Notes to Condensed Consolidated Financial Statements
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The
Blackstone Group L.P., together with its subsidiaries (Blackstone or the Partnership), is a leading global manager of private capital. The alternative asset management business includes the management of private equity funds,
real estate funds, real estate investment trusts (REITs), funds of hedge funds, hedge funds, credit-focused funds, collateralized loan obligation (CLO) vehicles, separately managed accounts and registered investment companies
(collectively referred to as the Blackstone Funds). Blackstones business is organized into four segments: private equity, real estate, hedge fund solutions and credit.
The Partnership was formed as a Delaware limited partnership on March 12, 2007. The Partnership is managed and operated by its
general partner, Blackstone Group Management L.L.C., which is in turn wholly owned and controlled by one of Blackstones founders, Stephen A. Schwarzman (the Founder), and Blackstones other senior managing directors. The
activities of the Partnership are conducted through its holding partnerships: Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. (collectively,
Blackstone Holdings, Blackstone Holdings Partnerships or the Holding Partnerships). The Partnership, through its wholly owned subsidiaries, is the sole general partner in each of these Holding Partnerships.
Generally, holders of the limited partner interests in the Holding Partnerships may, four times each year, exchange their
limited partnership interests (Partnership Units) for Blackstone common units, on a one-to-one basis, exchanging one Partnership Unit from each of the Holding Partnerships for one Blackstone common unit.
2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared in accordance with accounting
principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude
some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and
that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim
period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Partnerships Annual Report on Form 10-K for the year ended
December 31, 2016 filed with the Securities and Exchange Commission. As disclosed in the audited consolidated financial statements, the Partnership adopted certain accounting guidance for the quarter ended June 30, 2016 and any adjustments
were reflected prospectively as of January 1, 2016. As such, the condensed consolidated financial statements for the three months ended March 31, 2016 were recast from the amounts originally reported in the Partnerships Quarterly
Report on Form 10-Q for the quarter ended March 31, 2016.
The condensed consolidated financial statements include the
accounts of the Partnership, its wholly owned or majority-owned subsidiaries, the consolidated entities which are considered to be variable interest entities and for which the Partnership is considered the primary beneficiary, and certain
partnerships or similar entities which are not considered variable interest entities but in which the general partner is presumed to have control.
All intercompany balances and transactions have been eliminated in consolidation.
13
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Restructurings within consolidated CLOs are treated as investment purchases or sales, as
applicable, in the Condensed Consolidated Statements of Cash Flows.
Consolidation
The Partnership consolidates all entities that it controls through a majority voting interest or otherwise, including those Blackstone
Funds in which the general partner has a controlling financial interest. The Partnership has a controlling interest in Blackstone Holdings because the limited partners do not have the right to dissolve the partnerships or have substantive kick out
rights or participating rights that would overcome the presumption of control by the Partnership. Accordingly, the Partnership consolidates Blackstone Holdings and records non-controlling interests to reflect the economic interests of the limited
partners of Blackstone Holdings.
In addition, the Partnership consolidates all variable interest entities (VIE)
in which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that
most significantly impact the entitys economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance
requires an analysis to determine (a) whether an entity in which the Partnership holds a variable interest is a VIE and (b) whether the Partnerships involvement, through holding interests directly or indirectly in the entity or
contractually through other variable interests (for example, management and performance related fees), would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment.
The Partnership determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity
and reconsiders that conclusion continually. In evaluating whether the Partnership is the primary beneficiary, Blackstone evaluates its economic interests in the entity held either directly or indirectly by the Partnership. The consolidation
analysis can generally be performed qualitatively; however, if it is not readily apparent that the Partnership is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Partnership,
affiliates of the Partnership or third parties) or amendments to the governing documents of the respective Blackstone Funds could affect an entitys status as a VIE or the determination of the primary beneficiary. At each reporting date, the
Partnership assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.
Assets of
consolidated VIEs that can only be used to settle obligations of the consolidated VIE and liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of Blackstone are presented
in a separate section in the Condensed Consolidated Statements of Financial Condition.
Blackstones other disclosures
regarding VIEs are discussed in Note 9. Variable Interest Entities.
Fair Value of Financial Instruments
GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring
financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the
existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment
used in measuring fair value.
14
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Financial instruments measured and reported at fair value are classified and disclosed
based on the observability of inputs used in the determination of fair values, as follows:
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Level I Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of
financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. The Partnership does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and
a sale could reasonably impact the quoted price.
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Level II Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the
reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held
within CLO vehicles, government and agency securities, less liquid and restricted equity securities, and certain over-the-counter derivatives where the fair value is based on observable inputs. Senior and subordinated notes issued by CLO vehicles
are classified within Level II of the fair value hierarchy.
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Level III Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market
activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership
interests in private equity and real estate funds, credit-focused funds, distressed debt and non-investment grade residual interests in securitizations, certain corporate bonds and loans held within CLO vehicles, and certain over-the-counter
derivatives where the fair value is based on unobservable inputs.
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In certain cases, the inputs used to
measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input
that is significant to the fair value measurement. The Partnerships assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial
instrument.
Transfers between levels of the fair value hierarchy are recognized at the beginning of the reporting period.
Level II Valuation Techniques
Financial instruments classified within Level II of the fair value hierarchy comprise debt instruments, including certain corporate loans and bonds held by Blackstones consolidated CLO vehicles and
debt securities sold, not yet purchased. Certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.
The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:
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Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable
dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in
comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.
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15
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
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Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit
spreads.
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Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value
of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.
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Level III Valuation Techniques
In the absence of observable market
prices, Blackstone values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; managements determination of fair value is then based on the best information
available in the circumstances, and may incorporate managements own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments
for non-performance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, real estate properties, certain funds of hedge funds and credit-focused investments.
Private Equity Investments
The fair values of private equity investments are determined by reference to
projected net earnings, earnings before interest, taxes, depreciation and amortization (EBITDA), the discounted cash flow method, public market or private transactions, valuations for comparable companies and other measures which, in
many cases, are based on unaudited information at the time received. Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee
company, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by
reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples.
Real Estate Investments
The fair values of real estate investments are determined by considering projected operating cash
flows, sales of comparable assets, if any, and replacement costs, among other measures. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rates (cap
rates) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or assets (for example, multiplying a key performance metric of the investee company or asset, such as EBITDA, by a relevant
valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other
similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to an exit EBITDA multiple or capitalization rate. Additionally, where applicable, projected distributable cash flow through debt maturity will be
considered in support of the investments fair value.
Credit-Focused Investments
The fair values of
credit-focused investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. For credit-focused investments that are not publicly traded or whose market prices are not
readily available, Blackstone may utilize other valuation techniques, including the discounted cash flow method or a market approach. The discounted cash flow method projects the expected cash flows of the debt instrument based on contractual terms,
and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly traded debt instruments issued by companies operating in similar industries as the subject investment,
with similar leverage statistics and time to maturity.
16
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The market approach is generally used to determine the enterprise value of the issuer of
a credit investment, and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit
instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.
Level III Valuation Process
Investments classified within Level III of the fair value hierarchy are valued on a quarterly basis, taking into
consideration factors including any changes in Blackstones weighted-average cost of capital assumptions, discounted cash flow projections and exit multiple assumptions, as well as any changes in economic and other relevant conditions, and
valuation models are updated accordingly. The valuation process also includes a review by an independent valuation party, at least annually for all investments, and quarterly for certain investments, to corroborate the values determined by
management. The valuations of Blackstones investments are reviewed quarterly by a valuation committee chaired by Blackstones Vice Chairman and includes senior heads of each of Blackstones businesses, as well as representatives of
legal and finance. Each quarter, the valuations of Blackstones investments are also reviewed by the Audit Committee in a meeting attended by the chairman of the valuation committee. The valuations are further tested by comparison to actual
sales prices obtained on disposition of the investments.
Investments, at Fair Value
The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and
Auditing Guide,
Investment Companies
, and reflect their investments, including majority-owned and controlled investments (the Portfolio Companies), at fair value. Such consolidated funds investments are reflected in
Investments on the Condensed Consolidated Statements of Financial Condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of Net Gains (Losses) from Fund Investment Activities in the
Condensed Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, at current market
conditions (i.e., the exit price).
Blackstones principal investments are presented at fair value with unrealized
appreciation or depreciation and realized gains and losses recognized in the Condensed Consolidated Statements of Operations within Investment Income (Loss).
For certain instruments, the Partnership has elected the fair value option. Such election is irrevocable and is applied on an investment by investment basis at initial recognition. The Partnership has
applied the fair value option for certain loans and receivables and certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses recorded in net income. Accounting for these financial
instruments at fair value is consistent with how the Partnership accounts for its other principal investments. Loans extended to third parties are recorded within Accounts Receivable within the Condensed Consolidated Statements of Financial
Condition. Debt securities for which the fair value option has been elected are recorded within Investments. The methodology for measuring the fair value of such investments is consistent with the methodology applied to private equity, real estate,
credit-focused and funds of hedge funds investments. Changes in the fair value of such instruments are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. Interest income on interest bearing loans and
receivables and debt securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within
Interest and Dividend Revenue.
17
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
In addition, the Partnership has elected the fair value option for the assets and
liabilities of CLO vehicles that are consolidated as of January 1, 2010, as a result of the initial adoption of variable interest entity consolidation guidance. The Partnership has also elected the fair value option for CLO vehicles
consolidated as a result of the acquisitions of CLO management contracts or the acquisition of the share capital of CLO managers. Historically, the adjustment resulting from the difference between the fair value of assets and liabilities for each of
these events was presented as a transition and acquisition adjustment to Appropriated Partners Capital. Assets of the consolidated CLOs are presented within Investments within the Condensed Consolidated Statements of Financial Condition and
Liabilities within Loans Payable for the amounts due to unaffiliated third parties and Due to Affiliates for the amounts held by non-consolidated affiliates. Changes in the fair value of consolidated CLO assets and liabilities and related interest,
dividend and other income subsequent to adoption and acquisition are presented within Net Gains (Losses) from Fund Investment Activities. Expenses of consolidated CLO vehicles are presented in Fund Expenses. Historically, amounts attributable to
Non-Controlling Interests in Consolidated Entities had a corresponding adjustment to Appropriated Partners Capital. On the adoption of the new CLO measurement guidance, there is no attribution of amounts to Non-Controlling Interests and no
corresponding adjustments to Appropriated Partners Capital.
The Partnership has elected the fair value option for
certain proprietary investments that would otherwise have been accounted for using the equity method of accounting. The fair value of such investments is based on quoted prices in an active market or using the discounted cash flow method. Changes in
fair value are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.
Further
disclosure on instruments for which the fair value option has been elected is presented in Note 7. Fair Value Option.
The investments of consolidated Blackstone Funds in funds of hedge funds (Investee Funds) are valued at net asset value (NAV) per share of the Investee Fund. In limited
circumstances, the Partnership may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Partnership will estimate the fair value in good faith and in a
manner that it reasonably chooses, in accordance with the requirements of GAAP.
Certain investments of Blackstone and of the
consolidated Blackstone funds of hedge funds and credit-focused funds measure their investments in underlying funds at fair value using NAV per share without adjustment. The terms of the investees investment generally provide for minimum
holding periods or lock-ups, the institution of gates on redemptions or the suspension of redemptions or an ability to side pocket investments, at the discretion of the investees fund manager, and as a result, investments may not be redeemable
at, or within three months of, the reporting date. A side pocket is used by hedge funds and funds of hedge funds to separate investments that may lack a readily ascertainable value, are illiquid or are subject to liquidity restriction. Redemptions
are generally not permitted until the investments within a side pocket are liquidated or it is deemed that the conditions existing at the time that required the investment to be included in the side pocket no longer exist. As the timing of either of
these events is uncertain, the timing at which the Partnership may redeem an investment held in a side pocket cannot be estimated. Further disclosure on instruments for which fair value is measured using NAV per share is presented in Note 5.
Net Asset Value as Fair Value.
Security and loan transactions are recorded on a trade date basis.
18
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Equity Method Investments
Investments in which the Partnership is deemed to exert significant influence, but not control, are accounted for using the equity method
of accounting. Under the equity method of accounting, the Partnerships share of earnings (losses) from equity method investments is included in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. The carrying
amounts of equity method investments are reflected in Investments in the Condensed Consolidated Statements of Financial Condition. As the underlying investments of the Partnerships equity method investments in Blackstone Funds are reported at
fair value, the carrying value of the Partnerships equity method investments approximates fair value.
Repurchase and Reverse
Repurchase Agreements
Securities purchased under agreements to resell (reverse repurchase agreements) and
securities sold under agreements to repurchase (repurchase agreements), comprised primarily of U.S. and non-U.S. government and agency securities, asset-backed securities and corporate debt, represent collateralized financing
transactions. Such transactions are recorded in the Condensed Consolidated Statements of Financial Condition at their contractual amounts and include accrued interest. The carrying value of repurchase and reverse repurchase agreements approximates
fair value.
The Partnership manages credit exposure arising from reverse repurchase agreements and repurchase agreements by,
in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Partnership, in the event of a counterparty default, the right to liquidate collateral and the right to offset a
counterpartys rights and obligations.
The Partnership takes possession of securities purchased under reverse repurchase
agreements and is permitted to repledge, deliver or otherwise use such securities. The Partnership also pledges its financial instruments to counterparties to collateralize repurchase agreements. Financial instruments pledged that can be repledged,
delivered or otherwise used by the counterparty are recorded in Investments in the Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to reverse repurchase and repurchase agreements are discussed in
Note 10. Reverse Repurchase and Repurchase Agreements.
Blackstone does not offset assets and liabilities
relating to reverse repurchase agreements and repurchase agreements in its Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to offsetting are discussed in Note 11. Offsetting of Assets and
Liabilities.
Securities Sold, Not Yet Purchased
Securities Sold, Not Yet Purchased consist of equity and debt securities that the Partnership has borrowed and sold. The Partnership is required to cover its short sale in the future by
purchasing the security at prevailing market prices and delivering it to the counterparty from which it borrowed the security. The Partnership is exposed to loss in the event that the price at which a security may have to be purchased to cover a
short sale exceeds the price at which the borrowed security was sold short.
Securities Sold, Not Yet Purchased are recorded
at fair value in the Condensed Consolidated Statements of Financial Condition.
Derivative Instruments
The Partnership recognizes all derivatives as assets or liabilities on its Condensed Consolidated Statements of Financial Condition at
fair value. On the date the Partnership enters into a derivative contract, it designates and
19
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
documents each derivative contract as one of the following: (a) a hedge of a recognized asset or liability (fair value hedge), (b) a hedge of a forecasted transaction or of
the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge), (c) a hedge of a net investment in a foreign operation, or (d) a derivative instrument not designated as a
hedging instrument (freestanding derivative). For a fair value hedge, Blackstone records changes in the fair value of the derivative and, to the extent that it is highly effective, changes in the fair value of the hedged asset or
liability attributable to the hedged risk, in current period earnings in General, Administrative and Other in the Condensed Consolidated Statements of Operations. Changes in the fair value of derivatives designated as hedging instruments caused by
factors other than changes in the risk being hedged, which are excluded from the assessment of hedge effectiveness, are recognized in current period earnings. Gains or losses on a derivative instrument that is designated as, and is effective as, an
economic hedge of a net investment in a foreign operation are reported in the cumulative translation adjustment section of other comprehensive income to the extent it is effective as a hedge. The ineffective portion of a net investment hedge is
recognized in current period earnings.
The Partnership formally documents at inception its hedge relationships, including
identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and the Partnerships evaluation of effectiveness of its hedged transaction. At least monthly, the
Partnership also formally assesses whether the derivative it designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in estimated fair values or cash flows of the hedged items using either the
regression analysis or the dollar offset method. For net investment hedges, the Partnership uses a method based on changes in spot rates to measure effectiveness. If it is determined that a derivative is not highly effective at hedging the
designated exposure, hedge accounting is discontinued. The Partnership may also at any time remove a designation of a fair value hedge. The fair values of hedging derivative instruments are reflected within Other Assets in the Condensed Consolidated
Statements of Financial Condition.
For freestanding derivative contracts, the Partnership presents changes in fair value in
current period earnings. Changes in the fair value of derivative instruments held by consolidated Blackstone Funds are reflected in Net Gains (Losses) from Fund Investment Activities or, where derivative instruments are held by the Partnership,
within Investment Income (Loss) in the Condensed Consolidated Statements of Operations. The fair value of freestanding derivative assets of the consolidated Blackstone Funds are recorded within Investments, the fair value of freestanding derivative
assets that are not part of the consolidated Blackstone Funds are recorded within Other Assets and the fair value of freestanding derivative liabilities are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed
Consolidated Statements of Financial Condition.
The Partnership has elected to not offset derivative assets and liabilities
or financial assets in its Condensed Consolidated Statements of Financial Condition, including cash, that may be received or paid as part of collateral arrangements, even when an enforceable master netting agreement is in place that provides the
Partnership, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterpartys rights and obligations.
Blackstones other disclosures regarding derivative financial instruments are discussed in Note 6. Derivative Financial Instruments.
Blackstones disclosures regarding offsetting are discussed in Note 11. Offsetting of Assets and Liabilities.
Affiliates
Blackstone considers its Founder, senior managing directors, employees, the Blackstone Funds and the Portfolio Companies to be affiliates.
20
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Distributions
Distributions are reflected in the condensed consolidated financial statements when declared.
Recent Accounting Developments
In May 2014, the Financial Accounting Standards Board (FASB) issued amended guidance on revenue from contracts with customers. The guidance requires that an entity should recognize revenue to
depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity is required to (a) identify the
contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize
revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative
revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.
The guidance
introduces new qualitative and quantitative disclosure requirements about contracts with customers including revenue and impairments recognized, disaggregation of revenue and information about contract balances and performance obligations.
Information is required about significant judgments and changes in judgments in determining the timing of satisfaction of performance obligations and determining the transaction price and amounts allocated to performance obligations. Additional
disclosures are required about assets recognized from the costs to obtain or fulfill a contract.
In August 2015, the FASB
issued new guidance deferring the effective date of the new revenue recognition standard by one year. The new guidance should be applied for annual reporting periods beginning after December 15, 2017, including interim periods within that
reporting period.
Blackstone has concluded that capital allocation-based Performance Fees (Capital Allocation-Based
Arrangements) represent equity method investments that are not in the scope of the amended revenue recognition guidance. Therefore, effective January 1, 2018, Blackstone will amend the recognition and measurement of Capital
Allocation-Based Arrangements. This accounting change will not change the timing or amount of revenue recognized related to Capital Allocation-Based Arrangements. These amounts are currently recognized within Realized and Unrealized Performance Fees
Carried Interest and Incentive Fees in the Consolidated Statements of Operations. Under the equity method of accounting Blackstone will recognize its allocations of Carried Interest or Incentive Fees within Investment Income along with the
allocations proportionate to Blackstones ownership interests in the Blackstone Funds. Blackstone will apply a retrospective application and prior periods shall be restated. The impact of adoption is a reclassification of Carried Interest to
Investment Income. This change will have no impact on Net Income Attributable to The Blackstone Group L.P. Blackstone has concluded that the majority of its Incentive Fees are not part of a Capital Allocation-Based Arrangement (Contractual
Incentive Fees), and are within the scope of the amended revenue recognition guidance. This accounting change will delay recognition of Contractual Incentive Fees compared to our current accounting treatment, and it is not expected to have a
material impact on Blackstones financial statements.
The Partnership is evaluating the impact of the amended revenue
recognition guidance on other revenue streams including management fees and considerations for reporting revenue gross versus net.
In February 2016, the FASB issued amended guidance on the accounting for leases. The guidance requires the recognition of lease assets and lease liabilities for those leases classified as operating leases
under previous GAAP. The guidance retains a distinction between finance leases and operating leases. The classification criteria for
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THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases under previous
GAAP. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not changed significantly from previous GAAP.
For operating leases, a lessee is required to do the following: (a) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the
Statement of Financial Condition, (b) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (c) classify all cash payments within operating
activities in the statement of cash flows.
The guidance is effective for fiscal periods beginning after December 15,
2018. Early application is permitted. Blackstone is evaluating the impact of the amended guidance on the Consolidated Statement of Financial Condition. It is not expected to have a material impact on the Consolidated Statements of Operations or the
Consolidated Statements of Cash Flows.
Intangible Assets, Net consists of the following:
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March 31,
2017
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December 31,
2016
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Finite-Lived Intangible Assets/Contractual Rights
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$
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1,400,876
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$
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1,400,876
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Accumulated Amortization
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(1,149,236
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)
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(1,138,272
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)
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Intangible Assets, Net
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$
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251,640
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$
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262,604
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Amortization expense associated with Blackstones intangible assets was $11.0 million for the
three months ended March 31, 2017 and $22.8 million for the three months ended March 31, 2016.
Amortization of Intangible Assets held at March 31, 2017 is expected to be $43.9 million, $43.8 million,
$43.8 million, $43.8 million, and $43.8 million for each of the years ending December 31, 2017, 2018, 2019, 2020, and 2021, respectively. Blackstones intangible assets as of March 31, 2017 are expected to
amortize over a weighted-average period of 5.9 years.
Investments
consist of the following:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
Investments of Consolidated Blackstone Funds
|
|
$
|
7,202,289
|
|
|
$
|
6,480,674
|
|
Equity Method Investments
|
|
|
2,955,852
|
|
|
|
3,092,378
|
|
Corporate Treasury Investments
|
|
|
2,451,274
|
|
|
|
2,518,438
|
|
Performance Fees
|
|
|
5,213,345
|
|
|
|
5,320,994
|
|
Other Investments
|
|
|
315,498
|
|
|
|
282,491
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18,138,258
|
|
|
$
|
17,694,975
|
|
|
|
|
|
|
|
|
|
|
22
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Blackstones share of Investments of Consolidated Blackstone Funds totaled
$384.2 million and $384.4 million at March 31, 2017 and December 31, 2016, respectively.
Investments of
Consolidated Blackstone Funds
The following table presents the Realized and Net Change in Unrealized Gains (Losses) on
investments held by the consolidated Blackstone Funds and a reconciliation to Other Income Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Realized Gains
|
|
$
|
55,908
|
|
|
$
|
13,382
|
|
Net Change in Unrealized Losses
|
|
|
(28,522
|
)
|
|
|
(25,241
|
)
|
|
|
|
|
|
|
|
|
|
Realized and Net Change in Unrealized Gains (Losses) from Consolidated Blackstone Funds
|
|
|
27,386
|
|
|
|
(11,859
|
)
|
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds
|
|
|
38,746
|
|
|
|
31,001
|
|
|
|
|
|
|
|
|
|
|
Other Income Net Gains from Fund Investment Activities
|
|
$
|
66,132
|
|
|
$
|
19,142
|
|
|
|
|
|
|
|
|
|
|
Equity Method Investments
Blackstones equity method investments include its investments in private equity funds, real estate funds, funds of hedge funds and credit-focused funds and other proprietary investments, which are
not consolidated but in which the Partnership exerts significant influence.
Blackstone evaluates each of its equity method
investments to determine if any were significant as defined by guidance from the United States Securities and Exchange Commission. As of and for the three months ended March 31, 2017 and 2016, no individual equity method investment held by
Blackstone met the significance criteria. As such, Blackstone is not required to present separate financial statements for any of its equity method investments.
The Partnership recognized net gains related to its equity method investments of $168.5 million and $17.6 million for the three months ended March 31, 2017 and 2016, respectively.
Corporate Treasury Investments
The portion of corporate treasury investments included in Investments represents the Partnerships investments into primarily fixed income securities, mutual fund interests, and other fund interests.
These strategies are managed by a combination of Blackstone personnel and third party advisors. The following table presents the Realized and Net Change in Unrealized Gains (Losses) on these investments:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Realized Losses
|
|
$
|
(5,681
|
)
|
|
$
|
(18,609
|
)
|
Net Change in Unrealized Gains
|
|
|
30,480
|
|
|
|
1,783
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
24,799
|
|
|
$
|
(16,826
|
)
|
|
|
|
|
|
|
|
|
|
23
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Performance Fees
Performance Fees allocated to the general partner in respect of performance of certain carry funds, funds of hedge funds and credit-focused funds were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private
Equity
|
|
|
Real Estate
|
|
|
Hedge Fund
Solutions
|
|
|
Credit
|
|
|
Total
|
|
Performance Fees, December 31, 2016
|
|
$
|
1,984,792
|
|
|
$
|
2,970,448
|
|
|
$
|
6,132
|
|
|
$
|
359,622
|
|
|
$
|
5,320,994
|
|
Performance Fees Allocated as a Result of Changes in Fund Fair Values
|
|
|
399,477
|
|
|
|
495,505
|
|
|
|
19,404
|
|
|
|
60,964
|
|
|
|
975,350
|
|
Foreign Exchange Gain
|
|
|
|
|
|
|
15,858
|
|
|
|
|
|
|
|
|
|
|
|
15,858
|
|
Fund Distributions
|
|
|
(635,706
|
)
|
|
|
(450,940
|
)
|
|
|
(3,347
|
)
|
|
|
(8,864
|
)
|
|
|
(1,098,857
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Fees, March 31, 2017
|
|
$
|
1,748,563
|
|
|
$
|
3,030,871
|
|
|
$
|
22,189
|
|
|
$
|
411,722
|
|
|
$
|
5,213,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Investments
Other Investments consist primarily of proprietary investment securities held by Blackstone. The following table presents Blackstones Realized and Net Change in Unrealized Gains (Losses) in other
investments:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Realized Gains
|
|
$
|
5
|
|
|
$
|
4,733
|
|
Net Change in Unrealized Gains (Losses)
|
|
|
5,488
|
|
|
|
(6,235
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,493
|
|
|
$
|
(1,502
|
)
|
|
|
|
|
|
|
|
|
|
5.
|
NET ASSET VALUE AS FAIR VALUE
|
A summary of fair value by strategy type alongside the remaining unfunded commitments and ability to redeem such investments as of March 31, 2017 is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategy
|
|
Fair Value
|
|
|
Unfunded
Commitments
|
|
|
Redemption
Frequency
(if currently
eligible)
|
|
|
Redemption
Notice
Period
|
|
Diversified Instruments
|
|
$
|
169,421
|
|
|
$
|
125
|
|
|
|
(a
|
)
|
|
|
(a
|
)
|
Credit Driven
|
|
|
206,419
|
|
|
|
268
|
|
|
|
(b
|
)
|
|
|
(b
|
)
|
Equity
|
|
|
59,748
|
|
|
|
|
|
|
|
(c
|
)
|
|
|
(c
|
)
|
Commodities
|
|
|
2,135
|
|
|
|
|
|
|
|
(d
|
)
|
|
|
(d
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
437,723
|
|
|
$
|
393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Diversified Instruments include investments in funds that invest across multiple strategies. Investments representing 4% of the fair value of the investments in this
category may not be redeemed at, or within three months of, the reporting date. The remaining 96% of investments in this category are redeemable as of the reporting date.
|
(b)
|
The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. Investments representing 43% of the fair value
of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 57% of investments in this category are redeemable as of the reporting date.
|
24
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
(c)
|
The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 100% of the fair
value of the investments in this category may not be redeemed at, or within three months of, the reporting date.
|
(d)
|
The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. Investments
representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date.
|
6.
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
Blackstone and the consolidated Blackstone Funds enter into derivative contracts in the normal course of business to achieve certain risk management objectives and for general investment purposes.
Blackstone may enter into derivative contracts in order to hedge its interest rate risk exposure against the effects of interest rate changes. Additionally, Blackstone may also enter into derivative contracts in order to hedge its foreign currency
risk exposure against the effects of a portion of its non-U.S. dollar denominated currency net investments. As a result of the use of derivative contracts, Blackstone and the consolidated Blackstone Funds are exposed to the risk that counterparties
will fail to fulfill their contractual obligations. To mitigate such counterparty risk, Blackstone and the consolidated Blackstone Funds enter into contracts with certain major financial institutions, all of which have investment grade ratings.
Counterparty credit risk is evaluated in determining the fair value of derivative instruments.
Net Investment Hedges
To manage the potential exposure from adverse changes in currency exchange rates arising from Blackstones net investment in foreign
operations, during December 2014, Blackstone entered into several foreign currency forward contracts to hedge a portion of the net investment in Blackstones non-U.S. dollar denominated foreign operations.
Blackstone uses foreign currency forward contracts to hedge portions of Blackstones net investments in foreign operations. The
gains and losses due to change in fair value attributable to changes in spot exchange rates on foreign currency derivatives designated as net investment hedges were recognized in Other Comprehensive Income, Net of Tax Currency Translation
Adjustment. For the three months ended March 31, 2017 the resulting loss was $0.6 million.
Freestanding Derivatives
Freestanding derivatives are instruments that Blackstone and certain of the consolidated Blackstone Funds have entered
into as part of their overall risk management and investment strategies. These derivative contracts are not designated as hedging instruments for accounting purposes. Such contracts may include interest rate swaps, foreign exchange contracts, equity
swaps, options, futures and other derivative contracts.
25
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The table below summarizes the aggregate notional amount and fair value of the
derivative financial instruments. The notional amount represents the absolute value amount of all outstanding derivative contracts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
|
|
Assets
|
|
|
Liabilities
|
|
|
Assets
|
|
|
Liabilities
|
|
|
|
Notional
|
|
|
Fair
Value
|
|
|
Notional
|
|
|
Fair
Value
|
|
|
Notional
|
|
|
Fair
Value
|
|
|
Notional
|
|
|
Fair
Value
|
|
Net Investment Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Contracts
|
|
$
|
55,678
|
|
|
$
|
771
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
51,267
|
|
|
$
|
587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blackstone
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate Contracts
|
|
|
1,883,697
|
|
|
|
1,658
|
|
|
|
512,719
|
|
|
|
2,239
|
|
|
|
2,651,583
|
|
|
|
2,356
|
|
|
|
546,211
|
|
|
|
2,355
|
|
Foreign Currency Contracts
|
|
|
213,764
|
|
|
|
2,411
|
|
|
|
209,298
|
|
|
|
1,751
|
|
|
|
164,247
|
|
|
|
1,037
|
|
|
|
127,444
|
|
|
|
966
|
|
Credit Default Swaps
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
351
|
|
|
|
|
|
|
|
|
|
|
|
3,819
|
|
|
|
215
|
|
Investments of Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blackstone Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Contracts
|
|
|
279,646
|
|
|
|
23,930
|
|
|
|
149,656
|
|
|
|
1,861
|
|
|
|
254,162
|
|
|
|
25,050
|
|
|
|
136,025
|
|
|
|
3,903
|
|
Credit Default Swaps
|
|
|
|
|
|
|
|
|
|
|
119,625
|
|
|
|
1,788
|
|
|
|
|
|
|
|
|
|
|
|
113,057
|
|
|
|
3,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,377,107
|
|
|
|
27,999
|
|
|
|
994,298
|
|
|
|
7,990
|
|
|
|
3,069,992
|
|
|
|
28,443
|
|
|
|
926,556
|
|
|
|
10,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,432,785
|
|
|
$
|
28,770
|
|
|
$
|
994,298
|
|
|
$
|
7,990
|
|
|
$
|
3,069,992
|
|
|
$
|
28,443
|
|
|
$
|
977,823
|
|
|
$
|
11,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below summarizes the impact to the Condensed Consolidated Statements of Operations from
derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Net Investment Hedges Foreign Currency Contracts
|
|
|
|
|
|
|
|
|
Hedge Ineffectiveness
|
|
$
|
(22
|
)
|
|
$
|
129
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
|
|
|
|
|
|
|
Realized Gains (Losses)
|
|
|
|
|
|
|
|
|
Interest Rate Contracts
|
|
$
|
(940
|
)
|
|
$
|
(7,358
|
)
|
Foreign Currency Contracts
|
|
|
1,420
|
|
|
|
(4,310
|
)
|
Credit Default Swaps
|
|
|
5
|
|
|
|
(3,811
|
)
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
485
|
|
|
$
|
(15,479
|
)
|
|
|
|
|
|
|
|
|
|
Net Change in Unrealized Gains (Losses)
|
|
|
|
|
|
|
|
|
Interest Rate Contracts
|
|
$
|
(217
|
)
|
|
$
|
(2,666
|
)
|
Foreign Currency Contracts
|
|
|
(1,960
|
)
|
|
|
15,322
|
|
Credit Default Swaps
|
|
|
1,947
|
|
|
|
(4,276
|
)
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
(230
|
)
|
|
$
|
8,380
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2017 and December 31, 2016, the Partnership had not designated any derivatives
as cash flow hedges.
26
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The
following table summarizes the financial instruments for which the fair value option has been elected:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
Assets
|
|
|
|
|
|
|
|
|
Loans and Receivables
|
|
$
|
112,056
|
|
|
$
|
211,359
|
|
Equity and Preferred Securities
|
|
|
466,219
|
|
|
|
444,713
|
|
Assets of Consolidated CLO Vehicles
|
|
|
|
|
|
|
|
|
Corporate Loans
|
|
|
5,587,151
|
|
|
|
4,762,071
|
|
Corporate Bonds
|
|
|
623,944
|
|
|
|
710,947
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,789,370
|
|
|
$
|
6,129,090
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Liabilities of Consolidated CLO Vehicles
|
|
|
|
|
|
|
|
|
Senior Secured Notes
|
|
$
|
6,027,719
|
|
|
$
|
5,125,804
|
|
Subordinated Notes
|
|
|
|
|
|
|
|
|
Loans Payable
|
|
|
355,694
|
|
|
|
337,846
|
|
Due to Affiliates
|
|
|
7,065
|
|
|
|
7,748
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,390,478
|
|
|
$
|
5,471,398
|
|
|
|
|
|
|
|
|
|
|
The following table presents the Realized and Net Change in Unrealized Gains (Losses) on financial
instruments on which the fair value option was elected:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
Realized
Gains
|
|
|
Net Change
in Unrealized
Gains (Losses)
|
|
|
Realized
Gains (Losses)
|
|
|
Net Change
in Unrealized
Gains (Losses)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and Receivables
|
|
$
|
|
|
|
$
|
7,418
|
|
|
$
|
|
|
|
$
|
(3,778
|
)
|
Equity and Preferred Securities
|
|
|
|
|
|
|
13,109
|
|
|
|
3
|
|
|
|
(3,832
|
)
|
Debt Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(689
|
)
|
Assets of Consolidated CLO Vehicles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Loans
|
|
|
1,872
|
|
|
|
(11,389
|
)
|
|
|
(13,707
|
)
|
|
|
957
|
|
Corporate Bonds
|
|
|
5,634
|
|
|
|
(5,874
|
)
|
|
|
190
|
|
|
|
271
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,506
|
|
|
$
|
3,264
|
|
|
$
|
(13,336
|
)
|
|
$
|
(7,071
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities of Consolidated CLO Vehicles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated Notes
|
|
$
|
|
|
|
$
|
7,912
|
|
|
$
|
|
|
|
$
|
12,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The following table presents information for those financial instruments for which the
fair value option was elected:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
|
|
|
|
|
For Financial Assets
Past Due (a)
|
|
|
|
|
|
For Financial Assets
Past Due (a)
|
|
|
|
Excess
(Deficiency)
of Fair Value
Over Principal
|
|
|
Fair
Value
|
|
|
Excess
of Fair Value
Over Principal
|
|
|
Excess
(Deficiency)
of Fair Value
Over Principal
|
|
|
Fair
Value
|
|
|
Excess
of Fair Value
Over Principal
|
|
Loans and Receivables
|
|
$
|
897
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(6,476
|
)
|
|
$
|
|
|
|
$
|
|
|
Assets of Consolidated CLO Vehicles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Loans
|
|
|
(6,631
|
)
|
|
|
|
|
|
|
|
|
|
|
2,616
|
|
|
|
|
|
|
|
|
|
Corporate Bonds
|
|
|
4,162
|
|
|
|
|
|
|
|
|
|
|
|
7,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,572
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,399
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Corporate Loans and Corporate Bonds within CLO assets are classified as past due if contractual payments are more than one day past due.
|
As of March 31, 2017 and December 31, 2016, no Loans and Receivables for which the fair value option was elected were past due
or in non-accrual status. As of March 31, 2017 and December 31, 2016, no Corporate Bonds included within the Assets of Consolidated CLO Vehicles for which the fair value option was elected were past due or in non-accrual status.
28
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
8.
|
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
|
The following tables summarize the valuation of the Partnerships financial assets and liabilities by the fair value hierarchy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
|
Level I
|
|
|
Level II
|
|
|
Level III
|
|
|
NAV
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents Money Market Funds
|
|
$
|
988,676
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
988,676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of Consolidated Blackstone Funds (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
148,665
|
|
|
|
148,665
|
|
Equity Securities
|
|
|
63,158
|
|
|
|
58,922
|
|
|
|
113,797
|
|
|
|
|
|
|
|
235,877
|
|
Partnership and LLC Interests
|
|
|
|
|
|
|
20,870
|
|
|
|
333,616
|
|
|
|
|
|
|
|
354,486
|
|
Debt Instruments
|
|
|
|
|
|
|
219,752
|
|
|
|
8,484
|
|
|
|
|
|
|
|
228,236
|
|
Freestanding Derivatives Foreign Currency Contracts
|
|
|
|
|
|
|
2,337
|
|
|
|
|
|
|
|
|
|
|
|
2,337
|
|
Assets of Consolidated CLO Vehicles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Loans
|
|
|
|
|
|
|
5,357,082
|
|
|
|
230,069
|
|
|
|
|
|
|
|
5,587,151
|
|
Corporate Bonds
|
|
|
|
|
|
|
623,944
|
|
|
|
|
|
|
|
|
|
|
|
623,944
|
|
Freestanding Derivatives Foreign Currency Contracts
|
|
|
|
|
|
|
21,593
|
|
|
|
|
|
|
|
|
|
|
|
21,593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments of Consolidated Blackstone Funds
|
|
|
63,158
|
|
|
|
6,304,500
|
|
|
|
685,966
|
|
|
|
148,665
|
|
|
|
7,202,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Treasury Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities
|
|
|
290,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
290,946
|
|
Debt Instruments
|
|
|
|
|
|
|
1,861,996
|
|
|
|
28,803
|
|
|
|
55,874
|
|
|
|
1,946,673
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
213,655
|
|
|
|
213,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Corporate Treasury Investments
|
|
|
290,946
|
|
|
|
1,861,996
|
|
|
|
28,803
|
|
|
|
269,529
|
|
|
|
2,451,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Investments
|
|
|
175,660
|
|
|
|
10,679
|
|
|
|
109,630
|
|
|
|
19,529
|
|
|
|
315,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
529,764
|
|
|
|
8,177,175
|
|
|
|
824,399
|
|
|
|
437,723
|
|
|
|
9,969,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable Loans and Receivables
|
|
|
|
|
|
|
|
|
|
|
112,056
|
|
|
|
|
|
|
|
112,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate Contracts
|
|
|
871
|
|
|
|
787
|
|
|
|
|
|
|
|
|
|
|
|
1,658
|
|
Foreign Currency Contracts
|
|
|
|
|
|
|
2,411
|
|
|
|
|
|
|
|
|
|
|
|
2,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Freestanding Derivatives
|
|
|
871
|
|
|
|
3,198
|
|
|
|
|
|
|
|
|
|
|
|
4,069
|
|
Net Investment Hedges Foreign Currency Contracts
|
|
|
|
|
|
|
771
|
|
|
|
|
|
|
|
|
|
|
|
771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Assets
|
|
|
871
|
|
|
|
3,969
|
|
|
|
|
|
|
|
|
|
|
|
4,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,519,311
|
|
|
$
|
8,181,144
|
|
|
$
|
936,455
|
|
|
$
|
437,723
|
|
|
$
|
11,074,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
|
Level I
|
|
|
Level II
|
|
|
Level III
|
|
|
Total
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Payable Liabilities of Consolidated CLO Vehicles (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Secured Notes (b)
|
|
$
|
|
|
|
$
|
6,027,719
|
|
|
$
|
|
|
|
$
|
6,027,719
|
|
Subordinated Notes (b)
|
|
|
|
|
|
|
355,694
|
|
|
|
|
|
|
|
355,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Loans Payable
|
|
|
|
|
|
|
6,383,413
|
|
|
|
|
|
|
|
6,383,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to Affiliates Liabilities of Consolidated CLO Vehicles (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated Notes (b)
|
|
|
|
|
|
|
7,065
|
|
|
|
|
|
|
|
7,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Due to Affiliates
|
|
|
|
|
|
|
7,065
|
|
|
|
|
|
|
|
7,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities Sold, Not Yet Purchased
|
|
|
|
|
|
|
178,448
|
|
|
|
|
|
|
|
178,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable, Accrued Expenses and Other Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities of Consolidated Blackstone Funds Freestanding Derivatives (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Contracts
|
|
|
|
|
|
|
1,861
|
|
|
|
|
|
|
|
1,861
|
|
Credit Default Swaps
|
|
|
|
|
|
|
1,788
|
|
|
|
|
|
|
|
1,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities of Consolidated Blackstone Funds
|
|
|
|
|
|
|
3,649
|
|
|
|
|
|
|
|
3,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate Contracts
|
|
|
988
|
|
|
|
1,251
|
|
|
|
|
|
|
|
2,239
|
|
Foreign Currency Contracts
|
|
|
|
|
|
|
1,751
|
|
|
|
|
|
|
|
1,751
|
|
Credit Default Swaps
|
|
|
|
|
|
|
351
|
|
|
|
|
|
|
|
351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Freestanding Derivatives
|
|
|
988
|
|
|
|
3,353
|
|
|
|
|
|
|
|
4,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Accounts Payable, Accrued Expenses and Other Liabilities
|
|
|
988
|
|
|
|
7,002
|
|
|
|
|
|
|
|
7,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
988
|
|
|
$
|
6,575,928
|
|
|
$
|
|
|
|
$
|
6,576,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
Level I
|
|
|
Level II
|
|
|
Level III
|
|
|
NAV
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents Money Market Funds
|
|
$
|
443,442
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
443,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of Consolidated Blackstone Funds (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
148,993
|
|
|
|
148,993
|
|
Equity Securities
|
|
|
76,381
|
|
|
|
70,544
|
|
|
|
93,657
|
|
|
|
|
|
|
|
240,582
|
|
Partnership and LLC Interests
|
|
|
|
|
|
|
29,430
|
|
|
|
337,230
|
|
|
|
|
|
|
|
366,660
|
|
Debt Instruments
|
|
|
|
|
|
|
219,049
|
|
|
|
7,322
|
|
|
|
|
|
|
|
226,371
|
|
Freestanding Derivatives Foreign Currency Contracts
|
|
|
|
|
|
|
2,327
|
|
|
|
|
|
|
|
|
|
|
|
2,327
|
|
Assets of Consolidated CLO Vehicles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Loans
|
|
|
|
|
|
|
4,514,407
|
|
|
|
247,664
|
|
|
|
|
|
|
|
4,762,071
|
|
Corporate Bonds
|
|
|
|
|
|
|
710,947
|
|
|
|
|
|
|
|
|
|
|
|
710,947
|
|
Freestanding Derivatives Foreign Currency Contracts
|
|
|
|
|
|
|
22,723
|
|
|
|
|
|
|
|
|
|
|
|
22,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments of Consolidated Blackstone Funds
|
|
|
76,381
|
|
|
|
5,569,427
|
|
|
|
685,873
|
|
|
|
148,993
|
|
|
|
6,480,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Treasury Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities
|
|
|
281,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
281,505
|
|
Debt Instruments
|
|
|
|
|
|
|
1,944,171
|
|
|
|
30,424
|
|
|
|
54,907
|
|
|
|
2,029,502
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
207,431
|
|
|
|
207,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Corporate Treasury Investments
|
|
|
281,505
|
|
|
|
1,944,171
|
|
|
|
30,424
|
|
|
|
262,338
|
|
|
|
2,518,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Investments
|
|
|
163,548
|
|
|
|
|
|
|
|
100,164
|
|
|
|
18,779
|
|
|
|
282,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
521,434
|
|
|
|
7,513,598
|
|
|
|
816,461
|
|
|
|
430,110
|
|
|
|
9,281,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable Loans and Receivables
|
|
|
|
|
|
|
|
|
|
|
211,359
|
|
|
|
|
|
|
|
211,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate Contracts
|
|
|
1,883
|
|
|
|
473
|
|
|
|
|
|
|
|
|
|
|
|
2,356
|
|
Foreign Currency Contracts
|
|
|
|
|
|
|
1,037
|
|
|
|
|
|
|
|
|
|
|
|
1,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Freestanding Derivatives
|
|
|
1,883
|
|
|
|
1,510
|
|
|
|
|
|
|
|
|
|
|
|
3,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Assets
|
|
|
1,883
|
|
|
|
1,510
|
|
|
|
|
|
|
|
|
|
|
|
3,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
966,759
|
|
|
$
|
7,515,108
|
|
|
$
|
1,027,820
|
|
|
$
|
430,110
|
|
|
$
|
9,939,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
Level I
|
|
|
Level II
|
|
|
Level III
|
|
|
Total
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Payable Liabilities of Consolidated CLO Vehicles (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Secured Notes (b)
|
|
$
|
|
|
|
$
|
5,125,804
|
|
|
$
|
|
|
|
$
|
5,125,804
|
|
Subordinated Notes (b)
|
|
|
|
|
|
|
337,846
|
|
|
|
|
|
|
|
337,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Loans Payable
|
|
|
|
|
|
|
5,463,650
|
|
|
|
|
|
|
|
5,463,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to Affiliates Liabilities of Consolidated CLO Vehicles (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated Notes (b)
|
|
|
|
|
|
|
7,748
|
|
|
|
|
|
|
|
7,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Due to Affiliates
|
|
|
|
|
|
|
7,748
|
|
|
|
|
|
|
|
7,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities Sold, Not Yet Purchased
|
|
|
|
|
|
|
215,398
|
|
|
|
|
|
|
|
215,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable, Accrued Expenses and Other Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities of Consolidated Blackstone Funds Freestanding Derivatives (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Contracts
|
|
|
|
|
|
|
3,903
|
|
|
|
|
|
|
|
3,903
|
|
Credit Default Swaps
|
|
|
|
|
|
|
3,350
|
|
|
|
|
|
|
|
3,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities of Consolidated Blackstone Funds
|
|
|
|
|
|
|
7,253
|
|
|
|
|
|
|
|
7,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate Contracts
|
|
|
750
|
|
|
|
1,605
|
|
|
|
|
|
|
|
2,355
|
|
Foreign Currency Contracts
|
|
|
|
|
|
|
966
|
|
|
|
|
|
|
|
966
|
|
Credit Default Swaps
|
|
|
|
|
|
|
215
|
|
|
|
|
|
|
|
215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Freestanding Derivatives
|
|
|
750
|
|
|
|
2,786
|
|
|
|
|
|
|
|
3,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Hedges Foreign Currency Contracts
|
|
|
|
|
|
|
587
|
|
|
|
|
|
|
|
587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Accounts Payable, Accrued Expenses and Other Liabilities
|
|
|
750
|
|
|
|
10,626
|
|
|
|
|
|
|
|
11,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
750
|
|
|
$
|
5,697,422
|
|
|
$
|
|
|
|
$
|
5,698,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Pursuant to GAAP consolidation guidance, the Partnership is required to consolidate all VIEs in which it has been identified as the primary beneficiary, including
certain CLO vehicles, and other funds in which a consolidated entity of the Partnership, as the general partner of the fund, has a controlling financial interest. While the Partnership is required to consolidate certain funds, including CLO
vehicles, for GAAP purposes, the Partnership has no ability to utilize the assets of these funds and there is no recourse to the Partnership for their liabilities since these are client assets and liabilities.
|
(b)
|
Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial
interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.
|
The following table summarizes the fair value transfers between Level I and Level II for positions that existed as of March 31, 2017 and 2016, respectively:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Transfers from Level I into Level II (a)
|
|
$
|
|
|
|
$
|
2,114
|
|
Transfers from Level II into Level I (b)
|
|
$
|
|
|
|
$
|
28,346
|
|
(a)
|
Transfers out of Level I represent those financial instruments for which restrictions exist and adjustments were made to an otherwise observable price to reflect fair
value at the reporting date.
|
(b)
|
Transfers into Level I represent those financial instruments for which an unadjusted quoted price in an active market became available for the identical asset.
|
32
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The following table summarizes the quantitative inputs and assumptions used for items
categorized in Level III of the fair value hierarchy as of March 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
Valuation
Techniques
|
|
|
Unobservable
Inputs
|
|
|
Ranges
|
|
|
Weighted
Average (a)
|
|
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of Consolidated Blackstone Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities
|
|
$
|
61,375
|
|
|
|
Discounted Cash Flows
|
|
|
|
Discount Rate
|
|
|
|
7.3% - 29.1%
|
|
|
|
12.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue CAGR
|
|
|
|
-0.6% - 39.7%
|
|
|
|
7.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Capitalization Rate
|
|
|
|
5.3% - 11.4%
|
|
|
|
8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Multiple - EBITDA
|
|
|
|
1.9x - 19.0x
|
|
|
|
9.7x
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit
Multiple - P/E
|
|
|
|
9.5x - 17.0x
|
|
|
|
10.1x
|
|
|
|
|
2,497
|
|
|
|
Market Comparable Companies
|
|
|
|
Book Value Multiple
|
|
|
|
0.9x
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Multiple
|
|
|
|
8.0x
|
|
|
|
N/A
|
|
|
|
|
18,088
|
|
|
|
Other
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
1,705
|
|
|
|
Third Party Pricing
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
30,132
|
|
|
|
Transaction Price
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Partnership and LLC Interests
|
|
|
301,370
|
|
|
|
Discounted Cash Flows
|
|
|
|
Discount Rate
|
|
|
|
4.5% - 27.6%
|
|
|
|
9.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue CAGR
|
|
|
|
-7.3% - 28.9%
|
|
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Capitalization Rate
|
|
|
|
3.0% - 11.0%
|
|
|
|
5.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Multiple - EBITDA
|
|
|
|
0.2x - 18.7x
|
|
|
|
10.8x
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit
Multiple - P/E
|
|
|
|
9.3x
|
|
|
|
N/A
|
|
|
|
|
530
|
|
|
|
Market Comparable Companies
|
|
|
|
Book Value Multiple
|
|
|
|
1.0x
|
|
|
|
N/A
|
|
|
|
|
14,018
|
|
|
|
Other
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
2,254
|
|
|
|
Third Party Pricing
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
15,444
|
|
|
|
Transaction Price
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Debt Instruments
|
|
|
4,942
|
|
|
|
Discounted Cash Flows
|
|
|
|
Discount Rate
|
|
|
|
8.9% - 20.0%
|
|
|
|
10.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue CAGR
|
|
|
|
5.1%
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Capitalization Rate
|
|
|
|
4.7% - 8.3%
|
|
|
|
7.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit
Multiple - EBITDA
|
|
|
|
12.0x
|
|
|
|
N/A
|
|
|
|
|
2,089
|
|
|
|
Third Party Pricing
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
1,453
|
|
|
|
Transaction Price
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Assets of Consolidated CLO Vehicles
|
|
|
14,183
|
|
|
|
Market Comparable Companies
|
|
|
|
EBITDA Multiple
|
|
|
|
9.6x
|
|
|
|
N/A
|
|
|
|
|
215,886
|
|
|
|
Third Party Pricing
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments of Consolidated Blackstone Funds
|
|
|
685,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
continued
33
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
Valuation
Techniques
|
|
|
Unobservable
Inputs
|
|
|
Ranges
|
|
|
Weighted
Average (a)
|
|
Corporate Treasury Investments
|
|
$
|
9,969
|
|
|
|
Discounted Cash Flows
|
|
|
|
Discount Rate
|
|
|
|
5.1% - 10.2%
|
|
|
|
6.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Default Rate
|
|
|
|
1.3% - 2.0%
|
|
|
|
1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-payment Rate
|
|
|
|
20.0%
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Lag
|
|
|
|
12 Months
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Rate
|
|
|
|
6.3% - 79.0%
|
|
|
|
66.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinvestment Rate
|
|
|
|
LIBOR + 350 bps -
|
|
|
|
LIBOR + 391 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBOR + 400 bps
|
|
|
|
|
|
|
|
|
18,834
|
|
|
|
Third Party Pricing
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
Loans and Receivables
|
|
|
112,056
|
|
|
|
Discounted Cash Flows
|
|
|
|
Discount Rate
|
|
|
|
8.4% - 14.3%
|
|
|
|
12.3%
|
|
|
|
|
|
|
|
Other Investments
|
|
|
79,977
|
|
|
|
Discounted Cash Flows
|
|
|
|
Discount Rate
|
|
|
|
0.6% - 15.0%
|
|
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Default Rate
|
|
|
|
2.0%
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-payment Rate
|
|
|
|
20.0%
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Lag
|
|
|
|
12 Months
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery Rate
|
|
|
|
70.0%
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinvestment Rate
|
|
|
|
LIBOR + 400 bps
|
|
|
|
N/A
|
|
|
|
|
29,653
|
|
|
|
Transaction Price
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
936,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The following table summarizes the quantitative inputs and assumptions used for items
categorized in Level III of the fair value hierarchy as of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
Valuation
Techniques
|
|
|
Unobservable
Inputs
|
|
|
Ranges
|
|
|
Weighted
Average (a)
|
|
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of Consolidated Blackstone Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities
|
|
$
|
58,826
|
|
|
|
Discounted Cash Flows
|
|
|
|
Discount Rate
|
|
|
|
7.3% - 28.7%
|
|
|
|
12.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue CAGR
|
|
|
|
-0.2% - 20.1%
|
|
|
|
6.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Capitalization Rate
|
|
|
|
5.0% - 11.4%
|
|
|
|
8.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Multiple - EBITDA
|
|
|
|
4.0x - 20.0x
|
|
|
|
10.0x
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Multiple - P/E
|
|
|
|
10.5x - 17.0x
|
|
|
|
11.0x
|
|
|
|
|
2,032
|
|
|
|
Market Comparable Companies
|
|
|
|
Book Value Multiple
|
|
|
|
0.9x
|
|
|
|
N/A
|
|
|
|
|
22,843
|
|
|
|
Other
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
9,956
|
|
|
|
Transaction Price
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Partnership and LLC Interests
|
|
|
303,281
|
|
|
|
Discounted Cash Flows
|
|
|
|
Discount Rate
|
|
|
|
3.4% - 27.6%
|
|
|
|
9.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue CAGR
|
|
|
|
-27.1% - 47.3%
|
|
|
|
7.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Capitalization Rate
|
|
|
|
3.0% - 11.0%
|
|
|
|
6.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit
Multiple - EBITDA
|
|
|
|
3.9x - 18.3x
|
|
|
|
10.5x
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Multiple - P/E
|
|
|
|
9.3x
|
|
|
|
N/A
|
|
|
|
|
13,945
|
|
|
|
Market Comparable Companies
|
|
|
|
Capitalization Rate
|
|
|
|
5.0% - 5.6%
|
|
|
|
5.2%
|
|
|
|
|
12,916
|
|
|
|
Other
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
1,238
|
|
|
|
Third Party Pricing
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
5,850
|
|
|
|
Transaction Price
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Debt Instruments
|
|
|
5,002
|
|
|
|
Discounted Cash Flows
|
|
|
|
Discount Rate
|
|
|
|
8.3% - 20.0%
|
|
|
|
12.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue CAGR
|
|
|
|
4.8% - 70.8%
|
|
|
|
33.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit Capitalization Rate
|
|
|
|
4.7% - 8.3%
|
|
|
|
7.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit
Multiple - EBITDA
|
|
|
|
9.6x - 12.0x
|
|
|
|
11.0x
|
|
|
|
|
2,227
|
|
|
|
Third Party Pricing
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
93
|
|
|
|
Transaction Price
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Assets of Consolidated CLO Vehicles
|
|
|
13,723
|
|
|
|
Market Comparable Companies
|
|
|
|
EBITDA Multiple
|
|
|
|
9.6x
|
|
|
|
N/A
|
|
|
|
|
233,941
|
|
|
|
Third Party Pricing
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments of Consolidated Blackstone Funds
|
|
|
685,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
continued
35
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
Valuation
Techniques
|
|
Unobservable
Inputs
|
|
|
Ranges
|
|
Weighted
Average (a)
|
|
|
|
|
|
|
Corporate Treasury Investments
|
|
$
|
9,783
|
|
|
Discounted Cash Flows
|
|
|
Discount Rate
|
|
|
6.1% - 10.0%
|
|
7.1%
|
|
|
|
|
|
|
|
|
|
Default Rate
|
|
|
1.0% - 2.0%
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
Pre-payment Rate
|
|
|
20.0%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Recovery Lag
|
|
|
12 Months
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Recovery Rate
|
|
|
18.5% - 76.5%
|
|
66.4%
|
|
|
|
|
|
|
|
|
|
Reinvestment Rate
|
|
|
LIBOR + 350 bps -
|
|
LIBOR + 390 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBOR + 400 bps
|
|
|
|
|
|
20,641
|
|
|
Third Party Pricing
|
|
|
N/A
|
|
|
N/A
|
|
N/A
|
Loans and Receivables
|
|
|
211,359
|
|
|
Discounted Cash Flows
|
|
|
Discount Rate
|
|
|
12.0% - 16.4%
|
|
13.3%
|
Other Investments
|
|
|
78,619
|
|
|
Discounted Cash Flows
|
|
|
Discount Rate
|
|
|
1.2% - 15.0%
|
|
3.1%
|
|
|
|
|
|
|
|
|
|
Default Rate
|
|
|
2.0%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Pre-payment Rate
|
|
|
20.0%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Recovery Lag
|
|
|
12 Months
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Recovery Rate
|
|
|
70.0%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Reinvestment Rate
|
|
|
LIBOR + 400 bps
|
|
N/A
|
|
|
|
21,545
|
|
|
Transaction Price
|
|
|
N/A
|
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,027,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
Not applicable.
|
CAGR
|
|
Compound annual growth rate.
|
EBITDA
|
|
Earnings before interest, taxes, depreciation and amortization.
|
Exit Multiple
|
|
Ranges include the last twelve months EBITDA, forward EBITDA and price/earnings exit multiples.
|
Third Party Pricing
|
|
Third Party Pricing is generally determined on the basis of unadjusted prices between market participants provided by reputable dealers or pricing services.
|
Transaction Price
|
|
Includes recent acquisitions or transactions.
|
(a)
|
|
Unobservable inputs were weighted based on the fair value of the investments included in the range.
|
The significant unobservable inputs used in the fair value measurement of corporate treasury investments,
debt instruments and other investments are discount rates, default rates, recovery rates, recovery lag, pre-payment rates and reinvestment rates. Increases (decreases) in any of the discount rates, default rates, recovery lag and pre-payment rates
in isolation would result in a lower (higher) fair value measurement. Increases (decreases) in any of the recovery rates and reinvestment rates in isolation would result in a higher (lower) fair value measurement. Generally, a change in the
assumption used for default rates may be accompanied by a directionally similar change in the assumption used for recovery lag and a directionally opposite change in the assumption used for recovery rates and pre-payment rates.
The significant unobservable inputs used in the fair value measurement of equity securities, partnership and LLC interests, debt
instruments, assets of consolidated CLO vehicles and loans and receivables are discount rates, exit capitalization rates, exit multiples, EBITDA multiples and revenue compound annual growth rates. Increases (decreases) in any of discount rates and
exit capitalization rates in isolation can result in a lower (higher) fair value measurement. Increases (decreases) in any of exit multiples and revenue compound annual growth rates in isolation can result in a higher (lower) fair value measurement.
36
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Since December 31, 2016, there have been no changes in valuation techniques within
Level II and Level III that have had a material impact on the valuation of financial instruments.
The following
tables summarize the changes in financial assets and liabilities measured at fair value for which the Partnership has used Level III inputs to determine fair value and does not include gains or losses that were reported in Level III in prior years
or for instruments that were transferred out of Level III prior to the end of the respective reporting period. Total realized and unrealized gains and losses recorded for Level III investments are reported in either Investment Income (Loss) or Net
Gains (Losses) from Fund Investment Activities in the Condensed Consolidated Statements of Operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level III Financial Assets at Fair
Value
Three Months Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
Investments
of
Consolidated
Funds
|
|
|
Loans
and
Receivables
|
|
|
Other
Investments (a)
|
|
|
Total
|
|
|
Investments
of
Consolidated
Funds
|
|
|
Loans
and
Receivables
|
|
|
Other
Investments (a)
|
|
|
Total
|
|
Balance, Beginning of Period
|
|
$
|
685,873
|
|
|
$
|
211,359
|
|
|
$
|
130,588
|
|
|
$
|
1,027,820
|
|
|
$
|
774,392
|
|
|
$
|
261,994
|
|
|
$
|
155,841
|
|
|
$
|
1,192,227
|
|
Transfer In to Level III (b)
|
|
|
47,866
|
|
|
|
|
|
|
|
9,923
|
|
|
|
57,789
|
|
|
|
54,626
|
|
|
|
|
|
|
|
290
|
|
|
|
54,916
|
|
Transfer Out of Level III (b)
|
|
|
(121,193
|
)
|
|
|
|
|
|
|
(6,080
|
)
|
|
|
(127,273
|
)
|
|
|
(61,879
|
)
|
|
|
|
|
|
|
(4,005
|
)
|
|
|
(65,884
|
)
|
Purchases
|
|
|
157,904
|
|
|
|
69,483
|
|
|
|
12,447
|
|
|
|
239,834
|
|
|
|
63,932
|
|
|
|
298,381
|
|
|
|
|
|
|
|
362,313
|
|
Sales
|
|
|
(112,814
|
)
|
|
|
(176,160
|
)
|
|
|
(10,032
|
)
|
|
|
(299,006
|
)
|
|
|
(92,578
|
)
|
|
|
(267,556
|
)
|
|
|
(20,007
|
)
|
|
|
(380,141
|
)
|
Settlements
|
|
|
|
|
|
|
(2,491
|
)
|
|
|
(100
|
)
|
|
|
(2,591
|
)
|
|
|
|
|
|
|
(4,294
|
)
|
|
|
(140
|
)
|
|
|
(4,434
|
)
|
Changes in Gains (Losses) Included in Earnings and Other Comprehensive Income (Loss)
|
|
|
28,330
|
|
|
|
9,865
|
|
|
|
1,687
|
|
|
|
39,882
|
|
|
|
(1,795
|
)
|
|
|
(667
|
)
|
|
|
(1,715
|
)
|
|
|
(4,177
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, End of Period
|
|
$
|
685,966
|
|
|
$
|
112,056
|
|
|
$
|
138,433
|
|
|
$
|
936,455
|
|
|
$
|
736,698
|
|
|
$
|
287,858
|
|
|
$
|
130,264
|
|
|
$
|
1,154,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date
|
|
$
|
3,197
|
|
|
$
|
9,864
|
|
|
$
|
339
|
|
|
$
|
13,400
|
|
|
$
|
(18,484
|
)
|
|
$
|
(667
|
)
|
|
$
|
(1,300
|
)
|
|
$
|
(20,451
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Represents corporate treasury investments and Other Investments.
|
(b)
|
Transfers in and out of Level III financial assets and liabilities were due to changes in the observability of inputs used in the valuation of such assets and
liabilities.
|
There were no Level III financial liabilities as of and for the three months ended March 31,
2017 and 2016.
9.
|
VARIABLE INTEREST ENTITIES
|
Pursuant to GAAP consolidation guidance, the Partnership consolidates certain VIEs in which it is determined that the Partnership is the
primary beneficiary either directly or indirectly, through a consolidated entity or affiliate. VIEs include certain private equity, real estate, credit-focused or funds of hedge funds entities and CLO vehicles. The purpose of such VIEs is to provide
strategy specific investment opportunities for investors in exchange for management and performance based fees. The investment strategies of the Blackstone Funds differ by product; however, the fundamental risks of the Blackstone Funds have similar
characteristics, including loss of invested capital and loss of management fees and performance based fees. In Blackstones role as general partner, collateral manager or investment adviser, it generally
37
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
considers itself the sponsor of the applicable Blackstone Fund. The Partnership does not provide performance guarantees and has no other financial obligation to provide funding to consolidated
VIEs other than its own capital commitments.
The assets of consolidated variable interest entities may only be used to settle
obligations of these consolidated Blackstone Funds. In addition, there is no recourse to the Partnership for the consolidated VIEs liabilities including the liabilities of the consolidated CLO vehicles.
The Partnership holds variable interests in certain VIEs which are not consolidated as it is determined that the Partnership is not the
primary beneficiary. The Partnerships involvement with such entities is in the form of direct equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets recognized by Blackstone relating to
non-consolidated entities, any amounts due to non-consolidated entities and any clawback obligation relating to previously distributed carried interest. The assets and liabilities recognized in the Partnerships Condensed Consolidated
Statements of Financial Condition related to the Partnerships interest in these non-consolidated VIEs and the Partnerships maximum exposure to loss relating to non-consolidated VIEs were as follows:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
Investments
|
|
$
|
669,970
|
|
|
$
|
644,546
|
|
Accounts Receivable
|
|
|
14,161
|
|
|
|
12,308
|
|
Due from Affiliates
|
|
|
46,520
|
|
|
|
35,099
|
|
|
|
|
|
|
|
|
|
|
Total VIE Assets
|
|
|
730,651
|
|
|
|
691,953
|
|
Due to Affiliates
|
|
|
689
|
|
|
|
577
|
|
Accounts Payable, Accrued Expenses and Other Liabilities
|
|
|
64
|
|
|
|
38
|
|
Potential Clawback Obligation
|
|
|
83,547
|
|
|
|
81,936
|
|
|
|
|
|
|
|
|
|
|
Maximum Exposure to Loss
|
|
$
|
814,951
|
|
|
$
|
774,504
|
|
|
|
|
|
|
|
|
|
|
10.
|
REVERSE REPURCHASE AND REPURCHASE AGREEMENTS
|
At March 31, 2017, the Partnership received securities, primarily U.S. and non-U.S. government and agency securities, asset-backed securities and corporate debt, with a fair value of
$43.4 million as collateral for reverse repurchase agreements that could be repledged, delivered or otherwise used. Securities with a fair value of $43.4 million and cash were used to cover Securities Sold, Not Yet Purchased. The
Partnership also pledged securities with a carrying value of $142.3 million and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.
At December 31, 2016, the Partnership pledged securities with a carrying value of $119.1 million and cash to collateralize its
repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.
38
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The following tables provide information regarding the Partnerships Repurchase
Agreements obligation by type of collateral pledged:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
|
Remaining Contractual Maturity of the Agreements
|
|
|
|
Overnight and
Continuous
|
|
|
Up to
30 Days
|
|
|
30 - 90
Days
|
|
|
Greater than
90 days
|
|
|
Total
|
|
Repurchase Agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and Agency Securities
|
|
$
|
21,253
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
21,253
|
|
Asset-Backed Securities
|
|
|
|
|
|
|
17,050
|
|
|
|
52,423
|
|
|
|
3,920
|
|
|
|
73,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
21,253
|
|
|
$
|
17,050
|
|
|
$
|
52,423
|
|
|
$
|
3,920
|
|
|
$
|
94,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. Offsetting of Assets and
Liabilities
|
|
|
$
|
94,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. Offsetting of Assets and
Liabilities
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
Remaining Contractual Maturity of the Agreements
|
|
|
|
Overnight and
Continuous
|
|
|
Up to
30 Days
|
|
|
30 - 90
Days
|
|
|
Greater than
90 days
|
|
|
Total
|
|
Repurchase Agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and Agency Securities
|
|
$
|
7,034
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
7,034
|
|
Asset-Backed Securities
|
|
|
|
|
|
|
12,805
|
|
|
|
30,796
|
|
|
|
24,689
|
|
|
|
68,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
7,034
|
|
|
$
|
12,805
|
|
|
$
|
30,796
|
|
|
$
|
24,689
|
|
|
$
|
75,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. Offsetting of Assets and
Liabilities
|
|
|
$
|
75,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. Offsetting of Assets and
Liabilities
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.
|
OFFSETTING OF ASSETS AND LIABILITIES
|
The following tables present the offsetting of assets and liabilities as of March 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross and Net
Amounts of Assets
Presented in the
Statement
of
Financial
Condition
|
|
|
Gross Amounts Not Offset in
the Statement of
Financial
Condition
|
|
|
|
|
|
|
|
Financial
Instruments
|
|
|
Cash Collateral
Received
|
|
|
Net Amount
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Hedges
|
|
$
|
771
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
771
|
|
Freestanding Derivatives
|
|
|
6,406
|
|
|
|
1,571
|
|
|
|
3,867
|
|
|
|
968
|
|
Reverse Repurchase Agreements
|
|
|
44,635
|
|
|
|
43,419
|
|
|
|
|
|
|
|
1,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
51,812
|
|
|
$
|
44,990
|
|
|
$
|
3,867
|
|
|
$
|
2,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross and Net
Amounts of Liabilities
Presented in
the
Statement of
Financial Condition
|
|
|
Gross Amounts Not Offset in
the Statement of
Financial
Condition
|
|
|
|
|
|
|
|
Financial
Instruments
|
|
|
Cash Collateral
Pledged
|
|
|
Net Amount
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
$
|
6,129
|
|
|
$
|
1,571
|
|
|
$
|
3,673
|
|
|
$
|
885
|
|
Repurchase Agreements
|
|
|
94,646
|
|
|
|
91,453
|
|
|
|
3,119
|
|
|
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
100,775
|
|
|
$
|
93,024
|
|
|
$
|
6,792
|
|
|
$
|
959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables present the offsetting of assets and liabilities as of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross and Net
Amounts of Assets
Presented in the
Statement
of
Financial Condition
|
|
|
Gross Amounts Not Offset in
the Statement of
Financial
Condition
|
|
|
|
|
|
|
|
Financial
Instruments
|
|
|
Cash Collateral
Received
|
|
|
Net Amount
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
$
|
5,720
|
|
|
$
|
1,064
|
|
|
$
|
2,892
|
|
|
$
|
1,764
|
|
Reverse Repurchase Agreements
|
|
|
118,495
|
|
|
|
117,775
|
|
|
|
|
|
|
|
720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
124,215
|
|
|
$
|
118,839
|
|
|
$
|
2,892
|
|
|
$
|
2,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross and Net
Amounts of Liabilities
Presented in
the
Statement of
Financial Condition
|
|
|
Gross Amounts Not Offset in
the Statement of
Financial
Condition
|
|
|
|
|
|
|
|
Financial
Instruments
|
|
|
Cash Collateral
Pledged
|
|
|
Net Amount
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Hedges
|
|
$
|
587
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
587
|
|
Freestanding Derivatives
|
|
|
6,886
|
|
|
|
1,064
|
|
|
|
5,638
|
|
|
|
184
|
|
Repurchase Agreements
|
|
|
75,324
|
|
|
|
72,195
|
|
|
|
3,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
82,797
|
|
|
$
|
73,259
|
|
|
$
|
8,767
|
|
|
$
|
771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse Repurchase Agreements and Repurchase Agreements are presented separately on the Condensed
Consolidated Statements of Financial Condition. Freestanding Derivative assets are included in Other Assets in the Condensed Consolidated Statements of Financial Condition. The following table presents the components of Other Assets:
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
Furniture, Equipment and Leasehold Improvements, Net
|
|
$
|
130,693
|
|
|
$
|
126,784
|
|
Prepaid Expenses
|
|
|
83,125
|
|
|
|
96,888
|
|
Other Assets
|
|
|
38,444
|
|
|
|
37,723
|
|
Freestanding Derivatives
|
|
|
4,069
|
|
|
|
3,393
|
|
Net Investment Hedges
|
|
|
771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
257,102
|
|
|
$
|
264,788
|
|
|
|
|
|
|
|
|
|
|
40
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Freestanding Derivative liabilities are included in Accounts Payable, Accrued Expenses
and Other Liabilities in the Condensed Consolidated Statements of Financial Condition and are not a significant component thereof.
Notional Pooling Arrangement
Blackstone has a notional cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows for cash withdrawals based upon aggregate cash balances on deposit at
the same financial institution. Cash withdrawals cannot exceed aggregate cash balances on deposit. The net balance of cash on deposit and overdrafts is used as a basis for calculating net interest expense or income. As of March 31, 2017, the
aggregate cash balance on deposit relating to the cash pooling arrangement was $1.5 billion, which was offset with an accompanying overdraft of $1.5 billion.
The following
table presents the general characteristics of each of our Notes, as well as their carrying value and fair value. The Notes are included in Loans Payable within the Condensed Consolidated Statements of Financial Condition. All of the Notes were
issued at a discount. All of the Notes accrue interest from the Issue Date and all pay interest in arrears on a semi-annual basis or annual basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
Senior Notes
|
|
Carrying
Value
|
|
|
Fair
Value (a)
|
|
|
Carrying
Value
|
|
|
Fair
Value (a)
|
|
6.625%, Due 8/15/2019 (b)
|
|
$
|
605,093
|
|
|
$
|
643,851
|
|
|
$
|
607,121
|
|
|
$
|
648,765
|
|
5.875%, Due 3/15/2021
|
|
|
398,205
|
|
|
|
445,600
|
|
|
|
398,105
|
|
|
|
447,600
|
|
4.750%, Due 2/15/2023
|
|
|
393,398
|
|
|
|
434,880
|
|
|
|
393,158
|
|
|
|
426,520
|
|
6.250%, Due 8/15/2042
|
|
|
237,876
|
|
|
|
295,850
|
|
|
|
237,830
|
|
|
|
285,450
|
|
5.000%, Due 6/15/2044
|
|
|
488,386
|
|
|
|
516,650
|
|
|
|
488,337
|
|
|
|
497,200
|
|
4.450%, Due 7/15/2045
|
|
|
343,843
|
|
|
|
332,710
|
|
|
|
343,816
|
|
|
|
322,525
|
|
2.000%, Due 5/19/2025
|
|
|
315,291
|
|
|
|
333,908
|
|
|
|
310,805
|
|
|
|
331,096
|
|
1.000%, Due 10/5/2026
|
|
|
628,624
|
|
|
|
602,435
|
|
|
|
620,750
|
|
|
|
598,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,410,716
|
|
|
$
|
3,605,884
|
|
|
$
|
3,399,922
|
|
|
$
|
3,557,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.
|
(b)
|
The carrying and fair values are determined using the original $600 million par amount less $15 million attributable to these notes which were acquired but
not retired by Blackstone during 2012.
|
41
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Included within Loans Payable and Due to Affiliates within the Condensed Consolidated
Statements of Financial Condition are amounts due to holders of debt securities issued by Blackstones consolidated CLO vehicles. Borrowings through the consolidated CLO vehicles consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
|
|
Borrowing
Outstanding
|
|
|
Weighted-
Average
Interest
Rate
|
|
|
Weighted-
Average
Remaining
Maturity in
Years
|
|
|
Borrowing
Outstanding
|
|
|
Weighted-
Average
Interest
Rate
|
|
|
Weighted-
Average
Remaining
Maturity in
Years
|
|
Senior Secured Notes
|
|
$
|
6,041,613
|
|
|
|
1.98
|
%
|
|
|
4.7
|
|
|
$
|
5,124,241
|
|
|
|
2.17
|
%
|
|
|
5.4
|
|
Subordinated Notes
|
|
|
410,590
|
|
|
|
(a
|
)
|
|
|
N/A
|
|
|
|
382,735
|
|
|
|
(a)
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,452,203
|
|
|
|
|
|
|
|
|
|
|
$
|
5,506,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The Subordinated Notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the CLO vehicles.
|
Senior Secured Notes and Subordinated Notes comprise the following amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
|
|
Fair Value
|
|
|
Amounts Due to Non-
Consolidated Affiliates
|
|
|
Fair Value
|
|
|
Amounts Due to Non-
Consolidated Affiliates
|
|
|
|
|
Borrowing
Outstanding
|
|
|
Fair Value
|
|
|
|
Borrowing
Outstanding
|
|
|
Fair Value
|
|
Senior Secured Notes
|
|
$
|
6,027,719
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,125,804
|
|
|
$
|
|
|
|
$
|
|
|
Subordinated Notes
|
|
|
362,759
|
|
|
|
10,000
|
|
|
|
7,065
|
|
|
|
345,594
|
|
|
|
10,000
|
|
|
|
7,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,390,478
|
|
|
$
|
10,000
|
|
|
$
|
7,065
|
|
|
$
|
5,471,398
|
|
|
|
$10,000
|
|
|
|
$7,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Loans Payable of the consolidated CLO vehicles are collateralized by assets held by each respective
CLO vehicle and assets of one vehicle may not be used to satisfy the liabilities of another. As of March 31, 2017 and December 31, 2016, the fair value of the consolidated CLO assets was $8.1 billion and $6.4 billion,
respectively. This collateral consisted of Cash, Corporate Loans, Corporate Bonds and other securities.
Scheduled principal
payments for borrowings as of March 31, 2017 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Borrowings
|
|
|
Blackstone Fund
Facilities/CLO
Vehicles
|
|
|
Total
Borrowings
|
|
2017
|
|
$
|
|
|
|
$
|
322,365
|
|
|
$
|
322,365
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
585,000
|
|
|
|
|
|
|
|
585,000
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
400,000
|
|
|
|
|
|
|
|
400,000
|
|
Thereafter
|
|
|
2,458,680
|
|
|
|
6,132,643
|
|
|
|
8,591,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,443,680
|
|
|
$
|
6,455,008
|
|
|
$
|
9,898,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Blackstones effective tax rate was 5.3% and 2.7% for the three months ended March 31, 2017 and 2016, respectively.
Blackstones income tax provision was $57.4 million and $9.1 million for the three months ended March 31, 2017 and 2016, respectively.
The Blackstone Group L.P. and certain of its subsidiaries operate in the U.S. as partnerships for income tax purposes (partnerships generally are not subject to federal income taxes) and generally as
corporate entities in non-U.S. jurisdictions. Blackstones effective tax rate for the three months ended March 31, 2017 and 2016 was substantially due to the fact that certain corporate subsidiaries are subject to federal, state, local and
foreign income taxes (as applicable) and other subsidiaries are subject to New York City unincorporated business taxes.
14.
|
NET INCOME PER COMMON UNIT
|
Basic and diluted net income per common unit for the three months ended March 31, 2017 and March 31, 2016 was calculated as
follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Net Income for Per Common Unit Calculations
|
|
|
|
|
|
|
|
|
Net Income Attributable to The Blackstone Group L.P., Basic
|
|
$
|
461,825
|
|
|
$
|
159,753
|
|
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units
|
|
|
371,284
|
|
|
|
117,684
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to The Blackstone Group L.P., Diluted
|
|
$
|
833,109
|
|
|
$
|
277,437
|
|
|
|
|
|
|
|
|
|
|
Units Outstanding
|
|
|
|
|
|
|
|
|
Weighted-Average Common Units Outstanding, Basic
|
|
|
660,939,708
|
|
|
|
644,897,849
|
|
Weighted-Average Unvested Deferred Restricted Common Units
|
|
|
809,184
|
|
|
|
1,332,772
|
|
Weighted-Average Blackstone Holdings Partnership Units
|
|
|
537,758,091
|
|
|
|
548,042,780
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Common Units Outstanding, Diluted
|
|
|
1,199,506,983
|
|
|
|
1,194,273,401
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Common Unit, Basic
|
|
$
|
0.70
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Common Unit, Diluted
|
|
$
|
0.69
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
Distributions Declared Per Common Unit (a)
|
|
$
|
0.47
|
|
|
$
|
0.61
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Distributions declared reflects the calendar date of the declaration for each distribution.
|
Unit Repurchase Program
In January 2008, Blackstone announced that the
Board of Directors of its general partner, Blackstone Group Management L.L.C., had authorized the repurchase by Blackstone of up to $500 million of Blackstone common units and Blackstone Holdings Partnership Units. Under this unit repurchase
program, units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of Blackstone common units and Blackstone Holdings Partnership Units repurchased
will depend on a variety of factors, including legal requirements, price and economic and market conditions. This unit repurchase program may be suspended or discontinued at any time and does not have a specified expiration date.
43
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
During the three month periods ended March 31, 2017 and 2016, no units were
repurchased. As of March 31, 2017, the amount remaining available for repurchases under this program was $335.8 million.
15.
|
EQUITY-BASED COMPENSATION
|
The Partnership has granted equity-based compensation awards to Blackstones senior managing directors, non-partner professionals,
non-professionals and selected external advisers under the Partnerships 2007 Equity Incentive Plan (the Equity Plan), the majority of which to date were granted in connection with Blackstones initial public offering
(IPO). The Equity Plan allows for the granting of options, unit appreciation rights or other unit-based awards (units, restricted units, restricted common units, deferred restricted common units, phantom restricted common units or other
unit-based awards based in whole or in part on the fair value of the Blackstone common units or Blackstone Holdings Partnership Units) which may contain certain service or performance requirements. As of January 1, 2017, the Partnership had the
ability to grant 170,379,944 units under the Equity Plan.
For the three months ended March 31, 2017 and March 31,
2016, the Partnership recorded compensation expense of $91.3 million and $79.8 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $14.1 million and $8.3 million, respectively.
As of March 31, 2017, there was $899.9 million of estimated unrecognized compensation expense related to unvested
awards. This cost is expected to be recognized over a weighted-average period of 4.4 years.
Total vested and unvested
outstanding units, including Blackstone common units, Blackstone Holdings Partnership Units and deferred restricted common units, were 1,198,182,811 as of March 31, 2017. Total outstanding unvested phantom units were 42,793 as of March 31,
2017.
A summary of the status of the Partnerships unvested equity-based awards as of March 31, 2017 and of changes
during the period January 1, 2017 through March 31, 2017 is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blackstone Holdings
|
|
|
The Blackstone Group L.P.
|
|
|
|
|
|
|
|
|
|
Equity Settled Awards
|
|
|
Cash Settled Awards
|
|
Unvested Units
|
|
Partnership
Units
|
|
|
Weighted-
Average
Grant
Date Fair
Value
|
|
|
Deferred
Restricted
Common
Units and
Options
|
|
|
Weighted-
Average
Grant
Date Fair
Value
|
|
|
Phantom
Units
|
|
|
Weighted-
Average
Grant
Date Fair
Value
|
|
Balance, December 31, 2016
|
|
|
34,568,726
|
|
|
$
|
33.58
|
|
|
|
12,206,016
|
|
|
$
|
24.65
|
|
|
|
40,460
|
|
|
$
|
28.14
|
|
Granted
|
|
|
179,596
|
|
|
|
27.03
|
|
|
|
2,213,133
|
|
|
|
27.64
|
|
|
|
3,057
|
|
|
|
27.03
|
|
Vested
|
|
|
(2,326,984
|
)
|
|
|
35.48
|
|
|
|
(2,352,245
|
)
|
|
|
25.87
|
|
|
|
(1,338
|
)
|
|
|
28.61
|
|
Forfeited
|
|
|
(255,433
|
)
|
|
|
24.52
|
|
|
|
(86,559
|
)
|
|
|
28.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2017
|
|
|
32,165,905
|
|
|
$
|
34.01
|
|
|
|
11,980,345
|
|
|
$
|
25.29
|
|
|
|
42,179
|
|
|
$
|
28.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Units Expected to Vest
The following unvested units, after expected forfeitures, as of March 31, 2017, are expected to vest:
|
|
|
|
|
|
|
|
|
|
|
Units
|
|
|
Weighted-Average
Service Period
in
Years
|
|
Blackstone Holdings Partnership Units
|
|
|
27,095,652
|
|
|
|
4.0
|
|
Deferred Restricted Blackstone Common Units
|
|
|
10,620,157
|
|
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
Total Equity-Based Awards
|
|
|
37,715,809
|
|
|
|
3.4
|
|
|
|
|
|
|
|
|
|
|
Phantom Units
|
|
|
32,589
|
|
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
16.
|
RELATED PARTY TRANSACTIONS
|
Affiliate
Receivables and Payables
Due from Affiliates and Due to Affiliates consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
Due from Affiliates
|
|
|
|
|
|
|
|
|
Advances Made on Behalf of Certain Non-Controlling Interest Holders and Blackstone Employees Principally for Investments in
Blackstone Funds
|
|
$
|
409,423
|
|
|
$
|
342,943
|
|
Amounts Due from Portfolio Companies and Funds
|
|
|
441,849
|
|
|
|
456,469
|
|
Management and Performance Fees Due from Non-Consolidated Funds
|
|
|
558,995
|
|
|
|
445,280
|
|
Payments Made on Behalf of Non-Consolidated Entities
|
|
|
256,341
|
|
|
|
196,134
|
|
Investments Redeemed in Non-Consolidated Funds of Hedge Funds
|
|
|
1,412
|
|
|
|
1,552
|
|
Accrual for Potential Clawback of Previously Distributed Carried Interest
|
|
|
1,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,669,124
|
|
|
$
|
1,442,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
Due to Affiliates
|
|
|
|
|
|
|
|
|
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements
|
|
$
|
1,141,411
|
|
|
$
|
1,186,145
|
|
Distributions Received on Behalf of Certain Non-Controlling Interest Holders and Blackstone Employees
|
|
|
35,735
|
|
|
|
28,012
|
|
Distributions Received on Behalf of Blackstone Entities
|
|
|
41,011
|
|
|
|
80,034
|
|
Payments Made by Non-Consolidated Entities
|
|
|
8,674
|
|
|
|
19,833
|
|
Due to Note Holders of Consolidated CLO Vehicles
|
|
|
7,065
|
|
|
|
7,748
|
|
Accrual for Potential Repayment of Previously Received Performance Fees
|
|
|
2,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,236,067
|
|
|
$
|
1,321,772
|
|
|
|
|
|
|
|
|
|
|
Interests of the Founder, Senior Managing Directors, Employees and Other Related Parties
The Founder, senior managing directors, employees and certain other related parties invest on a discretionary basis in the consolidated
Blackstone Funds both directly and through consolidated entities. These investments
45
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
generally are subject to preferential management fee and performance fee arrangements. As of March 31, 2017 and December 31, 2016, such investments aggregated $795.3 million and
$740.3 million, respectively. Their share of the Net Income Attributable to Redeemable Non-Controlling and Non-Controlling Interests in Consolidated Entities aggregated $30.6 million and $3.0 million for the three months ended
March 31, 2017 and 2016, respectively.
Revenues Earned from Affiliates
Management and Advisory Fees, Net earned from affiliates totaled $50.1 million and $56.7 million for the three months ended
March 31, 2017 and 2016, respectively. Fees relate primarily to transaction and monitoring fees which are negotiated in the ordinary course of fundraising and investment activities.
Loans to Affiliates
Loans to affiliates consist of interest bearing
advances to certain Blackstone individuals to finance their investments in certain Blackstone Funds. These loans earn interest at Blackstones cost of borrowing and such interest totaled $0.2 million and $0.2 million for the three
months ended March 31, 2017 and 2016, respectively.
Contingent Repayment Guarantee
Blackstone and its personnel who have received carried interest distributions have guaranteed payment on a several basis (subject to a
cap) to the carry funds of any clawback obligation with respect to the excess carried interest allocated to the general partners of such funds and indirectly received thereby to the extent that either Blackstone or its personnel fails to fulfill its
clawback obligation, if any. The Accrual for Potential Repayment of Previously Received Performance Fees represents amounts previously paid to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone
Funds if the carry funds were to be liquidated based on the fair value of their underlying investments as of March 31, 2017. See Note 17. Commitments and Contingencies Contingencies Contingent Obligations (Clawback).
Aircraft and Other Services
In the normal course of business, Blackstone personnel make use of aircraft owned as personal assets by Stephen A. Schwarzman; an aircraft owned jointly as a personal asset by Hamilton E. James,
Blackstones President and Chief Operating Officer, and a Director of Blackstone, and Jonathan D. Gray, Blackstones Global Head of Real Estate and a Director of Blackstone; and an aircraft owned jointly as a personal asset by Bennett J.
Goodman, Co-Founder of GSO Capital and a Director of Blackstone, and another senior managing director (each such aircraft, Personal Aircraft). Mr. Schwarzman paid for his purchases of his Personal Aircraft himself. Each of
Mr. James and Mr. Gray paid for his respective interest in their jointly owned Personal Aircraft. Mr. Goodman paid for his interest in his jointly owned Personal Aircraft. Mr. Schwarzman, Mr. James, Mr. Gray and
Mr. Goodman respectively bear operating, personnel and maintenance costs associated with the operation of such Personal Aircraft. Payment by Blackstone for the use of the Personal Aircraft by Blackstone employees is made based on market rates.
In addition, on occasion, certain of Blackstones executive officers and employee directors and their families may make
personal use of aircraft owned by Blackstone or in which Blackstone owns a fractional interest, as well as other assets of Blackstone. Any such personal use of Blackstone assets is charged to the executive officer or employee director based on
market rates and usage. Personal use of Blackstone resources is also reimbursed to Blackstone based on market rates.
The
transactions described herein are not material to the Condensed Consolidated Financial Statements.
46
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
Tax Receivable Agreements
Blackstone used a portion of the proceeds from the IPO and the sale of non-voting common units to Beijing Wonderful Investments to
purchase interests in the predecessor businesses from the predecessor owners. In addition, holders of Blackstone Holdings Partnership Units may exchange their Blackstone Holdings Partnership Units for Blackstone common units on a one-for-one basis.
The purchase and subsequent exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Blackstone Holdings and therefore reduce the amount of tax that Blackstones wholly owned subsidiaries would
otherwise be required to pay in the future.
One of the subsidiaries of the Partnership which is a corporate taxpayer has
entered into tax receivable agreements with each of the predecessor owners and additional tax receivable agreements have been executed, and will continue to be executed, with newly-admitted senior managing directors and others who acquire Blackstone
Holdings Partnership Units. The agreements provide for the payment by the corporate taxpayer to such owners of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the corporate taxpayers actually realize as a
result of the aforementioned increases in tax basis and of certain other tax benefits related to entering into these tax receivable agreements. For purposes of the tax receivable agreements, cash savings in income tax will be computed by comparing
the actual income tax liability of the corporate taxpayers to the amount of such taxes that the corporate taxpayers would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Blackstone
Holdings as a result of the exchanges and had the corporate taxpayers not entered into the tax receivable agreements.
Assuming no future material changes in the relevant tax law and that the corporate taxpayers earn sufficient taxable income to realize
the full tax benefit of the increased amortization of the assets, the expected future payments under the tax receivable agreements (which are taxable to the recipients) will aggregate $1.2 billion over the next 15 years. The after tax net
present value of these estimated payments totals $364.7 million assuming a 15% discount rate and using Blackstones most recent projections relating to the estimated timing of the benefit to be received. Future payments under the tax
receivable agreements in respect of subsequent exchanges would be in addition to these amounts. The payments under the tax receivable agreements are not conditioned upon continued ownership of Blackstone equity interests by the pre-IPO owners and
the others mentioned above.
Amounts related to the deferred tax asset resulting from the increase in tax basis from the
exchange of Blackstone Holdings Partnership Units to Blackstone common units, the resulting remeasurement of net deferred tax assets at the Blackstone ownership percentage at the balance sheet date, the due to affiliates for the future payments
resulting from the tax receivable agreements and resulting adjustment to partners capital are included as Acquisition of Ownership Interests from Non-Controlling Interest Holders in the Supplemental Disclosure of Non-Cash Investing and
Financing Activities in the Condensed Consolidated Statements of Cash Flows.
Other
Blackstone does business with and on behalf of some of its Portfolio Companies; all such arrangements are on a negotiated basis.
Additionally, please see Note 17. Commitments and Contingencies Contingencies Guarantees for
information regarding guarantees provided to a lending institution for certain loans held by employees.
47
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
17.
|
COMMITMENTS AND CONTINGENCIES
|
Commitments
Investment Commitments
Blackstone had $2.4 billion of investment commitments as of March 31, 2017 representing general partner capital
funding commitments to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. The consolidated Blackstone Funds had signed investment commitments of $359.0 million as of
March 31, 2017 which includes $65.3 million of signed investment commitments for portfolio company acquisitions in the process of closing.
Contingencies
Guarantees
Certain of Blackstones consolidated real estate funds guarantee payments to third parties in connection with the on-going business
activities and/or acquisitions of their Portfolio Companies. There is no direct recourse to the Partnership to fulfill such obligations. To the extent that underlying funds are required to fulfill guarantee obligations, the Partnerships
invested capital in such funds is at risk. Total investments at risk in respect of guarantees extended by consolidated real estate funds was $5.3 million as of March 31, 2017.
The Blackstone Holdings Partnerships provided guarantees to a lending institution for certain loans held by employees either for
investment in Blackstone Funds or for members capital contributions to Blackstone International Partners LLP. The amount guaranteed as of March 31, 2017 was $144.8 million.
Litigation
From time to time, Blackstone is named as a defendant in legal
actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, Blackstone does not have a potential liability related to any
current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial position or cash flows.
Contingent Obligations (Clawback)
Carried Interest is subject to clawback
to the extent that the Carried Interest received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The actual clawback liability, however, generally does not become realized until the end
of a funds life except for certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. The lives of the carry funds, including available contemplated
extensions, for which a liability for potential clawback obligations has been recorded for financial reporting purposes, are currently anticipated to expire at various points through 2028. Further extensions of such terms may be implemented under
given circumstances.
For financial reporting purposes, when applicable, the general partners record a liability for potential
clawback obligations to the limited partners of some of the carry funds due to changes in the unrealized value of a funds remaining investments and where the funds general partner has previously received Carried Interest distributions
with respect to such funds realized investments.
48
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The following table presents the clawback obligations by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
Segment
|
|
Blackstone
Holdings
|
|
|
Current and
Former Personnel
|
|
|
Total
|
|
|
Blackstone
Holdings
|
|
|
Current and
Former Personnel
|
|
|
Total
|
|
Credit
|
|
$
|
1,067
|
|
|
$
|
1,104
|
|
|
$
|
2,171
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Private Equity, Real Estate, and certain Credit Funds, a portion of the carried interest paid to
current and former Blackstone personnel is held in segregated accounts in the event of a cash clawback obligation. These segregated accounts are not included in the Condensed Consolidated Financial Statements of the Partnership, except to the extent
a portion of the assets held in the segregated accounts may be allocated to a consolidated Blackstone fund of hedge funds. At March 31, 2017, $658.2 million was held in segregated accounts for the purpose of meeting any clawback
obligations of current and former personnel if such payments are required.
In the Credit segment, payment of carried interest
to the Partnership by the majority of the rescue lending, mezzanine and hedge fund strategies funds is substantially deferred under the terms of the partnership agreements. This deferral mitigates the need to hold funds in segregated accounts in the
event of a cash clawback obligation.
If, at March 31, 2017, all of the investments held by our carry funds were deemed
worthless, a possibility that management views as remote, the amount of Carried Interest subject to potential clawback would be $5.4 billion, on an after tax basis where applicable, of which Blackstone Holdings is potentially liable for
$4.9 billion if current and former Blackstone personnel default on their share of the liability, a possibility that management also views as remote.
Blackstone transacts its primary business in the United States and substantially all of its revenues are generated domestically.
Blackstone conducts its alternative asset management businesses through four segments:
|
|
|
Private Equity Blackstones Private Equity segment primarily comprises its management of flagship corporate private equity funds,
sector-focused
corporate private equity funds, including
energy-focused
funds, a core private equity fund, an opportunistic investment platform, a secondary private equity
fund of funds business, a multi-asset investment program for eligible high net worth investors and a capital markets services business.
|
|
|
|
Real Estate Blackstones Real Estate segment primarily comprises its management of global, European focused and Asian focused
opportunistic real estate funds, high yield real estate debt funds, liquid real estate debt funds, core+ real estate funds, a NYSE-listed REIT and a non-exchange traded REIT.
|
|
|
|
Hedge Fund Solutions Blackstones Hedge Fund Solutions segment is comprised principally of Blackstone Alternative Asset
Management (BAAM), which manages a broad range of commingled and customized hedge fund of fund solutions and also includes investment platforms that seed new hedge fund businesses, purchase minority ownership interests in more
established hedge funds, invest in special situation opportunities, create alternative solutions in regulated structures and trade directly.
|
|
|
|
Credit Blackstones Credit segment consists principally of GSO Capital Partners LP (GSO), which is organized into
performing credit strategies (which include mezzanine lending funds, business development companies and other performing credit strategies), distressed strategies (which include hedge fund strategies, rescue lending funds and distressed energy
strategies) and long only strategies (which consist of CLOs, closed end funds, commingled funds and separately managed accounts).
|
49
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
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.
Blackstone uses Economic Income as a key measure of value creation, a benchmark of its performance and in making resource deployment and compensation decisions across its four segments. Economic Income
represents segment net income before taxes excluding transaction-related charges. Transaction-related charges arise from Blackstones IPO and certain long-term retention programs outside of annual deferred compensation and other corporate
actions, including acquisitions. Transaction-related charges include certain equity-based compensation charges, the amortization of intangible assets and contingent consideration associated with acquisitions. Economic Income presents revenues and
expenses on a basis that deconsolidates the investment funds Blackstone manages. Economic Net Income (ENI) represents Economic Income adjusted to include current period taxes. Taxes represent the total GAAP tax provision adjusted to
include only the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes.
Senior management
makes operating decisions and assesses the performance of each of Blackstones 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.
50
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The following table presents the financial data for Blackstones four segments as
of and for the three months ended March 31, 2017 and 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017 and the Three Months Then Ended
|
|
|
|
Private
Equity
|
|
|
Real Estate
|
|
|
Hedge Fund
Solutions
|
|
|
Credit
|
|
|
Total
Segments
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management and Advisory Fees, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Management Fees
|
|
$
|
177,464
|
|
|
$
|
197,879
|
|
|
$
|
128,468
|
|
|
$
|
139,147
|
|
|
$
|
642,958
|
|
Transaction, Advisory and Other Fees, Net
|
|
|
17,200
|
|
|
|
21,279
|
|
|
|
259
|
|
|
|
1,484
|
|
|
|
40,222
|
|
Management Fee Offsets
|
|
|
(12,190
|
)
|
|
|
(3,550
|
)
|
|
|
|
|
|
|
(17,859
|
)
|
|
|
(33,599
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management and Advisory Fees, Net
|
|
|
182,474
|
|
|
|
215,608
|
|
|
|
128,727
|
|
|
|
122,772
|
|
|
|
649,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried Interest
|
|
|
582,681
|
|
|
|
519,841
|
|
|
|
|
|
|
|
8,800
|
|
|
|
1,111,322
|
|
Incentive Fees
|
|
|
|
|
|
|
2,914
|
|
|
|
14,684
|
|
|
|
29,539
|
|
|
|
47,137
|
|
Unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried Interest
|
|
|
(184,833
|
)
|
|
|
(22,268
|
)
|
|
|
3,797
|
|
|
|
48,557
|
|
|
|
(154,747
|
)
|
Incentive Fees
|
|
|
|
|
|
|
18,713
|
|
|
|
40,311
|
|
|
|
992
|
|
|
|
60,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Performance Fees
|
|
|
397,848
|
|
|
|
519,200
|
|
|
|
58,792
|
|
|
|
87,888
|
|
|
|
1,063,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
|
|
|
80,889
|
|
|
|
119,579
|
|
|
|
(632
|
)
|
|
|
3,058
|
|
|
|
202,894
|
|
Unrealized
|
|
|
(40,824
|
)
|
|
|
(83,853
|
)
|
|
|
18,293
|
|
|
|
7,449
|
|
|
|
(98,935
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Income
|
|
|
40,065
|
|
|
|
35,726
|
|
|
|
17,661
|
|
|
|
10,507
|
|
|
|
103,959
|
|
Interest and Dividend Revenue
|
|
|
10,922
|
|
|
|
18,167
|
|
|
|
7,554
|
|
|
|
9,233
|
|
|
|
45,876
|
|
Other
|
|
|
(1,800
|
)
|
|
|
(3,150
|
)
|
|
|
(1,610
|
)
|
|
|
(1,727
|
)
|
|
|
(8,287
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
|
629,509
|
|
|
|
785,551
|
|
|
|
211,124
|
|
|
|
228,673
|
|
|
|
1,854,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits Compensation
|
|
|
83,742
|
|
|
|
102,702
|
|
|
|
47,604
|
|
|
|
54,979
|
|
|
|
289,027
|
|
Performance Fee Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried Interest
|
|
|
181,633
|
|
|
|
179,925
|
|
|
|
|
|
|
|
4,633
|
|
|
|
366,191
|
|
Incentive Fees
|
|
|
|
|
|
|
1,364
|
|
|
|
7,317
|
|
|
|
14,071
|
|
|
|
22,752
|
|
Unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried Interest
|
|
|
(39,356
|
)
|
|
|
11,798
|
|
|
|
1,209
|
|
|
|
21,962
|
|
|
|
(4,387
|
)
|
Incentive Fees
|
|
|
|
|
|
|
8,509
|
|
|
|
14,004
|
|
|
|
626
|
|
|
|
23,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Compensation and Benefits
|
|
|
226,019
|
|
|
|
304,298
|
|
|
|
70,134
|
|
|
|
96,271
|
|
|
|
696,722
|
|
Other Operating Expenses
|
|
|
42,822
|
|
|
|
51,969
|
|
|
|
25,800
|
|
|
|
32,701
|
|
|
|
153,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
|
268,841
|
|
|
|
356,267
|
|
|
|
95,934
|
|
|
|
128,972
|
|
|
|
850,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic Income
|
|
$
|
360,668
|
|
|
$
|
429,284
|
|
|
$
|
115,190
|
|
|
$
|
99,701
|
|
|
$
|
1,004,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Assets
|
|
$
|
5,983,046
|
|
|
$
|
7,916,805
|
|
|
$
|
2,297,471
|
|
|
$
|
3,302,146
|
|
|
$
|
19,499,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016
|
|
|
|
Private
Equity
|
|
|
Real Estate
|
|
|
Hedge Fund
Solutions
|
|
|
Credit
|
|
|
Total
Segments
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management and Advisory Fees, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Management Fees
|
|
$
|
130,648
|
|
|
$
|
199,907
|
|
|
$
|
130,158
|
|
|
$
|
125,990
|
|
|
$
|
586,703
|
|
Transaction, Advisory and Other Fees, Net
|
|
|
8,920
|
|
|
|
35,794
|
|
|
|
543
|
|
|
|
1,342
|
|
|
|
46,599
|
|
Management Fee Offsets
|
|
|
(6,848
|
)
|
|
|
(3,595
|
)
|
|
|
|
|
|
|
(9,658
|
)
|
|
|
(20,101
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management and Advisory Fees, Net
|
|
|
132,720
|
|
|
|
232,106
|
|
|
|
130,701
|
|
|
|
117,674
|
|
|
|
613,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried Interest
|
|
|
30,282
|
|
|
|
200,627
|
|
|
|
|
|
|
|
|
|
|
|
230,909
|
|
Incentive Fees
|
|
|
|
|
|
|
4,069
|
|
|
|
2,684
|
|
|
|
21,697
|
|
|
|
28,450
|
|
Unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried Interest
|
|
|
73,875
|
|
|
|
(11,522
|
)
|
|
|
32
|
|
|
|
(14,779
|
)
|
|
|
47,606
|
|
Incentive Fees
|
|
|
|
|
|
|
9,765
|
|
|
|
(2,935
|
)
|
|
|
270
|
|
|
|
7,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Performance Fees
|
|
|
104,157
|
|
|
|
202,939
|
|
|
|
(219
|
)
|
|
|
7,188
|
|
|
|
314,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
|
|
|
(15,357
|
)
|
|
|
12,975
|
|
|
|
(4,745
|
)
|
|
|
(2,974
|
)
|
|
|
(10,101
|
)
|
Unrealized
|
|
|
15,440
|
|
|
|
(2,137
|
)
|
|
|
(12,291
|
)
|
|
|
(17,561
|
)
|
|
|
(16,549
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Income (Loss)
|
|
|
83
|
|
|
|
10,838
|
|
|
|
(17,036
|
)
|
|
|
(20,535
|
)
|
|
|
(26,650
|
)
|
Interest and Dividend Revenue
|
|
|
9,849
|
|
|
|
13,188
|
|
|
|
5,296
|
|
|
|
6,748
|
|
|
|
35,081
|
|
Other
|
|
|
(1,587
|
)
|
|
|
(1,909
|
)
|
|
|
(1,388
|
)
|
|
|
(1,364
|
)
|
|
|
(6,248
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
|
245,222
|
|
|
|
457,162
|
|
|
|
117,354
|
|
|
|
109,711
|
|
|
|
929,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits Compensation
|
|
|
80,274
|
|
|
|
100,578
|
|
|
|
54,169
|
|
|
|
52,382
|
|
|
|
287,403
|
|
Performance Fee Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried Interest
|
|
|
15,427
|
|
|
|
43,076
|
|
|
|
|
|
|
|
|
|
|
|
58,503
|
|
Incentive Fees
|
|
|
|
|
|
|
2,133
|
|
|
|
1,863
|
|
|
|
10,127
|
|
|
|
14,123
|
|
Unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried Interest
|
|
|
9,296
|
|
|
|
27,703
|
|
|
|
|
|
|
|
(6,998
|
)
|
|
|
30,001
|
|
Incentive Fees
|
|
|
|
|
|
|
4,158
|
|
|
|
(1,195
|
)
|
|
|
485
|
|
|
|
3,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Compensation and Benefits
|
|
|
104,997
|
|
|
|
177,648
|
|
|
|
54,837
|
|
|
|
55,996
|
|
|
|
393,478
|
|
Other Operating Expenses
|
|
|
48,063
|
|
|
|
48,097
|
|
|
|
26,146
|
|
|
|
26,220
|
|
|
|
148,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
|
153,060
|
|
|
|
225,745
|
|
|
|
80,983
|
|
|
|
82,216
|
|
|
|
542,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic Income
|
|
$
|
92,162
|
|
|
$
|
231,417
|
|
|
$
|
36,371
|
|
|
$
|
27,495
|
|
|
$
|
387,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
The following table reconciles the Total Segments to Blackstones Income Before
Provision for Taxes and Total Assets as of and for the three months ended March 31, 2017 and 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017
|
|
|
Three Months Ended March 31, 2016
|
|
|
|
Total
Segments
|
|
|
Consolidation
Adjustments
and Reconciling
Items
|
|
|
Blackstone
Consolidated
|
|
|
Total
Segments
|
|
|
Consolidation
Adjustments
and Reconciling
Items
|
|
|
Blackstone
Consolidated
|
|
Revenues
|
|
$
|
1,854,857
|
|
|
$
|
85,866(a)
|
|
|
$
|
1,940,723
|
|
|
$
|
929,449
|
|
|
$
|
2,905(a)
|
|
|
$
|
932,354
|
|
Expenses
|
|
$
|
850,014
|
|
|
$
|
79,636(b)
|
|
|
$
|
929,650
|
|
|
$
|
542,004
|
|
|
$
|
75,706(b)
|
|
|
$
|
617,710
|
|
Other Income
|
|
$
|
|
|
|
$
|
66,132(c)
|
|
|
$
|
66,132
|
|
|
$
|
|
|
|
$
|
19,142(c)
|
|
|
$
|
19,142
|
|
Economic Income
|
|
$
|
1,004,843
|
|
|
$
|
72,362(d)
|
|
|
$
|
1,077,205
|
|
|
$
|
387,445
|
|
|
$
|
(53,659)(d)
|
|
|
$
|
333,786
|
|
Total Assets
|
|
$
|
19,499,468
|
|
|
$
|
8,837,696(e)
|
|
|
$
|
28,337,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The Revenues adjustment represents management and performance fees earned from Blackstone Funds that were eliminated in consolidation to arrive at Blackstone
consolidated revenues, non-segment related Investment Income (Loss), which is included in Blackstone consolidated revenues and the elimination of inter-segment interest income.
|
(b)
|
The Expenses adjustment represents the addition of expenses of the consolidated Blackstone Funds to the Blackstone unconsolidated expenses, amortization of intangibles,
expenses related to transaction-related equity-based compensation and the elimination of inter-segment interest expense to arrive at Blackstone consolidated expenses.
|
(c)
|
The Other Income adjustment results from the following:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Fund Management Fees and Performance Fees Eliminated in Consolidation and Transactional Investment Loss
|
|
$
|
(85,321
|
)
|
|
$
|
(2,757
|
)
|
Fund Expenses Added in Consolidation
|
|
|
7,491
|
|
|
|
(5,847
|
)
|
Income Associated with Non-Controlling Interests of Consolidated Entities
|
|
|
140,685
|
|
|
|
33,685
|
|
Transaction-Related Other Income (Loss)
|
|
|
3,277
|
|
|
|
(5,939
|
)
|
|
|
|
|
|
|
|
|
|
Total Consolidation Adjustments and Reconciling Items
|
|
$
|
66,132
|
|
|
$
|
19,142
|
|
|
|
|
|
|
|
|
|
|
(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 March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Economic Income
|
|
$
|
1,004,843
|
|
|
$
|
387,445
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Amortization of Intangibles
|
|
|
(11,344
|
)
|
|
|
(23,208
|
)
|
Transaction-Related Charges
|
|
|
(56,979
|
)
|
|
|
(64,136
|
)
|
Income Associated with Non-Controlling Interests of Consolidated Entities
|
|
|
140,685
|
|
|
|
33,685
|
|
|
|
|
|
|
|
|
|
|
Total Consolidation Adjustments and Reconciling Items
|
|
|
72,362
|
|
|
|
(53,659
|
)
|
|
|
|
|
|
|
|
|
|
Income Before Provision for Taxes
|
|
$
|
1,077,205
|
|
|
$
|
333,786
|
|
|
|
|
|
|
|
|
|
|
53
THE BLACKSTONE GROUP L.P.
Notes to Condensed Consolidated Financial StatementsContinued
(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)
(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.
|
There
have been no events since March 31, 2017 that require recognition or disclosure in the Condensed Consolidated Financial Statements.
54
ITEM 1A.
|
UNAUDITED SUPPLEMENTAL PRESENTATION OF STATEMENTS OF FINANCIAL CONDITION
|
THE BLACKSTONE GROUP L.P.
Unaudited Consolidating Statements of
Financial Condition
(Dollars in Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
|
Consolidated
Operating
Partnerships
|
|
|
Consolidated
Blackstone
Funds (a)
|
|
|
Reclasses and
Eliminations
|
|
|
Consolidated
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
$
|
2,303,680
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,303,680
|
|
Cash Held by Blackstone Funds and Other
|
|
|
327,687
|
|
|
|
1,089,217
|
|
|
|
|
|
|
|
1,416,904
|
|
Investments
|
|
|
11,334,290
|
|
|
|
7,209,216
|
|
|
|
(405,248
|
)
|
|
|
18,138,258
|
|
Accounts Receivable
|
|
|
327,390
|
|
|
|
946,764
|
|
|
|
|
|
|
|
1,274,154
|
|
Reverse Repurchase Agreements
|
|
|
44,635
|
|
|
|
|
|
|
|
|
|
|
|
44,635
|
|
Due from Affiliates
|
|
|
1,677,312
|
|
|
|
16,157
|
|
|
|
(24,345
|
)
|
|
|
1,669,124
|
|
Intangible Assets, Net
|
|
|
251,640
|
|
|
|
|
|
|
|
|
|
|
|
251,640
|
|
Goodwill
|
|
|
1,718,519
|
|
|
|
|
|
|
|
|
|
|
|
1,718,519
|
|
Other Assets
|
|
|
251,167
|
|
|
|
5,935
|
|
|
|
|
|
|
|
257,102
|
|
Deferred Tax Assets
|
|
|
1,263,148
|
|
|
|
|
|
|
|
|
|
|
|
1,263,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
19,499,468
|
|
|
$
|
9,267,289
|
|
|
$
|
(429,593
|
)
|
|
$
|
28,337,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Partners Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Payable
|
|
$
|
3,410,716
|
|
|
$
|
6,386,217
|
|
|
$
|
|
|
|
$
|
9,796,933
|
|
Due to Affiliates
|
|
|
1,187,566
|
|
|
|
104,446
|
|
|
|
(55,945
|
)
|
|
|
1,236,067
|
|
Accrued Compensation and Benefits
|
|
|
2,221,161
|
|
|
|
|
|
|
|
|
|
|
|
2,221,161
|
|
Securities Sold, Not Yet Purchased
|
|
|
92,763
|
|
|
|
85,685
|
|
|
|
|
|
|
|
178,448
|
|
Repurchase Agreements
|
|
|
21,253
|
|
|
|
73,393
|
|
|
|
|
|
|
|
94,646
|
|
Accounts Payable, Accrued Expenses and Other Liabilities
|
|
|
492,014
|
|
|
|
1,215,036
|
|
|
|
|
|
|
|
1,707,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
7,425,473
|
|
|
|
7,864,777
|
|
|
|
(55,945
|
)
|
|
|
15,234,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Non-Controlling Interests in
Consolidated Entities
|
|
|
|
|
|
|
188,658
|
|
|
|
|
|
|
|
188,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partners Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partners Capital
|
|
|
6,714,320
|
|
|
|
357,957
|
|
|
|
(358,655
|
)
|
|
|
6,713,622
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
(55,988
|
)
|
|
|
|
|
|
|
787
|
|
|
|
(55,201
|
)
|
Non-Controlling Interests in Consolidated Entities
|
|
|
1,810,672
|
|
|
|
855,897
|
|
|
|
(15,780
|
)
|
|
|
2,650,789
|
|
Non-Controlling Interests in Blackstone Holdings
|
|
|
3,604,991
|
|
|
|
|
|
|
|
|
|
|
|
3,604,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Partners Capital
|
|
|
12,073,995
|
|
|
|
1,213,854
|
|
|
|
(373,648
|
)
|
|
|
12,914,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Partners Capital
|
|
$
|
19,499,468
|
|
|
$
|
9,267,289
|
|
|
$
|
(429,593
|
)
|
|
$
|
28,337,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
continued
55
THE BLACKSTONE GROUP L.P.
Unaudited Consolidating Statements of Financial Condition
(Dollars in Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
Consolidated
Operating
Partnerships
|
|
|
Consolidated
Blackstone
Funds (a)
|
|
|
Reclasses and
Eliminations
|
|
|
Consolidated
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
$
|
1,837,253
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,837,253
|
|
Cash Held by Blackstone Funds and Other
|
|
|
261,909
|
|
|
|
743,252
|
|
|
|
|
|
|
|
1,005,161
|
|
Investments
|
|
|
11,618,729
|
|
|
|
6,474,168
|
|
|
|
(397,922
|
)
|
|
|
17,694,975
|
|
Accounts Receivable
|
|
|
404,843
|
|
|
|
367,852
|
|
|
|
|
|
|
|
772,695
|
|
Reverse Repurchase Agreements
|
|
|
118,495
|
|
|
|
|
|
|
|
|
|
|
|
118,495
|
|
Due from Affiliates
|
|
|
1,433,612
|
|
|
|
27,473
|
|
|
|
(18,707
|
)
|
|
|
1,442,378
|
|
Intangible Assets, Net
|
|
|
262,604
|
|
|
|
|
|
|
|
|
|
|
|
262,604
|
|
Goodwill
|
|
|
1,718,519
|
|
|
|
|
|
|
|
|
|
|
|
1,718,519
|
|
Other Assets
|
|
|
259,695
|
|
|
|
5,093
|
|
|
|
|
|
|
|
264,788
|
|
Deferred Tax Assets
|
|
|
1,286,469
|
|
|
|
|
|
|
|
|
|
|
|
1,286,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
19,202,128
|
|
|
$
|
7,617,838
|
|
|
$
|
(416,629
|
)
|
|
$
|
26,403,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Partners Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Payable
|
|
$
|
3,399,922
|
|
|
$
|
5,466,444
|
|
|
$
|
|
|
|
$
|
8,866,366
|
|
Due to Affiliates
|
|
|
1,253,791
|
|
|
|
86,688
|
|
|
|
(18,707
|
)
|
|
|
1,321,772
|
|
Accrued Compensation and Benefits
|
|
|
2,327,762
|
|
|
|
|
|
|
|
|
|
|
|
2,327,762
|
|
Securities Sold, Not Yet Purchased
|
|
|
127,710
|
|
|
|
87,688
|
|
|
|
|
|
|
|
215,398
|
|
Repurchase Agreements
|
|
|
7,034
|
|
|
|
68,290
|
|
|
|
|
|
|
|
75,324
|
|
Accounts Payable, Accrued Expenses and Other Liabilities
|
|
|
533,101
|
|
|
|
548,681
|
|
|
|
|
|
|
|
1,081,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
7,649,320
|
|
|
|
6,257,791
|
|
|
|
(18,707
|
)
|
|
|
13,888,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Non-Controlling Interests in Consolidated Entities
|
|
|
|
|
|
|
185,390
|
|
|
|
|
|
|
|
185,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partners Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partners Capital
|
|
|
6,524,607
|
|
|
|
398,001
|
|
|
|
(398,679
|
)
|
|
|
6,523,929
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
(63,644
|
)
|
|
|
|
|
|
|
757
|
|
|
|
(62,887
|
)
|
Non-Controlling Interests in Consolidated Entities
|
|
|
1,652,308
|
|
|
|
776,656
|
|
|
|
|
|
|
|
2,428,964
|
|
Non-Controlling Interests in Blackstone Holdings
|
|
|
3,439,537
|
|
|
|
|
|
|
|
|
|
|
|
3,439,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Partners Capital
|
|
|
11,552,808
|
|
|
|
1,174,657
|
|
|
|
(397,922
|
)
|
|
|
12,329,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Partners Capital
|
|
$
|
19,202,128
|
|
|
$
|
7,617,838
|
|
|
$
|
(416,629
|
)
|
|
$
|
26,403,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The Consolidated Blackstone Funds consisted of the following:
|
Blackstone Real Estate Partners VI.C ESH L.P.
Blackstone Real Estate
Special Situations Fund L.P.
Blackstone Real Estate Special Situations Offshore Fund Ltd.
Blackstone Strategic Alliance Fund L.P.
Blackstone/GSO Loan Financing Limited
BSSF I AIV L.P.
BTD CP Holdings, LP
GSO Legacy Associates II LLC
GSO Legacy Associates LLC
56
Private equity side-by-side investment vehicles
Real estate side-by-side investment vehicles
Mezzanine side-by-side investment vehicles
Collateralized loan obligation
vehicles