Record $3.936 Trillion in assets under management at March 31,
2013, up 7% year over year
BlackRock, Inc. (NYSE:BLK) today reported first quarter 2013 diluted EPS
of $3.62, up 15% from a year ago. Revenue increased 9% from the first
quarter 2012, reflecting growth in markets, long-dated net new business
and higher performance fees. Compared with fourth quarter 2012, revenue
reflected 2% growth in base fees despite two fewer revenue days and
seasonally lower performance fees. Operating income for the first
quarter 2013 was $909 million with an operating margin of 37.1%.
As adjusted results(1).
First quarter 2013 diluted EPS of $3.65 improved 16% and operating
income of $921 million rose 12% compared with first quarter 2012. The
first quarter 2013 as adjusted results included $33 million of
compensation and severance costs associated with the alignment of
staffing with the Company’s strategic priorities and growth
opportunities. First quarter 2013 results also included $18 million of
launch costs for the $700 million Multi-Sector Income Trust launched in
February 2013. First quarter diluted EPS included operating income of
$3.64 per diluted share and net non-operating income of $0.01 per
diluted share. Operating margin of 40.0% in first quarter 2013 rose 140
bps from first quarter 2012. For more information on as adjusted items
and the reconciliation to GAAP, see notes to the Condensed Consolidated
Statements of Income and Supplemental Information beginning on page 9.
“Our strong first quarter financial results, with revenue up 9% and EPS
up 16% year-over-year, once again demonstrate the strength of our
diversified business model,” commented Laurence D. Fink, Chairman and
CEO of BlackRock. “Our $39.4 billion in long-dated net new business for
the quarter is indicative of positive momentum across all client
channels and was driven by the strategic themes we continue to focus on:
ETFs, retirement, income, multi-asset class products, and alternatives.”
The table below presents AUM and a comparison of GAAP and as
adjusted results for certain financial measures.
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(Dollar amounts in millions, except per share data)
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Q1
2013
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Q1
2012
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Change
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Q4
2012
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Change
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AUM
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$ 3,936,409
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$ 3,684,087
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7%
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$ 3,791,588
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4%
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GAAP basis:
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Revenue
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$ 2,449
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$ 2,249
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9%
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$ 2,539
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(4%)
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Operating income
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$ 909
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$ 815
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12%
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$ 1,005
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(10%)
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Operating margin
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37.1%
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36.2%
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90 bps
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39.6%
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(250) bps
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Net income(2) |
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$ 632
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$ 572
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10%
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$ 690
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(8%)
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Diluted EPS
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$ 3.62
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$ 3.14
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15%
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$ 3.93
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(8%)
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Weighted average diluted shares
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174,561,132
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181,917,864
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(4%)
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175,176,037
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-%
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As Adjusted:
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Operating income(1) |
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$ 921
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$ 825
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12%
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$ 1,041
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(12%)
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Operating margin(1) |
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40.0%
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38.6%
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140 bps
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42.6%
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(260) bps
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Net income(1)(2) |
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$ 637
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$ 575
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11%
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$ 695
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(8%)
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Diluted EPS(1) |
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$ 3.65
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$ 3.16
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16%
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$ 3.96
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(8%)
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(1) See notes (a) through (f) to the Condensed
Consolidated Statements of Income and Supplemental Information in
Attachment I on pages 9 through 12 for more information on as
adjusted items and the reconciliation to GAAP.
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(2) Net income represents net income attributable to
BlackRock, Inc.
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“Aging populations are living longer worldwide at the same time that
global monetary policies have reduced interest rates to historic lows.
Now, long-dated fixed income instruments traditionally used to fund
retirement obligations carry asymmetric risk for investors looking to
match retirement assets and liabilities. This is having a significant
impact on where we're seeing asset flows as investors seek other sources
of yield, including from equities, where we witnessed a record $34
billion in net new flows.”
“iShares maintained its leadership position in the global ETF
market, capturing $26 billion in net new business, as we continued to
see adoption of ETFs across both institutional and retail investors
globally. We signed a critical new strategic alliance with Fidelity
Investments to deliver Fidelity's more than 10 million clients increased
access to iShares products, tools and support, and create a
powerhouse ETF offering for the self-directed investor in the U.S.
market. iShares has increasingly become a leading indicator of
investor sentiment and, during the quarter, investors turned to iShares
as a way to quickly and efficiently increase their exposure to equity
markets.
“Our successful brand and product positioning in the retail market
resulted in $9 billion of net inflows across the platform, our strongest
quarter in two years. Increasingly, investors are looking for
outcome-oriented solutions that leverage multi-asset class products,
income-oriented strategies and alternatives. During the quarter, we
added more than $1 billion of net inflows into retail alternative
products and now manage nearly $11 billion of retail alternative
products.
“Our institutional clients also displayed an expanded appetite for risk
and holistic portfolio solutions, generating strong net inflows in
multi-asset products, including our LifePath®
target-date funds where we now manage $62 billion, a 38% increase
year-over-year. BlackRock Solutions posted another strong quarter
and continues to expand globally. Our Aladdin assignments
generated year-over-year revenue growth of 11% driven by several
successful implementations and a growing global client base. Clients are
increasingly using Aladdin across multiple asset classes as they
consolidate investment systems. Including two substantial new client
wins in April, we have added seven Aladdin assignments in 2013
and we are implementing programs totaling close to $1.3 trillion in new
assets.
“During the quarter, we continued our efforts to reshape the
organization and invest in developing top-tier talent. We have made a
number of internal moves to create opportunities for high performing
employees and to add talent in key areas to enhance the experience for
our clients. Since our acquisition of Barclays Global Investors, the
Company has added more than 1,500 employees globally and expects
incremental net additions by the end of this year.
“Our first quarter results give us confidence that we have positioned
BlackRock to continue to deliver for our clients and shareholders across
all market environments,” said Mr. Fink.
First Quarter Business Highlights
Assets under management (“AUM”) totaled
a record $3.936 trillion at March 31, 2013, up 4% from December 31, 2012
and up 7% from a year ago. For the quarter, net inflows in long-term
products totaled $39.4 billion, reflecting positive net new business
across all client types. Equity, multi-asset class and core alternatives
net inflows of $33.7 billion, $9.0 billion and $1.5 billion,
respectively, were slightly offset by fixed income and alternatives
currency and commodities net outflows of $2.6 billion and $2.2 billion,
respectively. Total net inflows of $40.5 billion also included advisory
and cash management net inflows of $0.9 billion and $0.2 billion,
respectively. Market and foreign exchange valuation net gains
contributed $104.3 billion to AUM growth.
Net long-term inflows of $22.4 billion and $19.7 billion from clients in
EMEA and the Americas, respectively, were partially offset by $2.7
billion of net outflows from Asia-Pacific clients. At March 31, 2013,
BlackRock managed 61% of long-term AUM for investors in the Americas and
39% for international clients.
Long-term AUM: The following table presents long-term AUM and
base fees by client type:
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Business Mix Trend:
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March 31,
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Q1
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December 31,
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Q4
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March 31,
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Q1
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2013
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2013
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2012
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2012
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2012
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2012
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AUM
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Base Fees
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AUM
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Base Fees
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AUM
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Base Fees
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% of Total
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% of Total
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% of Total
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% of Total
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% of Total
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% of Total
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Retail
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11%
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33%
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12%
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34%
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12%
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35%
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iShares
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22%
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35%
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22%
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33%
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20%
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31%
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Institutional:
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Active
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24%
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22%
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25%
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23%
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26%
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24%
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Index
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43%
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10%
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41%
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10%
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42%
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10%
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Total institutional
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67%
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32%
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66%
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33%
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68%
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34%
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Total long-term
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100%
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100%
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100%
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100%
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100%
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100%
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Retail AUM of $421.1 billion reflected net
long-term inflows of $8.8 billion across both U.S. retail and high net
worth clients and international retail clients, and market and
investment performance gains of $8.9 billion.
U.S. retail
and high net worth net long-term inflows of $4.9 billion demonstrated
strong interest in our U.S. core and municipal fixed income offerings,
including the successful launch of the Multi-Sector Income Trust
closed-end fund, which gathered nearly $700 million in assets. We
expect the fund to reach $1.0 billion in AUM once fully levered.
International
retail net long-term inflows of $3.9 billion included positive net
long-term inflows in all asset classes, led by fixed income net
inflows of $1.5 billion into local currency and global bond mandates,
and multi-asset class net long-term inflows of $1.3 billion, largely
into global allocation products. Additionally, our retail alternatives
initiative continued to gain momentum with strong alternatives mutual
fund flows and the launch of three new retail funds generating $1.1
billion of net long-term inflows across both U.S. and international
retail client channels.
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iShares AUM of $802.8 billion included net long-term
inflows of $25.6 billion, which were dominated by net long-term
inflows of $26.3 billion into equity funds with early net inflows into
emerging markets products reverting to broad market and large cap
equities toward the latter part of the quarter as investor sentiment
toward the domestic market proved resilient. Equity net long-term
inflows were partially offset by fixed income net long-term outflows
of $1.0 billion, with flows demonstrating a shift within fixed income
from traditional long-term maturities toward short-term products.
U.S.
iShares net long-term inflows into equity funds totaled $20.4
billion, tilting toward large cap equities during the latter part of
the quarter. We saw continued client interest in our Core Series
product suite which garnered $3.5 billion of net long-term inflows.
International iShares net long-term inflows similarly were
driven by equity net long-term inflows of $5.9 billion, with
additional fixed income net long-term inflows of $2.2 billion.
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Institutional active AUM ended the quarter at
$878.7 billion, with market valuation gains of $4.3 billion offset by
net outflows of $10.3 billion. Multi-asset class products generated
strong net long-term inflows of $5.8 billion largely into target-date
offerings for defined contribution plans.
Core alternatives
net long-term inflows totaled $0.7 billion, excluding $0.3 billion of
return of capital. Single strategy hedge funds net long-term inflows
were led by demand for our model-driven fixed income and fundamental
European equity hedge funds. Core alternatives net long-term inflows
were offset by active currency redemptions of $3.2 billion. Equity net
long-term outflows of $5.6 billion were largely from fundamental U.S.
equity mandates. Fixed income net long-term outflows of $7.8 billion
reflected outflows from U.S. targeted duration, core and
sector-specialty mandates.
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Institutional index AUM totaled $1.527 trillion
at March 31, 2013, with net long-term inflows of $15.4 billion and
market and foreign exchange valuation gains of $69.8 billion. Flows
were led by equities with net long-term inflows of $13.6 billion
primarily into global and U.S. equity mandates as clients continue
their use of passive vehicles for broad macro exposure. Fixed income
net long-term inflows of $0.8 billion were largely due to net inflows
into U.S. core strategies.
Cash management AUM decreased 1%, or $2.4 billion, to $261.3
billion with net inflows of $0.2 billion and market and foreign exchange
declines of $2.6 billion.
Advisory AUM increased 1% to $45.8 billion due to the addition of
Financial Markets Advisory (“FMA”) portfolio liquidation mandates.
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Investment performance as
of March 31, 2013 is presented in the following table:
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One-year
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Three-year
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Five-year
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period
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period
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period
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Fixed Income:
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Actively managed products above benchmark or peer median
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Taxable
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79%
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81%
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70%
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Tax-exempt
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65%
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71%
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78%
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Passively managed products within or above tolerance
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92%
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96%
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86%
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Equity:
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Actively managed products above benchmark or peer median
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Fundamental
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32%
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39%
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43%
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Scientific
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77%
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92%
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82%
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Passively managed products within or above tolerance
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95%
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97%
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96%
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Multi-Asset*:
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Actively managed products above benchmark or peer median
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23%
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35%
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91%
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*Includes funds managed for unlevered, absolute return.
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BlackRock Solutions (“BRS”)
added seven net new assignments during the quarter, including five Aladdin
assignments. BRS also completed eight short-term advisory assignments
during the quarter.
Net new business pipeline
totaled $35.4 billion at April 11, 2013, including $18.1 billion in
institutional index mandates and $11.5 billion in active mandates
expected to fund in future quarters. In addition, the pipeline contains
$2.7 billion of mandates funded since March 31, 2013. The unfunded
portion of the pipeline primarily represents institutional assets, which
account for approximately two-thirds of long-term AUM but only one-third
of base fees. BlackRock Solutions pipeline of contracts and
proposals remains robust.
First Quarter Financial Highlights
Comparison to the First Quarter 2012
Operating income: First quarter 2013
operating income was $909 million compared with $815 million in first
quarter 2012. Operating income, as adjusted, was $921 million compared
with $825 million in first quarter 2012. First quarter 2013 included the
previously mentioned organizational alignment costs of $33 million and
fund launch costs of $18 million.
First quarter 2013 revenue of $2.4 billion increased $200 million from
$2.2 billion in first quarter 2012, primarily due to the following:
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Investment advisory, administration fees and
securities lending revenue of $2.1 billion in first quarter
2013 increased $152 million from $2.0 billion in first quarter 2012
due to growth in long-term average AUM. Securities lending fees were
$112 million and $111 million in first quarter 2013 and first quarter
2012, respectively.
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Performance fees were $108 million
in first quarter 2013 compared with $80 million in first quarter 2012,
primarily reflecting higher fees from alternative products, including
single-strategy hedge funds.
-
BlackRock Solutions and
advisory revenue totaled $126 million in first
quarter 2013 compared with $123 million in first quarter 2012,
primarily reflecting higher revenue from Aladdin mandates more
than offsetting the decline in revenues associated with the run off of
assets related to advisory assignments.
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Other revenue increased
$19 million, largely reflecting higher transition management service
fees and higher earnings from certain investments.
First quarter 2013 total operating expenses of $1.5 billion increased
$106 million from first quarter 2012. Results were primarily driven by
the following:
-
Employee compensation and benefits
increased $80 million reflecting higher incentive compensation
driven by higher operating income, including higher performance fees.
The current quarter also reflected the previously mentioned
organizational alignment costs of $33 million.
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General and administration expenses
increased $24 million, largely driven by closed-end fund launch
costs of $16 million (excluding $2 million included in employee
compensation and benefits expense).
Non-operating income (expense):
First quarter 2013 non-operating income, net of non-controlling
interests, was $7 million compared with $20 million non-operating income
in first quarter 2012. First quarter 2013 included $51 million of net
positive marks, primarily on distressed credit/mortgage fund
co-investments and positive marks on private equity fund co-investments,
offset by $48 million of net interest expense. Net interest expense
increased $8 million from first quarter 2012, primarily due to long-term
debt issuances in May 2012.
Income tax expense: Income tax
expense totaled $284 million and $263 million for first quarter 2013 and
first quarter 2012, respectively. The GAAP and as adjusted effective
income tax rates for the first quarter 2013 were both 31.0% compared
with 31.5% for the first quarter 2012.
See notes (a) through (f) in Attachment I for more information on as
adjusted items and the reconciliation to GAAP.
Comparison to the Fourth Quarter 2012
Operating income: First quarter 2013
operating income was $909 million compared with $1.0 billion in fourth
quarter 2012. The decline from the prior quarter was due to seasonally
lower performance fees. Operating income, as adjusted, was $921 million
compared with $1.0 billion in fourth quarter 2012.
First quarter 2013 revenue decreased $90 million from fourth quarter
2012, primarily due to the following:
-
Investment advisory, administration fees and
securities lending revenue of $2.1 billion in first quarter
2013 increased $48 million from fourth quarter 2012, driven by higher
long-term average AUM, partially offset by the effect of two fewer
revenue days in the quarter.
-
Performance fees were $108 million
in first quarter 2013 compared with $239 million in fourth quarter
2012. The decrease reflected the seasonality associated with the
magnitude of products with annual performance fee measurement periods
ending on December 31st.
-
BlackRock Solutions and
advisory revenue of $126 million in first quarter 2013
compared with $136 million in fourth quarter 2012, primarily
reflecting lower one-time revenue from advisory assignments.
First quarter 2013 total operating expenses of $1.5 billion increased $6
million from fourth quarter 2012. Operating expenses, as adjusted, of
$1.5 billion increased $30 million from fourth quarter 2012. Operating
results were primarily driven by the following:
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Employee compensation and benefits
increased $57 million, primarily reflecting the previously mentioned
organizational alignment costs of $33 million and higher seasonal
employer payroll taxes, partially offset by lower incentive
compensation.
-
General and administration expenses
decreased $70 million, primarily due to a one-time $30 million
contribution to certain of the Company’s bank-managed short-term
investment funds (“STIFs”) recorded in fourth quarter 2012, lower
marketing and promotional expenses and the benefit of foreign currency
remeasurement, offset partially by the previously mentioned closed-end
fund launch costs.
Non-operating income (expense):
First quarter 2013 non-operating income, net of non-controlling
interests, was $7 million compared with $27 million non-operating
expense in fourth quarter 2012. The first quarter 2013 reflected higher
positive marks on private equity fund co-investments and other
investments than fourth quarter 2012.
Income tax expense: Income tax
expense of $284 million for first quarter 2013 decreased $4 million from
fourth quarter 2012. The GAAP effective income tax rate for the first
quarter 2013 was 31.0% compared with 29.4% for fourth quarter 2012. The
fourth quarter 2012 GAAP tax rate included $20 million of non-cash
benefits primarily associated with revaluation of certain deferred tax
liabilities, which have been excluded from the as adjusted results. The
as adjusted effective income tax rate was 31.0% and 31.4% for first
quarter 2013 and fourth quarter 2012, respectively.
See notes (a) through (f) in Attachment I for more information on as
adjusted items and the reconciliation to GAAP.
Teleconference, Webcast and Presentation Information
Chairman and Chief Executive Officer, Laurence D. Fink, and Chief
Financial Officer, Ann Marie Petach, will host a teleconference call for
investors and analysts on Tuesday, April 16, 2013, at 8:30 a.m. (Eastern
Time). Members of the public who are interested in participating in the
teleconference should dial, from the United States, (800) 374-0176, or
from outside the United States, (706) 679-8281, shortly before 8:30 a.m.
and reference the BlackRock Conference Call (ID Number 29568207). A
live, listen-only webcast will also be available via the investor
relations section of www.blackrock.com.
Both the teleconference and webcast will be available for replay by
12:30 p.m. Eastern Time on Tuesday, April 16, 2013 and ending at
midnight on Friday, May 10, 2013. To access the replay of the
teleconference, callers from the United States should dial (800)
585-8367 and callers from outside the United States should dial (404)
537-3406 and enter the Conference ID Number 29568207. To access the
webcast, please visit the investor relations section of www.blackrock.com.
Performance Notes
Past performance is not indicative of future results. The performance
information shown is based on preliminarily available data. The
performance information for actively managed accounts reflects U.S.
open-end and closed-end mutual funds and similar EMEA-based products
with respect to peer median comparisons, and actively managed
institutional and high net worth separate accounts and funds located
globally with respect to benchmark comparisons, as determined using
objectively based internal parameters, using the most current verified
information available as of March 31, 2013 (February 28, 2013 for high
net worth accounts).
Accounts terminated prior to March 31, 2013 are not included. In
addition, accounts that have not been verified as of April 12, 2013 have
not been included. If such terminated and other accounts had been
included, the performance information may have substantially differed
from that shown. The performance information does not include funds or
accounts that are not measured against a benchmark, any benchmark-based
alternatives product, private equity products, CDOs, or accounts managed
by BlackRock’s Financial Markets Advisory Group. Comparisons are based
on gross-of-fee performance for U.S. retail, institutional and high net
worth separate accounts and EMEA institutional separate accounts and
net-of-fee performance for EMEA based retail products. The performance
tracking information for institutional index accounts is based on
gross-of-fee performance as of March 31, 2013, and includes all
institutional accounts and all iShares funds globally using an
index strategy. AUM information is based on AUM for each account or fund
in the asset class shown without adjustment for overlapping management
of the same account or fund, as of March 31, 2013.
Source of performance information and peer medians is BlackRock, Inc.
and is based in part on data from Lipper Inc. for U.S. funds and
Morningstar, Inc. for non-U.S. funds. Fund performance reflects the
reinvestment of dividends and distributions, but does not reflect sales
charges.
About BlackRock
BlackRock is a leader in investment management, risk management and
advisory services for institutional and retail clients worldwide. At
March 31, 2013, BlackRock’s AUM was $3.936 trillion. BlackRock offers
products that span the risk spectrum to meet clients’ needs, including
active, enhanced and index strategies across markets and asset classes.
Products are offered in a variety of structures including separate
accounts, mutual funds, iShares® (exchange-traded
funds), and other pooled investment vehicles. BlackRock also offers risk
management, advisory and enterprise investment system services to a
broad base of institutional investors through BlackRock Solutions®.
Headquartered in New York City, as of March 31, 2013, the firm has
approximately 10,600 employees in 30 countries and a major presence in
key global markets, including North and South America, Europe, Asia,
Australia and the Middle East and Africa. For additional information,
please visit the Company's website at www.blackrock.com.
Forward-looking Statements
This press release, and other statements that BlackRock may make, may
contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act, with respect to BlackRock’s future
financial or business performance, strategies or expectations.
Forward-looking statements are typically identified by words or phrases
such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,”
“comfortable,” “expect,” “anticipate,” “current,” “intention,”
“estimate,” “position,” “assume,” “outlook,” “continue,” “remain,”
“maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or
future or conditional verbs such as “will,” “would,” “should,” “could,”
“may” and similar expressions.
BlackRock cautions that forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over time.
Forward-looking statements speak only as of the date they are made, and
BlackRock assumes no duty to and does not undertake to update
forward-looking statements. Actual results could differ materially from
those anticipated in forward-looking statements and future results could
differ materially from historical performance.
In addition to risk factors previously disclosed in BlackRock’s
Securities and Exchange Commission (“SEC”) reports and those identified
elsewhere in this press release the following factors, among others,
could cause actual results to differ materially from forward-looking
statements or historical performance: (1) the introduction, withdrawal,
success and timing of business initiatives and strategies; (2) changes
and volatility in political, economic or industry conditions, the
interest rate environment, foreign exchange rates or financial and
capital markets, which could result in changes in demand for products or
services or in the value of assets under management; (3) the relative
and absolute investment performance of BlackRock’s investment products;
(4) the impact of increased competition; (5) the impact of future
acquisitions or divestitures; (6) the unfavorable resolution of legal
proceedings; (7) the extent and timing of any share repurchases; (8) the
impact, extent and timing of technological changes and the adequacy of
intellectual property, information and cyber security protection;
(9) the impact of legislative and regulatory actions and reforms,
including the Dodd-Frank Wall Street Reform and Consumer Protection Act,
and regulatory, supervisory or enforcement actions of government
agencies relating to BlackRock or The PNC Financial Services Group, Inc.
(“PNC”); (10) terrorist activities, international hostilities and
natural disasters, which may adversely affect the general economy,
domestic and local financial and capital markets, specific industries or
BlackRock; (11) the ability to attract and retain highly talented
professionals; (12) fluctuations in the carrying value of BlackRock’s
economic investments; (13) the impact of changes to tax legislation,
including income, payroll and transaction taxes, and taxation on
products or transactions, which could affect the value proposition to
clients and, generally, the tax position of the Company;
(14) BlackRock’s success in maintaining the distribution of its
products; (15) the impact of BlackRock electing to provide support to
its products from time to time and any potential liabilities related to
securities lending or other indemnification obligations; and (16) the
impact of problems at other financial institutions or the failure or
negative performance of products at other financial institutions.
BlackRock's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and BlackRock's subsequent filings with the SEC, accessible on the SEC's
website at www.sec.gov
and on BlackRock’s website at www.blackrock.com,
discuss these factors in more detail and identify additional factors
that can affect forward-looking statements. The information contained on
the Company’s website is not a part of this press release.
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Attachment I
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BlackRock, Inc.
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Condensed Consolidated Statements of Income and Supplemental
Information
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(Dollar amounts in millions, except per share data)
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(unaudited)
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Three Months
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Three Months Ended
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Ended
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March 31,
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December 31,
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2013
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2012
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$ Change
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2012
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$ Change
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Revenue
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Investment advisory, administration fees and securities lending
revenue
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$2,129
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$1,977
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$152
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$2,081
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$48
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Investment advisory performance fees
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108
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80
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28
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239
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(131
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BlackRock Solutions and advisory
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126
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123
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3
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136
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(10
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Distribution fees
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17
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19
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(2
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13
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4
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Other revenue
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69
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50
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19
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70
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(1
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)
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Total revenue
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2,449
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2,249
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200
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2,539
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(90
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)
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Expenses
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Employee compensation and benefits
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905
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825
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80
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848
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57
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Distribution and servicing costs
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91
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95
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(4
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)
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82
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9
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Amortization of deferred sales commissions
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12
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16
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(4
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12
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-
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Direct fund expenses
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161
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152
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9
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151
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10
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General and administration
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331
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307
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24
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401
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(70
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)
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Amortization of intangible assets
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40
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39
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1
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40
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-
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Total expenses
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1,540
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1,434
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106
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1,534
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6
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Operating income
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909
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815
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94
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1,005
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(96
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)
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Non-operating income (expense)
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Net gain (loss) on investments
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62
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75
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(13
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)
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20
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42
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Net gain (loss) on consolidated variable interest entities
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27
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(12
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)
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39
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(39
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66
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Interest and dividend income
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6
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9
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(3
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9
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(3
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)
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Interest expense
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(54
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)
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(49
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)
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(5
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)
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(57
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)
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3
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Total non-operating income (expense)
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41
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23
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18
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(67
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)
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108
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Income before income taxes
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950
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838
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112
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938
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12
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Income tax expense
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284
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263
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21
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288
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(4
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Net income
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666
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575
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91
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650
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16
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Less:
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Net income (loss) attributable to non-controlling interests
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34
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3
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31
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(40
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74
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Net income attributable to BlackRock, Inc.
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$632
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$572
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$60
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$690
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($58
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)
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Weighted-average common shares outstanding (f)
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Basic
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171,301,800
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179,022,840
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(7,721,040
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171,518,278
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(216,478
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Diluted
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174,561,132
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181,917,864
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(7,356,732
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175,176,037
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(614,905
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)
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Earnings per share attributable to BlackRock, Inc.
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common stockholders (e) (f)
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Basic
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$3.69
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$3.19
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$0.50
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$4.02
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($0.33
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)
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Diluted
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$3.62
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$3.14
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$0.48
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$3.93
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($0.31
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)
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Cash dividends declared and paid per share
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$1.68
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$1.50
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$0.18
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$1.50
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$0.18
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Supplemental information:
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AUM (end of period)
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$3,936,409
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$3,684,087
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$252,322
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$3,791,588
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$144,821
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Shares outstanding (end of period)
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171,102,532
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179,406,494
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(8,303,962
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171,215,729
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(113,197
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)
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GAAP:
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Operating margin
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37.1%
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36.2%
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90 bps
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39.6%
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(250) bps
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Effective tax rate
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31.0%
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31.5%
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(50) bps
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29.4%
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160 bps
|
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As adjusted:
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Operating income (a)
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$921
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$825
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$96
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$1,041
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($120)
|
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Operating margin (a)
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40.0%
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38.6%
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140 bps
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42.6%
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(260) bps
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Non-operating income (expense), less net income (loss)
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attributable to non-controlling interests (b)
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$3
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$15
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($12
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)
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($27
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)
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$30
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Net income attributable to BlackRock, Inc. (c) (d)
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$637
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$575
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$62
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$695
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($58
|
)
|
Diluted earnings attributable to BlackRock, Inc. common
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stockholders per share (c) (d) (e) (f)
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$3.65
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$3.16
|
|
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$0.49
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|
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$3.96
|
|
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($0.31
|
)
|
Effective tax rate
|
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31.0%
|
|
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31.5%
|
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|
(50) bps
|
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31.4%
|
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(40) bps
|
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|
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|
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BlackRock, Inc.
Notes to Condensed Consolidated
Statements of Income and Supplemental Information
(unaudited)
BlackRock reports its financial results in accordance with accounting
principles generally accepted in the United States ("GAAP"); however,
management believes evaluating the Company’s ongoing operating results
may be enhanced if investors have additional non-GAAP basis financial
measures. Management reviews non-GAAP financial measures to assess
ongoing operations and, for the reasons described below, considers them
to be effective indicators, for both management and investors, of
BlackRock's financial performance over time. BlackRock's management does
not advocate that investors consider such non-GAAP financial measures in
isolation from, or as a substitute for, financial information prepared
in accordance with GAAP.
Computations for all periods are derived from the Company's condensed
consolidated statements of income as follows:
(a) Operating income, as adjusted, and
operating margin, as adjusted:
Operating income, as adjusted, equals operating income, GAAP basis,
excluding certain items management deems non-recurring, or transactions
that ultimately will not impact BlackRock’s book value, as indicated in
the table below. Operating income used for operating margin measurement
equals operating income, as adjusted, excluding the impact of closed-end
fund launch costs and commissions. Operating margin, as adjusted, equals
operating income used for operating margin measurement, divided by
revenue (net of distribution and servicing costs and amortization of
deferred sales commissions) used for operating margin measurement, as
indicated in the table below.
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|
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Three Months Ended
|
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|
|
March 31,
|
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December 31,
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(Dollar amounts in millions)
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|
2013
|
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|
2012
|
|
|
2012
|
Operating income, GAAP basis
|
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$909
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|
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$815
|
|
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$1,005
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Non-GAAP expense adjustments:
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|
|
|
|
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Contribution to STIFs
|
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-
|
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-
|
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30
|
PNC LTIP funding obligation
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8
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5
|
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6
|
Compensation expense related to appreciation (depreciation) on
deferred compensation plans
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4
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5
|
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-
|
Operating income, as adjusted
|
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|
921
|
|
|
825
|
|
|
1,041
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Closed-end fund launch costs
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16
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-
|
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-
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Closed-end fund launch commissions
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2
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-
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|
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-
|
Operating income used for operating margin measurement
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$939
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|
|
$825
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|
|
$1,041
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Revenue, GAAP basis
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$2,449
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$2,249
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$2,539
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Non-GAAP adjustments:
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|
|
|
|
|
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|
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Distribution and servicing costs
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|
|
(91)
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|
|
(95)
|
|
|
(82)
|
Amortization of deferred sales commissions
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|
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(12)
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|
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(16)
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|
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(12)
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Revenue used for operating margin measurement
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$2,346
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$2,138
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$2,445
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|
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Operating margin, GAAP basis
|
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37.1%
|
|
|
36.2%
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|
|
39.6%
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Operating margin, as adjusted
|
|
|
40.0%
|
|
|
38.6%
|
|
|
42.6%
|
|
|
|
|
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|
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|
Management believes operating income, as adjusted, and operating margin,
as adjusted, are effective indicators of BlackRock’s financial
performance over time and, therefore, provide useful disclosure to
investors.
BlackRock, Inc.
Notes to Condensed Consolidated
Statements of Income and Supplemental Information
(unaudited)
(continued)
(a) (continued)
Operating income, as adjusted:
Operating income, as adjusted reflects the non-GAAP expense adjustments
discussed below. Contribution to STIFs represents a one-time
contribution to certain of the Company’s bank-managed STIFs. The portion
of compensation expense associated with certain long-term incentive
plans (“LTIP”) funded or to be funded through share distributions to
participants of BlackRock stock held by PNC has been excluded because it
ultimately does not impact BlackRock’s book value. Compensation expense
associated with appreciation (depreciation) on investments related to
certain BlackRock deferred compensation plans has been excluded as
returns on investments set aside for these plans, which substantially
offset this expense, are reported in non-operating income (expense).
Management believes operating income exclusive of these items is a
useful measure in evaluating BlackRock’s operating performance and helps
enhance the comparability of this information for the reporting periods
presented.
Operating margin, as adjusted:
Operating income used for measuring operating margin, as adjusted, is
equal to operating income, as adjusted, excluding the impact of
closed-end fund launch costs and commissions. Management believes the
exclusion of such costs and commissions is useful because these costs
can fluctuate considerably and revenues associated with the expenditure
of these costs will not fully impact BlackRock’s results until future
periods.
Operating margin, as adjusted, allows BlackRock to compare performance
from period-to-period by adjusting for items that may not recur, recur
infrequently or may have an economic offset in non-operating income
(expense). Examples of such adjustments include the contribution to
STIFs, commissions paid to certain employees as compensation and
fluctuations in compensation expense based on mark-to-market movements
in investments held to fund certain compensation plans. BlackRock also
uses operating margin, as adjusted, to monitor corporate performance and
efficiency and as a benchmark to compare its performance with other
companies. Management uses both GAAP and non-GAAP financial measures in
evaluating the financial performance of BlackRock. The non-GAAP measure
by itself may pose limitations because it does not include all of
BlackRock’s revenues and expenses.
Revenue used for operating margin, as adjusted, excludes distribution
and servicing costs paid to related parties and other third parties.
Management believes the exclusion of such costs is useful because it
creates consistency in the treatment for certain contracts for similar
services, which due to the terms of the contracts, are accounted for
under GAAP on a net basis within investment advisory, administration
fees and securities lending revenue. Amortization of deferred sales
commissions is excluded from revenue used for operating margin
measurement, as adjusted, because such costs, over time, substantially
offset distribution fee revenue earned by the Company. For each of these
items, BlackRock excludes from revenue used for operating margin, as
adjusted, the costs related to each of these items as a proxy for such
offsetting revenues.
BlackRock, Inc.
Notes to Condensed Consolidated
Statements of Income and Supplemental Information
(unaudited)
(continued)
(b) Non-operating income (expense), less net
income (loss) attributable to non-controlling interests, as adjusted:
Non-operating income (expense), less net income (loss) attributable to
non-controlling interests (“NCI”), as adjusted, is presented below. The
compensation expense offset is recorded in operating income. This
compensation expense has been included in non-operating income
(expense), less net income (loss) attributable to NCI, as adjusted, to
offset returns on investments set aside for these plans, which are
reported in non-operating income (expense), GAAP basis.
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
December 31,
|
(Dollar amounts in millions)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense), GAAP basis
|
|
|
$41
|
|
|
$23
|
|
|
($67)
|
Less: Net income (loss) attributable to NCI
|
|
|
34
|
|
|
3
|
|
|
(40)
|
Non-operating income (expense)(1) |
|
|
7
|
|
|
20
|
|
|
(27)
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
|
(4)
|
|
|
(5)
|
|
|
-
|
Non-operating income (expense), less net income (loss) attributable
to NCI, as adjusted
|
|
|
$3
|
|
|
$15
|
|
|
($27)
|
|
|
|
|
|
|
|
|
|
|
(1) Net of net income (loss) attributable to NCI.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management believes non-operating income (expense), less net income
(loss) attributable to NCI, as adjusted, provides comparability of this
information among reporting periods and is an effective measure for
reviewing BlackRock’s non-operating contribution to its results. As
compensation expense associated with (appreciation) depreciation on
investments related to certain deferred compensation plans, which is
included in operating income, substantially offsets the gain (loss) on
the investments set aside for these plans, management believes
non-operating income (expense), less net income (loss) attributable to
NCI, as adjusted, provides a useful measure, for both management and
investors, of BlackRock’s non-operating results that impact book value.
BlackRock, Inc.
Notes to Condensed Consolidated
Statements of Income and Supplemental Information
(unaudited)
(continued)
(c) Net income attributable to BlackRock, Inc.,
as adjusted:
Management believes net income attributable to BlackRock, Inc., as
adjusted, and diluted earnings per common share, as adjusted, are useful
measures of BlackRock’s profitability and financial performance. Net
income attributable to BlackRock, Inc., as adjusted, equals net income
attributable to BlackRock, Inc., GAAP basis, adjusted for significant
non-recurring items, charges that ultimately will not impact BlackRock’s
book value or certain tax items that do not impact cash flow.
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
December 31,
|
(Dollar amounts in millions, except per share data)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
Net income attributable to BlackRock, Inc., GAAP basis
|
|
|
$632
|
|
|
$572
|
|
|
$690
|
Non-GAAP adjustments, net of tax:(d) |
|
|
|
|
|
|
|
|
|
Contribution to STIFs
|
|
|
-
|
|
|
-
|
|
|
21
|
PNC LTIP funding obligation
|
|
|
5
|
|
|
3
|
|
|
4
|
Income tax changes
|
|
|
-
|
|
|
-
|
|
|
(20)
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
|
$637
|
|
|
$575
|
|
|
$695
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income, as adjusted, to common shares(e) |
|
|
$637
|
|
|
$574
|
|
|
$694
|
Diluted weighted-average common shares outstanding(f) |
|
|
174,561,132
|
|
|
181,917,864
|
|
|
175,176,037
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share, GAAP basis(f) |
|
|
$3.62
|
|
|
$3.14
|
|
|
$3.93
|
Diluted earnings per common share, as adjusted(f) |
|
|
$3.65
|
|
|
$3.16
|
|
|
$3.96
|
|
|
|
|
|
|
|
|
|
|
See note (a) Operating income, as adjusted, and operating margin, as
adjusted, for information on contribution to STIFs and the PNC LTIP
funding obligation.
During the quarter ended December 31, 2012, income tax changes included
adjustments related to the revaluation of certain deferred income tax
liabilities. The resulting decrease in income taxes has been excluded
from net income attributable to BlackRock, Inc., as adjusted, as these
items do not have a cash flow impact and to ensure comparability among
periods presented.
(d)
|
|
|
For the quarters ended March 31, 2013 and 2012 and December 31, 2012
non-GAAP adjustments were tax effected at 31.0%, 31.5% and 31.4%,
respectively, reflecting a blended rate applicable to the
adjustments. BlackRock’s tax rates in fourth quarter 2012 included
the impact of changes in the fourth quarter to the respective full
year blended rates applicable to the adjustments.
|
(e)
|
|
|
For the quarters ended March 31, 2012 and December 31, 2012, amounts
exclude net income attributable to participating securities (see
below).
|
(f)
|
|
|
Non-voting participating preferred shares are considered to be
common stock equivalents for purposes of determining basic and
diluted earnings per share calculations.
|
|
|
|
|
|
|
|
Prior to the first quarter 2013, certain unvested restricted stock
units were not included in diluted weighted-average common shares
outstanding as they were deemed participating securities in
accordance with required provisions of Accounting Standards
Codification (“ASC”) 260-10, Earnings per Share. Average outstanding
participating securities were 0.2 million for the quarters ended
March 31, 2012, and December 31, 2012.
|
Attachment II
|
BlackRock, Inc.
Summary of Revenues
(Dollar amounts in millions)
(unaudited)
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
$ Change
|
|
|
2012
|
|
|
$ Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
$433
|
|
|
$453
|
|
|
|
($20
|
)
|
|
|
$440
|
|
|
|
($7
|
)
|
iShares
|
|
|
|
|
571
|
|
|
|
473
|
|
|
|
98
|
|
|
|
|
515
|
|
|
|
56
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
|
312
|
|
|
|
279
|
|
|
|
33
|
|
|
|
|
317
|
|
|
|
(5
|
)
|
iShares
|
|
|
|
|
116
|
|
|
|
98
|
|
|
|
18
|
|
|
|
|
120
|
|
|
|
(4
|
)
|
Multi-asset class
|
|
|
|
|
248
|
|
|
|
243
|
|
|
|
5
|
|
|
|
|
239
|
|
|
|
9
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
|
136
|
|
|
|
135
|
|
|
|
1
|
|
|
|
|
130
|
|
|
|
6
|
|
Currency and commodities
|
|
|
|
|
30
|
|
|
|
34
|
|
|
|
(4
|
)
|
|
|
|
34
|
|
|
|
(4
|
)
|
Sub-total
|
|
|
|
|
1,846
|
|
|
|
1,715
|
|
|
|
131
|
|
|
|
1,795
|
|
|
|
51
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
140
|
|
|
|
123
|
|
|
|
17
|
|
|
|
|
134
|
|
|
|
6
|
|
Fixed income
|
|
|
|
|
57
|
|
|
|
50
|
|
|
|
7
|
|
|
|
|
58
|
|
|
|
(1
|
)
|
Sub-total Non-ETF Index
|
|
|
|
|
197
|
|
|
|
173
|
|
|
|
24
|
|
|
|
|
192
|
|
|
|
5
|
|
Long-term
|
|
|
|
|
2,043
|
|
|
|
1,888
|
|
|
|
155
|
|
|
|
|
1,987
|
|
|
|
56
|
|
Cash management
|
|
|
|
|
86
|
|
|
|
89
|
|
|
|
(3
|
)
|
|
|
|
94
|
|
|
|
(8
|
)
|
Total base fees
|
|
|
|
|
2,129
|
|
|
|
1,977
|
|
|
|
152
|
|
|
|
|
2,081
|
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory performance fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
17
|
|
|
|
19
|
|
|
|
(2
|
)
|
|
|
|
49
|
|
|
|
(32
|
)
|
Fixed income
|
|
|
|
|
1
|
|
|
|
6
|
|
|
|
(5
|
)
|
|
|
|
19
|
|
|
|
(18
|
)
|
Multi-asset class
|
|
|
|
|
7
|
|
|
|
3
|
|
|
|
4
|
|
|
|
|
9
|
|
|
|
(2
|
)
|
Alternatives
|
|
|
|
|
83
|
|
|
|
52
|
|
|
|
31
|
|
|
|
|
162
|
|
|
|
(79
|
)
|
Total
|
|
|
|
|
108
|
|
|
|
80
|
|
|
|
28
|
|
|
|
|
239
|
|
|
|
(131
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Solutions and advisory
|
|
|
|
|
126
|
|
|
|
123
|
|
|
|
3
|
|
|
|
|
136
|
|
|
|
(10
|
)
|
Distribution fees
|
|
|
|
|
17
|
|
|
|
19
|
|
|
|
(2
|
)
|
|
|
|
13
|
|
|
|
4
|
|
Other revenue
|
|
|
|
|
69
|
|
|
|
50
|
|
|
|
19
|
|
|
|
|
70
|
|
|
|
(1
|
)
|
Total revenue
|
|
|
|
$2,449
|
|
|
$2,249
|
|
|
$200
|
|
|
|
$2,539
|
|
|
|
($90
|
)
|
NOTE: Certain prior period information has been reclassified to conform
to current period presentation.
|
Mix of Investment Advisory, Administration Fees and Securities
Lending Revenue
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Three Months
Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
|
20%
|
|
|
22%
|
|
|
21%
|
iShares
|
|
|
|
|
27%
|
|
|
24%
|
|
|
25%
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
|
15%
|
|
|
14%
|
|
|
15%
|
iShares
|
|
|
|
|
5%
|
|
|
5%
|
|
|
6%
|
Multi-asset class
|
|
|
|
|
12%
|
|
|
12%
|
|
|
11%
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
|
6%
|
|
|
7%
|
|
|
6%
|
Currency and commodities
|
|
|
|
|
1%
|
|
|
2%
|
|
|
2%
|
Sub-total
|
|
|
|
|
86%
|
|
|
86%
|
|
|
86%
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
7%
|
|
|
6%
|
|
|
6%
|
Fixed income
|
|
|
|
|
3%
|
|
|
3%
|
|
|
3%
|
Sub-total Non-ETF Index
|
|
|
|
|
10%
|
|
|
9%
|
|
|
9%
|
Long-term
|
|
|
|
|
96%
|
|
|
95%
|
|
|
95%
|
Cash management
|
|
|
|
|
4%
|
|
|
5%
|
|
|
5%
|
Total
|
|
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
NOTE: Certain prior period information has been reclassified to conform
to current period presentation.
|
Attachment III
|
BlackRock, Inc.
|
Summary of Non-operating Income (Expense)
|
(Dollar amounts in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
|
$ Change
|
|
|
2012
|
|
|
$ Change
|
Non-operating income (expense), GAAP basis
|
|
|
|
|
$41
|
|
|
$23
|
|
|
|
$18
|
|
|
|
($67
|
)
|
|
|
$108
|
|
Less: Net income (loss) attributable to NCI
|
|
|
|
|
34
|
|
|
3
|
|
|
|
31
|
|
|
|
(40
|
)
|
|
|
74
|
|
Non-operating income (expense)(1) |
|
|
|
|
$7
|
|
|
$20
|
|
|
|
($13
|
)
|
|
|
($27
|
)
|
|
|
$34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
economic
investments at
March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
|
|
|
|
2013(2)
|
|
|
2013
|
|
2012
|
|
|
$ Change
|
|
|
2012
|
|
|
$ Change
|
Net gain (loss) on investments(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity
|
|
25-30%
|
|
|
$19
|
|
|
$21
|
|
|
|
($2
|
)
|
|
|
($1
|
)
|
|
|
$20
|
|
Real estate
|
|
10-15%
|
|
|
3
|
|
|
1
|
|
|
|
2
|
|
|
|
5
|
|
|
|
(2
|
)
|
Distressed credit/mortgage funds
|
|
15-20%
|
|
|
19
|
|
|
28
|
|
|
|
(9
|
)
|
|
|
15
|
|
|
|
4
|
|
Hedge funds/funds of hedge funds
|
|
10-15%
|
|
|
3
|
|
|
6
|
|
|
|
(3
|
)
|
|
|
3
|
|
|
|
-
|
|
Other investments(3) |
|
30-35%
|
|
|
7
|
|
|
(1
|
)
|
|
|
8
|
|
|
|
(1
|
)
|
|
|
8
|
|
Sub-total
|
|
|
|
|
51
|
|
|
55
|
|
|
|
(4
|
)
|
|
|
21
|
|
|
|
30
|
|
Investments related to deferred compensation plans
|
|
|
|
|
4
|
|
|
5
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
4
|
|
Total net gain (loss) on investments(1) |
|
|
|
|
55
|
|
|
60
|
|
|
|
(5
|
)
|
|
|
21
|
|
|
|
34
|
|
Interest and dividend income
|
|
|
|
|
6
|
|
|
9
|
|
|
|
(3
|
)
|
|
|
9
|
|
|
|
(3
|
)
|
Interest expense
|
|
|
|
|
(54
|
)
|
|
(49
|
)
|
|
|
(5
|
)
|
|
|
(57
|
)
|
|
|
3
|
|
Net interest expense
|
|
|
|
|
(48
|
)
|
|
(40
|
)
|
|
|
(8
|
)
|
|
|
(48
|
)
|
|
|
-
|
|
Total non-operating income (expense)(1) |
|
|
|
|
7
|
|
|
20
|
|
|
|
(13
|
)
|
|
|
(27
|
)
|
|
|
34
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
|
|
|
(4
|
)
|
|
(5
|
)
|
|
|
1
|
|
|
|
-
|
|
|
|
(4
|
)
|
Non-operating income (expense), as adjusted(1) |
|
|
|
|
$3
|
|
|
$15
|
|
|
|
($12
|
)
|
|
|
($27
|
)
|
|
|
$30
|
|
(1) Net of net income (loss) attributable to NCI.
|
(2) Percentages represent estimated percentages of
BlackRock's corporate economic investment portfolio as of March
31, 2013. Economic investment amounts at December 31, 2012 for
private equity, real estate, distressed credit/mortgage funds,
hedge funds/funds of hedge funds and other investments were $298
million, $122 million, $214 million, $159 million and $418
million, respectively. See the 2012 Form 10-K for more information.
|
(3) Amounts include net gains (losses) related to
equity, fixed income and commodity investments, and BlackRock's
seed capital hedging program.
|
|
BlackRock, Inc.
Economic Tangible Assets
(Dollar
amounts in billions)
(unaudited)
The Company presents economic tangible assets as additional information
to enable investors to eliminate gross presentation of certain assets
that have equal and offsetting liabilities or non-controlling interests
that ultimately do not have an impact on stockholders’ equity (excluding
appropriated retained earnings related to consolidated collateralized
loan obligations) or cash flows. In addition, goodwill and intangible
assets are excluded from economic tangible assets.
|
|
|
|
|
|
|
|
March 31,
2013 (Est.)
|
|
|
December 31,
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total balance sheet assets
|
|
|
|
|
|
|
|
$199
|
|
|
|
$200
|
|
Separate account assets and collateral
|
|
|
|
|
|
|
|
|
|
|
|
held under securities lending agreements
|
|
|
|
|
|
|
|
(157
|
)
|
|
|
(158
|
)
|
Consolidated VIEs/sponsored investment funds
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
(2
|
)
|
Goodwill and intangible assets, net
|
|
|
|
|
|
|
|
(30
|
)
|
|
|
(30
|
)
|
Economic tangible assets
|
|
|
|
|
|
|
|
$9
|
|
|
|
$10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic tangible assets include cash, receivables, seed and
co-investments, regulatory investments and other assets.
|
Attachment IV
|
BlackRock, Inc.
|
Changes in Assets Under Management
|
(Dollar amounts in millions)
|
(unaudited)
|
Current Quarter Component Changes
|
|
|
|
|
|
|
|
Net
|
|
|
Market
|
|
|
|
|
|
|
|
|
Variance vs.
|
|
|
|
|
December 31,
|
|
|
subscriptions
|
|
|
appreciation
|
|
|
Foreign
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2012
|
|
|
(redemptions)(1)
|
|
|
(depreciation)
|
|
|
exchange(2)
|
|
|
2013
|
|
|
2012
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
$287,215
|
|
|
($6,873
|
)
|
|
|
$16,732
|
|
|
|
($5,315
|
)
|
|
|
$291,759
|
|
|
2%
|
iShares
|
|
|
|
534,648
|
|
|
26,280
|
|
|
|
29,874
|
|
|
|
(2,108
|
)
|
|
|
588,694
|
|
|
10%
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
656,331
|
|
|
(2,380
|
)
|
|
|
1,782
|
|
|
|
(6,868
|
)
|
|
|
648,865
|
|
|
(1%)
|
iShares
|
|
|
|
192,852
|
|
|
(1,016
|
)
|
|
|
(962
|
)
|
|
|
(1,373
|
)
|
|
|
189,501
|
|
|
(2%)
|
Multi-asset class
|
|
|
|
267,748
|
|
|
9,029
|
|
|
|
11,125
|
|
|
|
(4,336
|
)
|
|
|
283,566
|
|
|
6%
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
68,367
|
|
|
1,511
|
|
|
|
797
|
|
|
|
(732
|
)
|
|
|
69,943
|
|
|
2%
|
Currency and commodities(3) |
|
|
|
41,428
|
|
|
(2,187
|
)
|
|
|
(903
|
)
|
|
|
(720
|
)
|
|
|
37,618
|
|
|
(9%)
|
Sub-total
|
|
|
|
2,048,589
|
|
|
24,364
|
|
|
|
58,445
|
|
|
|
(21,452
|
)
|
|
|
2,109,946
|
|
|
3%
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,023,638
|
|
|
14,267
|
|
|
|
91,162
|
|
|
|
(16,925
|
)
|
|
|
1,112,142
|
|
|
9%
|
Fixed income
|
|
|
|
410,139
|
|
|
816
|
|
|
|
10,457
|
|
|
|
(14,245
|
)
|
|
|
407,167
|
|
|
(1%)
|
Sub-total Non-ETF Index
|
|
|
|
1,433,777
|
|
|
15,083
|
|
|
|
101,619
|
|
|
|
(31,170
|
)
|
|
|
1,519,309
|
|
|
6%
|
Long-term
|
|
|
|
3,482,366
|
|
|
39,447
|
|
|
|
160,064
|
|
|
|
(52,622
|
)
|
|
|
3,629,255
|
|
|
4%
|
Cash management
|
|
|
|
263,743
|
|
|
166
|
|
|
|
101
|
|
|
|
(2,681
|
)
|
|
|
261,329
|
|
|
(1%)
|
Sub-total
|
|
|
|
3,746,109
|
|
|
39,613
|
|
|
|
160,165
|
|
|
|
(55,303
|
)
|
|
|
3,890,584
|
|
|
4%
|
Advisory(4) |
|
|
|
45,479
|
|
|
889
|
|
|
|
(61
|
)
|
|
|
(482
|
)
|
|
|
45,825
|
|
|
1%
|
Total AUM
|
|
|
|
$3,791,588
|
|
|
$40,502
|
|
|
|
$160,104
|
|
|
|
($55,785
|
)
|
|
|
$3,936,409
|
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes
|
|
|
|
|
|
Net
|
|
|
|
Market
|
|
|
|
|
|
Variance vs.
|
|
Memorandum
|
|
|
|
March 31,
|
|
subscriptions
|
|
|
|
appreciation
|
|
Foreign
|
|
March 31,
|
|
March 31,
|
|
Net subscriptions
|
|
|
|
2012
|
|
(redemptions)(1) |
|
Acquisition(5) |
|
(depreciation)
|
|
exchange(2) |
|
2013
|
|
2012
|
|
(redemptions)(1)(6)
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
$297,184
|
|
|
($20,508
|
)
|
|
$-
|
|
$20,067
|
|
|
($4,984
|
)
|
|
$291,759
|
|
(2%)
|
|
$
|
(20,508
|
)
|
iShares
|
|
|
|
479,585
|
|
|
71,417
|
|
|
|
-
|
|
|
39,843
|
|
|
(2,151
|
)
|
|
|
588,694
|
|
23%
|
|
|
71,417
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
624,723
|
|
|
(2,575
|
)
|
|
|
-
|
|
|
34,212
|
|
|
(7,495
|
)
|
|
|
648,865
|
|
4%
|
|
|
(2,575
|
)
|
iShares
|
|
|
|
168,365
|
|
|
18,329
|
|
|
|
-
|
|
|
4,097
|
|
|
(1,290
|
)
|
|
|
189,501
|
|
13%
|
|
|
18,329
|
|
Multi-asset class
|
|
|
|
246,507
|
|
|
20,079
|
|
|
|
-
|
|
|
21,422
|
|
|
(4,442
|
)
|
|
|
283,566
|
|
15%
|
|
|
20,079
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
65,788
|
|
|
(3,084
|
)
|
|
|
6,161
|
|
|
1,730
|
|
|
(652
|
)
|
|
|
69,943
|
|
6%
|
|
|
(3,084
|
)
|
Currency and commodities(3) |
|
|
|
44,656
|
|
|
(4,404
|
)
|
|
|
-
|
|
|
(1,769
|
)
|
|
(865
|
)
|
|
|
37,618
|
|
(16%)
|
|
|
(4,404
|
)
|
Sub-total
|
|
|
|
1,926,808
|
|
|
79,254
|
|
|
|
6,161
|
|
|
119,602
|
|
|
(21,879
|
)
|
|
|
2,109,946
|
|
10%
|
|
|
79,254
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
966,950
|
|
|
33,872
|
|
|
|
-
|
|
|
128,884
|
|
|
(17,564
|
)
|
|
|
1,112,142
|
|
15%
|
|
|
33,872
|
|
Fixed income
|
|
|
|
450,749
|
|
|
(65,819
|
)
|
|
|
-
|
|
|
30,561
|
|
|
(8,324
|
)
|
|
|
407,167
|
|
(10%)
|
|
|
8,381
|
|
Sub-total Non-ETF Index
|
|
|
|
1,417,699
|
|
|
(31,947
|
)
|
|
|
-
|
|
|
159,445
|
|
|
(25,888
|
)
|
|
|
1,519,309
|
|
7%
|
|
|
42,253
|
|
Long-term
|
|
|
|
3,344,507
|
|
|
47,307
|
|
|
|
6,161
|
|
|
279,047
|
|
|
(47,767
|
)
|
|
|
3,629,255
|
|
9%
|
|
|
121,507
|
|
Cash management
|
|
|
|
241,929
|
|
|
20,149
|
|
|
|
-
|
|
|
1,296
|
|
|
(2,045
|
)
|
|
|
261,329
|
|
8%
|
|
|
20,149
|
|
Sub-total
|
|
|
|
3,586,436
|
|
|
67,456
|
|
|
|
6,161
|
|
|
280,343
|
|
|
(49,812
|
)
|
|
|
3,890,584
|
|
8%
|
|
|
141,656
|
|
Advisory(4) |
|
|
|
97,651
|
|
|
(50,794
|
)
|
|
|
-
|
|
|
(557
|
)
|
|
(475
|
)
|
|
|
45,825
|
|
(53%)
|
|
|
(50,794
|
)
|
Total AUM
|
|
|
$3,684,087
|
|
$16,662
|
|
|
$6,161
|
|
$279,786
|
|
|
($50,287
|
)
|
|
$3,936,409
|
|
7%
|
|
$
|
90,862
|
|
(1) Amountsinclude distributions
representing return of capital and return on investment to
investors.
|
(2) Foreign exchange reflects the impact of converting
non-U.S. dollar denominated AUM into U.S. dollars for reporting
purposes.
|
(3) Amounts include commodity iShares.
|
(4) Advisory AUM represents long-term portfolio
liquidation assignments.
|
(5) Amount represents AUM acquired in the Swiss Re
Private Equity Partners acquisition in September 2012.
|
(6) Amounts exclude the effect of a single low-fee
non-ETP index fixed income outflow of $74.2 billion in third
quarter 2012.
|