Attached files
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| EX-99.1 - EARNINGS RELEASE DATED APRIL 17, 2014 ISSUED BY THE COMPANY - BlackRock Inc. | d713316dex991.htm |
| 8-K - FORM 8-K - BlackRock Inc. | d713316d8k.htm |
 Q1
2014 Earnings Earnings Release Supplement:
Results presented on an “as adjusted”
basis, unless otherwise noted
April 17, 2014
Exhibit 99.2 |
 1
A broadly diversified business across clients, products and geographies
Q1 2014 Long-term Base Fees of $2.217 billion
Long-term Assets Under Management of $4.106 trillion at March 31, 2014
Product Type
Client Type
Style
Region
Alternatives 3%
Alternatives 8%
Multi-asset
9%
Multi-asset
13%
Fixed Income
31%
Fixed Income
22%
Equity
57%
Equity
57%
iShares
23%
iShares
35%
Retail
12%
Retail
35%
Institutional
65%
Institutional
30%
AUM
Base Fees
AUM
Base Fees
Index
42%
Index
10%
iShares
23%
iShares
35%
Asia-Pacific 8%
Asia-Pacific 7%
EMEA
32%
EMEA
30%
Americas
60%
Americas
63%
Active
35%
Active
55%
AUM
Base Fees
AUM
Base Fees |
 2
Long-term net flows ($ in billions)
Total Long-Dated
Retail
iShares
Institutional
0%
2%
3%
5%
6%
7%
10%
9%
6%
14%
14%
13%
11%
8%
LTM organic growth rate
(2%)
(5%)
(5%)
(3%)
(2%)
1%
1%
0%
(1%)
0%
1%
2%
4%
3%
3%
13%
10%
1%
(1)
Includes
the
effects
of
single-client
institutional
fixed
income
index
redemptions
that
totaled
$36.0
billion
in
Q1
2012
and
$74.2
billion
in
Q3
2012.
Note: LTM
organic
growth
rate
measures
rolling
last
twelve
months
net
new
flows
over
beginning
period
assets.
0%
1%
10%
(2%)
LTM organic growth rate
LTM organic growth rate
LTM organic growth rate |
 3
Profitability ($ in millions, except per share data)
Net Income and EPS, as adjusted
Operating Income and Margin, as adjusted
For further information and reconciliation between GAAP and as adjusted, see page 9
of this earnings release supplement, notes (1) through (5) in the current earnings release as well as previously filed Form 10-Ks,
10-Qs and 8-Ks.
Operating Income
Operating Margin
•
Operating
income,
as
adjusted
of
$1,062
million
up
15%
year-over-year
•
Operating
margin,
as
adjusted
of
41.4%
expanded
140
bps
year-over-year
•
Net
income,
as
adjusted
of
$762
million,
up
20%
year-over-year
•
EPS,
as
adjusted
of
$4.43,
up
21%
year-over-year
Net Income
EPS |
 4
Capital management (amounts in millions, except per share
data) Share repurchases and weighted average diluted shares
Amounts above exclude repurchases of employee tax withholdings related to employee
stock transactions. Dividends and Payout Ratios
Amount includes $1.0 billion May 2012 buyback of 6.4 million shares from
Barclays. GAAP dividend payout ratio = Dividends declared / GAAP net
income. GAAP payout ratio = (Dividends declared + share repurchases) / GAAP
Net income. |
 5
Major market indices and exchange rates
Spot
Average Level
% Change
Q1 2014 vs.
Q1 2014
Q4 2013
% Change
Q1 2014
Q1 2013
Q4 2013
Q1 2013
Q4 2013
Equity Indices:
Domestic
S&P 500
1,872
1,848
1%
1,835
1,513
1,770
21%
4%
Global
MSCI Barra World Index
1,674
1,661
1%
1,647
1,405
1,602
17%
3%
MSCI Europe Index
114
112
2%
113
100
109
13%
4%
MSCI AC Asia Pacific Index
138
141
(2%)
137
133
141
3%
(3%)
MSCI Emerging Markets Index
995
1,003
(1%)
957
1,059
1,011
(5%)
S&P Global Natural Resources
3,499
3,503
0%
3,429
3,524
3,418
0%
Fixed Income Index:
Barclays U.S. Aggregate Bond Index
1,840
1,807
2%
1,831
1,837
1,814
0%
1%
Foreign Exchange Rates:
GBP to USD
1.67
1.66
1%
1.66
1.55
1.62
7%
2%
EUR to USD
1.38
1.38
0%
1.37
1.32
1.36
4%
1%
(10%)
(3%) |
 6
Revenue
Q1 2014 Compared to Q1 2013
$221 million
Total Revenue
Q1 2014
$2,670 million
Q1 2014 Compared to Q4 2013
($107) million
Percentage Change
Sequential
Basis Fees ex. SL
8%
0%
Securities Lending
(6)
5
Performance Fees
46
(41)
BRS & Advisory
22
(2)
Distribution Fees
12
0
Other Revenue
(30)
(9)
Total
9
(4)
81%
4%
6%
6%
1%
2%
Base Fees ex. SL
Securities Lending
Performance Fees
BRS and Advisory
Distribution Fees
Other Revenue
Year-over-Year |
 7
Investment advisory, administration fees and securities lending revenue
Q1 2014: $2,291 million
Q1 2014 Compared to Q1 2013
Investment advisory, administration fees and securities lending revenue
Q1 2014 Compared to Q4 2013
Q1 2013: $2,129 million
Q4 2013: $2,280 million
$162 million
$11 million |
 8
Expenses
Q1 2014
$1,608 million
Expenses, as adjusted, by Category
Q1 2014 Compared to Q1 2013, as adjusted
(1)
G&A and compensation & benefits expenses exclude fund launch costs incurred
in first quarter 2013, which are presented separately above. For further
information and reconciliation between GAAP and as adjusted, see page 9 of this earnings release supplement and notes (1) through (5) in the current earnings release.
$80 million
Q1 2014 Compared to Q4 2013, as adjusted
($26) million
Percentage Change
Sequential
9%
6%
(2)
2
25
7
11
7
(5)
(24)
3
0
Total
5
(2)
60%
6%
1%
11%
19%
3%
Employee Comp. & Benefits
Distribution & Servicing Costs
Amort. of Deferred Sales
Commissions
Direct Fund Expenses
General & Administration
Amortization of Intangibles
Year-over-Year
Amort. of Deferred Sales Commissions
Distribution & Servicing Costs
Employee Comp. & Benefits
Direct Fund Expenses
General & Administrative
Amortization of Intangibles
Q1 2013
Fund Launch
Costs
G&A(1)
Distribution
& Servicing
Amort
-
Intangibles
Amort
-
DSCs
Direct Fund
Comp &
Benefits(1)
Q1 2014
Q4 2013
G&A
Amort
-
DSCs
Distribution
& Servicing
Direct Fund
Comp &
Benefits
Q1 2014 |
 9
2012
2013
2014
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Operating Income
GAAP
$815
$829
$875
$1,005
$909
$849
$966
$1,133
$1,051
Non-GAAP adjustments
10
3
1
36
12
133
12
10
11
As Adjusted
$825
$832
$876
$1,041
$921
$982
$978
$1,143
$1,062
Nonoperating Income (Expense)
GAAP
$23
($40)
$30
($67)
$41
$69
($18)
$24
$17
Non-GAAP adjustments
(8)
(3)
(17)
40
(38)
(57)
(3)
(11)
9
As Adjusted
$15
($43)
$13
($27)
$3
$12
($21)
$13
$26
Net Income
GAAP
$572
$554
$642
$690
$632
$729
$730
$841
$756
Non-GAAP adjustments
3
4
(32)
5
5
(7)
(58)
10
6
As Adjusted
$575
$558
$610
$695
$637
$722
$672
$851
$762
Reconciliation between GAAP and as adjusted ($ in millions)
Non-GAAP adjustments include amounts related to the PennyMac Charitable
Contribution, U.K. lease exit costs, a contribution to short-term investment funds (“STIFs”), PNC LTIP funding obligation,
compensation related to appreciation (depreciation) on certain deferred compensation
plans and noncash income tax changes, as applicable. For further information
and reconciliation between GAAP and as adjusted, see notes (1) through (5) in the current earnings release as well as previously filed Form 10-Ks, 10-Qs and 8-Ks. |
 10
Important Notes
This presentation, and other statements that BlackRock, Inc. (“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 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 future acquisitions or divestitures; (6) the unfavorable
resolution of legal proceedings; (7) the extent and timing of any share repurchases; (8) the impact,
extent and timing of technological changes and the adequacy of intellectual property,
information and cyber security protection; (9) the impact of legislative and regulatory actions and reforms,
including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulatory,
supervisory or enforcement actions of government agencies relating to BlackRock or The PNC
Financial Services Group, Inc.; (10) terrorist activities, international hostilities and natural disasters,
which may adversely affect the general economy, domestic and local financial and capital markets,
specific industries or BlackRock; (11) the ability to attract and retain highly talented
professionals; (12) fluctuations in the carrying value of BlackRock’s economic investments; (13) the
impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on
products or transactions, which could affect the value proposition to clients and, generally,
the tax position of BlackRock; (14) BlackRock’s success in maintaining the distribution of its
products; (15) the impact of BlackRock electing to provide support to its products from time to time
and any potential liabilities related to securities lending or other indemnification
obligations; and (16) the impact of problems at other financial institutions or the failure or negative performance of
products at other financial institutions. This
presentation also includes non-GAAP financial measures. You can find our presentations on the most directly comparable GAAP financial
measures calculated in accordance with GAAP and our reconciliations on page 9 of this earnings release
supplement, our current earnings release dated April 17, 2014, and BlackRock’s other
periodic reports, which are available on BlackRock’s web site at
www.blackrock.com.
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