-
5% revenue growth from the second quarter of 2014 driven by growth in
base fees
-
10% operating income growth from the second quarter of 2014
-
3% AUM growth from the second quarter of 2014
-
$7.3 billion of long-term net outflows for the second quarter of 2015
-
$23.6 billion of active and iShares net inflows drove organic
base fee growth, offsetting the impact of $30.9 billion of low-fee
non-ETF index net outflows
-
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)
|
|
|
Q2
2015
|
|
Q2
2014
|
|
Change
|
|
Q1
2015
|
|
Change
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
Change
|
|
AUM
|
|
|
$
|
4,721,294
|
|
|
$
|
4,593,612
|
|
|
3
|
%
|
|
$
|
4,774,192
|
|
|
(1
|
%)
|
|
$
|
4,721,294
|
|
|
$
|
4,593,612
|
|
|
3
|
%
|
|
GAAP basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
2,905
|
|
|
$
|
2,778
|
|
|
5
|
%
|
|
$
|
2,723
|
|
|
7
|
%
|
|
$
|
5,628
|
|
|
$
|
5,448
|
|
|
3
|
%
|
|
Operating income
|
|
|
$
|
1,238
|
|
|
$
|
1,122
|
|
|
10
|
%
|
|
$
|
1,067
|
|
|
16
|
%
|
|
$
|
2,305
|
|
|
$
|
2,173
|
|
|
6
|
%
|
|
Operating margin
|
|
|
|
42.6
|
%
|
|
|
40.4
|
%
|
|
220 bps
|
|
|
39.2
|
%
|
|
340 bps
|
|
|
41.0
|
%
|
|
|
39.9
|
%
|
|
110 bps
|
|
Net income(1)
|
|
|
$
|
819
|
|
|
$
|
808
|
|
|
1
|
%
|
|
$
|
822
|
|
|
0
|
%
|
|
$
|
1,641
|
|
|
$
|
1,564
|
|
|
5
|
%
|
|
Diluted EPS
|
|
|
$
|
4.84
|
|
|
$
|
4.72
|
|
|
3
|
%
|
|
$
|
4.84
|
|
|
0
|
%
|
|
$
|
9.69
|
|
|
$
|
9.12
|
|
|
6
|
%
|
|
Weighted average diluted shares
|
|
|
|
169.1
|
|
|
|
171.2
|
|
|
(1
|
%)
|
|
|
169.7
|
|
|
0
|
%
|
|
|
169.4
|
|
|
|
171.5
|
|
|
(1
|
%)
|
|
As Adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income(2)
|
|
|
$
|
1,248
|
|
|
$
|
1,133
|
|
|
10
|
%
|
|
$
|
1,077
|
|
|
16
|
%
|
|
$
|
2,325
|
|
|
$
|
2,195
|
|
|
6
|
%
|
|
Operating margin(2)
|
|
|
|
44.9
|
%
|
|
|
42.4
|
%
|
|
250 bps
|
|
|
41.2
|
%
|
|
370 bps
|
|
|
43.2
|
%
|
|
|
41.9
|
%
|
|
130 bps
|
|
Net income(1) (2)
|
|
|
$
|
838
|
|
|
$
|
837
|
|
|
0
|
%
|
|
$
|
830
|
|
|
1
|
%
|
|
$
|
1,668
|
|
|
$
|
1,599
|
|
|
4
|
%
|
|
Diluted EPS(2)
|
|
|
$
|
4.96
|
|
|
$
|
4.89
|
|
|
1
|
%
|
|
$
|
4.89
|
|
|
1
|
%
|
|
$
|
9.85
|
|
|
$
|
9.32
|
|
|
6
|
%
|
(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 and six months ended June 30, 2015.
“Although continued market volatility impacted asset flows in the second
quarter, BlackRock's diversified business model
drove strong financial results, with revenue up 5% and operating income
up 10% year-over-year,” commented Laurence D. Fink, Chairman and CEO of
BlackRock. “BlackRock’s unique combination of active and index
investment offerings, across all asset classes on a single
platform, enables us to provide solutions for our
clients’ evolving needs. Despite the impact of more than $30 billion of
low-fee institutional index outflows, net inflows into higher-fee active
and iShares products drove robust organic base fee growth for
the quarter.
“Year-to-date, a desire to reallocate and/or address cash needs drove
ten of our largest clients to redeem over $40 billion of institutional
index equity assets. However, those same clients reinvested across
BlackRock’s active equity and fixed income, multi-asset and alternatives
strategies, resulting in a positive net revenue impact for the firm.
This demonstrates the value of the deep, strategic relationships we
maintain with our clients and validates the strength of our
solutions-oriented business model.
“In the face of a challenging quarter for industry flows in US active
mutual funds, the strength of BlackRock’s franchise positioned us to
garner US retail net inflows of $7 billion – growing our domestic market
share and achieving a "top-5" ranking in US retail mutual fund industry
flows. Internationally, BlackRock saw more than $3 billion of net
inflows and maintained its #1 position in cross-border mutual fund flows
year-to-date, driven by strength in European and Asian equities.
“Executing on our plan to reinvigorate the performance of our
fundamental active equity platform remains critical to our success and,
while we still have work to do, we are pleased that 78% and 61% of
fundamental active equity assets performed above benchmark or peer
median for the one- and three-year periods ended June 30, 2015.
Long-term performance in active fixed income and
scientific active equities remains strong, with 89% and 95% of assets
above benchmark or peer median for the three-year period, respectively.
“BlackRock’s global platform and unique product offering across
investment styles and asset classes – combined with our Aladdin technology
platform – enable us to deliver solutions for our clients, no matter
their near- or long-term goals. This differentiated business model
allowed us to produce strong financial performance in the second quarter
and positions us well for stable growth in the future. I would like to
thank our employees for their ongoing commitment to superior investment
performance and client service as we work to create better financial
futures for our clients and drive long-term value for our shareholders.”
RESULTS BY CLIENT TYPE
|
|
|
(in millions), (unaudited)
|
|
Q2 2015
Net flows
|
|
June 30, 2015
AUM
|
|
Q2 2015
Base Fees(1)
|
|
June 30, 2015
AUM
% of Total
|
|
Q2 2015
Base Fees(1)
% of Total
|
|
Retail
|
|
$10,765
|
|
$561,062
|
|
$839
|
|
13%
|
|
34%
|
|
iShares
|
|
10,850
|
|
1,075,589
|
|
884
|
|
24%
|
|
36%
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
2,516
|
|
975,483
|
|
483
|
|
22%
|
|
20%
|
|
Index
|
|
(31,434)
|
|
1,824,755
|
|
252
|
|
41%
|
|
10%
|
|
Total institutional
|
|
(28,918)
|
|
2,800,238
|
|
735
|
|
63%
|
|
30%
|
|
Total long-term
|
|
($7,303 )
|
|
$4,436,889
|
|
$2,458
|
|
100%
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
RESULTS BY PRODUCT
|
|
|
(in millions), (unaudited)
|
|
Q2 2015
Net flows
|
|
June 30, 2015
AUM
|
|
Q2 2015
Base Fees(1)
|
|
June 30, 2015
AUM
% of Total
|
|
Q2 2015
Base Fees(1)
% of Total
|
|
Equity
|
|
($27,261)
|
|
$2,505,317
|
|
$1,365
|
|
56%
|
|
56%
|
|
Fixed income
|
|
12,847
|
|
1,422,434
|
|
597
|
|
32%
|
|
24%
|
|
Multi-asset
|
|
5,049
|
|
395,009
|
|
316
|
|
9%
|
|
13%
|
|
Alternatives
|
|
2,062
|
|
114,129
|
|
180
|
|
3%
|
|
7%
|
|
Total long-term
|
|
($7,303 )
|
|
$4,436,889
|
|
$2,458
|
|
100%
|
|
100%
|
(1) Base fees include investment advisory, administration
fees and securities lending revenue.
Long-Term Business Highlights
Long-term net inflows of $17.5 billion in the Americas were offset by
net outflows of $24.1 billion and $0.7 billion from clients in EMEA and
Asia-Pacific, respectively. At June 30, 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 second
quarter of 2015 is presented below.
-
Retail long-term net inflows of $10.8 billion included
net inflows of $7.4 billion in the United States and $3.4 billion
internationally. Net inflows were led by fixed income net inflows of
$9.8 billion, which were diversified across exposures, with $2.7
billion of inflows into unconstrained strategies, $1.6 billion into
the High Yield suite, and $1.2 billion into Total Return. In equities,
European Equities raised $1.5 billion, while multi-asset net inflows
were led by $1.6 billion into the Multi-Asset Income fund family.
-
iShares® long-term net inflows of
$10.9 billion included equity net inflows of $8.8 billion, driven by
demand for international developed market exposures. Fixed income net
inflows of $1.5 billion reflected flows into investment grade
corporate, U.S. aggregate and emerging markets bonds.
-
Institutional active long-term net inflows of $2.5
billion were led by multi-asset net inflows of $4.4 billion,
reflecting solutions-based insurance fundings in the quarter and
ongoing demand for the LifePath® target-date
suite. Alternatives net inflows of $0.6 billion were led by flows into
alternatives solutions and infrastructure, and included the impact of
$1.0 billion of capital returned to investors.
-
Institutional index long-term net outflows of $31.4
billion were driven by equity net outflows of $34.6 billion linked to
asset allocation, re-balancing and cash needs.
Cash management AUM decreased 7% to $271.5 billion, driven by
seasonal outflows.
Advisory AUM decreased $5.2 billion to $12.9 billion.
INVESTMENT PERFORMANCE AT JUNE 30, 2015(1)
|
|
|
|
|
|
One-year period
|
|
Three-year period
|
|
Five-year period
|
|
Fixed Income:
|
|
|
|
|
|
|
|
Actively managed products above benchmark or peer
median
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
71 %
|
|
89 %
|
|
91 %
|
|
Tax-exempt
|
|
|
65 %
|
|
71 %
|
|
73 %
|
|
Index products within or above applicable tolerance
|
|
|
96 %
|
|
98 %
|
|
98 %
|
|
Equity:
|
|
|
|
|
|
|
|
Actively managed products above benchmark or peer
median
|
|
|
|
|
|
|
|
|
Fundamental
|
|
|
78 %
|
|
61 %
|
|
52 %
|
|
Scientific
|
|
|
85 %
|
|
95 %
|
|
96 %
|
|
Index products within or above applicable tolerance
|
|
|
97 %
|
|
98 %
|
|
98 %
|
(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 Wednesday, July 15, 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 74398078). 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 Wednesday, July 15, 2015 and ending at
midnight on Wednesday, July 29, 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 74398078. To access
the webcast, please visit the investor relations section of www.blackrock.com.
About BlackRock
BlackRock is a leader in investment management, risk management and
advisory services for institutional and retail clients worldwide. At
June 30, 2015, BlackRock’s AUM was $4.721 trillion. BlackRock helps
clients meet their goals and overcome challenges with a range of
products that include separate accounts, mutual funds, iShares®
(exchange-traded funds), and other pooled investment vehicles. BlackRock
also offers risk management, advisory and enterprise investment system
services to a broad base of institutional investors through BlackRock
Solutions®. Headquartered in New York City, as of June
30, 2015, the firm had approximately 12,400 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 Ended
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
March 31,
|
|
|
|
|
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
|
$
|
2,534
|
|
|
$
|
2,434
|
|
|
$
|
100
|
|
|
$
|
2,390
|
|
|
$
|
144
|
|
|
Investment advisory performance fees
|
|
|
|
136
|
|
|
|
115
|
|
|
|
21
|
|
|
|
108
|
|
|
|
28
|
|
|
BlackRock Solutions and advisory
|
|
|
|
161
|
|
|
|
146
|
|
|
|
15
|
|
|
|
147
|
|
|
|
14
|
|
|
Distribution fees
|
|
|
|
13
|
|
|
|
18
|
|
|
|
(5
|
)
|
|
|
17
|
|
|
|
(4
|
)
|
|
Other revenue
|
|
|
|
61
|
|
|
|
65
|
|
|
|
(4
|
)
|
|
|
61
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
2,905
|
|
|
|
2,778
|
|
|
|
127
|
|
|
|
2,723
|
|
|
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
|
1,012
|
|
|
|
948
|
|
|
|
64
|
|
|
|
981
|
|
|
|
31
|
|
|
Distribution and servicing costs
|
|
|
|
105
|
|
|
|
89
|
|
|
|
16
|
|
|
|
99
|
|
|
|
6
|
|
|
Amortization of deferred sales commissions
|
|
|
|
12
|
|
|
|
14
|
|
|
|
(2
|
)
|
|
|
13
|
|
|
|
(1
|
)
|
|
Direct fund expense
|
|
|
|
191
|
|
|
|
187
|
|
|
|
4
|
|
|
|
189
|
|
|
|
2
|
|
|
General and administration
|
|
|
|
312
|
|
|
|
377
|
|
|
|
(65
|
)
|
|
|
339
|
|
|
|
(27
|
)
|
|
Amortization of intangible assets
|
|
|
|
35
|
|
|
|
41
|
|
|
|
(6
|
)
|
|
|
35
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expense
|
|
|
|
1,667
|
|
|
|
1,656
|
|
|
|
11
|
|
|
|
1,656
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
1,238
|
|
|
|
1,122
|
|
|
|
116
|
|
|
|
1,067
|
|
|
|
171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
|
|
(6
|
)
|
|
|
45
|
|
|
|
(51
|
)
|
|
|
59
|
|
|
|
(65
|
)
|
|
Net gain (loss) on consolidated variable interest entities
|
|
|
|
12
|
|
|
|
28
|
|
|
|
(16
|
)
|
|
|
4
|
|
|
|
8
|
|
|
Interest and dividend income
|
|
|
|
5
|
|
|
|
3
|
|
|
|
2
|
|
|
|
4
|
|
|
|
1
|
|
|
Interest expense
|
|
|
|
(52
|
)
|
|
|
(60
|
)
|
|
|
8
|
|
|
|
(51
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)
|
|
|
|
(41
|
)
|
|
|
16
|
|
|
|
(57
|
)
|
|
|
16
|
|
|
|
(57
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
1,197
|
|
|
|
1,138
|
|
|
|
59
|
|
|
|
1,083
|
|
|
|
114
|
|
|
Income tax expense
|
|
|
|
371
|
|
|
|
297
|
|
|
|
74
|
|
|
|
258
|
|
|
|
113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
826
|
|
|
|
841
|
|
|
|
(15
|
)
|
|
|
825
|
|
|
|
1
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
|
7
|
|
|
|
33
|
|
|
|
(26
|
)
|
|
|
3
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc.
|
|
|
$
|
819
|
|
|
$
|
808
|
|
|
$
|
11
|
|
|
$
|
822
|
|
|
|
($3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
166,616,558
|
|
|
|
168,712,221
|
|
|
|
(2,095,663
|
)
|
|
|
167,089,037
|
|
|
|
(472,479
|
)
|
|
Diluted
|
|
|
|
169,114,759
|
|
|
|
171,150,153
|
|
|
|
(2,035,394
|
)
|
|
|
169,723,167
|
|
|
|
(608,408
|
)
|
|
Earnings per share attributable to BlackRock, Inc. common
stockholders (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
4.92
|
|
|
$
|
4.79
|
|
|
$
|
0.13
|
|
|
$
|
4.92
|
|
|
$
|
-
|
|
|
Diluted
|
|
|
$
|
4.84
|
|
|
$
|
4.72
|
|
|
$
|
0.12
|
|
|
$
|
4.84
|
|
|
$
|
-
|
|
|
Cash dividends declared and paid per share
|
|
|
$
|
2.18
|
|
|
$
|
1.93
|
|
|
$
|
0.25
|
|
|
$
|
2.18
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
|
$
|
4,721,294
|
|
|
$
|
4,593,612
|
|
|
$
|
127,682
|
|
|
$
|
4,774,192
|
|
|
|
($52,898
|
)
|
|
Shares outstanding (end of period)
|
|
|
|
166,379,267
|
|
|
|
168,363,315
|
|
|
|
(1,984,048
|
)
|
|
|
167,084,582
|
|
|
|
(705,315
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
42.6
|
%
|
|
|
40.4
|
%
|
|
220 bps
|
|
|
39.2
|
%
|
|
340 bps
|
|
Effective tax rate
|
|
|
|
31.2
|
%
|
|
|
26.8
|
%
|
|
440 bps
|
|
|
23.9
|
%
|
|
730 bps
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (1)
|
|
|
$
|
1,248
|
|
|
$
|
1,133
|
|
|
$
|
115
|
|
|
$
|
1,077
|
|
|
$
|
171
|
|
|
Operating margin (1)
|
|
|
|
44.9
|
%
|
|
|
42.4
|
%
|
|
250 bps
|
|
|
41.2
|
%
|
|
370 bps
|
|
Nonoperating income (expense), less net income (loss) attributable
to noncontrolling interests (2)
|
|
|
|
($50
|
)
|
|
|
($20
|
)
|
|
|
($30
|
)
|
|
$
|
11
|
|
|
|
($61
|
)
|
|
Net income attributable to BlackRock, Inc. (3)
|
|
|
$
|
838
|
|
|
$
|
837
|
|
|
$
|
1
|
|
|
$
|
830
|
|
|
$
|
8
|
|
|
Diluted earnings attributable to BlackRock, Inc. common stockholders
per share (3) (4)
|
|
|
$
|
4.96
|
|
|
$
|
4.89
|
|
|
$
|
0.07
|
|
|
$
|
4.89
|
|
|
$
|
0.07
|
|
|
Effective tax rate
|
|
|
|
30.1
|
%
|
|
|
24.8
|
%
|
|
530 bps
|
|
|
23.7
|
%
|
|
640 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: During the second quarter of 2015, the Company adopted new
accounting guidance on consolidations effective January 1, 2015 using
the modified retrospective method. Upon adoption, the Company recorded a
change to total nonoperating income (expense) with an equal and
offsetting change to noncontrolling interests for the three months ended
March 31, 2015. There was no impact to net income attributable to
BlackRock, Inc. or to BlackRock’s earnings per share.
See the reconciliation to GAAP and notes (1) through (4) for more
information on as adjusted items.
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL
INFORMATION
|
|
(in millions, except per share data), (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
2015
|
|
2014
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
|
$
|
4,924
|
|
|
$
|
4,725
|
|
|
$
|
199
|
|
|
Investment advisory performance fees
|
|
|
|
244
|
|
|
|
273
|
|
|
|
(29
|
)
|
|
BlackRock Solutions and advisory
|
|
|
|
308
|
|
|
|
300
|
|
|
|
8
|
|
|
Distribution fees
|
|
|
|
30
|
|
|
|
37
|
|
|
|
(7
|
)
|
|
Other revenue
|
|
|
|
122
|
|
|
|
113
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
5,628
|
|
|
|
5,448
|
|
|
|
180
|
|
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
|
1,993
|
|
|
|
1,930
|
|
|
|
63
|
|
|
Distribution and servicing costs
|
|
|
|
204
|
|
|
|
178
|
|
|
|
26
|
|
|
Amortization of deferred sales commissions
|
|
|
|
25
|
|
|
|
29
|
|
|
|
(4
|
)
|
|
Direct fund expense
|
|
|
|
380
|
|
|
|
366
|
|
|
|
14
|
|
|
General and administration
|
|
|
|
651
|
|
|
|
690
|
|
|
|
(39
|
)
|
|
Amortization of intangible assets
|
|
|
|
70
|
|
|
|
82
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
Total expense
|
|
|
|
3,323
|
|
|
|
3,275
|
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
2,305
|
|
|
|
2,173
|
|
|
|
132
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
|
|
53
|
|
|
|
121
|
|
|
|
(68
|
)
|
|
Net gain (loss) on consolidated variable interest entities
|
|
|
|
16
|
|
|
|
12
|
|
|
|
4
|
|
|
Interest and dividend income
|
|
|
|
9
|
|
|
|
13
|
|
|
|
(4
|
)
|
|
Interest expense
|
|
|
|
(103
|
)
|
|
|
(113
|
)
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)
|
|
|
|
(25
|
)
|
|
|
33
|
|
|
|
(58
|
)
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
2,280
|
|
|
|
2,206
|
|
|
|
74
|
|
|
Income tax expense
|
|
|
|
629
|
|
|
|
621
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
1,651
|
|
|
|
1,585
|
|
|
|
66
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
|
10
|
|
|
|
21
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc.
|
|
|
$
|
1,641
|
|
|
$
|
1,564
|
|
|
$
|
77
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
166,851,492
|
|
|
|
168,895,801
|
|
|
|
(2,044,309
|
)
|
|
Diluted
|
|
|
|
169,418,964
|
|
|
|
171,540,018
|
|
|
|
(2,121,054
|
)
|
|
Earnings per share attributable to BlackRock, Inc. common
stockholders (4)
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
9.84
|
|
|
$
|
9.26
|
|
|
$
|
0.58
|
|
|
Diluted
|
|
|
$
|
9.69
|
|
|
$
|
9.12
|
|
|
$
|
0.57
|
|
|
Cash dividends declared and paid per share
|
|
|
$
|
4.36
|
|
|
$
|
3.86
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
|
$
|
4,721,294
|
|
|
$
|
4,593,612
|
|
|
$
|
127,682
|
|
|
Shares outstanding (end of period)
|
|
|
|
166,379,267
|
|
|
|
168,363,315
|
|
|
|
(1,984,048
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
41.0
|
%
|
|
|
39.9
|
%
|
|
110 bps
|
|
Effective tax rate
|
|
|
|
27.7
|
%
|
|
|
28.4
|
%
|
|
(70 bps)
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
Operating income (1)
|
|
|
$
|
2,325
|
|
|
$
|
2,195
|
|
|
$
|
130
|
|
|
Operating margin (1)
|
|
|
|
43.2
|
%
|
|
|
41.9
|
%
|
|
130 bps
|
|
Nonoperating income (expense), less net income (loss) attributable
to noncontrolling interests (2)
|
|
|
|
($39
|
)
|
|
$
|
6
|
|
|
|
($45
|
)
|
|
Net income attributable to BlackRock, Inc. (3)
|
|
|
$
|
1,668
|
|
|
$
|
1,599
|
|
|
$
|
69
|
|
|
Diluted earnings attributable to BlackRock, Inc. common stockholders
per share (3) (4)
|
|
|
$
|
9.85
|
|
|
$
|
9.32
|
|
|
$
|
0.53
|
|
|
Effective tax rate
|
|
|
|
27.0
|
%
|
|
|
27.4
|
%
|
|
(40 bps)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: During the second quarter of 2015, the Company adopted new
accounting guidance on consolidations effective January 1, 2015 using
the modified retrospective method. Upon adoption, the Company recorded a
change to total nonoperating income (expense) with an equal and
offsetting change to noncontrolling interests for the three months ended
March 31, 2015. There was no impact to net income attributable to
BlackRock, Inc. or to BlackRock’s earnings per share.
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2015
|
|
Net
inflows
(outflows)
|
|
Market change
|
|
FX impact (1)
|
|
June 30,
2015
|
|
Average AUM (2)
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
$
|
201,706
|
|
$
|
300
|
|
|
|
($400
|
)
|
|
$
|
1,767
|
|
$
|
203,373
|
|
$
|
205,427
|
|
Fixed income
|
|
|
|
201,405
|
|
|
9,802
|
|
|
|
(2,688
|
)
|
|
|
537
|
|
|
209,056
|
|
|
206,177
|
|
Multi-asset
|
|
|
|
128,402
|
|
|
714
|
|
|
|
(312
|
)
|
|
|
384
|
|
|
129,188
|
|
|
129,864
|
|
Alternatives
|
|
|
|
19,467
|
|
|
(51
|
)
|
|
|
(47
|
)
|
|
|
76
|
|
|
19,445
|
|
|
19,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail subtotal
|
|
|
|
550,980
|
|
|
10,765
|
|
|
|
(3,447
|
)
|
|
|
2,764
|
|
|
561,062
|
|
|
560,849
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
824,336
|
|
|
8,808
|
|
|
|
(8,833
|
)
|
|
|
3,746
|
|
|
828,057
|
|
|
833,952
|
|
Fixed income
|
|
|
|
233,183
|
|
|
1,544
|
|
|
|
(6,089
|
)
|
|
|
2,097
|
|
|
230,735
|
|
|
234,884
|
|
Multi-asset
|
|
|
|
1,772
|
|
|
101
|
|
|
|
(31
|
)
|
|
|
2
|
|
|
1,844
|
|
|
1,833
|
|
Alternatives
|
|
|
|
14,839
|
|
|
397
|
|
|
|
(329
|
)
|
|
|
46
|
|
|
14,953
|
|
|
15,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iShares subtotal
|
|
|
|
1,074,130
|
|
|
10,850
|
|
|
|
(15,282
|
)
|
|
|
5,891
|
|
|
1,075,589
|
|
|
1,085,675
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
128,036
|
|
|
(1,761
|
)
|
|
|
(518
|
)
|
|
|
2,275
|
|
|
128,032
|
|
|
129,512
|
|
Fixed income
|
|
|
|
526,117
|
|
|
(760
|
)
|
|
|
(12,123
|
)
|
|
|
4,017
|
|
|
517,251
|
|
|
524,246
|
|
Multi-asset
|
|
|
|
257,084
|
|
|
4,418
|
|
|
|
(9,150
|
)
|
|
|
4,612
|
|
|
256,964
|
|
|
259,498
|
|
Alternatives
|
|
|
|
73,045
|
|
|
619
|
|
|
|
(953
|
)
|
|
|
525
|
|
|
73,236
|
|
|
73,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active subtotal
|
|
|
|
984,282
|
|
|
2,516
|
|
|
|
(22,744
|
)
|
|
|
11,429
|
|
|
975,483
|
|
|
986,446
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,373,052
|
|
|
(34,608
|
)
|
|
|
(3,072
|
)
|
|
|
10,483
|
|
|
1,345,855
|
|
|
1,379,088
|
|
Fixed income
|
|
|
|
467,775
|
|
|
2,261
|
|
|
|
(18,642
|
)
|
|
|
13,998
|
|
|
465,392
|
|
|
468,699
|
|
Multi-asset
|
|
|
|
8,054
|
|
|
(184
|
)
|
|
|
(926
|
)
|
|
|
69
|
|
|
7,013
|
|
|
7,617
|
|
Alternatives
|
|
|
|
5,324
|
|
|
1,097
|
|
|
|
(106
|
)
|
|
|
180
|
|
|
6,495
|
|
|
5,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index subtotal
|
|
|
|
1,854,205
|
|
|
(31,434
|
)
|
|
|
(22,746
|
)
|
|
|
24,730
|
|
|
1,824,755
|
|
|
1,861,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutional subtotal
|
|
|
|
2,838,487
|
|
|
(28,918
|
)
|
|
|
(45,490
|
)
|
|
|
36,159
|
|
|
2,800,238
|
|
|
2,847,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
|
4,463,597
|
|
|
(7,303
|
)
|
|
|
(64,219
|
)
|
|
|
44,814
|
|
|
4,436,889
|
|
$
|
4,494,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash management
|
|
|
|
292,495
|
|
|
(23,890
|
)
|
|
|
26
|
|
|
|
2,875
|
|
|
271,506
|
|
|
|
Advisory (3)
|
|
|
|
18,100
|
|
|
(5,452
|
)
|
|
|
(136
|
)
|
|
|
387
|
|
|
12,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
4,774,192
|
|
|
($36,645
|
)
|
|
|
($64,329
|
)
|
|
$
|
48,076
|
|
$
|
4,721,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Product (Long-term)
|
|
|
|
|
March 31,
2015
|
|
Net
inflows
(outflows)
|
|
Market change
|
|
FX impact (1)
|
|
June 30,
2015
|
|
Average AUM (2)
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
$
|
298,118
|
|
|
($2,079
|
)
|
|
|
($450
|
)
|
|
$
|
3,295
|
|
$
|
298,884
|
|
$
|
302,364
|
|
iShares
|
|
|
|
824,336
|
|
|
8,808
|
|
|
|
(8,833
|
)
|
|
|
3,746
|
|
|
828,057
|
|
|
833,952
|
|
Non-ETF index
|
|
|
|
1,404,676
|
|
|
(33,990
|
)
|
|
|
(3,540
|
)
|
|
|
11,230
|
|
|
1,378,376
|
|
|
1,411,663
|
|
Equity subtotal
|
|
|
|
2,527,130
|
|
|
(27,261
|
)
|
|
|
(12,823
|
)
|
|
|
18,271
|
|
|
2,505,317
|
|
|
2,547,979
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
720,094
|
|
|
9,089
|
|
|
|
(14,621
|
)
|
|
|
4,291
|
|
|
718,853
|
|
|
722,831
|
|
iShares
|
|
|
|
233,183
|
|
|
1,544
|
|
|
|
(6,089
|
)
|
|
|
2,097
|
|
|
230,735
|
|
|
234,884
|
|
Non-ETF index
|
|
|
|
475,203
|
|
|
2,214
|
|
|
|
(18,832
|
)
|
|
|
14,261
|
|
|
472,846
|
|
|
476,291
|
|
Fixed income subtotal
|
|
|
|
1,428,480
|
|
|
12,847
|
|
|
|
(39,542
|
)
|
|
|
20,649
|
|
|
1,422,434
|
|
|
1,434,006
|
|
Multi-asset
|
|
|
|
395,312
|
|
|
5,049
|
|
|
|
(10,419
|
)
|
|
|
5,067
|
|
|
395,009
|
|
|
398,812
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
89,086
|
|
|
1,229
|
|
|
|
(1,014
|
)
|
|
|
653
|
|
|
89,954
|
|
|
89,582
|
|
Currency and commodities (4)
|
|
|
|
23,589
|
|
|
833
|
|
|
|
(421
|
)
|
|
|
174
|
|
|
24,175
|
|
|
23,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternatives subtotal
|
|
|
|
112,675
|
|
|
2,062
|
|
|
|
(1,435
|
)
|
|
|
827
|
|
|
114,129
|
|
|
113,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
$
|
4,463,597
|
|
|
($7,303
|
)
|
|
|
($64,219
|
)
|
|
$
|
44,814
|
|
$
|
4,436,889
|
|
$
|
4,494,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Investment Style
(Long-term)
|
|
|
|
|
March 31,
2015
|
|
Net
inflows
(outflows)
|
|
Market change
|
|
FX impact (1)
|
|
June 30,
2015
|
|
Average AUM (2)
|
|
Active
|
|
|
$
|
1,496,210
|
|
$
|
12,711
|
|
|
|
($25,533
|
)
|
|
$
|
13,183
|
|
$
|
1,496,571
|
|
$
|
1,507,127
|
|
Index and iShares
|
|
|
|
2,967,387
|
|
|
(20,014
|
)
|
|
|
(38,686
|
)
|
|
|
31,631
|
|
|
2,940,318
|
|
|
2,987,054
|
|
Long-term
|
|
|
$
|
4,463,597
|
|
|
($7,303
|
)
|
|
|
($64,219
|
)
|
|
$
|
44,814
|
|
$
|
4,436,889
|
|
$
|
4,494,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Foreign exchange reflects the impact of converting
non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
(2) Average AUM is calculated as the average of the month-end
spot AUM amounts for the trailing four months.
(3) Advisory AUM represents long-term portfolio liquidation
assignments.
(4) Amounts include commodity iShares.
|
|
|
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
|
|
|
|
Year-to-Date Changes by Client Type and Product
|
|
|
|
|
December 31,
2014
|
|
Net
inflows
(outflows)
|
|
Acquisition(1)
|
|
Market change
|
|
FX impact(2)
|
|
June 30,
2015
|
|
Average AUM (3)
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
$
|
200,445
|
|
$
|
631
|
|
|
$
|
-
|
|
$
|
4,703
|
|
|
($2,406
|
)
|
|
$
|
203,373
|
|
$
|
203,459
|
|
Fixed income
|
|
|
|
189,820
|
|
|
22,589
|
|
|
|
-
|
|
|
(1,726
|
)
|
|
(1,627
|
)
|
|
|
209,056
|
|
|
200,941
|
|
Multi-asset
|
|
|
|
125,341
|
|
|
2,116
|
|
|
|
-
|
|
|
2,113
|
|
|
(382
|
)
|
|
|
129,188
|
|
|
128,454
|
|
Alternatives
|
|
|
|
18,723
|
|
|
(400
|
)
|
|
|
1,293
|
|
|
249
|
|
|
(420
|
)
|
|
|
19,445
|
|
|
18,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail subtotal
|
|
|
|
534,329
|
|
|
24,936
|
|
|
|
1,293
|
|
|
5,339
|
|
|
(4,835
|
)
|
|
|
561,062
|
|
|
551,817
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
790,067
|
|
|
25,533
|
|
|
|
-
|
|
|
19,366
|
|
|
(6,909
|
)
|
|
|
828,057
|
|
|
818,378
|
|
Fixed income
|
|
|
|
217,671
|
|
|
20,138
|
|
|
|
-
|
|
|
(3,498
|
)
|
|
(3,576
|
)
|
|
|
230,735
|
|
|
231,196
|
|
Multi-asset
|
|
|
|
1,773
|
|
|
83
|
|
|
|
-
|
|
|
(1
|
)
|
|
(11
|
)
|
|
|
1,844
|
|
|
1,838
|
|
Alternatives
|
|
|
|
14,717
|
|
|
573
|
|
|
|
-
|
|
|
(280
|
)
|
|
(57
|
)
|
|
|
14,953
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iShares subtotal
|
|
|
|
1,024,228
|
|
|
46,327
|
|
|
|
-
|
|
|
15,587
|
|
|
(10,553
|
)
|
|
|
1,075,589
|
|
|
1,066,412
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
125,143
|
|
|
(1,593
|
)
|
|
|
-
|
|
|
5,688
|
|
|
(1,206
|
)
|
|
|
128,032
|
|
|
128,094
|
|
Fixed income
|
|
|
|
518,590
|
|
|
4,964
|
|
|
|
-
|
|
|
(2,577
|
)
|
|
(3,726
|
)
|
|
|
517,251
|
|
|
524,816
|
|
Multi-asset
|
|
|
|
242,913
|
|
|
16,135
|
|
|
|
-
|
|
|
3,400
|
|
|
(5,484
|
)
|
|
|
256,964
|
|
|
254,528
|
|
Alternatives
|
|
|
|
72,514
|
|
|
995
|
|
|
|
-
|
|
|
140
|
|
|
(413
|
)
|
|
|
73,236
|
|
|
72,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active subtotal
|
|
|
|
959,160
|
|
|
20,501
|
|
|
|
-
|
|
|
6,651
|
|
|
(10,829
|
)
|
|
|
975,483
|
|
|
980,388
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,335,456
|
|
|
(30,891
|
)
|
|
|
-
|
|
|
50,287
|
|
|
(8,997
|
)
|
|
|
1,345,855
|
|
|
1,366,131
|
|
Fixed income
|
|
|
|
467,572
|
|
|
1,444
|
|
|
|
-
|
|
|
(2,458
|
)
|
|
(1,166
|
)
|
|
|
465,392
|
|
|
469,534
|
|
Multi-asset
|
|
|
|
7,810
|
|
|
(493
|
)
|
|
|
-
|
|
|
(108
|
)
|
|
(196
|
)
|
|
|
7,013
|
|
|
7,732
|
|
Alternatives
|
|
|
|
5,286
|
|
|
1,312
|
|
|
|
-
|
|
|
(133
|
)
|
|
30
|
|
|
|
6,495
|
|
|
5,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index subtotal
|
|
|
|
1,816,124
|
|
|
(28,628
|
)
|
|
|
-
|
|
|
47,588
|
|
|
(10,329
|
)
|
|
|
1,824,755
|
|
|
1,849,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutional subtotal
|
|
|
|
2,775,284
|
|
|
(8,127
|
)
|
|
|
-
|
|
|
54,239
|
|
|
(21,158
|
)
|
|
|
2,800,238
|
|
|
2,829,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
|
4,333,841
|
|
|
63,136
|
|
|
|
1,293
|
|
|
75,165
|
|
|
(36,546
|
)
|
|
|
4,436,889
|
|
$
|
4,447,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash management
|
|
|
|
296,353
|
|
|
(23,329
|
)
|
|
|
-
|
|
|
(15
|
)
|
|
(1,503
|
)
|
|
|
271,506
|
|
|
|
Advisory (4)
|
|
|
|
21,701
|
|
|
(7,749
|
)
|
|
|
-
|
|
|
391
|
|
|
(1,444
|
)
|
|
|
12,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
4,651,895
|
|
$
|
32,058
|
|
|
$
|
1,293
|
|
$
|
75,541
|
|
|
($39,493
|
)
|
|
$
|
4,721,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date Component Changes by Product (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2014
|
|
Net
inflows
(outflows)
|
|
Acquisition(1)
|
|
Market change
|
|
FX impact(2)
|
|
June 30,
2015
|
|
Average AUM (3)
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
$
|
292,802
|
|
|
($1,533
|
)
|
|
$
|
-
|
|
$
|
10,995
|
|
|
($3,380
|
)
|
|
$
|
298,884
|
|
$
|
298,932
|
|
iShares
|
|
|
|
790,067
|
|
|
25,533
|
|
|
|
-
|
|
|
19,366
|
|
|
(6,909
|
)
|
|
|
828,057
|
|
|
818,378
|
|
Non-ETF index
|
|
|
|
1,368,242
|
|
|
(30,320
|
)
|
|
|
-
|
|
|
49,683
|
|
|
(9,229
|
)
|
|
|
1,378,376
|
|
|
1,398,752
|
|
Equity subtotal
|
|
|
|
2,451,111
|
|
|
(6,320
|
)
|
|
|
-
|
|
|
80,044
|
|
|
(19,518
|
)
|
|
|
2,505,317
|
|
|
2,516,062
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
701,324
|
|
|
26,944
|
|
|
|
-
|
|
|
(4,174
|
)
|
|
(5,241
|
)
|
|
|
718,853
|
|
|
718,356
|
|
iShares
|
|
|
|
217,671
|
|
|
20,138
|
|
|
|
-
|
|
|
(3,498
|
)
|
|
(3,576
|
)
|
|
|
230,735
|
|
|
231,196
|
|
Non-ETF index
|
|
|
|
474,658
|
|
|
2,053
|
|
|
|
-
|
|
|
(2,587
|
)
|
|
(1,278
|
)
|
|
|
472,846
|
|
|
476,935
|
|
Fixed income subtotal
|
|
|
|
1,393,653
|
|
|
49,135
|
|
|
|
-
|
|
|
(10,259
|
)
|
|
(10,095
|
)
|
|
|
1,422,434
|
|
|
1,426,487
|
|
Multi-asset
|
|
|
|
377,837
|
|
|
17,841
|
|
|
|
-
|
|
|
5,404
|
|
|
(6,073
|
)
|
|
|
395,009
|
|
|
392,552
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
88,006
|
|
|
1,028
|
|
|
|
1,293
|
|
|
411
|
|
|
(784
|
)
|
|
|
89,954
|
|
|
88,784
|
|
Currency and commodities (5)
|
|
|
|
23,234
|
|
|
1,452
|
|
|
|
-
|
|
|
(435
|
)
|
|
(76
|
)
|
|
|
24,175
|
|
|
23,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternatives subtotal
|
|
|
|
111,240
|
|
|
2,480
|
|
|
|
1,293
|
|
|
(24
|
)
|
|
(860
|
)
|
|
|
114,129
|
|
|
112,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
$
|
4,333,841
|
|
$
|
63,136
|
|
|
$
|
1,293
|
|
$
|
75,165
|
|
|
($36,546
|
)
|
|
$
|
4,436,889
|
|
$
|
4,447,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2014
|
|
Net
inflows
(outflows)
|
|
Acquisition(1)
|
|
Market change
|
|
FX impact(2)
|
|
June 30,
2015
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
$
|
1,453,613
|
|
$
|
44,256
|
|
|
$
|
1,293
|
|
$
|
12,730
|
|
|
($15,321
|
)
|
|
$
|
1,496,571
|
|
$
|
1,492,182
|
|
Index and iShares
|
|
|
|
2,880,228
|
|
|
18,880
|
|
|
|
-
|
|
|
62,435
|
|
|
(21,225
|
)
|
|
|
2,940,318
|
|
|
2,955,452
|
|
Long-term
|
|
|
$
|
4,333,841
|
|
$
|
63,136
|
|
|
$
|
1,293
|
|
$
|
75,165
|
|
|
($36,546
|
)
|
|
$
|
4,436,889
|
|
$
|
4,447,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amount represents $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 seven 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
|
|
|
|
|
June 30,
2014
|
|
Net
inflows
(outflows)
|
|
Acquisition (1)
|
|
Market change
|
|
FX impact (2)
|
|
June 30,
2015
|
|
Average AUM ((3))
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
$
|
216,469
|
|
|
($1,493
|
)
|
|
$
|
-
|
|
|
($2,188
|
)
|
|
($9,415
|
)
|
|
$
|
203,373
|
|
$
|
206,230
|
|
Fixed income
|
|
|
|
172,672
|
|
|
43,394
|
|
|
|
-
|
|
|
(2,909
|
)
|
|
(4,101
|
)
|
|
|
209,056
|
|
|
190,498
|
|
Multi-asset
|
|
|
|
126,392
|
|
|
10,813
|
|
|
|
-
|
|
|
(6,433
|
)
|
|
(1,584
|
)
|
|
|
129,188
|
|
|
127,589
|
|
Alternatives
|
|
|
|
18,969
|
|
|
36
|
|
|
|
1,293
|
|
|
210
|
|
|
(1,063
|
)
|
|
|
19,445
|
|
|
19,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail subtotal
|
|
|
|
534,502
|
|
|
52,750
|
|
|
|
1,293
|
|
|
(11,320
|
)
|
|
(16,163
|
)
|
|
|
561,062
|
|
|
543,327
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
774,053
|
|
|
63,589
|
|
|
|
-
|
|
|
11,662
|
|
|
(21,247
|
)
|
|
|
828,057
|
|
|
798,383
|
|
Fixed income
|
|
|
|
200,519
|
|
|
44,049
|
|
|
|
-
|
|
|
(4,133
|
)
|
|
(9,700
|
)
|
|
|
230,735
|
|
|
219,806
|
|
Multi-asset
|
|
|
|
1,624
|
|
|
278
|
|
|
|
-
|
|
|
(33
|
)
|
|
(25
|
)
|
|
|
1,844
|
|
|
1,731
|
|
Alternatives
|
|
|
|
17,636
|
|
|
810
|
|
|
|
-
|
|
|
(3,259
|
)
|
|
(234
|
)
|
|
|
14,953
|
|
|
15,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iShares subtotal
|
|
|
|
993,832
|
|
|
108,726
|
|
|
|
-
|
|
|
4,237
|
|
|
(31,206
|
)
|
|
|
1,075,589
|
|
|
1,035,579
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
133,780
|
|
|
(7,694
|
)
|
|
|
-
|
|
|
9,369
|
|
|
(7,423
|
)
|
|
|
128,032
|
|
|
129,195
|
|
Fixed income
|
|
|
|
523,665
|
|
|
4,191
|
|
|
|
-
|
|
|
9,904
|
|
|
(20,509
|
)
|
|
|
517,251
|
|
|
522,187
|
|
Multi-asset
|
|
|
|
239,207
|
|
|
23,863
|
|
|
|
-
|
|
|
11,891
|
|
|
(17,997
|
)
|
|
|
256,964
|
|
|
248,591
|
|
Alternatives
|
|
|
|
73,781
|
|
|
1,319
|
|
|
|
-
|
|
|
548
|
|
|
(2,412
|
)
|
|
|
73,236
|
|
|
72,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active subtotal
|
|
|
|
970,433
|
|
|
21,679
|
|
|
|
-
|
|
|
31,712
|
|
|
(48,341
|
)
|
|
|
975,483
|
|
|
972,801
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,338,283
|
|
|
(21,851
|
)
|
|
|
-
|
|
|
81,155
|
|
|
(51,732
|
)
|
|
|
1,345,855
|
|
|
1,351,919
|
|
Fixed income
|
|
|
|
443,869
|
|
|
17,031
|
|
|
|
-
|
|
|
34,857
|
|
|
(30,365
|
)
|
|
|
465,392
|
|
|
460,652
|
|
Multi-asset
|
|
|
|
7,250
|
|
|
5
|
|
|
|
-
|
|
|
766
|
|
|
(1,008
|
)
|
|
|
7,013
|
|
|
7,498
|
|
Alternatives
|
|
|
|
6,536
|
|
|
1,301
|
|
|
|
-
|
|
|
(1,078
|
)
|
|
(264
|
)
|
|
|
6,495
|
|
|
5,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index subtotal
|
|
|
|
1,795,938
|
|
|
(3,514
|
)
|
|
|
-
|
|
|
115,700
|
|
|
(83,369
|
)
|
|
|
1,824,755
|
|
|
1,825,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutional subtotal
|
|
|
|
2,766,371
|
|
|
18,165
|
|
|
|
-
|
|
|
147,412
|
|
|
(131,710
|
)
|
|
|
2,800,238
|
|
|
2,798,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
|
4,294,705
|
|
|
179,641
|
|
|
|
1,293
|
|
|
140,329
|
|
|
(179,079
|
)
|
|
|
4,436,889
|
|
$
|
4,377,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash management
|
|
|
|
268,388
|
|
|
11,288
|
|
|
|
-
|
|
|
193
|
|
|
(8,363
|
)
|
|
|
271,506
|
|
|
|
Advisory (4)
|
|
|
|
30,519
|
|
|
(15,131
|
)
|
|
|
-
|
|
|
1,094
|
|
|
(3,583
|
)
|
|
|
12,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
4,593,612
|
|
$
|
175,798
|
|
|
$
|
1,293
|
|
$
|
141,616
|
|
|
($191,025
|
)
|
|
$
|
4,721,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Product (Long-term)
|
|
|
|
|
June 30,
2014
|
|
Net
inflows
(outflows)
|
|
Acquisition (1)
|
|
Market change
|
|
FX impact (2)
|
|
June 30,
2015
|
|
Average AUM (3)
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
$
|
320,830
|
|
|
($14,157
|
)
|
|
$
|
-
|
|
$
|
6,911
|
|
|
($14,700
|
)
|
|
$
|
298,884
|
|
$
|
303,735
|
|
iShares
|
|
|
|
774,053
|
|
|
63,589
|
|
|
|
-
|
|
|
11,662
|
|
|
(21,247
|
)
|
|
|
828,057
|
|
|
798,383
|
|
Non-ETF index
|
|
|
|
1,367,702
|
|
|
(16,881
|
)
|
|
|
-
|
|
|
81,425
|
|
|
(53,870
|
)
|
|
|
1,378,376
|
|
|
1,383,609
|
|
Equity subtotal
|
|
|
|
2,462,585
|
|
|
32,551
|
|
|
|
-
|
|
|
99,998
|
|
|
(89,817
|
)
|
|
|
2,505,317
|
|
|
2,485,727
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
689,724
|
|
|
46,529
|
|
|
|
-
|
|
|
6,490
|
|
|
(23,890
|
)
|
|
|
718,853
|
|
|
705,640
|
|
iShares
|
|
|
|
200,519
|
|
|
44,049
|
|
|
|
-
|
|
|
(4,133
|
)
|
|
(9,700
|
)
|
|
|
230,735
|
|
|
219,806
|
|
Non-ETF index
|
|
|
|
450,482
|
|
|
18,087
|
|
|
|
-
|
|
|
35,362
|
|
|
(31,085
|
)
|
|
|
472,846
|
|
|
467,697
|
|
Fixed income subtotal
|
|
|
|
1,340,725
|
|
|
108,665
|
|
|
|
-
|
|
|
37,719
|
|
|
(64,675
|
)
|
|
|
1,422,434
|
|
|
1,393,143
|
|
Multi-asset
|
|
|
|
374,473
|
|
|
34,959
|
|
|
|
-
|
|
|
6,191
|
|
|
(20,614
|
)
|
|
|
395,009
|
|
|
385,409
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
88,758
|
|
|
1,882
|
|
|
|
1,293
|
|
|
948
|
|
|
(2,927
|
)
|
|
|
89,954
|
|
|
88,513
|
|
Currency and commodities (5)
|
|
|
|
28,164
|
|
|
1,584
|
|
|
|
-
|
|
|
(4,527
|
)
|
|
(1,046
|
)
|
|
|
24,175
|
|
|
24,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternatives subtotal
|
|
|
|
116,922
|
|
|
3,466
|
|
|
|
1,293
|
|
|
(3,579
|
)
|
|
(3,973
|
)
|
|
|
114,129
|
|
|
113,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
$
|
4,294,705
|
|
$
|
179,641
|
|
|
$
|
1,293
|
|
$
|
140,329
|
|
|
($179,079
|
)
|
|
$
|
4,436,889
|
|
$
|
4,377,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Investment Style (Long-term)
|
|
|
|
|
June 30,
2014
|
|
Net
inflows
(outflows)
|
|
Acquisition(1)
|
|
Market change
|
|
FX impact (2)
|
|
June 30,
2015
|
|
Average AUM (3)
|
|
Active
|
|
|
$
|
1,468,823
|
|
$
|
68,471
|
|
$
|
1,293
|
|
$
|
19,626
|
|
|
($61,642
|
)
|
|
$
|
1,496,571
|
|
$
|
1,477,361
|
|
Index and iShares
|
|
|
|
2,825,882
|
|
|
111,170
|
|
|
-
|
|
|
120,703
|
|
|
(117,437
|
)
|
|
|
2,940,318
|
|
|
2,900,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
$
|
4,294,705
|
|
$
|
179,641
|
|
$
|
1,293
|
|
$
|
140,329
|
|
|
($179,079
|
)
|
|
$
|
4,436,889
|
|
$
|
4,377,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amount represents $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
June 30,
|
|
Change
|
|
Three Months
Ended
March 31, 2015
|
|
Change
|
|
Six Months Ended
June 30,
|
|
|
|
(in millions), (unaudited)
|
|
|
2015
|
|
2014
|
|
|
|
|
2015
|
|
|
2014
|
|
Change
|
|
Investment advisory, administration fees and securities lending
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
$
|
447
|
|
$
|
478
|
|
|
($31
|
)
|
|
$
|
422
|
|
$
|
25
|
|
|
$
|
869
|
|
$
|
941
|
|
|
($72
|
)
|
|
iShares
|
|
|
|
728
|
|
|
677
|
|
|
51
|
|
|
|
684
|
|
|
44
|
|
|
|
1,412
|
|
|
1,311
|
|
|
101
|
|
|
Non-ETF Index
|
|
|
|
190
|
|
|
183
|
|
|
7
|
|
|
|
163
|
|
|
27
|
|
|
|
353
|
|
|
341
|
|
|
12
|
|
|
Equity subtotal
|
|
|
|
1,365
|
|
|
1,338
|
|
|
27
|
|
|
|
1,269
|
|
|
96
|
|
|
|
2,634
|
|
|
2,593
|
|
|
41
|
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
387
|
|
|
346
|
|
|
41
|
|
|
|
373
|
|
|
14
|
|
|
|
760
|
|
|
670
|
|
|
90
|
|
|
iShares
|
|
|
|
138
|
|
|
122
|
|
|
16
|
|
|
|
130
|
|
|
8
|
|
|
|
268
|
|
|
235
|
|
|
33
|
|
|
Non-ETF Index
|
|
|
|
72
|
|
|
71
|
|
|
1
|
|
|
|
68
|
|
|
4
|
|
|
|
140
|
|
|
129
|
|
|
11
|
|
|
Fixed income subtotal
|
|
|
|
597
|
|
|
539
|
|
|
58
|
|
|
|
571
|
|
|
26
|
|
|
|
1,168
|
|
|
1,034
|
|
|
134
|
|
|
Multi-asset
|
|
|
|
316
|
|
|
300
|
|
|
16
|
|
|
|
304
|
|
|
12
|
|
|
|
620
|
|
|
586
|
|
|
34
|
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
161
|
|
|
161
|
|
|
-
|
|
|
|
154
|
|
|
7
|
|
|
|
315
|
|
|
320
|
|
|
(5
|
)
|
|
Currency and commodities
|
|
|
|
19
|
|
|
23
|
|
|
(4
|
)
|
|
|
19
|
|
|
-
|
|
|
|
38
|
|
|
45
|
|
|
(7
|
)
|
|
Alternatives subtotal
|
|
|
|
180
|
|
|
184
|
|
|
(4
|
)
|
|
|
173
|
|
|
7
|
|
|
|
353
|
|
|
365
|
|
|
(12
|
)
|
|
Long-term
|
|
|
|
2,458
|
|
|
2,361
|
|
|
97
|
|
|
|
2,317
|
|
|
141
|
|
|
|
4,775
|
|
|
4,578
|
|
|
197
|
|
|
Cash management
|
|
|
|
76
|
|
|
73
|
|
|
3
|
|
|
|
73
|
|
|
3
|
|
|
|
149
|
|
|
147
|
|
|
2
|
|
|
Total base fees
|
|
|
|
2,534
|
|
|
2,434
|
|
|
100
|
|
|
|
2,390
|
|
|
144
|
|
|
|
4,924
|
|
|
4,725
|
|
|
199
|
|
|
Investment advisory performance fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
61
|
|
|
31
|
|
|
30
|
|
|
|
37
|
|
|
24
|
|
|
|
98
|
|
|
53
|
|
|
45
|
|
|
Fixed income
|
|
|
|
3
|
|
|
5
|
|
|
(2
|
)
|
|
|
4
|
|
|
(1
|
)
|
|
|
7
|
|
|
13
|
|
|
(6
|
)
|
|
Multi-asset
|
|
|
|
8
|
|
|
10
|
|
|
(2
|
)
|
|
|
8
|
|
|
-
|
|
|
|
16
|
|
|
13
|
|
|
3
|
|
|
Alternatives
|
|
|
|
64
|
|
|
69
|
|
|
(5
|
)
|
|
|
59
|
|
|
5
|
|
|
|
123
|
|
|
194
|
|
|
(71
|
)
|
|
Total performance fees
|
|
|
|
136
|
|
|
115
|
|
|
21
|
|
|
|
108
|
|
|
28
|
|
|
|
244
|
|
|
273
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Solutions and advisory
|
|
|
|
161
|
|
|
146
|
|
|
15
|
|
|
|
147
|
|
|
14
|
|
|
|
308
|
|
|
300
|
|
|
8
|
|
|
Distribution fees
|
|
|
|
13
|
|
|
18
|
|
|
(5
|
)
|
|
|
17
|
|
|
(4
|
)
|
|
|
30
|
|
|
37
|
|
|
(7
|
)
|
|
Other revenue
|
|
|
|
61
|
|
|
65
|
|
|
(4
|
)
|
|
|
61
|
|
|
-
|
|
|
|
122
|
|
|
113
|
|
|
9
|
|
|
Total revenue
|
|
|
$
|
2,905
|
|
$
|
2,778
|
|
$
|
127
|
|
|
$
|
2,723
|
|
$
|
182
|
|
|
$
|
5,628
|
|
$
|
5,448
|
|
$
|
180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
Investment advisory, administration fees and securities lending
revenue increased $100 million from the second quarter of 2014 driven
by organic growth and market appreciation, which outpaced the impact
of foreign exchange movements. Securities lending fees of $147 million
in the current quarter increased $7 million from the second quarter of
2014.
Investment advisory, administration fees and
securities lending revenue increased $144 million from the first
quarter of 2015 reflecting organic base fee growth, the effect of one
additional revenue day in the current quarter and seasonally higher
securities lending fees. Securities lending fees increased $33 million
from the first quarter of 2015.
-
Performance fees increased $21 million from the second quarter of 2014
and $28 million from the first quarter of 2015, primarily reflecting
higher fees from equity products.
-
BlackRock Solutions® and advisory revenue
increased $15 million from the second quarter of 2014 due to higher
revenue from the Aladdin® business. BlackRock
Solutions and advisory revenue included $129 million in Aladdin
business revenue in the current quarter compared with $113
million in the second quarter of 2014.
BlackRock
Solutions and advisory revenue increased $14 million from the
prior quarter due to higher Financial Markets Advisory Services
revenue. BlackRock Solutions and advisory revenue included $129
million in Aladdin business revenue in the current quarter
compared with $126 million in the first quarter of 2015.
SUMMARY OF OPERATING EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
June 30,
|
|
|
|
Three
Months
Ended
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
(in millions), (unaudited)
|
|
|
2015
|
|
|
2014
|
|
Change
|
|
|
March 31, 2015
|
|
|
Change
|
|
|
2015
|
|
2014
|
|
Change
|
|
Operating Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
$1,012
|
|
$
|
948
|
|
$64
|
|
|
|
$
|
981
|
|
|
$31
|
|
|
$
|
1,993
|
|
$
|
1,930
|
|
|
$
|
63
|
|
|
Distribution and servicing costs
|
|
|
105
|
|
|
89
|
|
16
|
|
|
|
|
99
|
|
|
6
|
|
|
|
204
|
|
|
178
|
|
|
|
26
|
|
|
Amortization of deferred sales commissions
|
|
|
12
|
|
|
14
|
|
(2
|
)
|
|
|
|
13
|
|
|
(1
|
)
|
|
|
25
|
|
|
29
|
|
|
|
(4
|
)
|
|
Direct fund expense
|
|
|
191
|
|
|
187
|
|
4
|
|
|
|
|
189
|
|
|
2
|
|
|
|
380
|
|
|
366
|
|
|
|
14
|
|
|
General and administration
|
|
|
312
|
|
|
377
|
|
(65
|
)
|
|
|
|
339
|
|
|
(27
|
)
|
|
|
651
|
|
|
690
|
|
|
|
(39
|
)
|
|
Amortization of intangible assets
|
|
|
35
|
|
|
41
|
|
(6
|
)
|
|
|
|
35
|
|
|
-
|
|
|
|
70
|
|
|
82
|
|
|
|
(12
|
)
|
|
Total Operating Expense
|
|
|
$1,667
|
|
$
|
1,656
|
|
$11
|
|
|
|
$
|
1,656
|
|
|
$11
|
|
|
$
|
3,323
|
|
$
|
3,275
|
|
|
$
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
Employee compensation and benefits increased $64 million from the
second quarter of 2014, reflecting higher headcount and higher
incentive compensation driven by higher operating income, partially
offset by the impact of foreign exchange movements.
Employee
compensation and benefits increased $31 million from the first quarter
of 2015, primarily reflecting higher incentive compensation driven by
higher operating income, partially offset by lower seasonal employer
payroll taxes.
-
General and administration expense decreased $65 million from the
second quarter of 2014, primarily reflecting lower marketing and
promotional expense, and lower legal and regulatory expense.
General
and administration expense decreased $27 million from the first
quarter of 2015, primarily reflecting lower marketing and promotional
expense.
|
INCOME TAX EXPENSE
|
|
|
|
|
Three
Months Ended
June 30,
|
|
|
|
|
|
Three
Months
Ended
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
(in millions), (unaudited)
|
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
March 31, 2015
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
Change
|
|
Income tax expense
|
|
|
$
|
371
|
|
$
|
297
|
|
|
$
|
74
|
|
|
$
|
258
|
|
|
$
|
113
|
|
$
|
629
|
|
$
|
621
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
Income tax expense in the second quarter of 2015 included a $3 million
net noncash expense, primarily associated with the revaluation of
certain deferred income tax liabilities as a result of domestic state
and local tax changes.
Income tax expense in the first
quarter of 2015 benefited from $69 million of nonrecurring items.
The
second quarter 2014 GAAP tax rate included a $23 million net noncash
expense, primarily associated with the revaluation of certain deferred
income tax liabilities arising from the state and local tax effect of
changes in the Company’s organizational structure. In addition, the
second quarter 2014 GAAP tax rate benefited from an improvement in the
geographic mix of earnings and included a $34 million net tax benefit
related to several favorable nonrecurring items.
|
SUMMARY OF NONOPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
Three Months Ended
March 31,
2015
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
(in millions), (unaudited)
|
|
|
|
|
2015
|
|
2014
|
|
Change
|
|
Change
|
|
2015
|
|
2014
|
|
|
Change
|
|
Nonoperating income (expense), GAAP basis
|
|
|
|
|
|
($41
|
)
|
|
$
|
16
|
|
|
($57
|
)
|
|
$
|
16
|
|
|
|
($57
|
)
|
|
|
($25
|
)
|
|
$
|
33
|
|
|
($58
|
)
|
|
Less: Net income (loss) attributable to NCI
|
|
|
|
|
|
7
|
|
|
|
33
|
|
|
(26
|
)
|
|
|
3
|
|
|
|
4
|
|
|
|
10
|
|
|
|
21
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)(1)
|
|
|
|
|
|
($48
|
)
|
|
|
($17
|
)
|
|
($31
|
)
|
|
$
|
13
|
|
|
|
($61
|
)
|
|
|
($35
|
)
|
|
$
|
12
|
|
|
($47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
economic
investments at
June
30, 2015(3)
|
|
|
Three Months Ended
June 30,
|
|
|
|
Three Months Ended
March 31,
2015
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
(in millions), (unaudited)
|
|
|
2015
|
|
2014
|
|
Change
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
|
Net gain (loss) on investments(1) (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity
|
|
25-30%
|
|
|
$
|
9
|
|
|
$
|
12
|
|
|
($3
|
)
|
|
$
|
1
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
56
|
|
|
($46
|
)
|
|
|
|
Real estate
|
|
5-10%
|
|
|
|
2
|
|
|
|
8
|
|
|
(6
|
)
|
|
|
2
|
|
|
|
-
|
|
|
|
4
|
|
|
|
10
|
|
|
(6
|
)
|
|
|
|
Other alternatives(4)
|
|
10-15%
|
|
|
|
-
|
|
|
|
14
|
|
|
(14
|
)
|
|
|
4
|
|
|
|
(4
|
)
|
|
|
4
|
|
|
|
35
|
|
|
(31
|
)
|
|
|
|
Other investments(5)
|
|
50-55%
|
|
|
|
(14
|
)
|
|
|
3
|
|
|
(17
|
)
|
|
|
6
|
|
|
|
(20
|
)
|
|
|
(8
|
)
|
|
|
5
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
|
|
(3
|
)
|
|
|
37
|
|
|
(40
|
)
|
|
|
13
|
|
|
|
(16
|
)
|
|
|
10
|
|
|
|
106
|
|
|
(96
|
)
|
|
|
|
Other gains(6)
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
45
|
|
|
|
(45
|
)
|
|
|
45
|
|
|
|
-
|
|
|
45
|
|
|
|
|
Investments related to deferred compensation plans
|
|
|
|
2
|
|
|
|
3
|
|
|
(1
|
)
|
|
|
2
|
|
|
|
-
|
|
|
|
4
|
|
|
|
6
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net gain (loss) on investments(1)
|
|
|
|
(1
|
)
|
|
|
40
|
|
|
(41
|
)
|
|
|
60
|
|
|
|
(61
|
)
|
|
|
59
|
|
|
|
112
|
|
|
(53
|
)
|
|
|
|
Interest and dividend income
|
|
|
|
5
|
|
|
|
3
|
|
|
2
|
|
|
|
4
|
|
|
|
1
|
|
|
|
9
|
|
|
|
13
|
|
|
(4
|
)
|
|
|
|
Interest expense
|
|
|
|
(52
|
)
|
|
|
(60
|
)
|
|
8
|
|
|
|
(51
|
)
|
|
|
(1
|
)
|
|
|
(103
|
)
|
|
|
(113
|
)
|
|
10
|
|
|
|
|
Net interest expense
|
|
|
|
(47
|
)
|
|
|
(57
|
)
|
|
10
|
|
|
|
(47
|
)
|
|
|
-
|
|
|
|
(94
|
)
|
|
|
(100
|
)
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)(1)
|
|
|
|
(48
|
)
|
|
|
(17
|
)
|
|
(31
|
)
|
|
|
13
|
|
|
|
(61
|
)
|
|
|
(35
|
)
|
|
|
12
|
|
|
(47
|
)
|
|
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
|
|
(2
|
)
|
|
|
(3
|
)
|
|
1
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
(6
|
)
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), as adjusted(1)
|
|
|
|
($50
|
)
|
|
|
($20
|
)
|
|
($30
|
)
|
|
$
|
11
|
|
|
|
($61
|
)
|
|
|
($39
|
)
|
|
$
|
6
|
|
|
($45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net of net income (loss) attributable to noncontrolling
interests (“NCI”).
(2) Amounts include net gain (loss) on consolidated variable
interest entities.
(3) Percentages represent estimated percentages of
BlackRock’s corporate economic investment portfolio at June 30, 2015.
Economic investment amounts at March 31, 2015 for private equity, real
estate, other alternatives and other investments were $358 million, $118
million, $247 million and $688 million, respectively. See the 2015 first
quarter Form 10-Q for more information.
(4) 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.
(5) Amounts include net gains (losses) related to equity and
fixed income investments, and BlackRock’s seed capital hedging program.
(6) Amount primarily includes a gain related to the
acquisition of certain assets of BlackRock Kelso Capital Advisors LLC.
Highlights
-
Net gain (loss) on investments decreased $41 million from the second
quarter of 2014 due to lower marks in the second quarter of 2015.
Net
gain (loss) on investments decreased $61 million from the first
quarter of 2015, primarily due to lower marks in the second quarter of
2015 and a $40 million gain related to BlackRock Kelso Capital
Advisors LLC recorded in the first quarter of 2015.
ECONOMIC TANGIBLE ASSETS
The Company presents economic tangible assets as additional information
to enable investors to exclude certain assets that have equal and
offsetting liabilities or noncontrolling interests that ultimately do
not have an impact on stockholders’ equity 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.
|
|
|
|
June 30,
|
|
December 31,
|
|
(in billions), (unaudited)
|
|
|
2015 (Est.)
|
|
2014
|
|
Total balance sheet assets
|
|
|
$
|
236
|
|
|
$
|
240
|
|
|
Separate account assets and separate account collateral held under
securities lending agreements
|
|
|
|
(195
|
)
|
|
|
(195
|
)
|
|
Consolidated VIEs/sponsored investment funds(1)
|
|
|
|
(1
|
)
|
|
|
(4
|
)
|
|
Goodwill and intangible assets, net
|
|
|
|
(30
|
)
|
|
|
(30
|
)
|
|
Economic tangible assets
|
|
|
$
|
10
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) During the second quarter of 2015, the Company adopted new
accounting guidance on consolidations effective January 1, 2015 using
the modified retrospective method. As a result of the adoption, the
Company’s estimated balance sheet at June 30, 2015 reflects the
deconsolidation of the Company’s previously consolidated collateralized
loan obligations.
|
|
|
RECONCILIATION OF U.S. GAAP OPERATING INCOME AND OPERATING
MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS ADJUSTED
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
(in millions), (unaudited)
|
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
Operating income, GAAP basis
|
|
|
$
|
1,238
|
|
|
$
|
1,122
|
|
|
$
|
1,067
|
|
|
$
|
2,305
|
|
|
$
|
2,173
|
|
|
Non-GAAP expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
PNC LTIP funding obligation
|
|
|
|
8
|
|
|
|
8
|
|
|
|
8
|
|
|
|
16
|
|
|
|
16
|
|
|
Compensation expense related to appreciation (depreciation) on
deferred compensation plans
|
|
|
|
2
|
|
|
|
3
|
|
|
|
2
|
|
|
|
4
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, as adjusted
|
|
|
|
1,248
|
|
|
|
1,133
|
|
|
|
1,077
|
|
|
|
2,325
|
|
|
|
2,195
|
|
|
Product placement fee costs and commissions
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income used for operating margin measurement
|
|
|
$
|
1,253
|
|
|
$
|
1,133
|
|
|
$
|
1,077
|
|
|
$
|
2,330
|
|
|
$
|
2,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, GAAP basis
|
|
|
$
|
2,905
|
|
|
$
|
2,778
|
|
|
$
|
2,723
|
|
|
$
|
5,628
|
|
|
$
|
5,448
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution and servicing costs
|
|
|
|
(105
|
)
|
|
|
(89
|
)
|
|
|
(99
|
)
|
|
|
(204
|
)
|
|
|
(178
|
)
|
|
Amortization of deferred sales commissions
|
|
|
|
(12
|
)
|
|
|
(14
|
)
|
|
|
(13
|
)
|
|
|
(25
|
)
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue used for operating margin measurement
|
|
|
$
|
2,788
|
|
|
$
|
2,675
|
|
|
$
|
2,611
|
|
|
$
|
5,399
|
|
|
$
|
5,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, GAAP basis
|
|
|
|
42.6
|
%
|
|
|
40.4
|
%
|
|
|
39.2
|
%
|
|
|
41.0
|
%
|
|
|
39.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as adjusted
|
|
|
|
44.9
|
%
|
|
|
42.4
|
%
|
|
|
41.2
|
%
|
|
|
43.2
|
%
|
|
|
41.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
(in millions), (unaudited)
|
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
Nonoperating income (expense), GAAP basis
|
|
|
($41
|
)
|
|
$
|
16
|
|
|
$
|
16
|
|
|
($25
|
)
|
|
$
|
33
|
|
|
Less: Net income (loss) attributable to NCI
|
|
|
7
|
|
|
|
33
|
|
|
|
3
|
|
|
10
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), net of NCI
|
|
|
(48
|
)
|
|
|
(17
|
)
|
|
|
13
|
|
|
(35
|
)
|
|
|
12
|
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
|
(2
|
)
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
(4
|
)
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), less net income (loss)
attributable to NCI, as adjusted
|
|
|
($50
|
)
|
|
|
($20
|
)
|
|
$
|
11
|
|
|
($39
|
)
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
(in millions, except per share data), (unaudited)
|
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
Net income attributable to BlackRock, Inc., GAAP basis
|
|
|
$
|
819
|
|
$
|
808
|
|
$
|
822
|
|
$
|
1,641
|
|
$
|
1,564
|
|
Non-GAAP adjustments, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
PNC LTIP funding obligation
|
|
|
|
6
|
|
|
6
|
|
|
5
|
|
|
11
|
|
|
12
|
|
Income tax matters
|
|
|
|
13
|
|
|
23
|
|
|
3
|
|
|
16
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
|
$
|
838
|
|
$
|
837
|
|
$
|
830
|
|
$
|
1,668
|
|
$
|
1,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common shares outstanding(4)
|
|
|
|
169.1
|
|
|
171.2
|
|
|
169.7
|
|
|
169.4
|
|
|
171.5
|
|
Diluted earnings per common share, GAAP basis(4)
|
|
|
$
|
4.84
|
|
$
|
4.72
|
|
$
|
4.84
|
|
$
|
9.69
|
|
$
|
9.12
|
|
Diluted earnings per common share, as adjusted(4)
|
|
|
$
|
4.96
|
|
$
|
4.89
|
|
$
|
4.89
|
|
$
|
9.85
|
|
$
|
9.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 product placement fee 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. The three and six months ended June 30,
2015 included $13 million and $16 million, respectively, of net noncash
tax expense primarily related to the revaluation of certain deferred tax
liabilities. The three and six months ended June 30, 2014 included a $23
million net noncash tax expense primarily related to the revaluation of
certain deferred tax liabilities. The resulting increase in income taxes
has been excluded from net income attributable to BlackRock, Inc., as
adjusted, as these items will not have a cash flow impact and to ensure
comparability among periods presented.
(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 June 30, 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 May 31, 2015. The performance data
does not include accounts terminated prior to June 30, 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 June 30,
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150715005353/en/
BlackRock, Inc.
Investor Relations
Tom Wojcik, 212-810-8127
or
Media
Relations
Brian Beades, 212-810-5596
Source: BlackRock, Inc.