Fourth Quarter 2017 Diluted EPS of $14.07, or $6.24 as adjusted
-
Record $367 billion of full year total net inflows reflects continued
strength of diversified business model
-
$103 billion of fourth quarter net inflows, positive across active,
index and iShares® and cash management
-
12% full year revenue growth driven by growth in base fees,
performance fees, and technology and risk management revenue
-
15% increase in full year operating income (13% as adjusted) reflects
operating margin expansion
-
59% increase in full year diluted EPS reflects net tax benefit from
Tax Cuts and Jobs Act (17% as adjusted)
-
Returned $2.8 billion to shareholders in 2017
-
Board of Directors approves 15% increase in quarterly cash dividend to
$2.88 per share
NEW YORK--(BUSINESS WIRE)--
BlackRock, Inc. (NYSE:BLK):
|
FINANCIAL RESULTS
|
|
|
|
Q4
|
|
|
Q4
|
|
|
|
|
|
|
|
Q3
|
|
|
|
|
|
|
Full Year
|
|
|
|
|
|
|
(in millions, except per share data)
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
AUM
|
|
$
|
6,288,195
|
|
|
$
|
5,147,852
|
|
|
|
22
|
%
|
|
|
$
|
5,976,892
|
|
|
5
|
%
|
|
|
$
|
6,288,195
|
|
|
$
|
5,147,852
|
|
|
|
22
|
%
|
|
Total net flows
|
|
$
|
102,929
|
|
|
$
|
98,050
|
|
|
|
|
|
|
|
$
|
96,112
|
|
|
|
|
|
|
$
|
367,254
|
|
|
$
|
202,191
|
|
|
|
|
|
|
GAAP basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
3,469
|
|
|
$
|
2,890
|
|
|
|
20
|
%
|
|
|
$
|
3,233
|
|
|
7
|
%
|
|
|
$
|
12,491
|
|
|
$
|
11,155
|
|
|
|
12
|
%
|
|
Operating income
|
|
$
|
1,489
|
|
|
$
|
1,225
|
|
|
|
22
|
%
|
|
|
$
|
1,394
|
|
|
7
|
%
|
|
|
$
|
5,272
|
|
|
$
|
4,570
|
|
|
|
15
|
%
|
|
Operating margin
|
|
|
42.9
|
%
|
|
|
42.4
|
%
|
|
|
50
|
bps
|
|
|
|
43.1
|
%
|
|
(20
|
) bps
|
|
|
|
42.2
|
%
|
|
|
41.0
|
%
|
|
|
120
|
bps
|
|
Net income(1) (2)
|
|
$
|
2,304
|
|
|
$
|
851
|
|
|
|
171
|
%
|
|
|
$
|
947
|
|
|
143
|
%
|
|
|
$
|
4,970
|
|
|
$
|
3,172
|
|
|
|
57
|
%
|
|
Diluted EPS
|
|
$
|
14.07
|
|
|
$
|
5.13
|
|
|
|
174
|
%
|
|
|
$
|
5.78
|
|
|
143
|
%
|
|
|
$
|
30.23
|
|
|
$
|
19.04
|
|
|
|
59
|
%
|
|
Weighted average diluted shares
|
|
|
163.8
|
|
|
|
165.9
|
|
|
|
(1
|
)%
|
|
|
|
163.8
|
|
|
-
|
%
|
|
|
|
164.4
|
|
|
|
166.6
|
|
|
|
(1
|
)%
|
|
As Adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income(3)
|
|
$
|
1,492
|
|
|
$
|
1,232
|
|
|
|
21
|
%
|
|
|
$
|
1,398
|
|
|
7
|
%
|
|
|
$
|
5,287
|
|
|
$
|
4,674
|
|
|
|
13
|
%
|
|
Operating margin(3)
|
|
|
44.8
|
%
|
|
|
44.4
|
%
|
|
|
40
|
bps
|
|
|
|
45.0
|
%
|
|
(20
|
) bps
|
|
|
|
44.1
|
%
|
|
|
43.7
|
%
|
|
|
40
|
bps
|
|
Net income(1) (3)
|
|
$
|
1,022
|
|
|
$
|
852
|
|
|
|
20
|
%
|
|
|
$
|
969
|
|
|
5
|
%
|
|
|
$
|
3,716
|
|
|
$
|
3,214
|
|
|
|
16
|
%
|
|
Diluted EPS(3)
|
|
$
|
6.24
|
|
|
$
|
5.14
|
|
|
|
21
|
%
|
|
|
$
|
5.92
|
|
|
5
|
%
|
|
|
$
|
22.60
|
|
|
$
|
19.29
|
|
|
|
17
|
%
|
|
(1)
|
|
Net income represents net income attributable to BlackRock, Inc.
|
|
(2)
|
|
GAAP net income for fourth quarter and full year 2017 reflects
$1.2 billion of net tax benefit related to the Tax Cuts and Jobs
Act. See the Income Tax Expense (Benefit) for more information.
|
|
(3)
|
|
See notes (1) through (3) 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, 2017.
“BlackRock’s record 2017 results reflect the long-term investments we’ve
consistently made in our business to better serve clients,” commented
Laurence D. Fink, Chairman and CEO of BlackRock. “$367 billion of total
net inflows for the year were the strongest flows in BlackRock’s
history, and included $103 billion in the fourth quarter.
“Full year net inflows represented 7% organic asset growth and were
positive across client types, asset classes, major regions and
investment styles. Investors are increasingly seeking comprehensive
solutions, and BlackRock’s differentiated ability to offer scaled
investment strategies, industry leading risk management and portfolio
construction technology and thought leadership is driving deeper client
partnerships than ever before. And we continue to expand the global
reach of our integrated platform to investors in high growth geographies
like China, where earlier this month we obtained our private fund
management registration to manufacture and distribute onshore investment
products.
“iShares ETFs generated $245 billion of full year net inflows, as
an increasingly diverse set of institutional and retail clients are
using ETFs for asset allocation and alpha generation. Investors are
using both equity and fixed income ETFs in their portfolios for Core and
precision exposures and as financial instruments. Investments made in iShares
ETFs drove expanded market share in 2017 and enabled us to once again
capture the #1 share of industry ETF flows globally, in the United
States and Europe, and in both equity and fixed income products.
“In alpha-seeking strategies, we are leveraging the powerful combination
of human investment expertise and sophisticated data analytics.
Performance across our alpha-seeking strategies remains strong and drove
$24 billion of net inflows in 2017.
“Technology and risk management revenue, powered by Aladdin®,
increased 14% for the full year, and demand remains strong across our
full range of capabilities. In 2017, we expanded our technology reach,
scaling our distribution capabilities through Aladdin Risk for Wealth
Management, Cachematrix, iCapital and Scalable Capital. We continue to
invest in technology and data to generate improved alpha, better serve
our clients and more efficiently run our business.
“Throughout BlackRock’s 30-year history, we have been driven by a
fiduciary commitment to our clients, a culture of innovation, a passion
for performance and a workplace that embraces diversity and inclusion.
We are fortunate to have dedicated employees who share our vision of
creating better financial futures for clients. We enter 2018 well
positioned to continue investing for future growth, developing our
talent and delivering differentiated value for clients and shareholders
alike.”
CAPITAL MANAGEMENT
BlackRock’s Board of Directors approved a 15% increase in the quarterly
cash dividend to $2.88 per share, payable March 22, 2018, to
shareholders of record at the close of business on March 7, 2018.
|
RESULTS BY CLIENT TYPE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
Q4 2017
|
|
|
|
Q4 2017
|
|
|
December 31, 2017
|
|
|
Q4 2017
|
|
|
AUM
|
|
Base fees(1)
|
|
(in millions), (unaudited)
|
|
Net flows
|
|
|
AUM
|
|
|
Base fees(1)
|
|
|
% of Total
|
|
% of Total
|
|
Retail
|
|
$
|
11,391
|
|
|
$
|
628,377
|
|
|
$
|
858
|
|
|
|
10
|
%
|
|
|
29
|
%
|
|
iShares ETFs
|
|
|
54,800
|
|
|
|
1,752,239
|
|
|
|
1,123
|
|
|
|
28
|
%
|
|
|
39
|
%
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
2,187
|
|
|
|
1,139,308
|
|
|
|
508
|
|
|
|
18
|
%
|
|
|
18
|
%
|
|
Index
|
|
|
12,202
|
|
|
|
2,316,807
|
|
|
|
257
|
|
|
|
37
|
%
|
|
|
9
|
%
|
|
Total institutional
|
|
|
14,389
|
|
|
|
3,456,115
|
|
|
|
765
|
|
|
|
55
|
%
|
|
|
27
|
%
|
|
Long-term
|
|
|
80,580
|
|
|
|
5,836,731
|
|
|
|
2,746
|
|
|
|
93
|
%
|
|
|
95
|
%
|
|
Cash management
|
|
|
23,406
|
|
|
|
449,949
|
|
|
|
150
|
|
|
|
7
|
%
|
|
|
5
|
%
|
|
Advisory
|
|
|
(1,057
|
)
|
|
|
1,515
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
$
|
102,929
|
|
|
$
|
6,288,195
|
|
|
$
|
2,896
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESULTS BY PRODUCT TYPE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
Q4 2017
|
|
|
|
Q4 2017
|
|
|
December 31, 2017
|
|
|
Q4 2017
|
|
|
AUM
|
|
Base fees(1)
|
|
(in millions), (unaudited)
|
|
Net flows
|
|
|
AUM
|
|
|
Base fees(1)
|
|
|
% of Total
|
|
% of Total
|
|
Equity
|
|
$
|
35,782
|
|
|
$
|
3,371,641
|
|
|
$
|
1,493
|
|
|
|
53
|
%
|
|
|
51
|
%
|
|
Fixed income
|
|
|
42,951
|
|
|
|
1,855,465
|
|
|
|
754
|
|
|
|
30
|
%
|
|
|
26
|
%
|
|
Multi-asset
|
|
|
4,923
|
|
|
|
480,278
|
|
|
|
305
|
|
|
|
8
|
%
|
|
|
11
|
%
|
|
Alternatives
|
|
|
(3,076
|
)
|
|
|
129,347
|
|
|
|
194
|
|
|
|
2
|
%
|
|
|
7
|
%
|
|
Long-term
|
|
|
80,580
|
|
|
|
5,836,731
|
|
|
|
2,746
|
|
|
|
93
|
%
|
|
|
95
|
%
|
|
Cash management
|
|
|
23,406
|
|
|
|
449,949
|
|
|
|
150
|
|
|
|
7
|
%
|
|
|
5
|
%
|
|
Advisory
|
|
|
(1,057
|
)
|
|
|
1,515
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
$
|
102,929
|
|
|
$
|
6,288,195
|
|
|
$
|
2,896
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESULTS BY INVESTMENT STYLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
Q4 2017
|
|
|
|
Q4 2017
|
|
|
December 31, 2017
|
|
|
Q4 2017
|
|
|
AUM
|
|
Base fees(1)
|
|
(in millions), (unaudited)
|
|
Net flows
|
|
|
AUM
|
|
|
Base fees(1)
|
|
|
% of Total
|
|
% of Total
|
|
Active
|
|
$
|
12,962
|
|
|
$
|
1,696,005
|
|
|
$
|
1,353
|
|
|
|
27
|
%
|
|
|
47
|
%
|
|
Index and iShares ETFs
|
|
|
67,618
|
|
|
|
4,140,726
|
|
|
|
1,393
|
|
|
|
66
|
%
|
|
|
48
|
%
|
|
Long-term
|
|
|
80,580
|
|
|
|
5,836,731
|
|
|
|
2,746
|
|
|
|
93
|
%
|
|
|
95
|
%
|
|
Cash management
|
|
|
23,406
|
|
|
|
449,949
|
|
|
|
150
|
|
|
|
7
|
%
|
|
|
5
|
%
|
|
Advisory
|
|
|
(1,057
|
)
|
|
|
1,515
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
$
|
102,929
|
|
|
$
|
6,288,195
|
|
|
$
|
2,896
|
|
|
|
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 $55.3 billion, $17.9 billion and $7.4 billion from clients in
the Americas, EMEA and Asia-Pacific, respectively. At December 31, 2017,
BlackRock managed 63% of its long-term AUM for clients in the Americas,
29% for clients in EMEA and 8% for clients in Asia-Pacific.
The Company’s net flows by client type for the fourth quarter of 2017
are presented below.
-
Retail long-term net inflows of $11.4 billion reflected
net inflows of $7.4 billion in the United States and $4.0 billion
internationally. Fixed income net inflows of $8.0 billion were
diversified across our top-performing active platform, led by net
inflows into unconstrained, short duration and municipals categories.
Multi-asset net inflows of $2.0 billion were largely due to inflows
into the Multi-asset Income fund family. Equity net inflows of $1.1
billion were paced by flows into international equities.
-
iShares ETFs long-term net inflows of $54.8 billion
reflected strength in iShares Core, precision exposure and
financial instrument ETFs. Equity net inflows of $44.9 billion were
driven by both U.S. and international equity market exposures. Fixed
income net inflows of $8.7 billion reflected inflows into broad fixed
income and investment grade corporate funds. Commodities iShares
generated $1.0 billion of net inflows.
-
Institutional active long-term net inflows of $2.2
billion were led by multi-asset net inflows of $2.9 billion,
reflecting ongoing demand for our LifePath®
target-date series and factors strategies, and fixed income net
inflows of $2.3 billion. Equity net outflows of $1.2 billion were
primarily due to outflows in fundamental active equities. Alternatives
net inflows were $2.1 billion, excluding $3.9 billion of capital
return associated with real estate and private equity fund-of-funds,
or $1.8 billion of total net outflows. Momentum in illiquid
alternatives fundraising continued, with $17 billion of committed
capital available to invest on behalf of clients.
-
Institutional index long-term net inflows of $12.2
billion included fixed income net inflows of $24.0 billion, led by
demand for liability-driven solutions, partially offset by equity net
outflows of $9.0 billion. Alternatives net outflows of $2.5 billion
were primarily due to outflows from passive currency overlays.
Cash management AUM increased 6% from the prior quarter to $449.9
billion.
INVESTMENT PERFORMANCE AT DECEMBER 31, 2017 (1)
|
|
|
One-year period
|
|
Three-year period
|
|
Five-year period
|
|
Fixed income:
|
|
|
|
|
|
|
|
Actively managed AUM above benchmark or peer median
|
|
|
|
|
|
|
|
Taxable
|
|
81%
|
|
73%
|
|
90%
|
|
Tax-exempt
|
|
52%
|
|
68%
|
|
72%
|
|
Index AUM within or above applicable tolerance
|
|
96%
|
|
93%
|
|
99%
|
|
Equity:
|
|
|
|
|
|
|
|
Actively managed AUM above benchmark or peer median
|
|
|
|
|
|
|
|
Fundamental
|
|
70%
|
|
72%
|
|
73%
|
|
Systematic
|
|
83%
|
|
87%
|
|
90%
|
|
Index AUM within or above applicable tolerance
|
|
96%
|
|
99%
|
|
98%
|
|
(1)
|
|
Past performance is not indicative of future results. The
performance information shown is based on preliminary available
data. Please refer to the Performance Notes for 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 12, 2018 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 6567048). 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 12, 2018 and ending at
midnight on Friday, January 26, 2018. 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 6567048. To access the
webcast, please visit the investor relations section of www.blackrock.com.
About BlackRock
BlackRock helps investors build better financial futures. As a fiduciary
to our clients, we provide the investment and technology solutions they
need when planning for their most important goals. As of December 31,
2017, the firm managed approximately $6.288 trillion in assets on behalf
of investors worldwide. For additional information on BlackRock, please
visit www.blackrock.com |
Twitter: @blackrock |
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
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and
securities lending revenue
|
|
|
$
|
2,896
|
|
|
$
|
2,486
|
|
|
$
|
410
|
|
|
$
|
2,792
|
|
|
$
|
104
|
|
|
Investment advisory performance fees
|
|
|
|
285
|
|
|
|
129
|
|
|
|
156
|
|
|
|
191
|
|
|
|
94
|
|
|
Technology and risk management revenue(a)
|
|
|
|
180
|
|
|
|
156
|
|
|
|
24
|
|
|
|
175
|
|
|
|
5
|
|
|
Distribution fees
|
|
|
|
7
|
|
|
|
9
|
|
|
|
(2
|
)
|
|
|
5
|
|
|
|
2
|
|
|
Advisory and other revenue(a)
|
|
|
|
101
|
|
|
|
110
|
|
|
|
(9
|
)
|
|
|
70
|
|
|
|
31
|
|
|
Total revenue
|
|
|
|
3,469
|
|
|
|
2,890
|
|
|
|
579
|
|
|
|
3,233
|
|
|
|
236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
|
1,147
|
|
|
|
987
|
|
|
|
160
|
|
|
|
1,088
|
|
|
|
59
|
|
|
Distribution and servicing costs
|
|
|
|
131
|
|
|
|
109
|
|
|
|
22
|
|
|
|
123
|
|
|
|
8
|
|
|
Amortization of deferred sales commissions
|
|
|
|
4
|
|
|
|
7
|
|
|
|
(3
|
)
|
|
|
4
|
|
|
|
-
|
|
|
Direct fund expense
|
|
|
|
238
|
|
|
|
183
|
|
|
|
55
|
|
|
|
234
|
|
|
|
4
|
|
|
General and administration
|
|
|
|
448
|
|
|
|
355
|
|
|
|
93
|
|
|
|
363
|
|
|
|
85
|
|
|
Amortization of intangible assets
|
|
|
|
12
|
|
|
|
24
|
|
|
|
(12
|
)
|
|
|
27
|
|
|
|
(15
|
)
|
|
Total expense
|
|
|
|
1,980
|
|
|
|
1,665
|
|
|
|
315
|
|
|
|
1,839
|
|
|
|
141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
1,489
|
|
|
|
1,225
|
|
|
|
264
|
|
|
|
1,394
|
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
|
|
33
|
|
|
|
6
|
|
|
|
27
|
|
|
|
41
|
|
|
|
(8
|
)
|
|
Interest and dividend income
|
|
|
|
14
|
|
|
|
7
|
|
|
|
7
|
|
|
|
15
|
|
|
|
(1
|
)
|
|
Interest expense
|
|
|
|
(46
|
)
|
|
|
(51
|
)
|
|
|
5
|
|
|
|
(46
|
)
|
|
|
-
|
|
|
Total nonoperating income (expense)
|
|
|
|
1
|
|
|
|
(38
|
)
|
|
|
39
|
|
|
|
10
|
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
1,490
|
|
|
|
1,187
|
|
|
|
303
|
|
|
|
1,404
|
|
|
|
86
|
|
|
Income tax expense (benefit)
|
|
|
|
(820
|
)
|
|
|
336
|
|
|
|
(1,156
|
)
|
|
|
445
|
|
|
|
(1,265
|
)
|
|
Net income
|
|
|
|
2,310
|
|
|
|
851
|
|
|
|
1,459
|
|
|
|
959
|
|
|
|
1,351
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
|
6
|
|
|
|
-
|
|
|
|
6
|
|
|
|
12
|
|
|
|
(6
|
)
|
|
Net income attributable to BlackRock, Inc.
|
|
|
$
|
2,304
|
|
|
$
|
851
|
|
|
$
|
1,453
|
|
|
$
|
947
|
|
|
$
|
1,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
161,272,950
|
|
|
|
163,441,552
|
|
|
|
(2,168,602
|
)
|
|
|
161,872,716
|
|
|
|
(599,766
|
)
|
|
Diluted
|
|
|
|
163,777,534
|
|
|
|
165,854,167
|
|
|
|
(2,076,633
|
)
|
|
|
163,773,546
|
|
|
|
3,988
|
|
|
Earnings per share attributable to BlackRock, Inc.
common stockholders (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
14.29
|
|
|
$
|
5.21
|
|
|
$
|
9.08
|
|
|
$
|
5.85
|
|
|
$
|
8.44
|
|
|
Diluted
|
|
|
$
|
14.07
|
|
|
$
|
5.13
|
|
|
$
|
8.94
|
|
|
$
|
5.78
|
|
|
$
|
8.29
|
|
|
Cash dividends declared and paid per share
|
|
|
$
|
2.50
|
|
|
$
|
2.29
|
|
|
$
|
0.21
|
|
|
$
|
2.50
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
|
$
|
6,288,195
|
|
|
$
|
5,147,852
|
|
|
$
|
1,140,343
|
|
|
$
|
5,976,892
|
|
|
$
|
311,303
|
|
|
Shares outstanding (end of period)
|
|
|
|
161,046,825
|
|
|
|
163,121,291
|
|
|
|
(2,074,466
|
)
|
|
|
161,597,770
|
|
|
|
(550,945
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
42.9
|
%
|
|
|
42.4
|
%
|
|
|
50
|
bps
|
|
|
43.1
|
%
|
|
|
(20
|
) bps
|
|
Effective tax rate
|
|
|
|
(55.2
|
)%
|
|
|
28.3
|
%
|
|
|
(8,350
|
) bps
|
|
|
32.0
|
%
|
|
|
(8,720
|
) bps
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (1)
|
|
|
$
|
1,492
|
|
|
$
|
1,232
|
|
|
$
|
260
|
|
|
$
|
1,398
|
|
|
$
|
94
|
|
|
Operating margin (1)
|
|
|
|
44.8
|
%
|
|
|
44.4
|
%
|
|
|
40
|
bps
|
|
|
45.0
|
%
|
|
|
(20
|
) bps
|
|
Nonoperating income (expense), less net income
(loss) attributable to noncontrolling interests
|
|
|
$
|
(5
|
)
|
|
$
|
(38
|
)
|
|
$
|
33
|
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
Net income attributable to BlackRock, Inc. (2)
|
|
|
$
|
1,022
|
|
|
$
|
852
|
|
|
$
|
170
|
|
|
$
|
969
|
|
|
$
|
53
|
|
|
Diluted earnings attributable to BlackRock, Inc.
common stockholders per share (2) (3)
|
|
|
$
|
6.24
|
|
|
$
|
5.14
|
|
|
$
|
1.10
|
|
|
$
|
5.92
|
|
|
$
|
0.32
|
|
|
Effective tax rate
|
|
|
|
31.3
|
%
|
|
|
28.6
|
%
|
|
|
270
|
bps
|
|
|
30.6
|
%
|
|
|
70
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See the reconciliation to GAAP and notes (1) through (3) for
more information on as adjusted items.
|
|
|
|
|
|
(a)
|
|
Beginning with the first quarter of 2017, Aladdin revenue
previously reported within “BlackRock Solutions®
and advisory” has been presented within “Technology and risk
management revenue” on the condensed consolidated statements of
income. The remaining previously reported “BlackRock Solutions
and advisory” revenue is currently reported as part of “Advisory
and other revenue.” Under the historical presentation, BlackRock
Solutions and advisory revenue would have totaled $234 million
for the three months ended December 31, 2017. The prior period
amount reported for BlackRock Solutions and advisory of
$197 million for the three months ended December 31, 2016 has been
reclassified to conform to the current presentation. See the
Summary of Revenue for further information.
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL
INFORMATION
(in millions, except shares and per share data), (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory, administration fees and securities
lending revenue
|
|
|
$
|
10,893
|
|
|
$
|
9,880
|
|
|
$
|
1,013
|
|
|
Investment advisory performance fees
|
|
|
|
594
|
|
|
|
295
|
|
|
|
299
|
|
|
Technology and risk management revenue(a)
|
|
|
|
677
|
|
|
|
595
|
|
|
|
82
|
|
|
Distribution fees
|
|
|
|
24
|
|
|
|
41
|
|
|
|
(17
|
)
|
|
Advisory and other revenue(a)
|
|
|
|
303
|
|
|
|
344
|
|
|
|
(41
|
)
|
|
Total revenue
|
|
|
|
12,491
|
|
|
|
11,155
|
|
|
|
1,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
|
4,255
|
|
|
|
3,880
|
|
|
|
375
|
|
|
Distribution and servicing costs
|
|
|
|
492
|
|
|
|
429
|
|
|
|
63
|
|
|
Amortization of deferred sales commissions
|
|
|
|
17
|
|
|
|
34
|
|
|
|
(17
|
)
|
|
Direct fund expense
|
|
|
|
904
|
|
|
|
766
|
|
|
|
138
|
|
|
General and administration
|
|
|
|
1,462
|
|
|
|
1,301
|
|
|
|
161
|
|
|
Restructuring charge
|
|
|
|
-
|
|
|
|
76
|
|
|
|
(76
|
)
|
|
Amortization of intangible assets
|
|
|
|
89
|
|
|
|
99
|
|
|
|
(10
|
)
|
|
Total expense
|
|
|
|
7,219
|
|
|
|
6,585
|
|
|
|
634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
5,272
|
|
|
|
4,570
|
|
|
|
702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
|
|
161
|
|
|
|
55
|
|
|
|
106
|
|
|
Interest and dividend income
|
|
|
|
49
|
|
|
|
40
|
|
|
|
9
|
|
|
Interest expense
|
|
|
|
(205
|
)
|
|
|
(205
|
)
|
|
|
-
|
|
|
Total nonoperating income (expense)
|
|
|
|
5
|
|
|
|
(110
|
)
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
5,277
|
|
|
|
4,460
|
|
|
|
817
|
|
|
Income tax expense
|
|
|
|
270
|
|
|
|
1,290
|
|
|
|
(1,020
|
)
|
|
Net income
|
|
|
|
5,007
|
|
|
|
3,170
|
|
|
|
1,837
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
|
37
|
|
|
|
(2
|
)
|
|
|
39
|
|
|
Net income attributable to BlackRock, Inc.
|
|
|
$
|
4,970
|
|
|
$
|
3,172
|
|
|
$
|
1,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
162,160,601
|
|
|
|
164,425,858
|
|
|
|
(2,265,257
|
)
|
|
Diluted
|
|
|
|
164,415,035
|
|
|
|
166,579,752
|
|
|
|
(2,164,717
|
)
|
|
Earnings per share attributable to BlackRock, Inc.
common stockholders (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
30.65
|
|
|
$
|
19.29
|
|
|
$
|
11.36
|
|
|
Diluted
|
|
|
$
|
30.23
|
|
|
$
|
19.04
|
|
|
$
|
11.19
|
|
|
Cash dividends declared and paid per share
|
|
|
$
|
10.00
|
|
|
$
|
9.16
|
|
|
$
|
0.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (end of period)
|
|
|
$
|
6,288,195
|
|
|
$
|
5,147,852
|
|
|
$
|
1,140,343
|
|
|
Shares outstanding (end of period)
|
|
|
|
161,046,825
|
|
|
|
163,121,291
|
|
|
|
(2,074,466
|
)
|
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
42.2
|
%
|
|
|
41.0
|
%
|
|
|
120
|
bps
|
|
Effective tax rate
|
|
|
|
5.2
|
%
|
|
|
28.9
|
%
|
|
|
(2,370
|
) bps
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (1)
|
|
|
$
|
5,287
|
|
|
$
|
4,674
|
|
|
$
|
613
|
|
|
Operating margin (1)
|
|
|
|
44.1
|
%
|
|
|
43.7
|
%
|
|
|
40
|
bps
|
|
Nonoperating income (expense), less net income (loss)
attributable to noncontrolling interests
|
|
|
$
|
(32
|
)
|
|
$
|
(108
|
)
|
|
$
|
76
|
|
|
Net income attributable to BlackRock, Inc. (2)
|
|
|
$
|
3,716
|
|
|
$
|
3,214
|
|
|
$
|
502
|
|
|
Diluted earnings attributable to BlackRock, Inc.
common stockholders per share (2) (3)
|
|
|
$
|
22.60
|
|
|
$
|
19.29
|
|
|
$
|
3.31
|
|
|
Effective tax rate
|
|
|
|
29.3
|
%
|
|
|
29.6
|
%
|
|
|
(30
|
) bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See the reconciliation to GAAP and notes (1) through (3) for
more information on as adjusted items.
|
|
|
|
|
|
(a)
|
|
Beginning with the first quarter of 2017, Aladdin revenue
previously reported within “BlackRock Solutions and
advisory” has been presented within “Technology and risk
management revenue” on the condensed consolidated statements of
income. The remaining previously reported “BlackRock Solutions
and advisory” revenue is currently reported as part of “Advisory
and other revenue.” Under the historical presentation, BlackRock
Solutions and advisory revenue would have totaled $805 million
for the year ended December 31, 2017. The prior period amount
reported for BlackRock Solutions and advisory of $714
million for the year ended December 31, 2016 has been reclassified
to conform to the current presentation. See the Summary of Revenue
for further information.
|
|
|
|
|
|
|
|
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
|
|
Current Quarter Component Changes by Client Type and Product Type
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
inflows
|
|
|
Market
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
2017
|
|
|
(outflows)
|
|
|
change
|
|
|
FX impact (1)
|
|
|
2017
|
|
|
Average AUM (2)
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
$
|
225,668
|
|
|
$
|
1,135
|
|
|
$
|
5,706
|
|
|
$
|
709
|
|
|
$
|
233,218
|
|
|
$
|
229,625
|
|
Fixed income
|
|
|
|
248,348
|
|
|
|
8,006
|
|
|
|
652
|
|
|
|
565
|
|
|
|
257,571
|
|
|
|
252,740
|
|
Multi-asset
|
|
|
|
118,062
|
|
|
|
1,990
|
|
|
|
682
|
|
|
|
121
|
|
|
|
120,855
|
|
|
|
119,514
|
|
Alternatives
|
|
|
|
16,443
|
|
|
|
260
|
|
|
|
(17
|
)
|
|
|
47
|
|
|
|
16,733
|
|
|
|
16,562
|
|
Retail subtotal
|
|
|
|
608,521
|
|
|
|
11,391
|
|
|
|
7,023
|
|
|
|
1,442
|
|
|
|
628,377
|
|
|
|
618,441
|
|
iShares ETFs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,228,395
|
|
|
|
44,888
|
|
|
|
54,910
|
|
|
|
1,417
|
|
|
|
1,329,610
|
|
|
|
1,284,240
|
|
Fixed income
|
|
|
|
386,267
|
|
|
|
8,672
|
|
|
|
(608
|
)
|
|
|
921
|
|
|
|
395,252
|
|
|
|
390,409
|
|
Multi-asset
|
|
|
|
3,491
|
|
|
|
262
|
|
|
|
8
|
|
|
|
-
|
|
|
|
3,761
|
|
|
|
3,670
|
|
Alternatives
|
|
|
|
22,284
|
|
|
|
978
|
|
|
|
341
|
|
|
|
13
|
|
|
|
23,616
|
|
|
|
22,874
|
|
iShares ETFs subtotal
|
|
|
|
1,640,437
|
|
|
|
54,800
|
|
|
|
54,651
|
|
|
|
2,351
|
|
|
|
1,752,239
|
|
|
|
1,701,193
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
130,366
|
|
|
|
(1,236
|
)
|
|
|
7,658
|
|
|
|
397
|
|
|
|
137,185
|
|
|
|
133,465
|
|
Fixed income
|
|
|
|
562,027
|
|
|
|
2,313
|
|
|
|
4,832
|
|
|
|
878
|
|
|
|
570,050
|
|
|
|
565,001
|
|
Multi-asset
|
|
|
|
327,733
|
|
|
|
2,910
|
|
|
|
15,635
|
|
|
|
1,547
|
|
|
|
347,825
|
|
|
|
336,773
|
|
Alternatives
|
|
|
|
85,098
|
|
|
|
(1,800
|
)
|
|
|
749
|
|
|
|
201
|
|
|
|
84,248
|
|
|
|
84,400
|
|
Active subtotal
|
|
|
|
1,105,224
|
|
|
|
2,187
|
|
|
|
28,874
|
|
|
|
3,023
|
|
|
|
1,139,308
|
|
|
|
1,119,639
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,588,036
|
|
|
|
(9,005
|
)
|
|
|
89,810
|
|
|
|
2,787
|
|
|
|
1,671,628
|
|
|
|
1,634,336
|
|
Fixed income
|
|
|
|
591,778
|
|
|
|
23,960
|
|
|
|
13,835
|
|
|
|
3,019
|
|
|
|
632,592
|
|
|
|
609,295
|
|
Multi-asset
|
|
|
|
7,741
|
|
|
|
(239
|
)
|
|
|
328
|
|
|
|
7
|
|
|
|
7,837
|
|
|
|
7,826
|
|
Alternatives
|
|
|
|
7,146
|
|
|
|
(2,514
|
)
|
|
|
101
|
|
|
|
17
|
|
|
|
4,750
|
|
|
|
5,404
|
|
Index subtotal
|
|
|
|
2,194,701
|
|
|
|
12,202
|
|
|
|
104,074
|
|
|
|
5,830
|
|
|
|
2,316,807
|
|
|
|
2,256,861
|
|
Institutional subtotal
|
|
|
|
3,299,925
|
|
|
|
14,389
|
|
|
|
132,948
|
|
|
|
8,853
|
|
|
|
3,456,115
|
|
|
|
3,376,500
|
|
Long-term
|
|
|
|
5,548,883
|
|
|
|
80,580
|
|
|
|
194,622
|
|
|
|
12,646
|
|
|
|
5,836,731
|
|
|
|
5,696,134
|
|
Cash management
|
|
|
|
425,423
|
|
|
|
23,406
|
|
|
|
389
|
|
|
|
731
|
|
|
|
449,949
|
|
|
|
437,747
|
|
Advisory (3)
|
|
|
|
2,586
|
|
|
|
(1,057
|
)
|
|
|
(16
|
)
|
|
|
2
|
|
|
|
1,515
|
|
|
|
2,069
|
|
Total
|
|
|
$
|
5,976,892
|
|
|
$
|
102,929
|
|
|
$
|
194,995
|
|
|
$
|
13,379
|
|
|
$
|
6,288,195
|
|
|
$
|
6,135,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Investment Style and Product
Type (Long-term)
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
inflows
|
|
|
Market
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
2017
|
|
|
(outflows)
|
|
|
change
|
|
|
FX impact (1)
|
|
|
2017
|
|
|
Average AUM (2)
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
$
|
300,176
|
|
|
$
|
(1,031
|
)
|
|
$
|
11,168
|
|
|
$
|
896
|
|
|
$
|
311,209
|
|
|
$
|
305,606
|
|
Fixed income
|
|
|
|
797,840
|
|
|
|
10,633
|
|
|
|
5,298
|
|
|
|
1,364
|
|
|
|
815,135
|
|
|
|
805,339
|
|
Multi-asset
|
|
|
|
445,795
|
|
|
|
4,900
|
|
|
|
16,317
|
|
|
|
1,667
|
|
|
|
468,679
|
|
|
|
456,287
|
|
Alternatives
|
|
|
|
101,541
|
|
|
|
(1,540
|
)
|
|
|
733
|
|
|
|
248
|
|
|
|
100,982
|
|
|
|
100,961
|
|
Active subtotal
|
|
|
|
1,645,352
|
|
|
|
12,962
|
|
|
|
33,516
|
|
|
|
4,175
|
|
|
|
1,696,005
|
|
|
|
1,668,193
|
|
Index and iShares ETFs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iShares ETFs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,228,395
|
|
|
|
44,888
|
|
|
|
54,910
|
|
|
|
1,417
|
|
|
|
1,329,610
|
|
|
|
1,284,240
|
|
Fixed income
|
|
|
|
386,267
|
|
|
|
8,672
|
|
|
|
(608
|
)
|
|
|
921
|
|
|
|
395,252
|
|
|
|
390,409
|
|
Multi-asset
|
|
|
|
3,491
|
|
|
|
262
|
|
|
|
8
|
|
|
|
-
|
|
|
|
3,761
|
|
|
|
3,670
|
|
Alternatives
|
|
|
|
22,284
|
|
|
|
978
|
|
|
|
341
|
|
|
|
13
|
|
|
|
23,616
|
|
|
|
22,874
|
|
iShares ETFs subtotal
|
|
|
|
1,640,437
|
|
|
|
54,800
|
|
|
|
54,651
|
|
|
|
2,351
|
|
|
|
1,752,239
|
|
|
|
1,701,193
|
|
Non-ETF Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,643,894
|
|
|
|
(8,075
|
)
|
|
|
92,006
|
|
|
|
2,997
|
|
|
|
1,730,822
|
|
|
|
1,691,820
|
|
Fixed income
|
|
|
|
604,313
|
|
|
|
23,646
|
|
|
|
14,021
|
|
|
|
3,098
|
|
|
|
645,078
|
|
|
|
621,697
|
|
Multi-asset
|
|
|
|
7,741
|
|
|
|
(239
|
)
|
|
|
328
|
|
|
|
8
|
|
|
|
7,838
|
|
|
|
7,826
|
|
Alternatives
|
|
|
|
7,146
|
|
|
|
(2,514
|
)
|
|
|
100
|
|
|
|
17
|
|
|
|
4,749
|
|
|
|
5,405
|
|
Non-ETF Index subtotal
|
|
|
|
2,263,094
|
|
|
|
12,818
|
|
|
|
106,455
|
|
|
|
6,120
|
|
|
|
2,388,487
|
|
|
|
2,326,748
|
|
Index & iShares ETFs subtotal
|
|
|
|
3,903,531
|
|
|
|
67,618
|
|
|
|
161,106
|
|
|
|
8,471
|
|
|
|
4,140,726
|
|
|
|
4,027,941
|
|
Long-term
|
|
|
$
|
5,548,883
|
|
|
$
|
80,580
|
|
|
$
|
194,622
|
|
|
$
|
12,646
|
|
|
$
|
5,836,731
|
|
|
$
|
5,696,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Quarter Component Changes by Product Type (Long-term)
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
inflows
|
|
|
Market
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
2017
|
|
|
(outflows)
|
|
|
change
|
|
|
FX impact (1)
|
|
|
2017
|
|
|
Average AUM (2)
|
|
Equity
|
|
|
$
|
3,172,465
|
|
|
$
|
35,782
|
|
|
$
|
158,084
|
|
|
$
|
5,310
|
|
|
$
|
3,371,641
|
|
|
$
|
3,281,666
|
|
Fixed income
|
|
|
|
1,788,420
|
|
|
|
42,951
|
|
|
|
18,711
|
|
|
|
5,383
|
|
|
|
1,855,465
|
|
|
|
1,817,445
|
|
Multi-asset
|
|
|
|
457,027
|
|
|
|
4,923
|
|
|
|
16,653
|
|
|
|
1,675
|
|
|
|
480,278
|
|
|
|
467,783
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
99,168
|
|
|
|
(1,570
|
)
|
|
|
685
|
|
|
|
250
|
|
|
|
98,533
|
|
|
|
98,557
|
|
Currency and commodities(4)
|
|
|
|
31,803
|
|
|
|
(1,506
|
)
|
|
|
489
|
|
|
|
28
|
|
|
|
30,814
|
|
|
|
30,683
|
|
Alternatives subtotal
|
|
|
|
130,971
|
|
|
|
(3,076
|
)
|
|
|
1,174
|
|
|
|
278
|
|
|
|
129,347
|
|
|
|
129,240
|
|
Long-term
|
|
|
$
|
5,548,883
|
|
|
$
|
80,580
|
|
|
$
|
194,622
|
|
|
$
|
12,646
|
|
|
$
|
5,836,731
|
|
|
$
|
5,696,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 ETFs.
|
|
|
|
|
|
|
|
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
|
|
Year-over-Year Component Changes by Client Type and Product Type
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
inflows
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
2016
|
|
|
(outflows)
|
|
|
Acquisition(1)
|
|
|
change
|
|
|
FX impact (2)
|
|
|
2017
|
|
|
Average AUM (3)
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
$
|
196,221
|
|
|
$
|
4,145
|
|
|
$
|
-
|
|
|
$
|
26,598
|
|
|
$
|
6,254
|
|
|
$
|
233,218
|
|
|
$
|
216,545
|
|
Fixed income
|
|
|
|
222,256
|
|
|
|
24,503
|
|
|
|
-
|
|
|
|
6,655
|
|
|
|
4,157
|
|
|
|
257,571
|
|
|
|
240,251
|
|
Multi-asset
|
|
|
|
107,997
|
|
|
|
1,143
|
|
|
|
-
|
|
|
|
10,687
|
|
|
|
1,028
|
|
|
|
120,855
|
|
|
|
114,485
|
|
Alternatives
|
|
|
|
15,478
|
|
|
|
101
|
|
|
|
-
|
|
|
|
708
|
|
|
|
446
|
|
|
|
16,733
|
|
|
|
16,541
|
|
Retail subtotal
|
|
|
|
541,952
|
|
|
|
29,892
|
|
|
|
-
|
|
|
|
44,648
|
|
|
|
11,885
|
|
|
|
628,377
|
|
|
|
587,822
|
|
iShares ETFs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
951,252
|
|
|
|
174,377
|
|
|
|
-
|
|
|
|
189,472
|
|
|
|
14,509
|
|
|
|
1,329,610
|
|
|
|
1,143,351
|
|
Fixed income
|
|
|
|
314,707
|
|
|
|
67,451
|
|
|
|
-
|
|
|
|
4,497
|
|
|
|
8,597
|
|
|
|
395,252
|
|
|
|
361,171
|
|
Multi-asset
|
|
|
|
3,149
|
|
|
|
322
|
|
|
|
-
|
|
|
|
280
|
|
|
|
10
|
|
|
|
3,761
|
|
|
|
3,262
|
|
Alternatives
|
|
|
|
18,771
|
|
|
|
3,192
|
|
|
|
-
|
|
|
|
1,478
|
|
|
|
175
|
|
|
|
23,616
|
|
|
|
21,071
|
|
iShares ETFs subtotal
|
|
|
|
1,287,879
|
|
|
|
245,342
|
|
|
|
-
|
|
|
|
195,727
|
|
|
|
23,291
|
|
|
|
1,752,239
|
|
|
|
1,528,855
|
|
Institutional:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
120,699
|
|
|
|
(13,594
|
)
|
|
|
-
|
|
|
|
25,681
|
|
|
|
4,399
|
|
|
|
137,185
|
|
|
|
128,133
|
|
Fixed income
|
|
|
|
536,727
|
|
|
|
(654
|
)
|
|
|
-
|
|
|
|
22,537
|
|
|
|
11,440
|
|
|
|
570,050
|
|
|
|
554,549
|
|
Multi-asset
|
|
|
|
276,933
|
|
|
|
19,604
|
|
|
|
-
|
|
|
|
37,166
|
|
|
|
14,122
|
|
|
|
347,825
|
|
|
|
310,561
|
|
Alternatives
|
|
|
|
75,615
|
|
|
|
566
|
|
|
|
3,264
|
|
|
|
2,771
|
|
|
|
2,032
|
|
|
|
84,248
|
|
|
|
80,821
|
|
Active subtotal
|
|
|
|
1,009,974
|
|
|
|
5,922
|
|
|
|
3,264
|
|
|
|
88,155
|
|
|
|
31,993
|
|
|
|
1,139,308
|
|
|
|
1,074,064
|
|
Index:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,389,004
|
|
|
|
(34,782
|
)
|
|
|
-
|
|
|
|
283,684
|
|
|
|
33,722
|
|
|
|
1,671,628
|
|
|
|
1,537,730
|
|
Fixed income
|
|
|
|
498,675
|
|
|
|
87,487
|
|
|
|
-
|
|
|
|
13,932
|
|
|
|
32,498
|
|
|
|
632,592
|
|
|
|
557,465
|
|
Multi-asset
|
|
|
|
6,928
|
|
|
|
(739
|
)
|
|
|
-
|
|
|
|
1,427
|
|
|
|
221
|
|
|
|
7,837
|
|
|
|
7,595
|
|
Alternatives
|
|
|
|
7,074
|
|
|
|
(2,882
|
)
|
|
|
-
|
|
|
|
294
|
|
|
|
264
|
|
|
|
4,750
|
|
|
|
6,911
|
|
Index subtotal
|
|
|
|
1,901,681
|
|
|
|
49,084
|
|
|
|
-
|
|
|
|
299,337
|
|
|
|
66,705
|
|
|
|
2,316,807
|
|
|
|
2,109,701
|
|
Institutional subtotal
|
|
|
|
2,911,655
|
|
|
|
55,006
|
|
|
|
3,264
|
|
|
|
387,492
|
|
|
|
98,698
|
|
|
|
3,456,115
|
|
|
|
3,183,765
|
|
Long-term
|
|
|
|
4,741,486
|
|
|
|
330,240
|
|
|
|
3,264
|
|
|
|
627,867
|
|
|
|
133,874
|
|
|
|
5,836,731
|
|
|
|
5,300,442
|
|
Cash management
|
|
|
|
403,584
|
|
|
|
38,259
|
|
|
|
-
|
|
|
|
1,239
|
|
|
|
6,867
|
|
|
|
449,949
|
|
|
|
414,835
|
|
Advisory (4)
|
|
|
|
2,782
|
|
|
|
(1,245
|
)
|
|
|
-
|
|
|
|
(205
|
)
|
|
|
183
|
|
|
|
1,515
|
|
|
|
2,508
|
|
Total
|
|
|
$
|
5,147,852
|
|
|
$
|
367,254
|
|
|
$
|
3,264
|
|
|
$
|
628,901
|
|
|
$
|
140,924
|
|
|
$
|
6,288,195
|
|
|
$
|
5,717,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Investment Style and Product
Type (Long-term)
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
inflows
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
2016
|
|
|
(outflows)
|
|
|
Acquisition(1)
|
|
|
change
|
|
|
FX impact (2)
|
|
|
2017
|
|
|
Average AUM (3)
|
|
Active:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
$
|
275,033
|
|
|
$
|
(18,506
|
)
|
|
$
|
-
|
|
|
$
|
46,134
|
|
|
$
|
8,548
|
|
|
$
|
311,209
|
|
|
$
|
293,278
|
|
Fixed income
|
|
|
|
749,996
|
|
|
|
21,541
|
|
|
|
-
|
|
|
|
28,800
|
|
|
|
14,798
|
|
|
|
815,135
|
|
|
|
783,345
|
|
Multi-asset
|
|
|
|
384,930
|
|
|
|
20,747
|
|
|
|
-
|
|
|
|
47,853
|
|
|
|
15,149
|
|
|
|
468,679
|
|
|
|
425,045
|
|
Alternatives
|
|
|
|
91,093
|
|
|
|
667
|
|
|
|
3,264
|
|
|
|
3,479
|
|
|
|
2,479
|
|
|
|
100,982
|
|
|
|
97,361
|
|
Active subtotal
|
|
|
|
1,501,052
|
|
|
|
24,449
|
|
|
|
3,264
|
|
|
|
126,266
|
|
|
|
40,974
|
|
|
|
1,696,005
|
|
|
|
1,599,029
|
|
Index and iShares ETFs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iShares ETFs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
951,252
|
|
|
|
174,377
|
|
|
|
-
|
|
|
|
189,472
|
|
|
|
14,509
|
|
|
|
1,329,610
|
|
|
|
1,143,351
|
|
Fixed income
|
|
|
|
314,707
|
|
|
|
67,451
|
|
|
|
-
|
|
|
|
4,497
|
|
|
|
8,597
|
|
|
|
395,252
|
|
|
|
361,171
|
|
Multi-asset
|
|
|
|
3,149
|
|
|
|
322
|
|
|
|
-
|
|
|
|
280
|
|
|
|
10
|
|
|
|
3,761
|
|
|
|
3,262
|
|
Alternatives
|
|
|
|
18,771
|
|
|
|
3,192
|
|
|
|
-
|
|
|
|
1,478
|
|
|
|
175
|
|
|
|
23,616
|
|
|
|
21,071
|
|
iShares ETFs subtotal
|
|
|
|
1,287,879
|
|
|
|
245,342
|
|
|
|
-
|
|
|
|
195,727
|
|
|
|
23,291
|
|
|
|
1,752,239
|
|
|
|
1,528,855
|
|
Non-ETF Index
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
1,430,891
|
|
|
|
(25,725
|
)
|
|
|
-
|
|
|
|
289,829
|
|
|
|
35,827
|
|
|
|
1,730,822
|
|
|
|
1,589,130
|
|
Fixed income
|
|
|
|
507,662
|
|
|
|
89,795
|
|
|
|
-
|
|
|
|
14,324
|
|
|
|
33,297
|
|
|
|
645,078
|
|
|
|
568,920
|
|
Multi-asset
|
|
|
|
6,928
|
|
|
|
(739
|
)
|
|
|
-
|
|
|
|
1,427
|
|
|
|
222
|
|
|
|
7,838
|
|
|
|
7,596
|
|
Alternatives
|
|
|
|
7,074
|
|
|
|
(2,882
|
)
|
|
|
-
|
|
|
|
294
|
|
|
|
263
|
|
|
|
4,749
|
|
|
|
6,912
|
|
Non-ETF Index subtotal
|
|
|
|
1,952,555
|
|
|
|
60,449
|
|
|
|
-
|
|
|
|
305,874
|
|
|
|
69,609
|
|
|
|
2,388,487
|
|
|
|
2,172,558
|
|
Index & iShares ETFs subtotal
|
|
|
|
3,240,434
|
|
|
|
305,791
|
|
|
|
-
|
|
|
|
501,601
|
|
|
|
92,900
|
|
|
|
4,140,726
|
|
|
|
3,701,413
|
|
Long-term
|
|
|
$
|
4,741,486
|
|
|
$
|
330,240
|
|
|
$
|
3,264
|
|
|
$
|
627,867
|
|
|
$
|
133,874
|
|
|
$
|
5,836,731
|
|
|
$
|
5,300,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year Component Changes by Product Type (Long-term)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
inflows
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
2016
|
|
|
(outflows)
|
|
|
Acquisition(1)
|
|
|
change
|
|
|
FX impact (2)
|
|
|
2017
|
|
|
Average AUM (3)
|
|
Equity
|
|
|
$
|
2,657,176
|
|
|
$
|
130,146
|
|
|
$
|
-
|
|
|
$
|
525,435
|
|
|
$
|
58,884
|
|
|
$
|
3,371,641
|
|
|
$
|
3,025,759
|
|
Fixed income
|
|
|
|
1,572,365
|
|
|
|
178,787
|
|
|
|
-
|
|
|
|
47,621
|
|
|
|
56,692
|
|
|
|
1,855,465
|
|
|
|
1,713,436
|
|
Multi-asset
|
|
|
|
395,007
|
|
|
|
20,330
|
|
|
|
-
|
|
|
|
49,560
|
|
|
|
15,381
|
|
|
|
480,278
|
|
|
|
435,903
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
88,630
|
|
|
|
780
|
|
|
|
3,264
|
|
|
|
3,438
|
|
|
|
2,421
|
|
|
|
98,533
|
|
|
|
94,976
|
|
Currency and commodities(5)
|
|
|
|
28,308
|
|
|
|
197
|
|
|
|
-
|
|
|
|
1,813
|
|
|
|
496
|
|
|
|
30,814
|
|
|
|
30,368
|
|
Alternatives subtotal
|
|
|
|
116,938
|
|
|
|
977
|
|
|
|
3,264
|
|
|
|
5,251
|
|
|
|
2,917
|
|
|
|
129,347
|
|
|
|
125,344
|
|
Long-term
|
|
|
$
|
4,741,486
|
|
|
$
|
330,240
|
|
|
$
|
3,264
|
|
|
$
|
627,867
|
|
|
$
|
133,874
|
|
|
$
|
5,836,731
|
|
|
$
|
5,300,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amount represents AUM acquired in the First Reserve Infrastructure
business transaction in June 2017 (“First Reserve Transaction”).
|
|
(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 ETFs.
|
|
|
|
|
|
|
|
SUMMARY OF REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
Ended
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
(in millions), (unaudited)
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
Investment advisory, administration fees
and securities lending revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
$
|
427
|
|
|
$
|
390
|
|
|
$
|
37
|
|
|
$
|
421
|
|
|
$
|
6
|
|
|
$
|
1,662
|
|
|
$
|
1,591
|
|
|
$
|
71
|
|
|
iShares ETFs
|
|
|
|
888
|
|
|
|
681
|
|
|
|
207
|
|
|
|
836
|
|
|
|
52
|
|
|
|
3,221
|
|
|
|
2,651
|
|
|
|
570
|
|
|
Non-ETF Index
|
|
|
|
178
|
|
|
|
166
|
|
|
|
12
|
|
|
|
170
|
|
|
|
8
|
|
|
|
687
|
|
|
|
674
|
|
|
|
13
|
|
|
Equity subtotal
|
|
|
|
1,493
|
|
|
|
1,237
|
|
|
|
256
|
|
|
|
1,427
|
|
|
|
66
|
|
|
|
5,570
|
|
|
|
4,916
|
|
|
|
654
|
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
454
|
|
|
|
421
|
|
|
|
33
|
|
|
|
442
|
|
|
|
12
|
|
|
|
1,735
|
|
|
|
1,658
|
|
|
|
77
|
|
|
iShares ETFs
|
|
|
|
213
|
|
|
|
184
|
|
|
|
29
|
|
|
|
210
|
|
|
|
3
|
|
|
|
808
|
|
|
|
696
|
|
|
|
112
|
|
|
Non-ETF Index
|
|
|
|
87
|
|
|
|
80
|
|
|
|
7
|
|
|
|
88
|
|
|
|
(1
|
)
|
|
|
344
|
|
|
|
297
|
|
|
|
47
|
|
|
Fixed income subtotal
|
|
|
|
754
|
|
|
|
685
|
|
|
|
69
|
|
|
|
740
|
|
|
|
14
|
|
|
|
2,887
|
|
|
|
2,651
|
|
|
|
236
|
|
|
Multi-asset
|
|
|
|
305
|
|
|
|
278
|
|
|
|
27
|
|
|
|
289
|
|
|
|
16
|
|
|
|
1,148
|
|
|
|
1,138
|
|
|
|
10
|
|
|
Alternatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
|
|
|
|
170
|
|
|
|
146
|
|
|
|
24
|
|
|
|
169
|
|
|
|
1
|
|
|
|
639
|
|
|
|
634
|
|
|
|
5
|
|
|
Currency and commodities
|
|
|
|
24
|
|
|
|
22
|
|
|
|
2
|
|
|
|
23
|
|
|
|
1
|
|
|
|
91
|
|
|
|
83
|
|
|
|
8
|
|
|
Alternatives subtotal
|
|
|
|
194
|
|
|
|
168
|
|
|
|
26
|
|
|
|
192
|
|
|
|
2
|
|
|
|
730
|
|
|
|
717
|
|
|
|
13
|
|
|
Long-term
|
|
|
|
2,746
|
|
|
|
2,368
|
|
|
|
378
|
|
|
|
2,648
|
|
|
|
98
|
|
|
|
10,335
|
|
|
|
9,422
|
|
|
|
913
|
|
|
Cash management
|
|
|
|
150
|
|
|
|
118
|
|
|
|
32
|
|
|
|
144
|
|
|
|
6
|
|
|
|
558
|
|
|
|
458
|
|
|
|
100
|
|
|
Total base fees
|
|
|
|
2,896
|
|
|
|
2,486
|
|
|
|
410
|
|
|
|
2,792
|
|
|
|
104
|
|
|
|
10,893
|
|
|
|
9,880
|
|
|
|
1,013
|
|
|
Investment advisory performance fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
95
|
|
|
|
35
|
|
|
|
60
|
|
|
|
30
|
|
|
|
65
|
|
|
|
152
|
|
|
|
102
|
|
|
|
50
|
|
|
Fixed income
|
|
|
|
14
|
|
|
|
4
|
|
|
|
10
|
|
|
|
9
|
|
|
|
5
|
|
|
|
34
|
|
|
|
13
|
|
|
|
21
|
|
|
Multi-asset
|
|
|
|
19
|
|
|
|
13
|
|
|
|
6
|
|
|
|
2
|
|
|
|
17
|
|
|
|
33
|
|
|
|
19
|
|
|
|
14
|
|
|
Alternatives
|
|
|
|
157
|
|
|
|
77
|
|
|
|
80
|
|
|
|
150
|
|
|
|
7
|
|
|
|
375
|
|
|
|
161
|
|
|
|
214
|
|
|
Total performance fees
|
|
|
|
285
|
|
|
|
129
|
|
|
|
156
|
|
|
|
191
|
|
|
|
94
|
|
|
|
594
|
|
|
|
295
|
|
|
|
299
|
|
|
Technology and risk management revenue(1)
|
|
|
|
180
|
|
|
|
156
|
|
|
|
24
|
|
|
|
175
|
|
|
|
5
|
|
|
|
677
|
|
|
|
595
|
|
|
|
82
|
|
|
Distribution fees
|
|
|
|
7
|
|
|
|
9
|
|
|
|
(2
|
)
|
|
|
5
|
|
|
|
2
|
|
|
|
24
|
|
|
|
41
|
|
|
|
(17
|
)
|
|
Advisory and other revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory(1)
|
|
|
|
54
|
|
|
|
41
|
|
|
|
13
|
|
|
|
25
|
|
|
|
29
|
|
|
|
128
|
|
|
|
119
|
|
|
|
9
|
|
|
Other
|
|
|
|
47
|
|
|
|
69
|
|
|
|
(22
|
)
|
|
|
45
|
|
|
|
2
|
|
|
|
175
|
|
|
|
225
|
|
|
|
(50
|
)
|
|
Advisory and other revenue
|
|
|
|
101
|
|
|
|
110
|
|
|
|
(9
|
)
|
|
|
70
|
|
|
|
31
|
|
|
|
303
|
|
|
|
344
|
|
|
|
(41
|
)
|
|
Total revenue
|
|
|
$
|
3,469
|
|
|
$
|
2,890
|
|
|
$
|
579
|
|
|
$
|
3,233
|
|
|
$
|
236
|
|
|
$
|
12,491
|
|
|
$
|
11,155
|
|
|
$
|
1,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Beginning with the first quarter of 2017, Aladdin revenue
previously reported within “BlackRock Solutions and
advisory” has been presented within “Technology and risk
management revenue” on the condensed consolidated statements of
income. The remaining previously reported “BlackRock Solutions
and advisory” revenue is currently reported as part of “Advisory
and other revenue.” Under the historical presentation, BlackRock
Solutions and advisory revenue would have totaled $234 million
and $805 million for the three months and year ended December 31,
2017, respectively. The prior period amounts reported for BlackRock
Solutions and advisory of $197 million and $714 million for
the three months and year ended December 31, 2016, respectively,
have been reclassified to conform to the current presentation.
|
|
|
|
|
Highlights
-
Investment advisory, administration fees and securities lending
revenue increased $410 million from the fourth quarter of 2016,
reflecting the impact of higher markets and organic growth on average
AUM. Securities lending revenue of $150 million in the current quarter
compared with $138 million in the fourth quarter of 2016.
Investment advisory, administration fees and securities lending
revenue increased $104 million from the third quarter of 2017,
driven by higher average AUM.
-
Performance fees increased $156 million from the fourth quarter of
2016, reflecting improved performance in hedge fund and long-only
equity products.
Performance fees increased $94 million from the third quarter of
2017, primarily due to seasonally higher fees from funds with a
performance measurement period that ended in the fourth quarter,
partially offset by strong performance from a single hedge fund with
an annual performance measurement period that ends in the third
quarter.
-
Technology and risk management revenue increased $24 million from the
fourth quarter of 2016 and $5 million from the third quarter of 2017,
reflecting ongoing demand for Aladdin.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUMMARY OF OPERATING EXPENSE
|
|
|
|
|
Three
|
|
|
|
|
|
|
Three
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Months Ended
|
|
|
|
|
|
|
Months Ended
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
(in millions), (unaudited)
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
Operating expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
$
|
1,147
|
|
|
$
|
987
|
|
|
$
|
160
|
|
|
$
|
1,088
|
|
|
$
|
59
|
|
|
$
|
4,255
|
|
|
$
|
3,880
|
|
|
$
|
375
|
|
|
Distribution and servicing costs
|
|
|
|
131
|
|
|
|
109
|
|
|
|
22
|
|
|
|
123
|
|
|
|
8
|
|
|
|
492
|
|
|
|
429
|
|
|
|
63
|
|
|
Amortization of deferred sales commissions
|
|
|
|
4
|
|
|
|
7
|
|
|
|
(3
|
)
|
|
|
4
|
|
|
|
-
|
|
|
|
17
|
|
|
|
34
|
|
|
|
(17
|
)
|
|
Direct fund expense
|
|
|
|
238
|
|
|
|
183
|
|
|
|
55
|
|
|
|
234
|
|
|
|
4
|
|
|
|
904
|
|
|
|
766
|
|
|
|
138
|
|
|
General and administration
|
|
|
|
448
|
|
|
|
355
|
|
|
|
93
|
|
|
|
363
|
|
|
|
85
|
|
|
|
1,462
|
|
|
|
1,301
|
|
|
|
161
|
|
|
Restructuring charge
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
76
|
|
|
|
(76
|
)
|
|
Amortization of intangible assets
|
|
|
|
12
|
|
|
|
24
|
|
|
|
(12
|
)
|
|
|
27
|
|
|
|
(15
|
)
|
|
|
89
|
|
|
|
99
|
|
|
|
(10
|
)
|
|
Total operating expense
|
|
|
$
|
1,980
|
|
|
$
|
1,665
|
|
|
$
|
315
|
|
|
$
|
1,839
|
|
|
$
|
141
|
|
|
$
|
7,219
|
|
|
$
|
6,585
|
|
|
$
|
634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
Employee compensation and benefits expense increased $160 million from
the fourth quarter of 2016, primarily reflecting higher incentive
compensation, driven primarily by higher performance fees and
operating income, and higher headcount.
Employee compensation and benefits expense increased $59 million
from the third quarter of 2017, primarily reflecting higher
incentive compensation, driven primarily by higher performance fees
and operating income.
-
Direct fund expense increased $55 million from the fourth quarter of
2016 and $4 million from the third quarter of 2017, reflecting higher
average AUM.
-
General and administration expense increased $93 million from the
fourth quarter of 2016, reflecting higher technology and occupancy
expense, as well as higher professional service fees (associated with
strategic transactions, MiFID implementation, and tax reform),
operating errors, contingent payments, and acquisition-related fair
value adjustments.
General and administration expense increased $85 million from the
third quarter of 2017, reflecting higher marketing and promotional
expense, as well as higher professional service fees (associated
with strategic transactions, MiFID implementation, and tax reform),
operating errors, and contingent payments.
|
|
|
INCOME TAX EXPENSE (BENEFIT)
|
|
|
|
|
Three
|
|
|
|
|
|
|
Three
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Months Ended
|
|
|
|
|
|
|
Months Ended
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
(in millions), (unaudited)
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
2017
|
|
Change
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
Income tax expense (benefit)
|
|
|
$
|
(820
|
)
|
|
$
|
336
|
|
|
$
|
(1,156
|
)
|
|
|
$
|
445
|
|
|
|
$
|
(1,265
|
)
|
|
$
|
270
|
|
|
$
|
1,290
|
|
|
$
|
(1,020
|
)
|
|
Effective tax rate
|
|
|
|
(55.2
|
)%
|
|
|
28.3
|
%
|
|
|
(8,350
|
) bps
|
|
|
|
32.0
|
%
|
|
|
|
(8,720
|
) bps
|
|
|
5.2
|
%
|
|
|
28.9
|
%
|
|
|
(2,370
|
) bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
-
The fourth quarter 2017 income tax benefit included the following
amounts related to the Tax Cuts and Jobs Act (the “2017 Act”) enacted
in the United States. These amounts, which are based on reasonable
estimates, may require further adjustments as additional guidance from
the U.S. Department of the Treasury is provided, changes in the
Company's assumptions, and as further information and interpretations
become available:
-
$106 million tax expense related to the revaluation of certain
deferred income tax assets;
-
$1,758 million noncash tax benefit related to the revaluation of
certain deferred income tax liabilities (which was excluded from
as adjusted results); and
-
$477 million tax expense related to the mandatory deemed
repatriation of undistributed foreign earnings and profits (which
was excluded from as adjusted results).
-
In addition, the fourth quarter 2017 income tax benefit included an
$84 million discrete tax benefit, primarily related to stock-based
compensation awards.
-
Third quarter 2017 income tax expense included a $19 million net
noncash tax expense (which was excluded from as adjusted results)
related to the revaluation of certain deferred income tax liabilities
as a result of domestic state and local tax changes.
|
|
|
SUMMARY AND RECONCILIATION OF U.S. GAAP NONOPERATING INCOME
(EXPENSE) TO NONOPERATING INCOME (EXPENSE), AS ADJUSTED
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
|
|
|
|
Ended
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
(in millions), (unaudited)
|
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
Nonoperating income (expense), GAAP basis
|
|
|
|
$
|
1
|
|
|
$
|
(38
|
)
|
|
$
|
39
|
|
|
$
|
10
|
|
|
$
|
(9
|
)
|
|
$
|
5
|
|
|
$
|
(110
|
)
|
|
$
|
115
|
|
Less: Net income (loss) attributable to
noncontrolling interests ("NCI")
|
|
|
|
|
6
|
|
|
|
-
|
|
|
|
6
|
|
|
|
12
|
|
|
|
(6
|
)
|
|
|
37
|
|
|
|
(2
|
)
|
|
|
39
|
|
Nonoperating income (expense), as adjusted(1)(2)
|
|
|
|
$
|
(5
|
)
|
|
$
|
(38
|
)
|
|
$
|
33
|
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
$
|
(32
|
)
|
|
$
|
(108
|
)
|
|
$
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
|
|
|
|
Ended
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
(in millions), (unaudited)
|
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
Net gain (loss) on investments(1)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity
|
|
|
|
$
|
-
|
|
|
$
|
(5
|
)
|
|
$
|
5
|
|
|
$
|
7
|
|
|
$
|
(7
|
)
|
|
$
|
21
|
|
|
$
|
6
|
|
|
$
|
15
|
|
Real assets
|
|
|
|
|
15
|
|
|
|
3
|
|
|
|
12
|
|
|
|
1
|
|
|
|
14
|
|
|
|
17
|
|
|
|
8
|
|
|
|
9
|
|
Other alternatives(3)
|
|
|
|
|
4
|
|
|
|
8
|
|
|
|
(4
|
)
|
|
|
11
|
|
|
|
(7
|
)
|
|
|
38
|
|
|
|
21
|
|
|
|
17
|
|
Other investments(4)
|
|
|
|
|
8
|
|
|
|
-
|
|
|
|
8
|
|
|
|
10
|
|
|
|
(2
|
)
|
|
|
43
|
|
|
|
22
|
|
|
|
21
|
|
Subtotal
|
|
|
|
|
27
|
|
|
|
6
|
|
|
|
21
|
|
|
|
29
|
|
|
|
(2
|
)
|
|
|
119
|
|
|
|
57
|
|
|
|
62
|
|
Other gains
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
5
|
|
Total net gain (loss) on investments(1)(2)
|
|
|
|
|
27
|
|
|
|
6
|
|
|
|
21
|
|
|
|
29
|
|
|
|
(2
|
)
|
|
|
124
|
|
|
|
57
|
|
|
|
67
|
|
Interest and dividend income
|
|
|
|
|
14
|
|
|
|
7
|
|
|
|
7
|
|
|
|
15
|
|
|
|
(1
|
)
|
|
|
49
|
|
|
|
40
|
|
|
|
9
|
|
Interest expense
|
|
|
|
|
(46
|
)
|
|
|
(51
|
)
|
|
|
5
|
|
|
|
(46
|
)
|
|
|
-
|
|
|
|
(205
|
)
|
|
|
(205
|
)
|
|
|
-
|
|
Net interest expense
|
|
|
|
|
(32
|
)
|
|
|
(44
|
)
|
|
|
12
|
|
|
|
(31
|
)
|
|
|
(1
|
)
|
|
|
(156
|
)
|
|
|
(165
|
)
|
|
|
9
|
|
Nonoperating income (expense), as adjusted(1)(2)
|
|
|
|
$
|
(5
|
)
|
|
$
|
(38
|
)
|
|
$
|
33
|
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
$
|
(32
|
)
|
|
$
|
(108
|
)
|
|
$
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Net of net income (loss) attributable to NCI.
|
|
(2)
|
|
Management believes nonoperating income (expense), as adjusted, is
an effective measure for reviewing BlackRock’s nonoperating
contribution to results. For more information on other as adjusted
items and the reconciliation to GAAP see notes (1) through (3) to
the Condensed Consolidated Statements of Income and Supplemental
Information.
|
|
(3)
|
|
Amounts primarily include net gains (losses) related to direct hedge
fund strategies and hedge fund solutions.
|
|
(4)
|
|
Amounts primarily include net gains (losses) related to equity and
fixed income investments.
|
|
|
|
|
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)
|
|
|
|
2017 (Est.)
|
|
|
2016
|
|
|
Total balance sheet assets
|
|
|
|
$
|
223
|
|
|
$
|
220
|
|
|
Separate account assets and separate account collateral held under
securities lending agreements
|
|
|
|
|
(176
|
)
|
|
|
(177
|
)
|
|
Consolidated sponsored investment funds
|
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Goodwill and intangible assets, net
|
|
|
|
|
(31
|
)
|
|
|
(30
|
)
|
|
Economic tangible assets
|
|
|
|
$
|
15
|
|
|
$
|
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)
|
|
2017
|
|
2016
|
|
2017
|
|
|
2017
|
|
2016
|
|
Operating income, GAAP basis
|
|
$
|
1,489
|
|
|
$
|
1,225
|
|
|
$
|
1,394
|
|
|
$
|
5,272
|
|
|
$
|
4,570
|
|
|
Non-GAAP expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charge
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
76
|
|
|
PNC LTIP funding obligation
|
|
|
3
|
|
|
|
7
|
|
|
|
4
|
|
|
|
15
|
|
|
|
28
|
|
|
Operating income, as adjusted
|
|
$
|
1,492
|
|
|
$
|
1,232
|
|
|
$
|
1,398
|
|
|
$
|
5,287
|
|
|
$
|
4,674
|
|
|
Revenue, GAAP basis
|
|
$
|
3,469
|
|
|
$
|
2,890
|
|
|
$
|
3,233
|
|
|
$
|
12,491
|
|
|
$
|
11,155
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution and servicing costs
|
|
|
(131
|
)
|
|
|
(109
|
)
|
|
|
(123
|
)
|
|
|
(492
|
)
|
|
|
(429
|
)
|
|
Amortization of deferred sales commissions
|
|
|
(4
|
)
|
|
|
(7
|
)
|
|
|
(4
|
)
|
|
|
(17
|
)
|
|
|
(34
|
)
|
|
Revenue used for operating margin measurement
|
|
$
|
3,334
|
|
|
$
|
2,774
|
|
|
$
|
3,106
|
|
|
$
|
11,982
|
|
|
$
|
10,692
|
|
|
Operating margin, GAAP basis
|
|
|
42.9
|
%
|
|
|
42.4
|
%
|
|
|
43.1
|
%
|
|
|
42.2
|
%
|
|
|
41.0
|
%
|
|
Operating margin, as adjusted
|
|
|
44.8
|
%
|
|
|
44.4
|
%
|
|
|
45.0
|
%
|
|
|
44.1
|
%
|
|
|
43.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 NET INCOME ATTRIBUTABLE TO BLACKROCK
TO NET INCOME ATTRIBUTABLE TO BLACKROCK, AS ADJUSTED
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
(in millions, except per share data), (unaudited)
|
|
2017
|
|
2016
|
|
2017
|
|
|
2017
|
|
2016
|
|
Net income attributable to BlackRock, Inc., GAAP basis
|
|
$
|
2,304
|
|
|
$
|
851
|
|
|
$
|
947
|
|
|
$
|
4,970
|
|
|
$
|
3,172
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charge (including $23 tax benefit)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
53
|
|
|
PNC LTIP funding obligation, net of tax
|
|
|
2
|
|
|
|
5
|
|
|
|
3
|
|
|
|
11
|
|
|
|
19
|
|
|
The 2017 Act:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax revaluation (noncash)
|
|
|
(1,758
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,758
|
)
|
|
|
-
|
|
|
Deemed repatriation tax
|
|
|
477
|
|
|
|
-
|
|
|
|
-
|
|
|
|
477
|
|
|
|
-
|
|
|
Other income tax matters
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
19
|
|
|
|
16
|
|
|
|
(30
|
)
|
|
Net income attributable to BlackRock, Inc., as adjusted
|
|
$
|
1,022
|
|
|
$
|
852
|
|
|
$
|
969
|
|
|
$
|
3,716
|
|
|
$
|
3,214
|
|
|
Diluted weighted-average common shares outstanding(3)
|
|
|
163.8
|
|
|
|
165.9
|
|
|
|
163.8
|
|
|
|
164.4
|
|
|
|
166.6
|
|
|
Diluted earnings per common share, GAAP basis(3)
|
|
$
|
14.07
|
|
|
$
|
5.13
|
|
|
$
|
5.78
|
|
|
$
|
30.23
|
|
|
$
|
19.04
|
|
|
Diluted earnings per common share, as adjusted(3)
|
|
$
|
6.24
|
|
|
$
|
5.14
|
|
|
$
|
5.92
|
|
|
$
|
22.60
|
|
|
$
|
19.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes (2) and (3) 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 considers them to be helpful, for both management
and investors, in evaluating 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. Non-GAAP measures may not be comparable to
other similarly titled measures of other companies.
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.
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. For the year ended
December 31, 2016, a restructuring charge comprised of severance and
accelerated amortization expense of previously granted deferred
compensation awards has been excluded to provide an analysis of
BlackRock’s ongoing operations and to ensure comparability among
periods presented.
-
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) 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. The noncash
deferred tax revaluation benefit of $1,758 million and the other income
tax matters noncash benefit of $3 million were 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. A deemed repatriation tax
expense of $477 million has been excluded from the as adjusted results
due to the one-time nature and to ensure comparability among periods
presented.
Per share amounts reflect net income attributable to BlackRock, Inc., as
adjusted divided by diluted weighted average common shares outstanding.
(3) 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.
BlackRock has previously disclosed risk factors in its Securities and
Exchange Commission (“SEC”) reports. These risk factors and those
identified elsewhere in this earnings release, among others, could cause
actual results to differ materially from forward-looking statements or
historical performance and include: (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 and regulatory, supervisory or enforcement actions of government
agencies relating to BlackRock or PNC; (11) changes in law and policy
and uncertainty pending any such changes; (12) 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; (13) the ability to attract
and retain highly talented professionals; (14) fluctuations in the
carrying value of BlackRock’s economic investments; (15) 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; (16) BlackRock’s success in negotiating distribution
arrangements and maintaining distribution channels for its products;
(17) the failure by a key vendor of BlackRock to fulfill its obligations
to the Company; (18) any disruption to the operations of third parties
whose functions are integral to BlackRock’s ETF platform; (19) 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 (20) 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, 2017
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, 2017. The performance
data does not include accounts terminated prior to December 31, 2017 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, 2017 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/20180112005096/en/
BlackRock, Inc.
Tom Wojcik, Investor Relations
212-810-8127
or
Brian
Beades, Media Relations
212-810-5596
Source: BlackRock, Inc.