Fourth Quarter 2016 Diluted EPS of $5.13, or $5.14 as adjusted
-
Record $202 billion of full year total net inflows reflects strength
of diversified business model
-
$98 billion of fourth quarter total net inflows, including $18 billion
in cash management, led by momentum in iShares® and
Institutional businesses
-
Demand for BlackRock technology solutions drove 13% full year revenue
growth in Aladdin®
-
Expansion in operating margin from prior year reflects continued
expense discipline
-
Returned $2.7 billion to shareholders in 2016
-
Board of Directors approves 9% increase in quarterly cash dividend to
$2.50 per share and authorizes repurchase of an additional 6 million
shares under existing share repurchase program
NEW YORK--(BUSINESS WIRE)--
BlackRock, Inc. (NYSE:BLK)
|
FINANCIAL RESULTS
|
|
(in millions, except per share data)
|
|
Q4
2016
|
|
Q4
2015
|
|
Change
|
|
Q3
2016
|
|
Change
|
|
Full Year
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
AUM
|
|
$
|
5,147,852
|
|
|
$
|
4,645,412
|
|
|
11
|
%
|
|
$
|
5,117,421
|
|
|
1
|
%
|
|
$
|
5,147,852
|
|
|
$
|
4,645,412
|
|
|
11
|
%
|
|
Total net flows
|
|
$
|
98,050
|
|
|
$
|
67,885
|
|
|
|
|
$
|
69,809
|
|
|
|
|
$
|
202,191
|
|
|
$
|
149,895
|
|
|
|
|
GAAP basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
2,890
|
|
|
$
|
2,863
|
|
|
1
|
%
|
|
$
|
2,837
|
|
|
2
|
%
|
|
$
|
11,155
|
|
|
$
|
11,401
|
|
|
(2
|
)%
|
|
Operating income
|
|
$
|
1,225
|
|
|
$
|
1,137
|
|
|
8
|
%
|
|
$
|
1,209
|
|
|
1
|
%
|
|
$
|
4,570
|
|
|
$
|
4,664
|
|
|
(2
|
)%
|
|
Operating margin
|
|
|
42.4
|
%
|
|
|
39.7
|
%
|
|
270 bps
|
|
|
42.6
|
%
|
|
(20) bps
|
|
|
41.0
|
%
|
|
|
40.9
|
%
|
|
10 bps
|
|
Net income(1)
|
|
$
|
851
|
|
|
$
|
861
|
|
|
(1
|
)%
|
|
$
|
875
|
|
|
(3
|
)%
|
|
$
|
3,172
|
|
|
$
|
3,345
|
|
|
(5
|
)%
|
|
Diluted EPS
|
|
$
|
5.13
|
|
|
$
|
5.11
|
|
|
-
|
%
|
|
$
|
5.26
|
|
|
(2
|
)%
|
|
$
|
19.04
|
|
|
$
|
19.79
|
|
|
(4
|
)%
|
|
Weighted average diluted shares
|
|
|
165.9
|
|
|
|
168.6
|
|
|
(2
|
)%
|
|
|
166.3
|
|
|
-
|
%
|
|
|
166.6
|
|
|
|
169.0
|
|
|
(1
|
)%
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income(2)
|
|
$
|
1,232
|
|
|
$
|
1,143
|
|
|
8
|
%
|
|
$
|
1,216
|
|
|
1
|
%
|
|
$
|
4,674
|
|
|
$
|
4,695
|
|
|
-
|
%
|
|
Operating margin(2)
|
|
|
44.4
|
%
|
|
|
41.6
|
%
|
|
280 bps
|
|
|
44.8
|
%
|
|
(40) bps
|
|
|
43.7
|
%
|
|
|
42.9
|
%
|
|
80 bps
|
|
Net income(1) (2)
|
|
$
|
852
|
|
|
$
|
801
|
|
|
6
|
%
|
|
$
|
854
|
|
|
-
|
%
|
|
$
|
3,214
|
|
|
$
|
3,313
|
|
|
(3
|
)%
|
|
Diluted EPS(2)
|
|
$
|
5.14
|
|
|
$
|
4.75
|
|
|
8
|
%
|
|
$
|
5.14
|
|
|
-
|
%
|
|
$
|
19.29
|
|
|
$
|
19.60
|
|
|
(2
|
)%
|
|
(1)
|
|
Net income represents net income attributable to BlackRock, Inc.
|
|
(2)
|
|
See notes (1) through (4) to the Condensed Consolidated Statements
of Income and Supplemental Information for more information on as
adjusted items and the reconciliation to GAAP.
|
|
|
BlackRock, Inc. (NYSE:BLK) today reported financial results for the
three months and year ended December 31, 2016.
“In a year of dramatic change and uncertainty around the world, clients
continued to put their trust in BlackRock, allowing us to deliver the
strongest annual net inflows in our firm’s history,” commented Laurence
D. Fink, Chairman and CEO of BlackRock. “2016 total net inflows of $202
billion were positive across product types and included $181 billion of
long-term net inflows. Our full year results reflect our continued
commitment to optimize the growth of our diverse investment, technology
and risk management capabilities in the most efficient way possible.
“While domestic equities rallied following the US election, the
combination of a strengthening dollar, underperforming international
equities and negative fixed income markets produced challenging outcomes
for global investors. Investors are rethinking their approach to active
management, asset allocation and portfolio construction, and we’re
seeing more clients use active and index strategies together to deliver
returns. We have purposefully invested in our platform to provide
clients with a full spectrum of offerings including cash, market
cap-weighted indexes, smart beta and factor-based investment strategies,
and high-conviction active products, whether fundamental, quantitative
or illiquid.
“Increasingly diversified groups of institutional and retail clients are
using ETFs in their portfolios. This broadening of the ETF ecosystem is
creating a deeper secondary market for ETF trading – enhancing liquidity
for all investors. iShares generated a record $140 billion of net
inflows for the year, including $60 billion into iShares fixed
income ETFs, capturing the #1 share of flows globally, in the US
and in Europe, and in equity and fixed income.
“Institutions looked to BlackRock to help them close funding gaps and
meet future liability objectives, and we saw record institutional net
inflows of $51 billion, driven by fixed income and multi-asset solutions.
“Technology is increasingly important in the evolving regulatory and
investment landscape, and clients increasingly value BlackRock’s
technology solutions to help them understand and manage risk, and build
portfolios. Aladdin revenue increased 13% in 2016, and is well
positioned for continued momentum with a broader set of clients than
ever before. Additionally, we launched Aladdin Risk for Wealth
Management and continued to deepen our relationships with our
distribution partners through FutureAdvisor’s digital advice
capabilities.
“BlackRock has always focused on repositioning its investment platform
and technology capabilities in anticipation of change, and BlackRock
employees embrace their responsibility to help clients navigate this
evolving, complex landscape. As we head into 2017, we remain committed
to investing for the future and developing our talent in order to
fulfill our responsibility to both clients and shareholders.”
CAPITAL MANAGEMENT
The BlackRock Board of Directors approved a 9% increase in the quarterly
cash dividend to $2.50 per share, payable March 23, 2017, to
shareholders of record at the close of business on March 6, 2017. In
addition, the Board authorized the repurchase of an additional 6 million
shares under the Company’s existing share repurchase program for a total
up to 9 million shares of BlackRock common stock.
|
RESULTS BY CLIENT TYPE
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
Q4 2016
|
|
|
|
Q4 2016
|
|
December 31, 2016
|
|
Q4 2016
|
|
AUM
|
|
Base fees(1)
|
|
(in millions), (unaudited)
|
|
Net flows
|
|
AUM
|
|
Base fees(1)
|
|
% of Total
|
|
% of Total
|
|
Retail
|
|
$
|
(2,444
|
)
|
|
$
|
541,952
|
|
$
|
789
|
|
10
|
%
|
|
31
|
%
|
|
iShares
|
|
|
49,300
|
|
|
|
1,287,879
|
|
|
885
|
|
25
|
%
|
|
36
|
%
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
6,306
|
|
|
|
1,009,974
|
|
|
453
|
|
20
|
%
|
|
18
|
%
|
|
Index
|
|
|
34,601
|
|
|
|
1,901,681
|
|
|
241
|
|
37
|
%
|
|
10
|
%
|
|
Total institutional
|
|
|
40,907
|
|
|
|
2,911,655
|
|
|
694
|
|
57
|
%
|
|
28
|
%
|
|
Long-term
|
|
|
87,763
|
|
|
|
4,741,486
|
|
|
2,368
|
|
92
|
%
|
|
95
|
%
|
|
Cash management
|
|
|
17,671
|
|
|
|
403,584
|
|
|
118
|
|
8
|
%
|
|
5
|
%
|
|
Advisory
|
|
|
(7,384
|
)
|
|
|
2,782
|
|
|
-
|
|
-
|
|
|
-
|
|
|
Total
|
|
$
|
98,050
|
|
|
$
|
5,147,852
|
|
$
|
2,486
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
RESULTS BY PRODUCT TYPE
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
Q4 2016
|
|
|
|
Q4 2016
|
|
December 31, 2016
|
|
Q4 2016
|
|
AUM
|
|
Base fees(1)
|
|
(in millions), (unaudited)
|
|
Net flows
|
|
AUM
|
|
Base fees(1)
|
|
% of Total
|
|
% of Total
|
|
Equity
|
|
$
|
57,965
|
|
|
$
|
2,657,176
|
|
$
|
1,237
|
|
52
|
%
|
|
50
|
%
|
|
Fixed income
|
|
|
25,306
|
|
|
|
1,572,365
|
|
|
685
|
|
30
|
%
|
|
27
|
%
|
|
Multi-asset
|
|
|
4,856
|
|
|
|
395,007
|
|
|
278
|
|
8
|
%
|
|
11
|
%
|
|
Alternatives
|
|
|
(364
|
)
|
|
|
116,938
|
|
|
168
|
|
2
|
%
|
|
7
|
%
|
|
Long-term
|
|
|
87,763
|
|
|
|
4,741,486
|
|
|
2,368
|
|
92
|
%
|
|
95
|
%
|
|
Cash management
|
|
|
17,671
|
|
|
|
403,584
|
|
|
118
|
|
8
|
%
|
|
5
|
%
|
|
Advisory
|
|
|
(7,384
|
)
|
|
|
2,782
|
|
|
-
|
|
-
|
|
|
-
|
|
|
Total
|
|
$
|
98,050
|
|
|
$
|
5,147,852
|
|
$
|
2,486
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
RESULTS BY INVESTMENT STYLE
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
Q4 2016
|
|
|
|
Q4 2016
|
|
December 31, 2016
|
|
Q4 2016
|
|
AUM
|
|
Base fees(1)
|
|
(in millions), (unaudited)
|
|
Net flows
|
|
AUM
|
|
Base fees(1)
|
|
% of Total
|
|
% of Total
|
|
Active
|
|
$
|
(546
|
)
|
|
$
|
1,501,052
|
|
$
|
1,232
|
|
29
|
%
|
|
49
|
%
|
|
Index and iShares
|
|
|
88,309
|
|
|
|
3,240,434
|
|
|
1,136
|
|
63
|
%
|
|
46
|
%
|
|
Long-term
|
|
|
87,763
|
|
|
|
4,741,486
|
|
|
2,368
|
|
92
|
%
|
|
95
|
%
|
|
Cash management
|
|
|
17,671
|
|
|
|
403,584
|
|
|
118
|
|
8
|
%
|
|
5
|
%
|
|
Advisory
|
|
|
(7,384
|
)
|
|
|
2,782
|
|
|
-
|
|
-
|
|
|
-
|
|
|
Total
|
|
$
|
98,050
|
|
|
$
|
5,147,852
|
|
$
|
2,486
|
|
100
|
%
|
|
100
|
%
|
|
(1) Base fees include investment advisory,
administration fees and securities lending revenue.
|
|
|
BUSINESS HIGHLIGHTS
Long-term net inflows were positive across all major regions, with net
inflows of $46.0 billion, $38.2 billion and $3.6 billion from clients in
the Americas, EMEA and Asia-Pacific, respectively. At December 31, 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 fourth
quarter of 2016 is presented below.
-
Retail long-term net outflows of $2.4 billion reflected
net outflows of $1.6 billion from the United States and $0.8 billion
internationally. Equity net inflows of $1.7 billion were paced by
flows into US equities and index mutual funds, and included the
seasonal impact of capital gains. Fixed income net outflows of $1.8
billion reflected outflows from unconstrained and high yield
categories. Multi-asset net outflows of $1.7 billion were largely due
to outflows from world allocation strategies.
-
iShares long-term net inflows of $49.3 billion were led
by equity net inflows of $50.7 billion, with strength in precision
exposures and iShares Core ETFs. Fixed income net outflows of
$0.3 billion reflected outflows from investment grade corporate and
treasury bond funds. Commodities iShares saw $1.7 billion
of net outflows.
-
Institutional active long-term net inflows of $6.3
billion were led by multi-asset net inflows of $5.7 billion, driven by
ongoing demand for solutions offerings and the LifePath®
target-date series. Alternatives net inflows of $2.2 billion reflected
inflows into multi-strategy hedge fund and alternatives solutions
offerings. Equity net outflows of $2.8 billion were primarily due to
outflows from Scientific Active equities and international equities.
-
Institutional index long-term net inflows of $34.6
billion were driven by fixed income net inflows of $26.2 billion,
reflecting demand for liability-driven investment solutions. Equity
saw net inflows of $8.4 billion.
Cash management AUM increased 4% to $403.6 billion, driven by
$17.7 billion of net inflows, primarily into government funds.
|
INVESTMENT PERFORMANCE AT DECEMBER 31, 2016(1)
|
|
|
|
One-year period
|
|
Three-year period
|
|
Five-year period
|
|
Fixed Income:
|
|
|
|
|
|
|
|
Actively managed AUM above benchmark or peer median
|
|
|
|
|
|
|
|
Taxable
|
|
60%
|
|
78%
|
|
88%
|
|
Tax-exempt
|
|
64%
|
|
63%
|
|
73%
|
|
Index AUM within or above applicable tolerance
|
|
90%
|
|
99%
|
|
99%
|
|
Equity:
|
|
|
|
|
|
|
|
Actively managed AUM above benchmark or peer median
|
|
|
|
|
|
|
|
Fundamental
|
|
48%
|
|
62%
|
|
65%
|
|
Scientific
|
|
43%
|
|
80%
|
|
91%
|
|
Index AUM within or above applicable tolerance
|
|
95%
|
|
97%
|
|
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 Friday, January 13, 2017 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 39041891). 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 Friday, January 13, 2017 and ending at
midnight on Friday, January 27, 2017. 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 39041891. 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 December
31, 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 December 31, 2016, the firm had
approximately 13,000 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
|
CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION
|
|
(in millions, except shares and per share data), (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Ended
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
|
$2,486
|
|
|
$2,460
|
|
|
$26
|
|
|
$2,546
|
|
|
$(60
|
)
|
|
Investment advisory performance fees
|
|
|
129
|
|
|
169
|
|
|
(40
|
)
|
|
58
|
|
|
71
|
|
|
BlackRock Solutions and advisory
|
|
|
197
|
|
|
171
|
|
|
26
|
|
|
174
|
|
|
23
|
|
|
Distribution fees
|
|
|
9
|
|
|
11
|
|
|
(2
|
)
|
|
10
|
|
|
(1
|
)
|
|
Other revenue
|
|
|
69
|
|
|
52
|
|
|
17
|
|
|
49
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
2,890
|
|
|
2,863
|
|
|
27
|
|
|
2,837
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
987
|
|
|
989
|
|
|
(2
|
)
|
|
969
|
|
|
18
|
|
|
Distribution and servicing costs
|
|
|
109
|
|
|
103
|
|
|
6
|
|
|
114
|
|
|
(5
|
)
|
|
Amortization of deferred sales commissions
|
|
|
7
|
|
|
11
|
|
|
(4
|
)
|
|
8
|
|
|
(1
|
)
|
|
Direct fund expense
|
|
|
183
|
|
|
189
|
|
|
(6
|
)
|
|
200
|
|
|
(17
|
)
|
|
General and administration
|
|
|
355
|
|
|
410
|
|
|
(55
|
)
|
|
312
|
|
|
43
|
|
|
Amortization of intangible assets
|
|
|
24
|
|
|
24
|
|
|
-
|
|
|
25
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expense
|
|
|
1,665
|
|
|
1,726
|
|
|
(61
|
)
|
|
1,628
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
1,225
|
|
|
1,137
|
|
|
88
|
|
|
1,209
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
|
6
|
|
|
57
|
|
|
(51
|
)
|
|
31
|
|
|
(25
|
)
|
|
Interest and dividend income
|
|
|
7
|
|
|
5
|
|
|
2
|
|
|
22
|
|
|
(15
|
)
|
|
Interest expense
|
|
|
(51
|
)
|
|
(51
|
)
|
|
-
|
|
|
(52
|
)
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)
|
|
|
(38
|
)
|
|
11
|
|
|
(49
|
)
|
|
1
|
|
|
(39
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
1,187
|
|
|
1,148
|
|
|
39
|
|
|
1,210
|
|
|
(23
|
)
|
|
Income tax expense
|
|
|
336
|
|
|
279
|
|
|
57
|
|
|
333
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
851
|
|
|
869
|
|
|
(18
|
)
|
|
877
|
|
|
(26
|
)
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
-
|
|
|
8
|
|
|
(8
|
)
|
|
2
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc.
|
|
|
$851
|
|
|
$861
|
|
|
$(10
|
)
|
|
$875
|
|
|
$(24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
163,441,552
|
|
|
165,826,808
|
|
|
(2,385,256
|
)
|
|
164,129,214
|
|
|
(687,662
|
)
|
|
Diluted
|
|
|
165,854,167
|
|
|
168,632,558
|
|
|
(2,778,391
|
)
|
|
166,256,598
|
|
|
(402,431
|
)
|
|
Earnings per share attributable to BlackRock, Inc. common
stockholders (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$5.21
|
|
|
$5.19
|
|
|
$0.02
|
|
|
$5.33
|
|
|
$(0.12
|
)
|
|
Diluted
|
|
|
$5.13
|
|
|
$5.11
|
|
|
$0.02
|
|
|
$5.26
|
|
|
$(0.13
|
)
|
|
Cash dividends declared and paid per share
|
|
|
$2.29
|
|
|
$2.18
|
|
|
$0.11
|
|
|
$2.29
|
|
|
$-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
|
$5,147,852
|
|
|
$4,645,412
|
|
|
$502,440
|
|
|
$5,117,421
|
|
|
$30,431
|
|
|
Shares outstanding (end of period)
|
|
|
163,121,291
|
|
|
165,596,139
|
|
|
(2,474,848
|
)
|
|
163,858,070
|
|
|
(736,779
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
42.4
|
%
|
|
39.7
|
%
|
|
270
|
bps
|
|
42.6
|
%
|
|
(20
|
) bps
|
|
Effective tax rate
|
|
|
28.3
|
%
|
|
24.5
|
%
|
|
380
|
bps
|
|
27.6
|
%
|
|
70
|
bps
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (1)
|
|
|
$1,232
|
|
|
$1,143
|
|
|
$89
|
|
|
$1,216
|
|
|
$16
|
|
|
Operating margin (1)
|
|
|
44.4
|
%
|
|
41.6
|
%
|
|
280
|
bps
|
|
44.8
|
%
|
|
(40
|
) bps
|
|
Nonoperating income (expense), less net income (loss) attributable
to noncontrolling interests (2)
|
|
|
$(38
|
)
|
|
$1
|
|
|
$(39
|
)
|
|
$(1
|
)
|
|
$(37
|
)
|
|
Net income attributable to BlackRock, Inc. (3)
|
|
|
$852
|
|
|
$801
|
|
|
$51
|
|
|
$854
|
|
|
$(2
|
)
|
|
Diluted earnings attributable to BlackRock, Inc. common stockholders
per share (3) (4)
|
|
|
$5.14
|
|
|
$4.75
|
|
|
$0.39
|
|
|
$5.14
|
|
|
$-
|
|
|
Effective tax rate
|
|
|
28.6
|
%
|
|
30.0
|
%
|
|
(140
|
) bps
|
|
29.7
|
%
|
|
(110
|
) 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)
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities lending
revenue
|
|
$9,880
|
|
|
$9,840
|
|
|
$40
|
|
|
Investment advisory performance fees
|
|
295
|
|
|
621
|
|
|
(326
|
)
|
|
BlackRock Solutions and advisory
|
|
714
|
|
|
646
|
|
|
68
|
|
|
Distribution fees
|
|
41
|
|
|
55
|
|
|
(14
|
)
|
|
Other revenue
|
|
225
|
|
|
239
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
11,155
|
|
|
11,401
|
|
|
(246
|
)
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
3,880
|
|
|
4,005
|
|
|
(125
|
)
|
|
Distribution and servicing costs
|
|
429
|
|
|
409
|
|
|
20
|
|
|
Amortization of deferred sales commissions
|
|
34
|
|
|
48
|
|
|
(14
|
)
|
|
Direct fund expense
|
|
766
|
|
|
767
|
|
|
(1
|
)
|
|
General and administration
|
|
1,301
|
|
|
1,380
|
|
|
(79
|
)
|
|
Restructuring charge
|
|
76
|
|
|
-
|
|
|
76
|
|
|
Amortization of intangible assets
|
|
99
|
|
|
128
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
Total expense
|
|
6,585
|
|
|
6,737
|
|
|
(152
|
)
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
4,570
|
|
|
4,664
|
|
|
(94
|
)
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
55
|
|
|
116
|
|
|
(61
|
)
|
|
Interest and dividend income
|
|
40
|
|
|
26
|
|
|
14
|
|
|
Interest expense
|
|
(205
|
)
|
|
(204
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)
|
|
(110
|
)
|
|
(62
|
)
|
|
(48
|
)
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
4,460
|
|
|
4,602
|
|
|
(142
|
)
|
|
Income tax expense
|
|
1,290
|
|
|
1,250
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
3,170
|
|
|
3,352
|
|
|
(182
|
)
|
|
Less:
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
(2
|
)
|
|
7
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc.
|
|
$3,172
|
|
|
$3,345
|
|
|
$(173
|
)
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
164,425,858
|
|
|
166,390,009
|
|
|
(1,964,151
|
)
|
|
Diluted
|
|
166,579,752
|
|
|
169,038,571
|
|
|
(2,458,819
|
)
|
|
Earnings per share attributable to BlackRock, Inc. common
stockholders (4)
|
|
|
|
|
|
|
|
Basic
|
|
$19.29
|
|
|
$20.10
|
|
|
$(0.81
|
)
|
|
Diluted
|
|
$19.04
|
|
|
$19.79
|
|
|
$(0.75
|
)
|
|
Cash dividends declared and paid per share
|
|
$9.16
|
|
|
$8.72
|
|
|
$0.44
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
$5,147,852
|
|
|
$4,645,412
|
|
|
$502,440
|
|
|
Shares outstanding (end of period)
|
|
163,121,291
|
|
|
165,596,139
|
|
|
(2,474,848
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
Operating margin
|
|
41.0
|
%
|
|
40.9
|
%
|
|
10 bps
|
|
Effective tax rate
|
|
28.9
|
%
|
|
27.2
|
%
|
|
170 bps
|
|
As adjusted:
|
|
|
|
|
|
|
|
Operating income (1)
|
|
$4,674
|
|
|
$4,695
|
|
|
$(21
|
)
|
|
Operating margin (1)
|
|
43.7
|
%
|
|
42.9
|
%
|
|
80 bps
|
|
Nonoperating income (expense), less net income (loss) attributable
to noncontrolling interests (2)
|
|
$(108
|
)
|
|
$(70
|
)
|
|
$(38
|
)
|
|
Net income attributable to BlackRock, Inc. (3)
|
|
$3,214
|
|
|
$3,313
|
|
|
$(99
|
)
|
|
Diluted earnings attributable to BlackRock, Inc. common stockholders
per share(3) (4)
|
|
$19.29
|
|
|
$19.60
|
|
|
$(0.31
|
)
|
|
Effective tax rate
|
|
29.6
|
%
|
|
28.4
|
%
|
|
120 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
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
inflows
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2016
|
|
(outflows)
|
|
Market change
|
|
FX impact (1)
|
|
2016
|
|
Average AUM (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$196,131
|
|
$1,742
|
|
|
$1,525
|
|
|
$(3,177
|
)
|
|
$196,221
|
|
$193,865
|
|
Fixed income
|
|
230,842
|
|
(1,832
|
)
|
|
(4,798
|
)
|
|
(1,956
|
)
|
|
222,256
|
|
226,160
|
|
Multi-asset
|
|
111,369
|
|
(1,699
|
)
|
|
(1,115
|
)
|
|
(558
|
)
|
|
107,997
|
|
108,785
|
|
Alternatives
|
|
16,436
|
|
(655
|
)
|
|
(33
|
)
|
|
(270
|
)
|
|
15,478
|
|
15,977
|
|
Retail subtotal
|
|
554,778
|
|
(2,444
|
)
|
|
(4,421
|
)
|
|
(5,961
|
)
|
|
541,952
|
|
544,787
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
891,010
|
|
50,650
|
|
|
15,721
|
|
|
(6,129
|
)
|
|
951,252
|
|
909,727
|
|
Fixed income
|
|
329,462
|
|
(326
|
)
|
|
(10,344
|
)
|
|
(4,085
|
)
|
|
314,707
|
|
320,334
|
|
Multi-asset
|
|
2,506
|
|
695
|
|
|
(49
|
)
|
|
(3
|
)
|
|
3,149
|
|
2,730
|
|
Alternatives
|
|
23,188
|
|
(1,719
|
)
|
|
(2,586
|
)
|
|
(112
|
)
|
|
18,771
|
|
20,869
|
|
iShares subtotal
|
|
1,246,166
|
|
49,300
|
|
|
2,742
|
|
|
(10,329
|
)
|
|
1,287,879
|
|
1,253,660
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
123,770
|
|
(2,804
|
)
|
|
2,652
|
|
|
(2,919
|
)
|
|
120,699
|
|
120,590
|
|
Fixed income
|
|
560,799
|
|
1,267
|
|
|
(14,537
|
)
|
|
(10,802
|
)
|
|
536,727
|
|
546,842
|
|
Multi-asset
|
|
280,406
|
|
5,657
|
|
|
(2,403
|
)
|
|
(6,727
|
)
|
|
276,933
|
|
275,203
|
|
Alternatives
|
|
74,678
|
|
2,186
|
|
|
71
|
|
|
(1,320
|
)
|
|
75,615
|
|
75,069
|
|
Active subtotal
|
|
1,039,653
|
|
6,306
|
|
|
(14,217
|
)
|
|
(21,768
|
)
|
|
1,009,974
|
|
1,017,704
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,355,128
|
|
8,377
|
|
|
52,752
|
|
|
(27,253
|
)
|
|
1,389,004
|
|
1,360,085
|
|
Fixed income
|
|
507,165
|
|
26,197
|
|
|
(15,902
|
)
|
|
(18,785
|
)
|
|
498,675
|
|
492,827
|
|
Multi-asset
|
|
7,980
|
|
203
|
|
|
(727
|
)
|
|
(528
|
)
|
|
6,928
|
|
7,645
|
|
Alternatives
|
|
7,228
|
|
(176
|
)
|
|
214
|
|
|
(192
|
)
|
|
7,074
|
|
7,102
|
|
Index subtotal
|
|
1,877,501
|
|
34,601
|
|
|
36,337
|
|
|
(46,758
|
)
|
|
1,901,681
|
|
1,867,659
|
|
Institutional subtotal
|
|
2,917,154
|
|
40,907
|
|
|
22,120
|
|
|
(68,526
|
)
|
|
2,911,655
|
|
2,885,363
|
|
Long-term
|
|
4,718,098
|
|
87,763
|
|
|
20,441
|
|
|
(84,816
|
)
|
|
4,741,486
|
|
4,683,810
|
|
Cash management
|
|
388,982
|
|
17,671
|
|
|
225
|
|
|
(3,294
|
)
|
|
403,584
|
|
397,661
|
|
Advisory (3)
|
|
10,341
|
|
(7,384
|
)
|
|
51
|
|
|
(226
|
)
|
|
2,782
|
|
8,018
|
|
Total
|
|
$5,117,421
|
|
$98,050
|
|
|
$20,717
|
|
|
$(88,336
|
)
|
|
$5,147,852
|
|
$5,089,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Product Type (Long-term)
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
inflows
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2016
|
|
(outflows)
|
|
Market change
|
|
FX impact (1)
|
|
2016
|
|
Average AUM (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$281,726
|
|
$(4,549
|
)
|
|
$3,063
|
|
|
$(5,207
|
)
|
|
$275,033
|
|
$275,078
|
|
iShares
|
|
891,010
|
|
50,650
|
|
|
15,721
|
|
|
(6,129
|
)
|
|
951,252
|
|
909,727
|
|
Non-ETF index
|
|
1,393,303
|
|
11,864
|
|
|
53,866
|
|
|
(28,142
|
)
|
|
1,430,891
|
|
1,399,462
|
|
Equity subtotal
|
|
2,566,039
|
|
57,965
|
|
|
72,650
|
|
|
(39,478
|
)
|
|
2,657,176
|
|
2,584,267
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
782,858
|
|
(1,485
|
)
|
|
(18,984
|
)
|
|
(12,393
|
)
|
|
749,996
|
|
764,415
|
|
iShares
|
|
329,462
|
|
(326
|
)
|
|
(10,344
|
)
|
|
(4,085
|
)
|
|
314,707
|
|
320,334
|
|
Non-ETF index
|
|
515,948
|
|
27,117
|
|
|
(16,253
|
)
|
|
(19,150
|
)
|
|
507,662
|
|
501,414
|
|
Fixed income subtotal
|
|
1,628,268
|
|
25,306
|
|
|
(45,581
|
)
|
|
(35,628
|
)
|
|
1,572,365
|
|
1,586,163
|
|
Multi-asset
|
|
402,261
|
|
4,856
|
|
|
(4,294
|
)
|
|
(7,816
|
)
|
|
395,007
|
|
394,363
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
88,731
|
|
1,217
|
|
|
19
|
|
|
(1,337
|
)
|
|
88,630
|
|
88,715
|
|
Currency and
commodities (4)
|
|
32,799
|
|
(1,581
|
)
|
|
(2,353
|
)
|
|
(557
|
)
|
|
28,308
|
|
30,302
|
|
Alternatives subtotal
|
|
121,530
|
|
(364
|
)
|
|
(2,334
|
)
|
|
(1,894
|
)
|
|
116,938
|
|
119,017
|
|
Long-term
|
|
$4,718,098
|
|
$87,763
|
|
|
$20,441
|
|
|
$(84,816
|
)
|
|
$4,741,486
|
|
$4,683,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
inflows
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2016
|
|
(outflows)
|
|
Market change
|
|
FX impact (1)
|
|
2016
|
|
Average AUM (2)
|
|
Active
|
|
$1,547,473
|
|
$(546
|
)
|
|
$(19,402
|
)
|
|
$(26,473
|
)
|
|
$1,501,052
|
|
$1,514,526
|
|
Index and iShares
|
|
3,170,625
|
|
88,309
|
|
|
39,843
|
|
|
(58,343
|
)
|
|
3,240,434
|
|
3,169,284
|
|
Long-term
|
|
$4,718,098
|
|
$87,763
|
|
|
$20,441
|
|
|
$(84,816
|
)
|
|
$4,741,486
|
|
$4,683,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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-over-Year Component Changes by Client Type and Product
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition (1)
|
|
Market change
|
|
FX impact(2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
$193,755
|
|
$(7,429
|
)
|
|
$ -
|
|
$15,456
|
|
|
$(5,561
|
)
|
|
$196,221
|
|
$192,311
|
|
Fixed income
|
|
212,653
|
|
8,407
|
|
|
-
|
|
3,130
|
|
|
(1,934
|
)
|
|
222,256
|
|
221,797
|
|
Multi-asset
|
|
115,307
|
|
(9,367
|
)
|
|
-
|
|
3,100
|
|
|
(1,043
|
)
|
|
107,997
|
|
111,416
|
|
Alternatives
|
|
19,410
|
|
(2,935
|
)
|
|
-
|
|
(835
|
)
|
|
(162
|
)
|
|
15,478
|
|
17,424
|
|
Retail subtotal
|
|
541,125
|
|
(11,324
|
)
|
|
-
|
|
20,851
|
|
|
(8,700
|
)
|
|
541,952
|
|
542,948
|
|
iShares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
823,156
|
|
74,914
|
|
|
-
|
|
56,469
|
|
|
(3,287
|
)
|
|
951,252
|
|
849,017
|
|
Fixed income
|
|
254,190
|
|
59,913
|
|
|
-
|
|
3,782
|
|
|
(3,178
|
)
|
|
314,707
|
|
301,061
|
|
Multi-asset
|
|
2,730
|
|
354
|
|
|
-
|
|
61
|
|
|
4
|
|
|
3,149
|
|
2,448
|
|
Alternatives
|
|
12,485
|
|
5,298
|
|
|
-
|
|
1,055
|
|
|
(67
|
)
|
|
18,771
|
|
18,561
|
|
iShares subtotal
|
|
1,092,561
|
|
140,479
|
|
|
-
|
|
61,367
|
|
|
(6,528
|
)
|
|
1,287,879
|
|
1,171,087
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
121,442
|
|
(7,449
|
)
|
|
-
|
|
11,112
|
|
|
(4,406
|
)
|
|
120,699
|
|
119,604
|
|
Fixed income
|
|
514,428
|
|
10,234
|
|
|
-
|
|
20,242
|
|
|
(8,177
|
)
|
|
536,727
|
|
542,332
|
|
Multi-asset
|
|
252,041
|
|
13,322
|
|
|
-
|
|
18,516
|
|
|
(6,946
|
)
|
|
276,933
|
|
265,652
|
|
Alternatives
|
|
74,941
|
|
1,811
|
|
|
-
|
|
619
|
|
|
(1,756
|
)
|
|
75,615
|
|
74,919
|
|
Active subtotal
|
|
962,852
|
|
17,918
|
|
|
-
|
|
50,489
|
|
|
(21,285
|
)
|
|
1,009,974
|
|
1,002,507
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,285,419
|
|
(8,612
|
)
|
|
-
|
|
135,997
|
|
|
(23,800
|
)
|
|
1,389,004
|
|
1,307,812
|
|
Fixed income
|
|
441,097
|
|
41,401
|
|
|
-
|
|
55,665
|
|
|
(39,488
|
)
|
|
498,675
|
|
478,444
|
|
Multi-asset
|
|
6,258
|
|
(82
|
)
|
|
-
|
|
843
|
|
|
(91
|
)
|
|
6,928
|
|
7,464
|
|
Alternatives
|
|
6,003
|
|
784
|
|
|
-
|
|
790
|
|
|
(503
|
)
|
|
7,074
|
|
6,642
|
|
Index subtotal
|
|
1,738,777
|
|
33,491
|
|
|
-
|
|
193,295
|
|
|
(63,882
|
)
|
|
1,901,681
|
|
1,800,362
|
|
Institutional subtotal
|
|
2,701,629
|
|
51,409
|
|
|
-
|
|
243,784
|
|
|
(85,167
|
)
|
|
2,911,655
|
|
2,802,869
|
|
Long-term
|
|
4,335,315
|
|
180,564
|
|
|
-
|
|
326,002
|
|
|
(100,395
|
)
|
|
4,741,486
|
|
4,516,904
|
|
Cash management
|
|
299,884
|
|
29,228
|
|
|
80,635
|
|
430
|
|
|
(6,593
|
)
|
|
403,584
|
|
358,498
|
|
Advisory (4)
|
|
10,213
|
|
(7,601
|
)
|
|
-
|
|
(68
|
)
|
|
238
|
|
|
2,782
|
|
9,687
|
|
Total
|
|
$4,645,412
|
|
$202,191
|
|
|
$80,635
|
|
$326,364
|
|
|
$(106,750
|
)
|
|
$5,147,852
|
|
$4,885,089
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Product Type (Long-term)
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition
|
|
Market change
|
|
FX impact(2)
|
|
2016
|
|
Average AUM (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$281,319
|
|
$(20,230
|
)
|
|
$ -
|
|
$21,045
|
|
|
$(7,101
|
)
|
|
$275,033
|
|
$275,656
|
|
iShares
|
|
823,156
|
|
74,914
|
|
|
-
|
|
56,469
|
|
|
(3,287
|
)
|
|
951,252
|
|
849,017
|
|
Non-ETF index
|
|
1,319,297
|
|
(3,260
|
)
|
|
-
|
|
141,520
|
|
|
(26,666
|
)
|
|
1,430,891
|
|
1,344,071
|
|
Equity subtotal
|
|
2,423,772
|
|
51,424
|
|
|
-
|
|
219,034
|
|
|
(37,054
|
)
|
|
2,657,176
|
|
2,468,744
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
719,653
|
|
16,625
|
|
|
-
|
|
22,742
|
|
|
(9,024
|
)
|
|
749,996
|
|
756,110
|
|
iShares
|
|
254,190
|
|
59,913
|
|
|
-
|
|
3,782
|
|
|
(3,178
|
)
|
|
314,707
|
|
301,061
|
|
Non-ETF index
|
|
448,525
|
|
43,417
|
|
|
-
|
|
56,295
|
|
|
(40,575
|
)
|
|
507,662
|
|
486,463
|
|
Fixed income subtotal
|
|
1,422,368
|
|
119,955
|
|
|
-
|
|
82,819
|
|
|
(52,777
|
)
|
|
1,572,365
|
|
1,543,634
|
|
Multi-asset
|
|
376,336
|
|
4,227
|
|
|
-
|
|
22,520
|
|
|
(8,076
|
)
|
|
395,007
|
|
386,980
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
92,085
|
|
(1,165
|
)
|
|
-
|
|
(291
|
)
|
|
(1,999
|
)
|
|
88,630
|
|
90,028
|
|
Currency and
commodities (5)
|
|
20,754
|
|
6,123
|
|
|
-
|
|
1,920
|
|
|
(489
|
)
|
|
28,308
|
|
27,518
|
|
Alternatives subtotal
|
|
112,839
|
|
4,958
|
|
|
-
|
|
1,629
|
|
|
(2,488
|
)
|
|
116,938
|
|
117,546
|
|
Long-term
|
|
$4,335,315
|
|
$180,564
|
|
|
$ -
|
|
$326,002
|
|
|
$(100,395
|
)
|
|
$4,741,486
|
|
$4,516,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Investment Style (Long-term)
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
inflows
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2015
|
|
(outflows)
|
|
Acquisition
|
|
Market change
|
|
FX impact (2)
|
|
2016
|
|
Average AUM (3)
|
|
Active
|
|
$1,462,672
|
|
$(774
|
)
|
|
$ -
|
|
$65,187
|
|
|
$(26,033
|
)
|
|
$1,501,052
|
|
$1,501,176
|
|
Index and iShares
|
|
2,872,643
|
|
181,338
|
|
|
-
|
|
260,815
|
|
|
(74,362
|
)
|
|
3,240,434
|
|
3,015,728
|
|
Long-term
|
|
$4,335,315
|
|
$180,564
|
|
|
$ -
|
|
$326,002
|
|
|
$(100,395
|
)
|
|
$4,741,486
|
|
$4,516,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amount represents 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 thirteen months.
|
|
(4)
|
|
Advisory AUM represents long-term portfolio liquidation assignments.
|
|
(5)
|
|
Amounts include commodity iShares.
|
|
|
|
|
|
|
|
|
|
SUMMARY OF REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
Three Months
Ended
September 30,
|
|
|
|
Year Ended
December 31,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Investment advisory, administration fees and securities lending
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
$390
|
|
$413
|
|
$(23
|
)
|
|
$409
|
|
$(19
|
)
|
|
$1,591
|
|
$1,709
|
|
$(118
|
)
|
|
iShares
|
|
681
|
|
666
|
|
15
|
|
|
691
|
|
(10
|
)
|
|
2,651
|
|
2,751
|
|
(100
|
)
|
|
Non-ETF Index
|
|
166
|
|
169
|
|
(3
|
)
|
|
170
|
|
(4
|
)
|
|
674
|
|
680
|
|
(6
|
)
|
|
Equity subtotal
|
|
1,237
|
|
1,248
|
|
(11
|
)
|
|
1,270
|
|
(33
|
)
|
|
4,916
|
|
5,140
|
|
(224
|
)
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
421
|
|
404
|
|
17
|
|
|
427
|
|
(6
|
)
|
|
1,658
|
|
1,566
|
|
92
|
|
|
iShares
|
|
184
|
|
147
|
|
37
|
|
|
188
|
|
(4
|
)
|
|
696
|
|
554
|
|
142
|
|
|
Non-ETF Index
|
|
80
|
|
72
|
|
8
|
|
|
78
|
|
2
|
|
|
297
|
|
282
|
|
15
|
|
|
Fixed income subtotal
|
|
685
|
|
623
|
|
62
|
|
|
693
|
|
(8
|
)
|
|
2,651
|
|
2,402
|
|
249
|
|
|
Multi-asset
|
|
278
|
|
311
|
|
(33
|
)
|
|
285
|
|
(7
|
)
|
|
1,138
|
|
1,253
|
|
(115
|
)
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
146
|
|
172
|
|
(26
|
)
|
|
156
|
|
(10
|
)
|
|
634
|
|
653
|
|
(19
|
)
|
|
Currency and commodities
|
|
22
|
|
17
|
|
5
|
|
|
24
|
|
(2
|
)
|
|
83
|
|
73
|
|
10
|
|
|
Alternatives subtotal
|
|
168
|
|
189
|
|
(21
|
)
|
|
180
|
|
(12
|
)
|
|
717
|
|
726
|
|
(9
|
)
|
|
Long-term
|
|
2,368
|
|
2,371
|
|
(3
|
)
|
|
2,428
|
|
(60
|
)
|
|
9,422
|
|
9,521
|
|
(99
|
)
|
|
Cash management
|
|
118
|
|
89
|
|
29
|
|
|
118
|
|
-
|
|
|
458
|
|
319
|
|
139
|
|
|
Total base fees
|
|
2,486
|
|
2,460
|
|
26
|
|
|
2,546
|
|
(60
|
)
|
|
9,880
|
|
9,840
|
|
40
|
|
|
Investment advisory performance fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
35
|
|
84
|
|
(49
|
)
|
|
14
|
|
21
|
|
|
102
|
|
205
|
|
(103
|
)
|
|
Fixed income
|
|
4
|
|
16
|
|
(12
|
)
|
|
2
|
|
2
|
|
|
13
|
|
26
|
|
(13
|
)
|
|
Multi-asset
|
|
13
|
|
15
|
|
(2
|
)
|
|
1
|
|
12
|
|
|
19
|
|
34
|
|
(15
|
)
|
|
Alternatives
|
|
77
|
|
54
|
|
23
|
|
|
41
|
|
36
|
|
|
161
|
|
356
|
|
(195
|
)
|
|
Total performance fees
|
|
129
|
|
169
|
|
(40
|
)
|
|
58
|
|
71
|
|
|
295
|
|
621
|
|
(326
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Solutions and advisory
|
|
197
|
|
171
|
|
26
|
|
|
174
|
|
23
|
|
|
714
|
|
646
|
|
68
|
|
|
Distribution fees
|
|
9
|
|
11
|
|
(2
|
)
|
|
10
|
|
(1
|
)
|
|
41
|
|
55
|
|
(14
|
)
|
|
Other revenue
|
|
69
|
|
52
|
|
17
|
|
|
49
|
|
20
|
|
|
225
|
|
239
|
|
(14
|
)
|
|
Total revenue
|
|
$2,890
|
|
$2,863
|
|
$27
|
|
|
$2,837
|
|
$53
|
|
|
$11,155
|
|
$11,401
|
|
$(246
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
Investment advisory, administration fees and securities lending
revenue increased $26 million from the fourth quarter of 2015
reflecting the impact of organic growth and higher markets on average
AUM, and the effect of AUM acquired in the BofA Global Capital
Management transaction, partially offset by the impact of divergent
beta and mix shift, and the impact of foreign exchange movements.
Securities lending revenue of $138 million in the current quarter
compared with $137 million in the fourth quarter of 2015.
Investment
advisory, administration fees and securities lending revenue decreased
$60 million from the third quarter of 2016 despite higher average AUM,
reflecting the impact of foreign exchange movements and beta
divergence. Securities lending revenue of $138 million in the current
quarter compared with $142 million in the third quarter of 2016.
-
Performance fees decreased $40 million from the fourth quarter of
2015, primarily reflecting lower fees from equity products.
Performance
fees increased $71 million from the third quarter of 2016, primarily
due to seasonally higher fees from funds with a performance
measurement period that ended in the fourth quarter and improved
investment performance.
-
BlackRock Solutions® and advisory revenue increased
$26 million from the fourth quarter of 2015. BlackRock Solutions
and advisory revenue included $156 million of Aladdin revenue
in the current quarter compared with $138 million in the fourth
quarter of 2015.
BlackRock Solutions and advisory
revenue increased $23 million from the third quarter of 2016,
primarily due to higher Financial Markets Advisory Services revenue. BlackRock
Solutions and advisory revenue included $156 million of Aladdin
revenue in the current quarter compared with $152 million in the third
quarter of 2016.
-
Other revenue increased $17 million from the fourth quarter of 2015
and $20 million from the third quarter of 2016, primarily due to
higher earnings from strategic investments and higher transition
management service fees.
|
SUMMARY OF OPERATING EXPENSE
|
|
|
|
|
|
Three
Months Ended
December 31,
|
|
|
|
|
Three
Months Ended
September 30,
|
|
|
|
Year Ended
December 31,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
|
|
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Operating expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
$987
|
|
$989
|
|
$(2
|
)
|
|
|
$969
|
|
$18
|
|
|
$3,880
|
|
$4,005
|
|
$(125
|
)
|
|
Distribution and servicing costs
|
|
109
|
|
103
|
|
6
|
|
|
|
114
|
|
(5
|
)
|
|
429
|
|
409
|
|
20
|
|
|
Amortization of deferred sales commissions
|
|
7
|
|
11
|
|
(4
|
)
|
|
|
8
|
|
(1
|
)
|
|
34
|
|
48
|
|
(14
|
)
|
|
Direct fund expense
|
|
183
|
|
189
|
|
(6
|
)
|
|
|
200
|
|
(17
|
)
|
|
766
|
|
767
|
|
(1
|
)
|
|
General and administration
|
|
355
|
|
410
|
|
(55
|
)
|
|
|
312
|
|
43
|
|
|
1,301
|
|
1,380
|
|
(79
|
)
|
|
Restructuring charge
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
|
76
|
|
-
|
|
76
|
|
|
Amortization of intangible assets
|
|
24
|
|
24
|
|
-
|
|
|
|
25
|
|
(1
|
)
|
|
99
|
|
128
|
|
(29
|
)
|
|
Total operating expense
|
|
$1,665
|
|
$1,726
|
|
$(61
|
)
|
|
|
$1,628
|
|
$37
|
|
|
$6,585
|
|
$6,737
|
|
$(152
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
Employee compensation and benefits expense decreased $2 million from
the fourth quarter of 2015 but increased $18 million from the third
quarter of 2016. The increase reflected higher incentive compensation,
driven primarily by higher performance fees and higher operating
income.
-
General and administration expense decreased $55 million from the
fourth quarter of 2015, reflecting lower discretionary marketing and
promotional spend in the current quarter and $23 million of
transaction-related expense recorded in the fourth quarter of 2015.
General
and administration expense increased $43 million from the third
quarter of 2016, reflecting higher marketing and promotional spend,
and higher foreign exchange remeasurement expense in the current
quarter.
|
INCOME TAX EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
December 31,
|
|
|
|
|
Three
Months Ended
September 30,
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
(in millions), (unaudited)
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
|
2016
|
|
Change
|
|
|
2016
|
|
2015
|
|
Change
|
|
Income tax expense
|
|
|
|
$336
|
|
$279
|
|
$57
|
|
|
$333
|
|
$3
|
|
|
$1,290
|
|
$1,250
|
|
$40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
Fourth quarter 2016 income tax expense included a $4 million net
noncash tax benefit, primarily related to the revaluation of certain
deferred income tax liabilities as a result of domestic state and
local tax changes.
-
Fourth quarter 2015 income tax expense included a $64 million noncash
benefit, primarily related to the revaluation of certain deferred
income tax liabilities, including the effect of tax legislation
enacted in the United Kingdom.
-
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.
|
SUMMARY OF NONOPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
|
|
Three Months
Ended
September 30,
|
|
|
|
Year Ended
December 31,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Nonoperating income (expense), GAAP basis
|
|
$(38
|
)
|
|
$11
|
|
|
$(49
|
)
|
|
$1
|
|
|
$(39
|
)
|
|
$(110
|
)
|
|
$(62
|
)
|
|
$(48
|
)
|
|
Less: Net income (loss) attributable to NCI
|
|
-
|
|
|
8
|
|
|
(8
|
)
|
|
2
|
|
|
(2
|
)
|
|
(2
|
)
|
|
7
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)(1)
|
|
$(38
|
)
|
$3
|
|
|
$(41
|
)
|
|
$(1
|
)
|
|
$(37
|
)
|
|
$(108
|
)
|
|
$(69
|
)
|
|
$(39
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
economic
investments at
December
31, 2016(2)
|
|
Three Months
Ended
December 31,
|
|
|
|
Three Months
Ended
September 30,
2016
|
|
|
|
Year Ended
December 31,
|
|
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
Change
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Net gain (loss) on investments(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity
|
|
20-25
|
%
|
|
$(5
|
)
|
|
$36
|
|
|
$(41
|
)
|
|
$2
|
|
|
$(7
|
)
|
|
$6
|
|
|
$71
|
|
|
$(65
|
)
|
|
Real assets
|
|
5-10
|
%
|
|
3
|
|
|
3
|
|
|
-
|
|
|
2
|
|
|
1
|
|
|
8
|
|
|
12
|
|
|
(4
|
)
|
|
Other alternatives(3)
|
|
15-20
|
%
|
|
8
|
|
|
4
|
|
|
4
|
|
|
9
|
|
|
(1
|
)
|
|
21
|
|
|
(2
|
)
|
|
23
|
|
|
Other investments(4)
|
|
55-60
|
%
|
|
-
|
|
|
5
|
|
|
(5
|
)
|
|
16
|
|
|
(16
|
)
|
|
22
|
|
|
(18
|
)
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
6
|
|
|
48
|
|
|
(42
|
)
|
|
29
|
|
|
(23
|
)
|
|
57
|
|
|
63
|
|
|
(6
|
)
|
|
Other gains(5)
|
|
-
|
|
|
1
|
|
|
(1
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
46
|
|
|
(46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net gain (loss) on investments(1)
|
|
6
|
|
|
49
|
|
|
(43
|
)
|
|
29
|
|
|
(23
|
)
|
|
57
|
|
|
109
|
|
|
(52
|
)
|
|
Interest and dividend income
|
|
7
|
|
|
5
|
|
|
2
|
|
|
22
|
|
|
(15
|
)
|
|
40
|
|
|
26
|
|
|
14
|
|
|
Interest expense
|
|
|
|
(51
|
)
|
|
(51
|
)
|
|
-
|
|
|
(52
|
)
|
|
1
|
|
|
(205
|
)
|
|
(204
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense
|
|
(44
|
)
|
|
(46
|
)
|
|
2
|
|
|
(30
|
)
|
|
(14
|
)
|
|
(165
|
)
|
|
(178
|
)
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonoperating income (expense)(1)
|
|
(38
|
)
|
|
3
|
|
|
(41
|
)
|
|
(1
|
)
|
|
(37
|
)
|
|
(108
|
)
|
|
(69
|
)
|
|
(39
|
)
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
-
|
|
|
(2
|
)
|
|
2
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1
|
)
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), as adjusted(1)
|
|
$(38
|
)
|
|
$1
|
|
|
$(39
|
)
|
|
$(1
|
)
|
|
$(37
|
)
|
|
$(108
|
)
|
|
$(70
|
)
|
|
$(38
|
)
|
|
(1)
|
|
Net of net income (loss) attributable to noncontrolling interests
(“NCI”).
|
|
(2)
|
|
Percentages represent estimated percentages of BlackRock’s corporate
economic investment portfolio at December 31, 2016. Economic
investment amounts at September 30, 2016 for private equity, real
assets, other alternatives and other investments were $348 million,
$109 million, $238 million and $1,156 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 year ended December 31, 2015 primarily includes a
gain related to the acquisition of certain assets of BlackRock Kelso
Capital Advisors LLC.
|
|
|
|
|
Highlights
-
Net gain (loss) on investments decreased $43 million from the fourth
quarter of 2015, primarily driven by a $35 million unrealized gain on
a strategic private equity investment recorded in the fourth quarter
of 2015.
Net gain (loss) on investments decreased $23
million from the third quarter of 2016 due to lower marks in the
fourth quarter of 2016.
-
Interest and dividend income decreased $15 million from the third
quarter of 2016, primarily due to lower dividend income recorded in
the fourth 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.
|
|
|
December 31,
|
|
December 31,
|
|
(in billions), (unaudited)
|
|
2016 (Est.)
|
|
2015
|
|
Total balance sheet assets
|
|
$220
|
|
|
$225
|
|
|
Separate account assets and separate account collateral held under
securities lending agreements
|
|
(177
|
)
|
|
(182
|
)
|
|
Consolidated sponsored investment funds
|
|
(1
|
)
|
|
(1
|
)
|
|
Goodwill and intangible assets, net
|
|
(30
|
)
|
|
(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
|
|
Year Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Operating income, GAAP basis
|
|
$
|
1,225
|
|
|
$
|
1,137
|
|
|
$
|
1,209
|
|
|
$
|
4,570
|
|
|
$
|
4,664
|
|
|
Non-GAAP expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charge
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
76
|
|
|
|
-
|
|
|
PNC LTIP funding obligation
|
|
|
7
|
|
|
|
4
|
|
|
|
7
|
|
|
|
28
|
|
|
|
30
|
|
|
Compensation expense related to appreciation (depreciation) on
deferred compensation plans
|
|
|
-
|
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income, as adjusted
|
|
|
1,232
|
|
|
|
1,143
|
|
|
|
1,216
|
|
|
|
4,674
|
|
|
|
4,695
|
|
|
Product launch costs and commissions
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income used for operating margin measurement
|
|
$
|
1,232
|
|
|
$
|
1,143
|
|
|
$
|
1,216
|
|
|
$
|
4,674
|
|
|
$
|
4,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, GAAP basis
|
|
$
|
2,890
|
|
|
$
|
2,863
|
|
|
$
|
2,837
|
|
|
$
|
11,155
|
|
|
$
|
11,401
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Distribution and servicing costs
|
|
|
(109
|
)
|
|
|
(103
|
)
|
|
|
(114
|
)
|
|
|
(429
|
)
|
|
|
(409
|
)
|
|
Amortization of deferred sales commissions
|
|
|
(7
|
)
|
|
|
(11
|
)
|
|
|
(8
|
)
|
|
|
(34
|
)
|
|
|
(48
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue used for operating margin measurement
|
|
$
|
2,774
|
|
|
$
|
2,749
|
|
|
$
|
2,715
|
|
|
$
|
10,692
|
|
|
$
|
10,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, GAAP basis
|
|
|
42.4
|
%
|
|
|
39.7
|
%
|
|
|
42.6
|
%
|
|
|
41.0
|
%
|
|
|
40.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as adjusted
|
|
|
44.4
|
%
|
|
|
41.6
|
%
|
|
|
44.8
|
%
|
|
|
43.7
|
%
|
|
|
42.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See note (1) to the Condensed Consolidated Statements of Income
and Supplemental Information for more information on as adjusted
items and the reconciliation to GAAP.
|
|
|
|
RECONCILIATION OF U.S. GAAP NONOPERATING INCOME NET OF NCI TO
NONOPERATING INCOME NET OF NCI, AS ADJUSTED
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
(in millions), (unaudited)
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Nonoperating income (expense), GAAP basis
|
|
$
|
(38
|
)
|
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
(110
|
)
|
|
$
|
(62
|
)
|
|
Less: Net income (loss) attributable to NCI
|
|
|
-
|
|
|
|
8
|
|
|
|
2
|
|
|
|
(2
|
)
|
|
|
7
|
|
|
Nonoperating income (expense), net of NCI
|
|
|
(38
|
)
|
|
|
3
|
|
|
|
(1
|
)
|
|
|
(108
|
)
|
|
|
(69
|
)
|
|
Compensation expense related to (appreciation) depreciation on
deferred compensation plans
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense), less net income (loss)
attributable to NCI, as adjusted
|
|
$
|
(38
|
)
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
(108
|
)
|
|
$
|
(70
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Year Ended
December 31,
|
|
|
|
|
December 31,
|
|
September 30,
|
|
|
(in millions, except per share data), (unaudited)
|
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Net income attributable to BlackRock, Inc., GAAP basis
|
|
|
$
|
851
|
|
|
$
|
861
|
|
|
$
|
875
|
|
|
$
|
3,172
|
|
|
$
|
3,345
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charge (including $23 tax benefit)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
53
|
|
|
|
-
|
|
|
PNC LTIP funding obligation, net of tax
|
|
|
|
5
|
|
|
|
4
|
|
|
|
5
|
|
|
|
19
|
|
|
|
22
|
|
|
Income tax matters
|
|
|
|
(4
|
)
|
|
|
(64
|
)
|
|
|
(26
|
)
|
|
|
(30
|
)
|
|
|
(54
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
|
$
|
852
|
|
|
$
|
801
|
|
|
$
|
854
|
|
|
$
|
3,214
|
|
|
$
|
3,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common shares outstanding(4)
|
|
|
|
165.9
|
|
|
|
168.6
|
|
|
|
166.3
|
|
|
|
166.6
|
|
|
|
169.0
|
|
|
Diluted earnings per common share, GAAP basis(4)
|
|
|
$
|
5.13
|
|
|
$
|
5.11
|
|
|
$
|
5.26
|
|
|
$
|
19.04
|
|
|
$
|
19.79
|
|
|
Diluted earnings per common share, as adjusted(4)
|
|
|
$
|
5.14
|
|
|
$
|
4.75
|
|
|
$
|
5.14
|
|
|
$
|
19.29
|
|
|
$
|
19.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 such costs represent a benchmark for the amount of
revenue passed through to external parties who distribute the
Company’s products. In addition, 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 potential for human error in connection with BlackRock’s operational
systems; (10) 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; (11) 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; (12) the ability to
attract and retain highly talented professionals; (13) fluctuations in
the carrying value of BlackRock’s economic investments; (14) 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; (15) BlackRock’s success in negotiating distribution
arrangements and maintaining distribution channels for its products;
(16) the failure by a key vendor of BlackRock to fulfill its obligations
to the Company; (17) any disruption to the operations of third parties
whose functions are integral to BlackRock’s ETF platform; (18) 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 (19) 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 December 31, 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 November 30, 2016. The performance
data does not include accounts terminated prior to December 31, 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 December 31, 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.
Performance shown is derived from applicable benchmarks or peer median
information, as selected by BlackRock, Inc. Peer medians are based in
part on data either from Lipper Inc. or Morningstar, Inc. for each
included product.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170113005084/en/
BlackRock, Inc.
Tom Wojcik, 212-810-8127
Investor Relations
or
Brian
Beades, 212-810-5596
Media Relations
Source: BlackRock, Inc.