Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - BlackRock Inc. | d50688d8k.htm |
| EX-99.1 - EARNINGS RELEASE DATED JULY 15, 2015 ISSUED BY THE COMPANY - BlackRock Inc. | d50688dex991.htm |
 Q2 2015 Earnings Earnings Release Supplement: Results presented on an “as adjusted” basis, unless otherwise noted July 15, 2015 Exhibit 99.2 |
 A broadly
diversified business across clients, products and geographies Q2 2015
Long-term Base Fees of $2.458 billion Long-term Assets Under
Management of $4.437 trillion at June 30, 2015 Product Type
Client Type Style Region Alternatives 3% Alternatives 7% Multi-asset 9% Multi-asset 13% Fixed Income 32% Fixed Income 24% Equity 56% Equity 56% iShares 24% iShares 36% Retail 13% Retail 34% Institutional 63% Institutional 30% AUM Base Fees AUM Base Fees Index 42% Index 11% iShares 24% iShares 36% Asia-Pacific 9% Asia-Pacific 8% EMEA 29% EMEA 28% Americas 62% Americas 64% Active 34% Active 53% AUM Base Fees AUM Base Fees Note: Revenue and AUM by region data is based on client domicile. 1 |
 6% 2% 4% 3% 3% 4% 5% Long-term net flows ($ in billions) Total Long-Term Retail iShares Institutional LTM organic asset growth rate (%) LTM organic base fee growth rate (%) 7% 2 5% 4% 7% 10% 10% 13% 11% 11% 11% 10% 13% 11% 8% 6% 10% 9% 11% 14% 11% (2%) 1% 1% 1% 0% 0% 1% 2% 1% Note: LTM organic asset growth rate measures rolling last twelve months net flows over beginning of period assets.
4% 7% 5% 5% 8% 6% 6% 7% 6% $12 $25 $41 $27 $38 $29 $88 $70 ($7) Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $5 $8 $17 $14 $13 $5 $23 $14 $11 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 ($1) $20 $19 $8 $30 $18 $44 $35 $11 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $8 ($3) $5 $5 ($6) $6 $21 $21 ($29) Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 |
 Profitability ($ 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 (4) in the current earnings release as well as previously filed Form 10-Ks, 10-Qs and 8-Ks. Operating Income Operating Margin Net Income EPS 3 $722 $672 $851 $762 $837 $890 $821 $830 $838 $4.15 $3.88 $4.92 $4.43 $4.89 $5.21 $4.82 $4.89 $4.96 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $982 $978 $1,143 $1,062 $1,133 $1,214 $1,154 $1,077 $1,248 41.3% 41.2% 42.7% 41.4% 42.4% 44.2% 43.6% 41.2% 44.9% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 |
 Capital
management (amounts in millions, except per share data) Amounts above
exclude repurchases of employee tax withholdings related to employee stock transactions. GAAP Dividend Payout Ratio = Dividends declared / GAAP net income. Total GAAP Payout Ratio = (Dividends declared + share repurchases) / GAAP net income. Share repurchases and weighted average diluted shares Dividends and Payout Ratios 4 $275 $275 $250 $250 $250 $250 $250 $250 $250 169.1 169.7 170.4 170.8 171.2 171.9 173.0 173.4 173.9 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013 Share Repurchases Weighted average diluted shares $1.68 $1.68 $1.68 $1.93 $1.93 $1.93 $1.93 $2.18 $2.18 39% 39% 34% 48% 40% 35% 40% 47% 44% 74% 74% 64% 81% 71% 63% 70% 81% 78% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Dividends GAAP Dividend Payout Ratio Total GAAP Payout Ratio |
 Major
market indices and exchange rates Spot
% Change 6/30/2015 vs. Average % Change Q2 2015 vs. 6/30/2014 3/31/2015 6/30/2015 3/31/2015 6/30/2014 Q2 2014 Q1 2015 Q2 2015 Q1 2015 Q2 2014 Equity Indices: Domestic S&P 500 1,960 2,068 2,063 0% 5% 1,900 2,063 2,102 2% 11% Global MSCI Barra World Index 1,743 1,741 1,736 0% 0% 1,698 1,726 1,780 3% 5% MSCI Europe Index 117 135 129 (4)% 10% 116 128 135 5% 16% MSCI AC Asia Pacific Index 146 146 146 0% 0% 141 142 151 6% 7% MSCI Emerging Markets Index 1,051 975 972 0% (8)% 1,024 969 1,016 5% (1)% S&P Global Natural Resources 3,733 3,061 3,057 0% (18)% 3,612 3,140 3,216 2% (11)% Fixed Income Index: Barclays U.S. Aggregate Bond Index 1,878 1,946 1,913 (2)% 2% 1,862 1,936 1,929 0% 4% Foreign Exchange Rates: GBP to USD 1.71 1.48 1.57 6% (8)% 1.68 1.51 1.53 1% (9)% EUR to USD 1.37 1.07 1.11 4% (19)% 1.37 1.13 1.11 (2)% (19)% Source: Bloomberg 5 |
 Quarterly
revenue Q2 2015 Compared to Q2 2014 $127 million Total Revenue Q2 2015 Compared to Q1 2015 $182 million Percentage Change Year-over-Year Sequential Base Fees ex. SL 4% 5% Securities Lending 5 29 Performance Fees 18 26 Aladdin 14 2 Other BRS (3) 52 Distribution Fees (28) (24) Other Revenue (6) 0 Total 5 7 6 Q2 2015 $2,905 million Base Fees ex. Securities Lending Securities Lending Performance Fees Aladdin Other BRS Distribution Fees Other Revenue 82% 5% 5% 4% 1% 1% 2% $2,778 $2,905 $93 $21 $16 $7 ($1) ($4) ($5) $2,723 $2,905 $111 $33 $28 $11 $3 ($4) Q1 2015 Base Fees ex Sec Lending Securities Lending Performance Fees Other BRS Aladdin Distribution fees Q2 2015 Q2 2014 Q2 2015 Sec Lending Base Fees ex Performance Fees Aladdin Securities Lending Other BRS Other Revenue Distribution Fees |
 Q2 2015:
$2,534 million Q2
2015 Compared to Q2 2014 Investment advisory, administration fees and securities lending revenue $100 million Q2 2015 Compared to Q1 2015 $144 million Q2 2014: $2,434 million 7 Q1 2015: $2,390 million 19% 28% 14% 5% 12% 8% 8% 3% 3% Active Equity iShares Equity Active Fixed Income iShares Fixed Income Multi-Asset Alternatives Non-ETF Index Equity Non-ETF Index Fixed Income Cash 18% 29% 15% 5% 12% 7% 8% 3% 3% 17% 29% 16% 5% 13% 7% 7% 3% 3% $2,390 $2,534 $44 $27 $25 $14 $12 $8 $7 $4 $3 $2,434 $2,534 $51 $41 $16 $16 $7 $3 $1 ($4) ($31) Q2 2014 iShares Active FI EQ iShares FI Multi- Asset Non-ETF Index EQ Cash Non-ETF Index FI Alts Active EQ Q2 2015 Q1 2015 iShares EQ Non-ETF EQ Active EQ Active FI Multi- Asset iShares FI Alts Non-ETF FI Cash Q2 2015 Quarterly investment advisory, administration fees and securities lending revenue |
 Quarterly
expense Expense, as adjusted, by category
Q2 2015 Compared to Q2 2014, as adjusted For further information and reconciliation between GAAP and as adjusted, see page 9 of this earnings release supplement and notes (1) through (4)
in the current earnings release. $12 million
Q2 2015 Compared to Q1 2015, as adjusted $11 million Percentage Change Year-over-Year Sequential Employee Comp. & Benefits 7% 3% Distribution & Servicing Costs 18 6 Amort. of Deferred Sales Commissions (14) (8) Direct Fund Expense 2 1 General & Administrative (17) (8) Amortization of Intangibles (15) 0 Total 1 1 8 Q2 2015 $1,657 million 60% 6% 1% 12% 19% 2% Employee Comp. & Benefits Distribution & Servicing Costs Amort. of Deferred Sales Commissions Direct Fund Expense General & Administration Amortization of Intangibles Q2 2014 G&A Amort- Intang assets Amort - Def Sales Comm Direct Fund Distribution & Servicing Comp & Benefits Q2 2015 Q1 2015 G&A Amort - Def Sales Comm Direct Fund Distribution & Servicing Comp & Benefits Q2 2015 $1,645 $1,657 ($2) $4 $16 $65 ($65) ($6) $1,646 ($27) ($1) $2 $6 $31 $1,657 |
 2013 2014 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Operating Income GAAP $849 $966 $1,133 $1,051 $1,122 $1,157 $1,144 $1,067 $1,238 Non-GAAP adjustments 133 12 10 11 11 57 10 10 10 As Adjusted $982 $978 $1,143 $1,062 $1,133 $1,214 $1,154 $1,077 $1,248 Nonoperating Income (Expense) GAAP $69 ($18) $24 $17 $16 ($52) ($60) $16 ($41) Non-GAAP adjustments (57) (3) (11) 9 (36) 44 6 (5) (9) As Adjusted $12 ($21) $13 $26 ($20) ($8) ($54) $11 ($50) Net Income GAAP $729 $730 $841 $756 $808 $917 $813 $822 $819 Non-GAAP adjustments (7) (58) 10 6 29 (27) 8 8 19 As Adjusted $722 $672 $851 $762 $837 $890 $821 $830 $838 Reconciliation between GAAP and as adjusted ($ in millions) For further information and reconciliation between GAAP and as adjusted, see notes (1) through (4) in the current earnings release as well as
previously filed Form 10-Ks, 10-Qs and 8-Ks. 9
Note: During the second quarter of 2015, the Company adopted new accounting guidance on
consolidations effective January 1, 2015 using the modified retrospective method. Upon adoption, the Company recorded a change to total nonoperating income (expense) with an equal and offsetting change to noncontrolling interests for the three months
ended March 31, 2015. There was no impact to net income attributable
to BlackRock, Inc. or to BlackRock’s earnings per share. Non-GAAP adjustments include amounts related to the reduction of an
indemnification asset, the PennyMac Charitable Contribution, PNC LTIP funding obligation, compensation related to appreciation (depreciation) on certain deferred compensation plans and noncash income tax matters, as applicable.
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 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 15, 2015, and BlackRock’s other periodic reports, which are available on BlackRock’s web site at www.blackrock.com.
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