Diluted EPS as adjusted increased 7% from 1Q11 and 3% from 4Q11
$3.684 Trillion in assets under management at March 31, 2012 up 5%
from year end
NEW YORK--(BUSINESS WIRE)--
BlackRock, Inc. (NYSE:BLK):
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iShares® generated its strongest first
quarter result on record with $18.2 billion of net new business, or
12% annualized organic growth
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Delivered 8% annualized organic growth in multi-asset
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Monetized a net $22.9 billion in advisory assets which resulted in
positive returns for clients, including returns benefitting U.S.
taxpayers
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Delivered a 72% payout ratio reflecting a 9% increase in the dividend
to $1.50 per share and the repurchase of 648,000 shares during the
quarter
BlackRock, Inc. (NYSE:BLK) today reported first quarter 2012 diluted EPS
of $3.14, up 9% from first quarter 2011. First quarter 2012 net income(1)
of $572 million increased $17 million from fourth quarter 2011 and $4
million from a year ago. Operating income for first quarter 2012 totaled
$815 million with operating margin of 36.2%.
As adjusted(2)
results. First quarter 2012 operating income of $825 million
increased $6 million from first quarter 2011 while diluted EPS of $3.16
improved 7%. First quarter diluted EPS included operating income of
$3.10 per diluted share and net non-operating income of $0.06 per
diluted share. Diluted EPS improved 3% from fourth quarter 2011.
Operating income compared to fourth quarter 2011 reflected growth in
base fees offset by seasonally lower performance fees. Operating margin
of 38.6% in first quarter 2012 reflected the seasonal effect of
performance fees and payroll taxes.
“Our first quarter 2012 results are a strong testament to the power of
BlackRock’s diversified business model and history of innovation,” said
Laurence D. Fink, Chairman and CEO of BlackRock. “During the quarter we
generated 7 percent year-over-year growth in diluted EPS with strong
underlying momentum in all asset classes and channels across our global
platform. As investors attempt to manage uncertain markets, they are
increasingly searching for a partner that can provide tools that span
the risk spectrum coupled with extensive global perspectives which
positions BlackRock extraordinarily well to continue to deliver across
market cycles. The first quarter 2012 marks the beginning of our third
full year of consolidated results with BGI, and I am extremely proud of
our employees for delivering consistently strong net new business
particularly in iShares where we have achieved positive flows in
every quarter since the merger, and in retail where we generated
positive flows in eight of the past nine quarters.”
Assets under management (“AUM”) closed the quarter at $3.684 trillion,
up 5% since year-end 2011 and up 1% year-over-year. Net new business in
long-term products totaled $25.7 billion before giving effect to a
previously announced institutional fixed income index redemption that
totaled $36.0 billion from a single client. Growth in AUM also reflected
market valuation gains and investment performance as well as the
acquisition of Claymore Investments, Inc.
The table below presents AUM and a comparison of GAAP and as adjusted
results for certain financial measures.
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Q1
|
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Q1
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%
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Q4
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%
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|
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2012
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2011
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|
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Change
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|
2011
|
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Change
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AUM
|
|
|
$3,684,087
|
|
$3,648,445
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|
|
1%
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|
$3,512,681
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5%
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GAAP basis:
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Revenue
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|
$2,249
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$2,282
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|
|
(1%)
|
|
$2,227
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1%
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|
|
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|
|
|
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|
|
|
|
|
|
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Operating income
|
|
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$815
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$798
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2%
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$808
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1%
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|
|
|
|
|
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|
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Net income(1)
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$572
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$568
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1%
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$555
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3%
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Diluted EPS
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$3.14
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$2.89
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9%
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$3.05
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3%
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As Adjusted:
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Operating income(2)
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|
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$825
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$819
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1%
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$841
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(2%)
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Net income(1)(2)
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$575
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$582
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(1%)
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$558
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3%
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Diluted EPS(2)
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$3.16
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$2.96
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7%
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$3.06
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3%
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(1)
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Net income represents net income attributable to BlackRock, Inc.
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(2)
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See notes (a) through (e) to the Condensed Consolidated Statements
of Income and Supplemental Information in Attachment I on pages 9
through 12 for more information on as adjusted items and the
reconciliation to GAAP.
|
“For most of the first quarter of 2012, we saw renewed confidence in
global markets driven by European stability following the European
Central Bank’s announced liquidity plan together with positive economic
data in the U.S., leading investors to seek out macro exposures
primarily through index products. As a result, BlackRock attracted
significant inflows into our institutional index and ETP products
highlighted by $18.2 billion in net flows in our global iShares
platform in what is typically a seasonally weaker quarter. These results
reflected particular strength in fixed income where we captured 46
percent of total fixed income ETP market flows. In retail, we continued
to drive strong results, attracting nearly $3 billion in fixed income
flows in the U.S. and internationally; while our institutional business
also demonstrated attractive fundamentals and a continued shift towards
advice-driven mandates, highlighted by strong flows in multi-asset
solutions. In addition, BlackRock Solutions®
continued its strong record of growth, adding 14 new assignments in the
quarter.
“While I am pleased with our quarterly results, we remain committed to
innovation through continued investments in our people, products and
technology across our global platform. In keeping with this, at the end
of February we launched our ‘Investing for a New World’ branding
initiative to ensure that both institutional and retail investors
increasingly recognize BlackRock as a leading solutions provider with
the capabilities and insights to help them achieve their investment
goals. Our initiative centers on the strategic focus areas of ETPs,
retirement, income, multi-asset solutions, and alternatives. During the
quarter, these focus areas accounted for the majority of our long-term
net inflows and we expect these themes to continue to drive organic
growth throughout 2012. We are also very excited to welcome our new
Emerging Markets Debt team and look forward to leveraging the team’s
proven track record of extraordinary investment performance as they join
BlackRock in mid-2012.
“While investing for future growth is critical to long-term success, we
are equally focused on returning capital to shareholders. During the
quarter our Board approved a nine percent increase in the quarterly
dividend and we repurchased 648,000 shares resulting in a payout ratio
of 72 percent in the first quarter. As we look forward to the balance of
the year, BlackRock remains well-positioned to deliver for our clients
through superior performance, a focus on providing solutions and the
unwavering commitment to excellence of our nearly 10,000 employees
worldwide.”
First Quarter Business Highlights
Net new business figures exclude the effect of a previously announced
low-fee fixed income institutional index redemption from an EMEA client
totaling $36.0 billion resulting from the decision to insource.
Long-term AUM increased 7% or $206.6 billion to $3.345 trillion at
March 31, 2012, which reflected $25.7 billion of net new business,
$209.3 billion of market and foreign exchange gains and $7.6 billion of
AUM relating to the March 7th acquisition of
Claymore Investments, Inc. Cash management AUM decreased 5% and advisory
AUM declined 19% in the quarter.
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Equity AUM grew 12%, or $183.6 billion, to $1.744 trillion, driven by
$177.1 billion of market valuation gains. Net inflows of $2.9 billion
consisted of $7.4 billion of net inflows into index products,
partially offset by $4.5 billion of net outflows from active products.
Active outflows were largely driven by $3.4 billion of outflows from
our scientific active equity (“SAE”) products despite continuing
improvements in performance, as evidenced by 62%, 80% and 52% of SAE
AUM performing above benchmark or peer median for the one-, three- and
five-year periods ended March 31, 2012. Fundamental active equity
products showed 45%, 50% and 87% of AUM performing above the benchmark
or peer median for the one-, three-, and five-year periods ended March
31, 2012. Our passive performance remained strong with 97%, 90% and
97% of AUM within or above tolerance for the one-, three- and
five-year periods ended March 31, 2012. During periods of significant
market volatility, average AUM calculated by using quarter-end data
may differ from actual average AUM used for billing purposes. First
quarter 2012 average AUM based on month-end data for active, index and iShares
equities was $292.3 billion, $925.1 billion and $457.4 billion,
respectively.
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Fixed income AUM ended the quarter at $1.244 trillion, with strong net
new business of $16.6 billion and $12.4 billion of market valuation
gains. Passive inflows of $15.5 billion were primarily into U.S.
sector-specialty and core mandates, with active inflows of $1.1
billion similarly led by flows into U.S. sector-specialty and
municipal offerings. Performance in active taxable-fixed income
products reflected 59%, 76% and 51% of AUM above the benchmark or peer
median for the one-, three-, and five-year periods ended March 31,
2012, while our active tax-exempt business showed consistent results
with 61%, 68% and 75% of AUM above the benchmark or peer median for
the same time periods. Our passive performance is strong with 93%, 91%
and 89% of AUM at or above tolerance for the one-, three- and
five-year periods ended March 31, 2012.
-
Multi-asset AUM increased 9% to $246.5 billion during the quarter. Net
new business of $4.8 billion was augmented by $16.5 billion of market
and foreign exchange valuation gains. Flows reflected continued
strength in target date and global asset allocation offerings.
Performance in these products showed 69%, 38%, and 91% of AUM above
the benchmark or peer median for the one-, three-, and five-year
periods ended March 31, 2012.
-
Alternatives AUM grew 5% to end the quarter at $110.4 billion. Net new
business of $1.3 billion reflected $0.7 billion of net inflows across
our core product offerings including hedge funds, fund of funds, real
estate and private equity, with additional inflows of $0.6 billion
into commodity and currency products. Results were further
strengthened by net market valuation gains of $3.3 billion.
-
Cash management AUM decreased 5% to $241.9 billion due to net
withdrawals of $14.9 billion, which were only partly offset by market
and foreign exchange gains of $2.2 billion. Outflows reflected
institutional reaction to the continued low-rate environment and
cyclical trends toward re-risking in the first quarter.
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Advisory AUM declined 19% to $97.7 billion driven almost exclusively
by portfolio liquidation disbursements.
Long-term net new business was positive across all client types, led
by strong inflows into iShares, as highlighted below.
-
iShares AUM grew 13% to $671.7 billion driven by net inflows of
$18.2 billion, up 74% from the first quarter of 2011. iShares
attracted inflows across all asset classes, with notable inflows of
$9.4 billion and $7.8 billion in fixed income and equity funds,
respectively. EMEA iShares showed signs of shifting investor
preferences with our emerging market and corporate bond funds leading
net inflows for the quarter. U.S. iShares generated over $12.6
billion of net inflows driven by demand for our emerging markets and
yield-oriented products. Our March 7th acquisition of the
Canadian ETP provider Claymore Investments, Inc. contributed $7.3
billion of AUM, largely in equity and fixed income. The transaction
added a complementary set of 38 ETPs to the iShares product
range and deepened our footprint in Canada.
-
Retail long-term AUM increased 7% to $387.5 billion, reflecting strong
inflows of $1.3 billion from Americas retail and high net worth
clients, which were dominated by strong interest in our U.S.
sector-specialty and municipal fixed income and asset allocation
offerings. Domestic inflows were slightly offset by international
retail outflows of $0.1 billion. International retail outflows have
slowed, reflecting recent stability in European markets.
-
Institutional long-term AUM grew 5% to $2.285 trillion and reflected
long-term net inflows of $6.2 billion. Long-term net new business was
driven by $9.0 billion of inflows into passive products, partially
offset by outflows of $2.8 billion from active mandates. Robust
multi-asset class inflows of $4.3 billion reflected strong demand for
target date and asset allocation offerings.
For the quarter, long-term net inflows of $23.0 billion in the
Americas and $5.0 billion in EMEA were partially offset by net outflows
of $2.4 billion from Asia-Pacific clients.
BlackRock Solutions added four net
new assignments during the quarter, including one Aladdin
assignment, five risk management mandates, and eight non-recurring
advisory engagements. We completed six short-term advisory assignments
during the quarter.
The net new business pipeline totaled $24.1 billion at April 12, 2012,
consisting of $3.0 billion of mandates that funded since quarter end,
including strong flows from iShares and domestic retail and high
net worth clients and $21.1 billion of awards to be funded. The unfunded
portion of the pipeline primarily represents institutional assets, which
account for approximately two-thirds of long-term AUM but only one-third
of revenues. BlackRock Solutions pipeline of contracts and
proposals remains robust.
First Quarter Financial Highlights
Comparison to the First Quarter 2011
Operating income: First quarter 2012
operating income increased to $815 million from $798 million in first
quarter 2011. Operating income, as adjusted, increased to $825 million.
First quarter 2012 revenue of $2.2 billion decreased $33 million, or 1%,
from $2.3 billion in first quarter 2011 primarily due to the following:
-
Investment advisory, administration fees and
securities lending revenue of $2.0 billion in first quarter
2012 remained about equal to first quarter 2011 as higher fees from
the majority of long-term asset classes and a $39 million increase in
securities lending revenue were offset by lower fees from active
equity and cash management products.
-
Performance fees were $80 million
in first quarter 2012 compared with $83 million in first quarter 2011
primarily reflecting lower performance fees from regional/country
strategies, partially offset by higher performance fees from hedge
funds and fixed income strategies.
-
BlackRock Solutions and
advisory revenue was $123 million in first quarter
2012 compared with $128 million in first quarter 2011, primarily
reflecting lower one-time fees from advisory assignments, partially
offset by higher revenue from additional Aladdin mandates in
first quarter 2012.
-
Other revenue decreased $9
million, largely reflecting lower transition management service fees.
First quarter 2012 total operating expenses of $1.4 billion decreased
$50 million. Operating expenses, as adjusted, decreased $39 million. See
notes (a) through (e) in Attachment I for more information on as
adjusted items and the reconciliation to GAAP. Results were driven by
the following:
-
Employee compensation and benefits
decreased $5 million. Employee compensation and benefits, as
adjusted, increased $6 million.
-
Distribution and servicing costs
decreased $14 million, driven by lower average cash management AUM.
-
Amortization of deferred sales commissions
decreased $6 million, primarily related to lower sales of certain
share classes of open-end funds.
-
Direct fund expenses increased
$9 million, reflecting an increase in average iShares AUM where
BlackRock pays certain non-advisory expenses of the funds.
-
General and administration expenses
decreased $33 million primarily related to the non-occurrence of
first quarter 2011 closed-end fund launch costs and lower occupancy
costs.
Non-operating income (expense):
First quarter 2012 non-operating income, net of non-controlling
interests, was $20 million compared with $19 million of non-operating
income in first quarter 2011. First quarter 2012 included $55 million of
net positive marks primarily on distressed credit/mortgage funds and
private equity fund co-investments, partially offset by $40 million of
net interest expense. Net interest expense increased from first quarter
2011 primarily due to the $1.5 billion long-term debt issuance in second
quarter 2011 in connection with the repurchase of Bank of America’s
remaining ownership interest in BlackRock.
Income tax expense: Income tax
expense totaled $263 million and $249 million for first quarter 2012 and
2011, respectively. The GAAP effective income tax rate for the first
quarter 2012 was 31.5% compared with 30.5% for the first quarter 2011.
The first quarter 2011 GAAP tax rate included a $24 million non-cash
benefit related to the resolution of certain outstanding tax positions,
partially offset by a $3 million increase due to enacted state tax
legislation.
Comparison to the Fourth Quarter 2011
Operating income: First quarter 2012
operating income was $815 million compared with $808 million in fourth
quarter 2011. Fourth quarter 2011 operating income included $32 million
of restructuring charges. Operating income, as adjusted, which excluded
the fourth quarter 2011 restructuring charges, decreased 2%.
First quarter 2012 revenues increased $22 million from fourth quarter
2011, primarily due to the following:
-
Investment advisory, administration fees and
securities lending revenue in first quarter 2012 increased
$114 million from fourth quarter 2011. The increase in revenue
reflected improved markets across all products.
-
Performance fees were $80 million
in first quarter 2012 compared with $147 million in fourth quarter
2011. The change reflected the timing of recognition due to the
magnitude of products with annual performance fee measurement periods
ending on December 31.
-
BlackRock Solutions and
advisory revenue of $123 million in first quarter 2012
decreased from $149 million in fourth quarter 2011 primarily
reflecting a high level of one-time revenues from advisory assignments
in fourth quarter 2011.
First quarter 2012 total operating expenses of $1.4 billion increased
$15 million from fourth quarter 2011. Fourth quarter 2011 results
included restructuring charges of $32 million. Operating expenses, as
adjusted, increased $38 million. See notes (a) through (e) in Attachment
I for more information on as adjusted items and the reconciliation to
GAAP. Results were driven by the following:
-
Employee compensation and benefits
increased $51 million. Employee compensation and benefits, as
adjusted, increased $42 million primarily related to a seasonal
increase in employer payroll taxes.
-
Direct fund expenses increased
$24 million, primarily related to an increase in average iShares
AUM where BlackRock pays certain non-advisory expenses of the funds.
-
General and administration expenses
decreased $34 million driven by lower professional fees and closed-end
fund launch costs, partially offset by higher marketing and
promotional expenses.
Non-operating income (expense):
First quarter 2012 non-operating income, net of non-controlling
interests, was $20 million compared with $21 million non-operating
expense in fourth quarter 2011. First quarter 2012 included $55 million
of net positive marks primarily on distressed credit/mortgage funds and
private equity fund co-investments, partially offset by $40 million of
net interest expense.
Income tax expense: The GAAP
effective income tax rate for the first quarter 2012 was 31.5% compared
with 29.5% for the fourth quarter 2011. Fourth quarter 2011 results
included a $20 million non-cash benefit associated with revaluation of
certain deferred tax liabilities, primarily due to tax legislation
enacted in Japan, which has been excluded from the as adjusted results.
Teleconference, Webcast and Presentation Information
Chairman and Chief Executive Officer, Laurence D. Fink, and Chief
Financial Officer, Ann Marie Petach, will host a teleconference call for
investors and analysts at 9:00 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 9:00 a.m. and reference the
BlackRock Conference Call (ID Number 69127291). 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 1:00
p.m. on Wednesday, April 18, 2012 and ending at midnight on Wednesday,
May 2, 2012. To access the replay of the teleconference, callers from
the United States should dial (800) 585-8367 and callers from outside
the United States should dial (404) 537-3406 and enter the Conference ID
Number 69127291. To access the webcast, please visit the investor
relations section of www.blackrock.com.
Performance Notes
Past performance is not indicative of future results. The performance
information shown is based on preliminarily available data. The
performance information for actively managed accounts reflects U.S.
open-end and closed-end mutual funds and similar EMEA-based products
with respect to peer median comparisons, and actively managed
institutional and high net worth separate accounts and funds located
globally with respect to benchmark comparisons, as determined using
objectively based internal parameters, using the most current verified
information available as of March 31, 2012 (February 29, 2012 for high
net worth accounts).
Accounts terminated prior to March 31, 2012 are not included. In
addition, accounts that have not been verified as of April 13, 2012 have
not been included. If such terminated and other accounts had been
included, the performance information may have substantially differed
from that shown. The performance information does not include funds or
accounts that are not measured against a benchmark, any benchmark-based
alternatives product, private equity products, CDOs, or accounts managed
by BlackRock’s Financial Markets Advisory Group. Comparisons are based
on gross-of-fee performance for U.S. retail, institutional and high net
worth separate accounts and EMEA institutional separate accounts and
net-of-fee performance for EMEA based retail products. The performance
tracking information for institutional index accounts is based on
gross-of-fee performance as of March 31, 2012, and includes all
institutional accounts and all iShares funds globally using an
index strategy. AUM information is based on AUM for each account or fund
in the asset class shown without adjustment for overlapping management
of the same account or fund, as of March 31, 2012.
Source of performance information and peer medians is BlackRock, Inc.
and is based in part on data from Lipper Inc. for U.S. funds and
Morningstar, Inc. for non-U.S. funds. Fund performance reflects the
reinvestment of dividends and distributions, but does not reflect sales
charges.
About BlackRock
BlackRock is a leader in investment management, risk management and
advisory services for institutional and retail clients worldwide. At
March 31, 2012, BlackRock’s AUM was $3.684 trillion. BlackRock offers
products that span the risk spectrum to meet clients’ needs, including
active, enhanced and index strategies across markets and asset classes.
Products are offered in a variety of structures including separate
accounts, mutual funds, iShares® (exchange-traded
funds), and other pooled investment vehicles. BlackRock also offers risk
management, advisory and enterprise investment system services to a
broad base of institutional investors through BlackRock Solutions®.
Headquartered in New York City, as of March 31, 2012, the firm has
approximately 9,900 employees in 27 countries and a major presence in
key global markets, including North and South America, Europe, Asia,
Australia, and the Middle East and Africa. For additional information,
please visit the Company's website at www.blackrock.com.
Forward-looking Statements
This report, 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” or 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 report 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 and information 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, Barclays Bank PLC 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 BlackRock’s
economic investments; (13) the impact of changes to tax legislation,
including taxation on products or transactions which could affect the
value proposition to clients and, generally, the tax position of the
Company; (14) BlackRock’s success in maintaining the distribution of its
products; (15) the impact of BlackRock electing to provide support to
its products from time to time; and (16) the impact of problems at other
financial institutions or the failure or negative performance of
products at other financial institutions.
BlackRock's Annual Report on Form 10-K and BlackRock's subsequent
filings with the SEC, accessible on the SEC's website at www.sec.gov
and on BlackRock’s website at www.blackrock.com,
discuss these factors in more detail and identify additional factors
that can affect forward-looking statements. The information contained on
the Company’s website is not a part of this press release.
|
Attachment I
|
|
BlackRock, Inc.
|
|
Condensed Consolidated Statements of Income and Supplemental
Information
|
|
(Dollar amounts in millions, except per share data)
|
|
(unaudited)
|
|
|
|
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|
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|
|
Three Months
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Ended
|
|
|
|
|
|
March 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2012
|
|
2011
|
|
$ Change
|
|
2011
|
|
$ Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
$1,977
|
|
$1,984
|
|
($7)
|
|
$1,863
|
|
$114
|
|
Investment advisory performance fees
|
|
80
|
|
83
|
|
(3)
|
|
147
|
|
(67)
|
|
BlackRock Solutions and advisory
|
|
123
|
|
128
|
|
(5)
|
|
149
|
|
(26)
|
|
Distribution fees
|
|
19
|
|
28
|
|
(9)
|
|
22
|
|
(3)
|
|
Other revenue
|
|
50
|
|
59
|
|
(9)
|
|
46
|
|
4
|
|
Total revenue
|
|
2,249
|
|
2,282
|
|
(33)
|
|
2,227
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
825
|
|
830
|
|
(5)
|
|
774
|
|
51
|
|
Distribution and servicing costs
|
|
95
|
|
109
|
|
(14)
|
|
87
|
|
8
|
|
Amortization of deferred sales commissions
|
|
16
|
|
22
|
|
(6)
|
|
18
|
|
(2)
|
|
Direct fund expenses
|
|
152
|
|
143
|
|
9
|
|
128
|
|
24
|
|
General and administration
|
|
307
|
|
340
|
|
(33)
|
|
341
|
|
(34)
|
|
Restructuring charges
|
|
-
|
|
-
|
|
-
|
|
32
|
|
(32)
|
|
Amortization of intangible assets
|
|
39
|
|
40
|
|
(1)
|
|
39
|
|
-
|
|
Total expenses
|
|
1,434
|
|
1,484
|
|
(50)
|
|
1,419
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
815
|
|
798
|
|
17
|
|
808
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
75
|
|
59
|
|
16
|
|
28
|
|
47
|
|
Net gain (loss) on consolidated variable interest entities
|
|
(12)
|
|
(15)
|
|
3
|
|
18
|
|
(30)
|
|
Interest and dividend income
|
|
9
|
|
9
|
|
-
|
|
9
|
|
-
|
|
Interest expense
|
|
(49)
|
|
(38)
|
|
(11)
|
|
(48)
|
|
(1)
|
|
Total non-operating income (expense)
|
|
23
|
|
15
|
|
8
|
|
7
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
838
|
|
813
|
|
25
|
|
815
|
|
23
|
|
Income tax expense
|
|
263
|
|
249
|
|
14
|
|
232
|
|
31
|
|
Net income
|
|
575
|
|
564
|
|
11
|
|
583
|
|
(8)
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to non-controlling interests
|
|
3
|
|
(4)
|
|
7
|
|
28
|
|
(25)
|
|
Net income attributable to BlackRock, Inc.
|
|
$572
|
|
$568
|
|
$4
|
|
$555
|
|
$17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding (e)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
179,022,840
|
|
191,797,365
|
|
(12,774,525)
|
|
178,562,187
|
|
460,653
|
|
Diluted
|
|
181,917,864
|
|
194,296,504
|
|
(12,378,640)
|
|
181,987,669
|
|
(69,805)
|
|
Earnings per share attributable to BlackRock, Inc. common
stockholders (e)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$3.19
|
|
$2.92
|
|
$0.27
|
|
$3.10
|
|
$0.09
|
|
Diluted
|
|
$3.14
|
|
$2.89
|
|
$0.25
|
|
$3.05
|
|
$0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared and paid per share
|
|
$1.50
|
|
$1.375
|
|
$0.125
|
|
$1.375
|
|
$0.125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
$3,684,087
|
|
$3,648,445
|
|
$35,642
|
|
$3,512,681
|
|
$171,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, as adjusted (a)
|
|
$825
|
|
$819
|
|
$6
|
|
$841
|
|
($16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, GAAP basis
|
|
36.2%
|
|
35.0%
|
|
1.2%
|
|
36.3%
|
|
(0.1%)
|
|
Operating margin, as adjusted (a)
|
|
38.6%
|
|
39.1%
|
|
(0.5%)
|
|
40.0%
|
|
(1.4%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense), less net income (loss) attributable
to non-controlling interests, as adjusted (b)
|
|
$15
|
|
$14
|
|
$1
|
|
($21)
|
|
$36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc., as adjusted (c) (d)
|
|
$575
|
|
$582
|
|
($7)
|
|
$558
|
|
$17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings attributable to BlackRock, Inc. common stockholders
per share, as adjusted (c) (d) (e)
|
|
$3.16
|
|
$2.96
|
|
$0.20
|
|
$3.06
|
|
$0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate, GAAP basis
|
|
31.5%
|
|
30.5%
|
|
1.0%
|
|
29.5%
|
|
2.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding excluding escrow shares (end of period)
|
|
179,406,494
|
|
192,243,415
|
|
(12,836,921)
|
|
178,309,109
|
|
1,097,385
|
BlackRock, Inc.
Notes to Condensed Consolidated Statements of Income and Supplemental
Information
(unaudited)
BlackRock reports its financial results in accordance with accounting
principles generally accepted in the United States ("GAAP"); however,
management believes evaluating the Company’s ongoing operating results
may be enhanced if investors have additional non-GAAP basis financial
measures. Management reviews non-GAAP financial measures to assess
ongoing operations and, for the reasons described below, considers them
to be effective indicators, for both management and investors, of
BlackRock's financial performance over time. BlackRock's management does
not advocate that investors consider such non-GAAP financial measures in
isolation from, or as a substitute for, financial information prepared
in accordance with GAAP.
Computations for all periods are derived from the Company's condensed
consolidated statements of income as follows:
(a) Operating income, as adjusted, and
operating margin, as adjusted:
Operating income, as adjusted, equals operating income, GAAP basis,
excluding certain items management deems non-recurring, or transactions
that ultimately will not impact BlackRock’s book value, as indicated in
the table below. Operating income used for operating margin measurement
equals operating income, as adjusted, excluding the impact of closed-end
fund launch costs and commissions. Operating margin, as adjusted, equals
operating income used for operating margin measurement, divided by
revenue used for operating margin measurement, as indicated in the table
below.
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
December 31,
|
|
(Dollar amounts in millions)
|
|
2012
|
|
2011
|
|
2011
|
|
Operating income, GAAP basis
|
|
$815
|
|
$798
|
|
$808
|
|
Non-GAAP expense adjustments:
|
|
|
|
|
|
|
|
Restructuring charges
|
|
-
|
|
-
|
|
32
|
|
PNC LTIP funding obligation
|
|
5
|
|
14
|
|
1
|
|
Merrill Lynch compensation contribution
|
|
-
|
|
2
|
|
-
|
|
Compensation expense related to appreciation (depreciation) on
deferred compensation plans
|
|
5
|
|
5
|
|
-
|
|
Operating income, as adjusted
|
|
825
|
|
819
|
|
841
|
|
Closed-end fund launch costs
|
|
-
|
|
19
|
|
7
|
|
Closed-end fund launch commissions
|
|
-
|
|
2
|
|
1
|
|
Operating income used for operating margin measurement
|
|
$825
|
|
$840
|
|
$849
|
|
|
|
|
|
|
|
|
|
Revenue, GAAP basis
|
|
$2,249
|
|
$2,282
|
|
$2,227
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
Distribution and servicing costs
|
|
(95)
|
|
(109)
|
|
(87)
|
|
Amortization of deferred sales commissions
|
|
(16)
|
|
(22)
|
|
(18)
|
|
Revenue used for operating margin measurement
|
|
$2,138
|
|
$2,151
|
|
$2,122
|
|
|
|
|
|
|
|
|
|
Operating margin, GAAP basis
|
|
36.2%
|
|
35.0%
|
|
36.3%
|
|
Operating margin, as adjusted
|
|
38.6%
|
|
39.1%
|
|
40.0%
|
|
|
|
|
|
|
|
|
BlackRock, Inc.
Notes to Condensed Consolidated Statements of Income and Supplemental
Information
(unaudited)
(continued)
(a) (continued)
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:
Restructuring charges consist of compensation costs and professional
fees.
The portion of compensation expense associated with certain long-term
incentive plans (“LTIP”) that has been or will be funded through
distributions to participants of shares of BlackRock stock held by The
PNC Financial Services Group, Inc. ("PNC") and a Merrill Lynch & Co.,
Inc. ("Merrill Lynch") cash compensation contribution, all of which has
been received as of first quarter 2012, has been excluded because these
charges ultimately do not impact BlackRock’s book value. The expense
related to the Merrill Lynch cash compensation contribution ceased at
the end of the third quarter 2011.
Compensation expense associated with appreciation (depreciation) on
investments related to certain BlackRock deferred compensation plans has
been excluded as returns on investments set aside for these plans, which
substantially offset this expense, are reported in non-operating income
(expense).
Management believes operating income exclusive of these costs is a
useful measure in evaluating BlackRock’s operating performance and helps
enhance the comparability of this information for the reporting periods
presented.
Operating margin, as adjusted:
Operating income used for measuring operating margin, as adjusted, is
equal to operating income, as adjusted, excluding the impact of
closed-end fund launch costs and commissions. Management believes the
exclusion of such costs and commissions is useful because these costs
can fluctuate considerably and revenues associated with the expenditure
of these costs will not fully impact BlackRock’s results until future
periods.
Operating margin, as adjusted, allows BlackRock to compare performance
from period-to-period by adjusting for items that may not recur, recur
infrequently or may have an economic offset in non-operating income.
Examples of such adjustments include restructuring charges, closed-end
fund launch costs, commissions paid to certain employees as compensation
and fluctuations in compensation expense based on mark-to-market
movements in investments held to fund certain compensation plans.
BlackRock also uses operating margin, as adjusted, to monitor corporate
performance and efficiency and as a benchmark to compare its performance
with other companies. Management uses both the GAAP and non-GAAP
financial measures in evaluating the financial performance of BlackRock.
The non-GAAP measure by itself may pose limitations because it does not
include all of BlackRock’s revenues and expenses.
Revenue used for operating margin, as adjusted, excludes distribution
and servicing costs paid to related parties and other third parties.
Management believes the exclusion of such costs is useful because it
creates consistency in the treatment for certain contracts for similar
services, which due to the terms of the contracts, are accounted for
under GAAP on a net basis within investment advisory, administration
fees and securities lending revenue. Amortization of deferred sales
commissions is excluded from revenue used for operating margin
measurement, as adjusted, because such costs, over time, substantially
offset distribution fee revenue earned by the Company. For each of these
items, BlackRock excludes from revenue used for operating margin, as
adjusted, the costs related to each of these items as a proxy for such
offsetting revenues.
BlackRock, Inc.
Notes to Condensed Consolidated Statements of Income and Supplemental
Information
(unaudited)
(continued)
(b) Non-operating income (expense), less net
income (loss) attributable to non-controlling interests, as adjusted:
Non-operating income (expense), less net income (loss) attributable to
non-controlling interests (“NCI”), as adjusted, is presented below. The
compensation expense offset is recorded in operating income. This
compensation expense has been included in non-operating income
(expense), less net income (loss) attributable to NCI, as adjusted, to
offset returns on investments set aside for these plans, which are
reported in non-operating income (expense), GAAP basis.
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
December 31,
|
|
(Dollar amounts in millions)
|
|
2012
|
|
2011
|
|
2011
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense), GAAP basis
|
|
$23
|
|
$15
|
|
$7
|
|
Less: Net income (loss) attributable to NCI
|
|
3
|
|
(4)
|
|
28
|
|
Non-operating income (expense)(1)
|
|
20
|
|
19
|
|
(21)
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
(5)
|
|
(5)
|
|
-
|
|
Non-operating income (expense), less net income (loss) attributable
to NCI, as adjusted
|
|
$15
|
|
$14
|
|
($21)
|
|
|
|
|
|
|
|
|
|
(1) Net of net income (loss) attributable to
non-controlling interests.
|
Management believes non-operating income (expense), less net income
(loss) attributable to NCI, as adjusted, provides comparability of this
information among reporting periods and is an effective measure for
reviewing BlackRock’s non-operating contribution to its results. As
compensation expense associated with (appreciation) depreciation on
investments related to certain deferred compensation plans, which is
included in operating income, substantially offsets the gain (loss) on
the investments set aside for these plans, management believes
non-operating income (expense), less net income (loss) attributable to
NCI, as adjusted, provides a useful measure, for both management and
investors, of BlackRock’s non-operating results that impact book value.
BlackRock, Inc.
Notes to Condensed Consolidated Statements of Income and Supplemental
Information
(unaudited)
(continued)
(c) Net income attributable to BlackRock, Inc.,
as adjusted:
Management believes net income attributable to BlackRock, Inc., as
adjusted, and diluted earnings per common share, as adjusted, are useful
measures of BlackRock’s profitability and financial performance. Net
income attributable to BlackRock, Inc., as adjusted, equals net income
attributable to BlackRock, Inc., GAAP basis, adjusted for significant
non-recurring items, charges that ultimately will not impact BlackRock’s
book value or certain tax items that do not impact cash flow.
|
|
|
Three Months Ended
|
|
(Dollar amounts in millions, except per share data)
|
|
March 31,
|
|
December 31,
|
|
|
2012
|
|
2011
|
|
2011
|
|
Net income attributable to BlackRock, Inc., GAAP basis
|
|
$572
|
|
$568
|
|
$555
|
|
Non-GAAP adjustments, net of tax:(d)
|
|
|
|
|
|
|
|
Restructuring charges
|
|
-
|
|
-
|
|
22
|
|
PNC LTIP funding obligation
|
|
3
|
|
9
|
|
1
|
|
Merrill Lynch compensation contribution
|
|
-
|
|
2
|
|
-
|
|
Income tax law changes/election
|
|
-
|
|
3
|
|
(20)
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
$575
|
|
$582
|
|
$558
|
|
|
|
|
|
|
|
|
|
Allocation of net income attributable to BlackRock, Inc., as
adjusted:
|
|
|
|
|
|
|
|
Common shares(e)
|
|
$574
|
|
$575
|
|
$557
|
|
Participating restricted stock units
|
|
1
|
|
7
|
|
1
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
$575
|
|
$582
|
|
$558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common shares outstanding(e)
|
|
181,917,864
|
|
194,296,504
|
|
181,987,669
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share, GAAP basis(e)
|
|
$3.14
|
|
$2.89
|
|
$3.05
|
|
Diluted earnings per common share, as adjusted(e)
|
|
$3.16
|
|
$2.96
|
|
$3.06
|
See note (a) Operating income, as adjusted, and operating margin, as
adjusted, for information on restructuring charges, PNC LTIP funding
obligation and Merrill Lynch compensation contribution.
During the quarters ended March 31 and December 31, 2011, adjustments
primarily related to a state tax election, an enacted Japanese
legislation and state tax legislation, respectively, which resulted in
the re-measurement of certain deferred income tax liabilities primarily
related to acquired indefinite-lived intangible assets. The resulting
increase or decrease in income taxes has been excluded from net income
attributable to BlackRock, Inc., as adjusted, as these items will not
have a cash flow impact and to ensure comparability for periods
presented.
(d) For the quarters ended March 31, 2012 and 2011, and December 31,
2011, non-GAAP adjustments were tax effected at 31.5%, 33.0% and 31.8%,
respectively, reflecting a blended rate applicable to the adjustments.
BlackRock’s tax rate in fourth quarter 2011 included the impact of
changes in the fourth quarter to the full year blended rates applicable
to the adjustments.
(e) Non-voting participating preferred shares are considered to be
common stock equivalents for purposes of determining basic and diluted
earnings per share calculations. Certain unvested restricted stock units
are not included in this number as they are deemed participating
securities in accordance with required provisions of Accounting
Standards Codification 260-10, Earnings per Share. For the
quarters ended March 31, 2012 and 2011, and December 31, 2011 average
outstanding participating securities were 0.2 million, 2.4 million and
0.2 million, respectively.
|
Attachment II
|
|
BlackRock, Inc.
|
|
Summary of Revenues
|
|
(Dollar amounts in millions)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Ended
|
|
|
|
|
|
March 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2012
|
|
2011
|
|
$ Change
|
|
2011
|
|
$ Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$
|
453
|
|
|
$
|
511
|
|
|
$
|
(58
|
)
|
|
$
|
437
|
|
|
$
|
16
|
|
|
Institutional index
|
|
|
123
|
|
|
|
111
|
|
|
|
12
|
|
|
|
112
|
|
|
|
11
|
|
|
iShares
|
|
|
473
|
|
|
|
463
|
|
|
|
10
|
|
|
|
430
|
|
|
|
43
|
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
279
|
|
|
|
269
|
|
|
|
10
|
|
|
|
278
|
|
|
|
1
|
|
|
Institutional index
|
|
|
50
|
|
|
|
53
|
|
|
|
(3
|
)
|
|
|
48
|
|
|
|
2
|
|
|
iShares
|
|
|
98
|
|
|
|
71
|
|
|
|
27
|
|
|
|
88
|
|
|
|
10
|
|
|
Multi-asset class
|
|
|
243
|
|
|
|
218
|
|
|
|
25
|
|
|
|
220
|
|
|
|
23
|
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
135
|
|
|
|
139
|
|
|
|
(4
|
)
|
|
|
133
|
|
|
|
2
|
|
|
Currency and commodities
|
|
|
34
|
|
|
|
33
|
|
|
|
1
|
|
|
|
32
|
|
|
|
2
|
|
|
Long-term
|
|
|
1,888
|
|
|
|
1,868
|
|
|
|
20
|
|
|
|
1,778
|
|
|
|
110
|
|
|
Cash management
|
|
|
89
|
|
|
|
116
|
|
|
|
(27
|
)
|
|
|
85
|
|
|
|
4
|
|
|
Total base fees
|
|
|
1,977
|
|
|
|
1,984
|
|
|
|
(7
|
)
|
|
|
1,863
|
|
|
|
114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory performance fees:
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
19
|
|
|
|
30
|
|
|
|
(11
|
)
|
|
|
64
|
|
|
|
(45
|
)
|
|
Fixed income
|
|
|
6
|
|
|
|
1
|
|
|
|
5
|
|
|
|
18
|
|
|
|
(12
|
)
|
|
Multi-asset class
|
|
|
3
|
|
|
|
3
|
|
|
|
-
|
|
|
|
18
|
|
|
|
(15
|
)
|
|
Alternatives
|
|
|
52
|
|
|
|
49
|
|
|
|
3
|
|
|
|
47
|
|
|
|
5
|
|
|
Total
|
|
|
80
|
|
|
|
83
|
|
|
|
(3
|
)
|
|
|
147
|
|
|
|
(67
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Solutions and advisory
|
|
|
123
|
|
|
|
128
|
|
|
|
(5
|
)
|
|
|
149
|
|
|
|
(26
|
)
|
|
Distribution fees
|
|
|
19
|
|
|
|
28
|
|
|
|
(9
|
)
|
|
|
22
|
|
|
|
(3
|
)
|
|
Other revenue
|
|
|
50
|
|
|
|
59
|
|
|
|
(9
|
)
|
|
|
46
|
|
|
|
4
|
|
|
Total revenue
|
|
$
|
2,249
|
|
|
$
|
2,282
|
|
|
$
|
(33
|
)
|
|
$
|
2,227
|
|
|
$
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: Certain prior period information has been reclassified to
conform to current period presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mix of Investment Advisory, Administration Fees and Securities
Lending Revenue
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Ended
|
|
|
|
|
|
March 31,
|
|
Change in
|
|
December 31,
|
|
Change in
|
|
|
|
2012
|
|
2011
|
|
%
|
|
2011
|
|
%
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
22
|
%
|
|
|
25
|
%
|
|
|
(3
|
%)
|
|
|
22
|
%
|
|
|
-
|
|
|
Institutional index
|
|
|
6
|
%
|
|
|
6
|
%
|
|
|
-
|
|
|
|
6
|
%
|
|
|
-
|
|
|
iShares
|
|
|
24
|
%
|
|
|
22
|
%
|
|
|
2
|
%
|
|
|
23
|
%
|
|
|
1
|
%
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
14
|
%
|
|
|
14
|
%
|
|
|
-
|
|
|
|
15
|
%
|
|
|
(1
|
%)
|
|
Institutional index
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
-
|
|
|
|
3
|
%
|
|
|
-
|
|
|
iShares
|
|
|
5
|
%
|
|
|
4
|
%
|
|
|
1
|
%
|
|
|
5
|
%
|
|
|
-
|
|
|
Multi-asset class
|
|
|
12
|
%
|
|
|
11
|
%
|
|
|
1
|
%
|
|
|
12
|
%
|
|
|
-
|
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
7
|
%
|
|
|
7
|
%
|
|
|
-
|
|
|
|
7
|
%
|
|
|
-
|
|
|
Currency and commodities
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
-
|
|
|
|
2
|
%
|
|
|
-
|
|
|
Long-term
|
|
|
95
|
%
|
|
|
94
|
%
|
|
|
1
|
%
|
|
|
95
|
%
|
|
|
-
|
|
|
Cash management
|
|
|
5
|
%
|
|
|
6
|
%
|
|
|
(1
|
%)
|
|
|
5
|
%
|
|
|
-
|
|
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
-
|
|
|
|
100
|
%
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: Certain prior period information has been reclassified to
conform to current period presentation.
|
|
Attachment III
|
|
|
BlackRock, Inc.
|
|
|
Summary of Non-operating Income (Expense)
|
|
|
(Dollar amounts in millions)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Ended
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
$ Change
|
|
2011
|
|
$ Change
|
|
|
Non-operating income (expense), GAAP basis
|
|
|
|
$
|
23
|
|
|
$
|
15
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
16
|
|
|
|
Less: Net income (loss) attributable to NCI
|
|
|
|
|
3
|
|
|
|
(4
|
)
|
|
|
7
|
|
|
|
28
|
|
|
|
(25
|
)
|
|
|
Non-operating income (expense)(1)
|
|
|
|
$
|
20
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
(21
|
)
|
|
$
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
economic
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
investments at
|
|
Three Months Ended
|
|
|
|
Ended
|
|
|
|
|
|
|
March 31,
|
|
March 31,
|
|
|
|
December 31,
|
|
|
|
|
|
|
2012(2)
|
|
2012
|
|
2011
|
|
$ Change
|
|
2011
|
|
$ Change
|
|
|
Net gain (loss) on investments(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity
|
|
25-30%
|
|
$
|
21
|
|
|
$
|
8
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
7
|
|
|
|
Real estate
|
|
< 10%
|
|
|
1
|
|
|
|
1
|
|
|
|
-
|
|
|
|
3
|
|
|
|
(2
|
)
|
|
|
Distressed credit/mortgage funds
|
|
20-25%
|
|
|
28
|
|
|
|
27
|
|
|
|
1
|
|
|
|
-
|
|
|
|
28
|
|
|
|
Hedge funds/funds of hedge funds
|
|
20-25%
|
|
|
6
|
|
|
|
4
|
|
|
|
2
|
|
|
|
(1
|
)
|
|
|
7
|
|
|
|
Other investments(3)
|
|
20-25%
|
|
|
(1
|
)
|
|
|
3
|
|
|
|
(4
|
)
|
|
|
2
|
|
|
|
(3
|
)
|
|
|
Sub-total
|
|
|
|
|
55
|
|
|
|
43
|
|
|
|
12
|
|
|
|
18
|
|
|
|
37
|
|
|
|
Investments related to deferred compensation plans
|
|
|
|
|
5
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
|
|
Total net gain (loss) on investments(1)
|
|
|
|
|
60
|
|
|
|
48
|
|
|
|
12
|
|
|
|
18
|
|
|
|
42
|
|
|
|
Interest and dividend income
|
|
|
|
|
9
|
|
|
|
9
|
|
|
|
-
|
|
|
|
9
|
|
|
|
-
|
|
|
|
Interest expense
|
|
|
|
|
(49
|
)
|
|
|
(38
|
)
|
|
|
(11
|
)
|
|
|
(48
|
)
|
|
|
(1
|
)
|
|
|
Net interest expense
|
|
|
|
|
(40
|
)
|
|
|
(29
|
)
|
|
|
(11
|
)
|
|
|
(39
|
)
|
|
|
(1
|
)
|
|
|
Total non-operating income (expense)(1)
|
|
|
|
|
20
|
|
|
|
19
|
|
|
|
1
|
|
|
|
(21
|
)
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
Non-operating income (expense), as adjusted(1)
|
|
|
|
$
|
15
|
|
|
$
|
14
|
|
|
$
|
1
|
|
|
$
|
(21
|
)
|
|
$
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net of net income (loss) attributable to NCI.
|
|
|
(2) Percentages represent estimated percentages of
BlackRock's corporate economic investment portfolio as of March 31,
2012.
|
|
|
Economic investment amounts at December 31, 2011 for private equity,
real estate, distressed credit/mortgage funds, hedge funds/funds of
hedge funds and other investments were $306 million, $108 million,
$217 million, $167 million and $264 million, respectively. See 2011
Form 10-K for more information.
|
|
|
(3) Amounts include net gains (losses) related to equity
and fixed income investments and BlackRock's seed capital hedging
program.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock, Inc.
|
|
|
Economic Tangible Assets
|
|
|
(Dollar amounts in billions)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company presents economic tangible assets as additional
information to enable investors to eliminate gross presentation of
certain assets that have equal and offsetting liabilities or
non-controlling interests that ultimately do not have an impact on
stockholders’ equity (excluding appropriated retained earnings
related to consolidated collateralized loan obligations) or cash
flows. In addition, goodwill and intangible assets are excluded from
economic tangible assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 (Est.)
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total balance sheet assets
|
|
|
|
$
|
185
|
|
|
$
|
180
|
|
|
|
|
|
|
|
|
|
Separate account assets and collateral held under securities
lending agreements
|
|
|
|
|
(145
|
)
|
|
|
(140
|
)
|
|
|
|
|
|
|
|
|
Consolidated VIEs/sponsored investment funds
|
|
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
Goodwill and intangible assets, net
|
|
|
|
|
(30
|
)
|
|
|
(30
|
)
|
|
|
|
|
|
|
|
|
Economic tangible assets
|
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic tangible assets include cash, receivables, seed and
co-investments, regulatory investments and other assets.
|
|
|
Attachment IV
|
|
BlackRock, Inc.
|
|
Changes in Assets Under Management
|
|
(Dollar amounts in millions)
|
|
(unaudited)
|
|
Current Quarter Component Changes
|
|
|
|
|
|
|
|
Net
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
subscriptions
|
|
|
|
appreciation
|
|
Foreign
|
|
March 31,
|
|
Variance vs.
|
|
|
|
|
|
2011
|
|
(redemptions)(1)
|
|
Acquisition (2)
|
|
(depreciation)
|
|
exchange(3)
|
|
2012
|
|
December 31, 2011
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$
|
275,156
|
|
$
|
(4,477)
|
|
$
|
-
|
|
$
|
25,215
|
|
$
|
1,290
|
|
$
|
297,184
|
|
|
8%
|
|
|
|
Institutional index
|
|
|
865,299
|
|
|
(452)
|
|
|
95
|
|
|
101,009
|
|
|
999
|
|
|
966,950
|
|
|
12%
|
|
|
|
iShares
|
|
|
419,651
|
|
|
7,836
|
|
|
3,517
|
|
|
46,463
|
|
|
2,118
|
|
|
479,585
|
|
|
14%
|
|
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
614,804
|
|
|
1,087
|
|
|
-
|
|
|
8,094
|
|
|
738
|
|
|
624,723
|
|
|
2%
|
|
|
|
Institutional index
|
|
|
479,116
|
|
|
(29,871)
|
|
|
-
|
|
|
888
|
|
|
616
|
|
|
450,749
|
|
|
(6%)
|
|
|
|
iShares
|
|
|
153,802
|
|
|
9,441
|
|
|
3,026
|
|
|
1,265
|
|
|
831
|
|
|
168,365
|
|
|
9%
|
|
|
|
Multi-asset class
|
|
|
225,170
|
|
|
4,766
|
|
|
78
|
|
|
14,777
|
|
|
1,716
|
|
|
246,507
|
|
|
9%
|
|
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
63,647
|
|
|
672
|
|
|
5
|
|
|
1,335
|
|
|
129
|
|
|
65,788
|
|
|
3%
|
|
|
|
Currency and commodities
|
|
|
41,301
|
|
|
672
|
|
|
860
|
|
|
2,171
|
|
|
(348)
|
|
|
44,656
|
|
|
8%
|
|
|
|
Long-term
|
|
|
3,137,946
|
|
|
(10,326)
|
|
|
7,581
|
|
|
201,217
|
|
|
8,089
|
|
|
3,344,507
|
|
|
7%
|
|
|
|
Cash management
|
|
|
254,665
|
|
|
(14,935)
|
|
|
-
|
|
|
787
|
|
|
1,412
|
|
|
241,929
|
|
|
(5%)
|
|
|
|
Sub-total
|
|
|
3,392,611
|
|
|
(25,261)
|
|
|
7,581
|
|
|
202,004
|
|
|
9,501
|
|
|
3,586,436
|
|
|
6%
|
|
|
|
Advisory(4)
|
|
|
120,070
|
|
|
(22,856)
|
|
|
-
|
|
|
(309)
|
|
|
746
|
|
|
97,651
|
|
|
(19%)
|
|
|
|
Total AUM
|
|
$
|
3,512,681
|
|
$
|
(48,117)
|
|
$
|
7,581
|
|
$
|
201,695
|
|
$
|
10,247
|
|
$
|
3,684,087
|
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock, Inc.
|
|
Changes in Assets Under Management
|
|
(Dollar amounts in millions)
|
|
(unaudited)
|
|
Year-over-Year Component Changes
|
|
|
|
|
|
|
|
Net
|
|
BGI merger-
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
subscriptions
|
|
related
|
|
|
|
appreciation
|
|
Foreign
|
|
March 31,
|
|
Variance vs.
|
|
|
|
2011(5)
|
|
(redemptions)(1)
|
|
outflows(6)
|
|
Acquisition (2)
|
|
(depreciation)
|
|
exchange(3)
|
|
2012
|
|
March 31, 2011
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$
|
343,389
|
|
$
|
(29,584)
|
|
$
|
-
|
|
$
|
-
|
|
$
|
(15,631)
|
|
$
|
(990)
|
|
$
|
297,184
|
|
(13%)
|
|
Institutional index
|
|
|
945,226
|
|
|
20,887
|
|
|
(9,900)
|
|
|
95
|
|
|
14,280
|
|
|
(3,638)
|
|
|
966,950
|
|
2%
|
|
iShares
|
|
|
474,966
|
|
|
25,250
|
|
|
-
|
|
|
3,517
|
|
|
(20,288)
|
|
|
(3,860)
|
|
|
479,585
|
|
1%
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
595,314
|
|
|
(13,634)
|
|
|
-
|
|
|
-
|
|
|
45,081
|
|
|
(2,038)
|
|
|
624,723
|
|
5%
|
|
Institutional index
|
|
|
436,084
|
|
|
(43,884)
|
|
|
-
|
|
|
-
|
|
|
58,910
|
|
|
(361)
|
|
|
450,749
|
|
3%
|
|
iShares
|
|
|
126,791
|
|
|
33,977
|
|
|
-
|
|
|
3,026
|
|
|
6,094
|
|
|
(1,523)
|
|
|
168,365
|
|
33%
|
|
Multi-asset class
|
|
|
207,982
|
|
|
32,481
|
|
|
-
|
|
|
78
|
|
|
9,422
|
|
|
(3,456)
|
|
|
246,507
|
|
19%
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
66,657
|
|
|
(912)
|
|
|
-
|
|
|
5
|
|
|
166
|
|
|
(128)
|
|
|
65,788
|
|
(1%)
|
|
Currency and commodities
|
|
|
48,596
|
|
|
(2,292)
|
|
|
-
|
|
|
860
|
|
|
(2,531)
|
|
|
23
|
|
|
44,656
|
|
(8%)
|
|
Long-term
|
|
|
3,245,005
|
|
|
22,289
|
|
|
(9,900)
|
|
|
7,581
|
|
|
95,503
|
|
|
(15,971)
|
|
|
3,344,507
|
|
3%
|
|
Cash management
|
|
|
256,694
|
|
|
(13,393)
|
|
|
-
|
|
|
-
|
|
|
593
|
|
|
(1,965)
|
|
|
241,929
|
|
(6%)
|
|
Sub-total
|
|
|
3,501,699
|
|
|
8,896
|
|
|
(9,900)
|
|
|
7,581
|
|
|
96,096
|
|
|
(17,936)
|
|
|
3,586,436
|
|
2%
|
|
Advisory(4)
|
|
|
146,746
|
|
|
(48,251)
|
|
|
-
|
|
|
-
|
|
|
1,224
|
|
|
(2,068)
|
|
|
97,651
|
|
(33%)
|
|
Total AUM
|
|
$
|
3,648,445
|
|
$
|
(39,355)
|
|
$
|
(9,900)
|
|
$
|
7,581
|
|
$
|
97,320
|
|
$
|
(20,004)
|
|
$
|
3,684,087
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts include distributions representing return
of capital and return on investment to investors.
|
|
(2) Amount includes AUM acquired in the Claymore
Investments, Inc. acquisition in March 2012.
|
|
(3) Foreign exchange reflects the impact of converting
non-U.S. dollar denominated AUM into U.S. dollars for reporting
purposes.
|
|
(4) Advisory AUM represents long-term portfolio
liquidation assignments.
|
|
(5) Data reflects the reclassification of prior period
AUM into the current period presentation.
|
|
(6) Amounts include outflows due to manager concentration
considerations.
|
|
|
BlackRock, Inc.
Media Relations:
Bobbie Collins,
212-810-8155
or
Investor Relations:
Ellen
Taylor, 212-810-3815
Source: BlackRock, Inc.