v2.4.0.8

SEGMENT REPORTING

9 Months Ended

Sep. 30, 2013

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 and financial advisory businesses through five segments:

• Private Equity — Blackstone’s Private Equity segment comprises its management of private equity funds and certain multi-asset class investment funds.

• Real Estate — Blackstone’s Real Estate segment primarily comprises its management of global, European focused and Asian opportunistic real estate funds. In addition, the segment has debt investment funds targeting non-controlling real estate debt-related investment opportunities in the public and private markets, primarily in the United States and Europe.

• Hedge Fund Solutions – Blackstone’s Hedge Fund Solutions segment is comprised principally of Blackstone Alternative Asset Management (“BAAM”), an institutional solutions provider utilizing hedge funds across a variety of strategies.

• Credit – Blackstone’s Credit segment, which principally includes GSO Capital Partners LP (“GSO”), manages credit-focused products within private debt and public market strategies. GSO’s products include senior credit-focused funds, distressed debt funds, mezzanine funds, general credit-focused funds, registered investment companies, separately managed accounts and CLO vehicles.

• Financial Advisory – Blackstone’s Financial Advisory segment comprises its financial and strategic advisory services, restructuring and reorganization advisory services and Park Hill Group, which provides fund placement services for alternative investment funds.

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, while the Financial Advisory segment primarily earns its income from fees related to investment banking services and advice and fund placement services.

Blackstone uses Economic Income (“EI”) as a key measure of value creation, a benchmark of its performance and in making resource deployment and compensation decisions across its five segments. EI represents segment net income before taxes excluding transaction-related charges. Transaction-related charges arise from Blackstone’s IPO and long-term retention programs outside of annual deferred compensation and other corporate actions, including acquisitions. Transaction-related charges include equity-based compensation charges, the amortization of intangible assets and contingent consideration associated with acquisitions. EI presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages. Economic Net Income (“ENI”) represents EI adjusted to include current period taxes. Taxes represent the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes.

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. Consequently, all segment data excludes the assets, liabilities and operating results related to the Blackstone Funds.

The following table presents the financial data for Blackstone’s segments for the three months ended September 30, 2013 and 2012:

		Three Months Ended September 30, 2013
		Private Equity				Real Estate				Hedge Fund Solutions				Credit				Financial Advisory				Total Segments
Segment Revenues
Management and Advisory Fees, Net
Base Management Fees		$	95,281			$	136,721			$	103,392			$	101,900			$	—			$	437,294
Advisory Fees			—				—				—				—				83,602				83,602
Transaction and Other Fees, Net			16,052				19,205				295				7,058				196				42,806
Management Fee Offsets			(2,080	)			(2,385	)			(1,200	)			(2,606	)			—				(8,271	)
Total Management and Advisory Fees, Net			109,253				153,541				102,487				106,352				83,798				555,431
Performance Fees
Realized
Carried Interest			85,121				93,878				—				3,655				—				182,654
Incentive Fees			—				3,737				5,320				22,181				—				31,238
Unrealized
Carried Interest			(86,300	)			340,406				—				35,946				—				290,052
Incentive Fees			—				2,481				29,208				9,303				—				40,992
Total Performance Fees			(1,179	)			440,502				34,528				71,085				—				544,936
Investment Income (Loss)
Realized			11,495				928				(598	)			496				(829	)			11,492
Unrealized			23,621				57,656				6,439				(1,042	)			1,006				87,680
Total Investment Income (Loss)			35,116				58,584				5,841				(546	)			177				99,172
Interest and Dividend Revenue			5,231				6,060				2,523				5,288				2,437				21,539
Other			1,521				2,113				595				(357	)			836				4,708
Total Revenues			149,942				660,800				145,974				181,822				87,248				1,225,786
Expenses
Compensation and Benefits
Compensation			55,800				75,346				37,611				53,250				57,491				279,498
Performance Fee Compensation
Realized
Carried Interest			19,824				38,942				—				1,603				—				60,369
Incentive Fees			—				1,919				1,954				10,726				—				14,599
Unrealized
Carried Interest			(36,198	)			99,323				—				19,216				—				82,341
Incentive Fees			—				615				10,177				292				—				11,084
Total Compensation and Benefits			39,426				216,145				49,742				85,087				57,491				447,891
Other Operating Expenses			30,024				30,614				19,575				23,451				19,208				122,872
Total Expenses			69,450				246,759				69,317				108,538				76,699				570,763
Economic Income		$	80,492			$	414,041			$	76,657			$	73,284			$	10,549			$	655,023

		Three Months Ended September 30, 2012
		Private Equity				Real Estate				Hedge Fund Solutions				Credit				Financial Advisory				Total Segments
Segment Revenues
Management and Advisory Fees, Net
Base Management Fees		$	86,136			$	135,659			$	87,334			$	88,959			$	—			$	398,088
Advisory Fees			—				—				—				—				59,951				59,951
Transaction and Other Fees, Net			25,693				14,937				4				4,486				6				45,126
Management Fee Offsets			(767	)			(6,034	)			(382	)			(1,271	)			—				(8,454	)
Total Management and Advisory Fees, Net			111,062				144,562				86,956				92,174				59,957				494,711
Performance Fees
Realized
Carried Interest			31,592				51,845				—				328				—				83,765
Incentive Fees			—				4,879				2,637				4,104				—				11,620
Unrealized
Carried Interest			128,746				207,695				—				67,024				—				403,465
Incentive Fees			—				6,150				36,635				61,364				—				104,149
Total Performance Fees			160,338				270,569				39,272				132,820				—				602,999
Investment Income (Loss)
Realized			7,189				10,324				637				6,697				251				25,098
Unrealized			43,267				33,676				5,199				(736	)			928				82,334
Total Investment Income			50,456				44,000				5,836				5,961				1,179				107,432
Interest and Dividend Revenue			3,413				3,581				540				2,673				1,797				12,004
Other			1,650				1,941				315				(678	)			(751	)			2,477
Total Revenues			326,919				464,653				132,919				232,950				62,182				1,219,623
Expenses
Compensation and Benefits
Compensation			62,424				71,456				28,826				50,236				46,619				259,561
Performance Fee Compensation
Realized
Carried Interest			1,048				19,822				—				1,153				—				22,023
Incentive Fees			—				2,570				1,062				825				—				4,457
Unrealized
Carried Interest			43,228				47,940				—				37,695				—				128,863
Incentive Fees			—				2,876				8,062				33,316				—				44,254
Total Compensation and Benefits			106,700				144,664				37,950				123,225				46,619				459,158
Other Operating Expenses			30,944				31,284				12,878				33,527				18,823				127,456
Total Expenses			137,644				175,948				50,828				156,752				65,442				586,614
Economic Income (Loss)		$	189,275			$	288,705			$	82,091			$	76,198			$	(3,260	)		$	633,009

The following table reconciles the Total Segments to Blackstone’s Income Before Provision for Taxes for the three months ended September 30, 2013 and 2012:

		Three Months Ended September 30, 2013												Three Months Ended September 30, 2012
		Total Segments				Consolidation Adjustments and Reconciling Items				Blackstone Consolidated				Total Segments				Consolidation Adjustments and Reconciling Items				Blackstone Consolidated
Revenues		$	1,225,786			$	(8,941	)(a)		$	1,216,845			$	1,219,623			$	3,467	(a)		$	1,223,090
Expenses		$	570,763			$	215,642	(b)		$	786,405			$	586,614			$	264,777	(b)		$	851,391
Other Income (Loss)		$	—			$	87,952	(c)		$	87,952			$	—			$	(135,960	)(c)		$	(135,960	)
Economic Income		$	655,023			$	(136,631	)(d)		$	518,392			$	633,009			$	(397,270	)(d)		$	235,739

(a) The Revenues adjustment principally represents management and performance fees earned from Blackstone Funds which were eliminated in consolidation to arrive at Blackstone consolidated revenues.

(b) The Expenses adjustment represents the addition of expenses of the consolidated Blackstone Funds to the Blackstone unconsolidated expenses, amortization of intangibles and expenses related to transaction-related equity-based compensation to arrive at Blackstone consolidated expenses.

(c) The Other Income (Loss) adjustment results from the following:

		Three Months Ended September 30,
		2013				2012
Fund Management Fees and Performance Fees Eliminated in Consolidation and Transactional Investment Loss		$	6,321			$	(4,273	)
Fund Expenses Added in Consolidation			7,679				(8,837	)
Non-Controlling Interests in Income (Loss) of Consolidated Entities			81,419				(115,753	)
Transaction-Related Other Income			(7,467	)			(7,097	)
Total Consolidation Adjustments and Reconciling Items		$	87,952			$	(135,960	)

(d) The reconciliation of Economic Income to Income Before Provision for Taxes as reported in the Condensed Consolidated Statements of Operations consists of the following:

		Three Months Ended September 30,
		2013				2012
Economic Income		$	655,023			$	633,009
Adjustments
Amortization of Intangibles			(27,525	)			(33,338	)
IPO and Acquisition-Related Charges			(190,525	)			(248,179	)
Non-Controlling Interests in Income (Loss) of Consolidated Entities			81,419				(115,753	)
Total Consolidation Adjustments and Reconciling Items			(136,631	)			(397,270	)
Income Before Provision for Taxes		$	518,392			$	235,739

The following table presents the financial data for Blackstone’s segments as of and for the nine months ended September 30, 2013 and 2012:

		September 30, 2013 and the Nine Months Then Ended
		Private Equity				Real Estate				Hedge Fund Solutions				Credit				Financial Advisory				Total Segments
Segment Revenues
Management and Advisory Fees, Net Base Management Fees		$	268,148			$	412,067			$	296,296			$	295,204			$	—			$	1,271,715
Advisory Fees			—				—				—				—				271,356				271,356
Transaction and Other Fees, Net			78,853				47,358				360				20,434				239				147,244
Management Fee Offsets			(4,510	)			(15,983	)			(2,238	)			(5,737	)			—				(28,468	)
Total Management and Advisory Fees, Net			342,491				443,442				294,418				309,901				271,595				1,661,847
Performance Fees
Realized
Carried Interest			228,912				306,132				—				125,068				—				660,112
Incentive Fees			—				37,931				32,874				60,027				—				130,832
Unrealized
Carried Interest			12,672				880,454				—				30,979				—				924,105
Incentive Fees			—				(27,398	)			105,698				74,805				—				153,105
Total Performance Fees			241,584				1,197,119				138,572				290,879				—				1,868,154
Investment Income (Loss)
Realized			57,243				29,039				13,922				4,725				(741	)			104,188
Unrealized			76,420				148,595				(1,702	)			4,432				(871	)			226,874
Total Investment Income (Loss)			133,663				177,634				12,220				9,157				(1,612	)			331,062
Interest and Dividend Revenue			11,466				14,754				5,617				13,906				5,799				51,542
Other			2,311				1,706				426				408				836				5,687
Total Revenues			731,515				1,834,655				451,253				624,251				276,618				3,918,292
Expenses
Compensation and Benefits
Compensation			179,750				218,597				108,323				154,712				191,570				852,952
Performance Fee Compensation
Realized
Carried Interest			36,947				119,810				—				68,959				—				225,716
Incentive Fees			—				19,376				12,092				28,653				—				60,121
Unrealized
Carried Interest			68,532				266,984				—				15,121				—				350,637
Incentive Fees			—				(14,680	)			37,679				35,647				—				58,646
Total Compensation and Benefits			285,229				610,087				158,094				303,092				191,570				1,548,072
Other Operating Expenses			91,370				86,693				51,269				67,374				60,762				357,468
Total Expenses			376,599				696,780				209,363				370,466				252,332				1,905,540
Economic Income		$	354,916			$	1,137,875			$	241,890			$	253,785			$	24,286			$	2,012,752
Segment Assets as of September 30, 2013		$	4,231,858			$	6,410,733			$	996,494			$	2,500,468			$	763,965			$	14,903,518

		Nine Months Ended September 30, 2012
		Private Equity				Real Estate				Hedge Fund Solutions				Credit				Financial Advisory				Total Segments
Segment Revenues
Management and Advisory Fees, Net
Base Management Fees		$	259,400			$	411,278			$	253,433			$	250,827			$	—			$	1,174,938
Advisory Fees			—				—				—				—				229,169				229,169
Transaction and Other Fees, Net			58,741				54,500				161				19,395				253				133,050
Management Fee Offsets			(5,221	)			(20,018	)			(1,092	)			(3,146	)			—				(29,477	)
Total Management and Advisory Fees, Net			312,920				445,760				252,502				267,076				229,422				1,507,680
Performance Fees
Realized
Carried Interest			64,306				74,001				—				14,947				—				153,254
Incentive Fees			—				12,644				7,110				8,837				—				28,591
Unrealized
Carried Interest			74,904				573,705				—				137,942				—				786,551
Incentive Fees			—				12,538				48,841				93,817				—				155,196
Total Performance Fees			139,210				672,888				55,951				255,543				—				1,123,592
Investment Income (Loss)
Realized			14,905				27,203				2,069				13,018				755				57,950
Unrealized			31,399				74,532				9,934				(681	)			1,440				116,624
Total Investment Income			46,304				101,735				12,003				12,337				2,195				174,574
Interest and Dividend Revenue			8,947				9,410				1,421				6,850				5,112				31,740
Other			1,997				642				215				(1,703	)			(709	)			442
Total Revenues			509,378				1,230,435				322,092				540,103				236,020				2,838,028
Expenses
Compensation and Benefits
Compensation			168,746				216,921				91,618				130,224				175,708				783,217
Performance Fee Compensation
Realized
Carried Interest			2,172				27,300				—				8,388				—				37,860
Incentive Fees			—				6,443				2,095				5,746				—				14,284
Unrealized
Carried Interest			33,917				133,892				—				82,412				—				250,221
Incentive Fees			—				6,015				12,536				28,886				—				47,437
Total Compensation and Benefits			204,835				390,571				106,249				255,656				175,708				1,133,019
Other Operating Expenses			90,346				86,768				41,318				66,372				65,211				350,015
Total Expenses			295,181				477,339				147,567				322,028				240,919				1,483,034
Economic Income (Loss)		$	214,197			$	753,096			$	174,525			$	218,075			$	(4,899	)		$	1,354,994

The following table reconciles the Total Segments to Blackstone’s Income Before Provision for Taxes and Total Assets as of and for the nine months ended September 30, 2013 and 2012:

		September 30, 2013 and the Nine Months Then  Ended												Nine Months Ended September 30, 2012
		Total Segments				Consolidation Adjustments and Reconciling Items				Blackstone Consolidated				Total Segments				Consolidation Adjustments and Reconciling Items				Blackstone Consolidated
Revenues		$	3,918,292			$	(14,504	)(a)		$	3,903,788			$	2,838,028			$	(35,700	)(a)		$	2,802,328
Expenses		$	1,905,540			$	630,728	(b)		$	2,536,268			$	1,483,034			$	891,968	(b)		$	2,375,002
Other Income		$	—			$	196,128	(c)		$	196,128			$	—			$	400,412	(c)		$	400,412
Economic Income		$	2,012,752			$	(449,104	)(d)		$	1,563,648			$	1,354,994			$	(527,256	)(d)		$	827,738
Total Assets		$	14,903,518			$	13,131,364	(e)		$	28,034,882

(a) The Revenues adjustment principally represents management and performance fees earned from Blackstone Funds which were eliminated in consolidation to arrive at Blackstone consolidated revenues.

(b) The Expenses adjustment represents the addition of expenses of the consolidated Blackstone Funds to the Blackstone unconsolidated expenses, amortization of intangibles and expenses related to transaction-related equity-based compensation to arrive at Blackstone consolidated expenses.

(c) The Other Income adjustment results from the following:

		Nine Months Ended September 30,
		2013				2012
Fund Management Fees and Performance Fees Eliminated in Consolidation and Transactional Investment Loss		$	11,455			$	32,217
Fund Expenses Added in Consolidation			21,703				31,040
Non-Controlling Interests in Income of Consolidated Entities			184,593				358,417
Transaction-Related Other Income			(21,623	)			(21,262	)
Total Consolidation Adjustments and Reconciling Items		$	196,128			$	400,412

(d) The reconciliation of Economic Income to Income Before Provision for Taxes as reported in the Condensed Consolidated Statements of Operations consists of the following:

		Nine Months Ended September 30,
		2013				2012
Economic Income		$	2,012,752			$	1,354,994
Adjustments
Amortization of Intangibles			(77,504	)			(123,661	)
IPO and Acquisition-Related Charges			(556,193	)			(762,012	)
Non-Controlling Interests in Income of Consolidated Entities			184,593				358,417
Total Consolidation Adjustments and Reconciling Items			(449,104	)			(527,256	)
Income Before Provision for Taxes		$	1,563,648			$	827,738

(e) The Total Assets adjustment represents the addition of assets of the consolidated Blackstone Funds to the Blackstone unconsolidated assets to arrive at Blackstone consolidated assets.

X

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599



Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 32

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599



Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 10

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599



Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 26

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599



Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 29

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599



Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 34

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599



Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 35

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599



Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 41

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599



Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 30

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599



Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 42

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599



Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 31

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599



Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 40

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599



Reference 13: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 33

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599



Reference 14: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

+ Details

Name:	us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration