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BlackRock Reports Full Year 2017 Diluted EPS of $30.23, or $22.60 as adjusted

Company Release - 1/12/2018 6:00 AM ET

Fourth Quarter 2017 Diluted EPS of $14.07, or $6.24 as adjusted

  • Record $367 billion of full year total net inflows reflects continued strength of diversified business model
  • $103 billion of fourth quarter net inflows, positive across active, index and iShares® and cash management
  • 12% full year revenue growth driven by growth in base fees, performance fees, and technology and risk management revenue
  • 15% increase in full year operating income (13% as adjusted) reflects operating margin expansion
  • 59% increase in full year diluted EPS reflects net tax benefit from Tax Cuts and Jobs Act (17% as adjusted)
  • Returned $2.8 billion to shareholders in 2017
  • Board of Directors approves 15% increase in quarterly cash dividend to $2.88 per share

NEW YORK--(BUSINESS WIRE)--

BlackRock, Inc. (NYSE:BLK):

FINANCIAL RESULTS

  Q4   Q4         Q3       Full Year    
(in millions, except per share data)   2017     2016  

 

Change

    2017  

 

Change

    2017     2016  

 

Change

AUM $ 6,288,195 $ 5,147,852 22 % $ 5,976,892 5 %   $ 6,288,195   $ 5,147,852 22 %
Total net flows $ 102,929 $ 98,050 $ 96,112 $ 367,254 $ 202,191

GAAP basis:

Revenue $ 3,469 $ 2,890 20 % $ 3,233 7 % $ 12,491 $ 11,155 12 %
Operating income $ 1,489 $ 1,225 22 % $ 1,394 7 % $ 5,272 $ 4,570 15 %
Operating margin 42.9

%

 

42.4

%

 

50 bps 43.1

%

(20 ) bps 42.2 % 41.0

%

 

120 bps
Net income(1) (2) $ 2,304 $ 851 171 % $ 947 143 % $ 4,970 $ 3,172 57 %
Diluted EPS $ 14.07 $ 5.13 174 % $ 5.78 143 % $ 30.23 $ 19.04 59 %
Weighted average diluted shares 163.8 165.9 (1 )% 163.8 - % 164.4 166.6 (1 )%

As Adjusted:

Operating income(3) $ 1,492 $ 1,232 21 % $ 1,398 7 % $ 5,287 $ 4,674 13 %

Operating margin(3)

44.8

%

 

44.4

%

 

40 bps 45.0

%

(20 ) bps 44.1 % 43.7

%

 

40 bps
Net income(1) (3) $ 1,022 $ 852 20 % $ 969 5 % $ 3,716 $ 3,214 16 %
Diluted EPS(3)   $ 6.24     $ 5.14       21 %     $ 5.92     5 %     $ 22.60     $ 19.29       17 %
(1)   Net income represents net income attributable to BlackRock, Inc.
(2)

GAAP net income for fourth quarter and full year 2017 reflects $1.2 billion of net tax benefit related to the Tax Cuts and Jobs Act. See the Income Tax Expense (Benefit) for more information.

(3)

See notes (1) through (3) 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, 2017.

“BlackRock’s record 2017 results reflect the long-term investments we’ve consistently made in our business to better serve clients,” commented Laurence D. Fink, Chairman and CEO of BlackRock. “$367 billion of total net inflows for the year were the strongest flows in BlackRock’s history, and included $103 billion in the fourth quarter.

“Full year net inflows represented 7% organic asset growth and were positive across client types, asset classes, major regions and investment styles. Investors are increasingly seeking comprehensive solutions, and BlackRock’s differentiated ability to offer scaled investment strategies, industry leading risk management and portfolio construction technology and thought leadership is driving deeper client partnerships than ever before. And we continue to expand the global reach of our integrated platform to investors in high growth geographies like China, where earlier this month we obtained our private fund management registration to manufacture and distribute onshore investment products.

iShares ETFs generated $245 billion of full year net inflows, as an increasingly diverse set of institutional and retail clients are using ETFs for asset allocation and alpha generation. Investors are using both equity and fixed income ETFs in their portfolios for Core and precision exposures and as financial instruments. Investments made in iShares ETFs drove expanded market share in 2017 and enabled us to once again capture the #1 share of industry ETF flows globally, in the United States and Europe, and in both equity and fixed income products.

“In alpha-seeking strategies, we are leveraging the powerful combination of human investment expertise and sophisticated data analytics. Performance across our alpha-seeking strategies remains strong and drove $24 billion of net inflows in 2017.

“Technology and risk management revenue, powered by Aladdin®, increased 14% for the full year, and demand remains strong across our full range of capabilities. In 2017, we expanded our technology reach, scaling our distribution capabilities through Aladdin Risk for Wealth Management, Cachematrix, iCapital and Scalable Capital. We continue to invest in technology and data to generate improved alpha, better serve our clients and more efficiently run our business.

“Throughout BlackRock’s 30-year history, we have been driven by a fiduciary commitment to our clients, a culture of innovation, a passion for performance and a workplace that embraces diversity and inclusion. We are fortunate to have dedicated employees who share our vision of creating better financial futures for clients. We enter 2018 well positioned to continue investing for future growth, developing our talent and delivering differentiated value for clients and shareholders alike.”

CAPITAL MANAGEMENT

BlackRock’s Board of Directors approved a 15% increase in the quarterly cash dividend to $2.88 per share, payable March 22, 2018, to shareholders of record at the close of business on March 7, 2018.

RESULTS BY CLIENT TYPE
                                         
            December 31, 2017   Q4 2017
Q4 2017 December 31, 2017 Q4 2017 AUM Base fees(1)
(in millions), (unaudited)   Net flows     AUM     Base fees(1)     % of Total   % of Total
Retail $ 11,391 $ 628,377 $ 858   10 %   29 %
iShares ETFs 54,800 1,752,239 1,123 28 % 39 %
Institutional:
Active 2,187 1,139,308 508 18 % 18 %
Index   12,202       2,316,807       257       37 %     9 %
Total institutional   14,389       3,456,115       765       55 %     27 %
Long-term 80,580 5,836,731 2,746 93 % 95 %
Cash management 23,406 449,949 150 7 % 5 %
Advisory   (1,057 )     1,515       -       -       -  
Total   $ 102,929     $ 6,288,195     $ 2,896       100 %     100 %
 
RESULTS BY PRODUCT TYPE
                                         
December 31, 2017 Q4 2017
Q4 2017 December 31, 2017 Q4 2017 AUM Base fees(1)
(in millions), (unaudited)   Net flows     AUM     Base fees(1)     % of Total   % of Total
Equity $ 35,782 $ 3,371,641 $ 1,493 53 % 51 %
Fixed income 42,951 1,855,465 754 30 % 26 %
Multi-asset 4,923 480,278 305 8 % 11 %
Alternatives   (3,076 )     129,347       194       2 %     7 %
Long-term 80,580 5,836,731 2,746 93 % 95 %
Cash management 23,406 449,949 150 7 % 5 %
Advisory   (1,057 )     1,515       -       -       -  
Total   $ 102,929     $ 6,288,195     $ 2,896       100 %     100 %
 
RESULTS BY INVESTMENT STYLE
                                         
December 31, 2017 Q4 2017
Q4 2017 December 31, 2017 Q4 2017 AUM Base fees(1)
(in millions), (unaudited)   Net flows     AUM     Base fees(1)     % of Total   % of Total
Active $ 12,962 $ 1,696,005 $ 1,353 27 % 47 %
Index and iShares ETFs   67,618       4,140,726       1,393       66 %     48 %
Long-term 80,580 5,836,731 2,746 93 % 95 %
Cash management 23,406 449,949