BLACKSTONE GROUP L.P.

Transcription

1 BLACKSTONE GROUP L.P. FORM 8-K/A (Amended Current report filing) Filed 03/20/12 for the Period Ending 03/20/12 Address 345 PARK AVENUE NEW YORK, NY, Telephone CIK Symbol BX SIC Code Investment Advice Industry Investment Management & Fund Operators Sector Financials Fiscal Year 12/31 Copyright 2019, EDGAR Online, a division of Donnelley Financial Solutions. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, a division of Donnelley Financial Solutions, Terms of Use.

2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 20, 2012 The Blackstone Group L.P. (Exact name of Registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) (Commission File Number) (212) (Registrant s telephone number, including area code) NOT APPLICABLE (Former name or former address, if changed since last report) (I.R.S. Employer Identification No.) 345 Park Avenue New York, New York (Address of principal executive offices) (Zip Code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): Written communications pursuant to Rule 425 under the Securities Act (17 CFR ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR e-4(c))

3 Item 2.01 Completion of Acquisition or Disposition of Assets. On January 11, 2012, The Blackstone Group L.P. ( Blackstone ) filed a Current Report on Form 8-K to report its acquisition of the entire share capital of ( Harbourmaster ), an Island of Jersey company. This Current Report on Form 8-K/A amends the Current Report on Form 8-K filed on January 11, 2012 to include the financial statements as required by Items 9.01 (a) and 9.01 (b) of Form 8-K. Rule 3-05 of Regulation S-X of the Securities Exchange Act of 1934 specifies the financial statements to be included in Item 9.01, based on certain significance tests, for the acquisition of a non-u.s. acquiree. The financial statements of Harbourmaster are prepared in accordance with accounting principles generally accepted in the United Kingdom ( U.K. GAAP ), a basis of accounting other than those generally accepted in the United States of America ( U.S. GAAP ). Harbourmaster met the significance test for 2010 at the 20% level and not at the 30% level and is therefore only required to include a narrative description of the key differences between U.K. GAAP and U.S. GAAP in the notes to its 2010 consolidated financial statements, which are included in Item 9.01 (a) (Exhibit 99.1). Item 9.01 Financial Statements and Exhibits. (a) The audited Consolidated Balance Sheet of as of 31 December 2010 and the Consolidated Profit and Loss Account, Cash Flows and Reconciliation of Shareholders Funds for the Year Ended 31 December 2010 and the related notes, including a narrative description of the key differences to U.S. GAAP, are filed as Exhibit 99.1 hereto. The unaudited Consolidated Balance Sheet of Financial Condition of as of 30 June 2011 and Consolidated Profit and Loss Account, Cash Flows and Reconciliation of Shareholders Funds for the Six Months Ended 30 June 2011 and 2010 are filed as Exhibit 99.2 hereto. (b) Financial Statements of Businesses Acquired. Pro Forma Financial Information. The unaudited pro forma condensed combined financial statements of Blackstone and Harbourmaster as of and for the six months ended June 30, 2011 and for the year ended December 31, 2010 are filed as Exhibit 99.3 hereto. (d) Exhibits. Exhibit No Consent of Ernst & Young. 1 Description 99.1 Audited Consolidated Balance Sheet of as of 31 December 2010 and the Consolidated Profit and Loss Account, Cash Flows and Reconciliation of Shareholders Funds for the Year Ended 31 December Unaudited Consolidated Balance Sheet of as of 30 June 2011 and Consolidated Profit and Loss Account, Cash Flows and Reconciliation of Shareholders Funds for the Six Months Ended 30 June 2011 and Unaudited Pro Forma Condensed Combined Statement of Financial Condition of The Blackstone Group L.P. as of June 30, 2011 and Unaudited Pro Forma Condensed Combined Statements of Operations for the Six Months Ended June 30, 2011 and for the Year Ended December 31, 2010.

4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: March 20, The Blackstone Group L.P. By: Blackstone Group Management L.L.C., its General Partner By: /s/ Laurence A. Tosi Name: Laurence A. Tosi Title: Chief Financial Officer

5 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the following Registration Statements: Registration Statement No (Common Units Representing Limited Partnership Interests) on Form S-3ASR, Registration Statement No (Common Units Representing Limited Partnership Interests) on Form S-3ASR, Registration Statement No (The Blackstone Group L.P Equity Incentive Plan) on Form S-8, Registration Statement No (The Blackstone Group L.P Equity Incentive Plan) on Form S-8, Registration Statement No (The Blackstone Group L.P Equity Incentive Plan) on Form S-8, Registration Statement No (The Blackstone Group L.P Equity Incentive Plan) on Form S-8, and Registration Statement No (The Blackstone Group L.P Equity Incentive Plan) on Form S-8 Exhibit 23.1 of our report dated March 20, 2012, relating to the consolidated financial statements of, appearing in this Current Report on Form 8-K/A of The Blackstone Group L.P. Our report dated March 20, 2012 includes an explanatory paragraph that states that accounting principles generally accepted in the United Kingdom vary in certain significant respects from U.S. generally accepted accounting principles. Information relating to the nature of such differences is presented in note 23 to the consolidated financial statements. /s/ Ernst & Young Dublin, Ireland March 20, 2012

6 Exhibit 99.1 Consolidated Financial Statements For the Year Ended 31 December

7 REPORT OF INDEPENDENT AUDITORS The Board of Directors and Shareholders of We have audited the accompanying consolidated balance sheet of ( the Company ) as of December 31, 2010, and the related consolidated profit and loss account, consolidated reconciliation of shareholders funds and consolidated cash flow statement for the year then ended. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Accounting principles generally accepted in the United Kingdom require that financial statements be presented with comparative financial information. These consolidated financial statements have been prepared solely for the purpose of meeting the requirements of Rule 3-05 of Regulation S-X. Accordingly, no comparative financial information is presented. In our opinion, except for the omission of comparative financial information as discussed in the preceding paragraph, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of as at 31 December 2010 and the consolidated results of its operations and its cash flow and its consolidated reconciliation of shareholders funds for the year then ended in conformity with accounting principles generally accepted in the United Kingdom. Accounting principles generally accepted in the United Kingdom vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature of such differences is presented in note 23 to the consolidated financial statements. /s/ Ernst & Young Dublin, Ireland 20 March

8 CONSOLIDATED BALANCE SHEET As at 31 December Notes 31 December 2010 FIXED ASSETS Investments 4 7,349,819 Tangible Fixed Assets ,066 7,611,885 CURRENT ASSETS Trade Debtors 7 3,954,039 Other Debtors 7 85,871 Cash and Cash Equivalents 20,203,446 24,243,356 CREDITORS: amounts falling due within one year Creditors and Accruals 8 (2,743,322) NET CURRENT ASSETS 21,500,034 TOTAL ASSETS LESS CURRENT LIABILITIES 29,111,919 CREDITORS: amounts falling due after one year Creditors and Accruals 9 (468,750) TOTAL NET ASSETS 28,643,169 REPRESENTED BY: Share Capital ,840 Share Based Payment Reserve 18 1,466,923 Capital Contribution 76,002 Profit and Loss Account 26,876,404 TOTAL EQUITY SHAREHOLDERS FUNDS 28,643,169

9 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the Year Ended 31 December Notes Year Ended 31 December 2010 Operating Income 3 72,967,008 Operating Costs (8,675,717) Operating Profit 64,291,291 Write-Up (Down) on Financial Fixed Assets 3,160,417 Profit on Ordinary Activities before Interest 67,451,708 Interest Receivable and Similar Income 146,823 Interest Payable and Similar Charges (21,622) Profit on Ordinary Activities before Taxation 67,576,909 Taxation 6 (113,765 ) Profit for the Financial Year 67,463,144

10 CONSOLIDATED CASH FLOW STATEMENT As at 31 December Notes Year Ended 31 December 2010 Net Cash Inflow from Operating Activities before Taxation 12 64,773,156 Taxation Corporation Paid (142,639) Corporation Tax Refund Received 12,323 Net Cash Inflow from Operating Activities 64,642,840 Cash Flows from Capital Expenditure and Investing Activities Purchase of Tangible Fixed Assets (59,033 ) Purchase of Financial Fixed Assets (5,570,000 ) Sales of Financial Fixed Assets 5,511,928 (117,105 ) Cash Flows from Return on Investments and Servicing of Finance Interest Income 146,823 Interest Paid (22,300 ) 124,523 Equity Dividends Paid (65,184,957 ) Cash Flows from Financing Activities Repayment of Bank Loan 13 (625,000) Issue of Shares 22,200 Redemption of Shares (817,287) (1,420,087) Net Increase in Cash 13 (1,954,786 ) Cash at the Beginning of the Year 22,158,232 Cash at the End of the Year 13 20,203,446

11 CONSOLIDATED RECONCILIATION OF SHAREHOLDERS FUNDS As at 31 December Issued Capital Retained Profit Share Based Payment Reserve Capital Contribution As at 1 January ,640 25,415,505 1,262,559 76,002 26,955,706 Profit for the Year 67,463,144 67,463,144 Share Based Payment Expense 204, ,364 Share Issuance/Buy-back 22,200 (817,288) (795,088) Dividends (65,184,957) (65,184,957) As at 31 December ,840 26,876,404 1,466,923 76,002 28,643,169 Total

12 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 December ACCOUNTING POLICIES Basis of Preparation The consolidated financial statements of ( the Group ) have been prepared under the historical cost convention on a going concern basis. Except for the omission of comparative information as discussed below, the consolidated financial statements have been prepared in accordance with United Kingdom generally accepted accounting principles ( UK GAAP ). The Group consists of Harbourmaster Capital Management Limited, Harbourmaster Capital Limited and Harbourmaster Capital (Holdings) Limited. These financial statements have been prepared solely for the purposes of meeting the requirements of Rule 3-05 of Regulation S-X. Accordingly no comparative information is presented. The principal accounting policies are as follows: Functional Currency and Presentational Currency The functional currency is the euro. The presentation currency is the euro. Monetary assets and liabilities denominated in foreign currencies have been translated at rates of exchange ruling on the balance sheet date. Resultant foreign exchange gains and losses have been accounted for in the Profit and Loss account for the year. Transactions denominated in foreign currencies are translated into euro at the rate of exchange ruling on the date of the transaction. Interest and expense recognition Interest income and expense is recognised on an accruals basis. Tangible Fixed Assets Tangible Fixed Assets are stated at historical cost less accumulated depreciation. Depreciation is provided on a straight line basis at rates which will write off these assets over their expected useful lives, as follows; Furniture, Fixtures and Fittings Computer Hardware and Software Office Equipment 8 years 3 years 3 years Income Fees are earned for the provision of collateral management and advisory services to a number of entities and are accrued over the period of time the services are provided. Where fees payable to the Group for a particular period have been deferred by the counterparty under the terms of the contract due to trigger conditions not being met, such fees are not recognised until all relevant conditions are met. Pension Contribution The Group makes contributions to pension schemes which have been established for its employees. Contributions are charged to the Profit and Loss account as they become payable. Pension benefits are funded over the employees period of service by way of contributions to a defined contribution scheme. Taxation Current tax payable is the expected tax payable on the taxable income for the year adjusted for changes to previous years and is calculated based on the applicable tax law in each jurisdiction in which the Group operates. Deferred tax is provided using the balance sheet method on temporary differences arising between the tax bases of assets and liabilities for taxation purposes and their carrying amounts in the financial statements. Current and deferred taxes are determined using tax rates legislation enacted or substantively enacted at the balance sheet date and expected to apply when the tax asset is realised or the related tax liability is realised. Deferred tax is recognised in respect of all material timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay 7

13 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 December 2010 more or right to pay less tax. Deferred tax is measured on an undiscounted basis using the tax rates that have been enacted or substantively enacted at the balance sheet date as an approximation of the rates expected to apply in the periods in which timing differences reverse. Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Investments Investments are stated at historical cost less provision for impairment. The discount arising from the purchase of investments is accreted annually through the Profit and Loss account. Any impairment loss is recognised in the Profit and Loss account. The amount of write down is based on the par credit loss of each deal s portfolio of collateral obligations as at balance sheet date on a mark to market basis. Share Based Payments In accordance with the provisions of FRS 20 the effects of Share Based Payment transactions, including transactions in which share options are granted to employees, have been fully reflected in the financial position of as at 31 December The share based payment reserve reflects the charge for performance and non performance options over the shares of the ultimate parent undertaking, as set out in note 18 below, granted to directors and the incremental fair value for subsequent awards. The cost of these awards is measured with reference to the fair value of these options at the grant date, and is ascertained by an external valuation agent, using the Black-Scholes Merton Option Pricing model. All Options are equity settled. The Profit and Loss account expense for the year is recognized within Operating Costs and represents the movement in cumulative expense recognized at the beginning and end of the year. Where the terms of the awards are modified, any additional expense is recognized at the modification date based on the fair value of the modified share-based payment arrangement. Cash and Cash Equivalents Cash includes cash in hand, demand deposits and other short-term highly liquid investments with original maturities of three months or less. 2. PRINCIPAL FINANCIAL RISKS The main risks to which the Group is exposed are detailed below together with the policies adopted by the board to manage the risk. Market Risk Market Risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group s income or the value of its holdings of financial instruments. (i) Interest Rate Risk The Group s income is principally in the form of management fees and other fees. Therefore, the directors believe that there is low interest rate risk to the Group. (ii) Currency Rate Risk All significant assets, liabilities, incomes and expenses are denominated in euro. Accordingly, the directors believe there is no currency exchange rate risk to the Group. 8

14 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 December 2010 Credit Risk Credit Risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. While the Group actively manages the portfolios of Collateralised Loan Obligations ( CLOs ) and funds, there can be no assurance that the CLOs and / or other instruments in which the Group has invested will not be subject to credit difficulties, leading to the loss of some or all the sums invested in such a security. Maximum exposure to credit risk to the Group is 31,507, OPERATING INCOME The principal activity of the Group is the provision of administrative and management services in respect of various portfolios of collateral obligations. The Group also earns other ancillary income such as waiver fees and return on investments in the form of cash distributions. 4. INVESTMENTS The Group s investments comprise of those made in special purpose vehicles and investment funds containing portfolios of loan obligations and asset backed securities. The Group does not have any voting rights in these entities. The CLO investments range from a holding of 8% of the subordinated tranche down to 3% of the subordinated tranche issued by each transaction. Investments are carried at cost less provisions for impairment. At balance sheet date the directors believed that there was no longer objective evidence of impairment in a number of these investments holdings. This analysis was based on a detailed assessment of the carrying value of the individual holdings based on the present value of estimated cash flows discounted at the financial asset s original effective interest rate (in this case a minimum Internal Rate of Return hurdle). Based on this analysis, the previously recognised impairments were written back through the Profit and Loss account to the extent of their carrying valuation. The cost of the assets held at year end is 22,029,794, which carry an impairment provision of 14,679, PROFIT BEFORE TAXATION 2010 Carrying Value at 1 January 3,919,402 Additions 5,570,000 Disposals (5,300,000) Equity Impairment/Writeback 3,160,417 Carrying Value at 31 December 7,349,819 Profit on Ordinary Activities before Taxation is stated after charging: Auditor s Remuneration 29,000 Directors Emoluments 2,956,369 Directors Pension 116,333 Depreciation 78,

15 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 December TAXATION Analysis of Profit and Loss account charge: is subject to tax on its profits at zero percent. Profits of its overseas subsidiaries are taxed at a higher rate, resulting in tax on profit on ordinary activities of 113, DEBTORS Current Tax: Corporation Tax on Profits for the Year 114,985 Deferred Tax: Credit for the Year (1,220) Tax on Profit on Ordinary Activities 113,765 Trade Debtors Accrued Management Fee Income 2,039,132 Waiver Fees 1,914,907 3,954, Other Debtors VAT Recoverable 47,771 Deferred Tax 17,894 Corporation Tax Receivable 20,206 85,

16 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 December CREDITORS: amounts falling due within one year 2010 Accrued Expenses 2,115,920 Bank Loans 625,000 Interest Payable on Loans 2,402 2,743, CREDITORS: amounts falling due after one year The loan is repayable in 16 equal quarterly instalments of 156,250 on each payment date commencing on 30 November Interest is payable on 17 November, February, May and August in each year commencing on 17 November 2008 and ending on 17 August The interest rate is a percentage per annum which is the aggregate of; a) Margin 0.75% b) Euribor applicable during the period. 10. SHARE CAPITAL 2010 Bank Loan Payable 468, ,750 Authorised 11,192 Shares of 20 Each 223,840 Issued 6,182 Class A Shares of 20 Each Fully Paid 123,640 3,699 Class B1 Shares of 20 Each Fully Paid 73,980 1,201 Class B2 Shares of 20 Each Fully Paid 24, Class C Shares of 20 Each Fully Paid 2, ,840 The holders of Class A, B1 and B2 shares have full voting rights and the Class C shares have no voting rights attached. All class of dividend rights are equal. In January 2010, repurchased and cancelled 191 A shares. In addition 1,110 A shares were issued during the year, for 20 each

17 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 December DIVIDENDS The directors paid dividends during the year ended 31 December 2010 as follows: 2010 Class A Share 34,522,548 Class B1 Share 23,182,767 Class B2 Share 7,077,761 Class C Share 401,881 65,184, RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH INFLOW 2010 Profit on Operating Activities before Taxation 67,576,909 Decrease in Debtors 425,021 Increase in Creditors (41,372) Share Based Payment Expense 204,364 Write Up on Financial Fixed Assets (3,160,417) Depreciation 78,780 Gain on Disposal of Financial Fixed Assets (211,928) Interest Income (146,823) Interest Expense 21,622 Net Cash Inflow from Operating Activities before Taxation 64,773, ANALYSIS OF CHANGE IN NET DEBT 2009 Cash flow Net Debt 2010 Cash at Bank 22,158,232 (1,954,786) 20,203,446 Bank Loans (1,718,750) 625,000 (1,093,750) 20,439,482 (1,954,786 ) 625,000 19,109, RELATED PARTY TRANSACTIONS Matthew Swan and Michael Lombardi, who are directors of, are partners in the law firm of Ogier, the Jersey legal advisers to the Group which may receive fees for providing legal advice from time to time in respect of the Group. They also have a beneficial interest in Ogier Fiduciary Services Holding Company Limited and certain of its subsidiaries, including Ogier Fiduciary Services (Jersey) Limited ( OFS(J)L ). Ogier SPV Services Limited is wholly owned subsidiary OFS(J)L which received fees for the 12

18 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 December 2010 provision of legal advice and administration services from time to time in respect of the Group. Any such fees will be discharged through the Group. Administration fees in the financial year 2010 were 82,166. Legal fees in the financial year 2010 were 437. No fees were outstanding as at year end. Fabio Salvalaggio, who was a director of the Harbourmaster Capital Management Limited until 5 January 2012, received 166,378 in fees under a consultancy agreement in the period. An amount of 172,994 was also paid to HM Revenue and Customs for PAYE and National Insurance with respect to payments received by Fabio Salvalaggio during the period. Stewart Wilkinson, who was also a director in the Group until 5 January 2012, received 300,000 under the servicing agreement in the period. In January 2010, repurchased 191 shares from its shareholders for 817,287. is a related party, through its subsidiary companies, Harbourmaster Capital Limited and Harbourmaster Capital Management Limited with the CLO entities it acts as collateral manager to, as well as invests in. Harbourmaster Capital Limited receives all of its operating fee income from these related parties during the normal course of business. 15. TANGIBLE FIXED ASSETS Furniture and Computer Office Fittings Equipment Equipment Total Cost At 1 January , , , ,088 Additions 58, ,033 At 31 December , , , ,121 Depreciation At 1 January , , , ,275 Charge for Year 54,404 19,861 4,515 78,780 At 31 December , , , ,055 Net Book Amounts At 31 December ,279 39, , CONTROLLING PARTY At the balance sheet date there is no one controlling party. Voting shares are held by a number of separate parties with no one shareholder owning the majority of the voting shares. Refer to Note 22 Post Balance Sheet Events for changes after the balance sheet date. 17. PRINCIPAL GROUP COMPANIES, a company incorporated under the laws of Jersey, Channel Islands, is the ultimate parent of the Group. owns 100% of Harbourmaster Capital Limited and Harbourmaster Capital Limited owns 100% of Harbourmaster Capital Management Limited. Harbourmaster Capital Management Limited provides collateral advisory services to Harbourmaster Capital Limited. Refer to Note 22 Post Balance Sheet Events for changes after the balance sheet date. 18. SHARE BASED PAYMENT RESERVE The share based payment reserve reflects the charge for performance and non performance options over the shares of the ultimate parent undertaking, as set out in the table below, granted to directors as of 14 December 2007 and 13

19 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 December 2010 the incremental fair value for the 7 July 2009 and 18 January 2010 awards. The fair value of these options was ascertained by an external valuation agent, using the Black-Scholes Merton Option Pricing model. All options are equity settled. The performance tranche of the 2007 grant was linked to EBITDA Target Growth over each of 2007, 2008 and Reference The above expense includes 166,216 which is the incremental fair value of the modified option grant on the A share option awards in 2009 and 2010 over the original C share awards. The modifications of the original options consist of a) removal of performance conditions, b) award is over A shares rather than C shares and c) modified options vest immediately. The following table lists the inputs to the model used to fair value the incremental modified A share equity settled options over the original performance and non-performance options which were granted during the year: 14 Grant Date Vesting Date Expiry Number Granted Weighted Average Exercise Price () C Share Non-Performance Options 14-Dec Apr Dec C Share Performance Options 14-Dec Dec Dec-14 Up to A Share Options 7-Jul-09 7-Jul-09 7-Jul-16 1, A Share Options 18-Jan Jan Jan Reference 2010 Expense arising from equity settled share based payment transactions 204,364 Performance Options Non-Performance Options July 2009 A Shares January 2010 A Shares Share Price () Weighted Average Exercise Price () Expected Life of Options (years) Expected Volatility (%) Risk Free Rate (%) Dividend Yield (%) 40

20 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 December 2010 As the Group is a private company an estimate of its historic market volatility is not observable. The directors have made a reasonable estimate of volatility for the industry in 2009 at 50% and 2010 at 45%. The following table reflects the movement in share options outstanding during the year: 2010 Outstanding at the Beginning of the Year 1,110 Granted During the Year 191 Exercised During the Year (1,301) Outstanding at the End of the Year As the Group is private there is no observable share price at the dates on which the share options were exercised in The directors believe the fair value of the Group s shares would be 888 a share on these dates (January 2010 and March 2010). 19. EMPLOYEES AND RENUMERATION The average number of persons employed by the Group during the year was 27. All were engaged in the provision of advisory services. The related remuneration incurred by the Group was: 2010 Wages and Salaries 5,181,166 Social Welfare Costs 739,586 Pension Costs 431,907 6,352, LEASE OBLIGATIONS During 2007, the Group entered into lease agreement in respect of office buildings. An amount of 381,572 is payable within one year of the balance sheet date in respect of the obligations under the lease which expires more than five years from the balance sheet date. This is the only lease to which the Group is a party to. The legal maturity of the lease is April PENSION The Group operates defined contribution pension schemes. The assets of the scheme are held separately from those of the Group in independently administered funds. The pension cost charge represents contributions payable by the Group to the schemes and amounted to 431,907. At year end there was 22,306 of pension contributions outstanding. 22. POST BALANCE SHEET EVENTS On 6 October 2011, GSO Capital Partners, the global credit platform of The Blackstone Group L.P., agreed to purchase the entire share capital of. On 5 January 2012, the transaction was completed. As part of the transaction Stewart Wilkinson and Fabio Salvallaggio, two of the principals and shareholders of the business, departed. All share classes in holding company,, were converted into common shares with Graphite Holdings LLC, a subsidiary of GSO Capital Partners, the sole shareholder. 15

21 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 December SUMMARY OF THE SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED KINGDOM AND ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United Kingdom (UK GAAP). Such principles differ in certain respects from generally accepted accounting principles in the United States (US GAAP). A summary of principal differences applicable to the Group is set out below: Investments Under UK GAAP, investments are stated at historical cost less provision for impairment. Any impairment loss is recognised in the profit and loss account. A subsequent reversal of impairment is recorded in the profit and loss account. (a) Variable Interest Entities Under US GAAP certain of these investments would be consolidated by the Group, under Financial Accounting Standard (FAS) No. 167, Amendments to FASB Interpretation No. 46(R) (Accounting Standards Codification (ASC) ), when the Group is deemed to be the primary beneficiary of the entities on the basis that the Group holds a controlling financial interest in those entities through holding an equity interest and/or a variable contractual interest to earn asset management fees. Consolidation of such investments will affect a number of line items within the financial statements, including investments, cash, debtors, other assets, loans payable, accounts payable, interest income, interest expense, realised and unrealised gains and losses on investments, operating expenses, taxation and reserves. Additionally, ASC requires certain additional disclosures about the involvement with variable interest entities and any significant changes in risk exposure due to that involvement. (b) Other Investments Under US GAAP, an impairment related to investments that are not consolidated would not be reversed. 16

22 Exhibit 99.2 Unaudited Consolidated Financial Statements As of 30 June 2011 and the Six Months Ended 30 June 2011 and

23 INTERIM CONSOLIDATED BALANCE SHEET As at 30 June 2011 and December Notes 30 June 2011 Unaudited 31 December 2010 FIXED ASSETS Investments 4 7,349,819 7,349,819 Tangible Fixed Assets , ,066 7,573,184 7,611,885 CURRENT ASSETS Trade Debtors 6 3,894,454 3,954,039 Other Debtors 6 66,722 85,871 Cash and Cash Equivalents 48,841,850 20,203,446 52,803,026 24,243,356 CREDITORS: amounts falling due within one year Creditors and Accruals 7 (858,207) (2,743,322) NET CURRENT ASSETS 51,944,819 21,500,034 TOTAL ASSETS LESS CURRENT LIABILITIES 59,518,003 29,111,919 CREDITORS: amounts falling due after one year Creditors and Accruals 8 (156,250) (468,750) TOTAL NET ASSETS 59,361,753 28,643,169 REPRESENTED BY: Share Capital 9 223, ,840 Share Based Payment Reserve 14 1,466,923 1,466,923 Capital Contribution 76,002 76,002 Profit and Loss Account 57,594,988 26,876,404 TOTAL EQUITY SHAREHOLDERS FUNDS 59,361,753 28,643,169 Audited

24 INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT (UNAUDITED) For the 6 Months Ended 30 June 2011 and 30 June 2010 All operations are continuing. There were no other recognised gains / losses for the period apart from the results for the year. There is no difference between the profit for the period and its historical cost equivalent. The accompanying notes form an integral part of these interim unaudited consolidated financial statements. 3 Notes Six Months Ended 30 June 2011 Six Months Ended 30 June 2010 Operating Income 3 33,724,240 40,121,334 Operating Costs (3,100,307) (3,964,520) Profit on Ordinary Activities before Interest 30,623,933 36,156,814 Interest Receivable and Similar Income 107,840 17,741 Interest Payable and Similar Charges (9,794) (11,816) Profit on Ordinary Activities before Taxation 30,721,979 36,162,739 Taxation 5 25,487 Profit for the Financial Period 30,747,466 36,162,739

25 INTERIM CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED) For the 6 Months Ended 30 June 2011 and 30 June Notes Six Months Ended 30 June 2011 Six Months Ended 30 June 2010 Net Cash Inflow from Operating Activities before Taxation 10 28,514,608 33,608,097 Taxation Corporation Tax Refund Received 25,487 Net Cash Inflow from Operating Activities 28,540,095 33,608,097 Cash Flows from Capital Expenditure and Investing Activities Purchase of Tangible Fixed Assets (690) (7,687) Purchase of Financial Fixed Assets (4,700,000) (690) (4,707,687) Equity Dividends Paid (30,000,000 ) Cash Flows from Investments and Servicing of Finance Interest Income 108,793 17,741 Interest Expense (9,794) (11,816) 98,999 5,925 Cash Flows from Financing Activities Share Buy Back (821,109) (821,109) Net Increase (Decrease) for Cash for the Period 28,638,404 (1,914,774 ) Cash at the Beginning of the Period 20,203,446 22,158,232 Cash at the End of the Period 48,841,850 20,243,458

26 INTERIM CONSOLIDATED RECONCILIATION OF SHAREHOLDERS FUNDS (UNAUDITED) For the 6 Months Ended 30 June 2011 and Issued Capital Retained Profit Share Based Payment Reserve Capital Contribution As at 1 January ,640 25,415,505 1,262,559 76,002 26,955,706 Profit for the Period 4,685,166 4,685,166 Share Based Payment Expense 204, ,364 Share Issuance 22,200 22,200 As at 30 June ,840 30,100,671 1,466,923 76,002 31,867,436 Issued Capital Retained Profit Share Based Payment Reserve Capital Contribution As at 1 January ,840 26,876,404 1,466,923 76,002 28,643,169 Profit for the Period 30,718,584 30,718,584 As at 30 June ,840 57,594,988 1,466,923 76,002 59,361,753 Total Total

27 NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS 1. ACCOUNTING POLICIES Basis of Preparation The consolidated financial statements have been prepared under the historical cost convention on a going concern basis. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Kingdom. The interim consolidated accounts do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group s annual accounts as at 31 December Functional Currency and Presentational Currency The functional currency is the euro. The presentation currency is the euro. Monetary assets and liabilities denominated in foreign currencies have been translated at rates of exchange ruling on the balance sheet date. Resultant foreign exchange gains and losses have been accounted for in the Profit and Loss account for the year. Transactions denominated in foreign currencies are translated into euro at the rate of exchange ruling on the date of the transaction. Interest and expense recognition Interest income and expense is recognised on an accruals basis. Tangible Fixed Assets Tangible Fixed Assets are stated at historical cost less accumulated depreciation. Depreciation is provided on a straight line basis at rates which will write off these assets over their expected useful lives, as follows; Furniture, Fixtures and Fittings Computer Hardware and Software Office Equipment 8 years 3 years 3 years Income Where fees payable to the Group (consisting of Harbourmaster Capital Management Limited, Harbourmaster Capital Limited and ) for a particular period have been deferred by the counterparty under the terms of the contract due to trigger conditions not being met, such fees are not recognised until all relevant conditions are met. Pension Contribution The Group makes contributions to pension schemes which have been established for its employees. Contributions are charged to the Profit and Loss account as they become payable. Pension benefits are funded over the employees period of service by way of contributions to a defined contribution scheme. Taxation Current tax payable is the expected tax payable on the taxable income for the year adjusted for changes to previous years and is calculated based on the applicable tax law in each jurisdiction in which the Group operates. Deferred tax is provided using the balance sheet method on temporary differences arising between the tax bases of assets and liabilities for taxation purposes and their carrying amounts in the financial statements. Current and deferred taxes are determined using tax rates legislation enacted or substantively enacted at the balance sheet date and expected to apply when the tax asset is realised or the related tax liability is realised. Deferred tax is recognised in respect of all material timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more or right to pay less tax. Deferred tax is measured on an undiscounted basis using the tax rates that have been enacted or substantively enacted at the balance sheet date as an approximation of the rates expected to apply in the periods in which timing differences reverse. 6

28 NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Investments Investments are stated at historical cost less provision for impairment. The discount arising from the purchase of investments is accreted annually through the Profit and Loss account. Any impairment loss is recognised in the Profit and Loss account. The amount of write down is based on the par credit loss of each deal s portfolio of collateral obligations as at balance sheet date on a mark to market basis. Share Based Payments In accordance with the provisions of FRS 20 the effects of Share Based Payment transactions, including transactions in which share options are granted to employees, have been fully reflected in the financial position of as at 30 June 2011 and 31 December PRINCIPAL FINANCIAL RISKS The main risks to which the Group is exposed are detailed below together with the policies adopted by the board to manage the risk. Market Risk Market Risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group s income or the value of its holdings of financial instruments. (i) Interest Rate Risk The Group s income is principally in the form of management fees and other fees. Therefore, the directors believe that there is low interest rate risk to the Group. (ii) Currency Rate Risk All significant assets, liabilities, incomes and expenses are denominated in euro. Accordingly, the directors believe there is no currency exchange rate risk to the Group. Credit Risk Credit Risk is the risk that the value of an instrument will not be realised at the full expected amounts. While the Group actively manages the portfolios of Colateralised Loan Obligations ( CLOs ) and funds, there can be no assurance that the CLOs and / or other instruments in which the Group has invested will not be subject to credit difficulties, leading to the loss of some or all the sums invested in such a security. 3. OPERATING INCOME The principal activity of the Group is the provision of administrative and management services in respect of various portfolios of collateral obligations. The Group also earns other ancillary income such as waiver fees and return on investments in the form of cash distributions. 4. INVESTMENTS The Group s investments comprise of those made in special purpose vehicles and investment funds containing portfolios of loan obligations and asset backed securities. The Group does not have any voting rights in these entities. The CLO investments range from a holding of 8% of the subordinated tranche down to 3% of the subordinated tranche issued by each transaction. Investments are carried at cost less provisions for impairment. At 31 December 2010 the directors believed that there was no longer objective evidence of impairment in a number of these investments holdings. This analysis was based on a detailed assessment of the carrying value of the individual holdings based on the present value of 7

29 NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS estimated cash flows discounted at the financial asset s original effective interest rate (in this case a minimum Internal Rate of Return Hurdle). Based on this analysis, the previously recognised impairments were written back through the Profit and Loss account to the extent of their carrying valuation. Six Months Ended 30 June 2011 Year Ended 31 December 2010 Unaudited Audited Carrying Value at 1 January 7,349,819 3,919,402 Additions 5,570,000 Disposals (5,300,000) Equity Impairment/Writeback 3,160,417 Carrying Value at Period End 7,349,819 7,349, TAXATION Analysis of Profit and Loss account charge: Six Months Six Months Ended 30 Ended 30 June 2011 June 2010 Unaudited Unaudited Deferred Tax: Credit for the Period (25,487) Tax on Profit on Ordinary Activities (25,487 ) 6. DEBTORS Six Months Ended 30 June 2011 Unaudited Year Ended 31 December 2010 Audited Trade Debtors Accrued Management Fee Income 1,975,505 2,039,132 Waiver Fees 1,918,949 1,914,907 3,894,454 3,954,039 8 Six Months Ended 30 June 2011 Unaudited Year Ended 31 December 2010 Audited Other Debtors VAT Recoverable 47,608 47,771 Deferred Tax 19,114 19,114 Corporation Tax Receivable 18,986 66,772 85,871

30 NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS 7. CREDITORS: amounts falling due within one year 30 June December Unaudited Audited Trade Creditors 679,478 Accrued Expenses 175,823 2,115,920 Bank Loans and Overdraft 625,000 Interest Payable on Loans and Overdrafts 2,906 2, ,207 2,743, CREDITORS: amounts falling due after one year The loan is repayable is repayable in 16 equal monthly instalments of 156,250 on each payment date commencing on 30 November Interest is payable on 17 November, February, May and August in each year commencing on 17 November 2008 and ending on 17 August The interest rate is a percentage per annum which is the aggregate of; a) Margin 0.75% b) Euribor applicable during the period. 9. SHARE CAPITAL The holders of Class A, B1 and B2 shares have full voting rights and the Class C shares have no voting rights attached June 2011 Unaudited 31 December 2010 Audited Bank Loan Payable 156, , , , December 30 June Unaudited Audited Authorised 11,192 Shares of 20 Each 223, ,840 Issued 6,182 Class A Shares of 20 Each Fully Paid 123, ,640 3,699 Class B1 Shares of 20 Each Fully Paid 73,980 73,980 1,201 Class B2 Shares of 20 Each Fully Paid 24,020 24, Class C Shares of 20 Each Fully Paid 2,200 2, , ,840

31 NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS 10. DIVIDENDS The directors declared dividends during the six months ended 30 June 2011 and 2010 as follows: Six Months Ended 30 June 2011 Six Months Ended 30 June 2010 Unaudited Unaudited Class A Share 16,232,862 Class B1 Share 10,250,130 Class B2 Share 3,328,035 Class C Share 188,973 30,000, RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH INFLOW 10 Six Months Six Months Ended 30 Ended 30 June 2011 June 2010 Unaudited Unaudited Profit on Operating Activities before Taxation 30,721,979 36,162,739 Decrease in Debtors (107,351) (290,864) Increase in Creditors (2,197,615) (2,291,777) Write Down on Financial Fixed Assets 156,250 Depreciation 39,391 33,924 Interest Income (107,840) (17,741) Interest Expense 9,794 11,816 Net Cash Inflow from Operating Activities before Taxation 28,514,608 33,608,097

32 NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS 12. TANGIBLE FIXED ASSETS Furniture and Computer Office Fittings Equipment Equipment Total Cost At 1 January , , , ,121 Additions At 30 June 2011 (Unaudited) 437, , , ,811 Depreciation At 1 January , , , ,055 Charge for period 27,202 9,932 2,257 39,391 At 30 June 2011 (Unaudited) 242, , , ,446 Net Book Amounts At 30 June 2011 (Unaudited) 195,077 30,045 (1,757) 223,365 At 31 December 2010 (Audited) 222,279 39, , CONTROLLING PARTY There is no one controlling party. Voting shares are held by a number of separate parties with no one shareholder owning the majority of the voting shares. 14. PRINCIPAL GROUP COMPANIES, a company incorporated under the laws of Jersey, Channel Islands, is the ultimate parent of the Group. owns 100% of Harbourmaster Capital Limited and Harbourmaster Capital Limited owns 100% of Harbourmaster Capital Management Limited. Harbourmaster Capital Management Limited provides collateral advisory services to Harbourmaster Capital Limited. 15. SHARE BASED PAYMENT RESERVE The share based payment reserve reflects the charge for performance and non performance options over the shares of the ultimate parent undertaking, as set out in the table below, granted to directors as of 14 December 2007 and the incremental fair value for the 7 July 2009 and 18 January 2010 awards. The fair value of these options was ascertained using the Black-Scholes Merton Option Pricing model. All options are equity settled. 11

33 NOTES TO THE INTERIM CONSOLIDATED ACCOUNTS Reference Grant Date The above expense included 166,216 in 2010 which is the incremental fair value of the modified option grant on the A share option awards in 2009 and 2010 over the original C share awards. The modifications of the original options consist of a) removal of performance conditions, b) award is over A shares rather than C shares and c) modified options vest immediately. The following table lists the inputs to the model used to fair value the incremental modified A-share equity settled options over the original performance and non-performance options: As Harbourmaster is a private company an estimate of its historic market volatility is not observable. The directors have made a reasonable estimate of volatility for the industry in 2009 at 50% and 2010 at 45%. The following table reflects the movement in share options outstanding during the period: 12 Vesting Date Expiry Number Granted Weighted Average Exercise Price () C Share Non-Performance Options 14-Dec Apr Dec C Share Performance Options 14-Dec Dec Dec-14 Up to A Share Options 7-Jul-09 7-Jul-09 7-Jul-16 1, A Share Options 18-Jan Jan Jan Reference Six Months Ended 30 June 2011 Unaudited Year Ended 31 December 2010 Audited Expense arising from equity settled share based payment transactions 204,364 Performance Options Non- Performance Options July 2009 A Shares January 2010 A Shares Share Price( ) Exercise Price () Expected Life of Options (years) Expected Volatility (%) Risk Free Rate (%) Dividend Yield (%) 40 Six Months Ended 30 June 2011 Unaudited Year Ended 31 December 2010 Audited Outstanding at the Beginning of the Period 1,110 Granted During the Period 191 Exercised During the Period (1,301) Outstanding at the End of the Period