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.