-
8% AUM growth from the first quarter of 2014
-
$70.4 billion of long-term net inflows for the first quarter of 2015,
representing 6.5% annualized organic growth
-
10% diluted EPS growth from the first quarter of 2014
-
13% increase in quarterly cash dividend to $2.18 per share and
consistent capital management with $275 million of quarterly share
repurchases
NEW YORK--(BUSINESS WIRE)--
BlackRock, Inc. (NYSE:BLK):
FINANCIAL RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except per share data)
|
|
|
|
Q1
2015
|
|
Q1
2014
|
|
Change
|
|
Q4
2014
|
|
Change
|
|
|
|
|
|
|
|
|
|
AUM
|
|
|
|
$
|
4,774,192
|
|
|
$
|
4,400,925
|
|
|
8
|
%
|
|
$
|
4,651,895
|
|
|
3
|
%
|
|
GAAP basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$
|
2,723
|
|
|
$
|
2,670
|
|
|
2
|
%
|
|
$
|
2,784
|
|
|
(2
|
%)
|
|
Operating income
|
|
|
|
$
|
1,067
|
|
|
$
|
1,051
|
|
|
2
|
%
|
|
$
|
1,144
|
|
|
(7
|
%)
|
|
Operating margin
|
|
|
|
|
39.2
|
%
|
|
|
39.4
|
%
|
|
(20 bps)
|
|
|
41.1
|
%
|
|
(190 bps)
|
|
Net income(1)
|
|
|
|
$
|
822
|
|
|
$
|
756
|
|
|
9
|
%
|
|
$
|
813
|
|
|
1
|
%
|
|
Diluted EPS
|
|
|
|
$
|
4.84
|
|
|
$
|
4.40
|
|
|
10
|
%
|
|
$
|
4.77
|
|
|
1
|
%
|
|
Weighted average diluted shares
|
|
|
|
|
169.7
|
|
|
|
171.9
|
|
|
(1
|
%)
|
|
|
170.4
|
|
|
-
|
%
|
|
As Adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income(2)
|
|
|
|
$
|
1,077
|
|
|
$
|
1,062
|
|
|
1
|
%
|
|
$
|
1,154
|
|
|
(7
|
%)
|
|
Operating margin(2)
|
|
|
|
|
41.2
|
%
|
|
|
41.4
|
%
|
|
(20 bps)
|
|
|
43.6
|
%
|
|
(240 bps)
|
|
Net income(1) (2)
|
|
|
|
$
|
830
|
|
|
$
|
762
|
|
|
9
|
%
|
|
$
|
821
|
|
|
1
|
%
|
|
Diluted EPS(2)
|
|
|
|
$
|
4.89
|
|
|
$
|
4.43
|
|
|
10
|
%
|
|
$
|
4.82
|
|
|
1
|
%
|
(1) Net income represents net income attributable to
BlackRock, Inc.
(2) See notes (1) through (4) to the Condensed Consolidated
Statements of Income and Supplemental Information for more information
on as adjusted items and the reconciliation to GAAP.
BlackRock, Inc. (NYSE:BLK) today reported financial results for the
three months ended March 31, 2015.
“In the first quarter, BlackRock’s diverse investment platform and
relentless focus on clients and performance drove long-term net inflows
of $70 billion,” commented Laurence D. Fink, Chairman and CEO of
BlackRock. “This was one of the most broadly diverse flow quarters in
BlackRock’s history. Flows were positive across all long-term asset
classes, client types, regions and investment styles, with active net
inflows of $32 billion and index net inflows of $38 billion. Our $252
billion of net new inflows over the last twelve months and continued
strong growth in Aladdin allowed us to achieve year-over-year
revenue growth despite the level of transaction-related revenue in last
year’s first quarter and significant foreign exchange headwinds, which
reduced the value of our non-dollar denominated base fees.
“In the face of divergent financial markets, investors continue to
search for yield, and BlackRock’s highly diversified global fixed income
platform again delivered strong returns for our clients. With 91% of our
taxable fixed income assets above benchmark or peer median for the
3-year period, we remain well positioned to benefit from ongoing changes
in the fixed income landscape.
“Institutional long-term net inflows of $21 billion were our highest
since the BGI acquisition, reflecting strong demand for customized
investment solutions. We partnered with leading global institutions to
address their specific objectives through a combination of investment
management expertise, robust portfolio construction and superior risk
management. Alternatives remain an important component of BlackRock’s
solutions capabilities and we raised another $2 billion of alternatives
commitments during the quarter, giving us more than $10 billion in
committed capital to deploy for clients. We also announced a landmark
public-private infrastructure investment partnership in Mexico, which
will finance two natural gas pipelines critical to the region’s
continued economic growth.
“In iShares, we saw net inflows of $35 billion, driven by
broad-based European flows and strength in our global fixed income
franchise. Our iShares platform continues to grow on multiple
fronts: our Core series for buy-and-hold investors, our offering of
precision exposures for asset allocators, and our financial instruments
for capital markets investors. BlackRock’s global Retail business
continued to benefit from stronger distribution, a broader product suite
and enhanced brand investment, and generated more than $14 billion of
long-term net inflows.
“We are confident that our platform, our distribution, our client
relationships and our long-term focus position BlackRock to continue to
execute on behalf of clients in an ever-changing investment landscape. I
would like to once again express my gratitude to BlackRock employees for
their commitment to excellence. Together, we look forward to continuing
to drive results for our clients and shareholders.”
|
|
|
RESULTS BY CLIENT TYPE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions), (unaudited)
|
|
|
|
Q1 2015
Net flows
|
|
March 31, 2015
AUM
|
|
Q1 2015
Base Fees(1)
|
|
March 31, 2015
AUM
% of Total
|
|
Q1 2015
Base Fees(1)
% of Total
|
|
Retail
|
|
|
|
$14,172
|
|
$550,980
|
|
$807
|
|
12%
|
|
34%
|
|
iShares
|
|
|
|
35,478
|
|
1,074,130
|
|
829
|
|
24%
|
|
36%
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
17,984
|
|
984,282
|
|
456
|
|
22%
|
|
20%
|
|
Index
|
|
|
|
2,806
|
|
1,854,205
|
|
225
|
|
42%
|
|
10%
|
|
Total institutional
|
|
|
|
20,790
|
|
2,838,487
|
|
681
|
|
64%
|
|
30%
|
|
Total long-term
|
|
|
|
$70,440
|
|
$4,463,597
|
|
$2,317
|
|
100%
|
|
100%
|
|
|
|
RESULTS BY PRODUCT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions), (unaudited)
|
|
|
|
Q1 2015
Net flows
|
|
March 31, 2015
AUM
|
|
Q1 2015
Base Fees(1)
|
|
March 31, 2015
AUM
% of Total
|
|
Q1 2015
Base Fees(1)
% of Total
|
|
Equity
|
|
|
|
$20,941
|
|
$2,527,130
|
|
$1,269
|
|
56%
|
|
55%
|
|
Fixed income
|
|
|
|
36,289
|
|
1,428,480
|
|
571
|
|
32%
|
|
25%
|
|
Multi-asset
|
|
|
|
12,792
|
|
395,312
|
|
304
|
|
9%
|
|
13%
|
|
Alternatives
|
|
|
|
418
|
|
112,675
|
|
173
|
|
3%
|
|
7%
|
|
Total long-term
|
|
|
|
$70,440
|
|
$4,463,597
|
|
$2,317
|
|
100%
|
|
100%
|
(1) Base fees include investment advisory, administration
fees and securities lending revenue.
Business Highlights
Long-term net inflows were positive across all regions, with net inflows
of $47.5 billion, $17.7 billion and $5.2 billion from clients in the
Americas, EMEA and Asia-Pacific, respectively. At March 31, 2015,
BlackRock managed 62% of its long-term AUM for investors in the Americas
and 38% for clients in EMEA and Asia-Pacific.
A discussion of the Company’s net flows by client type for the first
quarter of 2015 is presented below.
-
Retail long-term net inflows of $14.2 billion included
net inflows of $6.7 billion in the United States and $7.5 billion
internationally. Fixed income net inflows of $12.8 billion were
diversified across exposures, with $3.5 billion of net inflows into
the unconstrained Strategic Income Opportunities fund, $2.2 billion
into high yield and $1.1 billion into the Total Return fund. Global
multi-asset income funds raised an additional $2.0 billion of net new
assets.
-
iShares® long-term net inflows of
$35.5 billion were led by fixed income net inflows of $18.6 billion
which were diversified across exposures and geographies. Equity net
inflows of $16.7 billion were driven by the Core Series as well as
demand for European equities.
-
Institutional active long-term net inflows of $18.0
billion were led by multi-asset net inflows of $11.7 billion,
reflecting strong solutions-based insurance wins in the quarter and
ongoing demand for the LifePath® target-date
product suite. Fixed income net inflows of $5.7 billion were driven by
unconstrained and total return mandates. Alternatives net inflows of
$0.4 billion were led by flows into infrastructure and hedge fund
solutions, and were net of $0.7 billion of capital returned to
investors. Additionally, we raised more than $2 billion in
alternatives commitments in the quarter, which will translate into new
flows as they are invested.
-
Institutional index long-term net inflows of $2.8
billion were driven by equity net inflows of $3.7 billion, partially
offset by outflows from fixed income and multi-asset.
Cash management AUM decreased 1% from December 31, 2014 to $292.5
billion.
Advisory AUM decreased 17% from December 31, 2014 to $18.1
billion.
|
|
|
INVESTMENT PERFORMANCE AT MARCH 31, 2015(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-year period
|
|
Three-year period
|
|
Five-year period
|
|
Fixed Income:
|
|
|
|
|
|
|
|
|
|
Actively managed products above benchmark or peer
|
|
|
|
|
|
|
|
|
|
median
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
|
81 %
|
|
91 %
|
|
91 %
|
|
Tax-exempt
|
|
|
|
62 %
|
|
74 %
|
|
74 %
|
|
Index products within or above applicable tolerance
|
|
|
|
97 %
|
|
97 %
|
|
98 %
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
Actively managed products above benchmark or peer
|
|
|
|
|
|
|
|
|
|
median
|
|
|
|
|
|
|
|
|
|
Fundamental
|
|
|
|
41 %
|
|
52 %
|
|
48 %
|
|
Scientific
|
|
|
|
88 %
|
|
95 %
|
|
96 %
|
|
Index products within or above applicable tolerance
|
|
|
|
97 %
|
|
98 %
|
|
97 %
|
(1) Past performance is not indicative of future results. The
performance information shown is based on preliminary available data.
Please refer to performance disclosure detail.
Teleconference, Webcast and Presentation Information
Chairman and Chief Executive Officer, Laurence D. Fink, and Chief
Financial Officer, Gary S. Shedlin, will host a teleconference call for
investors and analysts on Thursday, April 16, 2015 at 8:30 a.m. (Eastern
Time). Members of the public who are interested in participating in the
teleconference should dial, from the United States, (800) 374-0176, or
from outside the United States, (706) 679-8281, shortly before 8:30 a.m.
and reference the BlackRock Conference Call (ID Number 20720497). 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, April 16, 2015 and ending at
midnight on Thursday, April 30, 2015. To access the replay of the
teleconference, callers from the United States should dial
(855) 859-2056 and callers from outside the United States should dial
(404) 537-3406 and enter the Conference ID Number 20720497. 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
March 31, 2015, BlackRock’s AUM was $4.774 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 March
31, 2015, the firm had approximately 12,300 employees in more than 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
| Twitter: @blackrock_news
| Blog: www.blackrockblog.com
| LinkedIn: www.linkedin.com/company/blackrock
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL
INFORMATION
(in millions, except shares and per share data), (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Ended
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
Change
|
|
2014
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
|
|
$2,390
|
|
$2,291
|
|
$99
|
|
$2,396
|
|
($6)
|
|
Investment advisory performance fees
|
|
|
|
108
|
|
158
|
|
(50)
|
|
144
|
|
(36)
|
|
BlackRock Solutions and advisory
|
|
|
|
147
|
|
154
|
|
(7)
|
|
170
|
|
(23)
|
|
Distribution fees
|
|
|
|
17
|
|
19
|
|
(2)
|
|
16
|
|
1
|
|
Other revenue
|
|
|
|
61
|
|
48
|
|
13
|
|
58
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
2,723
|
|
2,670
|
|
53
|
|
2,784
|
|
(61)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
|
981
|
|
982
|
|
(1)
|
|
926
|
|
55
|
|
Distribution and servicing costs
|
|
|
|
99
|
|
89
|
|
10
|
|
96
|
|
3
|
|
Amortization of deferred sales commissions
|
|
|
|
13
|
|
15
|
|
(2)
|
|
13
|
|
-
|
|
Direct fund expense
|
|
|
|
189
|
|
179
|
|
10
|
|
183
|
|
6
|
|
General and administration
|
|
|
|
339
|
|
313
|
|
26
|
|
387
|
|
(48)
|
|
Amortization of intangible assets
|
|
|
|
35
|
|
41
|
|
(6)
|
|
35
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expense
|
|
|
|
1,656
|
|
1,619
|
|
37
|
|
1,640
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
1,067
|
|
1,051
|
|
16
|
|
1,144
|
|
(77)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
|
|
63
|
|
76
|
|
(13)
|
|
(2)
|
|
65
|
|
Net gain (loss) on consolidated variable interest entities
|
|
|
|
35
|
|
(16)
|
|
51
|
|
(6)
|
|
41
|
|
Interest and dividend income
|
|
|
|
4
|
|
10
|
|
(6)
|
|
6
|
|
(2)
|
|
Interest expense
|
|
|
|
(51)
|
|
(53)
|
|
2
|
|
(58)
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)
|
|
|
|
51
|
|
17
|
|
34
|
|
(60)
|
|
111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
1,118
|
|
1,068
|
|
50
|
|
1,084
|
|
34
|
|
Income tax expense
|
|
|
|
258
|
|
324
|
|
(66)
|
|
278
|
|
(20)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
860
|
|
744
|
|
116
|
|
806
|
|
54
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
|
38
|
|
(12)
|
|
50
|
|
(7)
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc.
|
|
|
|
$822
|
|
$756
|
|
$66
|
|
$813
|
|
$9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
167,089,037
|
|
169,081,421
|
|
(1,992,384)
|
|
167,197,844
|
|
(108,807)
|
|
Diluted
|
|
|
|
169,723,167
|
|
171,933,803
|
|
(2,210,636)
|
|
170,367,445
|
|
(644,278)
|
|
Earnings per share attributable to BlackRock, Inc. common
stockholders (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$4.92
|
|
$4.47
|
|
$0.45
|
|
$4.86
|
|
$0.06
|
|
Diluted
|
|
|
|
$4.84
|
|
$4.40
|
|
$0.44
|
|
$4.77
|
|
$0.07
|
|
Cash dividends declared and paid per share
|
|
|
|
$2.18
|
|
$1.93
|
|
$0.25
|
|
$1.93
|
|
$0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
|
|
$4,774,192
|
|
$4,400,925
|
|
$373,267
|
|
$4,651,895
|
|
$122,297
|
|
Shares outstanding (end of period)
|
|
|
|
167,084,582
|
|
169,138,109
|
|
(2,053,527)
|
|
166,921,863
|
|
162,719
|
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
39.2%
|
|
39.4%
|
|
(20 bps)
|
|
41.1%
|
|
(190 bps)
|
|
Effective tax rate
|
|
|
|
23.9%
|
|
30.0 %
|
|
(610 bps)
|
|
25.5%
|
|
(160 bps)
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (1)
|
|
|
|
$1,077
|
|
$1,062
|
|
$15
|
|
$1,154
|
|
($77)
|
|
Operating margin (1)
|
|
|
|
41.2%
|
|
41.4%
|
|
(20 bps)
|
|
43.6%
|
|
(240 bps)
|
|
Nonoperating income (expense), less net income (loss) attributable
to noncontrolling interests (2)
|
|
|
|
$11
|
|
$26
|
|
($15)
|
|
($54)
|
|
$65
|
|
Net income attributable to BlackRock, Inc. (3)
|
|
|
|
$830
|
|
$762
|
|
$68
|
|
$821
|
|
$9
|
|
Diluted earnings attributable to BlackRock, Inc. common stockholders
per share (3) (4)
|
|
|
|
$4.89
|
|
$4.43
|
|
$0.46
|
|
$4.82
|
|
$0.07
|
|
Effective tax rate
|
|
|
|
23.7%
|
|
30.0%
|
|
(630 bps)
|
|
25.4%
|
|
(170 bps)
|
See the reconciliation to GAAP and notes (1) through (4) for more
information on as adjusted items.
|
|
|
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
Current Quarter Component Changes by Client Type and Product
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
2014
|
|
(outflows)
|
|
Acquisition(1)
|
|
Market change
|
|
FX impact (2)
|
|
2015
|
|
Average AUM (3)
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
$ 200,445
|
|
$332
|
|
$ -
|
|
$5,102
|
|
$(4,173)
|
|
$ 201,706
|
|
$201,052
|
|
Fixed income
|
|
|
|
189,820
|
|
12,787
|
|
-
|
|
962
|
|
(2,164)
|
|
201,405
|
|
195,821
|
|
Multi-asset
|
|
|
|
125,341
|
|
1,402
|
|
-
|
|
2,426
|
|
(767)
|
|
128,402
|
|
127,031
|
|
Alternatives
|
|
|
|
18,723
|
|
(349)
|
|
1,293
|
|
296
|
|
(496)
|
|
19,467
|
|
18,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail subtotal
|
|
|
|
534,329
|
|
14,172
|
|
1,293
|
|
8,786
|
|
(7,600)
|
|
550,980
|
|
542,575
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
790,067
|
|
16,725
|
|
-
|
|
28,200
|
|
(10,656)
|
|
824,336
|
|
804,294
|
|
Fixed income
|
|
|
|
217,671
|
|
18,595
|
|
-
|
|
2,591
|
|
(5,674)
|
|
233,183
|
|
228,005
|
|
Multi-asset
|
|
|
|
1,773
|
|
(18)
|
|
-
|
|
30
|
|
(13)
|
|
1,772
|
|
1,827
|
|
Alternatives
|
|
|
|
14,717
|
|
176
|
|
-
|
|
49
|
|
(103)
|
|
14,839
|
|
14,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iShares subtotal
|
|
|
|
1,024,228
|
|
35,478
|
|
-
|
|
30,870
|
|
(16,446)
|
|
1,074,130
|
|
1,049,080
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
125,143
|
|
168
|
|
-
|
|
6,206
|
|
(3,481)
|
|
128,036
|
|
126,662
|
|
Fixed income
|
|
|
|
518,590
|
|
5,723
|
|
-
|
|
9,546
|
|
(7,742)
|
|
526,117
|
|
525,711
|
|
Multi-asset
|
|
|
|
242,913
|
|
11,717
|
|
-
|
|
12,549
|
|
(10,095)
|
|
257,084
|
|
250,197
|
|
Alternatives
|
|
|
|
72,514
|
|
376
|
|
-
|
|
1,094
|
|
(939)
|
|
73,045
|
|
72,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active subtotal
|
|
|
|
959,160
|
|
17,984
|
|
-
|
|
29,395
|
|
(22,257)
|
|
984,282
|
|
975,304
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,335,456
|
|
3,716
|
|
-
|
|
53,361
|
|
(19,481)
|
|
1,373,052
|
|
1,354,904
|
|
Fixed income
|
|
|
|
467,572
|
|
(816)
|
|
-
|
|
16,183
|
|
(15,164)
|
|
467,775
|
|
469,931
|
|
Multi-asset
|
|
|
|
7,810
|
|
(309)
|
|
-
|
|
818
|
|
(265)
|
|
8,054
|
|
7,928
|
|
Alternatives
|
|
|
|
5,286
|
|
215
|
|
-
|
|
(27)
|
|
(150)
|
|
5,324
|
|
5,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index subtotal
|
|
|
|
1,816,124
|
|
2,806
|
|
-
|
|
70,335
|
|
(35,060)
|
|
1,854,205
|
|
1,838,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutional subtotal
|
|
|
|
2,775,284
|
|
20,790
|
|
-
|
|
99,730
|
|
(57,317)
|
|
2,838,487
|
|
2,813,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
|
4,333,841
|
|
70,440
|
|
1,293
|
|
139,386
|
|
(81,363)
|
|
4,463,597
|
|
$4,405,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash management
|
|
|
|
296,353
|
|
561
|
|
-
|
|
(42)
|
|
(4,377)
|
|
292,495
|
|
|
|
Advisory (4)
|
|
|
|
21,701
|
|
(2,297)
|
|
-
|
|
526
|
|
(1,830)
|
|
18,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$4,651,895
|
|
$68,704
|
|
$1,293
|
|
$139,870
|
|
$(87,570)
|
|
$4,774,192
|
|
|
|
|
|
Current Quarter Component Changes by Product (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
2014
|
|
(outflows)
|
|
Acquisition(1)
|
|
Market change
|
|
FX impact (2)
|
|
2015
|
|
Average AUM (3)
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
$292,802
|
|
$546
|
|
$ -
|
|
$11,445
|
|
$(6,675)
|
|
$298,118
|
|
$295,297
|
|
iShares
|
|
|
|
790,067
|
|
16,725
|
|
-
|
|
28,200
|
|
(10,656)
|
|
824,336
|
|
804,294
|
|
Non-ETF index
|
|
|
|
1,368,242
|
|
3,670
|
|
-
|
|
53,224
|
|
(20,460)
|
|
1,404,676
|
|
1,387,321
|
|
Equity subtotal
|
|
|
|
2,451,111
|
|
20,941
|
|
-
|
|
92,869
|
|
(37,791)
|
|
2,527,130
|
|
2,486,912
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
701,324
|
|
17,855
|
|
-
|
|
10,447
|
|
(9,532)
|
|
720,094
|
|
714,317
|
|
iShares
|
|
|
|
217,671
|
|
18,595
|
|
-
|
|
2,591
|
|
(5,674)
|
|
233,183
|
|
228,005
|
|
Non-ETF index
|
|
|
|
474,658
|
|
(161)
|
|
-
|
|
16,244
|
|
(15,538)
|
|
475,203
|
|
477,146
|
|
Fixed income subtotal
|
|
|
|
1,393,653
|
|
36,289
|
|
-
|
|
29,282
|
|
(30,744)
|
|
1,428,480
|
|
1,419,468
|
|
Multi-asset
|
|
|
|
377,837
|
|
12,792
|
|
-
|
|
15,823
|
|
(11,140)
|
|
395,312
|
|
386,983
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
88,006
|
|
(201)
|
|
1,293
|
|
1,425
|
|
(1,437)
|
|
89,086
|
|
88,062
|
|
Currency and commodities (5)
|
|
|
|
23,234
|
|
619
|
|
-
|
|
(13)
|
|
(251)
|
|
23,589
|
|
23,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternatives subtotal
|
|
|
|
111,240
|
|
418
|
|
1,293
|
|
1,412
|
|
(1,688)
|
|
112,675
|
|
111,718
|
|
Long-term
|
|
|
|
$4,333,841
|
|
$70,440
|
|
$1,293
|
|
$139,386
|
|
$(81,363)
|
|
$4,463,597
|
|
$4,405,081
|
|
|
|
Current Quarter Component Changes by Investment Style
(Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
2014
|
|
(outflows)
|
|
Acquisition(1)
|
|
Market change
|
|
FX impact (2)
|
|
2015
|
|
Average AUM (3)
|
|
Active
|
|
|
|
$1,453,613
|
|
$31,547
|
|
$1,293
|
|
$38,260
|
|
$(28,503)
|
|
$1,496,210
|
|
$1,478,247
|
|
Index and iShares
|
|
|
|
2,880,228
|
|
38,893
|
|
-
|
|
101,126
|
|
(52,860)
|
|
2,967,387
|
|
2,926,834
|
|
Long-term
|
|
|
|
$4,333,841
|
|
$70,440
|
|
$1,293
|
|
$139,386
|
|
$(81,363)
|
|
$4,463,597
|
|
$4,405,081
|
(1) Amounts represent $1.3 billion of AUM acquired in the
acquisition of certain assets of BlackRock Kelso Capital Advisors LLC in
March 2015.
(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 months.
(4) Advisory AUM represents long-term portfolio liquidation
assignments.
(5) Amounts include commodity iShares.
|
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
Year-over-Year Component Changes by Client Type and Product
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
inflows
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
2014
|
|
(outflows)
|
|
Acquisition(1)
|
|
Market change
|
|
FX impact (2)
|
|
2015
|
|
Average AUM (3)
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
$208,238
|
|
$(269)
|
|
$ -
|
|
$4,219
|
|
$(10,482)
|
|
$ 201,706
|
|
$206,939
|
|
Fixed income
|
|
|
|
160,448
|
|
43,724
|
|
-
|
|
1,806
|
|
(4,573)
|
|
201,405
|
|
180,458
|
|
Multi-asset
|
|
|
|
121,548
|
|
11,131
|
|
-
|
|
(2,418)
|
|
(1,859)
|
|
128,402
|
|
125,831
|
|
Alternatives
|
|
|
|
18,483
|
|
528
|
|
1,293
|
|
316
|
|
(1,153)
|
|
19,467
|
|
18,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail subtotal
|
|
|
|
508,717
|
|
55,114
|
|
1,293
|
|
3,923
|
|
(18,067)
|
|
550,980
|
|
532,125
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
723,973
|
|
75,417
|
|
-
|
|
48,942
|
|
(23,996)
|
|
824,336
|
|
775,337
|
|
Fixed income
|
|
|
|
188,022
|
|
51,979
|
|
-
|
|
4,635
|
|
(11,453)
|
|
233,183
|
|
210,296
|
|
Multi-asset
|
|
|
|
1,437
|
|
311
|
|
-
|
|
45
|
|
(21)
|
|
1,772
|
|
1,649
|
|
Alternatives
|
|
|
|
16,948
|
|
614
|
|
-
|
|
(2,450)
|
|
(273)
|
|
14,839
|
|
16,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iShares subtotal
|
|
|
|
930,380
|
|
128,321
|
|
-
|
|
51,172
|
|
(35,743)
|
|
1,074,130
|
|
1,003,372
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
132,374
|
|
(10,447)
|
|
-
|
|
14,632
|
|
(8,523)
|
|
128,036
|
|
129,656
|
|
Fixed income
|
|
|
|
509,692
|
|
5,802
|
|
-
|
|
32,841
|
|
(22,218)
|
|
526,117
|
|
520,137
|
|
Multi-asset
|
|
|
|
223,865
|
|
24,701
|
|
-
|
|
30,326
|
|
(21,808)
|
|
257,084
|
|
241,399
|
|
Alternatives
|
|
|
|
73,723
|
|
118
|
|
-
|
|
1,911
|
|
(2,707)
|
|
73,045
|
|
72,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active subtotal
|
|
|
|
939,654
|
|
20,174
|
|
-
|
|
79,710
|
|
(55,256)
|
|
984,282
|
|
964,109
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,283,349
|
|
4,819
|
|
-
|
|
141,113
|
|
(56,229)
|
|
1,373,052
|
|
1,331,971
|
|
Fixed income
|
|
|
|
430,852
|
|
15,567
|
|
-
|
|
59,601
|
|
(38,245)
|
|
467,775
|
|
453,205
|
|
Multi-asset
|
|
|
|
6,381
|
|
563
|
|
-
|
|
2,124
|
|
(1,014)
|
|
8,054
|
|
7,284
|
|
Alternatives
|
|
|
|
6,273
|
|
409
|
|
-
|
|
(997)
|
|
(361)
|
|
5,324
|
|
5,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index subtotal
|
|
|
|
1,726,855
|
|
21,358
|
|
-
|
|
201,841
|
|
(95,849)
|
|
1,854,205
|
|
1,798,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutional subtotal
|
|
|
|
2,666,509
|
|
41,532
|
|
-
|
|
281,551
|
|
(151,105)
|
|
2,838,487
|
|
2,762,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
|
4,105,606
|
|
224,967
|
|
1,293
|
|
336,646
|
|
(204,915)
|
|
4,463,597
|
|
$4,298,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash management
|
|
|
|
263,533
|
|
38,690
|
|
-
|
|
546
|
|
(10,274)
|
|
292,495
|
|
|
|
Advisory (4)
|
|
|
|
31,786
|
|
(11,697)
|
|
-
|
|
1,400
|
|
(3,389)
|
|
18,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$4,400,925
|
|
$251,960
|
|
$1,293
|
|
$338,592
|
|
$(218,578)
|
|
$4,774,192
|
|
|
|
|
|
Year-over-Year Component Changes by Product (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
inflows
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
2014
|
|
(outflows)
|
|
Acquisition(1)
|
|
Market change
|
|
FX impact (2)
|
|
2015
|
|
Average AUM (3)
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
$314,850
|
|
$(17,420)
|
|
$ -
|
|
$17,196
|
|
$(16,508)
|
|
$298,118
|
|
$306,332
|
|
iShares
|
|
|
|
723,973
|
|
75,417
|
|
-
|
|
48,942
|
|
(23,996)
|
|
824,336
|
|
775,337
|
|
Non-ETF index
|
|
|
|
1,309,111
|
|
11,523
|
|
-
|
|
142,768
|
|
(58,726)
|
|
1,404,676
|
|
1,362,234
|
|
Equity subtotal
|
|
|
|
2,347,934
|
|
69,520
|
|
-
|
|
208,906
|
|
(99,230)
|
|
2,527,130
|
|
2,443,903
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
665,151
|
|
47,006
|
|
-
|
|
33,861
|
|
(25,924)
|
|
720,094
|
|
694,165
|
|
iShares
|
|
|
|
188,022
|
|
51,979
|
|
-
|
|
4,635
|
|
(11,453)
|
|
233,183
|
|
210,296
|
|
Non-ETF index
|
|
|
|
435,841
|
|
18,087
|
|
-
|
|
60,387
|
|
(39,112)
|
|
475,203
|
|
459,635
|
|
Fixed income subtotal
|
|
|
|
1,289,014
|
|
117,072
|
|
-
|
|
98,883
|
|
(76,489)
|
|
1,428,480
|
|
1,364,096
|
|
Multi-asset
|
|
|
|
353,231
|
|
36,706
|
|
-
|
|
30,077
|
|
(24,702)
|
|
395,312
|
|
376,163
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
87,865
|
|
926
|
|
1,293
|
|
2,426
|
|
(3,424)
|
|
89,086
|
|
88,189
|
|
Currency and commodities (5)
|
|
|
|
27,562
|
|
743
|
|
-
|
|
(3,646)
|
|
(1,070)
|
|
23,589
|
|
25,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternatives subtotal
|
|
|
|
115,427
|
|
1,669
|
|
1,293
|
|
(1,220)
|
|
(4,494)
|
|
112,675
|
|
113,852
|
|
Long-term
|
|
|
|
$4,105,606
|
|
$224,967
|
|
$1,293
|
|
$336,646
|
|
$(204,915)
|
|
$4,463,597
|
|
$4,298,014
|
|
|
|
Year-over-Year Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
inflows
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
2014
|
|
(outflows)
|
|
Acquisition(1)
|
|
Market change
|
|
FX impact (2)
|
|
2015
|
|
Average AUM (3)
|
|
Active
|
|
|
|
$1,417,546
|
|
$66,131
|
|
$1,293
|
|
$81,198
|
|
$(69,958)
|
|
$1,496,210
|
|
$1,459,492
|
|
Index and iShares
|
|
|
|
2,688,060
|
|
158,836
|
|
-
|
|
255,448
|
|
(134,957)
|
|
2,967,387
|
|
2,838,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
|
$4,105,606
|
|
$224,967
|
|
$1,293
|
|
$336,646
|
|
$(204,915)
|
|
$4,463,597
|
|
$4,298,014
|
(1) Amounts represent $1.3 billion of AUM acquired in the
acquisition of certain assets of BlackRock Kelso Capital Advisors LLC in
March 2015.
(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 thirteen months.
(4) Advisory AUM represents long-term portfolio liquidation
assignments.
(5) Amounts include commodity iShares.
|
|
|
SUMMARY OF REVENUE
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
Change
|
|
Three Months Ended
December 31, 2014
|
|
Change
|
|
(in millions), (unaudited)
|
|
|
|
2015
|
|
2014
|
|
|
|
Investment advisory, administration fees and securities lending
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
$422
|
|
$463
|
|
($41)
|
|
$428
|
|
($6)
|
|
iShares
|
|
|
|
684
|
|
634
|
|
50
|
|
686
|
|
(2)
|
|
Non-ETF Index
|
|
|
|
163
|
|
158
|
|
5
|
|
168
|
|
(5)
|
|
Equity subtotal
|
|
|
|
1,269
|
|
1,255
|
|
14
|
|
1,282
|
|
(13)
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
373
|
|
324
|
|
49
|
|
367
|
|
6
|
|
iShares
|
|
|
|
130
|
|
113
|
|
17
|
|
126
|
|
4
|
|
Non-ETF Index
|
|
|
|
68
|
|
58
|
|
10
|
|
65
|
|
3
|
|
Fixed income subtotal
|
|
|
|
571
|
|
495
|
|
76
|
|
558
|
|
13
|
|
Multi-asset
|
|
|
|
304
|
|
286
|
|
18
|
|
303
|
|
1
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
154
|
|
159
|
|
(5)
|
|
159
|
|
(5)
|
|
Currency and commodities
|
|
|
|
19
|
|
22
|
|
(3)
|
|
21
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternatives subtotal
|
|
|
|
173
|
|
181
|
|
(8)
|
|
180
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
|
2,317
|
|
2,217
|
|
100
|
|
2,323
|
|
(6)
|
|
Cash management
|
|
|
|
73
|
|
74
|
|
(1)
|
|
73
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total base fees
|
|
|
|
2,390
|
|
2,291
|
|
99
|
|
2,396
|
|
(6)
|
|
Investment advisory performance fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
37
|
|
22
|
|
15
|
|
50
|
|
(13)
|
|
Fixed income
|
|
|
|
4
|
|
8
|
|
(4)
|
|
12
|
|
(8)
|
|
Multi-asset
|
|
|
|
8
|
|
3
|
|
5
|
|
11
|
|
(3)
|
|
Alternatives
|
|
|
|
59
|
|
125
|
|
(66)
|
|
71
|
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
108
|
|
158
|
|
(50)
|
|
144
|
|
(36)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Solutions and advisory
|
|
|
|
147
|
|
154
|
|
(7)
|
|
170
|
|
(23)
|
|
Distribution fees
|
|
|
|
17
|
|
19
|
|
(2)
|
|
16
|
|
1
|
|
Other revenue
|
|
|
|
61
|
|
48
|
|
13
|
|
58
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
$2,723
|
|
$2,670
|
|
$53
|
|
$2,784
|
|
($61)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
|
|
•
|
Investment advisory, administration fees and securities lending
revenue increased $99 million from the first quarter of 2014 driven
by strong organic growth and market appreciation, which outpaced the
impact of divergent beta and foreign exchange movements. Securities
lending fees of $114 million in the current quarter increased $9
million from the first quarter of 2014, primarily reflecting an
increase in average balances of securities on loan.
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue decreased $6 million from the fourth quarter of 2014 due to
the effect of two fewer days in the quarter, and the impact of
divergent beta and foreign exchange movements.
|
|
|
|
|
•
|
Performance fees decreased $50 million from the first quarter of
2014, primarily due to the impact of a large fee associated with the
liquidation of a closed-end mortgage fund in last year’s first
quarter.
|
|
|
|
|
|
Performance fees decreased $36 million from the fourth quarter of
2014 due to seasonally higher performance measurement locks in the
fourth quarter.
|
|
|
|
|
•
|
BlackRock Solutions® and advisory revenue decreased $7
million from the first quarter of 2014 due to reduced Financial
Markets Advisory Services (“FMA”) revenue from disposition-related
advisory assignments, partially offset by higher revenue from the
Aladdin® business. BlackRock Solutions and advisory
revenue included $126 million in Aladdin business revenue
in the current quarter compared with $112 million in the first
quarter of 2014.
|
|
|
|
|
|
BlackRock Solutions and advisory revenue decreased $23 million from
the prior quarter due to reduced FMA revenue from completed advisory
assignments. BlackRock Solutions and advisory revenue included $126
million in Aladdin business revenue in the current
quarter compared with $127 million in the fourth quarter of 2014.
|
|
|
|
|
|
|
SUMMARY OF OPERATING EXPENSE
|
|
|
|
|
|
|
|
Three
Months Ended
March 31,
|
|
|
Three
Months
Ended
|
|
|
|
(in millions), (unaudited)
|
|
|
|
2015
|
|
2014
|
|
Change
|
|
December 31, 2014
|
|
Change
|
|
Operating Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
|
$981
|
|
$982
|
|
($1)
|
|
$926
|
|
$55
|
|
Distribution and servicing costs
|
|
|
|
99
|
|
89
|
|
10
|
|
96
|
|
3
|
|
Amortization of deferred sales commissions
|
|
|
|
13
|
|
15
|
|
(2)
|
|
13
|
|
-
|
|
Direct fund expense
|
|
|
|
189
|
|
179
|
|
10
|
|
183
|
|
6
|
|
General and administration
|
|
|
|
339
|
|
313
|
|
26
|
|
387
|
|
(48)
|
|
Amortization of intangible assets
|
|
|
|
35
|
|
41
|
|
(6)
|
|
35
|
|
-
|
|
Total Operating Expense
|
|
|
|
$1,656
|
|
$1,619
|
|
$37
|
|
$1,640
|
|
$16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
|
|
•
|
Employee compensation and benefits decreased $1 million from the
first quarter of 2014, reflecting the impact of foreign exchange
movements, partially offset by higher headcount.
|
|
|
|
|
|
Employee compensation and benefits increased $55 million from the
fourth quarter of 2014, primarily reflecting higher seasonal
employer payroll taxes.
|
|
|
|
|
•
|
General and administration expense increased $26 million from the
first quarter of 2014, primarily reflecting higher marketing and
promotional expense, higher portfolio and professional services
expense, and the impact of a one-time benefit from the reversal of a
real estate-related retirement obligation which was no longer
required to be funded in last year’s first quarter.
|
|
|
|
|
|
General and administration expense decreased $48 million from the
fourth quarter of 2014, primarily reflecting seasonally lower
marketing and promotional expense, lower foreign exchange
remeasurement expense, and the impact of closed-end fund launch
costs in the fourth quarter of 2014.
|
|
|
|
|
|
|
INCOME TAX EXPENSE
|
|
|
|
|
Three
Months Ended
March 31,
|
|
|
Three
Months
Ended
|
|
|
|
(in millions), (unaudited)
|
2015
|
|
2014
|
|
Change
|
|
December 31, 2014
|
|
Change
|
|
Income tax expense
|
$258
|
|
$324
|
|
($66)
|
|
$278
|
|
($20)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
|
|
•
|
Income tax expense in the first quarter of 2015 benefited from $69
million of nonrecurring items.
|
|
|
|
|
|
Income tax expense in the fourth quarter of 2014 benefited from $39
million of nonrecurring items.
|
|
|
|
|
|
|
SUMMARY OF NONOPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
Three Months
Ended
December 31,
2014
|
|
|
|
(in millions), (unaudited)
|
|
|
|
|
2015
|
|
2014
|
|
Change
|
|
|
Change
|
|
Nonoperating income (expense), GAAP basis
|
|
$51
|
|
$17
|
|
$34
|
|
($60)
|
|
$111
|
|
Less: Net income (loss) attributable to NCI
|
|
38
|
|
(12)
|
|
50
|
|
(7)
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)(1)
|
|
$13
|
|
$29
|
|
($16)
|
|
($53)
|
|
$66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
economic
investments at
March
31, 2015(2)
|
|
Three Months
Ended
March 31,
|
|
|
|
Three Months
Ended
December 31,
2014
|
|
|
|
(in millions), (unaudited)
|
|
|
2015
|
|
2014
|
|
Change
|
|
Change
|
|
Net gain (loss) on investments(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity
|
|
|
25-30%
|
|
$1
|
|
$44
|
|
($43)
|
|
$3
|
|
($2)
|
|
Real estate
|
|
|
5-10%
|
|
2
|
|
2
|
|
-
|
|
3
|
|
(1)
|
|
Other alternatives(3)
|
|
|
15-20%
|
|
4
|
|
21
|
|
(17)
|
|
(5)
|
|
9
|
|
Other investments(4)
|
|
|
45-50%
|
|
6
|
|
2
|
|
4
|
|
(3)
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
|
13
|
|
69
|
|
(56)
|
|
(2)
|
|
15
|
|
Other gains(5)
|
|
45
|
|
-
|
|
45
|
|
-
|
|
45
|
|
Investments related to deferred compensation plans
|
|
2
|
|
3
|
|
(1)
|
|
1
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net gain (loss) on investments(1)
|
|
60
|
|
72
|
|
(12)
|
|
(1)
|
|
61
|
|
Interest and dividend income
|
|
4
|
|
10
|
|
(6)
|
|
6
|
|
(2)
|
|
Interest expense
|
|
|
|
|
(51)
|
|
(53)
|
|
2
|
|
(58)
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense
|
|
|
|
|
(47)
|
|
(43)
|
|
(4)
|
|
(52)
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)(1)
|
|
13
|
|
29
|
|
(16)
|
|
(53)
|
|
66
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
(2)
|
|
(3)
|
|
1
|
|
(1)
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), as adjusted(1)
|
|
$11
|
|
$26
|
|
($15)
|
|
($54)
|
|
$65
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net of net income (loss) attributable to noncontrolling
interests (“NCI”).
(2) Percentages represent estimated percentages of
BlackRock’s corporate economic investment portfolio at March 31, 2015.
Economic investment amounts at December 31, 2014 for private equity,
real estate, other alternatives and other investments were $314 million,
$117 million, $289 million and $599 million, respectively. See the 2014
Form 10-K for more information.
(3) Amounts primarily include net gains (losses) related to
direct hedge fund strategies and hedge fund solutions. The prior year
quarter also included net gains related to opportunistic credit
strategies.
(4) Amounts include net gains (losses) related to equity and
fixed income investments, and BlackRock’s seed capital hedging program.
(5) Amount primarily includes a gain related to the
acquisition of certain assets of BlackRock Kelso Capital Advisors LLC.
|
|
|
Highlights
|
|
•
|
On March 6, 2015, BlackRock acquired certain assets related to
managing BlackRock Capital Investment Corporation from BlackRock
Kelso Capital Advisors LLC (“BKCA”). In connection with the
acquisition, BlackRock recorded a noncash, nonoperating, pre-tax
gain of $40 million related to the fair value of its pre-existing
interest in BKCA.
|
|
|
|
|
•
|
Net gain (loss) on investments decreased from the first quarter of
2014 due to the positive impact of the monetization of a
nonstrategic, opportunistic private equity investment included in
the first quarter of 2014 and lower positive marks in the first
quarter of 2015. The decrease was partially offset by the $40
million gain related to BKCA in the first quarter of 2015.
|
|
|
|
|
|
Net gain (loss) on investments increased from the fourth quarter of
2014, primarily due to the $40 million gain related to BKCA.
|
|
|
|
ECONOMIC TANGIBLE ASSETS
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 noncontrolling 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.
Economic tangible assets include cash, receivables, seed and
co-investments, regulatory investments and other assets.
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
(in billions), (unaudited)
|
|
|
|
|
2015 (Est.)
|
|
2014
|
|
Total balance sheet assets
|
|
|
|
|
$243
|
|
$240
|
|
Separate account assets and separate account collateral held under
securities lending agreements
|
|
|
|
|
(198)
|
|
(195)
|
|
Consolidated VIEs/sponsored investment funds
|
|
|
|
|
(5)
|
|
(4)
|
|
Goodwill and intangible assets, net
|
|
|
|
|
(30)
|
|
(30)
|
|
Economic tangible assets
|
|
|
|
|
$10
|
|
$11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF U.S. GAAP OPERATING INCOME AND OPERATING
MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS ADJUSTED
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
(in millions), (unaudited)
|
|
|
|
2015
|
|
2014
|
|
2014
|
|
Operating income, GAAP basis
|
|
|
|
$1,067
|
|
$1,051
|
|
$1,144
|
|
Non-GAAP expense adjustments:
|
|
|
|
|
|
|
|
|
|
PNC LTIP funding obligation
|
|
|
|
8
|
|
8
|
|
9
|
|
Compensation expense related to appreciation (depreciation) on
deferred compensation plans
|
|
|
|
2
|
|
3
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, as adjusted
|
|
|
|
1,077
|
|
1,062
|
|
1,154
|
|
Closed-end fund launch costs
|
|
|
|
-
|
|
-
|
|
10
|
|
Closed-end fund launch commissions
|
|
|
|
-
|
|
-
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
Operating income used for operating margin measurement
|
|
|
|
$1,077
|
|
$1,062
|
|
$1,165
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, GAAP basis
|
|
|
|
$2,723
|
|
$2,670
|
|
$2,784
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
Distribution and servicing costs
|
|
|
|
(99)
|
|
(89)
|
|
(96)
|
|
Amortization of deferred sales commissions
|
|
|
|
(13)
|
|
(15)
|
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue used for operating margin measurement
|
|
|
|
$2,611
|
|
$2,566
|
|
$2,675
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, GAAP basis
|
|
|
|
39.2%
|
|
39.4%
|
|
41.1%
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as adjusted
|
|
|
|
41.2%
|
|
41.4%
|
|
43.6%
|
|
|
|
|
|
|
|
|
|
|
See note (1) to the Condensed Consolidated Statements of Income and
Supplemental Information for more information on as adjusted items and
the reconciliation to GAAP.
|
|
|
RECONCILIATION OF U.S. GAAP NONOPERATING INCOME NET OF NCI TO
NONOPERATING INCOME NET OF NCI, AS ADJUSTED
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
(in millions), (unaudited)
|
|
|
|
2015
|
|
2014
|
|
2014
|
|
Nonoperating income (expense), GAAP basis
|
|
|
|
$51
|
|
$17
|
|
($60)
|
|
Less: Net income (loss) attributable to NCI
|
|
|
|
38
|
|
(12)
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), net of NCI
|
|
|
|
13
|
|
29
|
|
(53)
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
|
|
(2)
|
|
(3)
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), less net income (loss)
attributable to NCI, as adjusted
|
|
|
|
$11
|
|
$26
|
|
($54)
|
|
|
|
|
|
|
|
|
|
|
See note (2) to the Condensed Consolidated Statements of Income and
Supplemental Information for more information on as adjusted items and
the reconciliation to GAAP.
|
|
|
RECONCILIATION OF U.S. GAAP NET INCOME ATTRIBUTABLE TO
BLACKROCK TO NET INCOME ATTRIBUTABLE TO BLACKROCK, AS ADJUSTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
December 31,
|
|
(in millions, except per share data), (unaudited)
|
|
|
2015
|
|
2014
|
|
2014
|
|
Net income attributable to BlackRock, Inc., GAAP basis
|
|
|
$822
|
|
$756
|
|
$813
|
|
Non-GAAP adjustments, net of tax:
|
|
|
|
|
|
|
|
|
PNC LTIP funding obligation
|
|
|
5
|
|
6
|
|
8
|
|
Income tax matters
|
|
|
3
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
|
$830
|
|
$762
|
|
$821
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common shares outstanding(4)
|
|
|
169.7
|
|
171.9
|
|
170.4
|
|
Diluted earnings per common share, GAAP basis(4)
|
|
|
$4.84
|
|
$4.40
|
|
$4.77
|
|
Diluted earnings per common share, as adjusted(4)
|
|
|
$4.89
|
|
$4.43
|
|
$4.82
|
See notes (3) and (4) to the Condensed Consolidated Statements of Income
and Supplemental Information for more information on as adjusted items
and the reconciliation to GAAP.
NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL
INFORMATION (unaudited)
BlackRock reports its financial results in accordance with accounting
principles generally accepted in the United States (“GAAP”); however,
management believes evaluating the Company’s ongoing operating results
may be enhanced if investors have additional non-GAAP financial
measures. Management reviews non-GAAP financial measures to assess
ongoing operations and, for the reasons described below, considers them
to be effective indicators, for both management and investors, of
BlackRock’s financial performance over time. Management also uses
non-GAAP financial measures as a benchmark to compare its performance
with other companies and to enhance the comparability of this
information for the reporting periods presented. Non-GAAP measures may
pose limitations because they do not include all of BlackRock’s revenue
and expense. BlackRock’s management does not advocate that investors
consider such non-GAAP financial measures in isolation from, or as a
substitute for, financial information prepared in accordance with GAAP.
Management uses both GAAP and non-GAAP financial measures in evaluating
BlackRock’s financial performance. Adjustments to GAAP financial
measures (“non-GAAP adjustments”) include certain items management deems
nonrecurring or occur infrequently, transactions that ultimately will
not impact BlackRock’s book value or certain tax items that do not
impact cash flow.
Computations for all periods are derived from the condensed consolidated
statements of income as follows:
(1) Operating income, as adjusted, and operating margin, as adjusted:
Management believes operating income, as adjusted, and operating margin,
as adjusted, are effective indicators of BlackRock’s financial
performance over time and, therefore, provide useful disclosure to
investors.
|
•
|
Operating income, as adjusted, includes non-GAAP expense
adjustments. The portion of compensation expense associated with
certain long-term incentive plans (“LTIP”) funded, or to be funded,
through share distributions to participants of BlackRock stock held
by The PNC Financial Services Group, Inc. (“PNC”) has been excluded
because it ultimately does not impact BlackRock’s book value.
Compensation expense associated with appreciation (depreciation) on
investments related to certain BlackRock deferred compensation plans
has been excluded as returns on investments set aside for these
plans, which substantially offset this expense, are reported in
nonoperating income (expense).
|
|
|
|
|
•
|
Operating income used for measuring operating margin, as adjusted,
is equal to operating income, as adjusted, excluding the impact of
closed-end fund launch costs and related commissions. Management
believes the exclusion of such costs and related commissions is
useful because these costs can fluctuate considerably and revenue
associated with the expenditure of these costs will not fully impact
BlackRock’s results until future periods.
|
|
|
|
|
|
Revenue used for operating margin, as adjusted, excludes
distribution and servicing costs paid to related parties and other
third parties. Management believes the exclusion of such costs is
useful because it creates consistency in the treatment for certain
contracts for similar services, which due to the terms of the
contracts, are accounted for under GAAP on a net basis within
investment advisory, administration fees and securities lending
revenue. Amortization of deferred sales commissions is excluded
from revenue used for operating margin measurement, as adjusted,
because such costs, over time, substantially offset distribution
fee revenue the Company earns. For each of these items, BlackRock
excludes from revenue used for operating margin, as adjusted, the
costs related to each of these items as a proxy for such
offsetting revenue.
|
|
|
|
(2) Nonoperating income (expense), less net income (loss)
attributable to NCI, as adjusted:
Nonoperating income (expense), less net income (loss) attributable to
NCI, as adjusted, equals nonoperating income (expense), GAAP basis, less
net income (loss) attributable to NCI, adjusted for compensation expense
associated with (appreciation) depreciation on investments related to
certain BlackRock deferred compensation plans. The compensation expense
offset is recorded in operating income. This compensation expense has
been included in nonoperating income (expense), less net income (loss)
attributable to NCI, as adjusted, to offset returns on investments set
aside for these plans, which are reported in nonoperating income
(expense), GAAP basis.
(3) Net income attributable to BlackRock, Inc., as adjusted:
See aforementioned discussion regarding operating income, as adjusted,
and operating margin, as adjusted, for information on the PNC LTIP
funding obligation.
For each period presented, the non-GAAP adjustment related to the PNC
LTIP funding obligation was tax effected at the respective blended rates
applicable to the adjustments.
(4) Nonvoting participating preferred stock is considered to be a
common stock equivalent for purposes of determining basic and diluted
earnings per share calculations.
Forward-looking Statements
This earnings release, and other statements that BlackRock may make, may
contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act, with respect to BlackRock’s future
financial or business performance, strategies or expectations.
Forward-looking statements are typically identified by words or phrases
such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,”
“comfortable,” “expect,” “anticipate,” “current,” “intention,”
“estimate,” “position,” “assume,” “outlook,” “continue,” “remain,”
“maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or
future or conditional verbs such as “will,” “would,” “should,” “could,”
“may” and similar expressions.
BlackRock cautions that forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over time.
Forward-looking statements speak only as of the date they are made, and
BlackRock assumes no duty to and does not undertake to update
forward-looking statements. Actual results could differ materially from
those anticipated in forward-looking statements and future results could
differ materially from historical performance.
In addition to risk factors previously disclosed in BlackRock’s
Securities and Exchange Commission (“SEC”) reports and those identified
elsewhere in this earnings release, the following factors, among others,
could cause actual results to differ materially from forward-looking
statements or historical performance: (1) the introduction, withdrawal,
success and timing of business initiatives and strategies; (2) changes
and volatility in political, economic or industry conditions, the
interest rate environment, foreign exchange rates or financial and
capital markets, which could result in changes in demand for products or
services or in the value of assets under management; (3) the relative
and absolute investment performance of BlackRock’s investment products;
(4) the impact of increased competition; (5) the impact of future
acquisitions or divestitures; (6) the unfavorable resolution of legal
proceedings; (7) the extent and timing of any share repurchases; (8) the
impact, extent and timing of technological changes and the adequacy of
intellectual property, information and cyber security protection;
(9) the impact of legislative and regulatory actions and reforms,
including the Dodd-Frank Wall Street Reform and Consumer Protection Act,
and regulatory, supervisory or enforcement actions of government
agencies relating to BlackRock or PNC; (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 earnings release.
Performance Notes
Past performance is not indicative of future results. Except as
specified, the performance information shown is as of March 31, 2015 and
is based on preliminary data available at that time. The performance
data shown reflects information for all actively and passively managed
equity and fixed income accounts, including U.S. registered investment
companies, European-domiciled retail funds and separate accounts for
which performance data is available, including performance data for high
net worth accounts available as of February 28, 2015. The performance
data does not include accounts terminated prior to March 31, 2015 and
accounts for which data has not yet been verified. If such accounts had
been included, the performance data provided may have substantially
differed from that shown.
Performance comparisons shown are gross-of-fees for U.S. retail,
institutional and high net worth separate accounts as well as EMEA
institutional separate accounts, and net-of-fee for European domiciled
retail funds. The performance tracking shown for institutional index
accounts is based on gross-of-fee performance and includes all
institutional accounts and all iShares funds globally using an
index strategy. AUM information is based on AUM available as of March
31, 2015 for each account or fund in the asset class shown without
adjustment for overlapping management of the same account or fund. Fund
performance reflects the reinvestment of dividends and distributions.
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.
BlackRock, Inc.
Investor Relations
Tom Wojcik, 212-810-8127
or
Media
Relations
Brian Beades, 212-810-5596
Source: BlackRock, Inc.