8-KEarnings & ResultsExhibits & Filings

Blackstone Inc. 8-K Report, Financial Results (Nov 13, 2007)

Filed November 13, 2007For Securities:BX

Summary

This 8-K filing from The Blackstone Group L.P. (BX), dated November 12, 2007, announces the release of its financial results for the third quarter ended September 30, 2007. The core of the filing is the inclusion of a press release detailing these results. Investors should note that Blackstone is presenting several non-GAAP financial measures, including Economic Net Income (ENI), Pro Forma Economic Net Income, Pro Forma Adjusted Economic Net Income After Taxes, Adjusted Cash Flow from Operations, and Pro Forma Adjusted Cash Flow from Operations. These measures are used by management to assess performance and liquidity, and Blackstone believes they offer valuable insights into operating performance and value creation when viewed alongside GAAP measures. The company emphasizes that ENI is a key performance indicator used for resource deployment and compensation decisions, and it represents net income before income taxes, certain non-cash charges, and pre-IPO profit-sharing arrangements. The pro forma measures are designed to provide a comparable view as if the company's initial public offering and reorganization had occurred earlier. The adjusted cash flow metrics are presented to help investors understand liquidity and amounts available for distributions. Reconciliations to GAAP measures are available in the attached press release.

Key Highlights

  • 1Blackstone Group L.P. (BX) released its Q3 2007 financial results via an 8-K filing on November 12, 2007.
  • 2The filing includes a press release detailing the company's financial performance for the quarter ended September 30, 2007.
  • 3Blackstone is presenting key non-GAAP financial metrics, including Economic Net Income (ENI) and various pro forma and adjusted cash flow measures.
  • 4Economic Net Income (ENI) is highlighted as a primary performance measure for management, excluding taxes, certain equity-based compensation, and amortization.
  • 5Pro Forma financial metrics are provided to give investors a historical perspective as if the IPO and reorganization occurred earlier.
  • 6Adjusted Cash Flow from Operations is presented as a supplemental measure of liquidity and distributable amounts.
  • 7The company states that reconciliations of non-GAAP measures to GAAP are included in the press release.

Frequently Asked Questions

Blackstone is reporting Economic Net Income (ENI), Pro Forma Economic Net Income, Pro Forma Adjusted Economic Net Income After Taxes, Adjusted Cash Flow from Operations, and Pro Forma Adjusted Cash Flow from Operations. These are presented as supplemental measures to GAAP and are intended to provide management and investors with a clearer view of operating performance and liquidity.

Blackstone uses these non-GAAP measures because management believes they are important for assessing value creation, making resource deployment and compensation decisions, and understanding liquidity. For example, ENI is used to benchmark performance, and adjusted cash flow metrics help assess amounts available for distributions. The company provides these alongside GAAP measures for a more comprehensive view.

Economic Net Income (ENI) is defined by Blackstone as net income excluding the impact of income taxes, non-cash charges from vesting of transaction-related equity-based compensation, and amortization of intangibles. For historical periods before the IPO, ENI was equivalent to income before taxes as certain items were treated as partnership distributions. Management views ENI as a key measure of value creation.

The detailed financial results, including the definitions and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures, are provided in the press release attached as Exhibit 99.1 to this 8-K filing.