Record Full Year Diluted EPS of $13.79 ($13.68 as adjusted)
Quarterly Revenue of Over $2.5 Billion Up 14% from Fourth Quarter
2011 and 9% from Third Quarter 2012
BlackRock Board of Directors Approves 12% Increase in Quarterly
Dividend to $1.68 and Expands Share Repurchase Authority by an
Additional 7.5 Million Shares to 10.2 Million Shares
-
Record assets under management of $3.792 trillion at year end, up 8%
from year end 2011
-
Generated quarterly diluted EPS growth of 29% from fourth quarter 2011
and full year growth of 11% (15% as adjusted)
-
Grew operating income 24% from fourth quarter 2011 and over 8% for the
year
-
Improved operating margin to 39.6% (42.6% as adjusted) for the quarter
and to 37.7% (40.4% as adjusted) for the year
-
Attracted $47.0 billion in net long-term inflows with growth across
all client channels and geographies
-
Liquidated the BlackRock Public-Private Investment Fund at a 23.5%
internal rate of return to the U.S. Treasury
-
Continued strong repurchase activity buying 868,500 shares in the
quarter and 9.1 million shares for the year
-
Board of Directors has declared a quarterly cash dividend of $1.68 per
share of common stock. The dividend is payable March 25, 2013 to
shareholders of record at the close of business on March 7, 2013.
NEW YORK--(BUSINESS WIRE)--
BlackRock, Inc. (NYSE:BLK) today reported full year diluted EPS of
$13.79, up 11% from 2011. Fourth quarter 2012 diluted EPS of $3.93 was
up 29% from fourth quarter 2011. Revenue increased 14% from fourth
quarter 2011 and 9% from third quarter 2012, reflecting growth in
markets, strength in base fees and higher performance fees. Operating
income for fourth quarter and full year 2012 was $1.0 billion and $3.5
billion, respectively. Operating margin of 39.6% for fourth quarter 2012
rose 330 bps from fourth quarter 2011.
As adjusted results(1).
Full year 2012 diluted EPS of $13.68 improved 15% from 2011. Fourth
quarter 2012 operating income of $1.0 billion rose 24% and 19% from
fourth quarter 2011 and third quarter 2012, respectively. Fourth quarter
diluted EPS totaled $3.96 and included operating income of $4.07 per
diluted share and net non-operating expense of $0.11 per diluted share.
Adjusted operating margin of 42.6% in fourth quarter 2012 rose 260 bps
from fourth quarter 2011. For more information on as adjusted items and
the reconciliation to GAAP, see notes to the Condensed Consolidated
Statements of Income and Supplemental Information beginning on page 10.
“BlackRock’s financial performance in 2012 was strong by any measure,”
commented Laurence D. Fink, Chairman and CEO of BlackRock. “We closed
the year with record earnings for both the quarter and the year. We
improved investment performance in key areas and our work with clients
was rewarded with $107.7 billion of long-term net new business. Every
client type contributed to these strong flows. Our results demonstrate
not only the diversity of our platform and the breadth of our global
product offering, but how we have differentiated the firm and continued
to evolve in anticipation of our clients’ needs.”
|
The table below presents AUM and a comparison of GAAP and as
adjusted results for certain financial measures.
|
|
(Dollar amounts in millions, except per share data)
|
|
Q4
2012
|
|
Q4
2011
|
|
Change
|
|
Q3
2012
|
|
Change
|
|
Full Year
2012
|
|
Full Year
2011
|
|
Change
|
|
AUM
|
|
$
|
3,791,588
|
|
$
|
3,512,681
|
|
8%
|
|
$
|
3,673,274
|
|
3%
|
|
$
|
3,791,588
|
|
$
|
3,512,681
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
2,539
|
|
$
|
2,227
|
|
14%
|
|
$
|
2,320
|
|
9%
|
|
$
|
9,337
|
|
$
|
9,081
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
1,005
|
|
$
|
808
|
|
24%
|
|
$
|
875
|
|
15%
|
|
$
|
3,524
|
|
$
|
3,249
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
39.6%
|
|
|
36.3%
|
|
330 bps
|
|
|
37.7%
|
|
190 bps
|
|
|
37.7%
|
|
|
35.8%
|
|
190 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income(2)
|
|
$
|
690
|
|
$
|
555
|
|
24%
|
|
$
|
642
|
|
7%
|
|
$
|
2,458
|
|
$
|
2,337
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$
|
3.93
|
|
$
|
3.05
|
|
29%
|
|
$
|
3.65
|
|
8%
|
|
$
|
13.79
|
|
$
|
12.37
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
|
|
|
175,176,037
|
|
|
181,987,669
|
|
(4%)
|
|
|
175,450,532
|
|
-%
|
|
|
178,017,679
|
|
|
187,116,410
|
|
(5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income(1)
|
|
$
|
1,041
|
|
$
|
841
|
|
24%
|
|
$
|
876
|
|
19%
|
|
$
|
3,574
|
|
$
|
3,392
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin(1)
|
|
|
42.6%
|
|
|
40.0%
|
|
260 bps
|
|
|
40.7%
|
|
190 bps
|
|
|
40.4%
|
|
|
39.7%
|
|
70 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income(1)(2)
|
|
$
|
695
|
|
$
|
558
|
|
25%
|
|
$
|
610
|
|
14%
|
|
$
|
2,438
|
|
$
|
2,239
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS(1)
|
|
$
|
3.96
|
|
$
|
3.06
|
|
29%
|
|
$
|
3.47
|
|
14%
|
|
$
|
13.68
|
|
$
|
11.85
|
|
15%
|
(1) See notes (a) through (f) to the Condensed Consolidated
Statements of Income and Supplemental Information in Attachment I on
pages 10 through 13 for more information on as adjusted items and the
reconciliation to GAAP.
(2) Net income represents net income attributable to
BlackRock, Inc.
“In 2012, our people delivered focused execution across our key
strategic priorities. Retirement trends continue to drive new
opportunities across our retail and defined contribution businesses,
where we generated long-term net inflows during the year of $11.6
billion and $28.4 billion, respectively. As clients sought efficient
tools and creative solutions to manage their investment exposure, they
turned to iShares®. As a result, iShares maintained
its #1 global market share position and net new business returned to
pre-crisis levels with more than $85 billion in new assets generated
this year. Elsewhere in the business, we saw strong sustained demand
from clients for high yielding income strategies and multi-asset class
solutions, resulting in strong support for our fixed income and equity
dividend capabilities as well as multi-asset class products.
“BlackRock Solutions® remains a key
differentiator for our firm, both as the foundation for the entire
business as well as a key growth contributor on its own. This year we
continued to grow our capabilities across geographies and asset classes
adding over $3.5 trillion of new positions to our Aladdin platform.
Growth for Aladdin is coming from an increasingly global set of
clients focused on their entire investment portfolios across multi-asset
capabilities.”
“As we enter 2013, the improving global economy provides the potential
for greater market stability, but it is likely that political and
regulatory dynamics, persistent low-rates and protracted periods of
heightened volatility will remain key factors. Still, we are
well-positioned to continue delivering for our shareholders while
investing for future growth with significant cash flow, which in 2012
totaled $3 billion. Our strong and stable capital position enables
BlackRock to take advantage of opportunities to make strategic
acquisitions like Claymore, Swiss Re and, most recently, our purchase of
the ETF business from Credit Suisse, which represents a major expansion
for us in the Swiss market. We are able to make these acquisitions, even
as we consistently return cash to shareholders. We delivered a dividend
payout ratio of 43% during the year and repurchased nearly 9.1 million
shares including 868,500 in the fourth quarter, bringing our payout
ratio including share repurchases to 104%. We remain committed to
returning cash to our shareholders and are pleased to announce a 12%
increase to our quarterly dividend for 2013 and the authority to
repurchase an additional 7.5 million shares, bringing our buying
capacity to 10.2 million shares.”
“As we move into 2013, the investments we have made in people,
technology, products and brand give us confidence in BlackRock’s ability
to deliver exceptional value for clients and shareholders. As we
continue to invest in key growth opportunities, I am pleased to welcome
Hsueh-ming Wang, our new Chairman of BlackRock China. BlackRock’s
employees have remained intensely focused on serving our clients, and I
want to once again express my gratitude and admiration for their
commitment to our clients and the Firm.”
Fourth Quarter Business Highlights
Assets under management (“AUM”) totaled
$3.792 trillion at December 31, 2012, up 3% from September 30, 2012 and
up 8% from a year ago. Net inflows in long-term products totaled $47.0
billion, reflecting equity, fixed income and multi-asset class product
net inflows of $31.2 billion, $12.4 billion and $4.1 billion,
respectively. Net inflows were partially offset by alternatives net
outflows of $0.7 billion, including $2.0 billion of return of capital.
Total net inflows of $60.8 billion also included cash management net
inflows of $14.4 billion and planned advisory distributions of $0.6
billion.
|
Long-term AUM: The following table presents long-term AUM
and base fees by client type:
|
|
(Dollar amounts in millions)
|
|
December 31, 2012
AUM
|
|
% of Total
|
|
Q4
2012
Base Fees
|
|
% of Total
|
|
Full Year
2012
Base Fees
|
|
% of Total
|
|
September 30,
2012 AUM
|
|
% of Total
|
|
Q3
2012
Base Fees
|
|
% of Total
|
|
Retail
|
|
$403,484
|
|
12
|
%
|
|
$677
|
|
34
|
%
|
|
$2,638
|
|
34
|
%
|
|
$397,954
|
|
12
|
%
|
|
$654
|
|
34
|
%
|
|
iShares
|
|
752,707
|
|
22
|
%
|
|
660
|
|
33
|
%
|
|
2,475
|
|
32
|
%
|
|
705,765
|
|
21
|
%
|
|
625
|
|
32
|
%
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
884,695
|
|
25
|
%
|
|
454
|
|
23
|
%
|
|
1,797
|
|
23
|
%
|
|
880,726
|
|
26
|
%
|
|
452
|
|
23
|
%
|
|
Index
|
|
1,441,480
|
|
41
|
%
|
|
196
|
|
10
|
%
|
|
801
|
|
11
|
%
|
|
1,393,928
|
|
41
|
%
|
|
203
|
|
11
|
%
|
|
Total institutional
|
|
2,326,175
|
|
66
|
%
|
|
650
|
|
33
|
%
|
|
2,598
|
|
34
|
%
|
|
2,274,654
|
|
67
|
%
|
|
655
|
|
34
|
%
|
|
Total long-term
|
|
$3,482,366
|
|
100
|
%
|
|
$1,987
|
|
100
|
%
|
|
$7,711
|
|
100
|
%
|
|
$3,378,373
|
|
100
|
%
|
|
$1,934
|
|
100
|
%
|
Long-term net inflows were positive across all client regions, with net
inflows of $21.4 billion, $24.4 billion and $1.2 billion from clients in
the Americas, EMEA and Asia-Pacific, respectively. At December 31, 2012,
BlackRock managed 61% of long-term AUM for investors in the Americas and
39% for other international clients.
-
Retail AUM of $403.5 billion reflected net
inflows of $4.1 billion, and market and investment performance gains
of $1.4 billion.
International retail led flows, with long-term
net new business of $2.1 billion, led by fixed income net inflows of
over $2.0 billion. U.S. retail and high net worth net inflows of $2.0
billion showed continued strength in income-oriented products with
equity dividend and high-yield bond funds among top flow generators.
-
iShares net inflows of $35.7 billion reflected positive
net inflows across all asset classes, including net inflows of $30.1
billion into equity funds as demand tilted toward broad market and
large cap equities and flows into emerging markets funds outpacing
developed markets. Fixed income and alternatives products included net
inflows of $4.5 billion and $1.1 billion, respectively.
U.S.
iShares net inflows into equity funds totaled $24.1 billion
with notable flows into emerging markets and China equities.
International iShares similarly was driven by equity net
inflows of $6.0 billion led by developed and emerging broad and large
cap funds.
-
Institutional active AUM ended the quarter at
$884.7 billion, including market and investment performance gains of
$12.0 billion and continued strength in multi-asset class products
with net inflows of $3.2 billion largely into defined contribution
plan, target date and asset allocation offerings.
Core
alternatives net inflows were $1.1 billion, excluding $2.0 billion of
return of capital. Private equity funds of funds, real estate and
single strategy hedge funds experienced net inflows of $0.4 billion,
$0.4 billion and $0.2 billion, respectively. Equity net outflows of
$4.5 billion were split between active fundamental and scientific
active equity. Fixed income net outflows of $4.7 billion reflected
outflows from U.S. core mandates in the latter part of the quarter.
-
Institutional index AUM totaled $1.441 trillion
at December 31, 2012, reflecting net inflows of $15.2 billion and
market and foreign exchange valuation gains of $32.3 billion. Flows
were led by fixed income with net inflows of $8.3 billion led by flows
into local currency and global bond mandates. Equity net inflows of
$5.9 billion primarily reflected net inflows into regional and
country-specific strategies.
Cash management AUM increased 6%, or $15.4 billion, to $263.7
billion reflecting net inflows of $14.4 billion and market and net
foreign exchange gains of $1.0 billion.
Advisory AUM declined 2% to $45.5 billion, due to planned
portfolio liquidations.
Investment performance as of
December 31, 2012 is presented in the following table:
|
|
|
|
|
One-year
|
|
Three-year
|
|
Five-year
|
|
|
|
period
|
|
period
|
|
period
|
|
Fixed Income:
|
|
|
|
|
|
|
|
Actively managed products above benchmark or peer median
|
|
|
|
|
|
|
|
Taxable
|
|
84%
|
|
79%
|
|
63%
|
|
Tax-exempt
|
|
67%
|
|
65%
|
|
78%
|
|
Passively managed products within or above tolerance
|
|
96%
|
|
97%
|
|
89%
|
|
Equity:
|
|
|
|
|
|
|
|
Actively managed products above benchmark or peer median
|
|
|
|
|
|
|
|
Fundamental
|
|
30%
|
|
37%
|
|
46%
|
|
Scientific
|
|
84%
|
|
90%
|
|
88%
|
|
Passively managed products within or above tolerance
|
|
97%
|
|
97%
|
|
97%
|
|
Multi-Asset*:
|
|
|
|
|
|
|
|
Actively managed products above benchmark or peer median
|
|
22%
|
|
20%
|
|
92%
|
*Includes funds managed for unlevered, absolute return.
BlackRock Solutions (“BRS”)
added 13 net new assignments during the quarter, including one Aladdin
assignment, four Financial Markets Advisory assignments, and 10
non-recurring advisory engagements. BRS also completed 11 short-term
advisory assignments during the quarter.
Net new business pipeline
totaled $48.7 billion at January 10, 2013, including $25.4 billion in
institutional index mandates and $7.8 billion in active mandates
expected to fund in future quarters. In addition, the pipeline contains
$13.9 billion of mandates funded since December 31, 2012. 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 base fees. BlackRock Solutions’ pipeline of contracts and
proposals remains robust.
Fourth Quarter Financial Highlights
Comparison to the Fourth Quarter 2011
Operating income: Fourth quarter
2012 operating income was $1.0 billion compared with $808 million in
fourth quarter 2011. Operating income for fourth quarter 2012 included a
one-time $30 million charge related to a contribution to certain of the
Company’s bank-managed short-term investment funds (“STIFs”). This
contribution resulted from actions to ensure compliance with new
regulations from the Office of the Comptroller of the Currency (“OCC”)
taking effect in July 2013 that further limit a STIF’s weighted-average
portfolio life maturity. BlackRock chose to sell certain securities held
within STIFs and to make a one-time contribution to the STIFs to
maintain the value of the funds while ensuring compliance with the new
OCC rules. The securities sold were held in funds managed by Barclays
Global Investors (“BGI”) prior to BlackRock’s acquisition of BGI. Until
adoption of the new STIF regulations, BlackRock had been pursuing a
strategy to hold these securities as market values improved over
time. When BlackRock acquired BGI, Barclays provided capital support
agreements to the STIFs that covered certain losses in the aggregate of
up to $2.2 billion from December 1, 2009 through December 1, 2013 or
until certain criteria are met. Barclays recently exercised its
termination option on the support agreements for two of the STIFs. Last
quarter, BlackRock, on behalf of two of these STIFs, negotiated
amendments to their capital support agreements to remove certain assets
from coverage (with an estimated value of approximately $750 million) in
exchange for a payment by Barclays to the STIFs of $70 million. This
payment was an amount in excess of the payments that were expected under
the Barclays capital support agreements. As a result of the fourth
quarter security sales, these STIFs are currently in compliance with the
new OCC rules. The $30 million charge related to this contribution has
been excluded from as adjusted results. Fourth quarter 2011 operating
income included $32 million of restructuring charges. Operating income,
as adjusted, was $1.0 billion compared with $841 million in fourth
quarter 2011.
Fourth quarter 2012 revenue of $2.5 billion increased $312 million from
$2.2 billion in fourth quarter 2011, primarily due to the following:
-
Investment advisory, administration fees and
securities lending revenue of $2.1 billion in fourth
quarter 2012 increased $218 million from $1.9 billion in fourth
quarter 2011 due to growth in base fees and higher securities lending
revenue. Securities lending fees were $113 million in fourth quarter
2012 compared with $103 million in fourth quarter 2011.
-
Performance fees were $239 million
in fourth quarter 2012 compared with $147 million in fourth quarter
2011, primarily reflecting higher fees from alternative products,
including fees from a disposition-related opportunistic fund.
-
BlackRock Solutions and
advisory revenue totaled $136 million in fourth
quarter 2012 compared with $149 million in fourth quarter 2011,
primarily reflecting higher revenue from Aladdin mandates more
than offset by the run off of revenues associated with a lower level
of advisory assets and lower one-time revenue from advisory
assignments.
-
Other revenue increased
$24 million, largely reflecting higher earnings from certain operating
advisory company investments.
Fourth quarter 2012 total operating expenses of $1.5 billion increased
$115 million from fourth quarter 2011. Fourth quarter 2012 and fourth
quarter 2011 operating expenses included the previously mentioned
one-time $30 million contribution to STIFs and $32 million of
restructuring charges, respectively. Operating expenses, as adjusted, of
$1.5 billion increased $112 million from fourth quarter 2011. Results
were primarily driven by the following:
-
Employee compensation and benefits
increased $74 million, primarily reflecting higher incentive
compensation driven by higher operating income, including higher
performance fees.
-
Direct fund expenses increased
$23 million primarily related to an increase in average iShares
AUM where BlackRock pays certain non-advisory expenses of the funds.
-
General and administration expenses
increased $60 million, primarily due to the previously mentioned
contribution to STIFs and higher marketing and promotional expenses in
connection with the brand campaign, partially offset by lower
occupancy and consulting costs.
Non-operating income (expense):
Fourth quarter 2012 non-operating expense, net of non-controlling
interests, was $27 million compared with $21 million non-operating
expense in fourth quarter 2011. Fourth quarter 2012 included $21 million
of net positive marks, primarily on distressed credit/mortgage fund
co-investments offset by $48 million of net interest expense. Net
interest expense increased $9 million from fourth quarter 2011,
primarily due to long-term debt issuances in May 2012.
Income tax expense: Income tax
expense totaled $288 million and $232 million for fourth quarter 2012
and 2011, respectively. The GAAP effective income tax rate for the
fourth quarter 2012 was 29.4% compared with 29.5% for the fourth quarter
2011. The fourth quarter 2012 GAAP tax rate included $20 million of
non-cash benefits primarily associated with revaluation of certain
deferred tax liabilities, which have been excluded from the as adjusted
results. The fourth quarter 2011 GAAP tax rate included $20 million of
non-cash benefits associated with revaluation of certain deferred tax
liabilities primarily due to tax legislation enacted in Japan, which
have been excluded from the as adjusted results. The as adjusted
effective income tax rate was 31.4% and 32.0% for fourth quarter 2012
and 2011, respectively.
See notes (a) through (f) in Attachment I for more information on as
adjusted items and the reconciliation to GAAP.
Comparison to the Third Quarter 2012
Operating income: Fourth quarter
2012 operating income was $1.0 billion compared with $875 million in
third quarter 2012. Fourth quarter 2012 operating income included the
previously mentioned one-time $30 million contribution to STIFs.
Operating income, as adjusted, was $1.0 billion compared with $876
million in third quarter 2012.
Fourth quarter 2012 revenue increased $219 million from third quarter
2012, primarily due to the following:
-
Investment advisory, administration fees and
securities lending revenue of $2.1 billion in fourth
quarter 2012 increased $57 million from third quarter 2012, driven by
higher long-term average AUM, partially offset by lower securities
lending fees. Securities lending fees were $113 million in fourth
quarter 2012 compared with $129 million in third quarter 2012.
-
Performance fees increased $136
million to $239 million in fourth quarter 2012 from $103 million in
third quarter 2012. The current quarter reflected fees from a
disposition-related opportunistic fund and higher performance fees
from products with performance measurement periods ending on December
31st.
-
BlackRock Solutions and
advisory revenue of $136 million in fourth quarter 2012
increased from $128 million in third quarter 2012 driven by higher
one-time revenue from advisory assignments and higher revenue from Aladdin
mandates.
-
Other revenue increased
$24 million, largely reflecting higher earnings from certain operating
advisory company investments.
Fourth quarter 2012 total operating expenses of $1.5 billion increased
$89 million from third quarter 2012. Fourth quarter 2012 operating
expenses included the previously mentioned contribution related to
STIFs. Operating expenses, as adjusted, of $1.5 billion increased $54
million from third quarter 2012. Results were primarily driven by the
following:
-
Employee compensation and benefits
increased $20 million, primarily reflecting higher incentive
compensation driven by higher operating income.
-
Distribution and servicing costs
decreased $12 million, driven by lower distribution costs.
-
Direct fund expenses increased
$7 million, primarily related to an increase in average iShares
AUM where BlackRock pays certain non-advisory expenses of the funds.
-
General and administration expenses
increased $74 million, primarily due to the one-time $30 million
contribution to STIFs, higher marketing and promotional expenses in
connection with the brand campaign, and higher professional fees. The
increase was partially offset by the non-recurrence of closed-end fund
launch costs of $22 million recorded in third quarter 2012.
Non-operating income (expense):
Fourth quarter 2012 non-operating expense, net of non-controlling
interests, was $27 million compared with $17 million non-operating
income in third quarter 2012. Fourth quarter 2012 included $21 million
of net positive marks offset by $48 million of net interest expense. The
fourth quarter 2012 reflected lower positive marks on distressed
credit/mortgage funds than third quarter 2012 and negative marks on
private equity fund co-investments compared with positive marks in the
prior quarter.
Income tax expense: Income tax
expense of $288 million for fourth quarter 2012 increased $38 million
from third quarter 2012. The GAAP effective income tax rate for the
fourth quarter 2012 was 29.4% compared with 28.1% for third quarter
2012. The fourth quarter 2012 GAAP tax rate included $20 million of
non-cash benefits primarily associated with revaluation of certain
deferred tax liabilities, which have been excluded from the as adjusted
results. The third quarter 2012 GAAP tax rate included a $30 million net
non-cash benefit, related to revaluation of certain deferred income tax
liabilities, including tax legislation enacted in the United Kingdom and
the state and local income tax effect resulting from changes in the
Company’s organizational structure. The as adjusted effective income tax
rate was 31.4% for both fourth quarter 2012 and third quarter 2012.
See notes (a) through (f) in Attachment I for more information on as
adjusted items and the reconciliation to GAAP.
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 on Thursday, January 17, 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 85687431). 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, January 17, 2013 and ending at
midnight on Thursday, January 31, 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 85687431. 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 December 31, 2012 (November 30, 2012 for
high net worth accounts).
Accounts terminated prior to December 31, 2012 are not included. In
addition, accounts that have not been verified as of January 11, 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 December 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 December 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
December 31, 2012, BlackRock’s AUM was $3.792 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
December 31, 2012, the firm has approximately 10,500 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.
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” 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 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 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.
|
|
|
|
|
|
|
|
|
Attachment I
|
|
BlackRock, Inc.
|
|
Condensed Consolidated Statements of Income and Supplemental
Information
|
|
(Dollar amounts in millions, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
|
|
2012
|
|
2011
|
|
$ Change
|
|
2012
|
|
$ Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
$2,081
|
|
|
$1,863
|
|
|
$218
|
|
|
$2,024
|
|
|
$57
|
|
|
Investment advisory performance fees
|
|
239
|
|
|
147
|
|
|
92
|
|
|
103
|
|
|
136
|
|
|
BlackRock Solutions and advisory
|
|
136
|
|
|
149
|
|
|
(13
|
)
|
|
128
|
|
|
8
|
|
|
Distribution fees
|
|
13
|
|
|
22
|
|
|
(9
|
)
|
|
19
|
|
|
(6
|
)
|
|
Other revenue
|
|
70
|
|
|
46
|
|
|
24
|
|
|
46
|
|
|
24
|
|
|
Total revenue
|
|
2,539
|
|
|
2,227
|
|
|
312
|
|
|
2,320
|
|
|
219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
848
|
|
|
774
|
|
|
74
|
|
|
828
|
|
|
20
|
|
|
Distribution and servicing costs
|
|
82
|
|
|
87
|
|
|
(5
|
)
|
|
94
|
|
|
(12
|
)
|
|
Amortization of deferred sales commissions
|
|
12
|
|
|
18
|
|
|
(6
|
)
|
|
13
|
|
|
(1
|
)
|
|
Direct fund expenses
|
|
151
|
|
|
128
|
|
|
23
|
|
|
144
|
|
|
7
|
|
|
General and administration
|
|
401
|
|
|
341
|
|
|
60
|
|
|
327
|
|
|
74
|
|
|
Restructuring charges
|
|
-
|
|
|
32
|
|
|
(32
|
)
|
|
-
|
|
|
-
|
|
|
Amortization of intangible assets
|
|
40
|
|
|
39
|
|
|
1
|
|
|
39
|
|
|
1
|
|
|
Total expenses
|
|
1,534
|
|
|
1,419
|
|
|
115
|
|
|
1,445
|
|
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
1,005
|
|
|
808
|
|
|
197
|
|
|
875
|
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
20
|
|
|
28
|
|
|
(8
|
)
|
|
75
|
|
|
(55
|
)
|
|
Net gain (loss) on consolidated variable interest entities
|
|
(39
|
)
|
|
18
|
|
|
(57
|
)
|
|
2
|
|
|
(41
|
)
|
|
Interest and dividend income
|
|
9
|
|
|
9
|
|
|
-
|
|
|
10
|
|
|
(1
|
)
|
|
Interest expense
|
|
(57
|
)
|
|
(48
|
)
|
|
(9
|
)
|
|
(57
|
)
|
|
-
|
|
|
Total non-operating income (expense)
|
|
(67
|
)
|
|
7
|
|
|
(74
|
)
|
|
30
|
|
|
(97
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
938
|
|
|
815
|
|
|
123
|
|
|
905
|
|
|
33
|
|
|
Income tax expense
|
|
288
|
|
|
232
|
|
|
56
|
|
|
250
|
|
|
38
|
|
|
Net income
|
|
650
|
|
|
583
|
|
|
67
|
|
|
655
|
|
|
(5
|
)
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to non-controlling interests
|
|
(40
|
)
|
|
28
|
|
|
(68
|
)
|
|
13
|
|
|
(53
|
)
|
|
Net income attributable to BlackRock, Inc.
|
|
$690
|
|
|
$555
|
|
|
$135
|
|
|
$642
|
|
|
$48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding (f)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
171,518,278
|
|
|
178,562,187
|
|
|
(7,043,909
|
)
|
|
172,359,141
|
|
|
(840,863
|
)
|
|
Diluted
|
|
175,176,037
|
|
|
181,987,669
|
|
|
(6,811,632
|
)
|
|
175,450,532
|
|
|
(274,495
|
)
|
|
Earnings per share attributable to BlackRock, Inc. common
stockholders (e) (f)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$4.02
|
|
|
$3.10
|
|
|
$0.92
|
|
|
$3.72
|
|
|
$0.30
|
|
|
Diluted
|
|
$3.93
|
|
|
$3.05
|
|
|
$0.88
|
|
|
$3.65
|
|
|
$0.28
|
|
|
Cash dividends declared and paid per share
|
|
$1.50
|
|
|
$1.375
|
|
|
$0.125
|
|
|
$1.50
|
|
|
$-
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
$3,791,588
|
|
|
$3,512,681
|
|
|
$278,907
|
|
|
$3,673,274
|
|
|
$118,314
|
|
|
Shares outstanding (end of period)
|
|
171,215,729
|
|
|
178,309,109
|
|
|
(7,093,380
|
)
|
|
172,037,373
|
|
|
(821,644
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
39.6
|
%
|
|
36.3
|
%
|
|
330 bps
|
|
37.7
|
%
|
|
190 bps
|
|
Effective tax rate
|
|
29.4
|
%
|
|
29.5
|
%
|
|
(10) bps
|
|
28.1
|
%
|
|
130 bps
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (a)
|
|
$1,041
|
|
|
$841
|
|
|
$200
|
|
|
$876
|
|
|
$165
|
|
|
Operating margin (a)
|
|
42.6
|
%
|
|
40.0
|
%
|
|
260 bps
|
|
40.7
|
%
|
|
190 bps
|
|
Non-operating income (expense), less net income (loss) attributable
to non-controlling interests (b)
|
|
($27
|
)
|
|
($21
|
)
|
|
($6
|
)
|
|
$13
|
|
|
($40
|
)
|
|
Net income attributable to BlackRock, Inc. (c) (d)
|
|
$695
|
|
|
$558
|
|
|
$137
|
|
|
$610
|
|
|
$85
|
|
|
Diluted earnings attributable to BlackRock, Inc. common stockholders
per share (c) (d) (e) (f)
|
|
$3.96
|
|
|
$3.06
|
|
|
$0.90
|
|
|
$3.47
|
|
|
$0.49
|
|
|
Effective tax rate
|
|
31.4
|
%
|
|
32.0
|
%
|
|
(60) bps
|
|
31.4
|
%
|
|
- bps
|
|
BlackRock, Inc.
|
|
Condensed Consolidated Statements of Income and Supplemental
Information
|
|
(Dollar amounts in millions, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2012
|
|
2011
|
|
$ Change
|
|
Revenue
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
$8,072
|
|
|
$7,896
|
|
|
$176
|
|
|
Investment advisory performance fees
|
|
463
|
|
|
371
|
|
|
92
|
|
|
BlackRock Solutions and advisory
|
|
518
|
|
|
510
|
|
|
8
|
|
|
Distribution fees
|
|
71
|
|
|
100
|
|
|
(29
|
)
|
|
Other revenue
|
|
213
|
|
|
204
|
|
|
9
|
|
|
Total revenue
|
|
9,337
|
|
|
9,081
|
|
|
256
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
3,287
|
|
|
3,199
|
|
|
88
|
|
|
Distribution and servicing costs
|
|
364
|
|
|
386
|
|
|
(22
|
)
|
|
Amortization of deferred sales commissions
|
|
55
|
|
|
81
|
|
|
(26
|
)
|
|
Direct fund expenses
|
|
591
|
|
|
563
|
|
|
28
|
|
|
General and administration
|
|
1,359
|
|
|
1,415
|
|
|
(56
|
)
|
|
Restructuring charges
|
|
-
|
|
|
32
|
|
|
(32
|
)
|
|
Amortization of intangible assets
|
|
157
|
|
|
156
|
|
|
1
|
|
|
Total expenses
|
|
5,813
|
|
|
5,832
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
3,524
|
|
|
3,249
|
|
|
275
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
163
|
|
|
46
|
|
|
117
|
|
|
Net gain (loss) on consolidated variable interest entities
|
|
(38
|
)
|
|
(18
|
)
|
|
(20
|
)
|
|
Interest and dividend income
|
|
36
|
|
|
34
|
|
|
2
|
|
|
Interest expense
|
|
(215
|
)
|
|
(176
|
)
|
|
(39
|
)
|
|
Total non-operating income (expense)
|
|
(54
|
)
|
|
(114
|
)
|
|
60
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
3,470
|
|
|
3,135
|
|
|
335
|
|
|
Income tax expense
|
|
1,030
|
|
|
796
|
|
|
234
|
|
|
Net income
|
|
2,440
|
|
|
2,339
|
|
|
101
|
|
|
Less:
|
|
|
|
|
|
|
|
Net income (loss) attributable to non-controlling interests
|
|
(18
|
)
|
|
2
|
|
|
(20
|
)
|
|
Net income attributable to BlackRock, Inc.
|
|
$2,458
|
|
|
$2,337
|
|
|
$121
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding (f)
|
|
|
|
|
|
|
|
Basic
|
|
174,961,018
|
|
|
184,265,367
|
|
|
(9,304,349
|
)
|
|
Diluted
|
|
178,017,679
|
|
|
187,116,410
|
|
|
(9,098,731
|
)
|
|
Earnings per share attributable to BlackRock, Inc. common
stockholders (e) (f)
|
|
|
|
|
|
|
|
Basic
|
|
$14.03
|
|
|
$12.56
|
|
|
$1.47
|
|
|
Diluted
|
|
$13.79
|
|
|
$12.37
|
|
|
$1.42
|
|
|
Cash dividends declared and paid per share
|
|
$6.00
|
|
|
$5.50
|
|
|
$0.50
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
$3,791,588
|
|
|
$3,512,681
|
|
|
$278,907
|
|
|
Shares outstanding (end of period)
|
|
171,215,729
|
|
|
178,309,109
|
|
|
(7,093,380
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
Operating margin
|
|
37.7
|
%
|
|
35.8
|
%
|
|
190 bps
|
|
Effective tax rate
|
|
29.5
|
%
|
|
25.4
|
%
|
|
410 bps
|
|
As adjusted:
|
|
|
|
|
|
|
|
Operating income (a)
|
|
$3,574
|
|
|
$3,392
|
|
|
$182
|
|
|
Operating margin (a)
|
|
40.4
|
%
|
|
39.7
|
%
|
|
70 bps
|
|
Non-operating income (expense), less net income (loss) attributable
to non-controlling interests (b)
|
|
($42
|
)
|
|
($113
|
)
|
|
$71
|
|
|
Net income attributable to BlackRock, Inc. (c) (d)
|
|
$2,438
|
|
|
$2,239
|
|
|
$199
|
|
|
Diluted earnings attributable to BlackRock, Inc. common stockholders
per share (c) (d) (e) (f)
|
|
$13.68
|
|
|
$11.85
|
|
|
$1.83
|
|
|
Effective tax rate
|
|
31.0
|
%
|
|
31.7
|
%
|
|
(70) bps
|
|
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
|
|
Year Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
(Dollar amounts in millions)
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
2011
|
|
Operating income, GAAP basis
|
|
$1,005
|
|
$808
|
|
$875
|
|
$3,524
|
|
$3,249
|
|
Non-GAAP expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
U.K. lease exit costs
|
|
-
|
|
-
|
|
(8)
|
|
(8)
|
|
63
|
|
Contribution to STIFs
|
|
30
|
|
-
|
|
-
|
|
30
|
|
-
|
|
Restructuring charges
|
|
-
|
|
32
|
|
-
|
|
-
|
|
32
|
|
PNC LTIP funding obligation
|
|
6
|
|
1
|
|
5
|
|
22
|
|
44
|
|
Merrill Lynch compensation contribution
|
|
-
|
|
-
|
|
-
|
|
-
|
|
7
|
|
Compensation expense related to appreciation (depreciation) on
deferred compensation plans
|
|
-
|
|
-
|
|
4
|
|
6
|
|
(3)
|
|
Operating income, as adjusted
|
|
1,041
|
|
841
|
|
876
|
|
3,574
|
|
3,392
|
|
Closed-end fund launch costs
|
|
-
|
|
7
|
|
22
|
|
22
|
|
26
|
|
Closed-end fund launch commissions
|
|
-
|
|
1
|
|
3
|
|
3
|
|
3
|
|
Operating income used for operating margin measurement
|
|
$1,041
|
|
$849
|
|
$901
|
|
$3,599
|
|
$3,421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, GAAP basis
|
|
$2,539
|
|
$2,227
|
|
$2,320
|
|
$9,337
|
|
$9,081
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Distribution and servicing costs
|
|
(82)
|
|
(87)
|
|
(94)
|
|
(364)
|
|
(386)
|
|
Amortization of deferred sales commissions
|
|
(12)
|
|
(18)
|
|
(13)
|
|
(55)
|
|
(81)
|
|
Revenue used for operating margin measurement
|
|
$2,445
|
|
$2,122
|
|
$2,213
|
|
$8,918
|
|
$8,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, GAAP basis
|
|
39.6%
|
|
36.3%
|
|
37.7%
|
|
37.7%
|
|
35.8%
|
|
Operating margin, as adjusted
|
|
42.6%
|
|
40.0%
|
|
40.7%
|
|
40.4%
|
|
39.7%
|
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.
|
BlackRock, Inc.
|
|
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. Contribution to STIFs represents a contribution to
certain of the Company’s bank-managed STIFs. U.K. lease exit costs
represent costs to exit two locations in London in third quarter 2011.
The amount in third quarter 2012 represents an adjustment related to the
estimated costs initially recorded in third quarter 2011. Restructuring
charges consist of compensation costs and professional fees.
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 and a
Merrill Lynch & Co., Inc. ("Merrill Lynch") cash compensation
contribution, has been excluded because it ultimately does not impact
BlackRock’s book value. The expense related to the Merrill Lynch cash
compensation contribution ceased at the end of third quarter 2011. As of
first quarter 2012, all of the Merrill Lynch contributions had been
received.
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 the contribution to
STIFs, U.K. lease exit costs, 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 GAAP and non-GAAP financial measures in
evaluating BlackRock’s financial performance. 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
|
|
Year Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
(Dollar amounts in millions)
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense), GAAP basis
|
|
($67)
|
|
$7
|
|
$30
|
|
($54)
|
|
($114)
|
|
Less: Net income (loss) attributable to NCI
|
|
(40)
|
|
28
|
|
13
|
|
(18)
|
|
2
|
|
Non-operating income (expense)(1)
|
|
(27)
|
|
(21)
|
|
17
|
|
(36)
|
|
(116)
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
-
|
|
-
|
|
(4)
|
|
(6)
|
|
3
|
|
Non-operating income (expense), less net income (loss) attributable
to NCI, as adjusted
|
|
($27)
|
|
($21)
|
|
$13
|
|
($42)
|
|
($113)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net of net income (loss) attributable to NCI.
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
|
|
Year Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
(Dollar amounts in millions, except per share data)
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
2011
|
|
Net income attributable to BlackRock, Inc., GAAP basis
|
|
$690
|
|
$555
|
|
$642
|
|
$2,458
|
|
$2,337
|
|
Non-GAAP adjustments, net of tax:(d)
|
|
|
|
|
|
|
|
|
|
|
|
U.K. lease exit costs
|
|
-
|
|
-
|
|
(5)
|
|
(5)
|
|
43
|
|
Contribution to STIFs
|
|
21
|
|
-
|
|
-
|
|
21
|
|
-
|
|
Restructuring charges
|
|
-
|
|
22
|
|
-
|
|
-
|
|
22
|
|
PNC LTIP funding obligation
|
|
4
|
|
1
|
|
3
|
|
14
|
|
30
|
|
Merrill Lynch compensation contribution
|
|
-
|
|
-
|
|
-
|
|
-
|
|
5
|
|
Income tax changes
|
|
(20)
|
|
(20)
|
|
(30)
|
|
(50)
|
|
(198)
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
$695
|
|
$558
|
|
$610
|
|
$2,438
|
|
$2,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income, as adjusted, to common shares(e)
|
|
$694
|
|
$557
|
|
$609
|
|
$2,435
|
|
$2,218
|
|
Diluted weighted-average common shares outstanding(f)
|
|
175,176,037
|
|
181,987,669
|
|
175,450,532
|
|
178,017,679
|
|
187,116,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share, GAAP basis(f)
|
|
$3.93
|
|
$3.05
|
|
$3.65
|
|
$13.79
|
|
$12.37
|
|
Diluted earnings per common share, as adjusted(f)
|
|
$3.96
|
|
$3.06
|
|
$3.47
|
|
$13.68
|
|
$11.85
|
See note (a) Operating income, as adjusted, and operating margin, as
adjusted, for information on contribution to STIFs, U.K. lease exit
costs, restructuring charges, PNC LTIP funding obligation and Merrill
Lynch compensation contribution.
During the year ended December 31, 2012, income tax changes included
adjustments related to the revaluation of certain deferred income tax
liabilities due to tax legislation enacted in the United Kingdom and the
state and local income tax effect resulting from changes in the
Company’s organizational structure. During the quarter and year ended
December 31, 2011, income tax changes included adjustments related to
the revaluation of certain deferred income tax liabilities due to a
state tax election and enacted U.K., Japan, U.S. state and local tax
legislation. The resulting decrease in income taxes has been excluded
from net income attributable to BlackRock, Inc., as adjusted, as these
items do not have a cash flow impact and to ensure comparability among
periods presented.
(d) For the years ended December 31, 2012 and 2011, non-GAAP adjustments
were tax effected at 31.4% and 31.8%, respectively, reflecting a blended
rate applicable to the adjustments. BlackRock’s tax rates in fourth
quarter 2012 and 2011 included the impact of changes in the fourth
quarter to the respective full year blended rates applicable to the
adjustments.
(e) 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. In addition, 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 (“ASC”) 260-10, Earnings per
Share. Average outstanding participating securities were 0.2 million
for the quarters ended December 31, 2012 and 2011 and September 30,
2012. For the year ended December 31, 2012 and 2011, average outstanding
participating securities were 0.2 million and 1.8 million, respectively.
|
Attachment II
|
|
BlackRock, Inc.
|
|
Summary of Revenues
|
|
(Dollar amounts in millions)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
2012
|
|
2011
|
|
$Change
|
|
2012
|
|
$Change
|
|
2012
|
|
2011
|
|
$ Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$
|
440
|
|
$
|
437
|
|
$
|
3
|
|
$
|
431
|
|
$
|
9
|
|
$
|
1,753
|
|
$
|
1,967
|
|
$
|
(214)
|
|
iShares
|
|
|
515
|
|
|
430
|
|
|
85
|
|
|
486
|
|
|
29
|
|
|
1,941
|
|
|
1,847
|
|
|
94
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
317
|
|
|
278
|
|
|
39
|
|
|
301
|
|
|
16
|
|
|
1,182
|
|
|
1,104
|
|
|
78
|
|
iShares
|
|
|
120
|
|
|
88
|
|
|
32
|
|
|
116
|
|
|
4
|
|
|
441
|
|
|
317
|
|
|
124
|
|
Multi-asset class
|
|
|
239
|
|
|
220
|
|
|
19
|
|
|
239
|
|
|
-
|
|
|
957
|
|
|
894
|
|
|
63
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
130
|
|
|
133
|
|
|
(3)
|
|
|
130
|
|
|
-
|
|
|
525
|
|
|
557
|
|
|
(32)
|
|
Currency and commodities
|
|
|
34
|
|
|
32
|
|
|
2
|
|
|
31
|
|
|
3
|
|
|
131
|
|
|
136
|
|
|
(5)
|
|
Sub-total
|
|
|
1,795
|
|
|
1,618
|
|
|
177
|
|
|
1,734
|
|
|
61
|
|
|
6,930
|
|
|
6,822
|
|
|
108
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
134
|
|
|
112
|
|
|
22
|
|
|
139
|
|
|
(5)
|
|
|
552
|
|
|
488
|
|
|
64
|
|
Fixed income
|
|
|
58
|
|
|
48
|
|
|
10
|
|
|
61
|
|
|
(3)
|
|
|
229
|
|
|
203
|
|
|
26
|
|
Sub-total Non-ETF Index
|
|
|
192
|
|
|
160
|
|
|
32
|
|
|
200
|
|
|
(8)
|
|
|
781
|
|
|
691
|
|
|
90
|
|
Long-term
|
|
|
1,987
|
|
|
1,778
|
|
|
209
|
|
|
1,934
|
|
|
53
|
|
|
7,711
|
|
|
7,513
|
|
|
198
|
|
Cash management
|
|
|
94
|
|
|
85
|
|
|
9
|
|
|
90
|
|
|
4
|
|
|
361
|
|
|
383
|
|
|
(22)
|
|
Total base fees
|
|
|
2,081
|
|
|
1,863
|
|
|
218
|
|
|
2,024
|
|
|
57
|
|
|
8,072
|
|
|
7,896
|
|
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory performance fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
49
|
|
|
64
|
|
|
(15)
|
|
|
17
|
|
|
32
|
|
|
88
|
|
|
145
|
|
|
(57)
|
|
Fixed income
|
|
|
19
|
|
|
18
|
|
|
1
|
|
|
13
|
|
|
6
|
|
|
48
|
|
|
35
|
|
|
13
|
|
Multi-asset class
|
|
|
9
|
|
|
18
|
|
|
(9)
|
|
|
2
|
|
|
7
|
|
|
15
|
|
|
20
|
|
|
(5)
|
|
Alternatives
|
|
|
162
|
|
|
47
|
|
|
115
|
|
|
71
|
|
|
91
|
|
|
312
|
|
|
171
|
|
|
141
|
|
Total
|
|
|
239
|
|
|
147
|
|
|
92
|
|
|
103
|
|
|
136
|
|
|
463
|
|
|
371
|
|
|
92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Solutions and advisory
|
|
|
136
|
|
|
149
|
|
|
(13)
|
|
|
128
|
|
|
8
|
|
|
518
|
|
|
510
|
|
|
8
|
|
Distribution fees
|
|
|
13
|
|
|
22
|
|
|
(9)
|
|
|
19
|
|
|
(6)
|
|
|
71
|
|
|
100
|
|
|
(29)
|
|
Other revenue
|
|
|
70
|
|
|
46
|
|
|
24
|
|
|
46
|
|
|
24
|
|
|
213
|
|
|
204
|
|
|
9
|
|
Total revenue
|
|
$
|
2,539
|
|
$
|
2,227
|
|
$
|
312
|
|
$
|
2,320
|
|
$
|
219
|
|
$
|
9,337
|
|
$
|
9,081
|
|
$
|
256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Year Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
2011
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
21
|
%
|
|
22
|
%
|
|
21
|
%
|
|
22
|
%
|
|
25
|
%
|
|
iShares
|
|
25
|
%
|
|
23
|
%
|
|
24
|
%
|
|
23
|
%
|
|
23
|
%
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
15
|
%
|
|
15
|
%
|
|
15
|
%
|
|
15
|
%
|
|
14
|
%
|
|
iShares
|
|
6
|
%
|
|
5
|
%
|
|
6
|
%
|
|
5
|
%
|
|
4
|
%
|
|
Multi-asset class
|
|
11
|
%
|
|
12
|
%
|
|
12
|
%
|
|
12
|
%
|
|
11
|
%
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
6
|
%
|
|
7
|
%
|
|
6
|
%
|
|
7
|
%
|
|
7
|
%
|
|
Currency and commodities
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
Sub-total
|
|
86
|
%
|
|
86
|
%
|
|
86
|
%
|
|
86
|
%
|
|
86
|
%
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
6
|
%
|
|
6
|
%
|
|
7
|
%
|
|
7
|
%
|
|
6
|
%
|
|
Fixed income
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
Sub-total Non-ETF Index
|
|
9
|
%
|
|
9
|
%
|
|
10
|
%
|
|
10
|
%
|
|
9
|
%
|
|
Long-term
|
|
95
|
%
|
|
95
|
%
|
|
96
|
%
|
|
96
|
%
|
|
95
|
%
|
|
Cash management
|
|
5
|
%
|
|
5
|
%
|
|
4
|
%
|
|
4
|
%
|
|
5
|
%
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
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
|
|
|
|
Year Ended
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
September 30,
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
$ Change
|
|
2012
|
|
$ Change
|
|
2012
|
|
2011
|
|
$ Change
|
|
Non-operating income (expense), GAAP basis
|
|
|
|
$
|
(67
|
)
|
|
$
|
7
|
|
|
$
|
(74
|
)
|
|
$
|
30
|
|
|
$
|
(97
|
)
|
|
$
|
(54
|
)
|
|
$
|
(114
|
)
|
|
$
|
60
|
|
|
Less: Net income (loss) attributable to NCI
|
|
|
|
|
(40
|
)
|
|
|
28
|
|
|
|
(68
|
)
|
|
|
13
|
|
|
|
(53
|
)
|
|
|
(18
|
)
|
|
|
2
|
|
|
|
(20
|
)
|
|
Non-operating income (expense)(1)
|
|
|
|
$
|
(27
|
)
|
|
$
|
(21
|
)
|
|
$
|
(6
|
)
|
|
$
|
17
|
|
|
$
|
(44
|
)
|
|
$
|
(36
|
)
|
|
$
|
(116
|
)
|
|
$
|
80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
economic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investments at
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
September 30,
|
|
|
|
December 31,
|
|
|
|
|
|
2012(2)
|
|
2012
|
|
2011
|
|
$ Change
|
|
2012
|
|
$ Change
|
|
2012
|
|
2011
|
|
$ Change
|
|
Net gain (loss) on investments(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity
|
|
20-25
|
%
|
|
$
|
(1
|
)
|
|
$
|
14
|
|
|
$
|
(15
|
)
|
|
$
|
20
|
|
|
$
|
(21
|
)
|
|
$
|
36
|
|
|
$
|
36
|
|
|
$
|
-
|
|
|
Real estate
|
|
10-15
|
%
|
|
|
5
|
|
|
|
3
|
|
|
|
2
|
|
|
|
5
|
|
|
|
-
|
|
|
|
14
|
|
|
|
10
|
|
|
|
4
|
|
|
Distressed credit/mortgage funds
|
|
15-20
|
%
|
|
|
15
|
|
|
|
-
|
|
|
|
15
|
|
|
|
26
|
|
|
|
(11
|
)
|
|
|
69
|
|
|
|
(13
|
)
|
|
|
82
|
|
|
Hedge funds/funds of hedge funds
|
|
10-15
|
%
|
|
|
3
|
|
|
|
(1
|
)
|
|
|
4
|
|
|
|
7
|
|
|
|
(4
|
)
|
|
|
20
|
|
|
|
(5
|
)
|
|
|
25
|
|
|
Other investments(3)
|
|
30-35
|
%
|
|
|
(1
|
)
|
|
|
2
|
|
|
|
(3
|
)
|
|
|
2
|
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
(3
|
)
|
|
Sub-total
|
|
|
|
|
21
|
|
|
|
18
|
|
|
|
3
|
|
|
|
60
|
|
|
|
(39
|
)
|
|
|
137
|
|
|
|
29
|
|
|
|
108
|
|
|
Investments related to deferred compensation plans
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
(4
|
)
|
|
|
6
|
|
|
|
(3
|
)
|
|
|
9
|
|
|
Total net gain (loss) on investments(1)
|
|
|
|
|
21
|
|
|
|
18
|
|
|
|
3
|
|
|
|
64
|
|
|
|
(43
|
)
|
|
|
143
|
|
|
|
26
|
|
|
|
117
|
|
|
Interest and dividend income
|
|
|
|
|
9
|
|
|
|
9
|
|
|
|
-
|
|
|
|
10
|
|
|
|
(1
|
)
|
|
|
36
|
|
|
|
34
|
|
|
|
2
|
|
|
Interest expense
|
|
|
|
|
(57
|
)
|
|
|
(48
|
)
|
|
|
(9
|
)
|
|
|
(57
|
)
|
|
|
-
|
|
|
|
(215
|
)
|
|
|
(176
|
)
|
|
|
(39
|
)
|
|
Net interest expense
|
|
|
|
|
(48
|
)
|
|
|
(39
|
)
|
|
|
(9
|
)
|
|
|
(47
|
)
|
|
|
(1
|
)
|
|
|
(179
|
)
|
|
|
(142
|
)
|
|
|
(37
|
)
|
|
Total non-operating income (expense)(1)
|
|
|
|
|
(27
|
)
|
|
|
(21
|
)
|
|
|
(6
|
)
|
|
|
17
|
|
|
|
(44
|
)
|
|
|
(36
|
)
|
|
|
(116
|
)
|
|
|
80
|
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
4
|
|
|
|
(6
|
)
|
|
|
3
|
|
|
|
(9
|
)
|
|
Non-operating income (expense), as adjusted(1)
|
|
|
|
$
|
(27
|
)
|
|
$
|
(21
|
)
|
|
$
|
(6
|
)
|
|
$
|
13
|
|
|
$
|
(40
|
)
|
|
$
|
(42
|
)
|
|
$
|
(113
|
)
|
|
$
|
71
|
|
|
(1)
|
|
Net of net income (loss) attributable to NCI.
|
|
(2)
|
|
Percentages represent estimated percentages of BlackRock's
corporate economic investment portfolio as of December 31, 2012.
Economic investment amounts at September 30, 2012 for private
equity, real estate, distressed credit/mortgage funds, hedge
funds/funds of hedge funds and other investments were $314
million, $118 million, $223 million, $140 million and $282
million, respectively. See the 2012 third 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.
|
|
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.
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2012 (Est.)
|
|
2011
|
|
|
|
|
|
|
|
|
Total balance sheet assets
|
|
|
$
|
200
|
|
|
$
|
180
|
|
|
Separate account assets and collateral held under securities
lending agreements
|
|
|
|
(158
|
)
|
|
|
(140
|
)
|
|
Consolidated VIEs/sponsored investment funds
|
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
Goodwill and intangible assets, net
|
|
|
|
(30
|
)
|
|
|
(30
|
)
|
|
Economic tangible assets
|
|
|
$
|
10
|
|
|
$
|
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
|
|
|
|
|
|
Variance vs.
|
|
|
|
|
|
|
|
September 30,
|
|
subscriptions
|
|
appreciation
|
|
Foreign
|
|
December 31,
|
|
September 30,
|
|
|
|
|
|
|
|
2012
|
|
(redemptions)(1)
|
|
(depreciation)
|
|
exchange(2)
|
|
2012
|
|
2012
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$
|
288,799
|
|
$
|
(5,442
|
)
|
|
$
|
4,254
|
|
|
$
|
(396
|
)
|
|
$
|
287,215
|
|
|
|
(1
|
%)
|
|
|
|
|
|
iShares
|
|
|
491,534
|
|
|
30,075
|
|
|
|
12,332
|
|
|
|
707
|
|
|
|
534,648
|
|
|
|
9
|
%
|
|
|
|
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
652,780
|
|
|
(374
|
)
|
|
|
5,597
|
|
|
|
(1,672
|
)
|
|
|
656,331
|
|
|
|
1
|
%
|
|
|
|
|
|
iShares
|
|
|
187,771
|
|
|
4,462
|
|
|
|
150
|
|
|
|
469
|
|
|
|
192,852
|
|
|
|
3
|
%
|
|
|
|
|
|
Multi-asset class
|
|
|
257,607
|
|
|
4,086
|
|
|
|
5,290
|
|
|
|
765
|
|
|
|
267,748
|
|
|
|
4
|
%
|
|
|
|
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
68,931
|
|
|
(970
|
)
|
|
|
471
|
|
|
|
(65
|
)
|
|
|
68,367
|
|
|
|
(1
|
%)
|
|
|
|
|
|
Currency and commodities(3)
|
|
|
44,494
|
|
|
276
|
|
|
|
(2,727
|
)
|
|
|
(615
|
)
|
|
|
41,428
|
|
|
|
(7
|
%)
|
|
|
|
|
|
Sub-total
|
|
|
1,991,916
|
|
|
32,113
|
|
|
|
25,367
|
|
|
|
(807
|
)
|
|
|
2,048,589
|
|
|
|
3
|
%
|
|
|
|
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
993,197
|
|
|
6,559
|
|
|
|
28,084
|
|
|
|
(4,202
|
)
|
|
|
1,023,638
|
|
|
|
3
|
%
|
|
|
|
|
|
Fixed income
|
|
|
393,260
|
|
|
8,313
|
|
|
|
8,825
|
|
|
|
(259
|
)
|
|
|
410,139
|
|
|
|
4
|
%
|
|
|
|
|
|
Sub-total Non-ETF Index
|
|
|
1,386,457
|
|
|
14,872
|
|
|
|
36,909
|
|
|
|
(4,461
|
)
|
|
|
1,433,777
|
|
|
|
3
|
%
|
|
|
|
|
|
Long-term
|
|
|
3,378,373
|
|
|
46,985
|
|
|
|
62,276
|
|
|
|
(5,268
|
)
|
|
|
3,482,366
|
|
|
|
3
|
%
|
|
|
|
|
|
|
|
Cash management
|
|
|
248,331
|
|
|
14,416
|
|
|
|
283
|
|
|
|
713
|
|
|
|
263,743
|
|
|
|
6
|
%
|
|
|
|
|
|
Sub-total
|
|
|
3,626,704
|
|
|
61,401
|
|
|
|
62,559
|
|
|
|
(4,555
|
)
|
|
|
3,746,109
|
|
|
|
3
|
%
|
|
|
|
|
|
Advisory(4)
|
|
|
46,570
|
|
|
(646
|
)
|
|
|
(248
|
)
|
|
|
(197
|
)
|
|
|
45,479
|
|
|
|
(2
|
%)
|
|
|
|
|
|
Total AUM
|
|
$
|
3,673,274
|
|
$
|
60,755
|
|
|
$
|
62,311
|
|
|
$
|
(4,752
|
)
|
|
$
|
3,791,588
|
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes
|
|
|
|
|
|
|
|
Net
|
|
|
|
Market
|
|
|
|
|
|
Variance vs.
|
|
Memorandum
|
|
|
|
December 31,
|
|
subscriptions
|
|
|
|
appreciation
|
|
Foreign
|
|
December 31,
|
|
December 31,
|
|
Net subscriptions
|
|
|
|
2011
|
|
(redemptions)(1)
|
|
Acquisitions(5)
|
|
(depreciation)
|
|
exchange(2)
|
|
2012
|
|
2011
|
|
(redemptions)(1)(6)
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$
|
275,156
|
|
$
|
(18,111
|
)
|
|
$
|
-
|
|
|
$
|
28,550
|
|
|
$
|
1,620
|
|
|
$
|
287,215
|
|
|
|
4
|
%
|
|
$
|
(18,111
|
)
|
|
iShares
|
|
|
419,651
|
|
|
52,973
|
|
|
|
3,517
|
|
|
|
56,433
|
|
|
|
2,074
|
|
|
|
534,648
|
|
|
|
27
|
%
|
|
|
52,973
|
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
614,804
|
|
|
892
|
|
|
|
-
|
|
|
|
40,524
|
|
|
|
111
|
|
|
|
656,331
|
|
|
|
7
|
%
|
|
|
892
|
|
|
iShares
|
|
|
153,802
|
|
|
28,785
|
|
|
|
3,026
|
|
|
|
6,325
|
|
|
|
914
|
|
|
|
192,852
|
|
|
|
25
|
%
|
|
|
28,785
|
|
|
Multi-asset class
|
|
|
225,170
|
|
|
15,817
|
|
|
|
78
|
|
|
|
25,072
|
|
|
|
1,611
|
|
|
|
267,748
|
|
|
|
19
|
%
|
|
|
15,817
|
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
63,647
|
|
|
(3,922
|
)
|
|
|
6,166
|
|
|
|
2,266
|
|
|
|
210
|
|
|
|
68,367
|
|
|
|
7
|
%
|
|
|
(3,922
|
)
|
|
Currency and commodities(3)
|
|
|
41,301
|
|
|
(1,547
|
)
|
|
|
860
|
|
|
|
1,307
|
|
|
|
(493
|
)
|
|
|
41,428
|
|
|
|
-
|
%
|
|
|
(1,547
|
)
|
|
Sub-total
|
|
|
1,793,531
|
|
|
74,887
|
|
|
|
13,647
|
|
|
|
160,477
|
|
|
|
6,047
|
|
|
|
2,048,589
|
|
|
|
14
|
%
|
|
|
74,887
|
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
865,299
|
|
|
19,154
|
|
|
|
95
|
|
|
|
138,730
|
|
|
|
360
|
|
|
|
1,023,638
|
|
|
|
18
|
%
|
|
|
19,154
|
|
|
Fixed income
|
|
|
479,116
|
|
|
(96,506
|
)
|
|
|
-
|
|
|
|
20,991
|
|
|
|
6,538
|
|
|
|
410,139
|
|
|
|
(14
|
%)
|
|
|
13,694
|
|
|
Sub-total Non-ETF Index
|
|
|
1,344,415
|
|
|
(77,352
|
)
|
|
|
95
|
|
|
|
159,721
|
|
|
|
6,898
|
|
|
|
1,433,777
|
|
|
|
7
|
%
|
|
|
32,848
|
|
|
Long-term
|
|
|
3,137,946
|
|
|
(2,465
|
)
|
|
|
13,742
|
|
|
|
320,198
|
|
|
|
12,945
|
|
|
|
3,482,366
|
|
|
|
11
|
%
|
|
|
107,735
|
|
|
Cash management
|
|
|
254,665
|
|
|
5,048
|
|
|
|
-
|
|
|
|
1,983
|
|
|
|
2,047
|
|
|
|
263,743
|
|
|
|
4
|
%
|
|
|
5,048
|
|
|
Sub-total
|
|
|
3,392,611
|
|
|
2,583
|
|
|
|
13,742
|
|
|
|
322,181
|
|
|
|
14,992
|
|
|
|
3,746,109
|
|
|
|
10
|
%
|
|
|
112,783
|
|
|
Advisory(4)
|
|
|
120,070
|
|
|
(74,540
|
)
|
|
|
-
|
|
|
|
(804
|
)
|
|
|
753
|
|
|
|
45,479
|
|
|
|
(62
|
%)
|
|
|
(74,540
|
)
|
|
Total AUM
|
|
$
|
3,512,681
|
|
$
|
(71,957
|
)
|
|
$
|
13,742
|
|
|
$
|
321,377
|
|
|
$
|
15,745
|
|
|
$
|
3,791,588
|
|
|
|
8
|
%
|
|
$
|
38,243
|
|
|
(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)
|
|
Amounts include commodity iShares.
|
|
(4)
|
|
Advisory AUM represents long-term portfolio liquidation
assignments.
|
|
(5)
|
|
Amounts represent AUM acquired in the Swiss Re Private Equity
Partners acquisition in September 2012 and Claymore Investments,
Inc. acquisition in March 2012.
|
|
(6)
|
|
Amounts exclude the effect of two single low-fee institutional
index fixed income outflows of $36.0 billion and $74.2 billion in
first quarter 2012 and third quarter 2012, respectively.
|
BlackRock, Inc.
Media Relations:
Bobbie Collins 212-810-8155
or
Investor
Relations:
Kristen Dickey 212-810-5572
Source: BlackRock, Inc.