-
$70 billion of total net inflows, including $55 billion in long-term
net inflows, reflects positive flows across all product types,
investment styles and regions
-
4% increase in base fees year-over-year driven by organic growth and
market performance, offset by mix change favoring fixed income and cash
-
13% growth in Aladdin® revenue year-over-year
reflects ongoing demand for risk management technology
-
Expansion in operating margin from prior year driven by continued
expense discipline in the current quarter
-
5% increase in diluted EPS (3% as adjusted) year-over-year
-
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)
|
|
Q3
2016
|
|
Q3
2015
|
|
Change
|
|
Q2
2016
|
|
Change
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Change
|
|
AUM
|
|
$
|
5,117,421
|
|
|
$
|
4,505,721
|
|
|
14
|
%
|
|
$
|
4,890,121
|
|
|
5
|
%
|
|
$
|
5,117,421
|
|
|
$
|
4,505,721
|
|
|
14
|
%
|
|
GAAP basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
2,837
|
|
|
$
|
2,910
|
|
|
(3
|
)%
|
|
$
|
2,804
|
|
|
1
|
%
|
|
$
|
8,265
|
|
|
$
|
8,538
|
|
|
(3
|
)%
|
|
Operating income
|
|
$
|
1,209
|
|
|
$
|
1,222
|
|
|
(1
|
)%
|
|
$
|
1,173
|
|
|
3
|
%
|
|
$
|
3,345
|
|
|
$
|
3,527
|
|
|
(5
|
)%
|
|
Operating margin
|
|
|
42.6
|
%
|
|
|
42.0
|
%
|
|
60 bps
|
|
|
41.8
|
%
|
|
80 bps
|
|
|
40.5
|
%
|
|
|
41.3
|
%
|
|
(80) bps
|
|
Net income(1)
|
|
$
|
875
|
|
|
$
|
843
|
|
|
4
|
%
|
|
$
|
789
|
|
|
11
|
%
|
|
$
|
2,321
|
|
|
$
|
2,484
|
|
|
(7
|
)%
|
|
Diluted EPS
|
|
$
|
5.26
|
|
|
$
|
5.00
|
|
|
5
|
%
|
|
$
|
4.73
|
|
|
11
|
%
|
|
$
|
13.92
|
|
|
$
|
14.68
|
|
|
(5
|
)%
|
|
Weighted average diluted shares
|
|
|
166.3
|
|
|
|
168.7
|
|
|
(1
|
)%
|
|
|
166.6
|
|
|
-
|
%
|
|
|
166.8
|
|
|
|
169.2
|
|
|
(1
|
)%
|
|
As Adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income(2)
|
|
$
|
1,216
|
|
|
$
|
1,227
|
|
|
(1
|
)%
|
|
$
|
1,179
|
|
|
3
|
%
|
|
$
|
3,442
|
|
|
$
|
3,552
|
|
|
(3
|
)%
|
|
Operating margin(2)
|
|
|
44.8
|
%
|
|
|
43.9
|
%
|
|
90 bps
|
|
|
43.9
|
%
|
|
90 bps
|
|
|
43.5
|
%
|
|
|
43.4
|
%
|
|
10 bps
|
|
Net income(1) (2)
|
|
$
|
854
|
|
|
$
|
844
|
|
|
1
|
%
|
|
$
|
797
|
|
|
7
|
%
|
|
$
|
2,362
|
|
|
$
|
2,512
|
|
|
(6
|
)%
|
|
Diluted EPS(2)
|
|
$
|
5.14
|
|
|
$
|
5.00
|
|
|
3
|
%
|
|
$
|
4.78
|
|
|
8
|
%
|
|
$
|
14.16
|
|
|
$
|
14.85
|
|
|
(5
|
)%
|
|
(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 nine months ended September 30, 2016.
“BlackRock’s business model was built to thrive in all market
environments,” commented Laurence D. Fink, Chairman and CEO of
BlackRock. “In the third quarter, even as investor preferences continued
to migrate from equity to fixed income and cash, and away from active
strategies, the diversity of our platform drove nearly $70 billion of
total net inflows. Our $55 billion of long-term net inflows were
positive across both active and index strategies, and positive across
every asset class and region.
“Retail and institutional investors continued turning to iShares as
an effective way to express market views and generate alpha. iShares
once again captured the #1 market share of net new business in the
United States, in Europe and globally, across both equity and fixed
income. Our European fixed income ETFs reached $100 billion of AUM and
fixed income remains an important growth area for iShares.
“With pensions and insurers facing continued challenges to fund future
liabilities in a ‘lower-for-longer’ environment, we saw $8 billion of
long-term active net inflows from institutional clients in the quarter,
reflecting demand for BlackRock’s customized fixed income solutions and
multi-asset strategies. Institutional demand for investment and risk
management technology remains strong and drove 13% growth in our Aladdin
revenue year-over-year.
“Regulatory change continues to have a material impact on our industry.
In retail, the DoL fiduciary rule will increasingly influence the
choices that financial intermediaries make for their clients.
Anticipating that change, BlackRock is using our scale to provide
distribution partners with the highest quality investment strategies at
the best value, as well as portfolio construction and risk tools, to
help them build better portfolios. In cash management, where more than
$1 trillion dollars has shifted from prime to government funds as a
result of money market reform, the breadth of our platform and our
ability to both embrace and adapt ahead of change have enabled us to
meet our clients’ evolving needs and increase market share, and we saw
$15 billion of net inflows into cash management in the third quarter.
“I want to thank our employees for their ongoing commitment to improving
our clients’ financial futures. We continue to evolve our business model
and invest in our future to help clients achieve their investment goals
and deliver long-term value for shareholders.”
|
LONG-TERM RESULTS BY CLIENT TYPE
|
|
(in millions), (unaudited)
|
|
Q3 2016
Net flows
|
|
September 30, 2016
AUM
|
|
Q3 2016
Base Fees(1)
|
|
September 30, 2016
AUM
% of Total
|
|
Q3 2016
Base Fees(1)
% of Total
|
|
Retail
|
|
$(2,228
|
)
|
|
$554,778
|
|
$821
|
|
12
|
%
|
|
34
|
%
|
|
iShares
|
|
51,257
|
|
|
1,246,166
|
|
901
|
|
26
|
%
|
|
37
|
%
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
7,531
|
|
|
1,039,653
|
|
465
|
|
22
|
%
|
|
19
|
%
|
|
Index
|
|
(1,376
|
)
|
|
1,877,501
|
|
241
|
|
40
|
%
|
|
10
|
%
|
|
Total institutional
|
|
6,155
|
|
|
2,917,154
|
|
706
|
|
62
|
%
|
|
29
|
%
|
|
Total long-term
|
|
$55,184
|
|
|
$4,718,098
|
|
$2,428
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM RESULTS BY PRODUCT TYPE
|
|
(in millions), (unaudited)
|
|
Q3 2016
Net flows
|
|
September 30, 2016
AUM
|
|
Q3 2016
Base Fees(1)
|
|
September 30, 2016
AUM
% of Total
|
|
Q3 2016
Base Fees(1)
% of Total
|
|
Equity
|
|
$13,350
|
|
$2,566,039
|
|
$1,270
|
|
54
|
%
|
|
52
|
%
|
|
Fixed income
|
|
36,981
|
|
1,628,268
|
|
693
|
|
34
|
%
|
|
29
|
%
|
|
Multi-asset
|
|
3,038
|
|
402,261
|
|
285
|
|
9
|
%
|
|
12
|
%
|
|
Alternatives
|
|
1,815
|
|
121,530
|
|
180
|
|
3
|
%
|
|
7
|
%
|
|
Total long-term
|
|
$55,184
|
|
$4,718,098
|
|
$2,428
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM RESULTS BY INVESTMENT STYLE
|
|
(in millions), (unaudited)
|
|
Q3 2016
Net flows
|
|
September 30, 2016
AUM
|
|
Q3 2016
Base Fees(1)
|
|
September 30, 2016
AUM
% of Total
|
|
Q3 2016
Base Fees(1)
% of Total
|
|
Active
|
|
$4,039
|
|
$1,547,473
|
|
$1,274
|
|
33
|
%
|
|
52
|
%
|
|
Index and iShares
|
|
51,145
|
|
3,170,625
|
|
1,154
|
|
67
|
%
|
|
48
|
%
|
|
Total long-term
|
|
$55,184
|
|
$4,718,098
|
|
$2,428
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Base fees include investment advisory, administration fees and
securities lending revenue.
|
Long-Term Business Highlights
Long-term net inflows were positive across all major regions, with net
inflows of $38.7 billion, $13.4 billion and $3.1 billion from clients in
the Americas, EMEA and Asia-Pacific, respectively. At September 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 third
quarter of 2016 is presented below.
-
Retail long-term net outflows of $2.2 billion reflected
net outflows of $1.9 billion and $0.3 billion from the United States
and internationally, respectively. Fixed income saw net inflows of
$5.8 billion, paced by flows into emerging market debt and high yield
bond funds. Equity net outflows of $3.9 billion were primarily related
to outflows from European and U.S. equities. Multi-asset net outflows
of $3.5 billion were largely due to outflows from world allocation
strategies.
-
iShares® long-term net
inflows of $51.3 billion were led by equity net inflows of $25.5
billion, with strength in emerging market precision exposures and iShares
Core ETFs. Fixed income net inflows of $22.7 billion were diversified
across corporate, emerging markets and core bond funds. Commodities iShares generated
$2.9 billion of net inflows.
-
Institutional active long-term net inflows of $7.5
billion were led by multi-asset net inflows of $6.5 billion, driven by
ongoing demand for solutions offerings and the LifePath®
target-date series. Fixed income net inflows of $5.1 billion reflected
strong flows from insurance clients in the quarter. Equity net
outflows of $3.4 billion were primarily due to outflows from
Scientific Active equities and European equities.
-
Institutional index long-term net outflows of $1.4
billion reflected equity net outflows of $4.9 billion, partially
offset by fixed income inflows of $3.4 billion, driven by inflows into
liability-driven investment solutions.
Cash management AUM increased 4% to $389.0 billion, driven by
$14.7 billion of net inflows, primarily into government funds ahead of
money market reform.
Advisory AUM ended the third quarter at $10.3 billion.
|
INVESTMENT PERFORMANCE AT SEPTEMBER 30, 2016 (1)
|
|
|
|
|
|
|
|
One-year period
|
|
Three-year period
|
|
Five-year period
|
|
Fixed Income:
|
|
|
|
|
|
|
Actively managed AUM above benchmark or peer
median
|
|
|
|
|
|
|
|
Taxable
|
|
59
|
%
|
|
79
|
%
|
|
88
|
%
|
|
Tax-exempt
|
|
60
|
%
|
|
60
|
%
|
|
65
|
%
|
|
Index AUM within or above applicable tolerance
|
|
89
|
%
|
|
98
|
%
|
|
98
|
%
|
|
Equity:
|
|
|
|
|
|
|
Actively managed AUM above benchmark or peer
median
|
|
|
|
|
|
|
|
Fundamental
|
|
50
|
%
|
|
66
|
%
|
|
53
|
%
|
|
Scientific
|
|
31
|
%
|
|
83
|
%
|
|
93
|
%
|
|
Index AUM within or above applicable tolerance
|
|
96
|
%
|
|
99
|
%
|
|
97
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Past performance is not indicative of future results. The
performance information shown is based on preliminary available
data. Please refer to performance disclosure detail.
|
Teleconference, Webcast and Presentation Information
Chairman and Chief Executive Officer, Laurence D. Fink, and Chief
Financial Officer, Gary S. Shedlin, will host a teleconference call for
investors and analysts on Tuesday, October 18, 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 92557521). 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 Tuesday, October 18, 2016 and ending at
midnight on Tuesday, November 1, 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 92557521. 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 September
30, 2016, BlackRock’s AUM was $5.1 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 September 30, 2016, the firm had
approximately 13,000 employees in 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
|
|
|
|
|
|
September 30,
|
|
|
|
June 30,
|
|
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
$2,546
|
|
|
$2,456
|
|
|
$90
|
|
|
$2,489
|
|
|
$57
|
|
|
Investment advisory performance fees
|
|
58
|
|
|
208
|
|
|
(150
|
)
|
|
74
|
|
|
(16
|
)
|
|
BlackRock Solutions and advisory
|
|
174
|
|
|
167
|
|
|
7
|
|
|
172
|
|
|
2
|
|
|
Distribution fees
|
|
10
|
|
|
14
|
|
|
(4
|
)
|
|
11
|
|
|
(1
|
)
|
|
Other revenue
|
|
49
|
|
|
65
|
|
|
(16
|
)
|
|
58
|
|
|
(9
|
)
|
|
Total revenue
|
|
2,837
|
|
|
2,910
|
|
|
(73
|
)
|
|
2,804
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
969
|
|
|
1,023
|
|
|
(54
|
)
|
|
977
|
|
|
(8
|
)
|
|
Distribution and servicing costs
|
|
114
|
|
|
102
|
|
|
12
|
|
|
109
|
|
|
5
|
|
|
Amortization of deferred sales commissions
|
|
8
|
|
|
12
|
|
|
(4
|
)
|
|
9
|
|
|
(1
|
)
|
|
Direct fund expense
|
|
200
|
|
|
198
|
|
|
2
|
|
|
195
|
|
|
5
|
|
|
General and administration
|
|
312
|
|
|
319
|
|
|
(7
|
)
|
|
316
|
|
|
(4
|
)
|
|
Amortization of intangible assets
|
|
25
|
|
|
34
|
|
|
(9
|
)
|
|
25
|
|
|
-
|
|
|
Total expense
|
|
1,628
|
|
|
1,688
|
|
|
(60
|
)
|
|
1,631
|
|
|
(3
|
)
|
|
Operating income
|
|
1,209
|
|
|
1,222
|
|
|
(13
|
)
|
|
1,173
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
31
|
|
|
(10
|
)
|
|
41
|
|
|
20
|
|
|
11
|
|
|
Interest and dividend income
|
|
22
|
|
|
12
|
|
|
10
|
|
|
6
|
|
|
16
|
|
|
Interest expense
|
|
(52
|
)
|
|
(50
|
)
|
|
(2
|
)
|
|
(51
|
)
|
|
(1
|
)
|
|
Total nonoperating income (expense)
|
|
1
|
|
|
(48
|
)
|
|
49
|
|
|
(25
|
)
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
1,210
|
|
|
1,174
|
|
|
36
|
|
|
1,148
|
|
|
62
|
|
|
Income tax expense
|
|
333
|
|
|
342
|
|
|
(9
|
)
|
|
353
|
|
|
(20
|
)
|
|
Net income
|
|
877
|
|
|
832
|
|
|
45
|
|
|
795
|
|
|
82
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling
interests
|
|
2
|
|
|
(11
|
)
|
|
13
|
|
|
6
|
|
|
(4
|
)
|
|
Net income attributable to BlackRock, Inc.
|
|
$875
|
|
|
$843
|
|
|
$32
|
|
|
$789
|
|
|
$86
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
164,129,214
|
|
|
166,045,291
|
|
|
(1,916,077
|
)
|
|
164,758,612
|
|
|
(629,398
|
)
|
|
Diluted
|
|
166,256,598
|
|
|
168,665,303
|
|
|
(2,408,705
|
)
|
|
166,639,290
|
|
|
(382,692
|
)
|
|
Earnings per share attributable to BlackRock, Inc.
common
stockholders (4)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$5.33
|
|
|
$5.08
|
|
|
$0.25
|
|
|
$4.79
|
|
|
$0.54
|
|
|
Diluted
|
|
$5.26
|
|
|
$5.00
|
|
|
$0.26
|
|
|
$4.73
|
|
|
$0.53
|
|
|
Cash dividends declared and paid per share
|
|
$2.29
|
|
|
$2.18
|
|
|
$0.11
|
|
|
$2.29
|
|
|
$ -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
$5,117,421
|
|
|
$4,505,721
|
|
|
$611,700
|
|
|
$4,890,121
|
|
|
$227,300
|
|
|
Shares outstanding (end of period)
|
|
163,858,070
|
|
|
166,057,085
|
|
|
(2,199,015
|
)
|
|
164,463,297
|
|
|
(605,227
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
42.6
|
%
|
|
42.0
|
%
|
|
60 bps
|
|
41.8
|
%
|
|
80 bps
|
|
Effective tax rate
|
|
27.6
|
%
|
|
28.8
|
%
|
|
(120) bps
|
|
30.9
|
%
|
|
(330) bps
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (1)
|
|
$1,216
|
|
|
$1,227
|
|
|
$(11
|
)
|
|
$1,179
|
|
|
$37
|
|
|
Operating margin (1)
|
|
44.8
|
%
|
|
43.9
|
%
|
|
90 bps
|
|
43.9
|
%
|
|
90 bps
|
|
Nonoperating income (expense), less net income
(loss)
attributable to noncontrolling interests (2)
|
|
$(1
|
)
|
|
$(32
|
)
|
|
$31
|
|
|
$(31
|
)
|
|
$30
|
|
|
Net income attributable to BlackRock, Inc. (3)
|
|
$854
|
|
|
$844
|
|
|
$10
|
|
|
$797
|
|
|
$57
|
|
|
Diluted earnings attributable to BlackRock, Inc.
common
stockholders per share (3) (4)
|
|
$5.14
|
|
|
$5.00
|
|
|
$0.14
|
|
|
$4.78
|
|
|
$0.36
|
|
|
Effective tax rate
|
|
29.7
|
%
|
|
29.3
|
%
|
|
40 bps
|
|
30.6
|
%
|
|
(90) 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)
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
$7,394
|
|
|
$7,380
|
|
|
$14
|
|
|
Investment advisory performance fees
|
|
166
|
|
|
452
|
|
|
(286
|
)
|
|
BlackRock Solutions and advisory
|
|
517
|
|
|
475
|
|
|
42
|
|
|
Distribution fees
|
|
32
|
|
|
44
|
|
|
(12
|
)
|
|
Other revenue
|
|
156
|
|
|
187
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
8,265
|
|
|
8,538
|
|
|
(273
|
)
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
2,893
|
|
|
3,016
|
|
|
(123
|
)
|
|
Distribution and servicing costs
|
|
320
|
|
|
306
|
|
|
14
|
|
|
Amortization of deferred sales commissions
|
|
27
|
|
|
37
|
|
|
(10
|
)
|
|
Direct fund expense
|
|
583
|
|
|
578
|
|
|
5
|
|
|
General and administration
|
|
946
|
|
|
970
|
|
|
(24
|
)
|
|
Restructuring charge
|
|
76
|
|
|
-
|
|
|
76
|
|
|
Amortization of intangible assets
|
|
75
|
|
|
104
|
|
|
(29
|
)
|
|
Total expense
|
|
4,920
|
|
|
5,011
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
3,345
|
|
|
3,527
|
|
|
(182
|
)
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
49
|
|
|
59
|
|
|
(10
|
)
|
|
Interest and dividend income
|
|
33
|
|
|
21
|
|
|
12
|
|
|
Interest expense
|
|
(154
|
)
|
|
(153
|
)
|
|
(1
|
)
|
|
Total nonoperating income (expense)
|
|
(72
|
)
|
|
(73
|
)
|
|
1
|
|
|
Income before income taxes
|
|
3,273
|
|
|
3,454
|
|
|
(181
|
)
|
|
Income tax expense
|
|
954
|
|
|
971
|
|
|
(17
|
)
|
|
Net income
|
|
2,319
|
|
|
2,483
|
|
|
(164
|
)
|
|
Less:
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
Net income attributable to BlackRock, Inc.
|
|
$2,321
|
|
|
$2,484
|
|
|
$(163
|
)
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
164,756,355
|
|
|
166,579,805
|
|
|
(1,823,450
|
)
|
|
Diluted
|
|
166,760,912
|
|
|
169,157,188
|
|
|
(2,396,276
|
)
|
|
Earnings per share attributable to BlackRock, Inc. common
stockholders (4)
|
|
|
|
|
|
|
|
Basic
|
|
$14.09
|
|
|
$14.91
|
|
|
$(0.82
|
)
|
|
Diluted
|
|
$13.92
|
|
|
$14.68
|
|
|
$(0.76
|
)
|
|
Cash dividends declared and paid per share
|
|
$6.87
|
|
|
$6.54
|
|
|
$0.33
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
$5,117,421
|
|
|
$4,505,721
|
|
|
$611,700
|
|
|
Shares outstanding (end of period)
|
|
163,858,070
|
|
|
166,057,085
|
|
|
(2,199,015
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
Operating margin
|
|
40.5
|
%
|
|
41.3
|
%
|
|
(80) bps
|
|
Effective tax rate
|
|
29.1
|
%
|
|
28.1
|
%
|
|
100 bps
|
|
As adjusted:
|
|
|
|
|
|
|
|
Operating income (1)
|
|
$3,442
|
|
|
$3,552
|
|
|
$(110
|
)
|
|
Operating margin (1)
|
|
43.5
|
%
|
|
43.4
|
%
|
|
10 bps
|
|
Nonoperating income (expense), less net income (loss) attributable
to
noncontrolling interests (2)
|
|
$(70
|
)
|
|
$(71
|
)
|
|
$1
|
|
|
Net income attributable to BlackRock, Inc. (3)
|
|
$2,362
|
|
|
$2,512
|
|
|
$(150
|
)
|
|
Diluted earnings attributable to BlackRock, Inc. common
stockholders per
share(3) (4)
|
|
$14.16
|
|
|
$14.85
|
|
|
$(0.69
|
)
|
|
Effective tax rate
|
|
30.0
|
%
|
|
27.8
|
%
|
|
220 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
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
inflows
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2016
|
|
(outflows)
|
|
Market Change
|
|
FX impact (1)
|
|
2016
|
|
Average AUM (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$191,980
|
|
$(3,889
|
)
|
|
$8,550
|
|
|
$(510
|
)
|
|
$196,131
|
|
$195,266
|
|
Fixed income
|
|
223,710
|
|
5,801
|
|
|
1,228
|
|
|
103
|
|
|
230,842
|
|
228,099
|
|
Multi-asset
|
|
111,456
|
|
(3,452
|
)
|
|
3,435
|
|
|
(70
|
)
|
|
111,369
|
|
112,263
|
|
Alternatives
|
|
17,281
|
|
(688
|
)
|
|
(190
|
)
|
|
33
|
|
|
16,436
|
|
16,753
|
|
Retail subtotal
|
|
544,427
|
|
(2,228
|
)
|
|
13,023
|
|
|
(444
|
)
|
|
554,778
|
|
552,381
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
826,768
|
|
25,519
|
|
|
38,628
|
|
|
95
|
|
|
891,010
|
|
868,747
|
|
Fixed income
|
|
304,896
|
|
22,730
|
|
|
1,607
|
|
|
229
|
|
|
329,462
|
|
320,249
|
|
Multi-asset
|
|
2,328
|
|
124
|
|
|
56
|
|
|
(2
|
)
|
|
2,506
|
|
2,430
|
|
Alternatives
|
|
20,130
|
|
2,884
|
|
|
160
|
|
|
14
|
|
|
23,188
|
|
22,162
|
|
iShares subtotal
|
|
1,154,122
|
|
51,257
|
|
|
40,451
|
|
|
336
|
|
|
1,246,166
|
|
1,213,588
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
120,127
|
|
(3,357
|
)
|
|
7,455
|
|
|
(455
|
)
|
|
123,770
|
|
122,790
|
|
Fixed income
|
|
549,686
|
|
5,060
|
|
|
6,538
|
|
|
(485
|
)
|
|
560,799
|
|
557,357
|
|
Multi-asset
|
|
264,937
|
|
6,533
|
|
|
8,909
|
|
|
27
|
|
|
280,406
|
|
274,516
|
|
Alternatives
|
|
74,971
|
|
(705
|
)
|
|
565
|
|
|
(153
|
)
|
|
74,678
|
|
74,741
|
|
Active subtotal
|
|
1,009,721
|
|
7,531
|
|
|
23,467
|
|
|
(1,066
|
)
|
|
1,039,653
|
|
1,029,404
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,293,683
|
|
(4,923
|
)
|
|
68,226
|
|
|
(1,858
|
)
|
|
1,355,128
|
|
1,335,780
|
|
Fixed income
|
|
488,364
|
|
3,390
|
|
|
21,566
|
|
|
(6,155
|
)
|
|
507,165
|
|
499,187
|
|
Multi-asset
|
|
7,799
|
|
(167
|
)
|
|
322
|
|
|
26
|
|
|
7,980
|
|
7,982
|
|
Alternatives
|
|
6,808
|
|
324
|
|
|
169
|
|
|
(73
|
)
|
|
7,228
|
|
7,081
|
|
Index subtotal
|
|
1,796,654
|
|
(1,376
|
)
|
|
90,283
|
|
|
(8,060
|
)
|
|
1,877,501
|
|
1,850,030
|
|
Institutional subtotal
|
|
2,806,375
|
|
6,155
|
|
|
113,750
|
|
|
(9,126
|
)
|
|
2,917,154
|
|
2,879,434
|
|
Long-term
|
|
4,504,924
|
|
55,184
|
|
|
167,224
|
|
|
(9,234
|
)
|
|
4,718,098
|
|
4,645,403
|
|
Cash management
|
|
374,684
|
|
14,696
|
|
|
219
|
|
|
(617
|
)
|
|
388,982
|
|
383,424
|
|
Advisory (3)
|
|
10,513
|
|
(71
|
)
|
|
(14
|
)
|
|
(87
|
)
|
|
10,341
|
|
10,419
|
|
Total
|
|
$4,890,121
|
|
$69,809
|
|
|
$167,429
|
|
|
$(9,938
|
)
|
|
$5,117,421
|
|
$5,039,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Product Type (Long-term)
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
inflows
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2016
|
|
(outflows)
|
|
Market Change
|
|
FX impact (1)
|
|
2016
|
|
Average AUM (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$276,348
|
|
$(7,831
|
)
|
|
$13,725
|
|
|
$(516
|
)
|
|
$281,726
|
|
$281,136
|
|
iShares
|
|
826,768
|
|
25,519
|
|
|
38,628
|
|
|
95
|
|
|
891,010
|
|
868,747
|
|
Non-ETF index
|
|
1,329,442
|
|
(4,338
|
)
|
|
70,506
|
|
|
(2,307
|
)
|
|
1,393,303
|
|
1,372,700
|
|
Equity subtotal
|
|
2,432,558
|
|
13,350
|
|
|
122,859
|
|
|
(2,728
|
)
|
|
2,566,039
|
|
2,522,583
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
765,431
|
|
10,182
|
|
|
7,455
|
|
|
(210
|
)
|
|
782,858
|
|
777,109
|
|
iShares
|
|
304,896
|
|
22,730
|
|
|
1,607
|
|
|
229
|
|
|
329,462
|
|
320,249
|
|
Non-ETF index
|
|
496,329
|
|
4,069
|
|
|
21,877
|
|
|
(6,327
|
)
|
|
515,948
|
|
507,534
|
|
Fixed income subtotal
|
|
1,566,656
|
|
36,981
|
|
|
30,939
|
|
|
(6,308
|
)
|
|
1,628,268
|
|
1,604,892
|
|
Multi-asset
|
|
386,520
|
|
3,038
|
|
|
12,722
|
|
|
(19
|
)
|
|
402,261
|
|
397,191
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
89,912
|
|
(1,408
|
)
|
|
372
|
|
|
(145
|
)
|
|
88,731
|
|
89,149
|
|
Currency and
commodities (4)
|
|
29,278
|
|
3,223
|
|
|
332
|
|
|
(34
|
)
|
|
32,799
|
|
31,588
|
|
Alternatives subtotal
|
|
119,190
|
|
1,815
|
|
|
704
|
|
|
(179
|
)
|
|
121,530
|
|
120,737
|
|
Long-term
|
|
$4,504,924
|
|
$55,184
|
|
|
$167,224
|
|
|
$(9,234
|
)
|
|
$4,718,098
|
|
$4,645,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
inflows
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2016
|
|
(outflows)
|
|
Market Change
|
|
FX impact (1)
|
|
2016
|
|
Average AUM (2)
|
|
Active
|
|
$1,510,424
|
|
$4,039
|
|
|
$33,900
|
|
|
$(890
|
)
|
|
$1,547,473
|
|
$1,536,517
|
|
Index and iShares
|
|
2,994,500
|
|
51,145
|
|
|
133,324
|
|
|
(8,344
|
)
|
|
3,170,625
|
|
3,108,886
|
|
Long-term
|
|
$4,504,924
|
|
$55,184
|
|
|
$167,224
|
|
|
$(9,234
|
)
|
|
$4,718,098
|
|
$4,645,403
|
|
(1)
|
|
Foreign exchange reflects the impact of translating 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
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition (1)
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$193,755
|
|
$(9,171
|
)
|
|
$ -
|
|
$13,929
|
|
|
$(2,382
|
)
|
|
$196,131
|
|
$192,072
|
|
Fixed income
|
|
212,653
|
|
10,239
|
|
|
-
|
|
7,929
|
|
|
21
|
|
|
230,842
|
|
220,956
|
|
Multi-asset
|
|
115,307
|
|
(7,668
|
)
|
|
-
|
|
4,216
|
|
|
(486
|
)
|
|
111,369
|
|
112,464
|
|
Alternatives
|
|
19,410
|
|
(2,279
|
)
|
|
-
|
|
(803
|
)
|
|
108
|
|
|
16,436
|
|
17,904
|
|
Retail subtotal
|
|
541,125
|
|
(8,879
|
)
|
|
-
|
|
25,271
|
|
|
(2,739
|
)
|
|
554,778
|
|
543,396
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
823,156
|
|
24,264
|
|
|
-
|
|
40,747
|
|
|
2,843
|
|
|
891,010
|
|
828,932
|
|
Fixed income
|
|
254,190
|
|
60,238
|
|
|
-
|
|
14,126
|
|
|
908
|
|
|
329,462
|
|
296,192
|
|
Multi-asset
|
|
2,730
|
|
(340
|
)
|
|
-
|
|
110
|
|
|
6
|
|
|
2,506
|
|
2,341
|
|
Alternatives
|
|
12,485
|
|
7,016
|
|
|
-
|
|
3,642
|
|
|
45
|
|
|
23,188
|
|
18,100
|
|
iShares subtotal
|
|
1,092,561
|
|
91,178
|
|
|
-
|
|
58,625
|
|
|
3,802
|
|
|
1,246,166
|
|
1,145,565
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
121,442
|
|
(4,644
|
)
|
|
-
|
|
8,459
|
|
|
(1,487
|
)
|
|
123,770
|
|
119,626
|
|
Fixed income
|
|
514,428
|
|
8,967
|
|
|
-
|
|
34,779
|
|
|
2,625
|
|
|
560,799
|
|
542,375
|
|
Multi-asset
|
|
252,041
|
|
7,664
|
|
|
-
|
|
20,920
|
|
|
(219
|
)
|
|
280,406
|
|
263,307
|
|
Alternatives
|
|
74,941
|
|
(375
|
)
|
|
-
|
|
549
|
|
|
(437
|
)
|
|
74,678
|
|
74,835
|
|
Active subtotal
|
|
962,852
|
|
11,612
|
|
|
-
|
|
64,707
|
|
|
482
|
|
|
1,039,653
|
|
1,000,143
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,285,419
|
|
(16,990
|
)
|
|
-
|
|
83,247
|
|
|
3,452
|
|
|
1,355,128
|
|
1,291,634
|
|
Fixed income
|
|
441,097
|
|
15,204
|
|
|
-
|
|
71,566
|
|
|
(20,702
|
)
|
|
507,165
|
|
475,562
|
|
Multi-asset
|
|
6,258
|
|
(285
|
)
|
|
-
|
|
1,569
|
|
|
438
|
|
|
7,980
|
|
7,443
|
|
Alternatives
|
|
6,003
|
|
960
|
|
|
-
|
|
576
|
|
|
(311
|
)
|
|
7,228
|
|
6,518
|
|
Index subtotal
|
|
1,738,777
|
|
(1,111
|
)
|
|
-
|
|
156,958
|
|
|
(17,123
|
)
|
|
1,877,501
|
|
1,781,157
|
|
Institutional subtotal
|
|
2,701,629
|
|
10,501
|
|
|
-
|
|
221,665
|
|
|
(16,641
|
)
|
|
2,917,154
|
|
2,781,300
|
|
Long-term
|
|
4,335,315
|
|
92,800
|
|
|
-
|
|
305,561
|
|
|
(15,578
|
)
|
|
4,718,098
|
|
4,470,261
|
|
Cash management
|
|
299,884
|
|
11,556
|
|
|
80,635
|
|
206
|
|
|
(3,299
|
)
|
|
388,982
|
|
345,881
|
|
Advisory (4)
|
|
10,213
|
|
(216
|
)
|
|
-
|
|
(120
|
)
|
|
464
|
|
|
10,341
|
|
10,419
|
|
Total
|
|
$4,645,412
|
|
$104,140
|
|
|
$80,635
|
|
$305,647
|
|
|
$(18,413
|
)
|
|
$5,117,421
|
|
$4,826,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date Component Changes by Product Type (Long-term)
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$281,319
|
|
$(15,680
|
)
|
|
$ -
|
|
$17,980
|
|
|
$(1,893
|
)
|
|
$281,726
|
|
$276,494
|
|
iShares
|
|
823,156
|
|
24,264
|
|
|
-
|
|
40,747
|
|
|
2,843
|
|
|
891,010
|
|
828,932
|
|
Non-ETF index
|
|
1,319,297
|
|
(15,125
|
)
|
|
-
|
|
87,655
|
|
|
1,476
|
|
|
1,393,303
|
|
1,326,838
|
|
Equity subtotal
|
|
2,423,772
|
|
(6,541
|
)
|
|
-
|
|
146,382
|
|
|
2,426
|
|
|
2,566,039
|
|
2,432,264
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
719,653
|
|
18,110
|
|
|
-
|
|
41,727
|
|
|
3,368
|
|
|
782,858
|
|
755,462
|
|
iShares
|
|
254,190
|
|
60,238
|
|
|
-
|
|
14,126
|
|
|
908
|
|
|
329,462
|
|
296,192
|
|
Non-ETF index
|
|
448,525
|
|
16,300
|
|
|
-
|
|
72,547
|
|
|
(21,424
|
)
|
|
515,948
|
|
483,431
|
|
Fixed income subtotal
|
|
1,422,368
|
|
94,648
|
|
|
-
|
|
128,400
|
|
|
(17,148
|
)
|
|
1,628,268
|
|
1,535,085
|
|
Multi-asset
|
|
376,336
|
|
(629
|
)
|
|
-
|
|
26,815
|
|
|
(261
|
)
|
|
402,261
|
|
385,555
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
92,085
|
|
(2,382
|
)
|
|
-
|
|
(309
|
)
|
|
(663
|
)
|
|
88,731
|
|
90,424
|
|
Currency and
commodities (5)
|
|
20,754
|
|
7,704
|
|
|
-
|
|
4,273
|
|
|
68
|
|
|
32,799
|
|
26,933
|
|
Alternatives subtotal
|
|
112,839
|
|
5,322
|
|
|
-
|
|
3,964
|
|
|
(595
|
)
|
|
121,530
|
|
117,357
|
|
Long-term
|
|
$4,335,315
|
|
$92,800
|
|
|
$ -
|
|
$305,561
|
|
|
$(15,578
|
)
|
|
$4,718,098
|
|
$4,470,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
Active
|
|
$1,462,672
|
|
$(228
|
)
|
|
$ -
|
|
$84,589
|
|
|
$440
|
|
|
$1,547,473
|
|
$1,500,466
|
|
Index and iShares
|
|
2,872,643
|
|
93,028
|
|
|
-
|
|
220,972
|
|
|
(16,018
|
)
|
|
3,170,625
|
|
2,969,795
|
|
Long-term
|
|
$4,335,315
|
|
$92,800
|
|
|
$ -
|
|
$305,561
|
|
|
$(15,578
|
)
|
|
$4,718,098
|
|
$4,470,261
|
|
(1)
|
|
Amount represents 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 ten 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
inflows
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisitions(1)
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$184,265
|
|
$(2,443
|
)
|
|
$ -
|
|
$18,203
|
|
|
$(3,894
|
)
|
|
$196,131
|
|
$192,360
|
|
Fixed income
|
|
210,605
|
|
14,175
|
|
|
-
|
|
6,755
|
|
|
(693
|
)
|
|
230,842
|
|
218,901
|
|
Multi-asset
|
|
120,486
|
|
(11,233
|
)
|
|
366
|
|
2,444
|
|
|
(694
|
)
|
|
111,369
|
|
114,089
|
|
Alternatives
|
|
19,852
|
|
(2,358
|
)
|
|
-
|
|
(1,025
|
)
|
|
(33
|
)
|
|
16,436
|
|
18,374
|
|
Retail subtotal
|
|
535,208
|
|
(1,859
|
)
|
|
366
|
|
26,377
|
|
|
(5,314
|
)
|
|
554,778
|
|
543,724
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
748,458
|
|
71,824
|
|
|
-
|
|
71,109
|
|
|
(381
|
)
|
|
891,010
|
|
821,038
|
|
Fixed income
|
|
246,712
|
|
72,177
|
|
|
-
|
|
11,342
|
|
|
(769
|
)
|
|
329,462
|
|
286,110
|
|
Multi-asset
|
|
1,808
|
|
577
|
|
|
-
|
|
120
|
|
|
1
|
|
|
2,506
|
|
2,246
|
|
Alternatives
|
|
13,515
|
|
6,824
|
|
|
-
|
|
2,843
|
|
|
6
|
|
|
23,188
|
|
17,042
|
|
iShares subtotal
|
|
1,010,493
|
|
151,402
|
|
|
-
|
|
85,414
|
|
|
(1,143
|
)
|
|
1,246,166
|
|
1,126,436
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
116,718
|
|
(4,421
|
)
|
|
-
|
|
14,226
|
|
|
(2,753
|
)
|
|
123,770
|
|
120,066
|
|
Fixed income
|
|
522,509
|
|
5,581
|
|
|
-
|
|
32,670
|
|
|
39
|
|
|
560,799
|
|
538,467
|
|
Multi-asset
|
|
245,776
|
|
10,674
|
|
|
-
|
|
27,244
|
|
|
(3,288
|
)
|
|
280,406
|
|
261,256
|
|
Alternatives
|
|
74,351
|
|
160
|
|
|
560
|
|
362
|
|
|
(755
|
)
|
|
74,678
|
|
74,820
|
|
Active subtotal
|
|
959,354
|
|
11,994
|
|
|
560
|
|
74,502
|
|
|
(6,757
|
)
|
|
1,039,653
|
|
994,609
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,223,796
|
|
(18,036
|
)
|
|
-
|
|
152,702
|
|
|
(3,334
|
)
|
|
1,355,128
|
|
1,289,332
|
|
Fixed income
|
|
465,811
|
|
2,872
|
|
|
-
|
|
66,253
|
|
|
(27,771
|
)
|
|
507,165
|
|
473,484
|
|
Multi-asset
|
|
6,931
|
|
(869
|
)
|
|
-
|
|
1,557
|
|
|
361
|
|
|
7,980
|
|
7,282
|
|
Alternatives
|
|
6,201
|
|
1,161
|
|
|
-
|
|
253
|
|
|
(387
|
)
|
|
7,228
|
|
6,454
|
|
Index subtotal
|
|
1,702,739
|
|
(14,872
|
)
|
|
-
|
|
220,765
|
|
|
(31,131
|
)
|
|
1,877,501
|
|
1,776,552
|
|
Institutional subtotal
|
|
2,662,093
|
|
(2,878
|
)
|
|
560
|
|
295,267
|
|
|
(37,888
|
)
|
|
2,917,154
|
|
2,771,161
|
|
Long-term
|
|
4,207,794
|
|
146,665
|
|
|
926
|
|
407,058
|
|
|
(44,345
|
)
|
|
4,718,098
|
|
4,441,321
|
|
Cash management
|
|
285,692
|
|
27,323
|
|
|
80,635
|
|
29
|
|
|
(4,697
|
)
|
|
388,982
|
|
332,029
|
|
Advisory (4)
|
|
12,235
|
|
(1,963
|
)
|
|
-
|
|
(124
|
)
|
|
193
|
|
|
10,341
|
|
10,596
|
|
Total
|
|
$4,505,721
|
|
$172,025
|
|
|
$81,561
|
|
$406,963
|
|
|
$(48,849
|
)
|
|
$5,117,421
|
|
$4,783,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Product Type (Long-term)
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
inflows
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisitions(1)
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$270,423
|
|
$(10,814
|
)
|
|
$ -
|
|
$26,313
|
|
|
$(4,196
|
)
|
|
$281,726
|
|
$277,777
|
|
iShares
|
|
748,458
|
|
71,824
|
|
|
-
|
|
71,109
|
|
|
(381
|
)
|
|
891,010
|
|
821,038
|
|
Non-ETF index
|
|
1,254,356
|
|
(14,086
|
)
|
|
-
|
|
158,818
|
|
|
(5,785
|
)
|
|
1,393,303
|
|
1,323,981
|
|
Equity subtotal
|
|
2,273,237
|
|
46,924
|
|
|
-
|
|
256,240
|
|
|
(10,362
|
)
|
|
2,566,039
|
|
2,422,796
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
725,802
|
|
18,341
|
|
|
-
|
|
38,470
|
|
|
245
|
|
|
782,858
|
|
749,590
|
|
iShares
|
|
246,712
|
|
72,177
|
|
|
-
|
|
11,342
|
|
|
(769
|
)
|
|
329,462
|
|
286,110
|
|
Non-ETF index
|
|
473,123
|
|
4,287
|
|
|
-
|
|
67,208
|
|
|
(28,670
|
)
|
|
515,948
|
|
481,262
|
|
Fixed income subtotal
|
|
1,445,637
|
|
94,805
|
|
|
-
|
|
117,020
|
|
|
(29,194
|
)
|
|
1,628,268
|
|
1,516,962
|
|
Multi-asset
|
|
375,001
|
|
(851
|
)
|
|
366
|
|
31,365
|
|
|
(3,620
|
)
|
|
402,261
|
|
384,873
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
91,358
|
|
(1,424
|
)
|
|
560
|
|
(667
|
)
|
|
(1,096
|
)
|
|
88,731
|
|
90,760
|
|
Currency and
commodities (5)
|
|
22,561
|
|
7,211
|
|
|
-
|
|
3,100
|
|
|
(73
|
)
|
|
32,799
|
|
25,930
|
|
Alternatives subtotal
|
|
113,919
|
|
5,787
|
|
|
560
|
|
2,433
|
|
|
(1,169
|
)
|
|
121,530
|
|
116,690
|
|
Long-term
|
|
$4,207,794
|
|
$146,665
|
|
|
$926
|
|
$407,058
|
|
|
$(44,345
|
)
|
|
$4,718,098
|
|
$4,441,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
inflows
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisitions(1)
|
|
Market Change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
Active
|
|
$1,456,692
|
|
$4,771
|
|
|
$926
|
|
$93,805
|
|
|
$(8,721
|
)
|
|
$1,547,473
|
|
$1,495,906
|
|
Index and iShares
|
|
2,751,102
|
|
141,894
|
|
|
-
|
|
313,253
|
|
|
(35,624
|
)
|
|
3,170,625
|
|
2,945,415
|
|
Long-term
|
|
$4,207,794
|
|
$146,665
|
|
|
$926
|
|
$407,058
|
|
|
$(44,345
|
)
|
|
$4,718,098
|
|
$4,441,321
|
|
(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
September 30,
|
|
Change
|
|
Three Months
Ended
June 30, 2016
|
|
Change
|
|
Nine Months Ended
September 30,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Change
|
|
Investment advisory, administration fees
and securities
lending revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$409
|
|
$427
|
|
$(18
|
)
|
|
$406
|
|
$3
|
|
|
$1,201
|
|
$1,296
|
|
$(95
|
)
|
|
iShares
|
|
691
|
|
673
|
|
18
|
|
|
656
|
|
35
|
|
|
1,970
|
|
2,085
|
|
(115
|
)
|
|
Non-ETF Index
|
|
170
|
|
158
|
|
12
|
|
|
174
|
|
(4
|
)
|
|
508
|
|
511
|
|
(3
|
)
|
|
Equity subtotal
|
|
1,270
|
|
1,258
|
|
12
|
|
|
1,236
|
|
34
|
|
|
3,679
|
|
3,892
|
|
(213
|
)
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
427
|
|
402
|
|
25
|
|
|
414
|
|
13
|
|
|
1,237
|
|
1,162
|
|
75
|
|
|
iShares
|
|
188
|
|
139
|
|
49
|
|
|
172
|
|
16
|
|
|
512
|
|
407
|
|
105
|
|
|
Non-ETF Index
|
|
78
|
|
70
|
|
8
|
|
|
69
|
|
9
|
|
|
217
|
|
210
|
|
7
|
|
|
Fixed income subtotal
|
|
693
|
|
611
|
|
82
|
|
|
655
|
|
38
|
|
|
1,966
|
|
1,779
|
|
187
|
|
|
Multi-asset
|
|
285
|
|
322
|
|
(37
|
)
|
|
291
|
|
(6
|
)
|
|
860
|
|
942
|
|
(82
|
)
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
156
|
|
166
|
|
(10
|
)
|
|
168
|
|
(12
|
)
|
|
488
|
|
481
|
|
7
|
|
|
Currency and commodities
|
|
24
|
|
18
|
|
6
|
|
|
20
|
|
4
|
|
|
61
|
|
56
|
|
5
|
|
|
Alternatives subtotal
|
|
180
|
|
184
|
|
(4
|
)
|
|
188
|
|
(8
|
)
|
|
549
|
|
537
|
|
12
|
|
|
Long-term
|
|
2,428
|
|
2,375
|
|
53
|
|
|
2,370
|
|
58
|
|
|
7,054
|
|
7,150
|
|
(96
|
)
|
|
Cash management
|
|
118
|
|
81
|
|
37
|
|
|
119
|
|
(1
|
)
|
|
340
|
|
230
|
|
110
|
|
|
Total base fees
|
|
2,546
|
|
2,456
|
|
90
|
|
|
2,489
|
|
57
|
|
|
7,394
|
|
7,380
|
|
14
|
|
|
Investment advisory performance fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
14
|
|
23
|
|
(9
|
)
|
|
42
|
|
(28
|
)
|
|
67
|
|
121
|
|
(54
|
)
|
|
Fixed income
|
|
2
|
|
3
|
|
(1
|
)
|
|
2
|
|
-
|
|
|
9
|
|
10
|
|
(1
|
)
|
|
Multi-asset
|
|
1
|
|
3
|
|
(2
|
)
|
|
2
|
|
(1
|
)
|
|
6
|
|
19
|
|
(13
|
)
|
|
Alternatives
|
|
41
|
|
179
|
|
(138
|
)
|
|
28
|
|
13
|
|
|
84
|
|
302
|
|
(218
|
)
|
|
Total performance fees
|
|
58
|
|
208
|
|
(150
|
)
|
|
74
|
|
(16
|
)
|
|
166
|
|
452
|
|
(286
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Solutions and advisory
|
|
174
|
|
167
|
|
7
|
|
|
172
|
|
2
|
|
|
517
|
|
475
|
|
42
|
|
|
Distribution fees
|
|
10
|
|
14
|
|
(4
|
)
|
|
11
|
|
(1
|
)
|
|
32
|
|
44
|
|
(12
|
)
|
|
Other revenue
|
|
49
|
|
65
|
|
(16
|
)
|
|
58
|
|
(9
|
)
|
|
156
|
|
187
|
|
(31
|
)
|
|
Total revenue
|
|
$2,837
|
|
$2,910
|
|
$(73
|
)
|
|
$2,804
|
|
$33
|
|
|
$8,265
|
|
$8,538
|
|
$(273
|
)
|
Highlights
-
Investment advisory, administration fees and securities lending
revenue increased $90 million from the third quarter of 2015
reflecting the impact of organic growth, higher markets on long-term
average AUM and the effect of AUM acquired in the BofA Global Capital
Management transaction, partially offset by mix shift from equities to
fixed income and cash products. Securities lending revenue of $142
million in the current quarter increased $27 million from the third
quarter of 2015, primarily reflecting higher average balances of
securities on loan and higher spreads.
Investment advisory,
administration fees and securities lending revenue increased $57
million from the second quarter of 2016, driven by higher average AUM
and the effect of one additional day in the current quarter.
Securities lending revenue decreased $9 million from the second
quarter of 2016.
-
Performance fees decreased $150 million from the third quarter of
2015, primarily reflecting strong performance from a single hedge fund
with an annual measurement period that ended in the third quarter of
2015, and decreased $16 million from the second quarter of 2016.
-
BlackRock Solutions® and advisory revenue increased
$7 million from the third quarter of 2015 and $2 million from the
second quarter of 2016. BlackRock Solutions and advisory
revenue included $152 million of Aladdin revenue in the current
quarter compared with $135 million in the third quarter of 2015 and
$146 million in the second quarter of 2016.
|
SUMMARY OF OPERATING EXPENSE
|
|
|
|
|
|
Three
Months Ended
September 30,
|
|
|
|
Three
Months
Ended
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
|
June 30,
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Operating Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and
benefits
|
|
$969
|
|
$1,023
|
|
$(54
|
)
|
|
$977
|
|
$(8
|
)
|
|
$2,893
|
|
$3,016
|
|
$(123
|
)
|
|
Distribution and servicing costs
|
|
114
|
|
102
|
|
12
|
|
|
109
|
|
5
|
|
|
320
|
|
306
|
|
14
|
|
|
Amortization of deferred sales
commissions
|
|
8
|
|
12
|
|
(4
|
)
|
|
9
|
|
(1
|
)
|
|
27
|
|
37
|
|
(10
|
)
|
|
Direct fund expense
|
|
200
|
|
198
|
|
2
|
|
|
195
|
|
5
|
|
|
583
|
|
578
|
|
5
|
|
|
General and administration
|
|
312
|
|
319
|
|
(7
|
)
|
|
316
|
|
(4
|
)
|
|
946
|
|
970
|
|
(24
|
)
|
|
Restructuring charge
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
|
76
|
|
-
|
|
76
|
|
|
Amortization of intangible assets
|
|
25
|
|
34
|
|
(9
|
)
|
|
25
|
|
-
|
|
|
75
|
|
104
|
|
(29
|
)
|
|
Total Operating Expense
|
|
$1,628
|
|
$1,688
|
|
$(60
|
)
|
|
$1,631
|
|
$(3
|
)
|
|
$4,920
|
|
$5,011
|
|
$(91
|
)
|
Highlights
-
Employee compensation and benefits decreased $54 million from the
third quarter of 2015, reflecting lower incentive compensation, driven
primarily by lower performance fees, and decreased $8 million from the
second quarter of 2016.
-
General and administration expense decreased $7 million from the third
quarter of 2015, reflecting expense discipline, and decreased $4
million from the second quarter of 2016.
|
INCOME TAX EXPENSE
|
|
|
|
|
|
Three
Months Ended
September 30,
|
|
|
|
Three
Months Ended
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
|
June 30,
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Income tax expense
|
|
$333
|
|
$342
|
|
$(9)
|
|
$353
|
|
$(20)
|
|
$954
|
|
$971
|
|
$(17)
|
Highlights
-
The third quarter 2016 income tax expense included a $26 million net
noncash tax benefit, primarily related to the revaluation of certain
deferred income tax liabilities as a result of legislation enacted in
the United Kingdom, and domestic state and local tax changes.
-
The second quarter 2016 income tax expense included a $4 million net
noncash expense, primarily related to the revaluation of certain
deferred income tax liabilities as a result of domestic state and
local tax changes.
-
The third quarter 2015 income tax expense included a $6 million
noncash tax benefit, primarily associated with the revaluation of
certain deferred income tax liabilities as a result of domestic state
and local tax changes.
|
SUMMARY OF NONOPERATING INCOME (EXPENSE)
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
|
|
Three Months
Ended
June 30,
2016
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Nonoperating income (expense), GAAP
basis
|
|
$1
|
|
|
$(48
|
)
|
|
$49
|
|
|
$(25
|
)
|
|
$26
|
|
|
$(72
|
)
|
|
$(73
|
)
|
|
$1
|
|
|
Less: Net income (loss) attributable to NCI
|
|
2
|
|
|
(11
|
)
|
|
13
|
|
|
6
|
|
|
(4
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)(1)
|
|
$(1
|
)
|
$(37
|
)
|
|
$36
|
|
|
$(31
|
)
|
|
$30
|
|
|
$(70
|
)
|
|
$(72
|
)
|
|
$2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
economic
investments at
September
30, 2016(2)
|
|
Three Months
Ended
September 30,
|
|
|
|
Three Months
Ended
June 30,
2016
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Net gain (loss) on
investments(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity
|
|
15-20%
|
|
$2
|
|
|
$25
|
|
|
$(23
|
)
|
|
$7
|
|
|
$(5
|
)
|
|
$11
|
|
|
$35
|
|
|
$(24
|
)
|
|
Real assets
|
|
5-10%
|
|
2
|
|
|
5
|
|
|
(3
|
)
|
|
1
|
|
|
1
|
|
|
5
|
|
|
9
|
|
|
(4
|
)
|
|
Other alternatives(3)
|
|
10-15%
|
|
9
|
|
|
(10
|
)
|
|
19
|
|
|
4
|
|
|
5
|
|
|
13
|
|
|
(6
|
)
|
|
19
|
|
|
Other investments(4)
|
|
60-65%
|
|
16
|
|
|
(19
|
)
|
|
35
|
|
|
2
|
|
|
14
|
|
|
22
|
|
|
(23
|
)
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
29
|
|
|
1
|
|
|
28
|
|
|
14
|
|
|
15
|
|
|
51
|
|
|
15
|
|
|
36
|
|
|
Other gains(5)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
45
|
|
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net gain (loss) on investments(1)
|
|
29
|
|
|
1
|
|
|
28
|
|
|
14
|
|
|
15
|
|
|
51
|
|
|
60
|
|
|
(9
|
)
|
|
Interest and dividend income
|
|
22
|
|
|
12
|
|
|
10
|
|
|
6
|
|
|
16
|
|
|
33
|
|
|
21
|
|
|
12
|
|
|
Interest expense
|
|
|
|
(52
|
)
|
|
(50
|
)
|
|
(2
|
)
|
|
(51
|
)
|
|
(1
|
)
|
|
(154
|
)
|
|
(153
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense
|
|
(30
|
)
|
|
(38
|
)
|
|
8
|
|
|
(45
|
)
|
|
15
|
|
|
(121
|
)
|
|
(132
|
)
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)(1)
|
|
(1
|
)
|
|
(37
|
)
|
|
36
|
|
|
(31
|
)
|
|
30
|
|
|
(70
|
)
|
|
(72
|
)
|
|
2
|
|
|
Compensation expense related to
(appreciation) depreciation
on deferred
compensation plans
|
|
-
|
|
|
5
|
|
|
(5
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), as
adjusted(1)
|
|
$(1
|
)
|
|
$(32
|
)
|
|
$31
|
|
|
$(31
|
)
|
|
$30
|
|
|
$(70
|
)
|
|
$(71
|
)
|
|
$1
|
|
|
(1)
|
|
Net of net income (loss) attributable to noncontrolling interests
(“NCI”).
|
|
(2)
|
|
Percentages represent estimated percentages of BlackRock’s corporate
economic investment portfolio at September 30, 2016. Economic
investment amounts at June 30, 2016 for private equity, real assets,
other alternatives and other investments were $351 million, $106
million, $230 million and $826 million, respectively.
|
|
(3)
|
|
Amounts primarily include net gains (losses) related to direct hedge
fund strategies and hedge fund solutions.
|
|
(4)
|
|
Amounts include net gains (losses) related to equity and fixed
income investments, and BlackRock’s seed capital hedging program.
|
|
(5)
|
|
Amount for the nine months ended September 30, 2015 primarily
includes a gain related to the acquisition of certain assets of
BlackRock Kelso Capital Advisors LLC.
|
Highlights
-
Net interest expense in the current quarter reflected higher dividend
income compared with third quarter of 2015 and 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.
|
|
|
September 30,
|
|
December 31,
|
|
(in billions), (unaudited)
|
|
2016 (Est.)
|
|
2015
|
|
Total balance sheet assets
|
|
$227
|
|
|
$225
|
|
|
Separate account assets and separate account collateral held under
securities
lending agreements
|
|
(184
|
)
|
|
(182
|
)
|
|
Consolidated sponsored investment funds
|
|
-
|
|
|
(1
|
)
|
|
Goodwill and intangible assets, net
|
|
(31
|
)
|
|
(30
|
)
|
|
Economic tangible assets
|
|
$12
|
|
|
$12
|
|
|
RECONCILIATION OF U.S. GAAP OPERATING INCOME AND OPERATING
MARGIN TO OPERATING INCOME
AND OPERATING MARGIN, AS
ADJUSTED
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Operating income, GAAP basis
|
|
$1,209
|
|
|
$1,222
|
|
|
$1,173
|
|
|
$3,345
|
|
|
$3,527
|
|
|
Non-GAAP expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charge
|
|
-
|
|
|
-
|
|
|
-
|
|
|
76
|
|
|
-
|
|
|
PNC LTIP funding obligation
|
|
7
|
|
|
10
|
|
|
6
|
|
|
21
|
|
|
26
|
|
|
Compensation expense related to
appreciation (depreciation) on
deferred
compensation plans
|
|
-
|
|
|
(5
|
)
|
|
-
|
|
|
-
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, as adjusted
|
|
1,216
|
|
|
1,227
|
|
|
1,179
|
|
|
3,442
|
|
|
3,552
|
|
|
Product launch costs and
commissions
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income used for operating
margin measurement
|
|
$1,216
|
|
|
$1,227
|
|
|
$1,179
|
|
|
$3,442
|
|
|
$3,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, GAAP basis
|
|
$2,837
|
|
|
$2,910
|
|
|
$2,804
|
|
|
$8,265
|
|
|
$8,538
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Distribution and servicing costs
|
|
(114
|
)
|
|
(102
|
)
|
|
(109
|
)
|
|
(320
|
)
|
|
(306
|
)
|
|
Amortization of deferred sales
commissions
|
|
(8
|
)
|
|
(12
|
)
|
|
(9
|
)
|
|
(27
|
)
|
|
(37
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue used for operating margin
measurement
|
|
$2,715
|
|
|
$2,796
|
|
|
$2,686
|
|
|
$7,918
|
|
|
$8,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, GAAP basis
|
|
42.6
|
%
|
|
42.0
|
%
|
|
41.8
|
%
|
|
40.5
|
%
|
|
41.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as adjusted
|
|
44.8
|
%
|
|
43.9
|
%
|
|
43.9
|
%
|
|
43.5
|
%
|
|
43.4
|
%
|
|
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
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Nonoperating income (expense), GAAP basis
|
|
$1
|
|
|
$(48
|
)
|
|
$(25
|
)
|
|
$(72
|
)
|
|
$(73
|
)
|
|
Less: Net income (loss) attributable to NCI
|
|
2
|
|
|
(11
|
)
|
|
6
|
|
|
(2
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), net of NCI
|
|
(1
|
)
|
|
(37
|
)
|
|
(31
|
)
|
|
(70
|
)
|
|
(72
|
)
|
|
Compensation expense related to (appreciation)
depreciation
on deferred compensation plans
|
|
-
|
|
|
5
|
|
|
-
|
|
|
-
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), less net income
(loss)
attributable to NCI, as adjusted
|
|
$(1
|
)
|
|
$(32
|
)
|
|
$(31
|
)
|
|
$(70
|
)
|
|
$(71
|
)
|
|
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
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
(in millions, except per share data), (unaudited)
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Net income attributable to BlackRock, Inc., GAAP basis
|
|
$875
|
|
|
$843
|
|
|
$789
|
|
$2,321
|
|
|
$2,484
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charge (including $23 tax benefit)
|
|
-
|
|
|
-
|
|
|
-
|
|
53
|
|
|
-
|
|
PNC LTIP funding obligation, net of tax
|
|
5
|
|
|
7
|
|
|
4
|
|
14
|
|
|
18
|
|
Income tax matters
|
|
(26
|
)
|
|
(6
|
)
|
|
4
|
|
(26
|
)
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
$854
|
|
|
$844
|
|
|
$797
|
|
$2,362
|
|
|
$2,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common shares outstanding(4)
|
|
166.3
|
|
|
168.7
|
|
|
166.6
|
|
166.8
|
|
|
169.2
|
|
Diluted earnings per common share, GAAP basis(4)
|
|
$5.26
|
|
|
$5.00
|
|
|
$4.73
|
|
$13.92
|
|
|
$14.68
|
|
Diluted earnings per common share, as adjusted(4)
|
|
$5.14
|
|
|
$5.00
|
|
|
$4.78
|
|
$14.16
|
|
|
$14.85
|
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 the 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. Amounts for
income tax matters represent net noncash (benefits) expense primarily
associated with the revaluation of certain deferred tax liabilities
related to intangible assets and goodwill. 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 September 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 August 31, 2016. The performance data
does not include accounts terminated prior to September 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 September 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/20161018005575/en/
BlackRock
Tom Wojcik, 212-810-8127
Investor Relations
or
Brian
Beades, 212-810-5596
Media Relations
Source: BlackRock, Inc.