-
AUM of $4.9 trillion, up 4% year-over-year and 3% sequentially
-
$2 billion of long-term net inflows in the second quarter of 2016, and
$126 billion over the last twelve months, demonstrate strength of
diversified business model
-
2% decline in base fees year-over-year, driven by mix shift from
equities to fixed income and cash
-
13% growth in Aladdin® revenue from the second
quarter of 2015 reflects continued demand for risk management
-
2% decline in diluted EPS (4% as adjusted) year-over-year reflects mix
shift and lower performance fees
-
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
2016
|
|
Q2
2015
|
|
Change
|
|
Q1
2016
|
|
Change
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
AUM
|
|
$
|
4,890,121
|
|
$
|
4,721,294
|
|
4%
|
|
$
|
4,737,165
|
|
3%
|
|
$
|
4,890,121
|
|
$
|
4,721,294
|
|
4%
|
|
GAAP basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
2,804
|
|
$
|
2,905
|
|
(3)%
|
|
$
|
2,624
|
|
7%
|
|
$
|
5,428
|
|
$
|
5,628
|
|
(4)%
|
|
Operating income
|
|
$
|
1,173
|
|
$
|
1,238
|
|
(5)%
|
|
$
|
963
|
|
22%
|
|
$
|
2,136
|
|
$
|
2,305
|
|
(7)%
|
|
Operating margin
|
|
|
41.8%
|
|
|
42.6%
|
|
(80) bps
|
|
|
36.7%
|
|
510 bps
|
|
|
39.4%
|
|
|
41.0%
|
|
(160) bps
|
|
Net income(1)
|
|
$
|
789
|
|
$
|
819
|
|
(4)%
|
|
$
|
657
|
|
20%
|
|
$
|
1,446
|
|
$
|
1,641
|
|
(12)%
|
|
Diluted EPS
|
|
$
|
4.73
|
|
$
|
4.84
|
|
(2)%
|
|
$
|
3.92
|
|
21%
|
|
$
|
8.66
|
|
$
|
9.69
|
|
(11)%
|
|
Weighted average diluted shares
|
|
|
166.6
|
|
|
169.1
|
|
(1)%
|
|
|
167.4
|
|
-%
|
|
|
167.0
|
|
|
169.4
|
|
(1)%
|
|
As Adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income(2)
|
|
$
|
1,179
|
|
$
|
1,248
|
|
(6)%
|
|
$
|
1,047
|
|
13%
|
|
$
|
2,226
|
|
$
|
2,325
|
|
(4)%
|
|
Operating margin(2)
|
|
|
43.9%
|
|
|
44.9%
|
|
(100) bps
|
|
|
41.6%
|
|
230 bps
|
|
|
42.8%
|
|
|
43.2%
|
|
(40) bps
|
|
Net income(1) (2)
|
|
$
|
797
|
|
$
|
838
|
|
(5)%
|
|
$
|
711
|
|
12%
|
|
$
|
1,508
|
|
$
|
1,668
|
|
(10)%
|
|
Diluted EPS(2)
|
|
$
|
4.78
|
|
$
|
4.96
|
|
(4)%
|
|
$
|
4.25
|
|
12%
|
|
$
|
9.03
|
|
$
|
9.85
|
|
(8)%
|
|
|
|
|
|
(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, 2016.
“Our clients are facing unprecedented challenges as they attempt to
navigate the current investment environment,” said Chairman and Chief
Executive Officer Laurence D. Fink. “Political and macroeconomic
uncertainty, historically low yields and elevated market volatility are
leading clients to pause, as evidenced by more than $55 trillion in bank
deposits in the US, China and Japan alone.
“BlackRock generated $2 billion of long-term net flows in the quarter
and $126 billion of inflows over the last twelve months, despite the
impact of market headwinds and a slowdown in client activity. Beta and
mix shift favored fixed income and cash relative to equities, and
impacted second quarter base fees year-over-year.
“This market environment is creating greater opportunities for BlackRock
to engage with clients – leading to more frequent and substantive
conversations than ever before. Clients are seeking advice,
goal-oriented investment solutions and risk management and technological
expertise. The differentiated platform we have purposely built at
BlackRock is resonating with clients. Our combination of active, index
and alternative investment capabilities, powered by Aladdin’s
industry-leading technology and risk management, positions us well to
capture flows when client activity accelerates.
“We are seeing increasing evidence that our recent strategic investments
are driving growth. iShares generated $16 billion of net new
business during the quarter, with significant strength in fixed income
and ‘smart-beta’ ETFs, as clients utilize these tools to manage risk and
minimize volatility. We saw another strong quarter of capital raising in
infrastructure, bringing total invested and committed capital to $8
billion, providing clients access to attractive long-term returns and
stimulating needed economic growth. Finally, Aladdin revenue grew
13% year-over-year. The increasing impact of technology on our industry
continues to drive demand, as we signed one of our largest ever
institutional clients during the quarter, and we remain focused on
meeting the growing need for technology solutions in the retail sector.
“Now more than ever, BlackRock is uniquely positioned to provide
innovative solutions to our clients' complex investment and technology
needs. Our focus remains on investing for the future so BlackRock can
help clients meet their financial goals and deliver long-term value for
shareholders.”
|
|
|
RESULTS BY CLIENT TYPE
|
|
(in millions), (unaudited)
|
|
Q2 2016
Net flows
|
|
June 30, 2016
AUM
|
|
Q2 2016
Base Fees(1)
|
|
June 30, 2016
AUM
% of Total
|
|
Q2 2016
Base Fees(1)
%
of Total
|
|
Retail
|
|
$
|
(6,292
|
)
|
|
$
|
544,427
|
|
$
|
806
|
|
12
|
%
|
|
34
|
%
|
|
iShares
|
|
|
15,675
|
|
|
|
1,154,122
|
|
|
845
|
|
26
|
%
|
|
36
|
%
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
(6,717
|
)
|
|
|
1,009,721
|
|
|
479
|
|
22
|
%
|
|
20
|
%
|
|
Index
|
|
|
(1,129
|
)
|
|
|
1,796,654
|
|
|
240
|
|
40
|
%
|
|
10
|
%
|
|
Total institutional
|
|
|
(7,846
|
)
|
|
|
2,806,375
|
|
|
719
|
|
62
|
%
|
|
30
|
%
|
|
Total long-term
|
|
$
|
1,537
|
|
|
$
|
4,504,924
|
|
$
|
2,370
|
|
100
|
%
|
|
100
|
%
|
|
|
|
RESULTS BY PRODUCT TYPE
|
|
(in millions), (unaudited)
|
|
Q2 2016
Net flows
|
|
June 30, 2016
AUM
|
|
Q2 2016
Base Fees(1)
|
|
June 30, 2016
AUM
% of Total
|
|
Q2 2016
Base Fees(1)
%
of Total
|
|
Equity
|
|
$
|
(2,215
|
)
|
|
$
|
2,432,558
|
|
$
|
1,236
|
|
54
|
%
|
|
52
|
%
|
|
Fixed income
|
|
|
5,494
|
|
|
|
1,566,656
|
|
|
655
|
|
34
|
%
|
|
28
|
%
|
|
Multi-asset
|
|
|
(3,099
|
)
|
|
|
386,520
|
|
|
291
|
|
9
|
%
|
|
12
|
%
|
|
Alternatives
|
|
|
1,357
|
|
|
|
119,190
|
|
|
188
|
|
3
|
%
|
|
8
|
%
|
|
Total long-term
|
|
$
|
1,537
|
|
|
$
|
4,504,924
|
|
$
|
2,370
|
|
100
|
%
|
|
100
|
%
|
|
|
|
RESULTS BY INVESTMENT STYLE
|
|
(in millions), (unaudited)
|
|
Q2 2016
Net flows
|
|
June 30, 2016
AUM
|
|
Q2 2016
Base Fees(1)
|
|
June 30, 2016
AUM
% of Total
|
|
Q2 2016
Base Fees(1)
%
of Total
|
|
Active
|
|
$
|
(12,812
|
)
|
|
$
|
1,510,424
|
|
$
|
1,277
|
|
34
|
%
|
|
54
|
%
|
|
Index and iShares
|
|
|
14,349
|
|
|
|
2,994,500
|
|
|
1,093
|
|
66
|
%
|
|
46
|
%
|
|
Total long-term
|
|
$
|
1,537
|
|
|
$
|
4,504,924
|
|
$
|
2,370
|
|
100
|
%
|
|
100
|
%
|
|
(1) Base fees include investment advisory,
administration fees and securities lending revenue.
|
|
|
Long-Term Business Highlights
Long-term net inflows of $4.1 billion and $9.3 billion from clients in
the Americas and EMEA regions, respectively, were partially offset by
net outflows of $11.9 billion from clients in Asia-Pacific. At June 30,
2016, BlackRock managed 63% of its long-term AUM for investors in the
Americas and 37% for clients in EMEA and Asia-Pacific.
A discussion of the Company’s net flows by client type for the second
quarter of 2016 is presented below.
-
Retail long-term net outflows of $6.3 billion reflected
net outflows of $2.7 billion and $3.6 billion from the United States
and internationally, respectively. Fixed income saw net inflows of
$2.3 billion, paced by flows into municipals and core bond funds.
Equity net outflows of $4.9 billion were primarily related to outflows
from international equities driven by market uncertainty and
de-risking. Multi-asset net outflows of $2.6 billion were largely due
to outflows from world allocation strategies.
-
iShares long-term net inflows of $15.7 billion were
driven by fixed income net inflows of $10.0 billion, diversified
across corporate, emerging market and municipal bond funds. Equity net
inflows of $3.4 billion reflected strong flows into the Core Series
and Minimum Volatility funds. Commodities iShares generated
$2.1 billion of net inflows.
-
Institutional active long-term net outflows of $6.7
billion were primarily due to fixed income net outflows of $7.0
billion, driven by client re-allocation activity.
-
Institutional index long-term net outflows of $1.1
billion reflected equity net outflows of $1.2 billion.
Cash management AUM increased 28% to $374.7 billion, primarily
reflecting $80.6 billion in AUM acquired in the BofA® Global
Capital Management transaction.
Advisory AUM ended the second quarter at $10.5 billion.
|
INVESTMENT PERFORMANCE AT JUNE 30, 2016 (1)
|
|
|
|
One-year period
|
|
Three-year period
|
|
Five-year period
|
|
Fixed Income:
|
|
|
|
|
|
|
Actively managed AUM above benchmark or peer
median
|
|
|
|
|
|
|
|
Taxable
|
|
53
|
%
|
|
80
|
%
|
|
91
|
%
|
|
Tax-exempt
|
|
46
|
%
|
|
48
|
%
|
|
70
|
%
|
|
Index AUM within or above applicable tolerance
|
|
93
|
%
|
|
99
|
%
|
|
99
|
%
|
|
Equity:
|
|
|
|
|
|
|
Actively managed AUM above benchmark or peer
median
|
|
|
|
|
|
|
|
Fundamental
|
|
63
|
%
|
|
67
|
%
|
|
51
|
%
|
|
Scientific
|
|
40
|
%
|
|
82
|
%
|
|
92
|
%
|
|
Index AUM within or above applicable tolerance
|
|
96
|
%
|
|
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 Thursday, July 14, 2016 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 38298849). A
live, listen-only webcast will also be available via the investor
relations section of www.blackrock.com.
Both the teleconference and webcast will be available for replay by
12:30 p.m. (Eastern Time) on Thursday, July 14, 2016 and ending at
midnight on Thursday, July 28, 2016. 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 38298849. To access
the webcast, please visit the investor relations section of www.blackrock.com.
About BlackRock
BlackRock is a global leader in investment management, risk management
and advisory services for institutional and retail clients. At June 30,
2016, BlackRock’s AUM was $4.890 trillion. BlackRock helps clients
around the world 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®. As of June 30, 2016, the firm had
approximately 12,700 employees in more than 30 countries and a major
presence in 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
|
|
|
|
|
|
|
June 30,
|
|
|
|
March 31,
|
|
|
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
Change
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and
securities
lending revenue
|
|
$2,489
|
|
|
$2,534
|
|
|
$(45
|
)
|
|
$2,359
|
|
|
$130
|
|
|
|
Investment advisory performance fees
|
|
74
|
|
|
136
|
|
|
(62
|
)
|
|
34
|
|
|
40
|
|
|
|
BlackRock Solutions and advisory
|
|
172
|
|
|
161
|
|
|
11
|
|
|
171
|
|
|
1
|
|
|
|
Distribution fees
|
|
11
|
|
|
13
|
|
|
(2
|
)
|
|
11
|
|
|
-
|
|
|
|
Other revenue
|
|
58
|
|
|
61
|
|
|
(3
|
)
|
|
49
|
|
|
9
|
|
|
|
Total revenue
|
|
2,804
|
|
|
2,905
|
|
|
(101
|
)
|
|
2,624
|
|
|
180
|
|
|
|
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
977
|
|
|
1,012
|
|
|
(35
|
)
|
|
947
|
|
|
30
|
|
|
|
Distribution and servicing costs
|
|
109
|
|
|
105
|
|
|
4
|
|
|
97
|
|
|
12
|
|
|
|
Amortization of deferred sales commissions
|
|
9
|
|
|
12
|
|
|
(3
|
)
|
|
10
|
|
|
(1
|
)
|
|
|
Direct fund expense
|
|
195
|
|
|
191
|
|
|
4
|
|
|
188
|
|
|
7
|
|
|
|
General and administration
|
|
316
|
|
|
312
|
|
|
4
|
|
|
318
|
|
|
(2
|
)
|
|
|
Restructuring charge
|
|
-
|
|
|
-
|
|
|
-
|
|
|
76
|
|
|
(76
|
)
|
|
|
Amortization of intangible assets
|
|
25
|
|
|
35
|
|
|
(10
|
)
|
|
25
|
|
|
-
|
|
|
|
Total expense
|
|
1,631
|
|
|
1,667
|
|
|
(36
|
)
|
|
1,661
|
|
|
(30
|
)
|
|
|
Operating income
|
|
1,173
|
|
|
1,238
|
|
|
(65
|
)
|
|
963
|
|
|
210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
20
|
|
|
6
|
|
|
14
|
|
|
(2
|
)
|
|
22
|
|
|
|
Interest and dividend income
|
|
6
|
|
|
5
|
|
|
1
|
|
|
5
|
|
|
1
|
|
|
|
Interest expense
|
|
(51
|
)
|
|
(52
|
)
|
|
1
|
|
|
(51
|
)
|
|
-
|
|
|
|
Total nonoperating income (expense)
|
|
(25
|
)
|
|
(41
|
)
|
|
16
|
|
|
(48
|
)
|
|
23
|
|
|
|
Income before income taxes
|
|
1,148
|
|
|
1,197
|
|
|
(49
|
)
|
|
915
|
|
|
233
|
|
|
|
Income tax expense
|
|
353
|
|
|
371
|
|
|
(18
|
)
|
|
268
|
|
|
85
|
|
|
|
Net income
|
|
795
|
|
|
826
|
|
|
(31
|
)
|
|
647
|
|
|
148
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling
interests
|
|
6
|
|
|
7
|
|
|
(1
|
)
|
|
(10
|
)
|
|
16
|
|
|
|
Net income attributable to BlackRock, Inc.
|
|
$789
|
|
|
$819
|
|
|
$(30
|
)
|
|
$657
|
|
|
$132
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
164,758,612
|
|
|
166,616,558
|
|
|
(1,857,946
|
)
|
|
165,388,130
|
|
|
(629,518
|
)
|
|
|
Diluted
|
|
166,639,290
|
|
|
169,114,759
|
|
|
(2,475,469
|
)
|
|
167,398,938
|
|
|
(759,648
|
)
|
|
|
Earnings per share attributable to BlackRock, Inc.
common
stockholders (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$4.79
|
|
|
$4.92
|
|
|
$(0.13
|
)
|
|
$3.97
|
|
|
$0.82
|
|
|
|
Diluted
|
|
$4.73
|
|
|
$4.84
|
|
|
$(0.11
|
)
|
|
$3.92
|
|
|
$0.81
|
|
|
|
Cash dividends declared and paid per share
|
|
$2.29
|
|
|
$2.18
|
|
|
$0.11
|
|
|
$2.29
|
|
|
$ -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
$4,890,121
|
|
|
$4,721,294
|
|
|
$168,827
|
|
|
$4,737,165
|
|
|
$152,956
|
|
|
|
Shares outstanding (end of period)
|
|
164,463,297
|
|
|
166,379,267
|
|
|
(1,915,970
|
)
|
|
165,174,069
|
|
|
(710,772
|
)
|
|
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
41.8
|
%
|
|
42.6
|
%
|
|
(80) bps
|
|
36.7
|
%
|
|
510 bps
|
|
|
Effective tax rate
|
|
30.9
|
%
|
|
31.2
|
%
|
|
(30) bps
|
|
29.0
|
%
|
|
190 bps
|
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (1)
|
|
$1,179
|
|
|
$1,248
|
|
|
$(69
|
)
|
|
$1,047
|
|
|
$132
|
|
|
|
Operating margin (1)
|
|
43.9
|
%
|
|
44.9
|
%
|
|
(100) bps
|
|
41.6
|
%
|
|
230 bps
|
|
|
Nonoperating income (expense), less net income
(loss)
attributable to noncontrolling interests (2)
|
|
$(31
|
)
|
|
$(50
|
)
|
|
$19
|
|
|
$(38
|
)
|
|
$7
|
|
|
|
Net income attributable to BlackRock, Inc. (3)
|
|
$797
|
|
|
$838
|
|
|
$(41
|
)
|
|
$711
|
|
|
$86
|
|
|
|
Diluted earnings attributable to BlackRock, Inc.
common
stockholders per share (3) (4)
|
|
$4.78
|
|
|
$4.96
|
|
|
$(0.18
|
)
|
|
$4.25
|
|
|
$0.53
|
|
|
|
Effective tax rate
|
|
30.6
|
%
|
|
30.1
|
%
|
|
50 bps
|
|
29.6
|
%
|
|
100 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 shares and per share data), (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
$4,848
|
|
|
$4,924
|
|
|
$(76
|
)
|
|
Investment advisory performance fees
|
|
108
|
|
|
244
|
|
|
(136
|
)
|
|
BlackRock Solutions and advisory
|
|
343
|
|
|
308
|
|
|
35
|
|
|
Distribution fees
|
|
22
|
|
|
30
|
|
|
(8
|
)
|
|
Other revenue
|
|
107
|
|
|
122
|
|
|
(15
|
)
|
|
Total revenue
|
|
5,428
|
|
|
5,628
|
|
|
(200
|
)
|
|
Expense
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
1,924
|
|
|
1,993
|
|
|
(69
|
)
|
|
Distribution and servicing costs
|
|
206
|
|
|
204
|
|
|
2
|
|
|
Amortization of deferred sales commissions
|
|
19
|
|
|
25
|
|
|
(6
|
)
|
|
Direct fund expense
|
|
383
|
|
|
380
|
|
|
3
|
|
|
General and administration
|
|
634
|
|
|
651
|
|
|
(17
|
)
|
|
Restructuring charge
|
|
76
|
|
|
-
|
|
|
76
|
|
|
Amortization of intangible assets
|
|
50
|
|
|
70
|
|
|
(20
|
)
|
|
Total expense
|
|
3,292
|
|
|
3,323
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
2,136
|
|
|
2,305
|
|
|
(169
|
)
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
18
|
|
|
69
|
|
|
(51
|
)
|
|
Interest and dividend income
|
|
11
|
|
|
9
|
|
|
2
|
|
|
Interest expense
|
|
(102
|
)
|
|
(103
|
)
|
|
1
|
|
|
Total nonoperating income (expense)
|
|
(73
|
)
|
|
(25
|
)
|
|
(48
|
)
|
|
Income before income taxes
|
|
2,063
|
|
|
2,280
|
|
|
(217
|
)
|
|
Income tax expense
|
|
621
|
|
|
629
|
|
|
(8
|
)
|
|
Net income
|
|
1,442
|
|
|
1,651
|
|
|
(209
|
)
|
|
Less:
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
(4
|
)
|
|
10
|
|
|
(14
|
)
|
|
Net income attributable to BlackRock, Inc.
|
|
$1,446
|
|
|
$1,641
|
|
|
$(195
|
)
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
165,073,371
|
|
|
166,851,492
|
|
|
(1,778,121
|
)
|
|
Diluted
|
|
167,023,559
|
|
|
169,418,964
|
|
|
(2,395,405
|
)
|
|
Earnings per share attributable to BlackRock, Inc. common
stockholders (4)
|
|
|
|
|
|
|
|
Basic
|
|
$8.76
|
|
|
$9.84
|
|
|
$(1.08
|
)
|
|
Diluted
|
|
$8.66
|
|
|
$9.69
|
|
|
$(1.03
|
)
|
|
Cash dividends declared and paid per share
|
|
$4.58
|
|
|
$4.36
|
|
|
$0.22
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
$4,890,121
|
|
|
$4,721,294
|
|
|
$168,827
|
|
|
Shares outstanding (end of period)
|
|
164,463,297
|
|
|
166,379,267
|
|
|
(1,915,970
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
Operating margin
|
|
39.4
|
%
|
|
41.0
|
%
|
|
(160) bps
|
|
Effective tax rate
|
|
30.1
|
%
|
|
27.7
|
%
|
|
240 bps
|
|
As adjusted:
|
|
|
|
|
|
|
|
Operating income (1)
|
|
$2,226
|
|
|
$2,325
|
|
|
$(99
|
)
|
|
Operating margin (1)
|
|
42.8
|
%
|
|
43.2
|
%
|
|
(40) bps
|
|
Nonoperating income (expense), less net income (loss) attributable
to
noncontrolling interests (2)
|
|
$(69
|
)
|
|
$(39
|
)
|
|
$(30
|
)
|
|
Net income attributable to BlackRock, Inc. (3)
|
|
$1,508
|
|
|
$1,668
|
|
|
$(160
|
)
|
|
Diluted earnings attributable to BlackRock, Inc. common
stockholders per
share (3) (4)
|
|
$9.03
|
|
|
$9.85
|
|
|
$(0.82
|
)
|
|
Effective tax rate
|
|
30.1
|
%
|
|
27.0
|
%
|
|
310 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
inflows
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2016
|
|
(outflows)
|
|
Acquisition (1)
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$193,436
|
|
$(4,887
|
)
|
|
$ -
|
|
$6,091
|
|
|
$(2,660
|
)
|
|
$191,980
|
|
$194,197
|
|
Fixed Income
|
|
217,209
|
|
2,317
|
|
|
-
|
|
5,250
|
|
|
(1,066
|
)
|
|
223,710
|
|
221,062
|
|
Multi-Asset
|
|
113,291
|
|
(2,581
|
)
|
|
-
|
|
1,271
|
|
|
(525
|
)
|
|
111,456
|
|
112,902
|
|
Alternatives
|
|
18,730
|
|
(1,141
|
)
|
|
-
|
|
(162
|
)
|
|
(146
|
)
|
|
17,281
|
|
17,971
|
|
Retail subtotal
|
|
542,666
|
|
(6,292
|
)
|
|
-
|
|
12,450
|
|
|
(4,397
|
)
|
|
544,427
|
|
546,132
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
818,104
|
|
3,431
|
|
|
-
|
|
7,661
|
|
|
(2,428
|
)
|
|
826,768
|
|
826,127
|
|
Fixed Income
|
|
291,132
|
|
10,026
|
|
|
-
|
|
5,720
|
|
|
(1,982
|
)
|
|
304,896
|
|
297,883
|
|
Multi-Asset
|
|
2,166
|
|
122
|
|
|
-
|
|
41
|
|
|
(1
|
)
|
|
2,328
|
|
2,255
|
|
Alternatives
|
|
16,152
|
|
2,096
|
|
|
-
|
|
1,915
|
|
|
(33
|
)
|
|
20,130
|
|
17,905
|
|
iShares subtotal
|
|
1,127,554
|
|
15,675
|
|
|
-
|
|
15,337
|
|
|
(4,444
|
)
|
|
1,154,122
|
|
1,144,170
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
118,833
|
|
482
|
|
|
-
|
|
2,529
|
|
|
(1,717
|
)
|
|
120,127
|
|
120,312
|
|
Fixed Income
|
|
544,244
|
|
(6,977
|
)
|
|
-
|
|
13,064
|
|
|
(645
|
)
|
|
549,686
|
|
545,509
|
|
Multi-Asset
|
|
262,010
|
|
(131
|
)
|
|
-
|
|
7,024
|
|
|
(3,966
|
)
|
|
264,937
|
|
263,270
|
|
Alternatives
|
|
75,104
|
|
(91
|
)
|
|
-
|
|
526
|
|
|
(568
|
)
|
|
74,971
|
|
75,404
|
|
Active subtotal
|
|
1,000,191
|
|
(6,717
|
)
|
|
-
|
|
23,143
|
|
|
(6,896
|
)
|
|
1,009,721
|
|
1,004,495
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,277,802
|
|
(1,241
|
)
|
|
-
|
|
20,404
|
|
|
(3,282
|
)
|
|
1,293,683
|
|
1,292,312
|
|
Fixed Income
|
|
472,568
|
|
128
|
|
|
-
|
|
30,198
|
|
|
(14,530
|
)
|
|
488,364
|
|
477,717
|
|
Multi-Asset
|
|
7,776
|
|
(509
|
)
|
|
-
|
|
330
|
|
|
202
|
|
|
7,799
|
|
7,570
|
|
Alternatives
|
|
6,003
|
|
493
|
|
|
-
|
|
487
|
|
|
(175
|
)
|
|
6,808
|
|
6,406
|
|
Index subtotal
|
|
1,764,149
|
|
(1,129
|
)
|
|
-
|
|
51,419
|
|
|
(17,785
|
)
|
|
1,796,654
|
|
1,784,005
|
|
Institutional subtotal
|
|
2,764,340
|
|
(7,846
|
)
|
|
-
|
|
74,562
|
|
|
(24,681
|
)
|
|
2,806,375
|
|
2,788,500
|
|
Long-term
|
|
4,434,560
|
|
1,537
|
|
|
-
|
|
102,349
|
|
|
(33,522
|
)
|
|
4,504,924
|
|
4,478,802
|
|
Cash Management
|
|
291,986
|
|
5,015
|
|
|
80,635
|
|
8
|
|
|
(2,960
|
)
|
|
374,684
|
|
353,432
|
|
Advisory (4)
|
|
10,619
|
|
(48
|
)
|
|
-
|
|
15
|
|
|
(73
|
)
|
|
10,513
|
|
10,624
|
|
Total
|
|
$4,737,165
|
|
$6,504
|
|
|
$80,635
|
|
$102,372
|
|
|
$(36,555
|
)
|
|
$4,890,121
|
|
$4,842,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Product (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
inflows
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2016
|
|
(outflows)
|
|
Acquisition
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$276,281
|
|
$(3,880
|
)
|
|
$ -
|
|
$7,093
|
|
|
$(3,146
|
)
|
|
$276,348
|
|
$278,552
|
|
iShares
|
|
818,104
|
|
3,431
|
|
|
-
|
|
7,661
|
|
|
(2,428
|
)
|
|
826,768
|
|
826,127
|
|
Non-ETF index
|
|
1,313,790
|
|
(1,766
|
)
|
|
-
|
|
21,931
|
|
|
(4,513
|
)
|
|
1,329,442
|
|
1,328,269
|
|
Equity subtotal
|
|
2,408,175
|
|
(2,215
|
)
|
|
-
|
|
36,685
|
|
|
(10,087
|
)
|
|
2,432,558
|
|
2,432,948
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
753,711
|
|
(4,987
|
)
|
|
-
|
|
17,962
|
|
|
(1,255
|
)
|
|
765,431
|
|
758,738
|
|
iShares
|
|
291,132
|
|
10,026
|
|
|
-
|
|
5,720
|
|
|
(1,982
|
)
|
|
304,896
|
|
297,883
|
|
Non-ETF index
|
|
480,310
|
|
455
|
|
|
-
|
|
30,550
|
|
|
(14,986
|
)
|
|
496,329
|
|
485,550
|
|
Fixed income subtotal
|
|
1,525,153
|
|
5,494
|
|
|
-
|
|
54,232
|
|
|
(18,223
|
)
|
|
1,566,656
|
|
1,542,171
|
|
Multi-asset
|
|
385,243
|
|
(3,099
|
)
|
|
-
|
|
8,666
|
|
|
(4,290
|
)
|
|
386,520
|
|
385,997
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
91,639
|
|
(1,153
|
)
|
|
-
|
|
313
|
|
|
(887
|
)
|
|
89,912
|
|
91,072
|
|
Currency and
commodities (5)
|
|
24,350
|
|
2,510
|
|
|
-
|
|
2,453
|
|
|
(35
|
)
|
|
29,278
|
|
26,614
|
|
Alternatives subtotal
|
|
115,989
|
|
1,357
|
|
|
-
|
|
2,766
|
|
|
(922
|
)
|
|
119,190
|
|
117,686
|
|
Long-term
|
|
$4,434,560
|
|
$1,537
|
|
|
$ -
|
|
$102,349
|
|
|
$(33,522
|
)
|
|
$4,504,924
|
|
$4,478,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
inflows
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2016
|
|
(outflows)
|
|
Acquisition
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
Active
|
|
$1,499,128
|
|
$(12,812
|
)
|
|
$ -
|
|
$33,714
|
|
|
$(9,606
|
)
|
|
$1,510,424
|
|
$1,506,836
|
|
Index and iShares
|
|
2,935,432
|
|
14,349
|
|
|
-
|
|
68,635
|
|
|
(23,916
|
)
|
|
2,994,500
|
|
2,971,966
|
|
Long-term
|
|
$4,434,560
|
|
$1,537
|
|
|
$ -
|
|
$102,349
|
|
|
$(33,522
|
)
|
|
$4,504,924
|
|
$4,478,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amount represents $80.6 billion of AUM acquired in the BofA Global
Capital Management transaction in April 2016.
|
|
(2)
|
|
Foreign exchange reflects the impact of translating 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-to-Date Changes by Client Type and Product
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition (1)
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$193,755
|
|
$(5,282
|
)
|
|
$ -
|
|
$5,380
|
|
|
$(1,873
|
)
|
|
$191,980
|
|
$190,233
|
|
Fixed Income
|
|
212,653
|
|
4,438
|
|
|
-
|
|
6,701
|
|
|
(82
|
)
|
|
223,710
|
|
217,268
|
|
Multi-Asset
|
|
115,307
|
|
(4,217
|
)
|
|
-
|
|
782
|
|
|
(416
|
)
|
|
111,456
|
|
112,436
|
|
Alternatives
|
|
19,410
|
|
(1,591
|
)
|
|
-
|
|
(613
|
)
|
|
75
|
|
|
17,281
|
|
18,472
|
|
Retail subtotal
|
|
541,125
|
|
(6,652
|
)
|
|
-
|
|
12,250
|
|
|
(2,296
|
)
|
|
544,427
|
|
538,409
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
823,156
|
|
(1,255
|
)
|
|
-
|
|
2,120
|
|
|
2,747
|
|
|
826,768
|
|
805,871
|
|
Fixed Income
|
|
254,190
|
|
37,508
|
|
|
-
|
|
12,519
|
|
|
679
|
|
|
304,896
|
|
283,690
|
|
Multi-Asset
|
|
2,730
|
|
(464
|
)
|
|
-
|
|
54
|
|
|
8
|
|
|
2,328
|
|
2,289
|
|
Alternatives
|
|
12,485
|
|
4,133
|
|
|
-
|
|
3,480
|
|
|
32
|
|
|
20,130
|
|
16,068
|
|
iShares subtotal
|
|
1,092,561
|
|
39,922
|
|
|
-
|
|
18,173
|
|
|
3,466
|
|
|
1,154,122
|
|
1,107,918
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
121,442
|
|
(1,288
|
)
|
|
-
|
|
1,005
|
|
|
(1,032
|
)
|
|
120,127
|
|
117,890
|
|
Fixed Income
|
|
514,428
|
|
3,907
|
|
|
-
|
|
28,240
|
|
|
3,111
|
|
|
549,686
|
|
534,858
|
|
Multi-Asset
|
|
252,041
|
|
1,131
|
|
|
-
|
|
12,011
|
|
|
(246
|
)
|
|
264,937
|
|
257,134
|
|
Alternatives
|
|
74,941
|
|
331
|
|
|
-
|
|
(17
|
)
|
|
(284
|
)
|
|
74,971
|
|
74,909
|
|
Active subtotal
|
|
962,852
|
|
4,081
|
|
|
-
|
|
41,239
|
|
|
1,549
|
|
|
1,009,721
|
|
984,791
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,285,419
|
|
(12,067
|
)
|
|
-
|
|
15,021
|
|
|
5,310
|
|
|
1,293,683
|
|
1,266,701
|
|
Fixed Income
|
|
441,097
|
|
11,814
|
|
|
-
|
|
50,001
|
|
|
(14,548
|
)
|
|
488,364
|
|
463,891
|
|
Multi-Asset
|
|
6,258
|
|
(117
|
)
|
|
-
|
|
1,246
|
|
|
412
|
|
|
7,799
|
|
7,186
|
|
Alternatives
|
|
6,003
|
|
635
|
|
|
-
|
|
408
|
|
|
(238
|
)
|
|
6,808
|
|
6,237
|
|
Index subtotal
|
|
1,738,777
|
|
265
|
|
|
-
|
|
66,676
|
|
|
(9,064
|
)
|
|
1,796,654
|
|
1,744,015
|
|
Institutional subtotal
|
|
2,701,629
|
|
4,346
|
|
|
-
|
|
107,915
|
|
|
(7,515
|
)
|
|
2,806,375
|
|
2,728,806
|
|
Long-term
|
|
4,335,315
|
|
37,616
|
|
|
-
|
|
138,338
|
|
|
(6,345
|
)
|
|
4,504,924
|
|
4,375,133
|
|
Cash Management
|
|
299,884
|
|
(3,140
|
)
|
|
80,635
|
|
(13
|
)
|
|
(2,682
|
)
|
|
374,684
|
|
328,543
|
|
Advisory (4)
|
|
10,213
|
|
(145
|
)
|
|
-
|
|
(107
|
)
|
|
552
|
|
|
10,513
|
|
10,433
|
|
Total
|
|
$4,645,412
|
|
$34,331
|
|
|
$80,635
|
|
$138,218
|
|
|
$(8,475
|
)
|
|
$4,890,121
|
|
$4,714,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date Component Changes by Product (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$281,319
|
|
$(7,850
|
)
|
|
$ -
|
|
$4,257
|
|
|
$(1,378
|
)
|
|
$276,348
|
|
$273,821
|
|
iShares
|
|
823,156
|
|
(1,255
|
)
|
|
-
|
|
2,120
|
|
|
2,747
|
|
|
826,768
|
|
805,871
|
|
Non-ETF index
|
|
1,319,297
|
|
(10,787
|
)
|
|
-
|
|
17,149
|
|
|
3,783
|
|
|
1,329,442
|
|
1,301,003
|
|
Equity subtotal
|
|
2,423,772
|
|
(19,892
|
)
|
|
-
|
|
23,526
|
|
|
5,152
|
|
|
2,432,558
|
|
2,380,695
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
719,653
|
|
7,928
|
|
|
-
|
|
34,272
|
|
|
3,578
|
|
|
765,431
|
|
744,516
|
|
iShares
|
|
254,190
|
|
37,508
|
|
|
-
|
|
12,519
|
|
|
679
|
|
|
304,896
|
|
283,690
|
|
Non-ETF index
|
|
448,525
|
|
12,231
|
|
|
-
|
|
50,670
|
|
|
(15,097
|
)
|
|
496,329
|
|
471,501
|
|
Fixed income subtotal
|
|
1,422,368
|
|
57,667
|
|
|
-
|
|
97,461
|
|
|
(10,840
|
)
|
|
1,566,656
|
|
1,499,707
|
|
Multi-asset
|
|
376,336
|
|
(3,667
|
)
|
|
-
|
|
14,093
|
|
|
(242
|
)
|
|
386,520
|
|
379,045
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
92,085
|
|
(973
|
)
|
|
-
|
|
(683
|
)
|
|
(517
|
)
|
|
89,912
|
|
91,079
|
|
Currency and
commodities (5)
|
|
20,754
|
|
4,481
|
|
|
-
|
|
3,941
|
|
|
102
|
|
|
29,278
|
|
24,607
|
|
Alternatives subtotal
|
|
112,839
|
|
3,508
|
|
|
-
|
|
3,258
|
|
|
(415
|
)
|
|
119,190
|
|
115,686
|
|
Long-term
|
|
$4,335,315
|
|
$37,616
|
|
|
$ -
|
|
$138,338
|
|
|
$(6,345
|
)
|
|
$4,504,924
|
|
$4,375,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
Active
|
|
$1,462,672
|
|
$(4,266
|
)
|
|
$ -
|
|
$50,688
|
|
|
$1,330
|
|
|
$1,510,424
|
|
$1,481,289
|
|
Index and iShares
|
|
2,872,643
|
|
41,882
|
|
|
-
|
|
87,650
|
|
|
(7,675
|
)
|
|
2,994,500
|
|
2,893,844
|
|
Long-term
|
|
$4,335,315
|
|
$37,616
|
|
|
$ -
|
|
$138,338
|
|
|
$(6,345
|
)
|
|
$4,504,924
|
|
$4,375,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amount represents $80.6 billion of AUM acquired in the BofA Global
Capital Management transaction in April 2016.
|
|
(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
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
inflows
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition (1)
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$203,373
|
|
$2,630
|
|
|
$ -
|
|
$(9,364
|
)
|
|
$(4,659
|
)
|
|
$191,980
|
|
$193,092
|
|
Fixed Income
|
|
209,056
|
|
12,963
|
|
|
-
|
|
2,736
|
|
|
(1,045
|
)
|
|
223,710
|
|
214,434
|
|
Multi-Asset
|
|
129,188
|
|
(7,639
|
)
|
|
366
|
|
(9,441
|
)
|
|
(1,018
|
)
|
|
111,456
|
|
117,523
|
|
Alternatives
|
|
19,445
|
|
(1,029
|
)
|
|
-
|
|
(1,039
|
)
|
|
(96
|
)
|
|
17,281
|
|
19,089
|
|
Retail subtotal
|
|
561,062
|
|
6,925
|
|
|
366
|
|
(17,108
|
)
|
|
(6,818
|
)
|
|
544,427
|
|
544,138
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
828,057
|
|
51,620
|
|
|
-
|
|
(49,596
|
)
|
|
(3,313
|
)
|
|
826,768
|
|
804,479
|
|
Fixed Income
|
|
230,735
|
|
67,678
|
|
|
-
|
|
8,511
|
|
|
(2,028
|
)
|
|
304,896
|
|
265,625
|
|
Multi-Asset
|
|
1,844
|
|
527
|
|
|
-
|
|
(35
|
)
|
|
(8
|
)
|
|
2,328
|
|
2,098
|
|
Alternatives
|
|
14,953
|
|
3,620
|
|
|
-
|
|
1,601
|
|
|
(44
|
)
|
|
20,130
|
|
15,033
|
|
iShares subtotal
|
|
1,075,589
|
|
123,445
|
|
|
-
|
|
(39,519
|
)
|
|
(5,393
|
)
|
|
1,154,122
|
|
1,087,235
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
128,032
|
|
(158
|
)
|
|
-
|
|
(3,722
|
)
|
|
(4,025
|
)
|
|
120,127
|
|
120,420
|
|
Fixed Income
|
|
517,251
|
|
4,634
|
|
|
-
|
|
29,597
|
|
|
(1,796
|
)
|
|
549,686
|
|
529,160
|
|
Multi-Asset
|
|
256,964
|
|
3,406
|
|
|
-
|
|
9,684
|
|
|
(5,117
|
)
|
|
264,937
|
|
256,501
|
|
Alternatives
|
|
73,236
|
|
2,445
|
|
|
560
|
|
(332
|
)
|
|
(938
|
)
|
|
74,971
|
|
74,607
|
|
Active subtotal
|
|
975,483
|
|
10,327
|
|
|
560
|
|
35,227
|
|
|
(11,876
|
)
|
|
1,009,721
|
|
980,688
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,345,855
|
|
(14,886
|
)
|
|
-
|
|
(29,110
|
)
|
|
(8,176
|
)
|
|
1,293,683
|
|
1,284,269
|
|
Fixed Income
|
|
465,392
|
|
201
|
|
|
-
|
|
54,776
|
|
|
(32,005
|
)
|
|
488,364
|
|
465,324
|
|
Multi-Asset
|
|
7,013
|
|
(635
|
)
|
|
-
|
|
1,066
|
|
|
355
|
|
|
7,799
|
|
7,068
|
|
Alternatives
|
|
6,495
|
|
1,117
|
|
|
-
|
|
(384
|
)
|
|
(420
|
)
|
|
6,808
|
|
6,277
|
|
Index subtotal
|
|
1,824,755
|
|
(14,203
|
)
|
|
-
|
|
26,348
|
|
|
(40,246
|
)
|
|
1,796,654
|
|
1,762,938
|
|
Institutional subtotal
|
|
2,800,238
|
|
(3,876
|
)
|
|
560
|
|
61,575
|
|
|
(52,122
|
)
|
|
2,806,375
|
|
2,743,626
|
|
Long-term
|
|
4,436,889
|
|
126,494
|
|
|
926
|
|
4,948
|
|
|
(64,333
|
)
|
|
4,504,924
|
|
4,374,999
|
|
Cash Management
|
|
271,506
|
|
27,698
|
|
|
80,635
|
|
270
|
|
|
(5,425
|
)
|
|
374,684
|
|
306,240
|
|
Advisory (4)
|
|
12,899
|
|
(2,025
|
)
|
|
-
|
|
(36
|
)
|
|
(325
|
)
|
|
10,513
|
|
11,097
|
|
Total
|
|
$4,721,294
|
|
$152,167
|
|
|
$81,561
|
|
$5,182
|
|
|
$(70,083
|
)
|
|
$4,890,121
|
|
$4,692,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Product (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
inflows
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition(1)
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$298,884
|
|
$(2,106
|
)
|
|
$ -
|
|
$(14,478
|
)
|
|
$(5,952
|
)
|
|
$276,348
|
|
$280,032
|
|
iShares
|
|
828,057
|
|
51,620
|
|
|
-
|
|
(49,596
|
)
|
|
(3,313
|
)
|
|
826,768
|
|
804,479
|
|
Non-ETF index
|
|
1,378,376
|
|
(10,308
|
)
|
|
-
|
|
(27,718
|
)
|
|
(10,908
|
)
|
|
1,329,442
|
|
1,317,749
|
|
Equity subtotal
|
|
2,505,317
|
|
39,206
|
|
|
-
|
|
(91,792
|
)
|
|
(20,173
|
)
|
|
2,432,558
|
|
2,402,260
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
718,853
|
|
16,912
|
|
|
-
|
|
31,538
|
|
|
(1,872
|
)
|
|
765,431
|
|
736,047
|
|
iShares
|
|
230,735
|
|
67,678
|
|
|
-
|
|
8,511
|
|
|
(2,028
|
)
|
|
304,896
|
|
265,625
|
|
Non-ETF index
|
|
472,846
|
|
886
|
|
|
-
|
|
55,571
|
|
|
(32,974
|
)
|
|
496,329
|
|
472,871
|
|
Fixed income subtotal
|
|
1,422,434
|
|
85,476
|
|
|
-
|
|
95,620
|
|
|
(36,874
|
)
|
|
1,566,656
|
|
1,474,543
|
|
Multi-asset
|
|
395,009
|
|
(4,341
|
)
|
|
366
|
|
1,274
|
|
|
(5,788
|
)
|
|
386,520
|
|
383,190
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
89,954
|
|
2,079
|
|
|
560
|
|
(1,305
|
)
|
|
(1,376
|
)
|
|
89,912
|
|
91,148
|
|
Currency and
commodities (5)
|
|
24,175
|
|
4,074
|
|
|
-
|
|
1,151
|
|
|
(122
|
)
|
|
29,278
|
|
23,858
|
|
Alternatives subtotal
|
|
114,129
|
|
6,153
|
|
|
560
|
|
(154
|
)
|
|
(1,498
|
)
|
|
119,190
|
|
115,006
|
|
Long-term
|
|
$4,436,889
|
|
$126,494
|
|
|
$926
|
|
$4,948
|
|
|
$(64,333
|
)
|
|
$4,504,924
|
|
$4,374,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
inflows
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition(1)
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
Active
|
|
$1,496,571
|
|
$11,987
|
|
|
$926
|
|
$15,933
|
|
|
$(14,993
|
)
|
|
$1,510,424
|
|
$1,483,802
|
|
Index and iShares
|
|
2,940,318
|
|
114,507
|
|
|
-
|
|
(10,985
|
)
|
|
(49,340
|
)
|
|
2,994,500
|
|
2,891,197
|
|
Long-term
|
|
$4,436,889
|
|
$126,494
|
|
|
$926
|
|
$4,948
|
|
|
$(64,333
|
)
|
|
$4,504,924
|
|
$4,374,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts represent $560 million of AUM acquired in the
Infraestructura Institucional acquisition in October 2015, $366
million of AUM acquired in the FutureAdvisor acquisition in
October 2015 and $80.6 billion of AUM acquired in the BofA Global
Capital Management transaction in April 2016. The FutureAdvisor
acquisition amount does not include AUM that was held in iShares
holdings.
|
|
(2)
|
|
Foreign exchange reflects the impact of translating 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, 2016
|
|
Change
|
|
Six Months Ended
June 30,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Change
|
|
Investment advisory, administration fees
and securities
lending revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$406
|
|
$447
|
|
$(41
|
)
|
|
$386
|
|
$20
|
|
|
$792
|
|
$869
|
|
$(77
|
)
|
|
iShares
|
|
656
|
|
728
|
|
(72
|
)
|
|
623
|
|
33
|
|
|
1,279
|
|
1,412
|
|
(133
|
)
|
|
Non-ETF Index
|
|
174
|
|
190
|
|
(16
|
)
|
|
164
|
|
10
|
|
|
338
|
|
353
|
|
(15
|
)
|
|
Equity subtotal
|
|
1,236
|
|
1,365
|
|
(129
|
)
|
|
1,173
|
|
63
|
|
|
2,409
|
|
2,634
|
|
(225
|
)
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
414
|
|
387
|
|
27
|
|
|
396
|
|
18
|
|
|
810
|
|
760
|
|
50
|
|
|
iShares
|
|
172
|
|
138
|
|
34
|
|
|
152
|
|
20
|
|
|
324
|
|
268
|
|
56
|
|
|
Non-ETF Index
|
|
69
|
|
72
|
|
(3
|
)
|
|
70
|
|
(1
|
)
|
|
139
|
|
140
|
|
(1
|
)
|
|
Fixed income subtotal
|
|
655
|
|
597
|
|
58
|
|
|
618
|
|
37
|
|
|
1,273
|
|
1,168
|
|
105
|
|
|
Multi-asset
|
|
291
|
|
316
|
|
(25
|
)
|
|
284
|
|
7
|
|
|
575
|
|
620
|
|
(45
|
)
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
168
|
|
161
|
|
7
|
|
|
164
|
|
4
|
|
|
332
|
|
315
|
|
17
|
|
|
Currency and commodities
|
|
20
|
|
19
|
|
1
|
|
|
17
|
|
3
|
|
|
37
|
|
38
|
|
(1
|
)
|
|
Alternatives subtotal
|
|
188
|
|
180
|
|
8
|
|
|
181
|
|
7
|
|
|
369
|
|
353
|
|
16
|
|
|
Long-term
|
|
2,370
|
|
2,458
|
|
(88
|
)
|
|
2,256
|
|
114
|
|
|
4,626
|
|
4,775
|
|
(149
|
)
|
|
Cash management
|
|
119
|
|
76
|
|
43
|
|
|
103
|
|
16
|
|
|
222
|
|
149
|
|
73
|
|
|
Total base fees
|
|
2,489
|
|
2,534
|
|
(45
|
)
|
|
2,359
|
|
130
|
|
|
4,848
|
|
4,924
|
|
(76
|
)
|
|
Investment advisory performance fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
42
|
|
61
|
|
(19
|
)
|
|
11
|
|
31
|
|
|
53
|
|
98
|
|
(45
|
)
|
|
Fixed income
|
|
2
|
|
3
|
|
(1
|
)
|
|
5
|
|
(3
|
)
|
|
7
|
|
7
|
|
-
|
|
|
Multi-asset
|
|
2
|
|
8
|
|
(6
|
)
|
|
3
|
|
(1
|
)
|
|
5
|
|
16
|
|
(11
|
)
|
|
Alternatives
|
|
28
|
|
64
|
|
(36
|
)
|
|
15
|
|
13
|
|
|
43
|
|
123
|
|
(80
|
)
|
|
Total performance fees
|
|
74
|
|
136
|
|
(62
|
)
|
|
34
|
|
40
|
|
|
108
|
|
244
|
|
(136
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Solutions and advisory
|
|
172
|
|
161
|
|
11
|
|
|
171
|
|
1
|
|
|
343
|
|
308
|
|
35
|
|
|
Distribution fees
|
|
11
|
|
13
|
|
(2
|
)
|
|
11
|
|
-
|
|
|
22
|
|
30
|
|
(8
|
)
|
|
Other revenue
|
|
58
|
|
61
|
|
(3
|
)
|
|
49
|
|
9
|
|
|
107
|
|
122
|
|
(15
|
)
|
|
Total revenue
|
|
$2,804
|
|
$2,905
|
|
$(101
|
)
|
|
$2,624
|
|
$180
|
|
|
$5,428
|
|
$5,628
|
|
$(200
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
Investment advisory, administration fees and securities lending
revenue decreased $45 million from the second quarter of 2015
reflecting mix shift from equities to fixed income and cash products,
partially offset by lower yield-related waivers on certain money
market funds and the effect of AUM acquired in the BofA Global Capital
Management transaction. Securities lending revenue of $151 million in
the current quarter increased $4 million from the second quarter of
2015.
Investment advisory, administration fees and
securities lending revenue increased $130 million from the first
quarter of 2016, driven by higher average AUM.
-
Performance fees decreased $62 million from the second quarter of
2015, primarily reflecting lower fees from alternative and equity
products, and increased $40 million from the first quarter of 2016.
-
BlackRock Solutions® and advisory revenue increased
$11 million from the second quarter of 2015. BlackRock Solutions
and advisory revenue included $146 million of Aladdin®
revenue in the current quarter compared with $129 million in the
second quarter of 2015 and $141 million in the first quarter of 2016.
|
|
|
SUMMARY OF OPERATING EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
June 30,
|
|
|
Three
Months
Ended
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
|
March 31,
2016
|
|
Change
|
|
2016
|
|
2015
|
|
|
Change
|
|
Operating Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and
benefits
|
|
$977
|
|
$1,012
|
|
$(35
|
)
|
|
$947
|
|
$30
|
|
|
$1,924
|
|
$1,993
|
|
|
$(69
|
)
|
|
Distribution and servicing costs
|
|
109
|
|
105
|
|
4
|
|
|
97
|
|
12
|
|
|
206
|
|
204
|
|
|
2
|
|
|
Amortization of deferred sales
commissions
|
|
9
|
|
12
|
|
(3
|
)
|
|
10
|
|
(1
|
)
|
|
19
|
|
25
|
|
|
(6
|
)
|
|
Direct fund expense
|
|
195
|
|
191
|
|
4
|
|
|
188
|
|
7
|
|
|
383
|
|
380
|
|
|
3
|
|
|
General and administration
|
|
316
|
|
312
|
|
4
|
|
|
318
|
|
(2
|
)
|
|
634
|
|
651
|
|
|
(17
|
)
|
|
Restructuring charge
|
|
-
|
|
-
|
|
-
|
|
|
76
|
|
(76
|
)
|
|
76
|
|
-
|
|
|
76
|
|
|
Amortization of intangible assets
|
|
25
|
|
35
|
|
(10
|
)
|
|
25
|
|
-
|
|
|
50
|
|
70
|
|
|
(20
|
)
|
|
Total Operating Expense
|
|
$1,631
|
|
$1,667
|
|
$(36
|
)
|
|
$1,661
|
|
$(30
|
)
|
|
$3,292
|
|
$3,323
|
|
|
$(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
Employee compensation and benefits decreased $35 million from the
second quarter of 2015, reflecting lower incentive compensation,
driven primarily by lower operating income and performance fees.
Employee
compensation and benefits increased $30 million from the first quarter
of 2016, reflecting higher incentive compensation, driven by higher
operating income and performance fees, partially offset by lower
seasonal employer payroll taxes.
-
A restructuring charge of $76 million, primarily comprised of
severance and accelerated amortization expense of previously granted
deferred compensation awards, was recorded in the first quarter of
2016 in connection with a project to streamline and simplify the
organization.
|
|
|
INCOME TAX EXPENSE
|
|
|
|
Three
Months Ended
June 30,
|
|
|
Three
Months
Ended
|
|
|
|
Six Months Ended
June 30,
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
|
March 31,
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Income tax expense
|
|
$353
|
|
$371
|
|
$(18)
|
|
$268
|
|
$85
|
|
$621
|
|
$629
|
|
$(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
The second quarter 2016 and 2015 income tax expense included a $4
million and $13 million net noncash expense, respectively, primarily
related to the revaluation of certain deferred income tax liabilities
as a result of domestic state and local tax changes.
-
The first quarter 2016 income tax expense included a $4 million net
noncash benefit, primarily related to the revaluation of certain
deferred income tax liabilities, including the effect of tax
legislation enacted in Japan and domestic state and local tax changes.
|
|
|
SUMMARY OF NONOPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
|
|
Three Months
Ended
March 31,
2016
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
(in millions), (unaudited)
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Nonoperating income (expense), GAAP basis
|
|
|
|
$(25
|
)
|
|
$(41
|
)
|
|
$16
|
|
|
$(48
|
)
|
|
$23
|
|
|
$(73
|
)
|
|
$(25
|
)
|
|
$(48
|
)
|
|
Less: Net income (loss) attributable to NCI
|
|
|
|
6
|
|
|
7
|
|
|
(1
|
)
|
|
(10
|
)
|
|
16
|
|
|
(4
|
)
|
|
10
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)(1)
|
|
|
|
$(31
|
)
|
$(48
|
)
|
|
$17
|
|
|
$(38
|
)
|
|
$7
|
|
|
$(69
|
)
|
|
$(35
|
)
|
|
$(34
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
economic
investments at
June 30, 2016(3)
|
|
Three Months
Ended
June 30,
|
|
|
|
Three Months
Ended
March 31,
2016
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Net gain (loss) on investments(1) (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity
|
|
20-25
|
%
|
|
$7
|
|
|
$9
|
|
|
$(2
|
)
|
|
$2
|
|
|
$5
|
|
|
$9
|
|
|
$10
|
|
|
$(1
|
)
|
|
Real assets
|
|
5-10
|
%
|
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
2
|
|
|
(1
|
)
|
|
3
|
|
|
4
|
|
|
(1
|
)
|
|
Other alternatives(4)
|
|
15-20
|
%
|
|
4
|
|
|
-
|
|
|
4
|
|
|
-
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|
-
|
|
|
Other investments(5)
|
|
50-55
|
%
|
|
2
|
|
|
(12
|
)
|
|
14
|
|
|
4
|
|
|
(2
|
)
|
|
6
|
|
|
(4
|
)
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
14
|
|
|
(1
|
)
|
|
15
|
|
|
8
|
|
|
6
|
|
|
22
|
|
|
14
|
|
|
8
|
|
|
Other gains(6)
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
45
|
|
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net gain (loss) on investments(1)
|
|
|
|
14
|
|
|
(1
|
)
|
|
15
|
|
|
8
|
|
|
6
|
|
|
22
|
|
|
59
|
|
|
(37
|
)
|
|
Interest and dividend income
|
|
|
|
6
|
|
|
5
|
|
|
1
|
|
|
5
|
|
|
1
|
|
|
11
|
|
|
9
|
|
|
2
|
|
|
Interest expense
|
|
|
|
(51
|
)
|
|
(52
|
)
|
|
1
|
|
|
(51
|
)
|
|
-
|
|
|
(102
|
)
|
|
(103
|
)
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense
|
|
|
|
(45
|
)
|
|
(47
|
)
|
|
2
|
|
|
(46
|
)
|
|
1
|
|
|
(91
|
)
|
|
(94
|
)
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)(1)
|
|
|
|
(31
|
)
|
|
(48
|
)
|
|
17
|
|
|
(38
|
)
|
|
7
|
|
|
(69
|
)
|
|
(35
|
)
|
|
(34
|
)
|
|
Compensation expense related to
(appreciation) depreciation
on deferred
compensation plans
|
|
|
|
-
|
|
|
(2
|
)
|
|
2
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(4
|
)
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), as
adjusted(1)
|
|
|
|
$(31
|
)
|
|
$(50
|
)
|
|
$19
|
|
|
$(38
|
)
|
|
$7
|
|
|
$(69
|
)
|
|
$(39
|
)
|
|
$(30
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2016. Economic investment
amounts at March 31, 2016 for private equity, real assets, other
alternatives and other investments were $360 million, $104 million,
$227 million and $871 million, respectively.
|
|
(4)
|
|
Amounts primarily include net gains (losses) related to direct hedge
fund strategies and hedge fund solutions.
|
|
(5)
|
|
Amounts include net gains (losses) related to equity and fixed
income investments, and BlackRock’s seed capital hedging program.
|
|
(6)
|
|
Amount for the six months ended June 30, 2015 primarily includes a
gain related to the acquisition of certain assets of BlackRock Kelso
Capital Advisors LLC.
|
|
|
|
|
Highlights
-
Net gain (loss) on investments increased from the second quarter of
2015 and first quarter of 2016 due to higher marks in the second
quarter of 2016.
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)
|
|
2016 (Est.)
|
|
2015
|
|
Total balance sheet assets
|
|
$222
|
|
|
$225
|
|
|
Separate account assets and separate account collateral held under
securities lending agreements
|
|
(179
|
)
|
|
(182
|
)
|
|
Consolidated sponsored investment funds
|
|
(1
|
)
|
|
(1
|
)
|
|
Goodwill and intangible assets, net
|
|
(31
|
)
|
|
(30
|
)
|
|
Economic tangible assets
|
|
$11
|
|
|
$12
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Operating income, GAAP basis
|
|
$1,173
|
|
|
$1,238
|
|
|
$963
|
|
|
$2,136
|
|
|
$2,305
|
|
|
Non-GAAP expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charge
|
|
-
|
|
|
-
|
|
|
76
|
|
|
76
|
|
|
-
|
|
|
PNC LTIP funding obligation
|
|
6
|
|
|
8
|
|
|
8
|
|
|
14
|
|
|
16
|
|
|
Compensation expense related to
appreciation (depreciation) on
deferred
compensation plans
|
|
-
|
|
|
2
|
|
|
-
|
|
|
-
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, as adjusted
|
|
1,179
|
|
|
1,248
|
|
|
1,047
|
|
|
2,226
|
|
|
2,325
|
|
|
Product launch costs and
commissions
|
|
-
|
|
|
5
|
|
|
-
|
|
|
-
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income used for operating
margin measurement
|
|
$1,179
|
|
|
$1,253
|
|
|
$1,047
|
|
|
$2,226
|
|
|
$2,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, GAAP basis
|
|
$2,804
|
|
|
$2,905
|
|
|
$2,624
|
|
|
$5,428
|
|
|
$5,628
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Distribution and servicing costs
|
|
(109
|
)
|
|
(105
|
)
|
|
(97
|
)
|
|
(206
|
)
|
|
(204
|
)
|
|
Amortization of deferred sales
commissions
|
|
(9
|
)
|
|
(12
|
)
|
|
(10
|
)
|
|
(19
|
)
|
|
(25
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue used for operating margin
measurement
|
|
$2,686
|
|
|
$2,788
|
|
|
$2,517
|
|
|
$5,203
|
|
|
$5,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, GAAP basis
|
|
41.8
|
%
|
|
42.6
|
%
|
|
36.7
|
%
|
|
39.4
|
%
|
|
41.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as adjusted
|
|
43.9
|
%
|
|
44.9
|
%
|
|
41.6
|
%
|
|
42.8
|
%
|
|
43.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Nonoperating income (expense), GAAP basis
|
|
$(25
|
)
|
|
$(41
|
)
|
|
$(48
|
)
|
|
$(73
|
)
|
|
$(25
|
)
|
|
Less: Net income (loss) attributable to NCI
|
|
6
|
|
|
7
|
|
|
(10
|
)
|
|
(4
|
)
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), net of NCI
|
|
(31
|
)
|
|
(48
|
)
|
|
(38
|
)
|
|
(69
|
)
|
|
(35
|
)
|
|
Compensation expense related to (appreciation)
depreciation
on deferred compensation plans
|
|
-
|
|
|
(2
|
)
|
|
-
|
|
|
-
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), less net income
(loss)
attributable to NCI, as adjusted
|
|
$(31
|
)
|
|
$(50
|
)
|
|
$(38
|
)
|
|
$(69
|
)
|
|
$(39
|
)
|
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)
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Net income attributable to BlackRock, Inc., GAAP basis
|
|
$789
|
|
$819
|
|
$657
|
|
|
$1,446
|
|
$1,641
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charge, net of tax
|
|
-
|
|
-
|
|
53
|
|
|
53
|
|
-
|
|
PNC LTIP funding obligation, net of tax
|
|
4
|
|
6
|
|
5
|
|
|
9
|
|
11
|
|
Income tax matters
|
|
4
|
|
13
|
|
(4
|
)
|
|
-
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
$797
|
|
$838
|
|
$711
|
|
|
$1,508
|
|
$1,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common shares outstanding(4)
|
|
166.6
|
|
169.1
|
|
167.4
|
|
|
167.0
|
|
169.4
|
|
Diluted earnings per common share, GAAP basis(4)
|
|
$4.73
|
|
$4.84
|
|
$3.92
|
|
|
$8.66
|
|
$9.69
|
|
Diluted earnings per common share, as adjusted(4)
|
|
$4.78
|
|
$4.96
|
|
$4.25
|
|
|
$9.03
|
|
$9.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 that 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.
A restructuring charge comprised of severance and accelerated
amortization expense of previously granted deferred compensation
awards has been excluded to provide more meaningful analysis of
BlackRock’s ongoing operations and to ensure comparability among
periods presented. 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
product launch costs (e.g. 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.
Management believes nonoperating income (expense), less net income
(loss) attributable to NCI, as adjusted, provides comparability of
information among reporting periods and is an effective measure for
reviewing BlackRock’s nonoperating contribution to results.
(3) Net income attributable to BlackRock, Inc., as adjusted:
Management believes net income attributable to BlackRock, Inc., as
adjusted, and diluted earnings per common share, as adjusted, are useful
measures of BlackRock’s profitability and financial performance. Net
income attributable to BlackRock, Inc., as adjusted, equals net income
attributable to BlackRock, Inc., GAAP basis, adjusted for significant
nonrecurring items, charges that ultimately will not impact BlackRock’s
book value or certain tax items that do not impact cash flow.
See aforementioned discussion regarding operating income, as adjusted,
and operating margin, as adjusted, for information on the PNC LTIP
funding obligation and restructuring charge.
For each period presented, the non-GAAP adjustment related to the
restructuring charge and PNC LTIP funding obligation was tax effected at
the respective blended rates applicable to the adjustments. The three
months ended June 30, 2016 and March 31, 2016 reflected a $4 million
noncash expense and $4 million noncash tax benefit, respectively,
primarily associated with the revaluation of certain deferred tax
liabilities related to intangible assets and goodwill. 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. Amounts have been
excluded from the as adjusted results as these items will not have a
cash flow impact and to ensure comparability among periods presented.
Per share amounts reflect net income attributable to BlackRock, as
adjusted divided by diluted weighted average common shares outstanding.
(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, 2016 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, 2016. The performance data
does not include accounts terminated prior to June 30, 2016 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 institutional and
high net worth separate accounts, and net-of-fees for retail funds. The
performance tracking shown for index accounts is based on gross-of-fees
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, 2016 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/20160714005296/en/
BlackRock, Inc.
Investor Relations:
Tom Wojcik, 212-810-8127
or
Media
Relations:
Brian Beades, 212-810-5596
Source: BlackRock, Inc.