2015 Q4 Form 10-Q Financial Statement

#000119312515368290 Filed on November 05, 2015

View on sec.gov

Income Statement

Concept 2015 Q4 2015 Q3 2014 Q3
Revenue $897.4M $11.57M $1.679B
YoY Change -55.59% -99.31% 38.01%
Cost Of Revenue $202.5M $112.9M $360.2M
YoY Change -38.39% -68.66% 113.9%
Gross Profit $694.9M -$101.3M $1.319B
YoY Change -58.93% -107.68% 25.83%
Gross Profit Margin 77.43% -875.31% 78.56%
Selling, General & Admin $442.2M $570.6M $663.4M
YoY Change -14.53% -13.99% 12.12%
% of Gross Profit 63.64% 50.28%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $23.50M $29.50M $25.10M
YoY Change -6.0% 17.53% 1.21%
% of Gross Profit 3.38% 1.9%
Operating Expenses $315.5M $327.2M $663.3M
YoY Change -31.26% -50.67% 12.1%
Operating Profit $379.4M -$428.5M $656.0M
YoY Change -69.23% -165.32% 43.61%
Interest Expense -$21.20M $36.86M $31.62M
YoY Change -120.19% 16.59% 20.36%
% of Operating Profit -5.59% 4.82%
Other Income/Expense, Net $100.4M -$16.87M $8.682M
YoY Change -28.53% -294.28% -90.13%
Pretax Income $440.9M -$482.3M $633.0M
YoY Change -67.05% -176.19% 22.1%
Income Tax $46.20M $1.573M $79.11M
% Of Pretax Income 10.48% 12.5%
Net Earnings $200.9M -$254.7M $250.5M
YoY Change -63.57% -201.67% 46.35%
Net Earnings / Revenue 22.38% -2200.79% 14.92%
Basic Earnings Per Share $0.31 -$0.40 $0.41
Diluted Earnings Per Share $0.23 -$0.40 $0.41
COMMON SHARES
Basic Shares Outstanding 558.4M shares 638.8M shares 611.7M shares
Diluted Shares Outstanding 638.8M shares 615.0M shares

Balance Sheet

Concept 2015 Q4 2015 Q3 2014 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $2.424B $2.235B $2.461B
YoY Change -24.74% -9.18% 22.32%
Cash & Equivalents $1.837B $1.380B $943.5M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables $613.0M $879.0M $1.984B
Other Receivables $1.241B $1.211B $0.00
Total Short-Term Assets $4.278B $4.325B $4.445B
YoY Change -12.85% -2.7% 16.33%
LONG-TERM ASSETS
Property, Plant & Equipment $135.5M $174.0M $134.0M
YoY Change -0.15% 29.87% -3.2%
Goodwill $1.719B $1.787B $1.787B
YoY Change -3.85% 0.0% 0.0%
Intangibles
YoY Change
Long-Term Investments $3.111B $3.018B $3.433B
YoY Change -4.01% -12.1% 15.82%
Other Assets $1.277B $1.373B $1.222B
YoY Change 2.0% 12.36% -4.46%
Total Long-Term Assets $18.25B $19.29B $26.07B
YoY Change -31.37% -25.99% 7.66%
TOTAL ASSETS
Total Short-Term Assets $4.278B $4.325B $4.445B
Total Long-Term Assets $18.25B $19.29B $26.07B
Total Assets $22.53B $23.62B $30.51B
YoY Change -28.48% -22.6% 8.84%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $649.0M $822.0M $2.049B
YoY Change -45.69% -59.88% 83.77%
Accrued Expenses $2.030B $2.365B $2.622B
YoY Change -16.77% -9.8% 60.56%
Deferred Revenue
YoY Change
Short-Term Debt $41.00M $42.00M $122.0M
YoY Change 36.67% -65.57% 76.81%
Long-Term Debt Due $188.0M
YoY Change 84.31%
Total Short-Term Liabilities $4.003B $4.616B $6.308B
YoY Change -22.33% -26.82% 33.39%
LONG-TERM LIABILITIES
Long-Term Debt $6.117B $6.159B $7.814B
YoY Change -31.45% -21.18% -27.66%
Other Long-Term Liabilities $177.0M $174.0M
YoY Change 105.81%
Total Long-Term Liabilities $6.294B $6.333B $7.814B
YoY Change -30.14% -18.95% -27.66%
TOTAL LIABILITIES
Total Short-Term Liabilities $4.003B $4.616B $6.308B
Total Long-Term Liabilities $6.294B $6.333B $7.814B
Total Liabilities $10.30B $10.95B $14.12B
YoY Change -27.31% -22.48% -9.06%
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $6.270B $6.517B $6.703B
YoY Change
Total Liabilities & Shareholders Equity $22.53B $23.62B $30.51B
YoY Change -28.48% -22.6% 8.84%

Cashflow Statement

Concept 2015 Q4 2015 Q3 2014 Q3
OPERATING ACTIVITIES
Net Income $200.9M -$254.7M $250.5M
YoY Change -63.57% -201.67% 46.35%
Depreciation, Depletion And Amortization $23.50M $29.50M $25.10M
YoY Change -6.0% 17.53% 1.21%
Cash From Operating Activities $1.014B -$216.9M $224.3M
YoY Change -345.58% -196.7% -83.89%
INVESTING ACTIVITIES
Capital Expenditures -$300.0K -$42.40M -$7.800M
YoY Change -96.63% 443.59% 95.0%
Acquisitions
YoY Change
Other Investing Activities $0.00 $0.00 $0.00
YoY Change -100.0%
Cash From Investing Activities -$400.0K -$42.30M -$7.700M
YoY Change -95.51% 449.35% -94.87%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -557.6M -524.1M -495.9M
YoY Change -162.61% 5.69% -51.12%
NET CHANGE
Cash From Operating Activities 1.014B -216.9M 224.3M
Cash From Investing Activities -400.0K -42.30M -7.700M
Cash From Financing Activities -557.6M -524.1M -495.9M
Net Change In Cash 455.5M -783.3M -279.3M
YoY Change -2.88% 180.45% -222.77%
FREE CASH FLOW
Cash From Operating Activities $1.014B -$216.9M $224.3M
Capital Expenditures -$300.0K -$42.40M -$7.800M
Free Cash Flow $1.014B -$174.5M $232.1M
YoY Change -351.06% -175.18% -83.38%

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bx Performance Fee Compensation Realized Incentive Fees
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bx Performance Fees Realized Incentive Fees
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bx Performance Fees Realized Carried Interest
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bx Net Settlement Of Vested Common Units
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bx Non Cash Performance Fees
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bx Increase Decrease In Cash Held By Funds And Other
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bx Performance Fee Compensation Unrealized Incentive Fees
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bx Net Settlement Of Vested Common Units And Repurchase Of Common And Partnership Units
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bx Performance Fees Unrealized Incentive Fees
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bx Deferred Tax Asset Exchange Of Founders And Senior Managing Directors Interests In Partnership Holdings
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bx Investment Income Loss Realized
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bx Transfers From Level Two To Level One
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bx Ipo And Acquisition Related Charges
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bx Fund Expenses Consolidated Funds
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bx Performance Fee Compensation Unrealized Carried Interest
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dei Document Type
DocumentType
10-Q
dei Trading Symbol
TradingSymbol
BX
dei Entity Central Index Key
EntityCentralIndexKey
0001393818
dei Document Period End Date
DocumentPeriodEndDate
2015-09-30
us-gaap Common Stock Dividends Per Share Declared
CommonStockDividendsPerShareDeclared
2.41
dei Entity Filer Category
EntityFilerCategory
Large Accelerated Filer
dei Current Fiscal Year End Date
CurrentFiscalYearEndDate
--12-31
dei Document Fiscal Period Focus
DocumentFiscalPeriodFocus
Q3
us-gaap Weighted Average Number Of Shares Outstanding Basic
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us-gaap Finite Lived Intangible Asset Useful Life
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us-gaap Effective Income Tax Rate Continuing Operations
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us-gaap Schedule Of Repurchase Agreements
ScheduleOfRepurchaseAgreements
<div> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%"> <font style="FONT-FAMILY: Times New Roman" size="2">The following table provides information regarding the Partnership&#x2019;s Repurchase Agreements obligation by type of collateral pledged as of September&#xA0;30, 2015:</font></p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px"> &#xA0;</p> <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tr> <td width="61%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"><font size="1">&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="18" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>September&#xA0;30, 2015</b></font></td> <td valign="bottom"><font size="1">&#xA0;</font></td> </tr> <tr> <td valign="bottom"><font size="1">&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="18" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Remaining Contractual Maturity of the Agreements</b></font></td> <td valign="bottom"><font size="1">&#xA0;</font></td> </tr> <tr> <td valign="bottom"><font size="1">&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Overnight<br /> Continuous</b></font></td> <td valign="bottom"><font size="1">&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Up to<br /> 30&#xA0;Days</b></font></td> <td valign="bottom"><font size="1">&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b><font style="WHITE-SPACE: nowrap">30&#xA0;-&#xA0;90</font><br /> Days</b></font></td> <td valign="bottom"><font size="1">&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Greater<br /> than<br /> 90&#xA0;days</b></font></td> <td valign="bottom"><font size="1">&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td> <td valign="bottom"><font size="1">&#xA0;</font></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Repurchase Agreements</b></font></p> </td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> <p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Asset-Backed Securities</font></p> </td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">&#x2014;&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">42,102</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">&#x2014;&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">&#x2014;&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">42,102</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 1px solid">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p> </td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">&#x2014;&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">42,102</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">&#x2014;&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">&#x2014;&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">42,102</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr> <td valign="top" colspan="16"> <p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. &#x201C;Offsetting of Assets and Liabilities&#x201D;</font></p> </td> <td valign="top"> <p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;&#xA0;</font></p> </td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">42,102</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top" colspan="16"> <p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. &#x201C;Offsetting of Assets and Liabilities&#x201D;</font></p> </td> <td valign="top"> <p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;&#xA0;</font></p> </td> <td valign="bottom"><font size="1">&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td> <td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">&#x2014;&#xA0;&#xA0;</font></td> <td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">&#xA0;&#xA0;</font></td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td valign="bottom"> <p style="BORDER-TOP: #000000 3px double">&#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div>
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<div> <table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="4%" valign="top" align="left"><font style="font-family:Times New Roman" size="2"><b>1.</b></font></td> <td align="left" valign="top"><font style="font-family:Times New Roman" size="2"><b>ORGANIZATION</b></font></td> </tr> </table> <p style="margin-top:6px;margin-bottom:0px; text-indent:4%"> <font style="font-family:Times New Roman" size="2">The Blackstone Group L.P., together with its subsidiaries (&#x201C;Blackstone&#x201D; or the &#x201C;Partnership&#x201D;), is a leading global manager of private capital and provider of financial advisory services. The alternative asset management business includes the management of private equity funds, real estate funds, real estate investment trusts (&#x201C;REITs&#x201D;), funds of hedge funds, hedge funds, credit-focused funds, collateralized loan obligation (&#x201C;CLO&#x201D;) vehicles, collateralized debt obligation (&#x201C;CDO&#x201D;) vehicles, separately managed accounts and registered investment companies (collectively referred to as the &#x201C;Blackstone Funds&#x201D;). Blackstone has also historically provided various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Blackstone&#x2019;s business is organized into five segments: private equity, real estate, hedge fund solutions, credit and financial advisory.</font></p> <p style="margin-top:12px;margin-bottom:0px; text-indent:4%"> <font style="font-family:Times New Roman" size="2">The Partnership was formed as a Delaware limited partnership on March&#xA0;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 Blackstone&#x2019;s founders, Stephen A. Schwarzman (the &#x201C;Founder&#x201D;), and Blackstone&#x2019;s other senior managing directors. The activities of the Partnership are conducted through its holding partnerships: Blackstone Holdings I L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. (collectively, &#x201C;Blackstone Holdings&#x201D;, &#x201C;Blackstone Holdings Partnerships&#x201D; or the &#x201C;Holding Partnerships&#x201D;). The Partnership, through its wholly owned subsidiaries, is the sole general partner in each of these Holding Partnerships.</font></p> <p style="margin-top:12px;margin-bottom:0px; text-indent:4%"> <font style="font-family:Times New Roman" size="2">Generally, holders of the limited partner interests in the four Holding Partnerships may, four times each year, exchange their limited partnership interests (&#x201C;Partnership Units&#x201D;) for Blackstone common units, on a one-to-one basis, exchanging one Partnership Unit in each of the four Holding Partnerships for one Blackstone common unit.</font></p> </div>
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