Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - BlackRock Inc. | d759108d8k.htm |
| EX-99.1 - EARNINGS RELEASE DATED JULY 16, 2014 ISSUED BY THE COMPANY - BlackRock Inc. | d759108dex991.htm |
 Q2
2014 Earnings Earnings Release Supplement:
Results
presented
on
an
“as
adjusted”
basis,
unless
otherwise
noted
July 16, 2014
Exhibit 99.2 |
 1
A broadly diversified business across clients, products and geographies
Q2 2014 Long-term Base Fees of $2.361 billion
Long-term Assets Under Management of $4.295 trillion at June 30, 2014
Product Type
Client Type
Style
Region
Alternatives 3%
Alternatives 8%
Multi-asset
9%
Multi-asset
13%
Fixed Income
31%
Fixed Income
23%
Equity
57%
Equity
56%
iShares
23%
iShares
35%
Retail
12%
Retail
35%
Institutional
65%
Institutional
30%
AUM
Base Fees
AUM
Base Fees
Index
43%
Index
11%
iShares
23%
iShares
35%
Asia-Pacific 8%
Asia-Pacific 7%
EMEA
32%
EMEA
30%
Americas
60%
Americas
63%
Active
34%
Active
54%
AUM
Base Fees
AUM
Base Fees |
 Long-term net flows ($ in billions)
Total Long-Term
Retail
iShares
Institutional
(1)
Includes the effect of a single-client institutional fixed income index
redemption that totaled $74.2 billion in Q3 2012. Note:
LTM
organic
asset
growth
rate
measures
rolling
last
twelve
months
net
new
flows
over
beginning
period
assets.
LTM organic asset growth rate (%)
9%
13%
14%
14%
13%
11%
(2%)
8%
6%
10%
0%
(1%)
0%
1%
2%
4%
3%
3%
4%
0%
2%
3%
5%
6%
7%
10%
10%
13%
(5%)
(5%)
(3%)
(2%)
1%
1%
1%
0%
$4
($43)
$47
$39
$12
$25
$41
$27
$38
$2
$5
$4
$9
$5
$8
$17
$14
$13
$6
$25
$36
$26
($1)
$20
$19
$8
$30
($4)
$7
$5
$8
($3)
$5
$5
($6)
1
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
1
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
($73)
2 |
 3
Profitability ($ 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 $1,133 million up 15% year-over-year
•
Operating margin, as adjusted
of 42.4% expanded 110 bps year-over-year
•
Net income, as adjusted
of $837 million, up 16% year-over-year
•
EPS, as adjusted
of $4.89, up 18% year-over-year
Net Income
EPS |
 4
Capital management (amounts in millions, except per share
data) Share repurchases and weighted average diluted shares
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. Amounts above exclude repurchases of employee tax withholdings
related to employee stock transactions. |
 5
Major market indices and exchange rates
Spot
Average Level
% Change
Q2 2014 vs.
Q2 2014
Q1 2014
% Change
Q2 2014
Q2 2013
Q1 2014
Q2 2013
Q1 2014
Equity Indices:
Domestic
S&P 500
1,960
1,872
5%
1,900
1,610
1,835
18%
4%
Global
MSCI Barra World Index
1,743
1,674
4%
1,698
1,463
1,647
16%
3%
MSCI Europe Index
117
114
3%
116
101
113
15%
3%
MSCI AC Asia Pacific Index
146
138
6%
141
136
137
4%
3%
MSCI Emerging Markets Index
1,051
995
6%
1,024
1,004
957
2%
7%
S&P Global Natural Resources
3,733
3,499
7%
3,612
3,295
3,429
10%
5%
Fixed Income Index:
Barclays U.S. Aggregate Bond Index
1,878
1,840
2%
1,862
1,839
1,831
1%
2%
Foreign Exchange Rates:
GBP to USD
1.71
1.67
2%
1.68
1.54
1.66
9%
1%
EUR to USD
1.37
1.38
(1%)
1.37
1.31
1.37
5%
-%
Source: Bloomberg |
 6
Revenue
Q2 2014 Compared to Q2 2013
Total Revenue
Q2 2014
$2,778 million
Q2 2014 Compared to Q1 2014
Percentage Change
Year-over-Year
Sequential
Base Fees ex. SL
12%
5%
Securities Lending
3
33
Performance Fees
29
(27)
Aladdin
11
-
Other BRS
(8)
(18)
Distribution Fees
-
(5)
Other Revenue
8
35
Total
12
4 |
 7
Investment advisory, administration fees and securities lending revenue
Q2 2014: $2,434 million
Q2 2014 Compared to Q2 2013
Investment advisory, administration fees and securities lending revenue
Q2 2014 Compared to Q1 2014
Q2 2013: $2,177 million
Q1 2014: $2,291 million
Index FI |
 8
Expense
Q2 2014
$1,645 million
Expense, as adjusted, by Category
Q2 2014 Compared to Q2 2013, as adjusted
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.
Q2 2014 Compared to Q1 2014, as adjusted
Percentage Change
Year-over-Year
Sequential
Employee Comp. & Benefits
10%
(4%)
Distribution & Servicing Costs
(1)
-
Amort. of Deferred Sales Commissions
17
(7)
Direct Fund Expense
15
4
General & Administrative
11
20
Amortization of Intangibles
3
-
Total
10
2 |
 9
2012
2013
2014
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Operating Income
GAAP
$829
$875
$1,005
$909
$849
$966
$1,133
$1,051
$1,122
Non-GAAP adjustments
3
1
36
12
133
12
10
11
11
As Adjusted
$832
$876
$1,041
$921
$982
$978
$1,143
$1,062
$1,133
Nonoperating Income (Expense)
GAAP
($40)
$30
($67)
$41
$69
($18)
$24
$17
$16
Non-GAAP adjustments
(3)
(17)
40
(38)
(57)
(3)
(11)
9
(36)
As Adjusted
($43)
$13
($27)
$3
$12
($21)
$13
$26
($20)
Net Income
GAAP
$554
$642
$690
$632
$729
$730
$841
$756
$808
Non-GAAP adjustments
4
(32)
5
5
(7)
(58)
10
6
29
As Adjusted
$558
$610
$695
$637
$722
$672
$851
$762
$837
Reconciliation between GAAP and as adjusted ($ 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
Q2 2013 PennyMac Financial Impact
Both GAAP and as adjusted results include a $39 million noncash, pre-tax
gain related to the carrying value of the Company’s equity method investment in PennyMac in connection with PennyMac’s initial public
offering.
GAAP
PennyMac IPO
Charitable
Contribution
Total
General and administration expense
$
-
$
(124)
$ (124)
Operating Income
-
(124)
(124)
Nonoperating Income:
Net Gain (loss)
39
80
119
Income before income taxes
39
(44)
(5)
Income tax (expense) benefits
(14)
57
43
Net Income attributable to BlackRock
$
25
$
13
$ 38
As Adjusted
PennyMac IPO
Charitable
Contribution
Total
General and administration expense
$
-
$
-
$
- Operating Income
-
-
-
Nonoperating Income:
Net Gain (loss)
39
-
39
Income before income taxes
39
-
39
Income tax (expense) benefits
(14)
-
(14)
Net Income attributable to BlackRock
$
25
$
-
$ 25
|
 11
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
July
16,
2014,
and
BlackRock’s
other
periodic
reports,
which
are
available
on
BlackRock’s
web
site
at
www.blackrock.com. |