treasury Investments
Schedule of Investments [Line Items]
Investments	$ 3,088,001	$ 2,566,043

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Investments - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Investment [Line Items]
Investments	$ 22,008,182		$ 22,008,182		$ 24,434,049
Recognized net gains related to equity method investments	165,600	$ 124,100	328,100	$ 292,600
Other Investments
Investment [Line Items]
Investments	368,203		368,203		322,474
Equity investments, carrying value	24,500		24,500
Unrealized gain on investment	$ 50,000		$ 50,000
Patria Investments Limited and Patria Investimentos Ltda.
Investment [Line Items]
Equity method investment, percentage	40.00%		40.00%
Consolidated Blackstone Funds
Investment [Line Items]
Investments	$ 8,608,565		$ 8,608,565		12,954,121
Consolidated Blackstone Funds | Blackstone
Investment [Line Items]
Investments	$ 373,500		$ 373,500		$ 488,400

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Reconciliation of Realized and Net Change in Unrealized Gains (Losses) to Other Income (Loss) - Net Gains (Losses) from Fund Investment Activities in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Gain (Loss) on Securities [Line Items]
Realized and net change in unrealized gains (losses) on other investments	$ 1,176,392	$ 830,527	$ 2,228,040	$ 2,028,967
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds	40,073	33,703	75,458	62,198
Other Income - Net Gains from Fund Investment Activities	73,519	110,054	184,118	176,186
Consolidated Blackstone Funds
Gain (Loss) on Securities [Line Items]
Realized Gains	52,236	51,777	34,378	107,685
Net Change in Unrealized Gains (Losses)	(22,278)	19,483	74,963	(9,039)
Realized and net change in unrealized gains (losses) on other investments	29,958	71,260	109,341	98,646
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds	43,561	38,794	74,777	77,540
Other Income - Net Gains from Fund Investment Activities	$ 73,519	$ 110,054	$ 184,118	$ 176,186

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Performance Fees Allocated to Funds (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	$ 24,434,049
Ending Balance	22,008,182
Performance Fees
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	5,328,280
Performance Allocations as a Result of Changes in Fund Fair Values	1,879,406
Foreign Exchange Loss	(37,950)
Fund Distributions	(815,557)
Ending Balance	6,354,179
Private Equity Segment | Performance Fees
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	1,916,971
Performance Allocations as a Result of Changes in Fund Fair Values	1,110,884
Fund Distributions	(217,712)
Ending Balance	2,810,143
Real Estate Segment | Performance Fees
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	2,859,307
Performance Allocations as a Result of Changes in Fund Fair Values	606,245
Foreign Exchange Loss	(37,950)
Fund Distributions	(484,316)
Ending Balance	2,943,286
Hedge Fund Solutions Segment | Performance Fees
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	13,802
Performance Allocations as a Result of Changes in Fund Fair Values	17,384
Fund Distributions	(7,081)
Ending Balance	24,105
Credit Segment | Performance Fees
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	538,200
Performance Allocations as a Result of Changes in Fund Fair Values	144,893
Fund Distributions	(106,448)
Ending Balance	$ 576,645

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Realized and Net Change in Unrealized Gains (Losses) on Investments Held by Blackstone's Treasury Cash Management Strategies (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Gain (Loss) on Securities [Line Items]
Total Investment Income	$ 1,176,392	$ 830,527	$ 2,228,040	$ 2,028,967
Corporate Treasury Investments
Gain (Loss) on Securities [Line Items]
Realized Gains (Losses)	4,774	2,252	7,113	(3,429)
Net Change in Unrealized Gains (Losses)	(6,702)	12,815	(14,896)	43,295
Total Investment Income	$ (1,928)	$ 15,067	$ (7,783)	$ 39,866

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Realized and Net Change in Unrealized Gains, Other Investments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Gain (Loss) on Securities [Line Items]
Total Investment Income	$ 1,176,392	$ 830,527	$ 2,228,040	$ 2,028,967
Other Investments
Gain (Loss) on Securities [Line Items]
Realized Gains	16,207	2,865	16,319	2,870
Net Change in Unrealized Gains	49,643	4,803	45,411	10,291
Total Investment Income	$ 65,850	$ 7,668	$ 61,730	$ 13,161

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Summary of Fair Value by Strategy Type Alongside Consolidated Funds of Hedge Funds' Remaining Unfunded Commitments and Ability to Redeem Such Investments (Detail) $ in Thousands	Jun. 30, 2018 USD ($)
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 364,934
Unfunded Commitments	399
Diversified Instruments
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	209,697	[1]
Unfunded Commitments	131	[1]
Credit Driven
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	114,592	[2]
Unfunded Commitments	268	[2]
Equity
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	38,839	[3]
Commodities
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 1,806	[4]

[1] Diversified Instruments include investments in funds that invest across multiple strategies. Investments representing 3% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 97% of investments in this category are redeemable as of the reporting date.

[2] The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. Investments representing 41% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 59% of investments in this category are redeemable as of the reporting date.

[3] The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. As of the reporting date, the investee fund manager had elected to side-pocket 8% of Blackstone's investments in the category.

[4] The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date.

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Summary of Fair Value by Strategy Type Alongside Consolidated Funds of Hedge Funds' Remaining Unfunded Commitments and Ability to Redeem Such Investments (Parenthetical) (Detail)	6 Months Ended
	Jun. 30, 2018
Diversified Instruments
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Percentage of investments unable to be redeemed at, or within 3 months of reporting date	3.00%
Percentage of investments side pocketed as of reporting date	97.00%
Credit Driven
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Percentage of investments unable to be redeemed at, or within 3 months of reporting date	41.00%
Percentage of investments redeemable as of reporting date	59.00%
Equity
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Percentage of investments unable to be redeemed at, or within 3 months of reporting date	100.00%
Investee funds categorized as non redeemable, percentage	8.00%
Commodities
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Percentage of investments unable to be redeemed at, or within 3 months of reporting date	100.00%

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Derivative Financial Instruments - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Derivative [Line Items]
Other Comprehensive Income (Loss), Net of Tax - Currency Translation Adjustment	$ (30,674,000)	$ 35,089,000	$ (26,248,000)	$ 46,593,000
Net Investment Hedges | Foreign Currency Contracts
Derivative [Line Items]
Other Comprehensive Income (Loss), Net of Tax - Currency Translation Adjustment	$ 0		$ (1,400,000)

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Summary of Aggregate Notional Amount and Fair Value of Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	$ 1,319,676	$ 1,071,169
Derivative Liabilities, Notional	1,102,657	2,190,208
Derivative Assets, Fair Value	30,378	32,787
Derivative Liabilities, Fair Value	57,375	41,798
Net Investment Hedges | Foreign Currency Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities, Notional		50,857
Derivative Liabilities, Fair Value		453
Freestanding Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	1,319,676	1,071,169
Derivative Liabilities, Notional	1,102,657	2,139,351
Derivative Assets, Fair Value	30,378	32,787
Derivative Liabilities, Fair Value	57,375	41,345
Freestanding Derivatives | Blackstone | Credit Default Swap
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	5,001	2,073
Derivative Liabilities, Notional	20,532	2,073
Derivative Assets, Fair Value	125	304
Derivative Liabilities, Fair Value	2,168	304
Freestanding Derivatives | Consolidated Blackstone Funds | Credit Default Swap
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	32,306	45,670
Derivative Liabilities, Notional	50,056	45,582
Derivative Assets, Fair Value	1,565	3,731
Derivative Liabilities, Fair Value	4,839	5,163
Freestanding Derivatives | Consolidated Blackstone Funds | Total Return Swaps
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	25,325	25,645
Derivative Assets, Fair Value	488	526
Freestanding Derivatives | Foreign Currency Contracts | Blackstone
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	198,028	279,050
Derivative Liabilities, Notional	98,298	296,252
Derivative Assets, Fair Value	782	2,097
Derivative Liabilities, Fair Value	570	2,975
Freestanding Derivatives | Foreign Currency Contracts | Consolidated Blackstone Funds
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	114,194	493,181
Derivative Liabilities, Notional	11,099	264,693
Derivative Assets, Fair Value	5,295	24,087
Derivative Liabilities, Fair Value	1,087	5,628
Freestanding Derivatives | Interest Rate Contracts | Blackstone
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	944,822	225,550
Derivative Liabilities, Notional	922,672	1,530,751
Derivative Assets, Fair Value	22,123	2,042
Derivative Liabilities, Fair Value	$ 48,711	$ 27,275

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Summary of Impact of Derivative Financial Instruments to Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net Investment Hedges | Foreign Currency Contracts
Derivative [Line Items]
Realized Gains (Losses)		$ (13)	$ (8)	$ (35)
Freestanding Derivatives
Derivative [Line Items]
Realized Gains (Losses)	$ 12,836	(9,402)	9,974	(8,917)
Net Change in Unrealized Gain (Loss)	39,327	15,430	(1,771)	15,200
Freestanding Derivatives | Total Return Swaps
Derivative [Line Items]
Realized Gains (Losses)	173		174
Net Change in Unrealized Gain (Loss)	(5)		52
Freestanding Derivatives | Credit Default Swap
Derivative [Line Items]
Realized Gains (Losses)	(107)	268	(508)	(1,658)
Net Change in Unrealized Gain (Loss)	615	1,214	488	3,161
Freestanding Derivatives | Foreign Currency Contracts
Derivative [Line Items]
Realized Gains (Losses)	12,321	(6,663)	8,238	(3,312)
Net Change in Unrealized Gain (Loss)	1,456	14,642	(2,272)	12,682
Freestanding Derivatives | Interest Rate Contracts
Derivative [Line Items]
Realized Gains (Losses)	449	(3,007)	2,070	(3,947)
Net Change in Unrealized Gain (Loss)	$ 37,261	$ (426)	$ (39)	$ (643)

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Summary of Financial Instruments for Which Fair Value Option Has Been Elected (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Loans and Receivables	$ 346,603	$ 239,659
Assets	8,452,816	12,649,547
Liabilities	6,770,774	11,339,206
Debt Securities
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Investments	522,033	418,061
Other
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Investments		458
Equity and Preferred Securities
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Investments	502,095	475,485
Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Investments	7,082,085	10,825,759
Corporate Bonds | Assets Of Consolidated CLO Vehicles
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Investments		690,125
Liabilities of Consolidated CLO Vehicles | Senior Secured Notes
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Fair value of Loan payable	6,528,326	10,594,656
Fair value of due to Affiliates	3,269	996
Liabilities of Consolidated CLO Vehicles | Subordinated Notes
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Fair value of Loan payable	175,900	703,164
Fair value of due to Affiliates	$ 63,279	$ 40,390

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Realized and Net Change in Unrealized Gains (Losses) on Financial Instruments on Financial Instruments on Which Fair Value Option was Elected (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Realized Gains (Losses) | Debt Securities
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments	$ 15		$ 827
Realized Gains (Losses) | Assets
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments	1,089	$ 2,103	(27,628)	$ 9,609
Realized Gains (Losses) | Equity and Preferred Securities
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments		1		1
Realized Gains (Losses) | Corporate Loans
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments	1,074	(543)	(4,399)	1,329
Realized Gains (Losses) | Corporate Bonds
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments		2,580	(24,056)	8,214
Realized Gains (Losses) | Other
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments		65		65
Net Change In Unrealized Gains (Losses) | Debt Securities
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments	(2,878)		(2,297)
Net Change In Unrealized Gains (Losses) | Assets
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments	(30,869)	31,402	(1,511)	34,666
Net Change In Unrealized Gains (Losses) | Loans and Receivables
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments				7,418
Net Change In Unrealized Gains (Losses) | Equity and Preferred Securities
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments	(2,095)	7,116	(1,867)	20,225
Net Change In Unrealized Gains (Losses) | Corporate Loans
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments	(25,896)	25,084	(7,046)	13,695
Net Change In Unrealized Gains (Losses) | Corporate Bonds
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments		(927)	9,693	(6,801)
Net Change In Unrealized Gains (Losses) | Subordinated Notes
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments	$ 16,846	24,800	60,460	32,712
Net Change In Unrealized Gains (Losses) | Other
Fair Value, Option, Qualitative Disclosures Related to Election [Abstract]
Realized and net change in unrealized gains (losses) on financial instruments		$ 129	$ 6	$ 129

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Information for Financial Instruments on Which Fair Value Option was Elected (Detail) - USD ($) $ in Thousands		Jun. 30, 2018	Dec. 31, 2017
Fair Value, Option, Quantitative Disclosures [Line Items]
Excess (Deficiency) of fair value over uncollected principal		$ (11,950)	$ (34,115)
Fair value of financial instruments more than one day past due	[1]		57,778
Excess (Deficiency) of fair value more than one day past due over uncollected principal	[1]		19,633
Debt Securities
Fair Value, Option, Quantitative Disclosures [Line Items]
Excess (Deficiency) of fair value over uncollected principal		(2,131)	(372)
Corporate Loans
Fair Value, Option, Quantitative Disclosures [Line Items]
Excess (Deficiency) of fair value over uncollected principal		(10,752)	(13,495)
Fair value of financial instruments more than one day past due	[1]		57,778
Excess (Deficiency) of fair value more than one day past due over uncollected principal	[1]		19,633
Corporate Bonds
Fair Value, Option, Quantitative Disclosures [Line Items]
Excess (Deficiency) of fair value over uncollected principal			(21,455)
Loans and Receivables
Fair Value, Option, Quantitative Disclosures [Line Items]
Excess (Deficiency) of fair value over uncollected principal		933	1,207
Fair value of financial instruments more than one day past due		$ 0	$ 0

[1] Corporate Loans and Corporate Bonds within CLO assets are classified as past due if contractual payments are more than one day past due.

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Information for Financial Instruments on Which Fair Value Option was Elected (Parenthetical) (Detail)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans and bonds contractual payment past due, number days	1 day	1 day

XML

Fair Value Option - Additional Information (Detail) - USD ($)		Jun. 30, 2018	Dec. 31, 2017
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of financial instruments more than one day past due	[1]		$ 57,778,000
Corporate Bonds
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of financial instruments more than one day past due		$ 0	0
Fair value of financial instruments with non-accrual status		0	0
Loans and Receivables
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of financial instruments more than one day past due		0	0
Fair value of financial instruments with non-accrual status		$ 0	$ 0

[1] Corporate Loans and Corporate Bonds within CLO assets are classified as past due if contractual payments are more than one day past due.

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Financial Assets and Liabilities at Fair Value (Detail) - USD ($) $ in Thousands		Jun. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts Receivable - Loans and Receivables		$ 346,603	$ 239,659
Assets		8,452,816	12,649,547
Securities Sold, Not Yet Purchased		155,780	154,380
Liabilities		6,770,774	11,339,206
Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		25,934	8,801
Derivatives liabilities		57,375	36,234
Net Investment Hedges
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities			453
Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments			458
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents - Money Market Funds		538,418	853,680
Total Investments		12,064,769	15,842,638
Accounts Receivable - Loans and Receivables		346,603	239,659
Derivatives assets			4,443
Assets		12,972,820	16,940,420
Total Other Assets		23,030
Fair value of due to Affiliates		66,548	41,386	[1]
Securities Sold, Not Yet Purchased		155,780	154,380
Total Accounts Payable, Accrued Expenses and Other Liabilities		57,375	41,798
Liabilities		6,983,929	11,535,384
Fair Value, Measurements, Recurring | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities		51,449	30,554
Fair Value, Measurements, Recurring | Freestanding Derivatives | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		782	2,097
Derivatives liabilities		570	2,975
Fair Value, Measurements, Recurring | Freestanding Derivatives | Interest Rate Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		22,123	2,042
Derivatives liabilities		48,711	27,275
Fair Value, Measurements, Recurring | Net Investment Hedges | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities			453
Fair Value, Measurements, Recurring | Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		368,203	322,474
Fair Value, Measurements, Recurring | Credit Default Swap | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		125	304
Derivatives liabilities		2,168	304
Fair Value, Measurements, Recurring | Net Asset Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		364,934	465,460
Assets		364,934	465,460
Fair Value, Measurements, Recurring | Net Asset Value | Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		19,252	19,847
Fair Value, Measurements, Recurring | Liabilities of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Loan payable		6,704,226	11,297,820	[1]
Fair value of due to Affiliates	[1],[2]		40,390
Fair Value, Measurements, Recurring | Liabilities of Consolidated CLO Vehicles | Senior Secured Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Loan payable	[2]	6,528,326	10,594,656	[1]
Fair value of due to Affiliates	[2]	3,269	996	[1]
Fair Value, Measurements, Recurring | Liabilities of Consolidated CLO Vehicles | Subordinated Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Loan payable	[2]	175,900	703,164	[1]
Fair value of due to Affiliates	[2]	63,279
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	8,608,565	12,954,121
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities		5,926	10,791
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Freestanding Derivatives | Total Return Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	488	526
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Freestanding Derivatives | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	5,295	101
Derivatives liabilities		1,087	5,628	[1]
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Freestanding Derivatives | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]		23,986
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]		458
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Investment Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	86,463	130,339
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	261,372	243,336
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Partnership And LLC Interests
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	315,519	333,997
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	855,778	701,763
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	7,082,085	10,825,759
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Corporate Bonds | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]		690,125
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Credit Default Swap | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	1,565	3,731
Derivatives liabilities		4,839	5,163	[1]
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Net Asset Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	86,463	130,339
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Net Asset Value | Investment Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	86,463	130,339
Fair Value, Measurements, Recurring | Corporate Treasury Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		3,088,001	2,566,043
Fair Value, Measurements, Recurring | Corporate Treasury Investments | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		259,219	315,274
Fair Value, Measurements, Recurring | Corporate Treasury Investments | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		309,131	282,866
Fair Value, Measurements, Recurring | Corporate Treasury Investments | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		2,519,651	1,967,903
Fair Value, Measurements, Recurring | Corporate Treasury Investments | Net Asset Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		259,219	315,274
Fair Value, Measurements, Recurring | Corporate Treasury Investments | Net Asset Value | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		259,219	315,274
Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents - Money Market Funds		538,418	853,680
Total Investments		608,837	543,381
Derivatives assets			575
Assets		1,148,190	1,397,636
Total Other Assets		935
Total Accounts Payable, Accrued Expenses and Other Liabilities		551	415
Liabilities		551	415
Fair Value, Measurements, Recurring | Level 1 | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities		551	415
Fair Value, Measurements, Recurring | Level 1 | Freestanding Derivatives | Interest Rate Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		935	575
Derivatives liabilities		551	415
Fair Value, Measurements, Recurring | Level 1 | Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		248,494	193,072
Fair Value, Measurements, Recurring | Level 1 | Consolidated Blackstone Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	51,212	67,443
Fair Value, Measurements, Recurring | Level 1 | Consolidated Blackstone Funds | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	51,212	67,443
Fair Value, Measurements, Recurring | Level 1 | Corporate Treasury Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		309,131	282,866
Fair Value, Measurements, Recurring | Level 1 | Corporate Treasury Investments | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		309,131	282,866
Fair Value, Measurements, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		9,889,551	13,684,784
Derivatives assets			3,868
Assets		9,911,646	13,688,652
Total Other Assets		22,095
Fair value of due to Affiliates		66,548	41,386	[1]
Securities Sold, Not Yet Purchased		155,780	154,380
Total Accounts Payable, Accrued Expenses and Other Liabilities		56,824	41,383
Liabilities		6,983,378	11,534,969
Fair Value, Measurements, Recurring | Level 2 | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities		50,898	30,139
Fair Value, Measurements, Recurring | Level 2 | Freestanding Derivatives | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		782	2,097
Derivatives liabilities		570	2,975
Fair Value, Measurements, Recurring | Level 2 | Freestanding Derivatives | Interest Rate Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		21,188	1,467
Derivatives liabilities		48,160	26,860
Fair Value, Measurements, Recurring | Level 2 | Net Investment Hedges | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities			453
Fair Value, Measurements, Recurring | Level 2 | Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		13,955	14,162
Fair Value, Measurements, Recurring | Level 2 | Credit Default Swap | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		125	304
Derivatives liabilities		2,168	304
Fair Value, Measurements, Recurring | Level 2 | Liabilities of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Loan payable		6,704,226	11,297,820	[1]
Fair value of due to Affiliates	[1],[2]		40,390
Fair Value, Measurements, Recurring | Level 2 | Liabilities of Consolidated CLO Vehicles | Senior Secured Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Loan payable	[2]	6,528,326	10,594,656	[1]
Fair value of due to Affiliates	[2]	3,269	996	[1]
Fair Value, Measurements, Recurring | Level 2 | Liabilities of Consolidated CLO Vehicles | Subordinated Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Loan payable	[2]	175,900	703,164	[1]
Fair value of due to Affiliates	[2]	63,279
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	7,384,166	11,726,968
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities		5,926	10,791
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Freestanding Derivatives | Total Return Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	488	526
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Freestanding Derivatives | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	5,295	101
Derivatives liabilities		1,087	5,628	[1]
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Freestanding Derivatives | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]		23,986
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	51,051	44,026
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Partnership And LLC Interests
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	1,527	2,549
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	771,977	643,608
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	6,552,263	10,318,316
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Corporate Bonds | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]		690,125
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Credit Default Swap | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	1,565	3,731
Derivatives liabilities		4,839	5,163	[1]
Fair Value, Measurements, Recurring | Level 2 | Corporate Treasury Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		2,491,430	1,943,654
Fair Value, Measurements, Recurring | Level 2 | Corporate Treasury Investments | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		2,491,430	1,943,654
Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		1,201,447	1,149,013
Accounts Receivable - Loans and Receivables		346,603	239,659
Assets		1,548,050	1,388,672
Fair Value, Measurements, Recurring | Level 3 | Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		86,502	95,393
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	1,086,724	1,029,371
Assets		1,086,724	1,029,371
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]		458
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	159,109	131,867
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	313,992	331,448
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	83,801	58,155
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments	[1]	529,822	507,443
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		28,221	24,249
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		$ 28,221	$ 24,249

[1] Pursuant to GAAP consolidation guidance, the Partnership is required to consolidate all VIEs in which it has been identified as the primary beneficiary, including certain CLO vehicles and other funds in which a consolidated entity of the Partnership, as the general partner of the fund, has a controlling financial interest. While the Partnership is required to consolidate certain funds, including CLO vehicles, for GAAP purposes, the Partnership has no ability to utilize the assets of these funds and there is no recourse to the Partnership for their liabilities since these are client assets and liabilities.

[2] Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.

XML

Summary of Fair Value Transfers Between Level I and Level II (Detail) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
		Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers from Level I into Level II (a)	[1]	$ 762		$ 762
Transfers from Level II into Level I (b)	[2]		$ 447

[1] Transfers out of Level I represent those financial instruments for which restrictions exist and adjustments were made to an otherwise observable price to reflect fair value at the reporting date.

[2] Transfers into Level I represent those financial instruments for which an unadjusted quoted price in an active market became available for the identical asset.

XML

Summary of Quantitative Inputs and Assumptions for Items Categorized in Level III of Fair Value Hierarchy (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 8,452,816	$ 12,649,547
Fair Value, Measurements, Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	12,972,820	16,940,420
Fair Value, Measurements, Recurring | Level 3
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	1,548,050	1,388,672
Fair Value, Measurements, Recurring | Level 3 | Loans and Receivables | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	217,709	$ 239,659
Fair Value, Measurements, Recurring | Level 3 | Loans and Receivables | Transaction Price Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 128,894
Fair Value, Measurements, Recurring | Level 3 | Minimum | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	5.80%	7.10%
Fair Value, Measurements, Recurring | Level 3 | Maximum | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	10.20%	10.30%
Fair Value, Measurements, Recurring | Level 3 | Weighted Average | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	9.00%	8.80%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 61,105	$ 65,821
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows | Measurement Input, Default Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	2.00%	2.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows | Measurement Input, Constant Prepayment Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	20.00%	20.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows | Measurement Input, Expected Term [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Lag	12 months	12 months
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows | Measurement Input Recovery Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Rate	70.00%	70.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows | Measurement Input Reinvestment Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Reinvestment Rate	4.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Transaction Price Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 25,397	$ 29,572
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Minimum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	0.70%	0.70%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Minimum | Discounted Cash Flows | Measurement Input Reinvestment Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Reinvestment Rate		4.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Maximum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	8.90%	13.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Maximum | Discounted Cash Flows | Measurement Input Reinvestment Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Reinvestment Rate		4.13%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Weighted Average | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	1.90%	2.20%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Weighted Average | Discounted Cash Flows | Measurement Input Reinvestment Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Reinvestment Rate		4.01%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 1,086,724	$ 1,029,371
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 37
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	8.00%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Market Comparable Companies
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets		$ 8,277
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Market Comparable Companies | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
EBITDA Multiple		7.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Third Party Pricing Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 529,785	$ 499,624
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	118,659	91,753
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Market Comparable Companies
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	1,477	$ 862
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Market Comparable Companies | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA		8
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Other
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	28,049	$ 17,536
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Transaction Price Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	10,870	$ 21,716
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Third Party Pricing Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 54
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	7.10%	7.10%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	(11.90%)	1.00%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	1.1
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	5.00%	5.00%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	2.8	4.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input Net Operating Income Rate[Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI	8.8
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input, Commodity Market Price [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - P/E	10.0	9.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input Net Operating Income [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI		8.8
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	0.7	0.8
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	25.70%	31.40%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	37.30%	49.40%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	9.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	11.40%	11.40%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	16.0	16.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input Net Operating Income Rate[Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI	12.8
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input, Commodity Market Price [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - P/E	17.0	17.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input Net Operating Income [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI		12.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	0.9	0.9
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	12.60%	12.60%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	7.10%	7.10%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	8.3
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	8.10%	8.50%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	10.2	9.9
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input Net Operating Income Rate[Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI	11.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input, Commodity Market Price [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - P/E	14.2	11.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input Net Operating Income [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI		10.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	0.8	0.9
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 267,616	$ 293,744
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Discounted Cash Flows | Measurement Input Net Operating Income [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI	12.5	12.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Market Comparable Companies
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 578	$ 530
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	1	1
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Market Comparable Companies | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	8
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Other
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 27,668	$ 22,346
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Transaction Price Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	17,587	14,070
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Third Party Pricing Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 543	$ 758
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	4.60%	4.60%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	(2.10%)	(22.20%)
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	8.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	1.50%	3.10%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	0.1	0.1
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	26.50%	26.50%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	45.50%	71.50%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	9.3
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	25.00%	10.00%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	28.6	15.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	9.90%	9.80%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	7.60%	8.40%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	9.2
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	5.90%	5.70%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	10.5	8.6
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 7,384	$ 6,122
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	23.60%	7.70%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	3.90%	8.30%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Discounted Cash Flows | Measurement Input Net Operating Income [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI		12.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Transaction Price Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 12,680	$ 1,897
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Third Party Pricing Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 63,737	$ 50,136
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Minimum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	6.30%	6.60%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Maximum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	16.70%	18.40%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Weighted Average | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	9.50%	9.60%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 11,070	$ 8,886
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Discounted Cash Flows | Measurement Input, Default Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	2.00%	2.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Discounted Cash Flows | Measurement Input, Constant Prepayment Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	20.00%	20.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Discounted Cash Flows | Measurement Input, Expected Term [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Lag	12 months	12 months
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Discounted Cash Flows | Measurement Input Reinvestment Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Reinvestment Rate		4.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Third Party Pricing Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 17,151	$ 15,363
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Minimum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		5.10%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Minimum | Discounted Cash Flows | Measurement Input Recovery Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Rate	30.00%	30.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Minimum | Discounted Cash Flows | Measurement Input Reinvestment Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Reinvestment Rate	3.50%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Minimum | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	0.70%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Maximum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		6.30%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Maximum | Discounted Cash Flows | Measurement Input Recovery Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Rate	70.00%	70.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Maximum | Discounted Cash Flows | Measurement Input Reinvestment Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Reinvestment Rate	4.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Maximum | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	6.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Weighted Average | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		5.40%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Weighted Average | Discounted Cash Flows | Measurement Input Recovery Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Rate	68.00%	68.10%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Weighted Average | Discounted Cash Flows | Measurement Input Reinvestment Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Reinvestment Rate	3.91%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Weighted Average | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	4.10%

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Summary of Changes in Financial Assets Measured at Fair Value for Which Level III Inputs Were Used (Detail) - Level 3 - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance, Beginning of Period		$ 1,243,635	$ 936,455	$ 1,388,672	$ 1,027,820
Transfer In Due to Consolidation and Acquisition			35,040	50,043	34,651
Transfer Out Due to Deconsolidation			(44,095)	(217,182)	(38,629)
Transfer In to Level III	[1]	152,666	74,600	180,401	79,521
Transfer Out of Level III	[1]	(124,866)	(117,095)	(156,821)	(158,581)
Purchases		512,808	389,782	799,556	578,556
Sales		(261,530)	(155,496)	(548,047)	(441,437)
Settlements		(5,635)	(2,385)	(9,321)	(4,987)
Changes in Gains Included in Earnings and Other Comprehensive Income		30,972	20,906	60,749	60,798
Balance, End of Period		1,548,050	1,137,712	1,548,050	1,137,712
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date		5,450	695	28,020	14,103
Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance, Beginning of Period	[2]	117,349	138,433	119,642	130,588
Transfer In to Level III	[1],[2]		6,473		16,396
Transfer Out of Level III	[1],[2]	(7,649)	(11,930)	(15,717)	(18,010)
Purchases	[2]	15,327	9,155	19,812	21,603
Sales	[2]	(23,304)	(34,014)	(23,479)	(44,045)
Settlements	[2]	(1)	(993)	(4)	(1,093)
Changes in Gains Included in Earnings and Other Comprehensive Income	[2]	13,001	8,565	14,469	10,250
Balance, End of Period	[2]	114,723	115,689	114,723	115,689
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	[2]	(49)	123	(289)	462
Loans and Receivables
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance, Beginning of Period		163,135	112,056	239,659	211,359
Purchases		294,258	268,222	370,921	337,705
Sales		(110,508)	(75,342)	(263,703)	(251,502)
Settlements		(5,634)	(1,392)	(9,317)	(3,894)
Changes in Gains Included in Earnings and Other Comprehensive Income		5,352	2,735	9,043	12,611
Balance, End of Period		346,603	306,279	346,603	306,279
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date		5,353	2,735	9,044	12,610
Consolidated Blackstone Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance, Beginning of Period		963,151	685,966	1,029,371	685,873
Transfer In Due to Consolidation and Acquisition			35,040	50,043	34,651
Transfer Out Due to Deconsolidation			(44,095)	(217,182)	(38,629)
Transfer In to Level III	[1]	152,666	68,127	180,401	63,125
Transfer Out of Level III	[1]	(117,217)	(105,165)	(141,104)	(140,571)
Purchases		203,223	112,405	408,823	219,248
Sales		(127,718)	(46,140)	(260,865)	(145,890)
Changes in Gains Included in Earnings and Other Comprehensive Income		12,619	9,606	37,237	37,937
Balance, End of Period		1,086,724	715,744	1,086,724	715,744
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date		$ 146	$ (2,163)	$ 19,265	$ 1,031

[1] Transfers in and out of Level III financial assets and liabilities were due to changes in the observability of inputs used in the valuation of such assets and liabilities.

[2] Represents corporate treasury investments and Other Investments.

XML

Fair Value Measurements of Financial instruments - Additional Information (Detail) - USD ($)	Jun. 30, 2018	Jun. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Level III financial liabilities	$ 0	$ 0

XML

Variable Interest Entities - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Variable Interest Entity [Line Items]
Total Assets	$ 30,075,297	$ 34,415,919
Total Liabilities	15,439,701	20,692,828
Non-Controlling Interests	3,492,621	$ 3,253,148
Cumulative-Effect Adjustment, Deconsolidation of Variable Interest Entity [Member]
Variable Interest Entity [Line Items]
Total Assets	(8,900,000)
Total Liabilities	(8,700,000)
Non-Controlling Interests	$ (196,100)

XML

Assets and Liabilities Related to Interest in Non-Consolidated VIEs and Maximum Exposure to Loss (Detail) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Variable Interest Entity [Line Items]
VIE Assets	$ 1,222,471	$ 902,726
Maximum Exposure to Loss	1,282,413	1,001,236
Investments
Variable Interest Entity [Line Items]
VIE Assets	969,868	805,501
Accounts Receivable
Variable Interest Entity [Line Items]
VIE Assets		15,760
Due from Affiliates
Variable Interest Entity [Line Items]
VIE Assets	252,603	81,465
Due to Affiliates
Variable Interest Entity [Line Items]
VIE Liabilities	4,110	179
Potential Clawback Obligation
Variable Interest Entity [Line Items]
VIE Liabilities	$ 55,832	$ 98,331

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Repurchase Agreements - Additional Information (Detail) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Securities Financing Transaction [Line Items]
Pledged securities with carrying value to collateralize its repurchase agreements	$ 217.8	$ 169.7

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Schedule of Repurchase Agreements Obligation by Type of Collateral Pledged (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	$ 182,489	$ 118,840
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. "Offsetting of Assets and Liabilities"	182,489	118,840
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. "Offsetting of Assets and Liabilities"	0	0
Asset-backed Securities
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	182,489	118,840
Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. "Offsetting of Assets and Liabilities"	0	0
Up to 30 Days
Assets Sold under Agreements to Repurchase [Line Items]
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. "Offsetting of Assets and Liabilities"	0	0
Up to 30 Days | Asset-backed Securities
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	48,796	22,756
30 - 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. "Offsetting of Assets and Liabilities"	0	0
30 - 90 Days | Asset-backed Securities
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	109,116	96,084
Greater than 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. "Offsetting of Assets and Liabilities"	0	$ 0
Greater than 90 Days | Asset-backed Securities
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	$ 24,577

XML

Offsetting of Assets and Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Offsetting Assets and Liabilities [Line Items]
Repurchase agreements gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition	$ 182,489	$ 118,840
Repurchase agreements gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments	182,489	118,840
Repurchase agreements gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral Received	0	0
Repurchase agreements Net Amount	0	0
Gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition	239,864	155,527
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments	226,432	122,119
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral Received	6,811	32,405
Net Amount	6,621	1,003
Net Investment Hedges
Offsetting Assets and Liabilities [Line Items]
Derivatives gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition		453
Derivatives Net Amount		453
Freestanding Derivatives
Offsetting Assets and Liabilities [Line Items]
Derivatives gross and Net Amounts of Assets Presented in the Statement of Financial Condition	25,934	8,801
Derivatives gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments	23,822	3,279
Derivatives gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral Received	0	0
Derivatives Net Amount	2,112	5,522
Derivatives gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition	57,375	36,234
Derivatives gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments	43,943	3,279
Derivatives gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral Received	6,811	32,405
Derivatives Net Amount	$ 6,621	$ 550

XML

Components of Other Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Schedule of Other Assets [Line Items]
Furniture, Equipment and Leasehold Improvements, Net	$ 122,318	$ 126,566
Prepaid Expenses	90,687	78,723
Other Assets	16,901	32,965
Freestanding Derivatives	23,030	4,443
Total	$ 252,936	$ 242,697

XML

Offsetting Of Assets And Liabilities - Additional Information (Detail) - Cash Pooling Arrangement $ in Billions	Jun. 30, 2018 USD ($)
Offsetting Assets [Line Items]
Aggregate cash balance on deposit relating to the cash pooling arrangement	$ 1.5
Overdraft facility	$ 1.5

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Carrying Value and Fair Value of Blackstone Issued Notes (Detail) - Senior Secured Notes - USD ($) $ in Thousands		Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Carrying Value		$ 3,488,358	$ 3,514,815
Debt instrument, fair value	[1]	3,600,894	3,836,528
5.875% Notes
Debt Instrument [Line Items]
Carrying Value		398,727	398,514
Debt instrument, fair value	[1]	425,360	438,320
4.750% Notes
Debt Instrument [Line Items]
Carrying Value		394,645	394,137
Debt instrument, fair value	[1]	418,840	434,200
2.000% Notes
Debt Instrument [Line Items]
Carrying Value		346,136	355,425
Debt instrument, fair value	[1]	369,728	385,433
1.000% Notes
Debt Instrument [Line Items]
Carrying Value		691,478	709,871
Debt instrument, fair value	[1]	677,906	711,440
3.150% Notes
Debt Instrument [Line Items]
Carrying Value		296,557	296,399
Debt instrument, fair value	[1]	284,700	295,320
6.250% Notes
Debt Instrument [Line Items]
Carrying Value		238,119	238,019
Debt instrument, fair value	[1]	294,700	328,200
5.000% Notes
Debt Instrument [Line Items]
Carrying Value		488,640	488,536
Debt instrument, fair value	[1]	526,000	574,100
4.450% Notes
Debt Instrument [Line Items]
Carrying Value		343,981	343,925
Debt instrument, fair value	[1]	337,260	372,575
4.000% Notes
Debt Instrument [Line Items]
Carrying Value		290,075	289,989
Debt instrument, fair value	[1]	$ 266,400	$ 296,940

[1] Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.

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Carrying Value and Fair Value of Blackstone Issued Notes (Parenthetical) (Detail) - Senior Secured Notes	6 Months Ended
	Jun. 30, 2018
5.875% Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	5.875%
Debt instrument, maturity date	Mar. 15, 2021
4.750% Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	4.75%
Debt instrument, maturity date	Feb. 15, 2023
2.000% Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	2.00%
Debt instrument, maturity date	May 19, 2025
1.000% Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	1.00%
Debt instrument, maturity date	Oct. 05, 2026
3.150% Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	3.15%
Debt instrument, maturity date	Oct. 02, 2027
6.250% Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	6.25%
Debt instrument, maturity date	Aug. 15, 2042
5.000% Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	5.00%
Debt instrument, maturity date	Jun. 15, 2044
4.450% Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	4.45%
Debt instrument, maturity date	Jul. 15, 2045
4.000% Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	4.00%
Debt instrument, maturity date	Oct. 02, 2047

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Partnership's Borrowings Through Consolidated CLO Vehicles (Detail) - Liabilities of Consolidated CLO Vehicles - USD ($) $ in Thousands		6 Months Ended	12 Months Ended
		Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Borrowing Outstanding		$ 6,865,160	$ 11,583,607
Senior Secured Notes
Debt Instrument [Line Items]
Borrowing Outstanding		$ 6,533,425	$ 10,689,240
Weighted Average Interest Rate		3.83%	2.35%
Weighted Average Remaining Maturity in Years		3 years 2 months 12 days	4 years 1 month 6 days
Subordinated Notes
Debt Instrument [Line Items]
Borrowing Outstanding		$ 331,735	$ 894,367
Weighted Average Interest Rate	[1]

[1] The Subordinated Notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the CLO vehicles.

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Senior Secured Notes and Subordinated Notes (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Fair Value	$ 6,770,774	$ 11,339,206
Senior Secured Notes
Debt Instrument [Line Items]
Borrowing Outstanding	3,488,358	3,514,815
Fair Value	6,531,595	10,595,652
Subordinated Notes
Debt Instrument [Line Items]
Fair Value	239,179	743,554
Non-Consolidated Affiliates Senior Secured Notes
Debt Instrument [Line Items]
Borrowing Outstanding	114,909	54,400
Fair Value	66,548	41,386
Non-Consolidated Affiliates Senior Secured Notes | Senior Secured Notes
Debt Instrument [Line Items]
Borrowing Outstanding	3,250	1,000
Fair Value	3,269	996
Non-Consolidated Affiliates Senior Secured Notes | Subordinated Notes
Debt Instrument [Line Items]
Borrowing Outstanding	111,659	53,400
Fair Value	$ 63,279	$ 40,390

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Borrowings - Additional Information (Detail) - USD ($) $ in Billions	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Fair value of the CLO assets	$ 7.5	$ 13.4

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Scheduled Principal Payments for Borrowings (Detail) $ in Thousands	Jun. 30, 2018 USD ($)
Debt Instrument [Line Items]
2018	$ 2,819
2019	0
2020	0
2021	400,000
2022	0
Thereafter	10,016,720
Total	10,419,539
Operating Borrowings
Debt Instrument [Line Items]
2019	0
2020	0
2021	400,000
2022	0
Thereafter	3,151,560
Total	3,551,560
Blackstone Fund Facilities CLO Vehicles
Debt Instrument [Line Items]
2018	2,819
2019	0
2020	0
2022	0
Thereafter	6,865,160
Total	$ 6,867,979

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Taxes [Line Items]
Effective tax rate	8.20%	3.90%	7.50%	4.80%
Provision for Taxes	$ 138,731	$ 29,608	$ 193,226	$ 87,045

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Basic and Diluted Net Income Per Common Unit (Detail) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Line Items]
Net Income Attributable to The Blackstone Group L.P., Basic		$ 742,042	$ 337,407	$ 1,109,914	$ 789,316
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units			260,488	858,727	624,716
Net Income Attributable to The Blackstone Group L.P., Diluted		$ 742,042	$ 597,895	$ 1,968,641	$ 1,414,032
Weighted-Average Common Units Outstanding, Basic		681,794,492	664,681,299	678,156,936	662,820,839
Weighted-Average Unvested Deferred Restricted Common Units		216,118	998,974	207,526	904,079
Weighted-Average Blackstone Holdings Partnership Units			534,326,066	532,363,486	536,031,472
Weighted-Average Common Units Outstanding, Diluted		682,010,610	1,200,006,339	1,210,727,948	1,199,756,390
Net Income Per Common Unit, Basic		$ 1.09	$ 0.51	$ 1.64	$ 1.19
Net Income Per Common Unit, Diluted		1.09	0.50	1.63	1.18
Distributions Declared Per Common Unit	[1]	$ 0.35	$ 0.87	$ 1.20	$ 1.34

[1] Distributions declared reflects the calendar date of the declaration for each distribution.

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Summary of Anti-Dilutive Securities (Detail)	3 Months Ended
	Jun. 30, 2018 shares
Blackstone Partnership Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted-Average Blackstone Holdings Partnership Units	528,872,187

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Net Income Per Common Unit - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Apr. 16, 2018
Unit Repurchase Program [Line Items]
Amount remaining available for repurchases	$ 928,300,000		$ 928,300,000
Common stock repurchased, units	2,200,000	0	2,200,000	0
Common stock repurchased, cost	$ 71,700,000		$ 71,700,000
Blackstone
Unit Repurchase Program [Line Items]
Amount authorized to repurchase under unit repurchase program					$ 1,000,000,000

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Equity-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Partnership grant units					172,155,134
Compensation expense in relation to equity-based awards	$ 116,800	$ 88,500	$ 208,994	$ 179,729
Tax benefits in relation to equity-based awards	20,100	$ 22,700	34,500	$ 36,800
Estimated unrecognized compensation expense related to unvested awards	$ 793,800		$ 793,800
Weighted-average period for recognized compensation expense related to unvested awards, years			4 years
Total vested and unvested outstanding units	1,203,395,001		1,203,395,001
Phantom Share Units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total outstanding unvested phantom units	44,850		44,850

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Summary of Status of Partnership's Unvested Equity-Based Awards (Detail)	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Blackstone | Blackstone Partnership Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance | shares	30,023,189
Granted (Units) | shares	2,224,551
Vested (Units) | shares	(2,161,371)
Forfeited (Units) | shares	(56,362)
Ending Balance | shares	30,030,007
Beginning Balance | $ / shares	$ 35.26
Granted (Weighted-Average Grant Date Fair Value) | $ / shares	32.01
Vested (Weighted-Average Grant Date Fair Value) | $ / shares	36.27
Forfeited (Weighted-Average Grant Date Fair Value) | $ / shares	32.89
Ending Balance | $ / shares	$ 34.95
Blackstone Group L P | Equity Settled Awards Deferred Restricted Common Units And Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance | shares	9,019,974
Granted (Units) | shares	3,343,695
Vested (Units) | shares	(3,309,089)
Forfeited (Units) | shares	(213,508)
Ending Balance | shares	8,841,072
Beginning Balance | $ / shares	$ 30.03
Granted (Weighted-Average Grant Date Fair Value) | $ / shares	32.48
Vested (Weighted-Average Grant Date Fair Value) | $ / shares	30.48
Forfeited (Weighted-Average Grant Date Fair Value) | $ / shares	30.34
Ending Balance | $ / shares	$ 30.76
Blackstone Group L P | Cash Settled Awards Phantom Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance | shares	44,196
Granted (Units) | shares	117
Vested (Units) | shares	(151)
Ending Balance | shares	44,162
Beginning Balance | $ / shares	$ 31.85
Granted (Weighted-Average Grant Date Fair Value) | $ / shares	33.43
Vested (Weighted-Average Grant Date Fair Value) | $ / shares	32.99
Ending Balance | $ / shares	$ 32.24

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Unvested Units, After Expected Forfeitures (Detail)	6 Months Ended
	Jun. 30, 2018 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Blackstone Holdings Partnership Units (Units)	26,551,896
Deferred Restricted Blackstone Common Units (Units)	7,761,280
Total Equity-Based Awards (Units)	34,313,176
Phantom Units (Units)	37,120
Blackstone Holdings Partnership Units (Weighted-Average Service Period in Years)	3 years 6 months
Deferred Restricted Blackstone Common Units (Weighted-Average Service in Years)	2 years 1 month 6 days
Total Equity-Based Awards (Weighted-Average Service Period in Years)	3 years 2 months 12 days
Phantom Units (Weighted-Average Service Period in Years)	2 years 4 months 24 days

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Due from Affiliates and Due to Affiliates (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Related Party Transaction [Line Items]
Advances Made on Behalf of Certain Non-Controlling Interest Holders and Blackstone Employees Principally for Investments in Blackstone Funds	$ 413,095	$ 410,877
Amounts Due from Portfolio Companies and Funds	514,064	587,955
Management Fees and Performance Allocations Due from Non-Consolidated Funds	547,235	594,484
Payments Made on Behalf of Non-Consolidated Entities	526,087	355,766
Investments Redeemed in Non-Consolidated Funds	14,355	77,943
Accrual for Potential Clawback of Previously Distributed Performance Allocations	1,113	1,112
Due from Affiliates, total	2,015,949	2,028,137
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements	779,758	715,734
Distributions Received on Behalf of Certain Non-Controlling Interest Holders and Blackstone Employees	63,349	87,829
Distributions Received on Behalf of Blackstone Entities	4,373	38,789
Payments Made by Non-Consolidated Entities	51,050	51,249
Due to Note Holders of Consolidated CLO Vehicles	66,548	41,386
Accrual for Potential Repayment of Previously Received Performance Allocations	2,172	2,171
Due to Affiliates, total	$ 967,250	$ 937,158

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Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Investments	$ 22,008,182		$ 22,008,182		$ 24,434,049
Partnership Unit to Blackstone Common Unit ratio			100.00%
Cash saving in tax receivable agreements, percentage			85.00%
Expected future payments under the tax receivable agreements	779,800		$ 779,800
Expected future payments under the tax receivable agreements in years			15 years
After-tax net present value estimated payments	$ 282,800		$ 282,800
After-tax net present value discount rate assumption	15.00%		15.00%
Consolidated Blackstone Funds
Related Party Transaction [Line Items]
Investments	$ 8,608,565		$ 8,608,565		12,954,121
Founder, senior managing directors, employees and certain other related parties
Related Party Transaction [Line Items]
Net Income Attributable to Non-Controlling Interests	37,000	$ 20,000	65,800	$ 50,500
Founder, senior managing directors, employees and certain other related parties | Consolidated Blackstone Funds
Related Party Transaction [Line Items]
Investments	843,800		843,800		$ 813,200
Affiliates
Related Party Transaction [Line Items]
Interest from loans to affiliates	$ 1,200	$ 1,100	$ 2,500	$ 1,300

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($)
Schedule Of Commitments And Contingencies [Line Items]
General partner capital funding	$ 2,400.0
Total investments at risk in respect of guarantees extended	$ 15.9
Contingent obligations currently anticipated to expire end	2028
Provision for cash clawback	$ 696.5
Contingent Obligations (Clawback)	6,500.0
Blackstone Holdings
Schedule Of Commitments And Contingencies [Line Items]
Loans held By employees for investment guaranteed	185.7
Contingent Obligations (Clawback)	6,000.0
Consolidated Blackstone Funds
Schedule Of Commitments And Contingencies [Line Items]
Funds signed investment commitments	545.2
Consolidated Blackstone Funds | Portfolio Company Acquisition
Schedule Of Commitments And Contingencies [Line Items]
Signed investment commitments for portfolio company acquisitions in process of closing	$ 155.4

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Clawback Obligations by Segment (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Product Liability Contingency [Line Items]
Clawback obligations	$ 2,172	$ 2,171
Credit Segment
Product Liability Contingency [Line Items]
Clawback obligations	2,172	2,171
Credit Segment | Blackstone Holdings
Product Liability Contingency [Line Items]
Clawback obligations	1,059	1,059
Credit Segment | Current And Former Blackstone Personnel
Product Liability Contingency [Line Items]
Clawback obligations	$ 1,113	$ 1,112

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Segment Reporting - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018 Segment
Segment Reporting Information [Line Items]
Number of business segments	4

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Financial Data of Segments (Detail) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Segment Reporting Information [Line Items]
Realized Incentive Fees		$ 19,378	$ 40,303	$ 31,944	$ 86,814
Performance Revenues Realized - Allocations		503,376	602,662	773,016	1,714,567
Performance Revenues Unrealized - Allocations		440,351	95,532	1,068,440	(29,089)
Principal Investment Income (Loss), Realized		129,197	125,058	171,342	376,402
Principal Investment Income (Loss), Unrealized		103,468	7,275	215,242	(32,913)
Total Investment Income		1,176,392	830,527	2,228,040	2,028,967
Interest and Dividend Revenue		40,073	33,703	75,458	62,198
Other		675,343	(59,664)	616,026	(63,876)
Total Revenues		2,632,570	1,535,726	4,401,701	3,450,444
Compensation		427,479	367,203	816,882	718,792
Performance Compensation, Realized - Allocations		186,398	195,738	298,460	562,216
Performance Compensation, Unrealized - Allocations		189,991	86,910	444,426	94,443
Total Compensation and Benefits		813,611	670,883	1,576,173	1,418,948
Interest Expense		39,320	41,089	77,991	81,335
Total Expenses		1,016,381	881,193	1,999,312	1,802,966
Economic Income	[1]	1,689,708	764,587	2,586,507	1,823,664
Segment Assets		30,075,297		30,075,297		$ 34,415,919
Investment Advice
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		721,384	690,857	1,450,233	1,336,341
Operating Segments
Segment Reporting Information [Line Items]
Realized Incentive Fees			40,303		86,814
Transaction, Advisory and Other Fees, Net		40,912	38,892	77,978	79,114
Management Fee Offsets		(10,833)	(13,424)	(19,011)	(47,023)
Performance Revenues Realized - Incentive Fees		19,504		32,070
Performance Revenues Realized - Allocations		503,555	603,096	773,197	1,715,044
Performance Revenues Unrealized - Allocations		440,424	95,707	1,068,763	(28,371)
Total Performance Revenue		963,483	739,106	1,874,030	1,773,487
Principal Investment Income (Loss), Realized		94,647	100,887	123,340	303,781
Principal Investment Income (Loss), Unrealized		52,126	(33,167)	66,104	(132,102)
Total Investment Income		146,773	67,720	189,444	171,679
Interest and Dividend Revenue		41,727	33,703	78,112	62,199
Other		94,416	(62,469)	33,522	(70,756)
Total Revenues		1,969,393	1,474,896	3,634,146	3,283,026
Compensation		317,390		653,717	594,284
Expenses			305,257
Performance Compensation, Realized - Incentive Fees		9,743	21,032	16,405	43,497
Performance Compensation, Realized - Allocations		186,398	195,738	298,460	562,216
Performance Compensation, Unrealized - Allocations		189,991	86,910	444,426	94,443
Total Compensation and Benefits		703,522	608,937	1,413,008	1,294,440
Interest Expense		38,885	40,294	77,123	79,744
Other Operating Expenses		122,466	105,838	229,558	202,300
Total Expenses		864,873	755,069	1,719,689	1,576,484
Economic Income	[1]	1,104,520	719,827	1,914,457	1,706,542
Segment Assets		21,486,487		21,486,487
Operating Segments | Management Service, Base
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		692,915	671,368	1,400,071	1,314,326
Operating Segments | Investment Advice
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		722,994	696,836	1,459,038	1,346,417
Operating Segments | Private Equity Segment
Segment Reporting Information [Line Items]
Transaction, Advisory and Other Fees, Net		12,780	17,289	23,874	33,465
Management Fee Offsets		(4,351)	(3,753)	(7,544)	(15,943)
Performance Revenues Realized - Allocations		138,171	198,168	215,294	780,849
Performance Revenues Unrealized - Allocations		498,274	9	895,590	(184,469)
Total Performance Revenue		636,445	198,177	1,110,884	596,380
Principal Investment Income (Loss), Realized		32,600	41,168	38,938	122,462
Principal Investment Income (Loss), Unrealized		84,247	(25,892)	101,615	(66,414)
Total Investment Income		116,847	15,276	140,553	56,048
Interest and Dividend Revenue		11,549	7,922	20,092	14,583
Other		26,667	(16,124)	10,259	(17,924)
Total Revenues		995,458	396,471	1,676,600	1,020,999
Compensation		103,798		203,527	174,279
Expenses			90,676
Performance Compensation, Realized - Allocations		68,513	63,060	101,558	244,693
Performance Compensation, Unrealized - Allocations		193,747	22,219	372,549	(17,137)
Total Compensation and Benefits		366,058	175,955	677,634	401,835
Interest Expense		12,773	10,728	22,906	21,155
Other Operating Expenses		36,047	28,592	67,198	56,353
Total Expenses		414,878	215,275	767,738	479,343
Economic Income		580,580	181,196	908,862	541,656
Segment Assets		7,574,520		7,574,520
Operating Segments | Private Equity Segment | Management Service, Base
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		195,521	177,684	378,482	354,390
Operating Segments | Private Equity Segment | Investment Advice
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		203,950	191,220	394,812	371,912
Operating Segments | Real Estate Segment
Segment Reporting Information [Line Items]
Realized Incentive Fees			4,878		7,760
Transaction, Advisory and Other Fees, Net		23,859	16,087	46,947	37,366
Management Fee Offsets		(3,785)	(5,018)	(5,453)	(8,568)
Performance Revenues Realized - Incentive Fees		11,394		15,769
Performance Revenues Realized - Allocations		351,630	389,441	502,939	909,314
Performance Revenues Unrealized - Allocations		(160,578)	89,688	65,864	81,642
Total Performance Revenue		202,446	484,007	584,572	998,716
Principal Investment Income (Loss), Realized		50,199	57,599	64,889	177,178
Principal Investment Income (Loss), Unrealized		(28,044)	(20,519)	(25,357)	(104,372)
Total Investment Income		22,155	37,080	39,532	72,806
Interest and Dividend Revenue		14,494	14,493	29,622	26,587
Other		30,457	(22,965)	8,960	(26,115)
Total Revenues		539,306	751,549	1,180,386	1,526,536
Compensation		109,599		222,423	212,968
Expenses			110,266
Performance Compensation, Realized - Incentive Fees		5,820	2,711	8,030	4,044
Performance Compensation, Realized - Allocations		109,233	124,512	163,416	304,468
Performance Compensation, Unrealized - Allocations		(51,370)	64,254	27,800	82,046
Total Compensation and Benefits		173,282	301,743	421,669	603,526
Interest Expense		11,389	14,787	25,538	29,422
Other Operating Expenses		36,026	33,379	65,443	64,243
Total Expenses		220,697	349,909	512,650	697,191
Economic Income		318,609	401,640	667,736	829,345
Segment Assets		7,536,885		7,536,885
Operating Segments | Real Estate Segment | Management Service, Base
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		249,680	227,865	476,206	425,744
Operating Segments | Real Estate Segment | Investment Advice
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		269,754	238,934	517,700	454,542
Operating Segments | Hedge Fund Solutions Segment
Segment Reporting Information [Line Items]
Realized Incentive Fees			6,548		20,635
Transaction, Advisory and Other Fees, Net		812	1,696	1,157	1,955
Performance Revenues Realized - Incentive Fees		6,887		15,058
Performance Revenues Realized - Allocations		383	447	2,389	1,044
Performance Revenues Unrealized - Allocations		9,930	14,849	14,991	33,664
Total Performance Revenue		17,200	21,844	32,438	55,343
Principal Investment Income (Loss), Realized		7,766	225	8,406	(407)
Principal Investment Income (Loss), Unrealized		(4,841)	11,578	(4,401)	29,871
Total Investment Income		2,925	11,803	4,005	29,464
Interest and Dividend Revenue		5,152	4,674	9,964	8,671
Other		17,619	(10,720)	7,331	(12,330)
Total Revenues		173,261	157,995	313,676	340,269
Compensation		48,086		98,386	94,965
Expenses			47,361
Performance Compensation, Realized - Incentive Fees		4,155	4,097	8,189	11,111
Performance Compensation, Realized - Allocations		937	265	3,352	568
Performance Compensation, Unrealized - Allocations		2,772	5,968	4,958	12,390
Total Compensation and Benefits		55,950	57,691	114,885	119,034
Interest Expense		5,900	6,688	12,171	13,231
Other Operating Expenses		18,494	16,318	37,279	32,697
Total Expenses		80,344	80,697	164,335	164,962
Economic Income		92,917	77,298	149,341	175,307
Segment Assets		2,275,685		2,275,685
Operating Segments | Hedge Fund Solutions Segment | Management Service, Base
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		129,553	128,698	258,781	257,166
Operating Segments | Hedge Fund Solutions Segment | Investment Advice
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		130,365	130,394	259,938	259,121
Operating Segments | Credit Segment
Segment Reporting Information [Line Items]
Realized Incentive Fees			28,877		58,419
Transaction, Advisory and Other Fees, Net		3,461	3,820	6,000	6,328
Management Fee Offsets		(2,697)	(4,653)	(6,014)	(22,512)
Performance Revenues Realized - Incentive Fees		1,223		1,243
Performance Revenues Realized - Allocations		13,371	15,040	52,575	23,837
Performance Revenues Unrealized - Allocations		92,798	(8,839)	92,318	40,792
Total Performance Revenue		107,392	35,078	146,136	123,048
Principal Investment Income (Loss), Realized		4,082	1,895	11,107	4,548
Principal Investment Income (Loss), Unrealized		764	1,666	(5,753)	8,813
Total Investment Income		4,846	3,561	5,354	13,361
Interest and Dividend Revenue		10,532	6,614	18,434	12,358
Other		19,673	(12,660)	6,972	(14,387)
Total Revenues		261,368	168,881	463,484	395,222
Compensation		55,907		129,381	112,072
Expenses			56,954
Performance Compensation, Realized - Incentive Fees		(232)	14,224	186	28,342
Performance Compensation, Realized - Allocations		7,715	7,901	30,134	12,487
Performance Compensation, Unrealized - Allocations		44,842	(5,531)	39,119	17,144
Total Compensation and Benefits		108,232	73,548	198,820	170,045
Interest Expense		8,823	8,091	16,508	15,936
Other Operating Expenses		31,899	27,549	59,638	49,007
Total Expenses		148,954	109,188	274,966	234,988
Economic Income		112,414	59,693	188,518	160,234
Segment Assets		4,099,397		4,099,397
Operating Segments | Credit Segment | Management Service, Base
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		118,161	137,121	286,602	277,026
Operating Segments | Credit Segment | Investment Advice
Segment Reporting Information [Line Items]
Management and Advisory Fees, Net		$ 118,925	$ 136,288	$ 286,588	$ 260,842

[1] Represents Total Segments Economic Income reconciled to Blackstone Consolidated Income Before Provision for Taxes.

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Reconciliation of Total Segments to Income (Loss) Before Provision for Taxes and Total Assets (Detail) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended
		Jun. 30, 2018		Jun. 30, 2017		Jun. 30, 2018		Jun. 30, 2017		Dec. 31, 2017
Segment Reporting Information [Line Items]
Revenues		$ 2,632,570		$ 1,535,726		$ 4,401,701		$ 3,450,444
Expenses		1,016,381		881,193		1,999,312		1,802,966
Other Income		73,519		110,054		184,118		176,186
Economic Income / Income Before Provision for Taxes	[1]	1,689,708		764,587		2,586,507		1,823,664
Total Assets		30,075,297				30,075,297				$ 34,415,919
Operating Segments
Segment Reporting Information [Line Items]
Revenues		1,969,393		1,474,896		3,634,146		3,283,026
Expenses		864,873		755,069		1,719,689		1,576,484
Economic Income / Income Before Provision for Taxes	[1]	1,104,520		719,827		1,914,457		1,706,542
Total Assets		21,486,487				21,486,487
Consolidation Adjustments and Reconciling Items
Segment Reporting Information [Line Items]
Revenues		663,177		60,830		767,555		167,418
Expenses		151,508		126,124		279,623		226,482
Other Income		73,519		110,054		184,118		176,186
Economic Income / Income Before Provision for Taxes	[1]	585,188		44,760		672,050		117,122
Total Assets		8,588,810				8,588,810
Consolidation Adjustments and Reconciling Items | Impact of Consolidation Adjustment [Member]
Segment Reporting Information [Line Items]
Revenues	[2]	82,752		57,503		186,276		159,142
Expenses	[2]	26,288		53,622		86,187		80,708
Other Income	[2]	73,519		110,054		184,118		176,186
Economic Income / Income Before Provision for Taxes	[1],[2]	129,983		113,935		284,207		254,620
Total Assets	[2]	8,588,810				8,588,810
Consolidation Adjustments and Reconciling Items | Amortization of Intangibles Adjustment [Member]
Segment Reporting Information [Line Items]
Revenues	[3]	(387)		(387)		(774)		(774)
Expenses	[3]	14,486		10,957		28,972		21,914
Economic Income / Income Before Provision for Taxes	[1],[3]	(14,873)		(11,344)		(29,746)		(22,688)
Consolidation Adjustments and Reconciling Items | Intersubsegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues		(1,293)	[4]	(1,628)		(2,634)		(3,067)
Expenses		(1,293)	[4]	(1,628)		(2,634)		(3,067)
Consolidation Adjustments and Reconciling Items | Transaction Related Charges Adjustment [Member]
Segment Reporting Information [Line Items]
Revenues		582,105		5,342	[4]	584,687	[5]	12,117	[5]
Expenses		112,027		63,173	[4]	167,098	[5]	126,927	[5]
Economic Income / Income Before Provision for Taxes	[1]	$ 470,078		$ (57,831)	[4]	$ 417,589	[5]	$ (114,810)	[5]

[1] Represents Total Segments Economic Income reconciled to Blackstone Consolidated Income Before Provision for Taxes.

[2] The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone's interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

[3] Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstone's investment in Patria, which is accounted for under the equity method.

[4] Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone's initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. During the three months ended June 30, 2018, Transaction-Related Charges include $580.9 million of Other Revenues received upon the conclusion of Blackstone's investment sub-advisory relationship with FS Investments' funds.

[5] Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone's initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. During the six months ended June 30, 2018, Transaction-Related Charges include $580.9 million of Other Revenues received upon the conclusion of Blackstone's investment sub-advisory relationship with FS Investments' funds.

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Reconciliation of Total Segments to Income (Loss) Before Provision for Taxes and Total Assets (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Segment Reporting Information [Line Items]
Transaction-Related Charges	$ 580.9	$ 580.9