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EQUITY-BASED COMPENSATION
 6 Months Ended
Jun. 30, 2012
EQUITY-BASED COMPENSATION
14. EQUITY-BASED COMPENSATION

The Partnership has granted equity-based compensation awards to Blackstone’s senior managing directors, non-partner professionals, non-professionals and selected external advisors under the Partnership’s 2007 Equity Incentive Plan (the “Equity Plan”), the majority of which to date were granted in connection with the 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, 2012, the Partnership had the ability to grant 162,195,378 units under the Equity Plan.

For the three and six months ended June 30, 2012, the Partnership recorded compensation expense of $244.6 million and $467.0 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $7.2 million and $12.7 million, respectively. For the three and six months ended June 30, 2011, the Partnership recorded compensation expense of $408.6 million and $834.9 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $4.5 million and $8.7 million, respectively. As of June 30, 2012, there was $2.2 billion of estimated unrecognized compensation expense related to unvested awards. This cost is expected to be recognized over a weighted-average period of 2.9 years.

Total vested and unvested outstanding units, including Blackstone Common Units, Blackstone Holdings Partnership Units and deferred restricted common units, were 1,128,718,375 as of June 30, 2012. Total outstanding unvested phantom units were 221,356 as of June 30, 2012.

 

A summary of the status of the Partnership’s unvested equity-based awards as of June 30, 2012 and a summary of changes during the period January 1, 2012 through June 30, 2012 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, 2011

      89,644,650      $ 29.88         17,635,945      $ 18.50         218,583      $ 13.88   

Granted

      1,612,611        14.04         1,550,478        13.25         6,736        12.82   

Vested

      (23,409,788 )      30.36         (4,598,271 )      19.94         (3,963 )      13.33   

Forfeited

      (2,063,277 )      30.58         (619,522 )      19.79         —          —     
  

 

 

       

 

 

       

 

 

    

Balance, June 30, 2012

      65,784,196      $ 29.30         13,968,630      $ 17.20         221,356      $ 12.22   
  

 

 

       

 

 

       

 

 

    

Units Expected to Vest

The following unvested units, after expected forfeitures, as of June 30, 2012, are expected to vest:

 

     Units      Weighted-Average
Service Period
in Years		  
     
     

Blackstone Holdings Partnership Units

      61,474,866         2.9   

Deferred Restricted Blackstone Common Units and Options

      11,895,121         2.6   
  

 

 

     

 

 

  

Total Equity-Based Awards

      73,369,987         2.8   
  

 

 

     

 

 

  

Phantom Units

      206,333         2.9