UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 16, 2015
BLACKROCK, INC.
(Exact
name of registrant as specified in its charter)
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DELAWARE |
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001-33099 |
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32-0174431 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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55 East 52nd Street, New York, New York |
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10055 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code: (212) 810-5300
(Former name or former address, if changed since last report.)
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 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition
On April 16, 2015, BlackRock, Inc. (the Company) reported results of operations for the three months ended March 31,
2015. A copy of the earnings release issued by the Company is attached as Exhibit 99.1. In addition, a copy of the Companys Earnings Release Supplement for the quarter ended March 31, 2015 is being furnished as Exhibit 99.2 to this Form
8-K.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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99.1 |
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Earnings release dated April 16, 2015 issued by the Company |
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99.2 |
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First Quarter 2015 Earnings Earnings Release Supplement |
SIGNATURES
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.
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BlackRock, Inc. |
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(Registrant) |
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By: |
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/s/ Gary Shedlin |
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Date: April 16, 2015 |
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Gary S. Shedlin |
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Senior Managing Director and Chief Financial
Officer |
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EXHIBIT INDEX
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99.1 |
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Earnings release dated April 16, 2015 issued by the Company |
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99.2 |
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First Quarter 2015 Earnings Earnings Release Supplement |
Exhibit 99.1
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Tom Wojcik, Investor Relations |
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Brian Beades, Media Relations |
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212.810.8127 |
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212.810.5596 |
BlackRock Reports First Quarter 2015 Diluted EPS of $4.84, or $4.89 as adjusted
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8% AUM growth from the first quarter of 2014 |
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$70.4 billion of long-term net inflows for the first quarter of 2015, representing 6.5% annualized organic growth |
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10% diluted EPS growth from the first quarter of 2014 |
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13% increase in quarterly cash dividend to $2.18 per share and consistent capital management with $275 million of quarterly share repurchases |
FINANCIAL RESULTS
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(in millions, except per share data) |
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Q1 2015 |
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Q1 2014 |
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Change |
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Q4 2014 |
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Change |
AUM |
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$ |
4,774,192 |
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$ |
4,400,925 |
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8% |
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$ |
4,651,895 |
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3% |
GAAP basis: |
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Revenue |
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$ |
2,723 |
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$ |
2,670 |
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2% |
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$ |
2,784 |
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(2%) |
Operating income |
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$ |
1,067 |
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$ |
1,051 |
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2% |
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$ |
1,144 |
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(7%) |
Operating margin |
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39.2 |
% |
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39.4 |
% |
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(20 bps) |
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41.1 |
% |
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(190 bps) |
Net income(1) |
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$ |
822 |
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$ |
756 |
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9% |
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$ |
813 |
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1% |
Diluted EPS |
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$ |
4.84 |
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$ |
4.40 |
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10% |
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$ |
4.77 |
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1% |
Weighted average diluted shares |
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169.7 |
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171.9 |
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(1%) |
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170.4 |
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% |
As Adjusted: |
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Operating income(2) |
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$ |
1,077 |
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$ |
1,062 |
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1% |
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$ |
1,154 |
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(7%) |
Operating margin(2) |
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41.2 |
% |
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41.4 |
% |
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(20 bps) |
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43.6 |
% |
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(240 bps) |
Net income(1) (2) |
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$ |
830 |
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$ |
762 |
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9% |
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$ |
821 |
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1% |
Diluted EPS(2) |
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$ |
4.89 |
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$ |
4.43 |
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10% |
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$ |
4.82 |
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1% |
(1) |
Net income represents net income attributable to BlackRock, Inc. |
(2) |
See notes (1) through (4) to the Condensed Consolidated Statements of Income and Supplemental Information on pages 11 through 12 for more information on as
adjusted items and the reconciliation to GAAP. |
New York, April 16, 2015 BlackRock, Inc. (NYSE:BLK) today reported
financial results for the three months ended March 31, 2015.
In the first quarter, BlackRocks diverse investment platform and relentless
focus on clients and performance drove long-term net inflows of $70 billion, commented Laurence D. Fink, Chairman and CEO of BlackRock. This was one of the most broadly diverse flow quarters in BlackRocks history. Flows were
positive across all long-term asset classes, client types, regions and investment styles, with active net inflows of $32 billion and index net inflows of $38 billion. Our $252 billion of net new inflows over the last twelve months and continued
strong growth in Aladdin allowed us to achieve year-over-year revenue growth despite the level of transaction-related revenue in last years first quarter and significant foreign exchange headwinds, which reduced the value of our
non-dollar denominated base fees.
In the face of divergent financial markets, investors continue to search for yield, and BlackRocks highly
diversified global fixed income platform again delivered strong returns for our clients. With 91% of our taxable fixed income assets above benchmark or peer median for the 3-year period, we remain well positioned to benefit from ongoing changes in
the fixed income landscape.
Institutional long-term net inflows of $21 billion were our highest since the BGI acquisition, reflecting strong demand
for customized investment solutions. We partnered with leading global institutions to address their specific objectives through a combination of investment management expertise, robust portfolio construction and superior risk management.
Alternatives remain an important component of BlackRocks solutions capabilities and we raised another $2 billion of alternatives commitments during the quarter, giving us more than $10 billion in committed capital to deploy for clients. We
also announced a landmark public-private infrastructure investment partnership in Mexico, which will finance two natural gas pipelines critical to the regions continued economic growth.
In iShares, we saw net inflows of $35 billion, driven by broad-based European flows and strength in our global fixed income franchise. Our
iShares platform continues to grow on multiple fronts: our Core series for buy-and-hold investors, our offering of precision exposures for asset allocators, and our financial instruments for capital markets investors.
-1-
BlackRocks global Retail business continued to benefit from stronger distribution, a broader product suite and enhanced brand investment, and generated more than $14 billion of long-term
net inflows.
We are confident that our platform, our distribution, our client relationships and our long-term focus position BlackRock to continue
to execute on behalf of clients in an ever-changing investment landscape. I would like to once again express my gratitude to BlackRock employees for their commitment to excellence. Together, we look forward to continuing to drive results for our
clients and shareholders.
RESULTS BY CLIENT TYPE
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(in millions), (unaudited) |
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Q1 2015 Net flows |
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March 31, 2015 AUM |
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Q1 2015 Base Fees(1) |
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March 31, 2015 AUM % of Total |
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Q1 2015 Base Fees(1) % of Total |
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Retail |
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$ |
14,172 |
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$ |
550,980 |
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$ |
807 |
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12 |
% |
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34 |
% |
iShares |
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35,478 |
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1,074,130 |
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829 |
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24 |
% |
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36 |
% |
Institutional: |
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Active |
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17,984 |
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984,282 |
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456 |
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22 |
% |
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20 |
% |
Index |
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2,806 |
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1,854,205 |
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225 |
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42 |
% |
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10 |
% |
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Total institutional |
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20,790 |
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2,838,487 |
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681 |
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64 |
% |
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30 |
% |
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Total long-term |
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$ |
70,440 |
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$ |
4,463,597 |
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$ |
2,317 |
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100 |
% |
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100 |
% |
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RESULTS BY PRODUCT
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(in millions), (unaudited) |
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Q1 2015 Net flows |
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March 31, 2015 AUM |
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Q1 2015 Base Fees(1) |
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March 31, 2015 AUM % of Total |
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Q1 2015 Base Fees(1) % of Total |
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Equity |
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$ |
20,941 |
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$ |
2,527,130 |
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$ |
1,269 |
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56 |
% |
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55 |
% |
Fixed income |
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36,289 |
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1,428,480 |
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571 |
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32 |
% |
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25 |
% |
Multi-asset |
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12,792 |
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395,312 |
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304 |
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9 |
% |
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13 |
% |
Alternatives |
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418 |
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112,675 |
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173 |
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3 |
% |
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7 |
% |
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Total long-term |
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$ |
70,440 |
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$ |
4,463,597 |
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$ |
2,317 |
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100 |
% |
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100 |
% |
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(1) |
Base fees include investment advisory, administration fees and securities lending revenue. |
Business
Highlights
Long-term net inflows were positive across all regions, with net inflows of $47.5 billion, $17.7 billion and $5.2 billion from clients in
the Americas, EMEA and Asia-Pacific, respectively. At March 31, 2015, BlackRock managed 62% of its long-term AUM for investors in the Americas and 38% for clients in EMEA and Asia-Pacific.
A discussion of the Companys net flows by client type for the first quarter of 2015 is presented below.
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Retail long-term net inflows of $14.2 billion included net inflows of $6.7 billion in the United States and $7.5 billion internationally. Fixed income net inflows of $12.8 billion were diversified across
exposures, with $3.5 billion of net inflows into the unconstrained Strategic Income Opportunities fund, $2.2 billion into high yield and $1.1 billion into the Total Return fund. Global multi-asset income funds raised an additional $2.0 billion of
net new assets. |
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iShares® long-term net inflows of $35.5 billion were led by fixed income net inflows of $18.6 billion which were diversified across exposures and
geographies. Equity net inflows of $16.7 billion were driven by the Core Series as well as demand for European equities. |
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Institutional active long-term net inflows of $18.0 billion were led by multi-asset net inflows of $11.7 billion, reflecting strong solutions-based insurance wins in the quarter and ongoing demand for the
LifePath® target-date product suite. Fixed income net inflows of $5.7 billion were driven by unconstrained and total return mandates. Alternatives net inflows of $0.4 billion were led
by flows into infrastructure and hedge fund solutions, and were net of $0.7 billion of capital returned to investors. Additionally, we raised more than $2 billion in alternatives commitments in the quarter, which will translate into new flows as
they are invested. |
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Institutional index long-term net inflows of $2.8 billion were driven by equity net inflows of $3.7 billion, partially offset by outflows from fixed income and multi-asset. |
Cash management AUM decreased 1% from December 31, 2014 to $292.5 billion.
Advisory AUM decreased 17% from December 31, 2014 to $18.1 billion.
-2-
INVESTMENT PERFORMANCE AT MARCH 31, 2015(1)
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One-year period |
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Three-year period |
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Five-year 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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81 |
% |
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91 |
% |
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91 |
% |
Tax-exempt |
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62 |
% |
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74 |
% |
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74 |
% |
Index products within or above applicable tolerance |
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97 |
% |
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97 |
% |
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98 |
% |
Equity: |
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Actively managed products above benchmark or peer median |
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Fundamental |
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41 |
% |
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52 |
% |
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48 |
% |
Scientific |
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88 |
% |
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95 |
% |
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96 |
% |
Index products within or above applicable tolerance |
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97 |
% |
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98 |
% |
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97 |
% |
(1) |
Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 13 for performance disclosure detail. |
Teleconference, Webcast and Presentation Information
Chairman and Chief Executive Officer, Laurence D. Fink, and Chief Financial Officer, Gary S. Shedlin, will host a teleconference call for investors and
analysts on Thursday, April 16, 2015 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 20720497). 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 Thursday, April 16, 2015 and ending at midnight on Thursday, April 30, 2015. To access the replay of the teleconference, callers from the United States should dial (855) 859-2056 and callers from outside the United States
should dial (404) 537-3406 and enter the Conference ID Number 20720497. To access the webcast, please visit the investor relations section of www.blackrock.com.
About BlackRock
BlackRock is a leader in investment
management, risk management and advisory services for institutional and retail clients worldwide. At March 31, 2015, BlackRocks AUM was $4.774 trillion. BlackRock helps clients meet their goals and overcome challenges with a
range of products that include separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory
and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, as of March 31, 2015, the
firm had approximately 12,300 employees in more than 30 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit
the Companys website at www.blackrock.com | Twitter: @blackrock_news | Blog: www.blackrockblog.com | LinkedIn: www.linkedin.com/company/blackrock
-3-
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION
(in millions, except shares and per share data), (unaudited)
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Three Months |
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Three Months Ended |
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Ended |
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March 31, |
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December 31, |
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2015 |
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2014 |
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Change |
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2014 |
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Change |
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Revenue |
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Investment advisory, administration fees and securities lending revenue |
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$ |
2,390 |
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$ |
2,291 |
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$ |
99 |
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$ |
2,396 |
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($ |
6 |
) |
Investment advisory performance fees |
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108 |
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158 |
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(50 |
) |
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144 |
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(36 |
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BlackRock Solutions and advisory |
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147 |
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154 |
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(7 |
) |
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170 |
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(23 |
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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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16 |
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1 |
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Other revenue |
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61 |
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48 |
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13 |
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58 |
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3 |
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Total revenue |
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2,723 |
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|
2,670 |
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53 |
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2,784 |
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(61 |
) |
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Expense |
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Employee compensation and benefits |
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|
981 |
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|
982 |
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(1 |
) |
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|
926 |
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|
55 |
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Distribution and servicing costs |
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|
99 |
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|
|
89 |
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|
|
10 |
|
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|
96 |
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|
3 |
|
Amortization of deferred sales commissions |
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|
13 |
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|
15 |
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(2 |
) |
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13 |
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Direct fund expense |
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|
189 |
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|
|
179 |
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|
10 |
|
|
|
183 |
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6 |
|
General and administration |
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339 |
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|
|
313 |
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|
|
26 |
|
|
|
387 |
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|
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(48 |
) |
Amortization of intangible assets |
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|
35 |
|
|
|
41 |
|
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(6 |
) |
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|
35 |
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Total expense |
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|
1,656 |
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|
1,619 |
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|
37 |
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|
|
1,640 |
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|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
1,067 |
|
|
|
1,051 |
|
|
|
16 |
|
|
|
1,144 |
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|
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(77 |
) |
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|
|
|
|
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Nonoperating income (expense) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments |
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|
63 |
|
|
|
76 |
|
|
|
(13 |
) |
|
|
(2 |
) |
|
|
65 |
|
Net gain (loss) on consolidated variable interest entities |
|
|
35 |
|
|
|
(16 |
) |
|
|
51 |
|
|
|
(6 |
) |
|
|
41 |
|
Interest and dividend income |
|
|
4 |
|
|
|
10 |
|
|
|
(6 |
) |
|
|
6 |
|
|
|
(2 |
) |
Interest expense |
|
|
(51 |
) |
|
|
(53 |
) |
|
|
2 |
|
|
|
(58 |
) |
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense) |
|
|
51 |
|
|
|
17 |
|
|
|
34 |
|
|
|
(60 |
) |
|
|
111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
1,118 |
|
|
|
1,068 |
|
|
|
50 |
|
|
|
1,084 |
|
|
|
34 |
|
Income tax expense |
|
|
258 |
|
|
|
324 |
|
|
|
(66 |
) |
|
|
278 |
|
|
|
(20 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
860 |
|
|
|
744 |
|
|
|
116 |
|
|
|
806 |
|
|
|
54 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests |
|
|
38 |
|
|
|
(12 |
) |
|
|
50 |
|
|
|
(7 |
) |
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc. |
|
$ |
822 |
|
|
$ |
756 |
|
|
$ |
66 |
|
|
$ |
813 |
|
|
$ |
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
167,089,037 |
|
|
|
169,081,421 |
|
|
|
(1,992,384 |
) |
|
|
167,197,844 |
|
|
|
(108,807 |
) |
Diluted |
|
|
169,723,167 |
|
|
|
171,933,803 |
|
|
|
(2,210,636 |
) |
|
|
170,367,445 |
|
|
|
(644,278 |
) |
Earnings per share attributable to BlackRock, Inc. common stockholders (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
4.92 |
|
|
$ |
4.47 |
|
|
$ |
0.45 |
|
|
$ |
4.86 |
|
|
$ |
0.06 |
|
Diluted |
|
$ |
4.84 |
|
|
$ |
4.40 |
|
|
$ |
0.44 |
|
|
$ |
4.77 |
|
|
$ |
0.07 |
|
Cash dividends declared and paid per share |
|
$ |
2.18 |
|
|
$ |
1.93 |
|
|
$ |
0.25 |
|
|
$ |
1.93 |
|
|
$ |
0.25 |
|
|
|
|
|
|
|
Supplemental information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period) |
|
$ |
4,774,192 |
|
|
$ |
4,400,925 |
|
|
$ |
373,267 |
|
|
$ |
4,651,895 |
|
|
$ |
122,297 |
|
Shares outstanding (end of period) |
|
|
167,084,582 |
|
|
|
169,138,109 |
|
|
|
(2,053,527 |
) |
|
|
166,921,863 |
|
|
|
162,719 |
|
GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
|
39.2 |
% |
|
|
39.4 |
% |
|
|
(20 bps |
) |
|
|
41.1 |
% |
|
|
(190 bps |
) |
Effective tax rate |
|
|
23.9 |
% |
|
|
30.0 |
% |
|
|
(610 bps |
) |
|
|
25.5 |
% |
|
|
(160 bps |
) |
As adjusted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (1) |
|
$ |
1,077 |
|
|
$ |
1,062 |
|
|
$ |
15 |
|
|
$ |
1,154 |
|
|
($ |
77 |
) |
Operating margin (1) |
|
|
41.2 |
% |
|
|
41.4 |
% |
|
|
(20 bps |
) |
|
|
43.6 |
% |
|
|
(240 bps |
) |
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests (2) |
|
$ |
11 |
|
|
$ |
26 |
|
|
($ |
15 |
) |
|
($ |
54 |
) |
|
$ |
65 |
|
Net income attributable to BlackRock, Inc. (3) |
|
$ |
830 |
|
|
$ |
762 |
|
|
$ |
68 |
|
|
$ |
821 |
|
|
$ |
9 |
|
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (3) (4) |
|
$ |
4.89 |
|
|
$ |
4.43 |
|
|
$ |
0.46 |
|
|
$ |
4.82 |
|
|
$ |
0.07 |
|
Effective tax rate |
|
|
23.7 |
% |
|
|
30.0 |
% |
|
|
(630 bps |
) |
|
|
25.4 |
% |
|
|
(170 bps |
) |
See pages 11-12 for the reconciliation to GAAP and notes (1) through (4) for more information on as adjusted
items.
-4-
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
Current Quarter Component
Changes by Client Type and Product
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
inflows |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
2014 |
|
|
(outflows) |
|
|
Acquisition(1) |
|
|
Market change |
|
|
FX impact (2) |
|
|
2015 |
|
|
Average AUM (3) |
|
Retail: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
$ |
200,445 |
|
|
$ |
332 |
|
|
$ |
|
|
|
$ |
5,102 |
|
|
$ |
(4,173 |
) |
|
$ |
201,706 |
|
|
$ |
201,052 |
|
Fixed income |
|
|
189,820 |
|
|
|
12,787 |
|
|
|
|
|
|
|
962 |
|
|
|
(2,164 |
) |
|
|
201,405 |
|
|
|
195,821 |
|
Multi-asset |
|
|
125,341 |
|
|
|
1,402 |
|
|
|
|
|
|
|
2,426 |
|
|
|
(767 |
) |
|
|
128,402 |
|
|
|
127,031 |
|
Alternatives |
|
|
18,723 |
|
|
|
(349 |
) |
|
|
1,293 |
|
|
|
296 |
|
|
|
(496 |
) |
|
|
19,467 |
|
|
|
18,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail subtotal |
|
|
534,329 |
|
|
|
14,172 |
|
|
|
1,293 |
|
|
|
8,786 |
|
|
|
(7,600 |
) |
|
|
550,980 |
|
|
|
542,575 |
|
iShares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
790,067 |
|
|
|
16,725 |
|
|
|
|
|
|
|
28,200 |
|
|
|
(10,656 |
) |
|
|
824,336 |
|
|
|
804,294 |
|
Fixed income |
|
|
217,671 |
|
|
|
18,595 |
|
|
|
|
|
|
|
2,591 |
|
|
|
(5,674 |
) |
|
|
233,183 |
|
|
|
228,005 |
|
Multi-asset |
|
|
1,773 |
|
|
|
(18 |
) |
|
|
|
|
|
|
30 |
|
|
|
(13 |
) |
|
|
1,772 |
|
|
|
1,827 |
|
Alternatives |
|
|
14,717 |
|
|
|
176 |
|
|
|
|
|
|
|
49 |
|
|
|
(103 |
) |
|
|
14,839 |
|
|
|
14,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iShares subtotal |
|
|
1,024,228 |
|
|
|
35,478 |
|
|
|
|
|
|
|
30,870 |
|
|
|
(16,446 |
) |
|
|
1,074,130 |
|
|
|
1,049,080 |
|
Institutional: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
125,143 |
|
|
|
168 |
|
|
|
|
|
|
|
6,206 |
|
|
|
(3,481 |
) |
|
|
128,036 |
|
|
|
126,662 |
|
Fixed income |
|
|
518,590 |
|
|
|
5,723 |
|
|
|
|
|
|
|
9,546 |
|
|
|
(7,742 |
) |
|
|
526,117 |
|
|
|
525,711 |
|
Multi-asset |
|
|
242,913 |
|
|
|
11,717 |
|
|
|
|
|
|
|
12,549 |
|
|
|
(10,095 |
) |
|
|
257,084 |
|
|
|
250,197 |
|
Alternatives |
|
|
72,514 |
|
|
|
376 |
|
|
|
|
|
|
|
1,094 |
|
|
|
(939 |
) |
|
|
73,045 |
|
|
|
72,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active subtotal |
|
|
959,160 |
|
|
|
17,984 |
|
|
|
|
|
|
|
29,395 |
|
|
|
(22,257 |
) |
|
|
984,282 |
|
|
|
975,304 |
|
Index: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
1,335,456 |
|
|
|
3,716 |
|
|
|
|
|
|
|
53,361 |
|
|
|
(19,481 |
) |
|
|
1,373,052 |
|
|
|
1,354,904 |
|
Fixed income |
|
|
467,572 |
|
|
|
(816 |
) |
|
|
|
|
|
|
16,183 |
|
|
|
(15,164 |
) |
|
|
467,775 |
|
|
|
469,931 |
|
Multi-asset |
|
|
7,810 |
|
|
|
(309 |
) |
|
|
|
|
|
|
818 |
|
|
|
(265 |
) |
|
|
8,054 |
|
|
|
7,928 |
|
Alternatives |
|
|
5,286 |
|
|
|
215 |
|
|
|
|
|
|
|
(27 |
) |
|
|
(150 |
) |
|
|
5,324 |
|
|
|
5,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index subtotal |
|
|
1,816,124 |
|
|
|
2,806 |
|
|
|
|
|
|
|
70,335 |
|
|
|
(35,060 |
) |
|
|
1,854,205 |
|
|
|
1,838,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutional subtotal |
|
|
2,775,284 |
|
|
|
20,790 |
|
|
|
|
|
|
|
99,730 |
|
|
|
(57,317 |
) |
|
|
2,838,487 |
|
|
|
2,813,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term |
|
|
4,333,841 |
|
|
|
70,440 |
|
|
|
1,293 |
|
|
|
139,386 |
|
|
|
(81,363 |
) |
|
|
4,463,597 |
|
|
$ |
4,405,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash management |
|
|
296,353 |
|
|
|
561 |
|
|
|
|
|
|
|
(42 |
) |
|
|
(4,377 |
) |
|
|
292,495 |
|
|
|
|
|
Advisory (4) |
|
|
21,701 |
|
|
|
(2,297 |
) |
|
|
|
|
|
|
526 |
|
|
|
(1,830 |
) |
|
|
18,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
4,651,895 |
|
|
$ |
68,704 |
|
|
$ |
1,293 |
|
|
$ |
139,870 |
|
|
$ |
(87,570 |
) |
|
$ |
4,774,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Product (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
inflows |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
2014 |
|
|
(outflows) |
|
|
Acquisition(1) |
|
|
Market change |
|
|
FX impact (2) |
|
|
2015 |
|
|
Average AUM (3) |
|
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active |
|
$ |
292,802 |
|
|
$ |
546 |
|
|
$ |
|
|
|
$ |
11,445 |
|
|
$ |
(6,675 |
) |
|
$ |
298,118 |
|
|
$ |
295,297 |
|
iShares |
|
|
790,067 |
|
|
|
16,725 |
|
|
|
|
|
|
|
28,200 |
|
|
|
(10,656 |
) |
|
|
824,336 |
|
|
|
804,294 |
|
Non-ETF index |
|
|
1,368,242 |
|
|
|
3,670 |
|
|
|
|
|
|
|
53,224 |
|
|
|
(20,460 |
) |
|
|
1,404,676 |
|
|
|
1,387,321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity subtotal |
|
|
2,451,111 |
|
|
|
20,941 |
|
|
|
|
|
|
|
92,869 |
|
|
|
(37,791 |
) |
|
|
2,527,130 |
|
|
|
2,486,912 |
|
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active |
|
|
701,324 |
|
|
|
17,855 |
|
|
|
|
|
|
|
10,447 |
|
|
|
(9,532 |
) |
|
|
720,094 |
|
|
|
714,317 |
|
iShares |
|
|
217,671 |
|
|
|
18,595 |
|
|
|
|
|
|
|
2,591 |
|
|
|
(5,674 |
) |
|
|
233,183 |
|
|
|
228,005 |
|
Non-ETF index |
|
|
474,658 |
|
|
|
(161 |
) |
|
|
|
|
|
|
16,244 |
|
|
|
(15,538 |
) |
|
|
475,203 |
|
|
|
477,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income subtotal |
|
|
1,393,653 |
|
|
|
36,289 |
|
|
|
|
|
|
|
29,282 |
|
|
|
(30,744 |
) |
|
|
1,428,480 |
|
|
|
1,419,468 |
|
Multi-asset |
|
|
377,837 |
|
|
|
12,792 |
|
|
|
|
|
|
|
15,823 |
|
|
|
(11,140 |
) |
|
|
395,312 |
|
|
|
386,983 |
|
Alternatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core |
|
|
88,006 |
|
|
|
(201 |
) |
|
|
1,293 |
|
|
|
1,425 |
|
|
|
(1,437 |
) |
|
|
89,086 |
|
|
|
88,062 |
|
Currency and commodities (5) |
|
|
23,234 |
|
|
|
619 |
|
|
|
|
|
|
|
(13 |
) |
|
|
(251 |
) |
|
|
23,589 |
|
|
|
23,656 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternatives subtotal |
|
|
111,240 |
|
|
|
418 |
|
|
|
1,293 |
|
|
|
1,412 |
|
|
|
(1,688 |
) |
|
|
112,675 |
|
|
|
111,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term |
|
$ |
4,333,841 |
|
|
$ |
70,440 |
|
|
$ |
1,293 |
|
|
$ |
139,386 |
|
|
$ |
(81,363 |
) |
|
$ |
4,463,597 |
|
|
$ |
4,405,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
inflows |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
2014 |
|
|
(outflows) |
|
|
Acquisition(1) |
|
|
Market change |
|
|
FX impact (2) |
|
|
2015 |
|
|
Average AUM (3) |
|
Active |
|
$ |
1,453,613 |
|
|
$ |
31,547 |
|
|
$ |
1,293 |
|
|
$ |
38,260 |
|
|
$ |
(28,503 |
) |
|
$ |
1,496,210 |
|
|
$ |
1,478,247 |
|
Index and iShares |
|
|
2,880,228 |
|
|
|
38,893 |
|
|
|
|
|
|
|
101,126 |
|
|
|
(52,860 |
) |
|
|
2,967,387 |
|
|
|
2,926,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term |
|
$ |
4,333,841 |
|
|
$ |
70,440 |
|
|
$ |
1,293 |
|
|
$ |
139,386 |
|
|
$ |
(81,363 |
) |
|
$ |
4,463,597 |
|
|
$ |
4,405,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Amounts represent $1.3 billion of AUM acquired in the acquisition of certain assets of BlackRock Kelso Capital Advisors LLC in March 2015. |
(2) |
Foreign exchange reflects the impact of converting non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. |
(3) |
Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing four months. |
(4) |
Advisory AUM represents long-term portfolio liquidation assignments. |
(5) |
Amounts include commodity iShares. |
-5-
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
Year-over-Year Component
Changes by Client Type and Product
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
inflows |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
2014 |
|
|
(outflows) |
|
|
Acquisition(1) |
|
|
Market change |
|
|
FX impact (2) |
|
|
2015 |
|
|
Average AUM (3) |
|
Retail: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
$ |
208,238 |
|
|
$ |
(269 |
) |
|
$ |
|
|
|
$ |
4,219 |
|
|
$ |
(10,482 |
) |
|
$ |
201,706 |
|
|
$ |
206,939 |
|
Fixed income |
|
|
160,448 |
|
|
|
43,724 |
|
|
|
|
|
|
|
1,806 |
|
|
|
(4,573 |
) |
|
|
201,405 |
|
|
|
180,458 |
|
Multi-asset |
|
|
121,548 |
|
|
|
11,131 |
|
|
|
|
|
|
|
(2,418 |
) |
|
|
(1,859 |
) |
|
|
128,402 |
|
|
|
125,831 |
|
Alternatives |
|
|
18,483 |
|
|
|
528 |
|
|
|
1,293 |
|
|
|
316 |
|
|
|
(1,153 |
) |
|
|
19,467 |
|
|
|
18,897 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail subtotal |
|
|
508,717 |
|
|
|
55,114 |
|
|
|
1,293 |
|
|
|
3,923 |
|
|
|
(18,067 |
) |
|
|
550,980 |
|
|
|
532,125 |
|
iShares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
723,973 |
|
|
|
75,417 |
|
|
|
|
|
|
|
48,942 |
|
|
|
(23,996 |
) |
|
|
824,336 |
|
|
|
775,337 |
|
Fixed income |
|
|
188,022 |
|
|
|
51,979 |
|
|
|
|
|
|
|
4,635 |
|
|
|
(11,453 |
) |
|
|
233,183 |
|
|
|
210,296 |
|
Multi-asset |
|
|
1,437 |
|
|
|
311 |
|
|
|
|
|
|
|
45 |
|
|
|
(21 |
) |
|
|
1,772 |
|
|
|
1,649 |
|
Alternatives |
|
|
16,948 |
|
|
|
614 |
|
|
|
|
|
|
|
(2,450 |
) |
|
|
(273 |
) |
|
|
14,839 |
|
|
|
16,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iShares subtotal |
|
|
930,380 |
|
|
|
128,321 |
|
|
|
|
|
|
|
51,172 |
|
|
|
(35,743 |
) |
|
|
1,074,130 |
|
|
|
1,003,372 |
|
Institutional: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
132,374 |
|
|
|
(10,447 |
) |
|
|
|
|
|
|
14,632 |
|
|
|
(8,523 |
) |
|
|
128,036 |
|
|
|
129,656 |
|
Fixed income |
|
|
509,692 |
|
|
|
5,802 |
|
|
|
|
|
|
|
32,841 |
|
|
|
(22,218 |
) |
|
|
526,117 |
|
|
|
520,137 |
|
Multi-asset |
|
|
223,865 |
|
|
|
24,701 |
|
|
|
|
|
|
|
30,326 |
|
|
|
(21,808 |
) |
|
|
257,084 |
|
|
|
241,399 |
|
Alternatives |
|
|
73,723 |
|
|
|
118 |
|
|
|
|
|
|
|
1,911 |
|
|
|
(2,707 |
) |
|
|
73,045 |
|
|
|
72,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active subtotal |
|
|
939,654 |
|
|
|
20,174 |
|
|
|
|
|
|
|
79,710 |
|
|
|
(55,256 |
) |
|
|
984,282 |
|
|
|
964,109 |
|
Index: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
1,283,349 |
|
|
|
4,819 |
|
|
|
|
|
|
|
141,113 |
|
|
|
(56,229 |
) |
|
|
1,373,052 |
|
|
|
1,331,971 |
|
Fixed income |
|
|
430,852 |
|
|
|
15,567 |
|
|
|
|
|
|
|
59,601 |
|
|
|
(38,245 |
) |
|
|
467,775 |
|
|
|
453,205 |
|
Multi-asset |
|
|
6,381 |
|
|
|
563 |
|
|
|
|
|
|
|
2,124 |
|
|
|
(1,014 |
) |
|
|
8,054 |
|
|
|
7,284 |
|
Alternatives |
|
|
6,273 |
|
|
|
409 |
|
|
|
|
|
|
|
(997 |
) |
|
|
(361 |
) |
|
|
5,324 |
|
|
|
5,948 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index subtotal |
|
|
1,726,855 |
|
|
|
21,358 |
|
|
|
|
|
|
|
201,841 |
|
|
|
(95,849 |
) |
|
|
1,854,205 |
|
|
|
1,798,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutional subtotal |
|
|
2,666,509 |
|
|
|
41,532 |
|
|
|
|
|
|
|
281,551 |
|
|
|
(151,105 |
) |
|
|
2,838,487 |
|
|
|
2,762,517 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term |
|
|
4,105,606 |
|
|
|
224,967 |
|
|
|
1,293 |
|
|
|
336,646 |
|
|
|
(204,915 |
) |
|
|
4,463,597 |
|
|
$ |
4,298,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash management |
|
|
263,533 |
|
|
|
38,690 |
|
|
|
|
|
|
|
546 |
|
|
|
(10,274 |
) |
|
|
292,495 |
|
|
|
|
|
Advisory (4) |
|
|
31,786 |
|
|
|
(11,697 |
) |
|
|
|
|
|
|
1,400 |
|
|
|
(3,389 |
) |
|
|
18,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
4,400,925 |
|
|
$ |
251,960 |
|
|
$ |
1,293 |
|
|
$ |
338,592 |
|
|
$ |
(218,578 |
) |
|
$ |
4,774,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Product (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
inflows |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
2014 |
|
|
(outflows) |
|
|
Acquisition(1) |
|
|
Market change |
|
|
FX impact (2) |
|
|
2015 |
|
|
Average AUM (3) |
|
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active |
|
$ |
314,850 |
|
|
$ |
(17,420 |
) |
|
$ |
|
|
|
$ |
17,196 |
|
|
$ |
(16,508 |
) |
|
$ |
298,118 |
|
|
$ |
306,332 |
|
iShares |
|
|
723,973 |
|
|
|
75,417 |
|
|
|
|
|
|
|
48,942 |
|
|
|
(23,996 |
) |
|
|
824,336 |
|
|
|
775,337 |
|
Non-ETF index |
|
|
1,309,111 |
|
|
|
11,523 |
|
|
|
|
|
|
|
142,768 |
|
|
|
(58,726 |
) |
|
|
1,404,676 |
|
|
|
1,362,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity subtotal |
|
|
2,347,934 |
|
|
|
69,520 |
|
|
|
|
|
|
|
208,906 |
|
|
|
(99,230 |
) |
|
|
2,527,130 |
|
|
|
2,443,903 |
|
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active |
|
|
665,151 |
|
|
|
47,006 |
|
|
|
|
|
|
|
33,861 |
|
|
|
(25,924 |
) |
|
|
720,094 |
|
|
|
694,165 |
|
iShares |
|
|
188,022 |
|
|
|
51,979 |
|
|
|
|
|
|
|
4,635 |
|
|
|
(11,453 |
) |
|
|
233,183 |
|
|
|
210,296 |
|
Non-ETF index |
|
|
435,841 |
|
|
|
18,087 |
|
|
|
|
|
|
|
60,387 |
|
|
|
(39,112 |
) |
|
|
475,203 |
|
|
|
459,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income subtotal |
|
|
1,289,014 |
|
|
|
117,072 |
|
|
|
|
|
|
|
98,883 |
|
|
|
(76,489 |
) |
|
|
1,428,480 |
|
|
|
1,364,096 |
|
Multi-asset |
|
|
353,231 |
|
|
|
36,706 |
|
|
|
|
|
|
|
30,077 |
|
|
|
(24,702 |
) |
|
|
395,312 |
|
|
|
376,163 |
|
Alternatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core |
|
|
87,865 |
|
|
|
926 |
|
|
|
1,293 |
|
|
|
2,426 |
|
|
|
(3,424 |
) |
|
|
89,086 |
|
|
|
88,189 |
|
Currency and commodities (5) |
|
|
27,562 |
|
|
|
743 |
|
|
|
|
|
|
|
(3,646 |
) |
|
|
(1,070 |
) |
|
|
23,589 |
|
|
|
25,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternatives subtotal |
|
|
115,427 |
|
|
|
1,669 |
|
|
|
1,293 |
|
|
|
(1,220 |
) |
|
|
(4,494 |
) |
|
|
112,675 |
|
|
|
113,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term |
|
$ |
4,105,606 |
|
|
$ |
224,967 |
|
|
$ |
1,293 |
|
|
$ |
336,646 |
|
|
$ |
(204,915 |
) |
|
$ |
4,463,597 |
|
|
$ |
4,298,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
inflows |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
2014 |
|
|
(outflows) |
|
|
Acquisition(1) |
|
|
Market change |
|
|
FX impact (2) |
|
|
2015 |
|
|
Average AUM (3) |
|
Active |
|
$ |
1,417,546 |
|
|
$ |
66,131 |
|
|
$ |
1,293 |
|
|
$ |
81,198 |
|
|
$ |
(69,958 |
) |
|
$ |
1,496,210 |
|
|
$ |
1,459,492 |
|
Index and iShares |
|
|
2,688,060 |
|
|
|
158,836 |
|
|
|
|
|
|
|
255,448 |
|
|
|
(134,957 |
) |
|
|
2,967,387 |
|
|
|
2,838,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term |
|
$ |
4,105,606 |
|
|
$ |
224,967 |
|
|
$ |
1,293 |
|
|
$ |
336,646 |
|
|
$ |
(204,915 |
) |
|
$ |
4,463,597 |
|
|
$ |
4,298,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Amounts represent $1.3 billion of AUM acquired in the acquisition of certain assets of BlackRock Kelso Capital Advisors LLC in March 2015. |
(2) |
Foreign exchange reflects the impact of converting non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. |
(3) |
Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months. |
(4) |
Advisory AUM represents long-term portfolio liquidation assignments. |
(5) |
Amounts include commodity iShares. |
-6-
SUMMARY OF REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
Three Months Ended December 31, 2014 |
|
|
Change |
|
(in millions), (unaudited) |
|
2015 |
|
|
2014 |
|
|
Change |
|
|
|
Investment advisory, administration fees and securities lending revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active |
|
$ |
422 |
|
|
$ |
463 |
|
|
($ |
41 |
) |
|
$ |
428 |
|
|
($ |
6 |
) |
iShares |
|
|
684 |
|
|
|
634 |
|
|
|
50 |
|
|
|
686 |
|
|
|
(2 |
) |
Non-ETF Index |
|
|
163 |
|
|
|
158 |
|
|
|
5 |
|
|
|
168 |
|
|
|
(5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity subtotal |
|
|
1,269 |
|
|
|
1,255 |
|
|
|
14 |
|
|
|
1,282 |
|
|
|
(13 |
) |
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active |
|
|
373 |
|
|
|
324 |
|
|
|
49 |
|
|
|
367 |
|
|
|
6 |
|
iShares |
|
|
130 |
|
|
|
113 |
|
|
|
17 |
|
|
|
126 |
|
|
|
4 |
|
Non-ETF Index |
|
|
68 |
|
|
|
58 |
|
|
|
10 |
|
|
|
65 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income subtotal |
|
|
571 |
|
|
|
495 |
|
|
|
76 |
|
|
|
558 |
|
|
|
13 |
|
Multi-asset |
|
|
304 |
|
|
|
286 |
|
|
|
18 |
|
|
|
303 |
|
|
|
1 |
|
Alternatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core |
|
|
154 |
|
|
|
159 |
|
|
|
(5 |
) |
|
|
159 |
|
|
|
(5 |
) |
Currency and commodities |
|
|
19 |
|
|
|
22 |
|
|
|
(3 |
) |
|
|
21 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternatives subtotal |
|
|
173 |
|
|
|
181 |
|
|
|
(8 |
) |
|
|
180 |
|
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term |
|
|
2,317 |
|
|
|
2,217 |
|
|
|
100 |
|
|
|
2,323 |
|
|
|
(6 |
) |
Cash management |
|
|
73 |
|
|
|
74 |
|
|
|
(1 |
) |
|
|
73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total base fees |
|
|
2,390 |
|
|
|
2,291 |
|
|
|
99 |
|
|
|
2,396 |
|
|
|
(6 |
) |
Investment advisory performance fees: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
37 |
|
|
|
22 |
|
|
|
15 |
|
|
|
50 |
|
|
|
(13 |
) |
Fixed income |
|
|
4 |
|
|
|
8 |
|
|
|
(4 |
) |
|
|
12 |
|
|
|
(8 |
) |
Multi-asset |
|
|
8 |
|
|
|
3 |
|
|
|
5 |
|
|
|
11 |
|
|
|
(3 |
) |
Alternatives |
|
|
59 |
|
|
|
125 |
|
|
|
(66 |
) |
|
|
71 |
|
|
|
(12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
108 |
|
|
|
158 |
|
|
|
(50 |
) |
|
|
144 |
|
|
|
(36 |
) |
|
|
|
|
|
|
BlackRock Solutions and advisory |
|
|
147 |
|
|
|
154 |
|
|
|
(7 |
) |
|
|
170 |
|
|
|
(23 |
) |
Distribution fees |
|
|
17 |
|
|
|
19 |
|
|
|
(2 |
) |
|
|
16 |
|
|
|
1 |
|
Other revenue |
|
|
61 |
|
|
|
48 |
|
|
|
13 |
|
|
|
58 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
$ |
2,723 |
|
|
$ |
2,670 |
|
|
$ |
53 |
|
|
$ |
2,784 |
|
|
($ |
61 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
|
|
Investment advisory, administration fees and securities lending revenue increased $99 million from the first quarter of 2014 driven by strong organic growth and market appreciation, which outpaced the impact of
divergent beta and foreign exchange movements. Securities lending fees of $114 million in the current quarter increased $9 million from the first quarter of 2014, primarily reflecting an increase in average balances of securities on loan.
|
Investment advisory, administration fees and securities lending revenue decreased $6 million from the fourth quarter of 2014
due to the effect of two fewer days in the quarter, and the impact of divergent beta and foreign exchange movements.
|
|
Performance fees decreased $50 million from the first quarter of 2014, primarily due to the impact of a large fee associated with the liquidation of a closed-end mortgage fund in last years first quarter.
|
Performance fees decreased $36 million from the fourth quarter of 2014 due to seasonally higher performance measurement
locks in the fourth quarter.
|
|
BlackRock Solutions® and advisory revenue decreased $7 million from the first quarter of 2014 due to reduced Financial Markets Advisory Services
(FMA) revenue from disposition-related advisory assignments, partially offset by higher revenue from the Aladdin® business. BlackRock Solutions and advisory revenue
included $126 million in Aladdin business revenue in the current quarter compared with $112 million in the first quarter of 2014. |
BlackRock Solutions and advisory revenue decreased $23 million from the prior quarter due to reduced FMA revenue from completed advisory
assignments. BlackRock Solutions and advisory revenue included $126 million in Aladdin business revenue in the current quarter compared with $127 million in the fourth quarter of 2014.
-7-
SUMMARY OF OPERATING EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
Three
Months Ended
December 31, |
|
|
|
|
(in millions), (unaudited) |
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2014 |
|
|
Change |
|
Operating Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
$ |
981 |
|
|
$ |
982 |
|
|
($ |
1 |
) |
|
$ |
926 |
|
|
$ |
55 |
|
Distribution and servicing costs |
|
|
99 |
|
|
|
89 |
|
|
|
10 |
|
|
|
96 |
|
|
|
3 |
|
Amortization of deferred sales commissions |
|
|
13 |
|
|
|
15 |
|
|
|
(2 |
) |
|
|
13 |
|
|
|
|
|
Direct fund expense |
|
|
189 |
|
|
|
179 |
|
|
|
10 |
|
|
|
183 |
|
|
|
6 |
|
General and administration |
|
|
339 |
|
|
|
313 |
|
|
|
26 |
|
|
|
387 |
|
|
|
(48 |
) |
Amortization of intangible assets |
|
|
35 |
|
|
|
41 |
|
|
|
(6 |
) |
|
|
35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expense |
|
$ |
1,656 |
|
|
$ |
1,619 |
|
|
$ |
37 |
|
|
$ |
1,640 |
|
|
$ |
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
|
|
Employee compensation and benefits decreased $1 million from the first quarter of 2014, reflecting the impact of foreign exchange movements, partially offset by higher headcount. |
Employee compensation and benefits increased $55 million from the fourth quarter of 2014, primarily reflecting higher seasonal employer payroll
taxes.
|
|
General and administration expense increased $26 million from the first quarter of 2014, primarily reflecting higher marketing and promotional expense, higher portfolio and professional services expense, and the impact
of a one-time benefit from the reversal of a real estate-related retirement obligation which was no longer required to be funded in last years first quarter. |
General and administration expense decreased $48 million from the fourth quarter of 2014, primarily reflecting seasonally lower marketing and
promotional expense, lower foreign exchange remeasurement expense, and the impact of closed-end fund launch costs in the fourth quarter of 2014.
INCOME TAX EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
Three
Months Ended
December 31, |
|
|
|
|
(in millions), (unaudited) |
|
2015 |
|
|
2014 |
|
|
Change |
|
|
2014 |
|
|
Change |
|
Income tax expense |
|
$ |
258 |
|
|
$ |
324 |
|
|
($ |
66 |
) |
|
$ |
278 |
|
|
($ |
20 |
) |
Highlights
|
|
Income tax expense in the first quarter of 2015 benefited from $69 million of nonrecurring items. |
Income tax expense in the fourth quarter of 2014 benefited from $39 million of nonrecurring items.
-8-
SUMMARY OF NONOPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
Three Months Ended December 31, 2014 |
|
|
|
|
(in millions), (unaudited) |
|
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
|
Change |
|
Nonoperating income (expense), GAAP basis |
|
$ |
51 |
|
|
$ |
17 |
|
|
$ |
34 |
|
|
($ |
60 |
) |
|
$ |
111 |
|
Less: Net income (loss) attributable to NCI |
|
|
38 |
|
|
|
(12 |
) |
|
|
50 |
|
|
|
(7 |
) |
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)(1) |
|
$ |
13 |
|
|
$ |
29 |
|
|
($ |
16 |
) |
|
($ |
53 |
) |
|
$ |
66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated economic investments at March 31, 2015(2) |
|
Three Months Ended March 31, |
|
|
|
|
|
Three Months Ended December 31, 2014 |
|
|
|
|
(in millions), (unaudited) |
|
|
2015 |
|
|
2014 |
|
|
Change |
|
|
|
Change |
|
Net gain (loss) on investments(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity |
|
25-30% |
|
$ |
1 |
|
|
$ |
44 |
|
|
($ |
43 |
) |
|
$ |
3 |
|
|
($ |
2 |
) |
Real estate |
|
5-10% |
|
|
2 |
|
|
|
2 |
|
|
|
|
|
|
|
3 |
|
|
|
(1 |
) |
Other alternatives(3) |
|
15-20% |
|
|
4 |
|
|
|
21 |
|
|
|
(17 |
) |
|
|
(5 |
) |
|
|
9 |
|
Other investments(4) |
|
45-50% |
|
|
6 |
|
|
|
2 |
|
|
|
4 |
|
|
|
(3 |
) |
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
|
|
13 |
|
|
|
69 |
|
|
|
(56 |
) |
|
|
(2 |
) |
|
|
15 |
|
Other gains(5) |
|
|
|
|
45 |
|
|
|
|
|
|
|
45 |
|
|
|
|
|
|
|
45 |
|
Investments related to deferred compensation plans |
|
|
|
|
2 |
|
|
|
3 |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net gain (loss) on investments(1) |
|
|
|
|
60 |
|
|
|
72 |
|
|
|
(12 |
) |
|
|
(1 |
) |
|
|
61 |
|
Interest and dividend income |
|
|
|
|
4 |
|
|
|
10 |
|
|
|
(6 |
) |
|
|
6 |
|
|
|
(2 |
) |
Interest expense |
|
|
|
|
(51 |
) |
|
|
(53 |
) |
|
|
2 |
|
|
|
(58 |
) |
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense |
|
|
|
|
(47 |
) |
|
|
(43 |
) |
|
|
(4 |
) |
|
|
(52 |
) |
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)(1) |
|
|
|
|
13 |
|
|
|
29 |
|
|
|
(16 |
) |
|
|
(53 |
) |
|
|
66 |
|
Compensation expense related to (appreciation) depreciation on deferred compensation plans |
|
|
|
|
(2 |
) |
|
|
(3 |
) |
|
|
1 |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), as adjusted(1) |
|
|
|
$ |
11 |
|
|
$ |
26 |
|
|
($ |
15 |
) |
|
($ |
54 |
) |
|
$ |
65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Net of net income (loss) attributable to noncontrolling interests (NCI). |
(2) |
Percentages represent estimated percentages of BlackRocks corporate economic investment portfolio at March 31, 2015. Economic investment amounts at
December 31, 2014 for private equity, real estate, other alternatives and other investments were $314 million, $117 million, $289 million and $599 million, respectively. See the 2014 Form 10-K for more information. |
(3) |
Amounts primarily include net gains (losses) related to direct hedge fund strategies and hedge fund solutions. The prior year quarter also included net gains related to opportunistic credit strategies.
|
(4) |
Amounts include net gains (losses) related to equity and fixed income investments, and BlackRocks seed capital hedging program. |
(5) |
Amount primarily includes a gain related to the acquisition of certain assets of BlackRock Kelso Capital Advisors LLC. |
Highlights
|
|
On March 6, 2015, BlackRock acquired certain assets related to managing BlackRock Capital Investment Corporation from BlackRock Kelso Capital Advisors LLC (BKCA). In connection with the acquisition,
BlackRock recorded a noncash, nonoperating, pre-tax gain of $40 million related to the fair value of its pre-existing interest in BKCA. |
|
|
Net gain (loss) on investments decreased from the first quarter of 2014 due to the positive impact of the monetization of a nonstrategic, opportunistic private equity investment included in the first quarter of 2014 and
lower positive marks in the first quarter of 2015. The decrease was partially offset by the $40 million gain related to BKCA in the first quarter of 2015. |
Net gain (loss) on investments increased from the fourth quarter of 2014, primarily due to the $40 million gain related to BKCA.
-9-
ECONOMIC TANGIBLE ASSETS
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 noncontrolling 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.
Economic tangible assets include cash, receivables, seed and co-investments,
regulatory investments and other assets.
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
(in billions), (unaudited) |
|
2015 (Est.) |
|
|
2014 |
|
Total balance sheet assets |
|
$ |
243 |
|
|
$ |
240 |
|
Separate account assets and separate account collateral held under securities lending agreements |
|
|
(198 |
) |
|
|
(195 |
) |
Consolidated VIEs/sponsored investment funds |
|
|
(5 |
) |
|
|
(4 |
) |
Goodwill and intangible assets, net |
|
|
(30 |
) |
|
|
(30 |
) |
|
|
|
|
|
|
|
|
|
Economic tangible assets |
|
$ |
10 |
|
|
$ |
11 |
|
|
|
|
|
|
|
|
|
|
-10-
RECONCILIATION OF U.S. GAAP OPERATING INCOME AND OPERATING MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS
ADJUSTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
December 31, |
|
(in millions), (unaudited) |
|
2015 |
|
|
2014 |
|
|
2014 |
|
Operating income, GAAP basis |
|
$ |
1,067 |
|
|
$ |
1,051 |
|
|
$ |
1,144 |
|
Non-GAAP expense adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
PNC LTIP funding obligation |
|
|
8 |
|
|
|
8 |
|
|
|
9 |
|
Compensation expense related to appreciation (depreciation) on deferred compensation plans |
|
|
2 |
|
|
|
3 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, as adjusted |
|
|
1,077 |
|
|
|
1,062 |
|
|
|
1,154 |
|
Closed-end fund launch costs |
|
|
|
|
|
|
|
|
|
|
10 |
|
Closed-end fund launch commissions |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income used for operating margin measurement |
|
$ |
1,077 |
|
|
$ |
1,062 |
|
|
$ |
1,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, GAAP basis |
|
$ |
2,723 |
|
|
$ |
2,670 |
|
|
$ |
2,784 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Distribution and servicing costs |
|
|
(99 |
) |
|
|
(89 |
) |
|
|
(96 |
) |
Amortization of deferred sales commissions |
|
|
(13 |
) |
|
|
(15 |
) |
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue used for operating margin measurement |
|
$ |
2,611 |
|
|
$ |
2,566 |
|
|
$ |
2,675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, GAAP basis |
|
|
39.2 |
% |
|
|
39.4 |
% |
|
|
41.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as adjusted |
|
|
41.2 |
% |
|
|
41.4 |
% |
|
|
43.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
See note (1) to the Condensed Consolidated Statements of Income and Supplemental Information on page 12 for more
information on as adjusted items and the reconciliation to GAAP.
RECONCILIATION OF U.S. GAAP NONOPERATING INCOME NET OF NCI TO NONOPERATING INCOME NET
OF NCI, AS ADJUSTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
December 31, |
|
(in millions), (unaudited) |
|
2015 |
|
|
2014 |
|
|
2014 |
|
Nonoperating income (expense), GAAP basis |
|
$ |
51 |
|
|
$ |
17 |
|
|
($ |
60 |
) |
Less: Net income (loss) attributable to NCI |
|
|
38 |
|
|
|
(12 |
) |
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), net of NCI |
|
|
13 |
|
|
|
29 |
|
|
|
(53 |
) |
Compensation expense related to (appreciation) depreciation on deferred compensation plans |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted |
|
$ |
11 |
|
|
$ |
26 |
|
|
($ |
54 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
See note (2) to the Condensed Consolidated Statements of Income and Supplemental Information on page 12 for more
information on as adjusted items and the reconciliation to GAAP.
RECONCILIATION OF U.S. GAAP NET INCOME ATTRIBUTABLE TO BLACKROCK TO NET INCOME
ATTRIBUTABLE TO BLACKROCK, AS ADJUSTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
December 31, |
|
(in millions, except per share data), (unaudited) |
|
2015 |
|
|
2014 |
|
|
2014 |
|
Net income attributable to BlackRock, Inc., GAAP basis |
|
$ |
822 |
|
|
$ |
756 |
|
|
$ |
813 |
|
Non-GAAP adjustments, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
PNC LTIP funding obligation |
|
|
5 |
|
|
|
6 |
|
|
|
8 |
|
Income tax matters |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc., as adjusted |
|
$ |
830 |
|
|
$ |
762 |
|
|
$ |
821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common shares outstanding(4) |
|
|
169.7 |
|
|
|
171.9 |
|
|
|
170.4 |
|
Diluted earnings per common share, GAAP basis(4) |
|
$ |
4.84 |
|
|
$ |
4.40 |
|
|
$ |
4.77 |
|
Diluted earnings per common share, as adjusted(4) |
|
$ |
4.89 |
|
|
$ |
4.43 |
|
|
$ |
4.82 |
|
See notes (3) and (4) to the Condensed Consolidated Statements of Income and Supplemental Information on page 12 for
more information on as adjusted items and the reconciliation to GAAP.
-11-
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 Companys ongoing operating results may be enhanced if investors have additional non-GAAP 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 BlackRocks financial performance over time. Management also uses non-GAAP financial measures as a benchmark to compare its performance with other
companies and to enhance the comparability of this information for the reporting periods presented. Non-GAAP measures may pose limitations because they do not include all of BlackRocks revenue and expense. BlackRocks 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.
Management uses both GAAP and non-GAAP financial measures in evaluating BlackRocks financial performance. Adjustments to GAAP financial measures
(non-GAAP adjustments) include certain items management deems nonrecurring or occur infrequently, transactions that ultimately will not impact BlackRocks book value or certain tax items that do not impact cash flow.
Computations for all periods are derived from the condensed consolidated statements of income as follows:
(1) Operating income, as adjusted, and operating margin, as adjusted:
Management believes operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRocks financial performance over
time and, therefore, provide useful disclosure to investors.
|
|
|
Operating income, as adjusted, includes non-GAAP expense adjustments. 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 The PNC Financial Services Group, Inc. (PNC) has been excluded because it ultimately does not impact BlackRocks 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 nonoperating income (expense).
|
|
|
|
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 related commissions. Management believes the
exclusion of such costs and related commissions is useful because these costs can fluctuate considerably and revenue associated with the expenditure of these costs will not fully impact BlackRocks results until future periods.
|
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 the Company earns. 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 revenue.
(2) Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted:
Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, equals nonoperating income (expense), GAAP basis, less net income
(loss) attributable to NCI, adjusted for compensation expense associated with (appreciation) depreciation on investments related to certain BlackRock deferred compensation plans. The compensation expense offset is recorded in operating income.
This compensation expense has been included in nonoperating 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 nonoperating income (expense),
GAAP basis.
(3) Net income attributable to BlackRock, Inc., as adjusted:
See aforementioned discussion regarding operating income, as adjusted, and operating margin, as adjusted, for information on the PNC LTIP funding obligation.
For each period presented, the non-GAAP adjustment related to the PNC LTIP funding obligation was tax effected at the respective blended rates applicable
to the adjustments.
(4) Nonvoting participating preferred stock is considered to be a common stock equivalent for purposes of determining basic
and diluted earnings per share calculations.
-12-
Forward-looking Statements
This earnings 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 BlackRocks 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 BlackRocks Securities and Exchange Commission (SEC) reports and those identified elsewhere in this earnings 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 BlackRocks 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 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 BlackRocks 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) BlackRocks 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.
BlackRocks Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and BlackRocks subsequent filings with the SEC, accessible on the SECs
website at www.sec.gov and on BlackRocks 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 Companys website is not a part of this earnings release.
Performance Notes
Past performance is not indicative of future results. Except as specified, the performance information shown is as of March 31, 2015 and is based on
preliminary data available at that time. The performance data shown reflects information for all actively and passively managed equity and fixed income accounts, including U.S. registered investment companies, European-domiciled retail funds and
separate accounts for which performance data is available, including performance data for high net worth accounts available as of February 28, 2015. The performance data does not include accounts terminated prior to March 31, 2015 and
accounts for which data has not yet been verified. If such accounts had been included, the performance data provided may have substantially differed from that shown.
Performance comparisons shown are gross-of-fees for U.S. retail, institutional and high net worth separate accounts as well as EMEA institutional separate
accounts, and net-of-fee for European domiciled retail funds. The performance tracking shown for institutional index accounts is based on gross-of-fee performance and includes all institutional accounts and all iShares funds globally using an
index strategy. AUM information is based on AUM available as of March 31, 2015 for each account or fund in the asset class shown without adjustment for overlapping management of the same account or fund. Fund performance reflects the
reinvestment of dividends and distributions.
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.
-13-
|
Q1
2015 Earnings Earnings Release Supplement:
Results
presented
on
an
as
adjusted
basis,
unless
otherwise
noted
April 16, 2015
Exhibit 99.2 |
|
A broadly
diversified business across clients, products and geographies Q1 2015
Long-term Base Fees of $2.317 billion Long-term Assets Under
Management of $4.464 trillion at March 31, 2015 Product Type
Client Type
Style
Region
Alternatives 3%
Alternatives 7%
Multi-asset
9%
Multi-asset
13%
Fixed Income
32%
Fixed Income
25%
Equity
56%
Equity
55%
iShares
24%
iShares
36%
Retail
12%
Retail
34%
Institutional
64%
Institutional
30%
AUM
Base Fees
AUM
Base Fees
Index
42%
Index
10%
iShares
24%
iShares
36%
Asia-Pacific 9%
Asia-Pacific 8%
EMEA
29%
EMEA
28%
Americas
62%
Americas
64%
Active
34%
Active
54%
AUM
Base Fees
AUM
Base Fees
Note: Revenue and AUM by region data is based on client domicile.
1 |
|
Long-term net flows ($ in billions)
Total Long-Term
Retail
iShares
Institutional
5%
6%
7%
10%
10%
10%
14%
13%
11%
8%
6%
(3%)
(2%)
1%
1%
1%
1%
2%
4%
3%
3%
4%
13%
0%
LTM organic asset growth rate (%)
4%
11%
9%
0%
5%
11%
11%
1%
2
5%
11%
14%
2%
Note: LTM organic asset growth rate measures rolling last twelve months net new flows over beginning
period assets. $39
$12
$25
$41
$27
$38
$29
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
$9
$5
$8
$17
$14
$13
$5
$23
$14
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
$26
($1)
$20
$19
$8
$30
$18
$44
$35
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
$5
$8
($3)
$5
$5
($6)
$6
$21
$21
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
$88
$70 |
|
Profitability ($ in millions, except per share data)
Net Income and EPS, as adjusted
Operating Income and Margin, as adjusted
For further information and reconciliation between GAAP and as adjusted, see page 9
of this earnings release supplement, notes (1) through (4) in the current earnings release as well as previously filed Form 10-Ks,
10-Qs and 8-Ks.
Operating Income
Operating Margin
Operating income, as adjusted
up 1% year-over-year
Operating margin, as adjusted
down 20 bps year-over-year
Net income, as adjusted
up 9% year-over-year
EPS, as adjusted
up 10% year-over-year
Net Income
EPS
3
$921
$982
$978
$1,143
$1,062
$1,133
$1,214
$1,154
$1,077
40.0%
41.3%
41.2%
42.7%
41.4%
42.4%
44.2%
43.6%
41.2%
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
$637
$722
$672
$851
$762
$837
$890
$821
$830
$3.65
$4.15
$3.88
$4.92
$4.43
$4.89
$5.21
$4.82
$4.89
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015 |
|
Capital management (amounts in millions, except per share data)
Amounts above exclude repurchases of employee tax withholdings related to employee
stock transactions. GAAP Dividend Payout Ratio = Dividends declared / GAAP
net income. Total GAAP Payout Ratio = (Dividends declared + share
repurchases) / GAAP net income. Share repurchases and weighted average diluted
shares Dividends and Payout Ratios
4
$275
$250
$250
$250
$250
$250
$250
$250
$250
169.7
170.4
170.8
171.2
171.9
173.0
173.4
173.9
174.6
Q1
2015
Q4
2014
Q3
2014
Q2
2014
Q1
2014
Q4
2013
Q3
2013
Q2
2013
Q1
2013
Share Repurchases
Weighted average diluted shares
$1.68
$1.68
$1.68
$1.68
$1.93
$1.93
$1.93
$1.93
$2.18
49%
39%
39%
34%
48%
40%
35%
40%
47%
88%
74%
74%
64%
81%
71%
63%
70%
81%
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Dividends
GAAP Dividend Payout Ratio
Total GAAP Payout Ratio |
|
Major
market indices and exchange rates Spot
% Change
3/31/2015 vs.
Average
% Change
Q1 2015 vs.
3/31/2014
12/31/2014
3/31/2015
12/31/2014
3/31/2014
Q1 2014
Q4 2014
Q1 2015
Q4 2014
Q1 2014
Equity Indices:
Domestic
S&P 500
1,872
2,059
2,068
-%
10%
1,835
2,011
2,063
3%
12%
Global
MSCI Barra World Index
1,674
1,710
1,741
2%
4%
1,647
1,695
1,726
2%
5%
MSCI Europe Index
114
117
135
15%
18%
113
114
128
12%
13%
MSCI AC Asia Pacific Index
138
138
146
6%
6%
137
139
142
2%
4%
MSCI Emerging Markets Index
995
956
975
2%
(2%)
957
982
969
(1%)
1%
S&P Global Natural Resources
3,499
3,147
3,061
(3%)
(13%)
3,429
3,249
3,140
(3%)
(8%)
Fixed Income Index:
Barclays U.S. Aggregate Bond Index
1,840
1,915
1,946
2%
6%
1,831
1,905
1,936
2%
6%
Foreign Exchange Rates:
GBP to USD
1.67
1.56
1.48
(5%)
(11%)
1.66
1.58
1.51
(4%)
(9%)
EUR to USD
1.38
1.21
1.07
(12%)
(22%)
1.37
1.25
1.13
(10%)
(18%)
Source: Bloomberg
5 |
|
Quarterly revenue
Q1 2015 Compared to Q1 2014
$53 million
Total Revenue
Q1 2015 Compared to Q4 2014
($61) million
6
Q1 2015
$2,723 million
Base Fees ex. Securities Lending
Securities Lending
Performance Fees
Aladdin
Other BRS
Distribution Fees
Other Revenue
83%
4%
4%
5%
1%
1%
2%
$2,670
$2,723
$90
$14
$13
$9
($2)
($21)
($50)
Q1 2014
Base Fees ex
Sec Lending
Aladdin
Other
Revenue
Securities
Lending
Distribution
fees
Other BRS
Performance
Fees
Q1 2015
$2,784
$2,723
$3
$1
($1)
($3)
($3)
($22)
($36)
Q4 2014
Other
Revenue
Distribution
fees
Aladdin
Base Fees ex
Sec Lending
Securities
Lending
Other BRS
Performance
Fees
Q1 2015
Percentage Change
Year-over-Year
Sequential
Base Fees ex. SL
4%
-%
Securities Lending
9
(3)
Performance Fees
(32)
(25)
Aladdin
13
(1)
Other BRS
(50)
(51)
Distribution Fees
(11)
6
Other Revenue
27
5
Total
2
(2) |
|
Quarterly investment advisory, administration fees and securities lending
revenue Q1 2015: $2,390 million
Q1 2015 Compared to Q1 2014
Investment advisory, administration fees and securities lending revenue
$99 million
Q1 2015 Compared to Q4 2014
($6) million
Q1 2014: $2,291 million
Q4 2014: $2,396 million
7
$2,291
$2,390
$50
$49
$18
$17
$10
$5
($1)
($8)
($41)
Q1 2014
iShares
EQ
Active FI
Multi-
Asset
iShares
FI
Non-ETF Non-ETF
Index FI
Index EQ
Cash
Alts
Active
EQ
Q1 2015
$2,396
$2,390
$6
$4
$3
$1
($2)
($5)
($6)
($7)
Q4 2014
Active FI
iShares FI
Non-ETF FI
Multi-Asset
iShares
EQ
Non-ETF
EQ
Active EQ
Alts
Q1 2015
20%
28%
14%
5%
12%
8%
7%
3%
3%
Active Equity
iShares Equity
Active Fixed Income
iShares Fixed Income
Multi-Assets
Alternatives
Non-ETF Index Equity
Non-ETF Index Fixed Income
Cash
17%
29%
16%
5%
13%
7%
7%
3%
3%
17%
29%
15%
5%
13%
8%
7%
3%
3% |
|
Quarterly
expense Expense, as adjusted, by category
Q1 2015 Compared to Q1 2014, as adjusted
For further information and reconciliation between GAAP and as adjusted, see page 9
of this earnings release supplement and notes (1) through (4) in the current earnings release.
$38 million
Q1 2015 Compared to Q4 2014, as adjusted
$16 million
Percentage Change
Year-over-Year
Sequential
Employee Comp. & Benefits
-%
6%
Distribution & Servicing Costs
11
3
Amort. of Deferred Sales Commissions
(13)
-
Direct Fund Expense
6
3
General & Administrative
8
(12)
Amortization of Intangibles
(15)
-
Total
2
1
8
Q1 2015
$1,646 million
$1,608
$1,646
$10
$10
$26
($6)
($2)
Q1 2014
Amort -Intang
assets
Amort -Def
Sales
Commission
Direct Fund
Distribution &
Servicing
G&A
Q1 2015
$1,630
$1,646
$3
$6
$55
($48)
Q4 2014
G&A
Distribution &
Servicing
Direct Fund
Expense
Comp &
Benefits
Q1 2015
59%
6%
1%
11%
21%
2%
Employee Comp. & Benefits
Distribution & Servicing Costs
Amort. of Deferred Sales
Commissions
Direct Fund Expense
General & Administration
Amortization of Intangibles |
|
2013
2014
2015
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Operating Income
GAAP
$909
$849
$966
$1,133
$1,051
$1,122
$1,157
$1,144
$1,067
Non-GAAP adjustments
12
133
12
10
11
11
57
10
10
As Adjusted
$921
$982
$978
$1,143
$1,062
$1,133
$1,214
$1,154
$1,077
Nonoperating Income (Expense)
GAAP
$41
$69
($18)
$24
$17
$16
($52)
($60)
$51
Non-GAAP adjustments
(38)
(57)
(3)
(11)
9
(36)
44
6
(40)
As Adjusted
$3
$12
($21)
$13
$26
($20)
($8)
($54)
$11
Net Income
GAAP
$632
$729
$730
$841
$756
$808
$917
$813
$822
Non-GAAP adjustments
5
(7)
(58)
10
6
29
(27)
8
8
As Adjusted
$637
$722
$672
$851
$762
$837
$890
$821
$830
Reconciliation between GAAP and as adjusted ($ in millions)
Non-GAAP
adjustments
include
amounts
related
to
the
reduction
of
an
indemnification
asset,
the
PennyMac
Charitable
Contribution,
PNC
LTIP
funding
obligation,
compensation
related
to
appreciation
(depreciation) on certain deferred compensation plans and noncash income tax
matters, as applicable. For further information and reconciliation between
GAAP and as adjusted, see notes (1) through (4) in the current earnings release as well as previously filed Form 10-Ks, 10-Qs and 8-Ks.
9 |
|
Important Notes
This presentation, and other statements that BlackRock, Inc.
(BlackRock) may make, may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act, with respect to BlackRocks 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 BlackRocks Securities and
Exchange Commission reports and those identified elsewhere in this
presentation, 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
BlackRocks
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.; (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 BlackRocks 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
BlackRock;
(14)
BlackRocks
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.
This presentation also includes non-GAAP financial measures. You can find
our presentations on the most directly comparable GAAP financial measures
calculated in accordance with GAAP and our reconciliations on page 9 of this
earnings release supplement, our current earnings release dated April 16,
2015,
and
BlackRocks
other
periodic
reports,
which
are
available
on
BlackRocks
web
site
at
www.blackrock.com.
10 |
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