$3.857 Trillion in assets under management at June 30, 2013, up 8%
year over year
• Record base fees of $2.2 billion for the quarter
• Operating income growth of 2% from 2012, or 18% as adjusted, drove
adjusted operating margin expansion
• Continued commitment to sound capital management with $250 million of
quarterly share repurchases
• Funded new charitable foundation to focus on giving back to
communities where BlackRock operates, including, among other things,
helping to promote financial education for low-income families and
individuals
NEW YORK--(BUSINESS WIRE)--
BlackRock, Inc. (NYSE:BLK) today reported second quarter 2013 diluted
EPS of $4.19, up 36% from a year ago. Revenue increased 11% from the
second quarter 2012, reflecting growth in markets, long-dated net new
business and higher performance fees. Operating income for the second
quarter 2013 was $849 million with an operating margin of 34.2%. In
connection with the PennyMac IPO during the second quarter 2013, the
Company recorded a non-cash, non-operating pre-tax gain of $39 million
related to the carrying value of the Company’s equity method investment.
Subsequent to the PennyMac IPO, the Company contributed 6.1 million
units of its PennyMac investment to a new Donor Advised Fund (“DAF”)
(the “Charitable Contribution”). The Charitable Contribution resulted in
an operating expense of $124 million, offset by an $80 million non-cash,
non-operating pre-tax gain on the contributed units and a tax benefit of
approximately $57 million.
As adjusted results(1):
Second quarter 2013 diluted EPS of $4.15 improved 34% and operating
income of $982 million rose 18% compared with the second quarter 2012.
Diluted EPS included operating income of $4.10 per diluted share and net
non-operating income of $0.05 per diluted share, including the $39
million non-cash, pre-tax gain related to the PennyMac IPO. The
financial impact related to the Charitable Contribution has been
excluded from as adjusted results. Operating margin of 41.3% in the
second quarter 2013 rose 210 bps from the second quarter 2012. Compared
with the first quarter 2013, operating margin rose 130 bps, reflecting
growth in base fees, lower payroll taxes and lower organizational costs,
partially offset by lower performance fees and higher brand campaign
costs.
“Our second quarter results, which reflect adjusted operating income up
18% year-over-year, once again highlight the strength of our globally
diversified multi-client platform that was built to deliver in all
market environments,” commented Laurence D. Fink, Chairman and CEO of
BlackRock. “During the quarter we generated record base fees and $11.9
billion in long-dated net new business across a broad range of products,
including 11 funds that each raised more than $1 billion. These funds
showcased the diversity of our offering, with representation across all
major asset classes, client segments and geographies. Results were
driven by global demand from retail and institutional clients for
multi-asset class, unconstrained fixed income and retail alternative
products. Our strong product capabilities in the retail alternative
mutual fund space, coupled with our broad distribution platform,
uniquely position us in this high growth segment, where second quarter
net flows of $1.1 billion drove sequential quarter AUM growth of 72%.”
The table below presents AUM and a comparison of GAAP and as adjusted
results for certain financial measures:
|
AUM, GAAP and as adjusted results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
(Dollar amounts in millions, except per share data)
|
|
|
Q2
2013
|
|
|
Q2
2012
|
|
|
Change
|
|
|
Q1
2013
|
|
|
Change
|
|
|
|
2013
|
|
|
|
2012
|
|
|
Change
|
|
AUM
|
|
|
$
|
3,857,007
|
|
|
$
|
3,559,934
|
|
|
8%
|
|
|
$
|
3,936,409
|
|
|
(2%)
|
|
|
$
|
3,857,007
|
|
|
$
|
3,559,934
|
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
2,482
|
|
|
$
|
2,229
|
|
|
11%
|
|
|
$
|
2,449
|
|
|
1%
|
|
|
$
|
4,931
|
|
|
$
|
4,478
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
849
|
|
|
$
|
829
|
|
|
2%
|
|
|
$
|
909
|
|
|
(7%)
|
|
|
$
|
1,758
|
|
|
$
|
1,644
|
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
34.2%
|
|
|
|
37.2%
|
|
|
(300 bps)
|
|
|
|
37.1%
|
|
|
(290 bps)
|
|
|
|
35.7%
|
|
|
|
36.7%
|
|
|
(100 bps)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income(2)
|
|
|
$
|
729
|
|
|
$
|
554
|
|
|
32%
|
|
|
$
|
632
|
|
|
15%
|
|
|
$
|
1,361
|
|
|
$
|
1,126
|
|
|
21%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
$
|
4.19
|
|
|
$
|
3.08
|
|
|
36%
|
|
|
$
|
3.62
|
|
|
16%
|
|
|
$
|
7.81
|
|
|
$
|
6.22
|
|
|
26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares
|
|
|
|
173,873,583
|
|
|
|
179,590,702
|
|
|
(3%)
|
|
|
|
174,561,132
|
|
|
-%
|
|
|
|
174,268,870
|
|
|
|
180,753,515
|
|
|
(4%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income(1)
|
|
|
$
|
982
|
|
|
$
|
832
|
|
|
18%
|
|
|
$
|
921
|
|
|
7%
|
|
|
$
|
1,903
|
|
|
$
|
1,657
|
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin(1)
|
|
|
|
41.3%
|
|
|
|
39.2%
|
|
|
210 bps
|
|
|
|
40.0%
|
|
|
130 bps
|
|
|
|
40.6%
|
|
|
|
38.9%
|
|
|
170 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income(1)(2)
|
|
|
$
|
722
|
|
|
$
|
558
|
|
|
29%
|
|
|
$
|
637
|
|
|
13%
|
|
|
$
|
1,359
|
|
|
$
|
1,133
|
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS(1)
|
|
|
$
|
4.15
|
|
|
$
|
3.10
|
|
|
34%
|
|
|
$
|
3.65
|
|
|
14%
|
|
|
$
|
7.80
|
|
|
$
|
6.26
|
|
|
25%
|
|
(1)
|
|
See notes (a) through (f) to the Condensed Consolidated Statements
of Income and Supplemental Information on pages 13 through 16 for
more information on as adjusted items and the reconciliation to GAAP.
|
|
(2)
|
|
Net income represents net income attributable to BlackRock, Inc.
|
“While markets were volatile this quarter, not all investor behavior was
uniform. Our largest institutional investors remain committed to their
long-term investment strategies, while trading-oriented clients once
again turned to iShares as a highly effective tool to quickly and
efficiently adjust their market exposures. iShares flows were
driven by clients stepping back from emerging markets equities and long
duration fixed income, though outflows in those products were largely
offset by flows into the Core Series and our Minimum Volatility suite,
resulting in net outflows from iShares of $1 billion for the
quarter. Our products provided liquidity and transparency for our
clients worldwide, and the record volume of trading in certain of our
products reflects our position as the premier provider of highly liquid
ETFs.
“We are also seeing the early stages of a rotation within fixed income
as investors increasingly focus on the duration of their fixed income
portfolios, with flows moving into actively managed, unconstrained
products. We have top quartile performance in these areas, with flagship
funds like Multi-Asset Income and Strategic Income Opportunities each
gathering more than $1 billion in new assets. We continue to leverage
our diverse distribution capabilities to deliver superior products to
our retail clients, and deepen and develop institutional relationships,
as clients look to us to evaluate risk and provide solutions.
“As we highlighted at our inaugural Investor Day, we see a number of
exciting growth opportunities across the firm and are continuing our
commitment to finding innovative solutions to serve our clients’ needs
in changing market conditions. This commitment to innovation is
illustrated by the launch of our new iSharesBonds series in April
combining the advantages of traditional bonds and ETFs and providing our
clients a tool to simplify their fixed income portfolio while managing
duration risk. In the second quarter, we also provided funding for a new
charitable initiative that will launch in 2014 and deepen our commitment
to public responsibility that has always been fundamental to our
business.
“We have built a unique platform at BlackRock that is differentiated by
the diversity of our clients, geographies and investment strategies, all
underpinned with risk management powered by Aladdin. That
platform drove more than $51 billion in long-dated net new business in
the first half of the year, and we believe it positions us to continue
to deliver both for our clients and our shareholders across market
cycles.”
Second Quarter Business Highlights
The following table presents net inflows, AUM, base fees and business
mix by client and product type:
|
Net inflows, AUM, base fees and business
mix, by client type
|
|
(Dollar amounts in millions)
|
|
|
|
|
|
|
|
Q2 2013
Net Inflows
|
|
|
June 30, 2013
AUM
|
|
|
Q2 2013
Base Fees
|
|
|
June 30, 2013
AUM
% of Total
|
|
|
Q2 2013
Base Fees
% of Total
|
|
Retail
|
|
|
|
|
|
|
|
$
|
5,076
|
|
|
|
$
|
414,379
|
|
|
$
|
697
|
|
|
12
|
%
|
|
|
33
|
%
|
|
iShares
|
|
|
|
|
|
|
|
|
(963
|
)
|
|
|
|
774,397
|
|
|
|
723
|
|
|
22
|
%
|
|
|
35
|
%
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
|
|
|
|
|
1,317
|
|
|
|
|
861,231
|
|
|
|
450
|
|
|
24
|
%
|
|
|
21
|
%
|
|
Index
|
|
|
|
|
|
|
|
|
6,477
|
|
|
|
|
1,514,448
|
|
|
|
224
|
|
|
42
|
%
|
|
|
11
|
%
|
|
Total institutional
|
|
|
|
|
|
|
|
|
7,794
|
|
|
|
|
2,375,679
|
|
|
|
674
|
|
|
66
|
%
|
|
|
32
|
%
|
|
Total long-term
|
|
|
|
|
|
|
|
$
|
11,907
|
|
|
|
$
|
3,564,455
|
|
|
$
|
2,094
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net inflows, AUM, base fees and business
mix, by product type
|
|
(Dollar amounts in millions)
|
|
|
|
|
|
|
|
Q2 2013
Net Inflows
|
|
|
June 30, 2013
AUM
|
|
|
Q2 2013
Base Fees
|
|
|
June 30, 2013
AUM
% of Total
|
|
|
Q2 2013
Base Fees
% of Total
|
|
Equity
|
|
|
|
|
|
|
|
|
($348
|
)
|
|
|
$
|
1,973,115
|
|
|
$
|
1,177
|
|
|
55
|
%
|
|
|
56
|
%
|
|
Fixed income
|
|
|
|
|
|
|
|
|
5,101
|
|
|
|
|
1,205,359
|
|
|
|
503
|
|
|
34
|
%
|
|
|
24
|
%
|
|
Multi-asset
|
|
|
|
|
|
|
|
|
11,051
|
|
|
|
|
289,305
|
|
|
|
253
|
|
|
8
|
%
|
|
|
12
|
%
|
|
Alternatives
|
|
|
|
|
|
|
|
|
(3,897
|
)
|
|
|
|
96,676
|
|
|
|
161
|
|
|
3
|
%
|
|
|
8
|
%
|
|
Total long-term
|
|
|
|
|
|
|
|
$
|
11,907
|
|
|
|
$
|
3,564,455
|
|
|
$
|
2,094
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net long-term inflows of $10.5 billion and $3.7 billion from clients in
EMEA and Asia-Pacific, respectively, were offset by net outflows of $2.3
billion from Americas (defined as the United States, Caribbean, Canada,
Latin America and Iberia) clients. At June 30, 2013, BlackRock managed
61% of long-term AUM for investors in the Americas and 39% for
international clients.
-
Retail net long-term inflows of $5.1 billion globally
included net inflows of $3.5 billion in the United States and $1.4
billion in EMEA. Growth was largely driven by a strong interest in
unconstrained fixed income and multi-asset income offerings. Flagship
funds in these areas include our Strategic Income Opportunities and
Multi-Asset Income funds, each of which raised over $1 billion in
assets during the quarter. Alternative mutual funds also had a strong
quarter, with $1.1 billion of net inflows, representing 72% AUM growth
over the prior quarter.
-
iShares net long-term outflows of $1.0 billion included
U.S. iShares net long-term outflows of $3.6 billion due to
outflows of $7.2 billion, $2.0 billion and $2.1 billion from our
flagship emerging markets equity, fixed income and commodities funds,
respectively. These outflows more than offset positive flows of $3.6
billion into the Core Series and $2.0 billion into Minimum Volatility
equity funds in the United States and $2.2 billion of equity inflows
into European iShares.
-
Institutional active net long-term inflows of $1.3
billion reflected strong flows of $8.8 billion into multi-asset class
products, driven by continued demand for our LifePath target
date suite, which had net inflows of $4.0 billion. Flows were
partially offset by combined equity and fixed income net outflows of
$4.2 billion, and active currency redemptions of $2.0 billion.
-
Institutional index net long-term inflows of $6.5
billion were primarily driven by demand for local currency fixed
income products in EMEA and for global bond mandates in Asia-Pacific.
Cash management AUM decreased 3%, or $8.8 billion, to $252.6
billion.
Advisory AUM decreased 13% to $40.0 billion due to planned
portfolio liquidations.
Investment performance as of
June 30, 2013 is presented in the following table:
|
Investment performance
|
|
|
|
One-year period
|
|
Three-year period
|
|
Five-year period
|
|
Fixed Income:
|
|
|
|
|
|
|
|
Actively managed products above benchmark or peer median
|
|
|
|
|
|
|
|
Taxable
|
|
76%
|
|
80%
|
|
70%
|
|
Tax-exempt
|
|
57%
|
|
66%
|
|
74%
|
|
Passively managed products within or above tolerance
|
|
94%
|
|
95%
|
|
87%
|
|
Equity:
|
|
|
|
|
|
|
|
Actively managed products above benchmark or peer median
|
|
|
|
|
|
|
|
Fundamental
|
|
42%
|
|
37%
|
|
42%
|
|
Scientific
|
|
82%
|
|
94%
|
|
60%
|
|
Passively managed products within or above tolerance
|
|
95%
|
|
97%
|
|
95%
|
|
|
|
|
|
|
|
|
Second Quarter Financial Highlights
PennyMac IPO. At March 31, 2013, BlackRock held an approximately
one-third economic equity interest in Private National Mortgage
Acceptance Company, LLC (“PNMAC”), which is accounted for as an equity
method investment. On May 8, 2013, PennyMac Financial Services, Inc.
(“PennyMac”) became the sole managing member of PNMAC in connection with
an initial public offering of PennyMac (the “PennyMac IPO”). As a result
of the PennyMac IPO, BlackRock recorded a non-cash, non-operating
pre-tax gain of $39 million related to the carrying value of its equity
method investment. BlackRock was not a seller in the PennyMac IPO.
Charitable Contribution. Subsequent to the PennyMac IPO, the
Company made a Charitable Contribution of approximately six million
units of its PennyMac investment to a new DAF in the second quarter. The
fair value of the Charitable Contribution was $124 million and is
included in general and administration expenses on the condensed
consolidated statement of income. In connection with the Charitable
Contribution, the Company also recorded a non-cash, non-operating
pre-tax gain of $80 million related to the contributed investment and a
tax benefit of approximately $57 million.
The Company will continue to account for its remaining approximately 20%
interest (approximately 16 million units) in PennyMac as an equity
method investment.
The general and administration expenses, non-operating gain and
associated tax benefit related to the Charitable Contribution have been
excluded from as adjusted results, among other items. For more
information on as adjusted items and the reconciliation to GAAP, see
notes to the Condensed Consolidated Statements of Income.
The new charitable fund will launch in 2014 and support BlackRock’s
philanthropic initiatives to give back to the communities in which the
Company operates, including, among other things, helping to promote
financial education for low-income families and individuals.
Comparison of the Second Quarter 2013 to the
Second Quarter 2012
The following discusses the Company’s results on a GAAP basis:
Operating income: Operating income
was $849 million compared with $829 million in the prior year. The
current quarter included the $124 million expense related to the
Charitable Contribution.
Revenue of $2.5 billion increased $253 million from $2.2 billion in the
prior year, primarily due to the following:
-
Investment advisory, administration fees and securities lending
revenue of $2.2 billion increased $187 million from the prior
year due to growth in long-term average AUM. Securities lending fees
were $136 million in the current quarter and $157 million in the prior
year quarter. The decrease in securities lending fees was driven
primarily by lower spreads.
-
Performance fees of $89 million increased $48 million,
primarily reflecting higher fees from alternative products.
-
BlackRock Solutions® and
advisory revenue totaled $138 million, including $98
million of revenue from the Aladdin® business,
compared with $131 million in the prior year quarter, which included
$95 million of Aladdin business revenue. The increase primarily
reflected higher revenue from Aladdin mandates and higher
one-time revenue from advisory assignments.
Total operating expenses of $1.6 billion increased $233 million and
included the previously mentioned $124 million related to the Charitable
Contribution. Results were primarily driven by the following:
-
Employee compensation and benefits increased $78
million, reflecting higher incentive compensation driven by higher
operating income, including higher performance fees.
-
Direct fund expenses increased $18 million,
reflecting an increase in average AUM where BlackRock pays certain
non-advisory expenses of the funds.
-
General and administration expenses increased
$141 million, largely driven by the $124 million related to the
Charitable Contribution.
Non-operating income (expense):
Non-operating income, net of non-controlling interests, was $92 million
compared with $46 million non-operating expense in the prior year
quarter. The current quarter included the $39 million gain related to
the PennyMac IPO, the $80 million gain related to the Charitable
Contribution and $22 million of net positive marks, offset by $49
million of net interest expense.
Income tax expense: Income tax
expense totaled $212 million and $229 million for the second quarter
2013 and 2012, respectively. The GAAP effective income tax rate was
22.5% compared with 29.3% for the prior year quarter. The current
quarter included the approximately $57 million tax benefit recognized in
connection with the Charitable Contribution. In addition, the current
quarter included a tax benefit of approximately $29 million, primarily
due to the realization of loss carryforwards.
The current quarter as adjusted effective tax rate of 27.3% excluded the
$57 million tax benefit related to the Charitable Contribution and
included the above mentioned tax benefit of $29 million. Excluding the
$29 million tax benefit, the as adjusted effective tax rate was 30.2%.
Comparison of the Second Quarter 2013 to the
First Quarter 2013
The following discusses the Company’s results on a GAAP basis:
Operating income: Operating income
was $849 million compared with $909 million in the prior quarter. The
current quarter included the $124 million expense related to the
Charitable Contribution.
Revenue of $2.5 billion increased $33 million from $2.4 billion in the
prior quarter, primarily due to the following:
-
Investment advisory, administration fees and securities lending
revenue of $2.2 billion increased $48 million, driven by
higher long-term average AUM, the effect of one additional revenue day
in the quarter and seasonally higher securities lending fees.
Securities lending fees were $136 million and $112 million in the
second quarter and first quarter, respectively. The increase in
securities lending fees was driven by higher seasonal demand.
-
Performance fees were $89 million compared with $108
million in the first quarter, primarily reflecting seasonally lower
performance fees from alternative products.
-
BlackRock Solutions and advisory revenue of $138
million, including $98 million of revenue from the Aladdin business,
compared with $126 million in the first quarter, which included $99
million of Aladdin business revenue. The increase primarily
reflected higher revenue from advisory assignments.
Total operating expenses of $1.6 billion increased $93 million and
included the previously mentioned $124 million related to the Charitable
Contribution. Results were primarily driven by the following:
-
Employee compensation and benefits decreased $41
million, primarily reflecting lower organizational alignment costs and
seasonally lower payroll taxes, partially offset by higher incentive
compensation.
-
General and administration expenses increased $134
million, primarily due to the $124 million related to the Charitable
Contribution, higher brand campaign costs and foreign currency
remeasurement. The increase was partially offset by the non-recurrence
of closed-end fund launch costs of $16 million (excluding $2 million
included in employee compensation and benefits expense) recorded in
the previous quarter.
Non-operating income (expense):
Non-operating income, net of non-controlling interests, was $92 million
compared with $7 million in the first quarter. The current quarter
included the $39 million gain related to the PennyMac IPO and the $80
million gain related to the Charitable Contribution, partially offset by
lower positive marks primarily on distressed credit/mortgage funds and
private equity fund co-investments.
Income tax expense: Income tax
expense totaled $212 million and $284 million for the second quarter
2013 and first quarter 2013, respectively. The GAAP effective income tax
rate was 22.5% compared with 31.0% for the first quarter. The current
quarter included the approximately $57 million tax benefit recognized in
connection with the Charitable Contribution. In addition, the current
quarter included a tax benefit of approximately $29 million, primarily
due to the realization of loss carryforwards.
Teleconference, Webcast and Presentation
Information
Chairman and Chief Executive Officer, Laurence D. Fink, and Chief
Financial Officer, Gary Shedlin, will host a teleconference call for
investors and analysts on Thursday, July 18, 2013, 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 14878195). A
live, listen-only webcast will also be available via the investor
relations section of www.blackrock.com.
Both the teleconference and webcast will be available for replay by
12:30 p.m. (Eastern Time) on Thursday, July 18, 2013 and ending at
midnight on Thursday, August 1, 2013. To access the replay of the
teleconference, callers from the United States should dial (800)
585-8367 and callers from outside the United States should dial (404)
537-3406 and enter the Conference ID Number 14878195. To access the
webcast, please visit the investor relations section of www.blackrock.com.
About BlackRock
BlackRock is a leader in investment management, risk management and
advisory services for institutional and retail clients worldwide. At
June 30, 2013, BlackRock’s AUM was $3.857 trillion. BlackRock helps
clients meet their goals and overcome challenges with a range of
products that include separate accounts, mutual funds, iShares®
(exchange-traded funds), and other pooled investment vehicles. BlackRock
also offers risk management, advisory and enterprise investment system
services to a broad base of institutional investors through BlackRock
Solutions®. Headquartered in New York City, as of June
30, 2013, the firm had approximately 10,700 employees in 30 countries
and a major presence in key global markets, including North and South
America, Europe, Asia, Australia and the Middle East and Africa. For
additional information, please visit the Company's website at www.blackrock.com.
|
|
|
Condensed Consolidated Statements of Income and Supplemental
Information
|
|
(Dollar amounts in millions, except per share data), (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Ended
|
|
|
|
|
|
June 30,
|
|
|
|
March 31,
|
|
|
|
|
|
2013
|
|
2012
|
|
$ Change
|
|
2013
|
|
$ Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
$2,177
|
|
|
$1,990
|
|
|
$187
|
|
|
$2,129
|
|
|
$48
|
|
|
Investment advisory performance fees
|
|
89
|
|
|
41
|
|
|
48
|
|
|
108
|
|
|
(19
|
)
|
|
BlackRock Solutions and advisory
|
|
138
|
|
|
131
|
|
|
7
|
|
|
126
|
|
|
12
|
|
|
Distribution fees
|
|
18
|
|
|
20
|
|
|
(2
|
)
|
|
17
|
|
|
1
|
|
|
Other revenue
|
|
60
|
|
|
47
|
|
|
13
|
|
|
69
|
|
|
(9
|
)
|
|
Total revenue
|
|
2,482
|
|
|
2,229
|
|
|
253
|
|
|
2,449
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
864
|
|
|
786
|
|
|
78
|
|
|
905
|
|
|
(41
|
)
|
|
Distribution and servicing costs
|
|
90
|
|
|
93
|
|
|
(3
|
)
|
|
91
|
|
|
(1
|
)
|
|
Amortization of deferred sales commissions
|
|
12
|
|
|
14
|
|
|
(2
|
)
|
|
12
|
|
|
-
|
|
|
Direct fund expenses
|
|
162
|
|
|
144
|
|
|
18
|
|
|
161
|
|
|
1
|
|
|
General and administration
|
|
465
|
|
|
324
|
|
|
141
|
|
|
331
|
|
|
134
|
|
|
Amortization of intangible assets
|
|
40
|
|
|
39
|
|
|
1
|
|
|
40
|
|
|
-
|
|
|
Total expenses
|
|
1,633
|
|
|
1,400
|
|
|
233
|
|
|
1,540
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
849
|
|
|
829
|
|
|
20
|
|
|
909
|
|
|
(60
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
141
|
|
|
(7
|
)
|
|
148
|
|
|
62
|
|
|
79
|
|
|
Net gain (loss) on consolidated variable interest entities
|
|
(23
|
)
|
|
11
|
|
|
(34
|
)
|
|
27
|
|
|
(50
|
)
|
|
Interest and dividend income
|
|
4
|
|
|
8
|
|
|
(4
|
)
|
|
6
|
|
|
(2
|
)
|
|
Interest expense
|
|
(53
|
)
|
|
(52
|
)
|
|
(1
|
)
|
|
(54
|
)
|
|
1
|
|
|
Total non-operating income (expense)
|
|
69
|
|
|
(40
|
)
|
|
109
|
|
|
41
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
918
|
|
|
789
|
|
|
129
|
|
|
950
|
|
|
(32
|
)
|
|
Income tax expense
|
|
212
|
|
|
229
|
|
|
(17
|
)
|
|
284
|
|
|
(72
|
)
|
|
Net income
|
|
706
|
|
|
560
|
|
|
146
|
|
|
666
|
|
|
40
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to non-controlling interests
|
|
(23
|
)
|
|
6
|
|
|
(29
|
)
|
|
34
|
|
|
(57
|
)
|
|
Net income attributable to BlackRock, Inc.
|
|
$729
|
|
|
$554
|
|
|
$175
|
|
|
$632
|
|
|
$97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding (f)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
170,648,731
|
|
|
177,010,239
|
|
|
(6,361,508
|
)
|
|
171,301,800
|
|
|
(653,069
|
)
|
|
Diluted
|
|
173,873,583
|
|
|
179,590,702
|
|
|
(5,717,119
|
)
|
|
174,561,132
|
|
|
(687,549
|
)
|
|
Earnings per share attributable to BlackRock, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
common stockholders (e) (f)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$4.27
|
|
|
$3.13
|
|
|
$1.14
|
|
|
$3.69
|
|
|
$0.58
|
|
|
Diluted
|
|
$4.19
|
|
|
$3.08
|
|
|
$1.11
|
|
|
$3.62
|
|
|
$0.57
|
|
|
Cash dividends declared and paid per share
|
|
$1.68
|
|
|
$1.50
|
|
|
$0.18
|
|
|
$1.68
|
|
|
$0.00
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
$3,857,007
|
|
|
$3,559,934
|
|
|
$297,073
|
|
|
$3,936,409
|
|
|
($79,402
|
)
|
|
Shares outstanding (end of period)
|
|
170,285,093
|
|
|
172,901,037
|
|
|
(2,615,944
|
)
|
|
171,102,532
|
|
|
(817,439
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
34.2
|
%
|
|
37.2
|
%
|
|
(300) bps
|
|
|
37.1
|
%
|
|
(290) bps
|
|
|
Effective tax rate
|
|
22.5
|
%
|
|
29.3
|
%
|
|
(680) bps
|
|
|
31.0
|
%
|
|
(850) bps
|
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (a)
|
|
$982
|
|
|
$832
|
|
|
$150
|
|
|
$921
|
|
|
$61
|
|
|
Operating margin (a)
|
|
41.3
|
%
|
|
39.2
|
%
|
|
210 bps
|
|
|
40.0
|
%
|
|
130 bps
|
|
|
Non-operating income (expense), less net income (loss) attributable
to non-controlling interests (b)
|
|
$12
|
|
|
($43
|
)
|
|
$55
|
|
|
$3
|
|
|
$9
|
|
|
Net income attributable to BlackRock, Inc. (c) (d)
|
|
$722
|
|
|
$558
|
|
|
$164
|
|
|
$637
|
|
|
$85
|
|
|
Diluted earnings attributable to BlackRock, Inc. common stockholders
per share (c) (d) (e) (f)
|
|
$4.15
|
|
|
$3.10
|
|
|
$1.05
|
|
|
$3.65
|
|
|
$0.50
|
|
|
Effective tax rate
|
|
27.3
|
%
|
|
29.3
|
%
|
|
(200) bps
|
|
|
31.0
|
%
|
|
(370) bps
|
|
|
|
|
See notes (a) through (f) for more information on as adjusted
items and the reconciliation to GAAP.
|
|
|
|
|
|
Condensed Consolidated Statements of Income and Supplemental
Information
|
|
(Dollar amounts in millions, except per share data), (unaudited)
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2013
|
|
2012
|
|
$ Change
|
|
Revenue
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
$4,306
|
|
|
$3,967
|
|
|
$339
|
|
|
Investment advisory performance fees
|
|
197
|
|
|
121
|
|
|
76
|
|
|
BlackRock Solutions and advisory
|
|
264
|
|
|
254
|
|
|
10
|
|
|
Distribution fees
|
|
35
|
|
|
39
|
|
|
(4
|
)
|
|
Other revenue
|
|
129
|
|
|
97
|
|
|
32
|
|
|
Total revenue
|
|
4,931
|
|
|
4,478
|
|
|
453
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
1,769
|
|
|
1,611
|
|
|
158
|
|
|
Distribution and servicing costs
|
|
181
|
|
|
188
|
|
|
(7
|
)
|
|
Amortization of deferred sales commissions
|
|
24
|
|
|
30
|
|
|
(6
|
)
|
|
Direct fund expenses
|
|
323
|
|
|
296
|
|
|
27
|
|
|
General and administration
|
|
796
|
|
|
631
|
|
|
165
|
|
|
Amortization of intangible assets
|
|
80
|
|
|
78
|
|
|
2
|
|
|
Total expenses
|
|
3,173
|
|
|
2,834
|
|
|
339
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
1,758
|
|
|
1,644
|
|
|
114
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
203
|
|
|
68
|
|
|
135
|
|
|
Net gain (loss) on consolidated variable interest entities
|
|
4
|
|
|
(1
|
)
|
|
5
|
|
|
Interest and dividend income
|
|
10
|
|
|
17
|
|
|
(7
|
)
|
|
Interest expense
|
|
(107
|
)
|
|
(101
|
)
|
|
(6
|
)
|
|
Total non-operating income (expense)
|
|
110
|
|
|
(17
|
)
|
|
127
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
1,868
|
|
|
1,627
|
|
|
241
|
|
|
Income tax expense
|
|
496
|
|
|
492
|
|
|
4
|
|
|
Net income
|
|
1,372
|
|
|
1,135
|
|
|
237
|
|
|
Less:
|
|
|
|
|
|
|
|
Net income (loss) attributable to non-controlling interests
|
|
11
|
|
|
9
|
|
|
2
|
|
|
Net income attributable to BlackRock, Inc.
|
|
$1,361
|
|
|
$1,126
|
|
|
$235
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding (f)
|
|
|
|
|
|
|
|
Basic
|
|
170,973,462
|
|
|
178,016,539
|
|
|
(7,043,077
|
)
|
|
Diluted
|
|
174,268,870
|
|
|
180,753,515
|
|
|
(6,484,645
|
)
|
|
Earnings per share attributable to BlackRock, Inc.
|
|
|
|
|
|
|
|
common stockholders (e) (f)
|
|
|
|
|
|
|
|
Basic
|
|
$7.96
|
|
|
$6.32
|
|
|
$1.64
|
|
|
Diluted
|
|
$7.81
|
|
|
$6.22
|
|
|
$1.59
|
|
|
Cash dividends declared and paid per share
|
|
$3.36
|
|
|
$3.00
|
|
|
$0.36
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
$3,857,007
|
|
|
$3,559,934
|
|
|
$297,073
|
|
|
Shares outstanding (end of period)
|
|
170,285,093
|
|
|
172,901,037
|
|
|
(2,615,944
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
Operating margin
|
|
35.7
|
%
|
|
36.7
|
%
|
|
(100) bps
|
|
|
Effective tax rate
|
|
26.7
|
%
|
|
30.4
|
%
|
|
(370) bps
|
|
|
As adjusted:
|
|
|
|
|
|
|
|
Operating income (a)
|
|
$1,903
|
|
|
$1,657
|
|
|
$246
|
|
|
Operating margin (a)
|
|
40.6
|
%
|
|
38.9
|
%
|
|
170 bps
|
|
|
Non-operating income (expense), less net income (loss) attributable
to non-controlling interests (b)
|
|
$15
|
|
|
($28
|
)
|
|
$43
|
|
|
Net income attributable to BlackRock, Inc. (c) (d)
|
|
$1,359
|
|
|
$1,133
|
|
|
$226
|
|
|
Diluted earnings attributable to BlackRock, Inc. common stockholders
per share (c) (d) (e) (f)
|
|
$7.80
|
|
|
$6.26
|
|
|
$1.54
|
|
|
Effective tax rate
|
|
29.1
|
%
|
|
30.4
|
%
|
|
(130) bps
|
|
|
|
|
See notes (a) through (f) for more information on as adjusted
items and the reconciliation to GAAP.
|
|
|
|
|
|
Assets Under Management
|
|
(Dollar amounts in millions), (unaudited)
|
|
|
|
Current Quarter Component Changes by Client Type and Product
|
|
|
|
|
|
|
|
|
|
Net
|
|
Market
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
subscriptions
|
|
appreciation
|
|
Foreign
|
|
June 30,
|
|
Q2 2013
|
|
|
|
2013
|
|
(redemptions)(1)
|
|
(depreciation)
|
|
exchange(2)
|
|
2013
|
|
Average AUM(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$
|
169,402
|
|
$
|
(1,753
|
)
|
|
$
|
(6,068
|
)
|
|
$
|
(140
|
)
|
|
$
|
161,441
|
|
$
|
167,174
|
|
Fixed income
|
|
|
143,711
|
|
|
2,636
|
|
|
|
(4,778
|
)
|
|
|
(28
|
)
|
|
|
141,541
|
|
|
144,877
|
|
Multi-asset
|
|
|
97,373
|
|
|
2,489
|
|
|
|
(501
|
)
|
|
|
(256
|
)
|
|
|
99,105
|
|
|
99,237
|
|
Alternatives
|
|
|
10,655
|
|
|
1,704
|
|
|
|
(66
|
)
|
|
|
(1
|
)
|
|
|
12,292
|
|
|
11,321
|
|
Retail subtotal
|
|
|
421,141
|
|
|
5,076
|
|
|
|
(11,413
|
)
|
|
|
(425
|
)
|
|
|
414,379
|
|
|
422,609
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
588,694
|
|
|
2,655
|
|
|
|
(12,922
|
)
|
|
|
(1,159
|
)
|
|
|
577,268
|
|
|
592,653
|
|
Fixed income
|
|
|
189,501
|
|
|
(1,449
|
)
|
|
|
(6,921
|
)
|
|
|
(188
|
)
|
|
|
180,943
|
|
|
190,060
|
|
Multi-asset
|
|
|
1,035
|
|
|
99
|
|
|
|
(21
|
)
|
|
|
(6
|
)
|
|
|
1,107
|
|
|
1,094
|
|
Alternatives
|
|
|
23,546
|
|
|
(2,268
|
)
|
|
|
(6,188
|
)
|
|
|
(11
|
)
|
|
|
15,079
|
|
|
19,187
|
|
iShares subtotal
|
|
|
802,776
|
|
|
(963
|
)
|
|
|
(26,052
|
)
|
|
|
(1,364
|
)
|
|
|
774,397
|
|
|
802,994
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
130,138
|
|
|
(2,938
|
)
|
|
|
361
|
|
|
|
(1,136
|
)
|
|
|
126,425
|
|
|
130,545
|
|
Fixed income
|
|
|
505,391
|
|
|
(1,269
|
)
|
|
|
(11,982
|
)
|
|
|
(1,650
|
)
|
|
|
490,490
|
|
|
502,573
|
|
Multi-asset
|
|
|
175,524
|
|
|
8,778
|
|
|
|
(4,064
|
)
|
|
|
72
|
|
|
|
180,310
|
|
|
179,882
|
|
Alternatives
|
|
|
67,688
|
|
|
(3,254
|
)
|
|
|
26
|
|
|
|
(454
|
)
|
|
|
64,006
|
|
|
65,835
|
|
Active subtotal
|
|
|
878,741
|
|
|
1,317
|
|
|
|
(15,659
|
)
|
|
|
(3,168
|
)
|
|
|
861,231
|
|
|
878,835
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
1,104,361
|
|
|
1,688
|
|
|
|
8,013
|
|
|
|
(6,081
|
)
|
|
|
1,107,981
|
|
|
1,121,347
|
|
Fixed income
|
|
|
406,930
|
|
|
5,183
|
|
|
|
(16,497
|
)
|
|
|
(3,231
|
)
|
|
|
392,385
|
|
|
406,456
|
|
Multi-asset
|
|
|
9,634
|
|
|
(315
|
)
|
|
|
(339
|
)
|
|
|
(197
|
)
|
|
|
8,783
|
|
|
9,358
|
|
Alternatives
|
|
|
5,672
|
|
|
(79
|
)
|
|
|
(292
|
)
|
|
|
(2
|
)
|
|
|
5,299
|
|
|
5,514
|
|
Index subtotal
|
|
|
1,526,597
|
|
|
6,477
|
|
|
|
(9,115
|
)
|
|
|
(9,511
|
)
|
|
|
1,514,448
|
|
|
1,542,675
|
|
Long-term
|
|
|
3,629,255
|
|
|
11,907
|
|
|
|
(62,239
|
)
|
|
|
(14,468
|
)
|
|
|
3,564,455
|
|
|
3,647,113
|
|
Cash management
|
|
|
261,329
|
|
|
(8,829
|
)
|
|
|
30
|
|
|
|
32
|
|
|
|
252,562
|
|
|
|
Advisory (4)
|
|
|
45,825
|
|
|
(4,891
|
)
|
|
|
(114
|
)
|
|
|
(830
|
)
|
|
|
39,990
|
|
|
|
Total
|
|
$
|
3,936,409
|
|
$
|
(1,813
|
)
|
|
$
|
(62,323
|
)
|
|
$
|
(15,266
|
)
|
|
$
|
3,857,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Product
|
|
|
|
|
|
|
|
|
|
Net
|
|
Market
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
subscriptions
|
|
appreciation
|
|
Foreign
|
|
June 30,
|
|
Q2 2013
|
|
|
|
2013
|
|
(redemptions)(1)
|
|
(depreciation)
|
|
exchange(2)
|
|
2013
|
|
Average AUM(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$
|
291,759
|
|
$
|
(4,333
|
)
|
|
$
|
(5,863
|
)
|
|
$
|
(1,231
|
)
|
|
$
|
280,332
|
|
$
|
290,002
|
|
iShares
|
|
|
588,694
|
|
|
2,655
|
|
|
|
(12,922
|
)
|
|
|
(1,159
|
)
|
|
|
577,268
|
|
|
592,653
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
648,865
|
|
|
1,367
|
|
|
|
(16,754
|
)
|
|
|
(1,670
|
)
|
|
|
631,808
|
|
|
647,218
|
|
iShares
|
|
|
189,501
|
|
|
(1,449
|
)
|
|
|
(6,921
|
)
|
|
|
(188
|
)
|
|
|
180,943
|
|
|
190,060
|
|
Multi-asset
|
|
|
283,566
|
|
|
11,051
|
|
|
|
(4,925
|
)
|
|
|
(387
|
)
|
|
|
289,305
|
|
|
289,571
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
69,943
|
|
|
406
|
|
|
|
56
|
|
|
|
(178
|
)
|
|
|
70,227
|
|
|
70,146
|
|
Currency and commodities (5)
|
|
|
37,618
|
|
|
(4,303
|
)
|
|
|
(6,576
|
)
|
|
|
(290
|
)
|
|
|
26,449
|
|
|
31,711
|
|
Sub-total
|
|
|
2,109,946
|
|
|
5,394
|
|
|
|
(53,905
|
)
|
|
|
(5,103
|
)
|
|
|
2,056,332
|
|
|
2,111,361
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
1,112,142
|
|
|
1,330
|
|
|
|
8,169
|
|
|
|
(6,126
|
)
|
|
|
1,115,515
|
|
|
1,129,064
|
|
Fixed income
|
|
|
407,167
|
|
|
5,183
|
|
|
|
(16,503
|
)
|
|
|
(3,239
|
)
|
|
|
392,608
|
|
|
406,688
|
|
Sub-total Non-ETF Index
|
|
|
1,519,309
|
|
|
6,513
|
|
|
|
(8,334
|
)
|
|
|
(9,365
|
)
|
|
|
1,508,123
|
|
|
1,535,752
|
|
Long-term
|
|
$
|
3,629,255
|
|
$
|
11,907
|
|
|
$
|
(62,239
|
)
|
|
$
|
(14,468
|
)
|
|
$
|
3,564,455
|
|
$
|
3,647,113
|
|
|
|
(1) Amounts include distributions
representing return of capital and return on investment to
investors.
|
|
(2) Foreign exchange reflects the impact of converting
non-U.S. dollar denominated AUM into U.S. dollars for reporting
purposes.
|
|
(3) Average AUM is calculated as the average of the
month-end spot AUM amounts for the trailing four, seven and
thirteen months for quarter-to-date, year-to-date and
year-over-year periods, respectively.
|
|
(4) Advisory AUM represents long-term portfolio
liquidation assignments.
|
|
(5) Amounts include commodity iShares.
|
|
|
|
NOTE: Certain prior period information has been reclassified to
conform to current period presentation.
|
|
|
|
|
|
Assets Under Management
|
|
(Dollar amounts in millions), (unaudited)
|
|
|
|
Year-to-Date Component Changes by Client Type and Product
|
|
|
|
|
|
|
|
|
|
Net
|
|
Market
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
subscriptions
|
|
appreciation
|
|
Foreign
|
|
June 30,
|
|
Year-to-Date
|
|
|
|
2012
|
|
(redemptions)(1)
|
|
(depreciation)
|
|
exchange(2)
|
|
2013
|
|
Average AUM(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$ 164,748
|
|
$ (2,364
|
)
|
|
$ 960
|
|
|
$ (1,903
|
)
|
|
$ 161,441
|
|
$ 167,598
|
|
Fixed income
|
|
138,425
|
|
8,073
|
|
|
(4,671
|
)
|
|
(286
|
)
|
|
141,541
|
|
143,014
|
|
Multi-asset
|
|
90,626
|
|
5,379
|
|
|
3,511
|
|
|
(411
|
)
|
|
99,105
|
|
96,577
|
|
Alternatives
|
|
9,685
|
|
2,783
|
|
|
(16
|
)
|
|
(160
|
)
|
|
12,292
|
|
10,718
|
|
Retail subtotal
|
|
403,484
|
|
13,871
|
|
|
(216
|
)
|
|
(2,760
|
)
|
|
414,379
|
|
417,907
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
534,648
|
|
28,934
|
|
|
16,952
|
|
|
(3,266
|
)
|
|
577,268
|
|
579,771
|
|
Fixed income
|
|
192,852
|
|
(2,465
|
)
|
|
(7,883
|
)
|
|
(1,561
|
)
|
|
180,943
|
|
190,317
|
|
Multi-asset
|
|
869
|
|
228
|
|
|
18
|
|
|
(8
|
)
|
|
1,107
|
|
1,032
|
|
Alternatives
|
|
24,337
|
|
(2,066
|
)
|
|
(7,149
|
)
|
|
(43
|
)
|
|
15,079
|
|
21,466
|
|
iShares subtotal
|
|
752,706
|
|
24,631
|
|
|
1,938
|
|
|
(4,878
|
)
|
|
774,397
|
|
792,586
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
129,024
|
|
(8,582
|
)
|
|
10,670
|
|
|
(4,687
|
)
|
|
126,425
|
|
130,167
|
|
Fixed income
|
|
518,102
|
|
(9,043
|
)
|
|
(10,308
|
)
|
|
(8,261
|
)
|
|
490,490
|
|
507,546
|
|
Multi-asset
|
|
166,708
|
|
14,607
|
|
|
2,563
|
|
|
(3,568
|
)
|
|
180,310
|
|
175,733
|
|
Alternatives
|
|
70,861
|
|
(5,965
|
)
|
|
668
|
|
|
(1,558
|
)
|
|
64,006
|
|
67,684
|
|
Active subtotal
|
|
884,695
|
|
(8,983
|
)
|
|
3,593
|
|
|
(18,074
|
)
|
|
861,231
|
|
881,130
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,017,081
|
|
15,335
|
|
|
98,571
|
|
|
(23,006
|
)
|
|
1,107,981
|
|
1,093,366
|
|
Fixed income
|
|
409,943
|
|
5,956
|
|
|
(6,038
|
)
|
|
(17,476
|
)
|
|
392,385
|
|
406,494
|
|
Multi-asset
|
|
9,545
|
|
(133
|
)
|
|
108
|
|
|
(737
|
)
|
|
8,783
|
|
9,447
|
|
Alternatives
|
|
4,912
|
|
675
|
|
|
(128
|
)
|
|
(160
|
)
|
|
5,299
|
|
5,376
|
|
Index subtotal
|
|
1,441,481
|
|
21,833
|
|
|
92,513
|
|
|
(41,379
|
)
|
|
1,514,448
|
|
1,514,683
|
|
Long-term
|
|
3,482,366
|
|
51,352
|
|
|
97,828
|
|
|
(67,091
|
)
|
|
3,564,455
|
|
3,606,306
|
|
Cash Management
|
|
263,743
|
|
(8,663
|
)
|
|
131
|
|
|
(2,649
|
)
|
|
252,562
|
|
|
|
Advisory (4)
|
|
45,479
|
|
(4,002
|
)
|
|
(175
|
)
|
|
(1,312
|
)
|
|
39,990
|
|
|
|
Total
|
|
$ 3,791,588
|
|
$ 38,687
|
|
|
$ 97,784
|
|
|
$ (71,052
|
)
|
|
$ 3,857,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date Component Changes by Product
|
|
|
|
|
|
|
|
|
|
Net
|
|
Market
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
subscriptions
|
|
appreciation
|
|
Foreign
|
|
June 30,
|
|
Year-to-Date
|
|
|
|
2012
|
|
(redemptions)(1)
|
|
(depreciation)
|
|
exchange(2)
|
|
2013
|
|
Average AUM(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$ 287,215
|
|
$ (11,208
|
)
|
|
$ 10,870
|
|
|
$ (6,545
|
)
|
|
$ 280,332
|
|
$ 290,339
|
|
iShares
|
|
534,648
|
|
28,934
|
|
|
16,952
|
|
|
(3,266
|
)
|
|
577,268
|
|
579,771
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
656,331
|
|
(1,013
|
)
|
|
(14,971
|
)
|
|
(8,539
|
)
|
|
631,808
|
|
650,337
|
|
iShares
|
|
192,852
|
|
(2,465
|
)
|
|
(7,883
|
)
|
|
(1,561
|
)
|
|
180,943
|
|
190,317
|
|
Multi-asset
|
|
267,748
|
|
20,081
|
|
|
6,200
|
|
|
(4,724
|
)
|
|
289,305
|
|
282,789
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
68,367
|
|
1,917
|
|
|
853
|
|
|
(910
|
)
|
|
70,227
|
|
69,743
|
|
Currency and commodities (5)
|
|
41,428
|
|
(6,490
|
)
|
|
(7,478
|
)
|
|
(1,011
|
)
|
|
26,449
|
|
35,501
|
|
Sub-total
|
|
2,048,589
|
|
29,756
|
|
|
4,543
|
|
|
(26,556
|
)
|
|
2,056,332
|
|
2,098,797
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,023,638
|
|
15,597
|
|
|
99,331
|
|
|
(23,051
|
)
|
|
1,115,515
|
|
1,100,792
|
|
Fixed income
|
|
410,139
|
|
5,999
|
|
|
(6,046
|
)
|
|
(17,484
|
)
|
|
392,608
|
|
406,717
|
|
Sub-total Non-ETF Index
|
|
1,433,777
|
|
21,596
|
|
|
93,285
|
|
|
(40,535
|
)
|
|
1,508,123
|
|
1,507,509
|
|
Long-term
|
|
$ 3,482,366
|
|
$ 51,352
|
|
|
$ 97,828
|
|
|
$ (67,091
|
)
|
|
$ 3,564,455
|
|
$ 3,606,306
|
|
|
|
(1) Amounts include distributions representing return
of capital and return on investment to investors.
|
|
(2) Foreign exchange reflects the impact of converting
non-U.S. dollar denominated AUM into U.S. dollars for reporting
purposes.
|
|
(3) Monthly average AUM is calculated as the average of
the month-end spot AUM amounts for the trailing four, seven and
thirteen months for quarter-to-date, year-to-date and
year-over-year periods, respectively.
|
|
(4) Advisory AUM represents long-term portfolio
liquidation assignments.
|
|
(5) Amounts include commodity iShares.
|
|
|
|
NOTE: Certain prior period information has been reclassified to
conform to current period presentation.
|
|
|
|
|
|
Assets Under Management
|
|
(Dollar amounts in millions), (unaudited)
|
|
|
|
Year-over-Year Component Changes by Client Type and Product
|
|
|
|
|
|
|
|
|
|
Net
|
|
Market
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
subscriptions
|
|
appreciation
|
|
Foreign
|
|
June 30,
|
|
Thirteen Month
|
|
|
|
2012
|
|
(redemptions)(1) (7)
|
|
(depreciation)(6)
|
|
exchange(2)
|
|
2013
|
|
Average AUM(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$ 154,835
|
|
$ (4,034)
|
|
$ 11,529
|
|
$ (889)
|
|
$ 161,441
|
|
$ 164,129
|
|
Fixed income
|
|
123,397
|
|
18,566
|
|
(318)
|
|
(104)
|
|
141,541
|
|
137,629
|
|
Multi-asset
|
|
86,372
|
|
5,194
|
|
7,867
|
|
(328)
|
|
99,105
|
|
92,859
|
|
Alternatives
|
|
9,404
|
|
2,890
|
|
54
|
|
(56)
|
|
12,292
|
|
10,084
|
|
Retail subtotal
|
|
374,008
|
|
22,616
|
|
19,132
|
|
(1,377)
|
|
414,379
|
|
404,701
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
443,311
|
|
79,522
|
|
54,978
|
|
(543)
|
|
577,268
|
|
531,848
|
|
Fixed income
|
|
180,355
|
|
5,205
|
|
(4,478)
|
|
(139)
|
|
180,943
|
|
188,715
|
|
Multi-asset
|
|
712
|
|
353
|
|
47
|
|
(5)
|
|
1,107
|
|
921
|
|
Alternatives
|
|
20,530
|
|
430
|
|
(5,883)
|
|
2
|
|
15,079
|
|
22,375
|
|
iShares subtotal
|
|
644,908
|
|
85,510
|
|
44,664
|
|
(685)
|
|
774,397
|
|
743,859
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
126,589
|
|
(18,057)
|
|
21,518
|
|
(3,625)
|
|
126,425
|
|
128,982
|
|
Fixed income
|
|
507,449
|
|
(16,332)
|
|
6,672
|
|
(7,299)
|
|
490,490
|
|
512,356
|
|
Multi-asset
|
|
147,409
|
|
20,952
|
|
12,591
|
|
(642)
|
|
180,310
|
|
166,299
|
|
Alternatives
|
|
68,547
|
|
(10,935)
|
|
8,207
|
|
(1,813)
|
|
64,006
|
|
68,920
|
|
Active subtotal
|
|
849,994
|
|
(24,372)
|
|
48,988
|
|
(13,379)
|
|
861,231
|
|
876,557
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
917,948
|
|
29,032
|
|
180,976
|
|
(19,975)
|
|
1,107,981
|
|
1,032,973
|
|
Fixed income
|
|
454,875
|
|
(57,990)
|
|
5,285
|
|
(9,785)
|
|
392,385
|
|
417,844
|
|
Multi-asset
|
|
8,594
|
|
267
|
|
837
|
|
(915)
|
|
8,783
|
|
9,240
|
|
Alternatives
|
|
5,091
|
|
411
|
|
(112)
|
|
(91)
|
|
5,299
|
|
5,247
|
|
Index subtotal
|
|
1,386,508
|
|
(28,280)
|
|
186,986
|
|
(30,766)
|
|
1,514,448
|
|
1,465,304
|
|
Long-term
|
|
3,255,418
|
|
55,474
|
|
299,770
|
|
(46,207)
|
|
3,564,455
|
|
3,490,421
|
|
Cash Management
|
|
239,471
|
|
12,821
|
|
737
|
|
(467)
|
|
252,562
|
|
|
|
Advisory (4)
|
|
65,045
|
|
(24,030)
|
|
(655)
|
|
(370)
|
|
39,990
|
|
|
|
Total
|
|
$ 3,559,934
|
|
$ 44,265
|
|
$ 299,852
|
|
$ (47,044)
|
|
$ 3,857,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Product
|
|
|
|
|
|
|
|
|
|
Net
|
|
Market
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
subscriptions
|
|
appreciation
|
|
Foreign
|
|
June 30,
|
|
Thirteen Month
|
|
|
|
2012
|
|
(redemptions)(1) (7)
|
|
(depreciation)(6)
|
|
exchange(2)
|
|
2013
|
|
Average AUM(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$ 274,670
|
|
$ (21,726)
|
|
$ 31,878
|
|
$ (4,490)
|
|
$ 280,332
|
|
$ 286,206
|
|
iShares
|
|
443,311
|
|
79,522
|
|
54,978
|
|
(543)
|
|
577,268
|
|
531,848
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
630,639
|
|
2,205
|
|
6,359
|
|
(7,395)
|
|
631,808
|
|
649,768
|
|
iShares
|
|
180,355
|
|
5,205
|
|
(4,478)
|
|
(139)
|
|
180,943
|
|
188,715
|
|
Multi-asset
|
|
243,087
|
|
26,766
|
|
21,342
|
|
(1,890)
|
|
289,305
|
|
269,319
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
63,575
|
|
(1,053)
|
|
8,356
|
|
(651)
|
|
70,227
|
|
68,110
|
|
Currency and commodities (5)
|
|
39,997
|
|
(6,151)
|
|
(6,090)
|
|
(1,307)
|
|
26,449
|
|
38,516
|
|
Sub-total
|
|
1,875,634
|
|
84,768
|
|
112,345
|
|
(16,415)
|
|
2,056,332
|
|
2,032,482
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
924,702
|
|
28,667
|
|
182,145
|
|
(19,999)
|
|
1,115,515
|
|
1,039,878
|
|
Fixed income
|
|
455,082
|
|
(57,961)
|
|
5,280
|
|
(9,793)
|
|
392,608
|
|
418,061
|
|
Sub-total Non-ETF Index
|
|
1,379,784
|
|
(29,294)
|
|
187,425
|
|
(29,792)
|
|
1,508,123
|
|
1,457,939
|
|
Long-term
|
|
$ 3,255,418
|
|
$ 55,474
|
|
$ 299,770
|
|
$ (46,207)
|
|
$ 3,564,455
|
|
$ 3,490,421
|
|
|
|
(1) Amounts include distributions
representing return of capital and return on investment to
investors.
|
|
(2) Foreign exchange reflects the impact of converting
non-U.S. dollar denominated AUM into U.S. dollars for reporting
purposes.
|
|
(3) Monthly average AUM is calculated as the average of
the month-end spot AUM amounts for the trailing four, seven and
thirteen months for quarter-to-date, year-to-date and
year-over-year periods, respectively.
|
|
(4) Advisory AUM represents long-term portfolio
liquidation assignments.
|
|
(5) Amounts include commodity iShares.
|
|
(6) Amounts include $6.1 billion of AUM acquired from
Swiss Re Private Equity Partners in September 2012.
|
|
(7) Amounts include the effect of a single low-fee
fixed income passive outflow of $74.2 billion in third quarter
2012.
|
|
|
|
NOTE: Certain prior period information has been reclassified to
conform to current period presentation.
|
|
|
|
|
|
Summary of Revenues
|
|
(Dollar amounts in millions), (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
June 30,
|
|
|
|
March 31,
|
|
|
|
June 30,
|
|
|
|
|
|
2013
|
|
2012
|
|
$ Change
|
|
2013
|
|
$ Change
|
|
2013
|
|
2012
|
|
$ Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$432
|
|
$429
|
|
$3
|
|
|
$433
|
|
($1
|
)
|
|
$865
|
|
$882
|
|
($17
|
)
|
|
iShares
|
|
584
|
|
467
|
|
117
|
|
|
571
|
|
13
|
|
|
1,155
|
|
940
|
|
215
|
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
322
|
|
285
|
|
37
|
|
|
312
|
|
10
|
|
|
634
|
|
564
|
|
70
|
|
|
iShares
|
|
120
|
|
107
|
|
13
|
|
|
116
|
|
4
|
|
|
236
|
|
205
|
|
31
|
|
|
Multi-asset
|
|
253
|
|
236
|
|
17
|
|
|
248
|
|
5
|
|
|
501
|
|
479
|
|
22
|
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
136
|
|
130
|
|
6
|
|
|
136
|
|
-
|
|
|
272
|
|
265
|
|
7
|
|
|
Currency and commodities
|
|
25
|
|
32
|
|
(7
|
)
|
|
30
|
|
(5
|
)
|
|
55
|
|
66
|
|
(11
|
)
|
|
Sub-total
|
|
1,872
|
|
1,686
|
|
186
|
|
|
1,846
|
|
26
|
|
|
3,718
|
|
3,401
|
|
317
|
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
161
|
|
156
|
|
5
|
|
|
140
|
|
21
|
|
|
301
|
|
279
|
|
22
|
|
|
Fixed income
|
|
61
|
|
60
|
|
1
|
|
|
57
|
|
4
|
|
|
118
|
|
110
|
|
8
|
|
|
Sub-total Non-ETF Index
|
|
222
|
|
216
|
|
6
|
|
|
197
|
|
25
|
|
|
419
|
|
389
|
|
30
|
|
|
Long-term
|
|
2,094
|
|
1,902
|
|
192
|
|
|
2,043
|
|
51
|
|
|
4,137
|
|
3,790
|
|
347
|
|
|
Cash management
|
|
83
|
|
88
|
|
(5
|
)
|
|
86
|
|
(3
|
)
|
|
169
|
|
177
|
|
(8
|
)
|
|
Total base fees
|
|
2,177
|
|
1,990
|
|
187
|
|
|
2,129
|
|
48
|
|
|
4,306
|
|
3,967
|
|
339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory performance fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
17
|
|
3
|
|
14
|
|
|
17
|
|
-
|
|
|
34
|
|
22
|
|
12
|
|
|
Fixed income
|
|
9
|
|
10
|
|
(1
|
)
|
|
1
|
|
8
|
|
|
10
|
|
16
|
|
(6
|
)
|
|
Multi-asset
|
|
3
|
|
1
|
|
2
|
|
|
7
|
|
(4
|
)
|
|
10
|
|
4
|
|
6
|
|
|
Alternatives
|
|
60
|
|
27
|
|
33
|
|
|
83
|
|
(23
|
)
|
|
143
|
|
79
|
|
64
|
|
|
Total
|
|
89
|
|
41
|
|
48
|
|
|
108
|
|
(19
|
)
|
|
197
|
|
121
|
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Solutions and advisory
|
|
138
|
|
131
|
|
7
|
|
|
126
|
|
12
|
|
|
264
|
|
254
|
|
10
|
|
|
Distribution fees
|
|
18
|
|
20
|
|
(2
|
)
|
|
17
|
|
1
|
|
|
35
|
|
39
|
|
(4
|
)
|
|
Other revenue
|
|
60
|
|
47
|
|
13
|
|
|
69
|
|
(9
|
)
|
|
129
|
|
97
|
|
32
|
|
|
Total revenue
|
|
$2,482
|
|
$2,229
|
|
$253
|
|
|
$2,449
|
|
$33
|
|
|
$4,931
|
|
$4,478
|
|
$453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: Certain prior period information has been reclassified to
conform to current period presentation.
|
|
|
|
|
|
Summary of Non-operating Income (Expense)
|
|
(Dollar amounts in millions), (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
March 31,
|
|
|
|
June 30,
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
$ Change
|
|
2013
|
|
$ Change
|
|
2013
|
|
2012
|
|
$ Change
|
|
Non-operating income (expense), GAAP basis
|
|
|
|
$69
|
|
|
($40
|
)
|
|
$109
|
|
|
$41
|
|
|
$28
|
|
|
$110
|
|
|
($17
|
)
|
|
$127
|
|
|
Less: Net income (loss) attributable to NCI
|
|
|
|
(23
|
)
|
|
6
|
|
|
(29
|
)
|
|
34
|
|
|
(57
|
)
|
|
11
|
|
|
9
|
|
|
2
|
|
|
Non-operating income (expense)(1)
|
|
|
|
$92
|
|
|
($46
|
)
|
|
$138
|
|
|
$7
|
|
|
$85
|
|
|
$99
|
|
|
($26
|
)
|
|
$125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
economic
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
|
|
investments at
|
|
Three Months Ended
|
|
|
|
Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
March 31,
|
|
|
|
June 30,
|
|
|
|
|
|
2013(2)
|
|
2013
|
|
2012
|
|
$ Change
|
|
2013
|
|
$ Change
|
|
2013
|
|
2012
|
|
$ Change
|
|
Net gain (loss) on investments(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity
|
|
20-25%
|
|
$4
|
|
|
($4
|
)
|
|
$8
|
|
|
$19
|
|
|
($15
|
)
|
|
$23
|
|
|
$17
|
|
|
$6
|
|
|
Real estate
|
|
5-10%
|
|
7
|
|
|
3
|
|
|
4
|
|
|
3
|
|
|
4
|
|
|
10
|
|
|
4
|
|
|
6
|
|
|
Distressed credit/mortgage funds
|
|
15-20%
|
|
4
|
|
|
-
|
|
|
4
|
|
|
19
|
|
|
(15
|
)
|
|
23
|
|
|
28
|
|
|
(5
|
)
|
|
Hedge funds/funds of hedge funds
|
|
10-15%
|
|
5
|
|
|
4
|
|
|
1
|
|
|
3
|
|
|
2
|
|
|
8
|
|
|
10
|
|
|
(2
|
)
|
|
Other investments(3)
|
|
35-40%
|
|
2
|
|
|
(2
|
)
|
|
4
|
|
|
7
|
|
|
(5
|
)
|
|
9
|
|
|
(3
|
)
|
|
12
|
|
|
Sub-total
|
|
|
|
22
|
|
|
1
|
|
|
21
|
|
|
51
|
|
|
(29
|
)
|
|
73
|
|
|
56
|
|
|
17
|
|
|
Gain related to PennyMac IPO
|
|
|
|
39
|
|
|
-
|
|
|
39
|
|
|
-
|
|
|
39
|
|
|
39
|
|
|
-
|
|
|
39
|
|
|
Gain related to the Charitable Contribution
|
|
|
|
80
|
|
|
-
|
|
|
80
|
|
|
-
|
|
|
80
|
|
|
80
|
|
|
-
|
|
|
80
|
|
|
Investments related to deferred compensation plans
|
|
|
|
-
|
|
|
(3
|
)
|
|
3
|
|
|
4
|
|
|
(4
|
)
|
|
4
|
|
|
2
|
|
|
2
|
|
|
Total net gain (loss) on investments(1)
|
|
|
|
141
|
|
|
(2
|
)
|
|
143
|
|
|
55
|
|
|
86
|
|
|
196
|
|
|
58
|
|
|
138
|
|
|
Interest and dividend income
|
|
|
|
4
|
|
|
8
|
|
|
(4
|
)
|
|
6
|
|
|
(2
|
)
|
|
10
|
|
|
17
|
|
|
(7
|
)
|
|
Interest expense
|
|
|
|
(53
|
)
|
|
(52
|
)
|
|
(1
|
)
|
|
(54
|
)
|
|
1
|
|
|
(107
|
)
|
|
(101
|
)
|
|
(6
|
)
|
|
Net interest expense
|
|
|
|
(49
|
)
|
|
(44
|
)
|
|
(5
|
)
|
|
(48
|
)
|
|
(1
|
)
|
|
(97
|
)
|
|
(84
|
)
|
|
(13
|
)
|
|
Total non-operating income (expense)(1)
|
|
|
|
92
|
|
|
(46
|
)
|
|
138
|
|
|
7
|
|
|
85
|
|
|
99
|
|
|
(26
|
)
|
|
125
|
|
|
Gain related to the Charitable Contribution
|
|
|
|
(80
|
)
|
|
-
|
|
|
(80
|
)
|
|
-
|
|
|
(80
|
)
|
|
(80
|
)
|
|
-
|
|
|
(80
|
)
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
|
|
-
|
|
|
3
|
|
|
(3
|
)
|
|
(4
|
)
|
|
4
|
|
|
(4
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
Non-operating income (expense), as adjusted(1)
|
|
|
|
$12
|
|
|
($43
|
)
|
|
$55
|
|
|
$3
|
|
|
$9
|
|
|
$15
|
|
|
($28
|
)
|
|
$43
|
|
|
(1) Net of net income (loss) attributable to NCI.
|
|
(2) Percentages represent estimated percentages of
BlackRock's corporate economic investment portfolio as of June 30,
2013. Economic investment amounts at March 31, 2013 for private
equity, real estate, distressed credit/mortgage funds, hedge
funds/funds of hedge funds and other investments were $306
million, $120 million, $202 million, $164 million and $410
million, respectively. See the 2013 first quarter Form 10-Q for
more information.
|
|
(3) Amounts include net gains (losses) related to
equity, fixed income and commodity investments, and BlackRock's
seed capital hedging program.
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
2013 (Est.)
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total balance sheet assets
|
|
|
|
|
$193
|
|
|
|
|
|
$200
|
|
|
Separate account assets and separate account collateral held under
securities lending agreements
|
|
|
|
|
(152
|
)
|
|
|
|
|
(158
|
)
|
|
Consolidated VIEs/sponsored investment funds
|
|
|
|
|
(3
|
)
|
|
|
|
|
(2
|
)
|
|
Goodwill and intangible assets, net
|
|
|
|
|
(30
|
)
|
|
|
|
|
(30
|
)
|
|
Economic tangible assets
|
|
|
|
|
$8
|
|
|
|
|
|
$10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic tangible assets include cash, receivables, seed and
co-investments, regulatory investments and other assets.
|
|
|
|
Notes to Condensed Consolidated
Statements of Income and Supplemental Information (unaudited)
|
|
|
|
BlackRock reports its financial results in accordance with
accounting principles generally accepted in the United States
("GAAP"); however, management believes evaluating the Company’s
ongoing operating results may be enhanced if investors have
additional non-GAAP basis financial measures. Management reviews
non-GAAP financial measures to assess ongoing operations and, for
the reasons described below, considers them to be effective
indicators, for both management and investors, of BlackRock's
financial performance over time. BlackRock's management does not
advocate that investors consider such non-GAAP financial measures in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP.
|
|
|
|
Computations for all periods are derived from the Company's
condensed consolidated statements of income as follows:
|
|
|
|
(a) Operating income, as adjusted, and operating
margin, as adjusted:
|
|
Operating income, as adjusted, equals operating income, GAAP basis,
excluding certain items management deems non-recurring, or
transactions that ultimately will not impact BlackRock’s book value,
as indicated in the table below. Operating income used for operating
margin measurement equals operating income, as adjusted, excluding
the impact of closed-end fund launch costs and commissions.
Operating margin, as adjusted, equals operating income used for
operating margin measurement, divided by revenue (net of
distribution and servicing costs and amortization of deferred sales
commissions) used for operating margin measurement, as indicated in
the table below.
|
|
|
|
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 and operating margin, as adjusted
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
(Dollar amounts in millions)
|
|
2013
|
|
2012
|
|
2013
|
|
2013
|
|
2012
|
|
Operating income, GAAP basis
|
|
$849
|
|
|
$829
|
|
|
$909
|
|
|
$1,758
|
|
|
$1,644
|
|
|
Non-GAAP expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Charitable Contribution
|
|
124
|
|
|
-
|
|
|
-
|
|
|
124
|
|
|
-
|
|
|
PNC LTIP funding obligation
|
|
9
|
|
|
6
|
|
|
8
|
|
|
17
|
|
|
11
|
|
|
Compensation expense related to appreciation (depreciation) on
deferred compensation plans
|
|
-
|
|
|
(3
|
)
|
|
4
|
|
|
4
|
|
|
2
|
|
|
Operating income, as adjusted
|
|
982
|
|
|
832
|
|
|
921
|
|
|
1,903
|
|
|
1,657
|
|
|
Closed-end fund launch costs
|
|
-
|
|
|
-
|
|
|
16
|
|
|
16
|
|
|
-
|
|
|
Closed-end fund launch commissions
|
|
-
|
|
|
-
|
|
|
2
|
|
|
2
|
|
|
-
|
|
|
Operating income used for operating margin measurement
|
|
$982
|
|
|
$832
|
|
|
$939
|
|
|
$1,921
|
|
|
$1,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, GAAP basis
|
|
$2,482
|
|
|
$2,229
|
|
|
$2,449
|
|
|
$4,931
|
|
|
$4,478
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Distribution and servicing costs
|
|
(90
|
)
|
|
(93
|
)
|
|
(91
|
)
|
|
(181
|
)
|
|
(188
|
)
|
|
Amortization of deferred sales commissions
|
|
(12
|
)
|
|
(14
|
)
|
|
(12
|
)
|
|
(24
|
)
|
|
(30
|
)
|
|
Revenue used for operating margin measurement
|
|
$2,380
|
|
|
$2,122
|
|
|
$2,346
|
|
|
$4,726
|
|
|
$4,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, GAAP basis
|
|
34.2
|
%
|
|
37.2
|
%
|
|
37.1
|
%
|
|
35.7
|
%
|
|
36.7
|
%
|
|
Operating margin, as adjusted
|
|
41.3
|
%
|
|
39.2
|
%
|
|
40.0
|
%
|
|
40.6
|
%
|
|
38.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated
Statements of Income and Supplemental Information (unaudited)
|
|
(continued)
|
|
|
|
(a)
|
(continued)
|
|
|
•
|
|
Operating income, as adjusted: Operating income, as
adjusted reflects the non-GAAP expense adjustments discussed
below. The $124 million expense related to the Charitable
Contribution has been excluded from operating income, as adjusted
due to its non-recurring nature and because the non-cash,
non-operating pre-tax gain of $80 million related to the
contributed PennyMac investment is reported in non-operating
income (expense). The portion of compensation expense associated
with certain long-term incentive plans (“LTIP”) funded or to be
funded through share distributions to participants of BlackRock
stock held by PNC has been excluded because it ultimately does not
impact BlackRock’s book value. Compensation expense associated
with appreciation (depreciation) on investments related to certain
BlackRock deferred compensation plans has been excluded as returns
on investments set aside for these plans, which substantially
offset this expense, are reported in non-operating income
(expense).
|
|
|
|
|
|
|
|
|
|
Management believes operating income exclusive of these items is a
useful measure in evaluating BlackRock’s operating performance and
helps enhance the comparability of this information for the
reporting periods presented.
|
|
|
|
|
|
|
|
•
|
|
Operating margin, as adjusted: Operating income used for
measuring operating margin, as adjusted, is equal to operating
income, as adjusted, excluding the impact of closed-end fund
launch costs and commissions. Management believes the exclusion of
such costs and commissions is useful because these costs can
fluctuate considerably and revenues associated with the
expenditure of these costs will not fully impact BlackRock’s
results until future periods.
|
|
|
|
|
|
|
|
|
|
Operating margin, as adjusted, allows BlackRock to compare
performance from period-to-period by adjusting for items that may
not recur, recur infrequently or may have an economic offset in
non-operating income (expense). Examples of such adjustments include
commissions paid to certain employees as compensation and
fluctuations in compensation expense based on mark-to-market
movements in investments held to fund certain compensation plans.
BlackRock also uses operating margin, as adjusted, to monitor
corporate performance and efficiency and as a benchmark to compare
its performance with other companies. Management uses both GAAP and
non-GAAP financial measures in evaluating the financial performance
of BlackRock. The non-GAAP measure by itself may pose limitations
because it does not include all of BlackRock’s revenues and expenses.
|
|
|
|
|
|
|
|
|
|
Revenue used for operating margin, as adjusted, excludes
distribution and servicing costs paid to related parties and other
third parties. Management believes the exclusion of such costs is
useful because it creates consistency in the treatment for certain
contracts for similar services, which due to the terms of the
contracts, are accounted for under GAAP on a net basis within
investment advisory, administration fees and securities lending
revenue. Amortization of deferred sales commissions is excluded from
revenue used for operating margin measurement, as adjusted, because
such costs, over time, substantially offset distribution fee revenue
earned by the Company. For each of these items, BlackRock excludes
from revenue used for operating margin, as adjusted, the costs
related to each of these items as a proxy for such offsetting
revenues.
|
|
|
|
|
|
|
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.
|
|
|
|
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. The non-cash, non-operating pre-tax gain of
$80 million related to the contributed PennyMac investment has been
excluded from non-operating income (expense), less net income (loss)
attributable to NCI, as adjusted due to its non-recurring nature and
because the more than offsetting associated Charitable Contribution
expense of $124 million is reported in operating income.
|
|
|
|
Non-operating income (expense), less net income (loss)
attributable to NCI, as adjusted
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2013
|
|
2012
|
|
(Dollar amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense), GAAP basis
|
|
$69
|
|
|
($40
|
)
|
|
$41
|
|
|
$110
|
|
|
($17
|
)
|
|
Less: Net income (loss) attributable to NCI
|
|
(23
|
)
|
|
6
|
|
|
34
|
|
|
11
|
|
|
9
|
|
|
Non-operating income (expense), net of NCI
|
|
92
|
|
|
(46
|
)
|
|
7
|
|
|
99
|
|
|
(26
|
)
|
|
Gain related to the Charitable Contribution
|
|
(80
|
)
|
|
-
|
|
|
-
|
|
|
(80
|
)
|
|
-
|
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
-
|
|
|
3
|
|
|
(4
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|
Non-operating income (expense), less net income (loss) attributable
to NCI, as adjusted
|
|
$12
|
|
|
($43
|
)
|
|
$3
|
|
|
$15
|
|
|
($28
|
)
|
|
|
|
|
|
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.
|
|
|
|
See note (a) Operating income, as adjusted, and operating margin, as
adjusted, for information on the Charitable Contribution and the PNC
LTIP funding obligation.
|
|
|
|
The three and six months ended June 30, 2013 included a tax benefit
of approximately $57 million recognized in connection with the
Charitable Contribution. The tax benefit has been excluded from net
income attributable to BlackRock, Inc., as adjusted due to the
non-recurring nature of the Charitable Contribution.
|
|
|
|
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
(Dollar amounts in millions, except per share data)
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2013
|
|
2012
|
|
Net income attributable to BlackRock, Inc., GAAP basis
|
|
$729
|
|
|
$554
|
|
$632
|
|
$1,361
|
|
|
$1,126
|
|
Non-GAAP adjustments, net of tax:(d)
|
|
|
|
|
|
|
|
|
|
|
|
Amount related to the Charitable Contribution
|
|
(13
|
)
|
|
-
|
|
-
|
|
(13
|
)
|
|
-
|
|
PNC LTIP funding obligation
|
|
6
|
|
|
4
|
|
5
|
|
11
|
|
|
7
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
$722
|
|
|
$558
|
|
$637
|
|
$1,359
|
|
|
$1,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income, as adjusted, to common shares(e)
|
|
$722
|
|
|
$557
|
|
$637
|
|
$1,359
|
|
|
$1,131
|
|
Diluted weighted-average common shares outstanding(f)
|
|
173,873,583
|
|
|
179,590,702
|
|
174,561,132
|
|
174,268,870
|
|
|
180,753,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share, GAAP basis(f)
|
|
$4.19
|
|
|
$3.08
|
|
$3.62
|
|
$7.81
|
|
|
$6.22
|
|
Diluted earnings per common share, as adjusted(f)
|
|
$4.15
|
|
|
$3.10
|
|
$3.65
|
|
$7.80
|
|
|
$6.26
|
|
|
|
(d) For the quarters ended June 30, 2013 and 2012 and March
31, 2013, the PNC LTIP funding obligation non-GAAP adjustment was
tax effected at 30.2%, 30.4% and 31.0%, respectively, reflecting a
blended rate applicable to the adjustment. For the six months
ended June 30, 2013 and 2012, the PNC LTIP funding obligation
non-GAAP adjustments were tax effected at 31.0%. The three and six
months ended June 30, 2013 also included a tax benefit of
approximately $57 million related to the Charitable Contribution.
|
|
|
|
(e) For the three and six months ended June 30, 2012,
amounts exclude net income attributable to participating
securities (see below).
|
|
|
|
(f) Non-voting participating preferred shares are
considered to be common stock equivalents for purposes of
determining basic and diluted earnings per share calculations.
|
|
|
|
Prior to the first quarter 2013, certain unvested restricted stock
units were not included in diluted weighted-average common shares
outstanding as they were deemed participating securities in
accordance with required provisions of Accounting Standards
Codification (“ASC”) 260-10, Earnings per Share. Average outstanding
participating securities were 0.2 million for the quarter and six
months ended June 30, 2012.
|
|
|
Forward-looking Statements
This press release, and other statements that BlackRock may make, may
contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act, with respect to BlackRock’s future
financial or business performance, strategies or expectations.
Forward-looking statements are typically identified by words or phrases
such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,”
“comfortable,” “expect,” “anticipate,” “current,” “intention,”
“estimate,” “position,” “assume,” “outlook,” “continue,” “remain,”
“maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or
future or conditional verbs such as “will,” “would,” “should,” “could,”
“may” and similar expressions.
BlackRock cautions that forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over time.
Forward-looking statements speak only as of the date they are made, and
BlackRock assumes no duty to and does not undertake to update
forward-looking statements. Actual results could differ materially from
those anticipated in forward-looking statements and future results could
differ materially from historical performance.
In addition to risk factors previously disclosed in BlackRock’s
Securities and Exchange Commission (“SEC”) reports and those identified
elsewhere in this press release the following factors, among others,
could cause actual results to differ materially from forward-looking
statements or historical performance: (1) the introduction, withdrawal,
success and timing of business initiatives and strategies; (2) changes
and volatility in political, economic or industry conditions, the
interest rate environment, foreign exchange rates or financial and
capital markets, which could result in changes in demand for products or
services or in the value of assets under management; (3) the relative
and absolute investment performance of BlackRock’s investment products;
(4) the impact of increased competition; (5) the impact of future
acquisitions or divestitures; (6) the unfavorable resolution of legal
proceedings; (7) the extent and timing of any share repurchases; (8) the
impact, extent and timing of technological changes and the adequacy of
intellectual property, information and cyber security protection; (9)
the impact of legislative and regulatory actions and reforms, including
the Dodd-Frank Wall Street Reform and Consumer Protection Act, and
regulatory, supervisory or enforcement actions of government agencies
relating to BlackRock or The PNC Financial Services Group, Inc. (“PNC”);
(10) terrorist activities, international hostilities and natural
disasters, which may adversely affect the general economy, domestic and
local financial and capital markets, specific industries or BlackRock;
(11) the ability to attract and retain highly talented professionals;
(12) fluctuations in the carrying value of BlackRock’s economic
investments; (13) the impact of changes to tax legislation, including
income, payroll and transaction taxes, and taxation on products or
transactions, which could affect the value proposition to clients and,
generally, the tax position of the Company; (14) BlackRock’s success in
maintaining the distribution of its products; (15) the impact of
BlackRock electing to provide support to its products from time to time
and any potential liabilities related to securities lending or other
indemnification obligations; and (16) the impact of problems at other
financial institutions or the failure or negative performance of
products at other financial institutions.
BlackRock's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and BlackRock's subsequent filings with the SEC, accessible on the SEC's
website at www.sec.gov
and on BlackRock’s website at www.blackrock.com,
discuss these factors in more detail and identify additional factors
that can affect forward-looking statements. The information contained on
the Company’s website is not a part of this press release.
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 shown 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 June 30, 2013 (May 31, 2013 for high net
worth accounts).
Accounts terminated prior to June 30, 2013 are not included. In
addition, accounts that have not been verified as of July 12, 2013 have
not been included. If such terminated and other accounts had been
included, the performance information may have substantially differed
from that shown. The performance information does not include funds or
accounts that are not measured against a benchmark, any benchmark-based
alternatives product, private equity products, CDOs, or accounts managed
by BlackRock’s Financial Markets Advisory Group. Comparisons are based
on gross-of-fee performance for U.S. retail, institutional and high net
worth separate accounts and EMEA institutional separate accounts and
net-of-fee performance for EMEA based retail products. The performance
tracking information for institutional index accounts is based on
gross-of-fee performance as of June 30, 2013, and includes all
institutional accounts and all iShares funds globally using an
index strategy. AUM information is based on AUM for each account or fund
in the asset class shown without adjustment for overlapping management
of the same account or fund, as of June 30, 2013.
Source of performance information and peer medians is BlackRock, Inc.
and is based in part on data from Lipper Inc. for U.S. funds and
Morningstar, Inc. for non-U.S. funds. Fund performance reflects the
reinvestment of dividends and distributions, but does not reflect sales
charges.
BlackRock, Inc.
Media Relations:
Brian Beades, 212-810-5596
or
Investor
Relations:
Tom Wojcik, 212-810-8127
Source: BlackRock, Inc.