Attached files
| file | filename |
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| EX-99.1 - EARNINGS RELEASE DATED JANUARY 13, 2017 - BlackRock Inc. | d264074dex991.htm |
| 8-K - FORM 8-K - BlackRock Inc. | d264074d8k.htm |
 Q4 2016 Earnings Earnings Release Supplement January 13, 2017 Exhibit 99.2 |
 8% 5% 8% 5% 2% 7% 8% 11% 25% 36% 25% 36% 7% 7% 30% 27% 11% 32% 38% 10% 29% 28% 52% 50% 64% 32% 29% 49% 64% 65% AUM Base Fees AUM Base Fees AUM Base Fees AUM Base Fees Product Type Client Type Style Region Equity Fixed Income Fixed Income Multi-asset Alternatives Equity Multi-asset Alternatives Institutional Institutional Retail Retail iShares iShares Active Active iShares iShares Index Index Americas Americas EMEA EMEA Asia-Pacific Asia-Pacific Cash Cash Cash Cash A broadly diversified business across clients, products and geographies Q4 2016 Total Base Fees of $2.486 billion Assets Under Management of $5.148 trillion at December 31, 2016 Note: Base Fees and AUM by region data is based on client domicile. 1 |
 3% 3% 4% $88 $70 $(7) $35 $54 $36 $2 $55 $88 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 5% 5% 4% 4% 3% Long-term net flows ($ in billions) Total Long-Term Retail iShares Institutional $23 $14 $11 $7 $7 $0 $(6) $(2) $(2) Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 $44 $35 $11 $23 $60 $24 $16 $51 $49 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 $21 $21 $(29) $5 $(13) $12 $(8) $6 $41 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 LTM organic asset growth rate (%) LTM organic base fee growth rate (%) 3% 11% 11% 10% 10% 7% 4% 1% 0% 11% 14% 11% 12% 13% 11% 11% 15% 1% 2% 1% 1% (1)% (1)% 0% 0% Note: LTM organic asset growth rate measures rolling last twelve months net flows over beginning of period assets.
4% 6% 7% 6% 6% 6% 4% 2% 1% (2)% 13% 2% 2 |
 Profitability ($ in millions, except per share data)
Net Income and EPS, as adjusted
Operating Income and Margin, as adjusted
For further information and reconciliations between GAAP and as adjusted, see page 12 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, as adjusted Operating Margin, as adjusted Net Income, as adjusted EPS, as adjusted $821 $830 $838 $844 $801 $711 $797 $854 $852 $4.82 $4.89 $4.96 $5.00 $4.75 $4.25 $4.78 $5.14 $5.14 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $400 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 $1,154 $1,077 $1,248 $1,227 $1,143 $1,047 $1,179 $1,216 $1,232 43.6% 41.2% 44.9% 43.9% 41.6% 41.6% 43.9% 44.8% 44.4% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% $400 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 3 |
 $1.93
$2.18 $2.18 $2.18 $2.18 $2.29 $2.29 $2.29 $2.29 40% 47% 44% 43% 42% 64% 48% 43% 44% 70% 81% 78% 76% 74% 109% 83% 74% 76% Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 (1) (1) $275 $275 $275 $300 $275 $275 $275 $275 $250 165.9 166.3 166.6 167.4 168.6 168.7 169.1 169.7 170.4 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 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. 4
(1) GAAP Dividend Payout Ratio and Total GAAP Payout Ratio include the pre-tax restructuring charge of $76
million. Share Repurchases Weighted average diluted shares Dividends GAAP Dividend Payout Ratio Total GAAP Payout Ratio Share repurchases and weighted average diluted shares Dividends and Payout Ratios |
 Major
market indices and exchange rates Spot
% Change 12/31/2016 vs. Average % Change Q4 2016 vs. 12/31/2015 9/30/2016 12/31/2016 9/30/2016 12/31/2015 Q4 2015 Q3 2016 Q4 2016 Q3 2016 Q4 2015 Equity Indices: Domestic S&P 500 2,044 2,168 2,239 3% 10% 2,053 2,161 2,186 1% 6% Global MSCI Barra World Index 1,663 1,726 1,751 1% 5% 1,677 1,712 1,718 -% 2% MSCI Europe Index 123 116 123 6% -% 125 115 117 2% (6)% MSCI AC Asia Pacific Index 132 140 135 (4)% 2% 132 137 137 -% 4% MSCI Emerging Markets Index 794 903 862 (5)% 9% 828 887 877 (1)% 6% S&P Global Natural Resources 2,376 2,930 3,123 7% 31% 2,509 2,888 3,010 4% 20% Fixed Income Index: Barclays U.S. Aggregate Bond Index 1,925 2,037 1,976 (3)% 3% 1,933 2,035 1,994 (2)% 3% Foreign Exchange Rates: GBP to USD 1.47 1.30 1.23 (5)% (16)% 1.52 1.31 1.24 (5)% (18)% EUR to USD 1.09 1.12 1.05 (6)% (4)% 1.09 1.12 1.08 (4)% (1)% 5 Source: Bloomberg |
 $2,837
$2,890 $71 $20 $19 $4 $(1) $(4) $(56) Q3 2016 Performance Fees Other Revenue Other BRS Aladdin Distribution Fees Securities Lending Base Fees ex Sec Lending Q4 2016 $2,863 $2,890 $25 $18 $17 $8 $1 $(2) $(40) Q4 2015 Base Fees ex Sec Lending Aladdin Other Revenue Other BRS Securities Lending Distribution Fees Performance Fees Q4 2016 Quarterly revenue Q4 2016 Compared to Q4 2015 $27 million Total Revenue Q4 2016 Compared to Q3 2016 $53 million Percentage Change Year-over-Year Sequential Base Fees ex. SL 1% (2)% Securities Lending 1% (3)% Performance Fees (24)% 122% Aladdin 13% 3% Other BRS 24% 86% Distribution Fees (18)% (10)% Other Revenue 33% 41% Total 1% 2% Q4 2016 $2,890 million 81% 5% 4% 5% 2% 1% 2% Base Fees ex. Securities Lending Securities Lending Performance Fees Aladdin Other BRS Distribution Fees Other Revenue 6 |
 $2,546
$2,486 $2 $(4) $(4) $(6) $(7) $(10) $(12) $(19) Q3 2016 Non-ETF FI iShares FI Non-ETF EQ Active FI Multi- Asset iShares EQ Alts Active EQ Q4 2016 $2,460 $2,486 $37 $29 $17 $15 $8 $(3) $(21) $(23) $(33) Q4 2015 iShares FI Cash Active FI iShares EQ Non-ETF FI Non-ETF EQ Alts Active EQ Multi- Asset Q4 2016 Quarterly investment advisory, administration fees and securities lending revenue $26 million $(60) million 16% 27% 7% 17% 7% 3% 11% 7% 5% Q4 2016: $2,486 million Q4 2015: $2,460 million 16% 27% 7% 17% 7% 3% 11% 7% 5% Q3 2016: $2,546 million 7 17% 27% 7% 16% 6% 3% 12% 8% 4% Investment advisory, administration fees and securities lending revenue Q4 2016 Compared to Q4 2015 Q4 2016 Compared to Q3 2016 Active Equity iShares Equity Non-ETF Index Equity Active Fixed Income iShares Fixed Income Non-ETF Index Fixed Income Multi-Asset Alternatives Cash |
 $1,720
$1,658 $6 $(55) $(6) $(4) $(3) Q4 2015 G&A Direct Fund Amort - Def Sales Comm Comp & Benefits Distribution & Servicing Q4 2016 $1,621 $1,658 $18 $43 $(17) $(5) $(1) $(1) Q3 2016 Direct Fund Distribution & Servicing Amort - Def Sales Comm Amort - Intang Assets Comp & Benefits G&A Q4 2016 Quarterly expense Expense, as adjusted, by category Q4 2016 Compared to Q4 2015, as adjusted $(62) million Q4 2016 Compared to Q3 2016, as adjusted $37 million Percentage Change Year-over-Year Sequential Employee Comp. & Benefits -% 2% Distribution & Servicing Costs 6% (4)% Amort. of Deferred Sales Commissions (36)% (13)% Direct Fund Expense (3)% (9)% General & Administrative (13)% 14% Amortization of Intangibles -% (4)% Total (4)% 2% Q4 2016 $1,658 million 59% 7% 1% 11% 21% 1% Employee Comp. & Benefits Distribution & Servicing Costs Amort. of Deferred Sales Commissions Direct Fund Expense General & Administration Amortization of Intangibles 8 Expense, as adjusted, includes non-GAAP adjustments related to PNC LTIP funding obligation of $7 million in the fourth quarter of 2016, $4
million in fourth quarter of 2015 and $7 million in the third quarter of
2016. Expense, as adjusted, also includes a non-GAAP adjustment for compensation related to appreciation (depreciation) on certain deferred compensation plans of $2 million in the fourth quarter of 2015. For further information, see notes (1) through (4) in the current earnings release.
|
 $11,401
$11,155 $67 $66 $1 $(14) $(14) $(26) $(326) 2015 Aladdin Securities Lending Other BRS Other Revenue Distribution Fees Base Fees ex Sec Lending Performance Fees 2016 Full year revenue 83% 5% 3% 5% 1% 1% 2% Base Fees ex. Securities Lending Securities Lending Performance Fees Aladdin Other BRS Distribution Fees Other Revenue 2016 Compared to 2015 $(246) million Total Revenue Percentage Change Year-over-Year Base Fees ex. SL -% Securities Lending 13% Performance Fees (52)% Aladdin 13% Other BRS 1% Distribution Fees (25)% Other Revenue (6)% Total (2)% Full year 2016 $11,155 million 9 |
 $9,840
$9,880 $142 $139 $92 $15 $(6) $(9) $(100) $(115) $(118) 2015 iShares FI Cash Active FI Non-ETF FI Non-ETF EQ Alts iShares EQ Multi- Asset Active EQ 2016 Full year investment advisory, administration fees and securities lending revenue 2016 Compared to 2015 Investment advisory, administration fees and securities lending revenue $40 million 17% 28% 7% 16% 6% 3% 13% 7% 3% 16% 27% 7% 17% 7% 3% 11% 7% 5% Full year 2016: $9,880 million Full year 2015: $9,840 million 10 Active Equity iShares Equity Non-ETF Index Equity Active Fixed Income iShares Fixed Income Non-ETF Index Fixed Income Multi-Asset Alternatives Cash |
 $6,706
$6,481 $20 $(122) $(79) $(29) $(14) $(1) 2015 Comp & Benefits G&A Amort - Intang Assets Amort - Def Sales Comm Direct Fund Distribution & Servicing 2016 Full year expense Expense, as adjusted, by category 2016 Compared to 2015, as adjusted Expense, as adjusted, includes non-GAAP adjustments related to a restructuring charge of $76 million in 2016
and PNC LTIP funding obligation of $28 million and $30 million in 2016
and 2015, respectively. Expense, as adjusted, also includes a non-GAAP
adjustment for compensation related to appreciation (depreciation) on certain deferred compensation plans of $1 million in 2015. For further information, see notes (1) through (4) in the current earnings release.
$(225) million Percentage Change Year-over-Year Employee Comp. & Benefits (3)% Distribution & Servicing Costs 5% Amort. of Deferred Sales Commissions (29)% Direct Fund Expense -% General & Administrative (6)% Amortization of Intangibles (23)% Total (3)% Full year 2016 $6,481 million 11 58% 7% 1% 12% 20% 2% Employee Comp. & Benefits Distribution & Servicing Costs Amort. of Deferred Sales Commissions Direct Fund Expense General & Administration Amortization of Intangibles |
 2014 2015 2016 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Operating Income GAAP $1,144 $1,067 $1,238 $1,222 $1,137 $963 $1,173 $1,209 $1,225 Non-GAAP adjustments 10 10 10 5 6 84 6 7 7 As Adjusted $1,154 $1,077 $1,248 $1,227 $1,143 $1,047 $1,179 $1,216 $1,232 Nonoperating Income (Expense) GAAP $(60) $16 $(41) $(48) $11 $(48) $(25) $1 $(38) Non-GAAP adjustments 6 (5) (9) 16 (10) 10 (6) (2) - As Adjusted $(54) $11 $(50) $(32) $1 $(38) $(31) $(1) $(38) Net Income GAAP $813 $822 $819 $843 $861 $657 $789 $875 $851 Non-GAAP adjustments 8 8 19 1 (60) 54 8 (21) 1 As Adjusted $821 $830 $838 $844 $801 $711 $797 $854 $852 Reconciliation between GAAP and as adjusted ($ in millions) Non-GAAP adjustments include amounts related to a restructuring charge, PNC LTIP funding obligation, compensation related to appreciation (depreciation) on certain deferred compensation plans and noncash income tax matters, as applicable. 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. 12
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 Important
Notes 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” 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 (“SEC”) reports and those identified elsewhere in this earnings release, 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 potential for human error in connection with BlackRock’s operational systems; (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 or PNC; (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, 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; (15) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (16) the failure by a key vendor of BlackRock to fulfill its obligations to the Company; (17) any disruption to the operations of third parties whose functions are integral to BlackRock’s ETF platform; (18) 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 (19) 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 12 of this earnings release supplement, our current earnings release dated January 13, 2017, and BlackRock’s other periodic reports, which are available on BlackRock’s website at www.blackrock.com.
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