8-KEarnings & ResultsExhibits & Filings

Blackstone Inc. 8-K Report, Financial Results (Aug 6, 2009)

Filed August 6, 2009For Securities:BX

Summary

Blackstone Inc. (BX) filed an 8-K on August 6, 2009, to report its financial results for the quarter ended June 30, 2009. The filing primarily serves to attach a press release detailing these results and, importantly, to introduce and explain several non-GAAP financial measures that the company utilizes to provide a clearer picture of its operational performance and value creation. These non-GAAP measures, including Economic Net Income (ENI) and Net Fee Related Earnings from Operations, are crucial for investors to understand Blackstone's unique business model and how management assesses performance. For investors, the key takeaway is that Blackstone employs specific metrics beyond standard GAAP to highlight its core earnings potential, the effectiveness of its fee-generating businesses, and its cash flow generation capacity before considering certain non-operational or fund-level impacts. The adoption and explanation of these metrics underscore Blackstone's commitment to transparency in communicating its financial health and operational efficiency to the market, particularly during a period that likely presented unique challenges and opportunities for alternative asset managers.

Key Highlights

  • 1Blackstone Group L.P. announced its financial results for the quarter ended June 30, 2009, via an 8-K filing.
  • 2The filing's primary purpose is to attach a press release (Exhibit 99.1) containing the detailed financial results.
  • 3Blackstone introduces and defines several non-GAAP financial measures: Economic Net Income (ENI), Economic Net Income After Taxes, Net Fee Related Earnings from Operations, and EBITDA-NFRE.
  • 4ENI is presented as a key measure for value creation and performance benchmarking, excluding income taxes and IPO/acquisition-related items.
  • 5Net Fee Related Earnings from Operations is highlighted to assess the profitability of recurring revenues over operating expenses, excluding performance fees.
  • 6Adjusted Cash Flows from Operations is used as a supplemental liquidity measure, focusing on cash flows before consolidation of investment funds and within one-year operating assets/liabilities.
  • 7Reconciliations for these non-GAAP measures to their GAAP equivalents are available in the accompanying press release.
  • 8The filing also notes Robert L. Friedman, Chief Legal Officer, as the signatory for The Blackstone Group L.P.

Frequently Asked Questions

The main purpose of this 8-K filing is to officially announce and provide access to Blackstone's financial results for the quarter ended June 30, 2009, through an attached press release. It also serves to introduce and explain the non-GAAP financial metrics that Blackstone uses to report its performance.

Blackstone uses non-GAAP measures, such as Economic Net Income (ENI), to provide a more insightful view of its operational performance and value creation. ENI excludes certain items like income taxes and IPO/acquisition-related costs, which management believes offers a clearer perspective on segment profitability and performance drivers, particularly for making resource deployment and compensation decisions.

Net Fee Related Earnings from Operations is a non-GAAP measure designed to highlight the earnings generated from Blackstone's core operational activities, excluding performance fees and related costs. Management uses this metric to assess whether the company's recurring revenue from fees is sufficient to cover operating expenses and generate profit, offering insight into the stability and efficiency of its business model.

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