Fourth Quarter 2016 Diluted EPS of $5.13, or
$5.14 as adjusted
- Record $202 billion of full year total
net inflows reflects strength of diversified business model
- $98 billion of fourth quarter total net
inflows, including $18 billion in cash management, led by momentum
in iShares® and Institutional businesses
- Demand for BlackRock technology
solutions drove 13% full year revenue growth in Aladdin®
- Expansion in operating margin from
prior year reflects continued expense discipline
- Returned $2.7 billion to shareholders
in 2016
- Board of Directors approves 9% increase
in quarterly cash dividend to $2.50 per share and authorizes
repurchase of an additional 6 million shares under existing share
repurchase program
BlackRock, Inc. (NYSE:BLK)
FINANCIAL RESULTS
(in millions, except per share data)
Q4
2016
Q4
2015
Change Q3
2016
Change Full Year
2016 2015
Change AUM $ 5,147,852 $ 4,645,412 11 % $ 5,117,421 1
% $ 5,147,852 $ 4,645,412 11 %
Total net flows $
98,050 $ 67,885 $ 69,809 $ 202,191 $ 149,895
GAAP
basis:
Revenue $ 2,890 $ 2,863 1 % $ 2,837 2 % $ 11,155 $ 11,401 (2 )%
Operating income $ 1,225 $ 1,137 8 % $ 1,209 1 % $ 4,570 $ 4,664 (2
)% Operating margin 42.4 % 39.7 % 270 bps 42.6 % (20) bps 41.0 %
40.9 % 10 bps Net income(1) $ 851 $ 861 (1 )% $ 875 (3 )% $ 3,172 $
3,345 (5 )% Diluted EPS $ 5.13 $ 5.11 - % $ 5.26 (2 )% $ 19.04 $
19.79 (4 )% Weighted average diluted shares 165.9 168.6 (2 )% 166.3
- % 166.6 169.0 (1 )%
As
adjusted:
Operating income(2) $ 1,232 $ 1,143 8 % $ 1,216 1 % $ 4,674 $ 4,695
- % Operating margin(2) 44.4 % 41.6 % 280 bps 44.8 % (40) bps 43.7
% 42.9 % 80 bps Net income(1) (2) $ 852 $ 801 6 % $ 854 - % $ 3,214
$ 3,313 (3 )% Diluted EPS(2) $ 5.14 $ 4.75
8 % $ 5.14
-
% $ 19.29 $ 19.60 (2 )% (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 for
more information on as adjusted items and the reconciliation to
GAAP.
BlackRock, Inc. (NYSE:BLK) today reported financial results for
the three months and year ended December 31, 2016.
“In a year of dramatic change and uncertainty around the world,
clients continued to put their trust in BlackRock, allowing us to
deliver the strongest annual net inflows in our firm’s history,”
commented Laurence D. Fink, Chairman and CEO of BlackRock. “2016
total net inflows of $202 billion were positive across product
types and included $181 billion of long-term net inflows. Our full
year results reflect our continued commitment to optimize the
growth of our diverse investment, technology and risk management
capabilities in the most efficient way possible.
“While domestic equities rallied following the US election, the
combination of a strengthening dollar, underperforming
international equities and negative fixed income markets produced
challenging outcomes for global investors. Investors are rethinking
their approach to active management, asset allocation and portfolio
construction, and we’re seeing more clients use active and index
strategies together to deliver returns. We have purposefully
invested in our platform to provide clients with a full spectrum of
offerings including cash, market cap-weighted indexes, smart beta
and factor-based investment strategies, and high-conviction active
products, whether fundamental, quantitative or illiquid.
“Increasingly diversified groups of institutional and retail
clients are using ETFs in their portfolios. This broadening of the
ETF ecosystem is creating a deeper secondary market for ETF trading
– enhancing liquidity for all investors. iShares generated a record
$140 billion of net inflows for the year, including $60 billion
into iShares fixed income ETFs, capturing the #1 share of flows
globally, in the US and in Europe, and in equity and fixed
income.
“Institutions looked to BlackRock to help them close funding
gaps and meet future liability objectives, and we saw record
institutional net inflows of $51 billion, driven by fixed income
and multi-asset solutions.
“Technology is increasingly important in the evolving regulatory
and investment landscape, and clients increasingly value
BlackRock’s technology solutions to help them understand and manage
risk, and build portfolios. Aladdin revenue increased 13% in 2016,
and is well positioned for continued momentum with a broader set of
clients than ever before. Additionally, we launched Aladdin Risk
for Wealth Management and continued to deepen our relationships
with our distribution partners through FutureAdvisor’s digital
advice capabilities.
“BlackRock has always focused on repositioning its investment
platform and technology capabilities in anticipation of change, and
BlackRock employees embrace their responsibility to help clients
navigate this evolving, complex landscape. As we head into 2017, we
remain committed to investing for the future and developing our
talent in order to fulfill our responsibility to both clients and
shareholders.”
CAPITAL MANAGEMENT
The BlackRock Board of Directors approved a 9% increase in the
quarterly cash dividend to $2.50 per share, payable March 23, 2017,
to shareholders of record at the close of business on March 6,
2017. In addition, the Board authorized the repurchase of an
additional 6 million shares under the Company’s existing share
repurchase program for a total up to 9 million shares of BlackRock
common stock.
RESULTS BY CLIENT TYPE
December 31, 2016
Q4 2016
Q4 2016
December 31, 2016
Q4 2016
AUM
Base fees(1)
(in millions), (unaudited)
Net flows
AUM
Base fees(1)
% of Total
% of Total
Retail $ (2,444 )
$
541,952
$ 789 10 % 31 % iShares 49,300 1,287,879 885 25 % 36 %
Institutional: Active 6,306 1,009,974 453 20 % 18 % Index
34,601 1,901,681 241 37 %
10 % Total institutional 40,907
2,911,655 694 57 %
28
%
Long-term 87,763 4,741,486 2,368
92 % 95 % Cash management 17,671
403,584 118 8 % 5 % Advisory (7,384 ) 2,782
- - -
Total
$ 98,050 $ 5,147,852
$ 2,486 100 %
100 %
RESULTS BY PRODUCT TYPE
December 31, 2016
Q4 2016
Q4 2016
December 31, 2016
Q4 2016
AUM
Base fees(1)
(in millions), (unaudited)
Net flows
AUM
Base fees(1)
% of Total
% of Total
Equity $ 57,965 $ 2,657,176 $ 1,237 52 % 50 % Fixed income 25,306
1,572,365 685 30 % 27 % Multi-asset 4,856 395,007 278 8 % 11 %
Alternatives (364 ) 116,938 168
2 % 7 %
Long-term 87,763
4,741,486 2,368 92 % 95 %
Cash management 17,671 403,584 118 8 % 5 % Advisory (7,384 )
2,782 - - -
Total $ 98,050 $
5,147,852 $ 2,486 100
% 100 %
RESULTS BY INVESTMENT STYLE
December 31, 2016
Q4 2016
Q4 2016
December 31, 2016
Q4 2016
AUM
Base fees(1)
(in millions), (unaudited)
Net flows
AUM
Base fees(1)
% of Total
% of Total
Active $ (546 ) $ 1,501,052 $ 1,232 29 % 49 % Index and iShares
88,309 3,240,434 1,136
63 % 46 %
Long-term 87,763
4,741,486 2,368 92 % 95 %
Cash management 17,671 403,584 118 8 % 5 % Advisory (7,384 )
2,782 - - -
Total $ 98,050 $
5,147,852 $ 2,486 100
% 100 %
(1) Base fees include investment advisory,
administration fees and securities lending revenue.
BUSINESS HIGHLIGHTS
Long-term net inflows were positive across all major regions,
with net inflows of $46.0 billion, $38.2 billion and $3.6 billion
from clients in the Americas, EMEA and Asia-Pacific, respectively.
At December 31, 2016, BlackRock managed 63% of its long-term AUM
for investors in the Americas and 37% for clients in EMEA and
Asia-Pacific.
A discussion of the Company’s net flows by client type for the
fourth quarter of 2016 is presented below.
- Retail long-term net outflows of
$2.4 billion reflected net outflows of $1.6 billion from the United
States and $0.8 billion internationally. Equity net inflows of $1.7
billion were paced by flows into US equities and index mutual
funds, and included the seasonal impact of capital gains. Fixed
income net outflows of $1.8 billion reflected outflows from
unconstrained and high yield categories. Multi-asset net outflows
of $1.7 billion were largely due to outflows from world allocation
strategies.
- iShares long-term net inflows of
$49.3 billion were led by equity net inflows of $50.7 billion, with
strength in precision exposures and iShares Core ETFs. Fixed income
net outflows of $0.3 billion reflected outflows from investment
grade corporate and treasury bond funds.
Commodities iShares saw $1.7 billion of net
outflows.
- Institutional active long-term
net inflows of $6.3 billion were led by multi-asset net inflows of
$5.7 billion, driven by ongoing demand for solutions offerings and
the LifePath® target-date series. Alternatives net inflows of $2.2
billion reflected inflows into multi-strategy hedge fund and
alternatives solutions offerings. Equity net outflows of $2.8
billion were primarily due to outflows from Scientific Active
equities and international equities.
- Institutional index long-term
net inflows of $34.6 billion were driven by fixed income net
inflows of $26.2 billion, reflecting demand for liability-driven
investment solutions. Equity saw net inflows of $8.4 billion.
Cash management AUM increased 4% to $403.6 billion,
driven by $17.7 billion of net inflows, primarily into government
funds.
INVESTMENT PERFORMANCE AT DECEMBER 31,
2016(1)
One-year period Three-year period
Five-year period Fixed Income:
Actively managed AUM above benchmark or
peer median
Taxable
60%
78%
88%
Tax-exempt
64%
63%
73%
Index AUM within or above applicable tolerance
90%
99%
99%
Equity:
Actively managed AUM above benchmark or
peer median
Fundamental
48%
62%
65%
Scientific
43%
80%
91%
Index AUM within or above applicable tolerance
95%
97%
97%
(1)
Past performance is not indicative of
future results. The performance information shown is based on
preliminary available data. Please refer to 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 Friday, January
13, 2017 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 39041891). 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 Friday, January 13, 2017 and ending
at midnight on Friday, January 27, 2017. 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
39041891. To access the webcast, please visit the investor
relations section of www.blackrock.com.
About BlackRock
BlackRock is a global leader in investment management, risk
management and advisory services for institutional and retail
clients. At December 31, 2016, BlackRock’s AUM was $5.1 trillion.
BlackRock helps clients around the world 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®. As of
December 31, 2016, the firm had approximately 13,000 employees in
more than 30 countries and a major presence in 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 | Twitter:
@blackrock_news | Blog: www.blackrockblog.com | LinkedIn:
www.linkedin.com/company/blackrock
CONSOLIDATED STATEMENTS OF INCOME AND
SUPPLEMENTAL INFORMATION
(in millions, except shares and per share
data), (unaudited)
Three Months
Three Months Ended Ended December 31,
September 30,
2016 2015 Change 2016 Change
Revenue Investment advisory, administration fees and
securities lending revenue $2,486 $2,460 $26 $2,546 $(60 )
Investment advisory performance fees 129 169 (40 ) 58 71 BlackRock
Solutions and advisory 197 171 26 174 23 Distribution fees 9 11 (2
) 10 (1 ) Other revenue 69 52 17 49 20
Total revenue 2,890 2,863 27
2,837 53
Expense Employee compensation
and benefits 987 989 (2 ) 969 18 Distribution and servicing costs
109 103 6 114 (5 ) Amortization of deferred sales commissions 7 11
(4 ) 8 (1 ) Direct fund expense 183 189 (6 ) 200 (17 ) General and
administration 355 410 (55 ) 312 43 Amortization of intangible
assets 24 24 - 25 (1 ) Total
expense 1,665 1,726 (61 ) 1,628 37
Operating income 1,225 1,137 88 1,209 16
Nonoperating income (expense) Net gain (loss) on investments
6 57 (51 ) 31 (25 ) Interest and dividend income 7 5 2 22 (15 )
Interest expense (51 ) (51 ) - (52 ) 1 Total
nonoperating income (expense) (38 ) 11 (49 ) 1 (39 )
Income before income taxes 1,187 1,148 39 1,210 (23 ) Income
tax expense 336 279 57 333 3
Net income 851 869 (18 ) 877 (26 ) Less: Net income
(loss) attributable to noncontrolling interests - 8
(8 ) 2 (2 )
Net income attributable to BlackRock,
Inc. $851 $861 $(10 ) $875 $(24 )
Weighted-average common shares outstanding Basic 163,441,552
165,826,808 (2,385,256 ) 164,129,214 (687,662 ) Diluted 165,854,167
168,632,558 (2,778,391 ) 166,256,598 (402,431 )
Earnings per
share attributable to BlackRock, Inc. common stockholders (4)
Basic $5.21 $5.19 $0.02 $5.33 $(0.12 ) Diluted $5.13 $5.11 $0.02
$5.26 $(0.13 )
Cash dividends declared and paid per share
$2.29 $2.18 $0.11 $2.29 $-
Supplemental
information:
AUM (end of period) $5,147,852 $4,645,412 $502,440
$5,117,421 $30,431 Shares outstanding (end of period) 163,121,291
165,596,139 (2,474,848 ) 163,858,070 (736,779 )
GAAP:
Operating margin 42.4 % 39.7 %
270
bps
42.6 %
(20
) bps
Effective tax rate 28.3 % 24.5 %
380
bps
27.6 %
70
bps
As adjusted: Operating income (1) $1,232 $1,143 $89 $1,216
$16 Operating margin (1) 44.4 % 41.6 %
280
bps
44.8 %
(40
) bps
Nonoperating income (expense), less net income (loss) attributable
to noncontrolling interests (2) $(38 ) $1 $(39 ) $(1 ) $(37 ) Net
income attributable to BlackRock, Inc. (3) $852 $801 $51 $854 $(2 )
Diluted earnings attributable to BlackRock, Inc. common
stockholders per share (3) (4) $5.14 $4.75 $0.39 $5.14 $- Effective
tax rate 28.6 % 30.0 %
(140
) bps
29.7 %
(110
) bps
See the reconciliation to GAAP and notes
(1) through (4) for more information on as adjusted
items.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME AND SUPPLEMENTAL INFORMATION
(in millions, except shares and per share
data), (unaudited)
Year Ended December 31,
2016 2015 Change Revenue
Investment advisory, administration fees and securities lending
revenue $9,880 $9,840 $40 Investment advisory performance fees 295
621 (326 ) BlackRock Solutions and advisory 714 646 68 Distribution
fees 41 55 (14 ) Other revenue 225 239 (14 )
Total revenue 11,155 11,401 (246 )
Expense Employee compensation and benefits 3,880 4,005 (125
) Distribution and servicing costs 429 409 20 Amortization of
deferred sales commissions 34 48 (14 ) Direct fund expense 766 767
(1 ) General and administration 1,301 1,380 (79 ) Restructuring
charge 76 - 76 Amortization of intangible assets 99 128
(29 ) Total expense 6,585 6,737 (152 )
Operating income 4,570 4,664 (94 )
Nonoperating
income (expense) Net gain (loss) on investments 55 116 (61 )
Interest and dividend income 40 26 14 Interest expense (205 ) (204
) (1 ) Total nonoperating income (expense) (110 ) (62 ) (48
) Income before income taxes 4,460 4,602 (142 ) Income tax
expense 1,290 1,250 40
Net
income 3,170 3,352 (182 ) Less: Net income (loss) attributable
to noncontrolling interests (2 ) 7 (9 )
Net income
attributable to BlackRock, Inc. $3,172 $3,345
$(173 )
Weighted-average common shares outstanding
Basic 164,425,858 166,390,009 (1,964,151 ) Diluted 166,579,752
169,038,571 (2,458,819 )
Earnings per share attributable to
BlackRock, Inc. common stockholders (4) Basic $19.29 $20.10
$(0.81 ) Diluted $19.04 $19.79 $(0.75 )
Cash dividends declared
and paid per share $9.16 $8.72 $0.44
Supplemental
information:
AUM (end of period) $5,147,852 $4,645,412 $502,440 Shares
outstanding (end of period) 163,121,291 165,596,139 (2,474,848 )
GAAP: Operating margin 41.0 % 40.9 % 10 bps Effective tax
rate 28.9 % 27.2 % 170 bps
As adjusted: Operating income (1)
$4,674 $4,695 $(21 ) Operating margin (1) 43.7 % 42.9 % 80 bps
Nonoperating income (expense), less net income (loss) attributable
to noncontrolling interests (2) $(108 ) $(70 ) $(38 ) Net income
attributable to BlackRock, Inc. (3) $3,214 $3,313 $(99 ) Diluted
earnings attributable to BlackRock, Inc. common stockholders per
share(3) (4) $19.29 $19.60 $(0.31 ) Effective tax rate 29.6 % 28.4
% 120 bps
See the reconciliation to GAAP and notes
(1) through (4) for more information on as adjusted
items.
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
Current Quarter Component Changes by Client Type and Product
Net September
30, inflows December 31, 2016
(outflows) Market change FX impact (1)
2016 Average AUM (2) Retail: Equity
$196,131 $1,742 $1,525 $(3,177 ) $196,221 $193,865 Fixed income
230,842 (1,832 ) (4,798 ) (1,956 ) 222,256 226,160 Multi-asset
111,369 (1,699 ) (1,115 ) (558 ) 107,997 108,785 Alternatives
16,436 (655 ) (33 ) (270 ) 15,478 15,977 Retail subtotal 554,778
(2,444 ) (4,421 ) (5,961 ) 541,952 544,787 iShares: Equity 891,010
50,650 15,721 (6,129 ) 951,252 909,727 Fixed income 329,462 (326 )
(10,344 ) (4,085 ) 314,707 320,334 Multi-asset 2,506 695 (49 ) (3 )
3,149 2,730 Alternatives 23,188 (1,719 ) (2,586 ) (112 ) 18,771
20,869 iShares subtotal 1,246,166 49,300 2,742 (10,329 ) 1,287,879
1,253,660 Institutional: Active: Equity 123,770 (2,804 ) 2,652
(2,919 ) 120,699 120,590 Fixed income 560,799 1,267 (14,537 )
(10,802 ) 536,727 546,842 Multi-asset 280,406 5,657 (2,403 ) (6,727
) 276,933 275,203 Alternatives 74,678 2,186 71 (1,320
) 75,615 75,069 Active subtotal 1,039,653 6,306 (14,217 ) (21,768 )
1,009,974 1,017,704 Index: Equity 1,355,128 8,377 52,752 (27,253 )
1,389,004 1,360,085 Fixed income 507,165 26,197 (15,902 ) (18,785 )
498,675 492,827 Multi-asset 7,980 203 (727 ) (528 ) 6,928 7,645
Alternatives 7,228 (176 ) 214 (192 ) 7,074 7,102 Index
subtotal 1,877,501 34,601 36,337 (46,758 ) 1,901,681
1,867,659 Institutional subtotal 2,917,154 40,907 22,120
(68,526 ) 2,911,655 2,885,363
Long-term
4,718,098 87,763 20,441 (84,816
) 4,741,486 4,683,810 Cash management 388,982
17,671 225 (3,294 ) 403,584 397,661 Advisory (3) 10,341 (7,384 ) 51
(226 ) 2,782 8,018
Total $5,117,421
$98,050 $20,717 $(88,336
) $5,147,852 $5,089,489
Current Quarter Component Changes by Product Type
(Long-term) Net September 30, inflows
December 31, 2016 (outflows) Market
change FX impact (1) 2016 Average
AUM (2) Equity: Active $281,726 $(4,549 ) $3,063
$(5,207 ) $275,033 $275,078 iShares 891,010 50,650 15,721 (6,129 )
951,252 909,727 Non-ETF index 1,393,303 11,864 53,866
(28,142 ) 1,430,891 1,399,462 Equity subtotal 2,566,039 57,965
72,650 (39,478 ) 2,657,176 2,584,267 Fixed income: Active 782,858
(1,485 ) (18,984 ) (12,393 ) 749,996 764,415 iShares 329,462 (326 )
(10,344 ) (4,085 ) 314,707 320,334 Non-ETF index 515,948 27,117
(16,253 ) (19,150 ) 507,662 501,414 Fixed income subtotal
1,628,268 25,306 (45,581 ) (35,628 ) 1,572,365 1,586,163
Multi-asset 402,261 4,856 (4,294 ) (7,816 ) 395,007 394,363
Alternatives: Core 88,731 1,217 19 (1,337 ) 88,630 88,715 Currency
and
commodities (4)
32,799 (1,581 ) (2,353 ) (557 ) 28,308 30,302 Alternatives subtotal
121,530 (364 ) (2,334 ) (1,894 ) 116,938 119,017
Long-term
$4,718,098 $87,763 $20,441
$(84,816 ) $4,741,486 $4,683,810
Current Quarter Component Changes by Investment Style
(Long-term) Net September 30, inflows
December 31, 2016 (outflows) Market
change FX impact (1) 2016 Average
AUM (2) Active $1,547,473 $(546 ) $(19,402 ) $(26,473 )
$1,501,052 $1,514,526 Index and iShares 3,170,625 88,309
39,843 (58,343 ) 3,240,434 3,169,284
Long-term
$4,718,098 $87,763 $20,441
$(84,816 ) $4,741,486 $4,683,810
(1)
Foreign exchange reflects the impact of
translating non-U.S. dollar denominated AUM into U.S. dollars for
reporting purposes.
(2) Average AUM is calculated as the average of the month-end spot
AUM amounts for the trailing four months. (3) Advisory AUM
represents long-term portfolio liquidation assignments. (4)
Amounts include commodity iShares.
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
Year-over-Year Component Changes by Client Type and Product
Net
December 31, inflows December 31, 2015
(outflows) Acquisition (1) Market
change
FX impact(2)
2016 Average AUM (3) Retail: Equity
$193,755 $(7,429 ) $ - $15,456 $(5,561 ) $196,221 $192,311 Fixed
income 212,653 8,407 - 3,130 (1,934 ) 222,256 221,797 Multi-asset
115,307 (9,367 ) - 3,100 (1,043 ) 107,997 111,416 Alternatives
19,410 (2,935 ) - (835 ) (162 ) 15,478 17,424 Retail subtotal
541,125 (11,324 ) - 20,851 (8,700 ) 541,952 542,948 iShares: Equity
823,156 74,914 - 56,469 (3,287 ) 951,252 849,017 Fixed income
254,190 59,913 - 3,782 (3,178 ) 314,707 301,061 Multi-asset 2,730
354 - 61 4 3,149 2,448 Alternatives 12,485 5,298 - 1,055
(67 ) 18,771 18,561 iShares subtotal 1,092,561 140,479 -
61,367 (6,528 ) 1,287,879 1,171,087 Institutional: Active: Equity
121,442 (7,449 ) - 11,112 (4,406 ) 120,699 119,604 Fixed income
514,428 10,234 - 20,242 (8,177 ) 536,727 542,332 Multi-asset
252,041 13,322 - 18,516 (6,946 ) 276,933 265,652 Alternatives
74,941 1,811 - 619 (1,756 ) 75,615 74,919 Active
subtotal 962,852 17,918 - 50,489 (21,285 ) 1,009,974 1,002,507
Index: Equity 1,285,419 (8,612 ) - 135,997 (23,800 ) 1,389,004
1,307,812 Fixed income 441,097 41,401 - 55,665 (39,488 ) 498,675
478,444 Multi-asset 6,258 (82 ) - 843 (91 ) 6,928 7,464
Alternatives 6,003 784 - 790 (503 ) 7,074 6,642 Index
subtotal 1,738,777 33,491 - 193,295 (63,882 )
1,901,681 1,800,362 Institutional subtotal 2,701,629 51,409
- 243,784 (85,167 ) 2,911,655 2,802,869
Long-term
4,335,315 180,564 - 326,002
(100,395 ) 4,741,486 4,516,904 Cash
management 299,884 29,228 80,635 430 (6,593 ) 403,584 358,498
Advisory (4) 10,213 (7,601 ) - (68 ) 238 2,782 9,687
Total $4,645,412 $202,191
$80,635 $326,364 $(106,750 )
$5,147,852 $4,885,089 Year-over-Year
Component Changes by Product Type (Long-term) Net
December 31, inflows December 31, 2015
(outflows) Acquisition Market change
FX impact(2)
2016 Average AUM (3) Equity: Active
$281,319 $(20,230 ) $ - $21,045 $(7,101 ) $275,033 $275,656 iShares
823,156 74,914 - 56,469 (3,287 ) 951,252 849,017 Non-ETF index
1,319,297 (3,260 ) - 141,520 (26,666 ) 1,430,891 1,344,071
Equity subtotal 2,423,772 51,424 - 219,034 (37,054 ) 2,657,176
2,468,744 Fixed income: Active 719,653 16,625 - 22,742 (9,024 )
749,996 756,110 iShares 254,190 59,913 - 3,782 (3,178 ) 314,707
301,061 Non-ETF index 448,525 43,417 - 56,295 (40,575
) 507,662 486,463 Fixed income subtotal 1,422,368 119,955 - 82,819
(52,777 ) 1,572,365 1,543,634 Multi-asset 376,336 4,227 - 22,520
(8,076 ) 395,007 386,980 Alternatives: Core 92,085 (1,165 ) - (291
) (1,999 ) 88,630 90,028 Currency and
commodities (5)
20,754 6,123 - 1,920 (489 ) 28,308 27,518
Alternatives subtotal 112,839 4,958 - 1,629 (2,488 )
116,938 117,546
Long-term $4,335,315 $180,564
$ - $326,002 $(100,395 )
$4,741,486 $4,516,904 Year-over-Year
Component Changes by Investment Style (Long-term) Net
December 31, inflows December 31, 2015
(outflows) Acquisition Market change FX
impact (2) 2016 Average AUM (3)
Active $1,462,672 $(774 ) $ - $65,187 $(26,033 ) $1,501,052
$1,501,176 Index and iShares 2,872,643 181,338 - 260,815
(74,362 ) 3,240,434 3,015,728
Long-term
$4,335,315 $180,564 $ - $326,002
$(100,395 ) $4,741,486
$4,516,904
(1)
Amount represents AUM acquired in the BofA® Global Capital
Management transaction in April 2016. (2) Foreign exchange reflects
the impact of translating 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.
SUMMARY OF REVENUE
Three Months Ended
December 31,
Three Months
Ended
September 30,
Year Ended
December 31,
(in millions), (unaudited)
2016
2015
Change
2016
Change
2016
2015
Change
Investment advisory, administration fees and securities lending
revenue: Equity: Active $390 $413 $(23 ) $409 $(19 ) $1,591 $1,709
$(118 ) iShares 681 666 15 691 (10 ) 2,651 2,751 (100 ) Non-ETF
Index 166 169 (3 ) 170 (4 ) 674 680 (6 ) Equity subtotal 1,237
1,248 (11 ) 1,270 (33 ) 4,916 5,140 (224 ) Fixed income: Active 421
404 17 427 (6 ) 1,658 1,566 92 iShares 184 147 37 188 (4 ) 696 554
142 Non-ETF Index 80 72 8 78 2 297 282 15
Fixed income subtotal 685 623 62 693 (8 ) 2,651 2,402 249
Multi-asset 278 311 (33 ) 285 (7 ) 1,138 1,253 (115 ) Alternatives:
Core 146 172 (26 ) 156 (10 ) 634 653 (19 ) Currency and commodities
22 17 5 24 (2 ) 83 73 10 Alternatives subtotal 168
189 (21 ) 180 (12 ) 717 726 (9 )
Long-term 2,368
2,371 (3 ) 2,428 (60 )
9,422 9,521 (99 ) Cash management 118
89 29 118 - 458 319 139
Total base fees
2,486 2,460 26 2,546 (60
) 9,880 9,840 40 Investment advisory
performance fees: Equity 35 84 (49 ) 14 21 102 205 (103 ) Fixed
income 4 16 (12 ) 2 2 13 26 (13 ) Multi-asset 13 15 (2 ) 1 12 19 34
(15 ) Alternatives 77 54 23 41 36 161 356 (195 )
Total performance fees 129 169 (40
) 58 71 295 621 (326
) BlackRock Solutions and advisory
197 171 26 174 23 714
646 68 Distribution fees 9 11
(2 ) 10 (1 ) 41 55
(14 ) Other revenue 69 52
17 49 20 225 239
(14 ) Total revenue $2,890
$2,863 $27 $2,837 $53
$11,155 $11,401 $(246 )
Highlights
- Investment advisory, administration
fees and securities lending revenue increased $26 million from the
fourth quarter of 2015 reflecting the impact of organic growth and
higher markets on average AUM, and the effect of AUM acquired in
the BofA Global Capital Management transaction, partially offset by
the impact of divergent beta and mix shift, and the impact of
foreign exchange movements. Securities lending revenue of $138
million in the current quarter compared with $137 million in the
fourth quarter of 2015.Investment advisory, administration fees and
securities lending revenue decreased $60 million from the third
quarter of 2016 despite higher average AUM, reflecting the impact
of foreign exchange movements and beta divergence. Securities
lending revenue of $138 million in the current quarter compared
with $142 million in the third quarter of 2016.
- Performance fees decreased $40 million
from the fourth quarter of 2015, primarily reflecting lower fees
from equity products.Performance fees increased $71 million from
the third quarter of 2016, primarily due to seasonally higher fees
from funds with a performance measurement period that ended in the
fourth quarter and improved investment performance.
- BlackRock Solutions® and advisory
revenue increased $26 million from the fourth quarter of 2015.
BlackRock Solutions and advisory revenue included $156 million of
Aladdin revenue in the current quarter compared with $138 million
in the fourth quarter of 2015.BlackRock Solutions and advisory
revenue increased $23 million from the third quarter of 2016,
primarily due to higher Financial Markets Advisory Services
revenue. BlackRock Solutions and advisory revenue included $156
million of Aladdin revenue in the current quarter compared with
$152 million in the third quarter of 2016.
- Other revenue increased $17 million
from the fourth quarter of 2015 and $20 million from the third
quarter of 2016, primarily due to higher earnings from strategic
investments and higher transition management service fees.
SUMMARY OF OPERATING EXPENSE
Three
Months EndedDecember 31,
Three
Months
EndedSeptember 30,
Year
EndedDecember 31,
(in millions), (unaudited)
2016 2015
Change 2016 Change 2016
2015 Change Operating expense Employee
compensation and benefits $987 $989
$(2
)
$969 $18 $3,880 $4,005 $(125 ) Distribution and servicing costs 109
103 6 114 (5 ) 429 409 20 Amortization of deferred sales
commissions 7 11 (4 )
8
(1 ) 34 48 (14 ) Direct fund expense 183 189 (6 ) 200 (17
)
766 767 (1 ) General and administration 355 410 (55 ) 312 43 1,301
1,380 (79 ) Restructuring charge - - - - - 76 - 76 Amortization of
intangible assets 24 24 - 25 (1 ) 99 128 (29 )
Total operating expense $1,665 $1,726
$(61 ) $1,628 $37 $6,585
$6,737 $(152 )
Highlights
- Employee compensation and benefits
expense decreased $2 million from the fourth quarter of 2015 but
increased $18 million from the third quarter of 2016. The increase
reflected higher incentive compensation, driven primarily by higher
performance fees and higher operating income.
- General and administration expense
decreased $55 million from the fourth quarter of 2015, reflecting
lower discretionary marketing and promotional spend in the current
quarter and $23 million of transaction-related expense recorded in
the fourth quarter of 2015.General and administration expense
increased $43 million from the third quarter of 2016, reflecting
higher marketing and promotional spend, and higher foreign exchange
remeasurement expense in the current quarter.
INCOME TAX EXPENSE
Three
Months EndedDecember 31,
Three
Months EndedSeptember
30,
Year Ended
December 31,
(in millions), (unaudited)
2016 2015
Change 2016 Change 2016
2015 Change Income tax expense $336 $279 $57 $333 $3
$1,290 $1,250 $40
Highlights
- Fourth quarter 2016 income tax expense
included a $4 million net noncash tax benefit, primarily related to
the revaluation of certain deferred income tax liabilities as a
result of domestic state and local tax changes.
- Fourth quarter 2015 income tax expense
included a $64 million noncash benefit, primarily related to the
revaluation of certain deferred income tax liabilities, including
the effect of tax legislation enacted in the United Kingdom.
- Third quarter 2016 income tax expense
included a $26 million net noncash tax benefit, primarily related
to the revaluation of certain deferred income tax liabilities as a
result of legislation enacted in the United Kingdom, and domestic
state and local tax changes.
SUMMARY OF NONOPERATING INCOME
(EXPENSE)
Three
MonthsEndedDecember 31,
Three MonthsEndedSeptember 30,
Year
EndedDecember 31,
(in millions), (unaudited)
2016 2015
Change 2016 Change 2016
2015 Change Nonoperating income (expense), GAAP basis
$(38 ) $11 $(49 ) $1 $(39 ) $(110 ) $(62 ) $(48 ) Less: Net income
(loss) attributable to NCI - 8 (8 ) 2 (2 ) (2
) 7 (9 ) Nonoperating income (expense)(1) $(38 ) $3
$(41 ) $(1 ) $(37 ) $(108 ) $(69 ) $(39 )
Estimatedeconomicinvestments atDecember 31,
2016(2) Three MonthsEndedDecember
31, Three MonthsEndedSeptember
30,2016
Year
EndedDecember 31,
(in millions), (unaudited)
2016 2015 Change
Change 2016 2015 Change Net gain (loss)
on investments(1) Private equity
20-25
% $(5 ) $36 $(41 ) $2 $(7 ) $6 $71 $(65 ) Real assets
5-10
% 3 3 - 2 1 8 12 (4 ) Other alternatives(3)
15-20
% 8 4 4 9 (1 ) 21 (2 ) 23 Other investments(4)
55-60
% - 5 (5 ) 16 (16 ) 22 (18 ) 40
Subtotal 6 48 (42 ) 29 (23 ) 57 63 (6 ) Other gains(5) -
1 (1 ) - - - 46 (46 )
Total net gain (loss) on investments(1) 6 49 (43 ) 29 (23 )
57 109 (52 ) Interest and dividend income 7 5 2 22 (15 ) 40 26 14
Interest expense (51 ) (51 ) - (52 ) 1 (205 ) (204 )
(1 ) Net interest expense (44 ) (46 ) 2 (30 ) (14 )
(165 ) (178 ) 13 Total nonoperating income
(expense)(1) (38 ) 3 (41 ) (1 ) (37 ) (108 ) (69 ) (39 )
Compensation expense related to (appreciation) depreciation on
deferred compensation plans - (2 ) 2 - -
- (1 ) 1 Nonoperating income (expense),
as adjusted(1) $(38 ) $1 $(39 ) $(1 ) $(37 ) $(108 ) $(70 )
$(38 ) (1) Net of net income (loss) attributable to
noncontrolling interests (“NCI”). (2) Percentages represent
estimated percentages of BlackRock’s corporate economic investment
portfolio at December 31, 2016. Economic investment amounts at
September 30, 2016 for private equity, real assets, other
alternatives and other investments were $348 million, $109 million,
$238 million and $1,156 million, respectively. (3) Amounts
primarily include net gains (losses) related to direct hedge fund
strategies and hedge fund solutions. (4) Amounts include net gains
(losses) related to equity and fixed income investments, and
BlackRock’s seed capital hedging program. (5) Amount for the year
ended December 31, 2015 primarily includes a gain related to the
acquisition of certain assets of BlackRock Kelso Capital Advisors
LLC.
Highlights
- Net gain (loss) on investments
decreased $43 million from the fourth quarter of 2015, primarily
driven by a $35 million unrealized gain on a strategic private
equity investment recorded in the fourth quarter of 2015.Net gain
(loss) on investments decreased $23 million from the third quarter
of 2016 due to lower marks in the fourth quarter of 2016.
- Interest and dividend income decreased
$15 million from the third quarter of 2016, primarily due to lower
dividend income recorded in the fourth quarter of 2016.
ECONOMIC TANGIBLE ASSETS
The Company presents economic tangible assets as additional
information to enable investors to exclude certain assets that have
equal and offsetting liabilities or noncontrolling interests that
ultimately do not have an impact on stockholders’ equity 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.
December 31, December 31, (in
billions), (unaudited)
2016 (Est.) 2015 Total
balance sheet assets $220 $225
Separate account assets and separate
account collateral held under securities lending agreements
(177 ) (182 ) Consolidated sponsored investment funds (1 ) (1 )
Goodwill and intangible assets, net (30 ) (30 )
Economic
tangible assets $12 $12
RECONCILIATION OF U.S. GAAP OPERATING
INCOME AND OPERATING MARGIN TO OPERATING INCOME AND OPERATING
MARGIN, AS ADJUSTED
Three Months Ended Year Ended
December 31,
September 30,
December 31, (in millions), (unaudited)
2016
2015
2016
2016
2015
Operating income, GAAP basis $ 1,225 $
1,137
$
1,209
$ 4,570 $ 4,664 Non-GAAP expense
adjustments: Restructuring charge - -
-
76 - PNC LTIP funding obligation 7 4
7
28 30 Compensation expense related to appreciation (depreciation)
on deferred compensation plans - 2
-
- 1
Operating income,
as adjusted 1,232 1,143
1,216
4,674 4,695 Product launch costs and commissions
- -
-
- 5 Operating income used
for operating margin measurement $ 1,232 $ 1,143
$
1,216
$ 4,674 $ 4,700 Revenue, GAAP basis $
2,890 $ 2,863
$
2,837
$ 11,155 $ 11,401 Non-GAAP adjustments: Distribution and servicing
costs (109 ) (103 )
(114
)
(429 ) (409 ) Amortization of deferred sales commissions (7
) (11 )
(8
)
(34 ) (48 ) Revenue used for operating margin
measurement $ 2,774 $ 2,749
$
2,715
$ 10,692 $ 10,944
Operating margin,
GAAP basis 42.4 % 39.7
%
42.6
%
41.0 % 40.9 %
Operating margin, as adjusted 44.4 %
41.6 %
44.8
%
43.7 % 42.9 %
See note (1) to the Condensed Consolidated
Statements of Income and Supplemental Information 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 Year Ended
December 31,
September 30,
December 31, (in millions), (unaudited)
2016
2015
2016
2016 2015 Nonoperating income (expense),
GAAP basis $ (38 ) $ 11
$
1
$ (110 ) $ (62 ) Less:
Net income (loss) attributable to NCI - 8
2
(2 ) 7 Nonoperating income (expense),
net of NCI (38 ) 3
(1
)
(108 ) (69 ) Compensation expense related to (appreciation)
depreciation on deferred compensation plans -
(2 )
-
- (1 )
Nonoperating income
(expense), less net income (loss) attributable to NCI, as
adjusted $ (38 ) $ 1
$
(1
)
$ (108 ) $ (70 )
See note (2) to the Condensed Consolidated
Statements of Income and Supplemental Information 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 Year
Ended
December 31,
December 31,
September 30,
(in millions, except per share data), (unaudited)
2016
2015
2016
2016 2015 Net income attributable to
BlackRock, Inc., GAAP basis $ 851 $
861
$
875
$ 3,172 $ 3,345 Non-GAAP adjustments:
Restructuring charge (including $23 tax benefit) - -
-
53 - PNC LTIP funding obligation, net of tax 5 4
5
19 22 Income tax matters (4 ) (64 )
(26
)
(30 ) (54 )
Net income attributable to
BlackRock, Inc., as adjusted $ 852
$ 801
$
854
$ 3,214 $ 3,313
Diluted weighted-average common shares outstanding(4) 165.9
168.6
166.3
166.6 169.0
Diluted earnings per common share, GAAP
basis(4) $ 5.13 $ 5.11
$
5.26
$ 19.04 $ 19.79 Diluted earnings per
common share, as adjusted(4) $ 5.14
$ 4.75
$
5.14
$ 19.29 $ 19.60
See notes (3) and (4) to the Condensed
Consolidated Statements of Income and Supplemental Information for
more information on as adjusted items and the reconciliation to
GAAP.
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 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. 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 BlackRock’s revenue
and expense. 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.
Management uses both GAAP and non-GAAP financial measures in
evaluating BlackRock’s financial performance. Adjustments to GAAP
financial measures (“non-GAAP adjustments”) include certain items
management deems nonrecurring or that occur infrequently,
transactions that ultimately will not impact BlackRock’s 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
BlackRock’s financial performance over time and, therefore, provide
useful disclosure to investors.
- Operating income, as adjusted, includes
non-GAAP expense adjustments. A restructuring charge comprised of
severance and accelerated amortization expense of previously
granted deferred compensation awards has been excluded to provide
more meaningful analysis of BlackRock’s ongoing operations and to
ensure comparability among periods presented. 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 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
nonoperating income (expense).
- Operating income used for measuring
operating margin, as adjusted, is equal to operating income, as
adjusted, excluding the impact of product launch costs (e.g.
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 BlackRock’s 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 such costs represent a benchmark for the amount of revenue
passed through to external parties who distribute the Company’s
products. In addition, 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.
Management believes nonoperating income (expense), less net
income (loss) attributable to NCI, as adjusted, provides
comparability of information among reporting periods and is an
effective measure for reviewing BlackRock’s nonoperating
contribution to results.
(3) 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 nonrecurring
items, charges that ultimately will not impact BlackRock’s book
value or certain tax items that do not impact cash flow.
See aforementioned discussion regarding operating income, as
adjusted, and operating margin, as adjusted, for information on the
PNC LTIP funding obligation and the restructuring charge.
For each period presented, the non-GAAP adjustment related to
the restructuring charge and PNC LTIP funding obligation was tax
effected at the respective blended rates applicable to the
adjustments. Amounts for income tax matters represent net noncash
(benefits) expense primarily associated with the revaluation of
certain deferred tax liabilities related to intangible assets and
goodwill. Amounts have been excluded from the as adjusted results
as these items will not have a cash flow impact and to ensure
comparability among periods presented.
Per share amounts reflect net income attributable to BlackRock,
as adjusted divided by diluted weighted average common shares
outstanding.
(4) Nonvoting participating preferred stock is considered
to be a common stock equivalent for purposes of determining basic
and diluted earnings per share calculations.
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
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 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 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 potential for
human error in connection with BlackRock’s operational systems;
(10) 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; (11) 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;
(12) the ability to attract and retain highly talented
professionals; (13) fluctuations in the carrying value of
BlackRock’s economic investments; (14) 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; (15) BlackRock’s success in negotiating distribution
arrangements and maintaining distribution channels for its
products; (16) the failure by a key vendor of BlackRock to fulfill
its obligations to the Company; (17) any disruption to the
operations of third parties whose functions are integral to
BlackRock’s ETF platform; (18) 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 (19) 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 earnings release.
Performance Notes
Past performance is not indicative of future results. Except as
specified, the performance information shown is as of December 31,
2016 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 November 30, 2016. The performance data does not include
accounts terminated prior to December 31, 2016 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
institutional and high net worth separate accounts, and net-of-fees
for retail funds. The performance tracking shown for index accounts
is based on gross-of-fees performance and includes all
institutional accounts and all iShares funds globally using an
index strategy. AUM information is based on AUM available as of
December 31, 2016 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.
Performance shown is derived from applicable benchmarks or peer
median information, as selected by BlackRock, Inc. Peer medians are
based in part on data either from Lipper Inc. or Morningstar, Inc.
for each included product.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170113005084/en/
BlackRock, Inc.Tom Wojcik, 212-810-8127Investor RelationsorBrian
Beades, 212-810-5596Media Relations
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