Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - BlackRock Inc. | d8k.htm |
| EX-99.1 - PRESS RELEASE DATED JULY 20, 2011 ISSUED BY THE COMPANY - BlackRock Inc. | dex991.htm |
 Q2
2011 Earnings Press Release Supplement
July 20, 2011
Exhibit 99.2 |
 1
$727
$741
$737
$962
$819
$883
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
$578
$582
$670
$469
$463
$537
$2.40
$2.96
$3.00
$2.75
$3.42
$2.37
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Strong operating income drove earnings
Operating and Net Income, as Adjusted ($ in millions)
Diluted Earnings Per Share, as Adjusted
Reconciliation between GAAP and as Adjusted is provided in the appendix
Operating Income
Net Income
Second quarter EPS results were affected by volatility in non-operating. Q3
2011 will include full effect of Bank of America buy-back. |
 2
Operating margin remained strong
Operating Margin, as Adjusted
For
further
information
and
reconciliation
between
GAAP
and
as
Adjusted,
see
note
(a)
in
the
current
earnings
release
as
well
as
the
2010
Form 10-K
and
first
quarter
2011
10-Q.
YTD 2011 = 39.4%
2011
year-to-date
margin
is
higher
than
the
full
year
and
second
quarter
2010
margins.
Full Year 2010 = 39.3%
BLK/BGI
Pro Forma |
 3
Equity markets improved from 2010
800
900
1,000
1,100
1,200
1,300
1,400
S&P 500
Q1 2011 Spot to Spot
Q2 2011 Spot to Spot
Q1-11 Average: 1,303
Q2-11 Average: 1,318
Q2 2010 Spot to Spot
The S&P averaged approximately 1,300 in both the first and second quarter of
2011. Q2-10 Average: 1,135
4/30/10
5/31/10
6/30/10 12/31/10
2/28/11
3/31/11
4/30/11
5/31/11
6/30/11
3/31/10
1/31/11 |
 Year-over-year
Q2 2011 vs. Q2 2010
4 |
 5
27% year-over-year growth in EPS driven by operating EPS
Q2-11 Compared to Q2-10, as Adjusted
$2.46
$3.09
$0.63
($0.10)
$0.40
$0.90
$1.40
$1.90
$2.40
$2.90
$3.40
Q2-10 EPS
Operating EPS
Q2-11 EPS
Increasing EPS
Non-Operating EPS
Operating EPS
Total EPS:
$3.00
Total EPS:
$2.37
Non-Operating :
($0.09)
Operating
EPS:
Operating
EPS:
For further information and reconciliation between GAAP and as Adjusted, see notes
(a) through (e) in the current earnings release Non-Operating :
($0.09) |
 $741
$315
($173)
$883
Q2-10
Revenue
Expenses
Q2-11
$700
$900
6
19% year-over-year growth in operating income
$142 million
Q2-11 Compared to Q2-10, as Adjusted
$0
$1,100
For
further
information
and
reconciliation
between
GAAP
and
as
Adjusted,
see
note
(a)
in
the
current
earnings
release
as
well
as
the
2010
Form
10-K
and
first
quarter
2011
10-Q. |
 $0
$1,800
$2,000
$2,200
$2,400
7
16% year-over-year revenue growth
Q2-11 Compared to Q2-10
Increasing Revenue
$315 million
Total Revenue
Q2-10
$2.03 billion
Q2-11
$2.35 billion
88%
2%
4%
6%
Base Fees
Performance Fees
BRS and Advisory
Other Revenue
90%
2%
5%
3%
Base Fees
Performance Fees
BRS and Advisory
Other Revenue |
 8
17% year-over-year base fee growth included higher fees in all long-term
asset classes Decreasing Base Fees
Increasing Base Fees
Q2-11 Compared to Q2-10
Q2-11
$2.10 billion
$308 million
Base fees
Q2-10
$1.79 billion
$0
$1,792
$2,100
$97
$76
$55
$30
$28
$19
$18
$15
($30)
$1,700
$1,900
$2,100
Q2-10
iShares/
ETP Equity
Active
Equity
Multi-Asset
Institutional
Index Equity
Alternatives
Active
Fixed
Income
Institutional
Index Fixed
Income
iShares/
ETP Fixed
Income
Cash
Q2-11
14%
3%
2%
26%
22%
7%
10%
9%
7%
Active Fixed Income
iShares/ ETP Fixed Income
Institutional Index Fixed Income
Active Equity
iShares/ ETP Equity
Institutional Index Equity
Multi-Asset
Alternatives
Cash
13%
4%
3%
25%
23%
11%
9%
5%
Active Fixed Income
iShares/ ETP Fixed Income
Institutional Index Fixed Income
Active Equity
iShares/ ETP Equity
Institutional Index Equity
Multi-Asset
Alternatives
Cash
7% |
 $0
$1,200
$1,300
$1,400
$1,500
9
13% year-over-year expense growth driven by continued business expansion
Increasing Expenses
Decreasing Expenses
55%
10%
24%
3%
7%
1%
Employee Comp. & Benefits
Distribution & Servicing Costs
Amort. of Deferred Sales Commissions
Direct Fund Expenses
General & Administration
Amortization of Intangibles
$1.46 billion
Q2-11 Expense, as Adjusted, by Category
Q2-11 Compared to Q2-10, as Adjusted
For further information and reconciliation between GAAP and as Adjusted, see note
(a) in the current earnings release |
 Sequential Quarters
Q2 2011 vs. Q1 2011
10 |
 11
Sequential growth in operating income offset partially by lower mark-to-market
gains on investments ($0.10)
$0.40
$0.90
$1.40
$1.90
$2.40
$2.90
$3.40
$3.90
Q1-11 EPS
Operating EPS
Non-Operating EPS
Tax Adjustment
Q2-11 EPS
$0.04
Increasing EPS
For further information and reconciliation between GAAP and as Adjusted, see notes
(a) through (e) in the current earnings release Decreasing EPS
Q2-11 Compared to Q1-11, as Adjusted
Non-Operating EPS
Operating EPS
Total EPS:
$2.96
Total EPS:
$3.00
Operating
EPS:
Non-Operating:
$0.05
Non-Operating:
($0.09)
Operating
EPS:
Tax Adjustment:
$0.12
Tax Adjustment
$2.79
$3.09
$0.30
($0.14)
($0.12) |
 12
8% sequential growth in operating income as a result of revenue growth
Q2-11 Compared to Q1-11, as Adjusted
$64 million
$0
$819
$883
($1)
$65
$700
$900
Q1-11
Revenue
Expenses
Q2-11
For
further
information
and
reconciliation
between
GAAP
and
as
Adjusted,
see
note
(a)
in
the
current
earnings
release
as
well
as
the
2010
Form
10-K
and
first
quarter
2011
10-Q. |
 13
3% sequential revenue growth driven by base fees
$65 million
Decreasing Revenue
$0
Q2-11 Compared to Q1-11
Increasing Revenue
Total Revenue
Q1-11
$2.28 billion
Q2-11
$2.35 billion
86%
4%
4%
6%
Base Fees
Performance Fees
BRS and Advisory
Other Revenue
90%
2%
3%
5%
Base Fees
Performance Fees
BRS and Advisory
Other Revenue
$1,800
$2,000
$2,200
$2,400
$2,600 |
 $0
$1,800
$2,000
$2,200
14
6% sequential base fee growth reflected higher fees in all long-term asset classes
as a result of strong securities lending fees and AUM growth
$116 million
Decreasing Base Fees
Increasing Base Fees
13%
4%
3%
25%
23%
7%
11%
9%
5%
Active Fixed Income
iShares/ ETP Fixed Income
Institutional Index Fixed Income
Active Equity
iShares/ ETP Equity
Institutional Index Equity
Multi-Asset
Alternatives
Cash
Q2-11 Base Fees
Q2-11 Compared to Q1-11
$2.10 billion
$2,100 |
 15
Sequential total expenses remained flat
Increasing Expenses
Decreasing Expenses
$0
$1.46 billion
Q2-11 Expense, as Adjusted, by Category
Q2-11 Compared to Q1-11, as Adjusted
For further information and reconciliation between GAAP and as Adjusted, see note
(a) in the current earnings release 55%
10%
24%
3%
7%
1%
Employee Comp. & Benefits
Distribution & Servicing Costs
Amort. of Deferred Sales Commissions
Direct Fund Expenses
General & Administration
Amortization of Intangibles
$1,300
$1,400
$1,500
$1,600
Q2-11
Q1-11
Direct Fund
Exp
G&A
Amort.–
Deferred
Commissions
Amort. –
Intangible
Assets
Compensation
& Benefits
Distribution &
Servicing
$1,463
$10
$5
($1)
($2)
($2)
($9)
$1,464 |
 Non-operating and payout ratio
16 |
 17
For
further
information
and
reconciliation
between
GAAP
and
as
Adjusted,
see
note
(b)
in
the
current
earnings
release
as
well
as
the
2010
Form 10-K
and
first
quarter
2011
10-Q.
Continued net investment gains offset by higher interest expense
$18
($13)
$2
$1
$2
($37)
($40)
($30)
($20)
($10)
$0
$10
$20
Private Equity
Real Estate
Distressed Credit/
Mortgage
Hedge Funds/
Funds of Hedge
Funds
Other Investments
Net Interest
Expense
Q2-11 $27 million Non-Operating Expense by Category, as Adjusted
Investment Losses/ Net Interest Expense
Investment Gain
$10 million Net Investment Gains |
 18
Increase in payout ratio as a result of the $2.5 billion buyback
$4.00
$3.12
$3.12
$2.68
$1.68
$1.20
$1.00
$0.80
$5.50
33%
83%
64%
50%
56%
53%
48%
44%
44%
2011
2010
2009
2008
2007
2006
2005
2004
2003
Dividend (A)
Payout Ratio (B)
Notes:
(A) 2003 and 2011 dividends have been annualized
(B) Payout ratio = (dividends + share repurchases) / GAAP net income. 2011 ratio
includes Q1 & Q2 2011 data only. (C) Payout ratio = (YTD 2Q 2011 dividends
x 2) + share repurchases) / (YTD 2Q 2011 GAAP net income x 2). N/A
2/26/04
2/15/05
2/17/06
2/27/07
2/15/08
N/A
2/25/10
3/7/11
Dividend Change
Declared:
151% with $2.5 bn buyback
(C)
Excludes $2.5 bn share buyback |
 Appendix
19 |
 20
$883
$962
$737
$741
$727
$819
$654
$697
$707
$940
$798
$866
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
GAAP
As Adjusted
Quarterly operating income –
GAAP and As Adjusted
Operating Income ($ in millions)
Non-GAAP Adjustments ($ in millions)
Non-GAAP
adjustments
include
BGI
integration
costs,
PNC
LTIP
funding
obligation,
Merrill
Lynch
compensation
contribution, and compensation related to appreciation (depreciation) on certain
deferred compensation plans $17
$21
$22
$30
$73
$44
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
For further information and reconciliation between GAAP and as Adjusted, see note (a) in the current
earnings release as well as previously filed Form 10-Qs |
 21
$578
$582
$670
$469
$463
$537
$432
$551
$657
$568
$619
$423
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Quarterly net income –
GAAP and As Adjusted
($41)
$14
$13
$46
$31
($14)
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Net Income ($ in millions)
Non-GAAP Adjustments ($ in millions)
GAAP
As Adjusted
For further information and reconciliation between GAAP and as Adjusted, see notes
(c) and (d) in the current earnings release as well as previously filed Form 10-Qs
Non-GAAP adjustments include BGI integration costs, PNC LTIP funding obligation, Merrill Lynch
compensation contribution, and income tax law changes
|
 22
$78
$18
$15
($27)
$2
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
$39
($28)
($6)
$20
$14
GAAP
As Adjusted
Quarterly non-operating income –
GAAP and As Adjusted
Non-Operating Income ($ in millions)
Non-GAAP Adjustments ($ in millions)
Non-GAAP adjustments include net income (loss) attributable to
non-controlling interests, and compensation expense related to
(appreciation) depreciation on certain deferred compensation plans $47
($8)
($39)
$2
($1)
$0
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
($75)
As Adjusted:
($27)
For further information and reconciliation between GAAP and as Adjusted, see note (b) in the current
earnings release as well as previously filed Form 10-Qs |
 23
Forward-looking statements
This
presentation,
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”
or
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. |
 24
Forward-looking statements
In addition to risk factors previously disclosed in BlackRock’s Securities and Exchange
Commission (“SEC”) reports and those identified elsewhere in this presentation 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 capital improvement projects; (6) the impact of future acquisitions or divestitures; (7) the
unfavorable resolution of legal proceedings; (8) the extent and timing of any share
repurchases; (9) the impact, extent and timing of technological changes and the adequacy of intellectual
property and information security protection; (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,
Barclays Bank PLC or The PNC Financial Services Group, Inc.; (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 and, generally, the tax position of the Company; (15) BlackRock’s success in
maintaining the distribution of its products; (16) the impact of BlackRock electing to provide
support to its products from time to time; (17) the impact of problems at other financial
institutions or the failure or negative performance of products at other financial institutions; and (18) the
ability of BlackRock to complete the integration of the operations of Barclays Global Investors.
|
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