8-KOther EventsExhibits & Filings

Blackstone Inc. 8-K Report, Corporate Update (Aug 11, 2009)

Filed August 11, 2009For Securities:BX

Summary

This 8-K filing from Blackstone Inc. (then The Blackstone Group L.P.) on August 11, 2009, primarily details the retrospective adoption of two new accounting standards: SFAS No. 160 concerning non-controlling interests and FSP EITF No. 03-6-1 regarding the treatment of participating securities in earnings per share calculations. These changes impact how Blackstone presents its consolidated financial statements, reclassifying non-controlling interests and influencing the calculation of net income attributable to the partnership and its various unitholders. Additionally, the filing announces a rebranding of Blackstone's "Marketable Alternative Asset Management" segment to "Credit and Marketable Alternatives" to better reflect its product mix, and the introduction of "EBITDA-NFRE" (Earnings Before Interest, Taxes, and Depreciation and Amortization from Net Fee Related Earnings) as a segment performance metric. These updates are intended to provide clearer financial reporting and a more representative view of the company's operations and segment performance.

Key Highlights

  • 1Adoption of SFAS No. 160, requiring non-controlling interests to be presented as equity, impacting consolidated balance sheets and income statements.
  • 2Recategorization of non-redeemable non-controlling interests and non-controlling interests in Blackstone Holdings as components of Partners' Capital.
  • 3Revised presentation of net income, now showing it before non-controlling interests and detailing net income attributable to different non-controlling interest categories.
  • 4Adoption of FSP EITF No. 03-6-1, influencing the calculation of earnings per share by including unvested participating share-based awards as a separate class of securities.
  • 5Renaming of the "Marketable Alternative Asset Management" segment to "Credit and Marketable Alternatives" to better align with its business focus.
  • 6Introduction of "EBITDA-NFRE" as a key performance indicator for segment analysis, particularly for assessing the ability to cover recurring operating expenses.
  • 7Enhancements to disclosures regarding clawback provisions and goodwill, with financial statement reclassifications to align with recent quarterly reporting.

Frequently Asked Questions

Blackstone adopted SFAS No. 160, which changes how non-controlling interests are presented on financial statements, moving them to equity and adjusting net income presentation. They also adopted FSP EITF No. 03-6-1, which affects the calculation of earnings per share by requiring certain unvested share-based awards to be treated as participating securities.

SFAS No. 160 leads to non-redeemable non-controlling interests being reclassified into Partners' Capital. Net income will now be presented before non-controlling interests, with separate line items for the net income attributable to each category of non-controlling interest, ultimately showing Net Income (Loss) Attributable to The Blackstone Group L.P. as the final net figure.

The renaming of the "Marketable Alternative Asset Management" segment to "Credit and Marketable Alternatives" better reflects its evolving product offerings. The introduction of "EBITDA-NFRE" provides investors with a metric to assess the segment's ability to cover its recurring operational costs, offering a more focused view on operational efficiency.

SFAS No. 160 is applied prospectively as of January 1, 2009, for the balance sheet and income statement, but its presentation and disclosure requirements are applied retrospectively for all periods presented. FSP EITF No. 03-6-1 is also applied retrospectively in this filing. The segment name change and EBITDA-NFRE are presented in line with the June 30, 2009, quarterly report.