Attached files
| file | filename |
|---|---|
| EX-99.1 - EARNINGS RELEASE DATED APRIL 19, 2017 - BlackRock Inc. | d354098dex991.htm |
| 8-K - FORM 8-K - BlackRock Inc. | d354098d8k.htm |
 Q1 2017
Earnings Earnings Release Supplement
April 19, 2017 Exhibit 99.2 |
 7% 5% 7% 5% 2% 6% 8% 11% 26% 37% 26% 37% 7% 7% 30% 27% 11% 32% 38% 10% 29% 28% 53% 51% 63% 31% 29% 48% 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 ETFs iShares ETFs Active Active iShares ETFs iShares ETFs Index Index Americas Americas EMEA EMEA Asia-Pacific Asia-Pacific Cash Cash Cash Cash A broadly diversified business across clients, products and geographies Q1 2017 Total Base Fees of $2.530 billion Assets Under Management of $5.420 trillion at March 31, 2017 Note: Base Fees and AUM by region data is based on client domicile. 1 |
 1% 4% 5% $70 $(7) $35 $54 $36 $2 $55 $88 $80 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 5% 4% 4% 4% 3% Long-term net flows ($ in billions) Total Long-Term Retail iShares ETFs
Institutional $14 $11 $7 $7 $0 $(6) $(2) $(2) $5 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 $35 $11 $23 $60 $24 $16 $51 $49 $64 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 $21 $(29) $5 $(13) $12 $(8) $6 $41 $11 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 LTM organic asset growth rate (%) LTM organic base fee growth rate (%) 3% Note: LTM organic asset growth rate measures rolling last twelve months net flows over beginning of period assets.
3% 7% 6% 6% 6% 4% 2% 3% 2% 2 11% 10% 10% 7% 1% 4% 0% (2)% (1)% 14% 11% 12% 13% 11% 11% 15% 13% 16% 2% 1% 1% (1)% 0% (1)% 0% 2% 2% |
 Profitability ($ 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 9 of
this earnings release supplement, notes (1) through (3) 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 $1,077 $1,248 $1,227 $1,143 $1,047 $1,179 $1,216 $1,232 $1,151 41.2% 44.9% 43.9% 41.6% 41.6% 43.9% 44.8% 44.4% 42.6% 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 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 3 $830 $838 $844 $801 $711 $797 $854 $852 $865 $4.89 $4.96 $5.00 $4.75 $4.25 $4.78 $5.14 $5.14 $5.25 $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 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 |
 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.
Dividends and Payout Ratios
4 (1) GAAP Dividend Payout Ratio and Total GAAP Payout Ratio include the pre-tax restructuring charge of $76
million. $2.18 $2.18 $2.18 $2.18 $2.29 $2.29 $2.29 $2.29 $2.50 47% 44% 43% 42% 64% 48% 43% 44% 52% 81% 78% 76% 74% 109% 83% 74% 76% 84% -30% -10% 10% 30% 50% 70% 90% 110% 130% 150% $6.00 $6.50 $7.00 $7.50 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Dividends GAAP Dividend Payout Ratio Total GAAP Payout Ratio (1) (1) Share repurchases and weighted average diluted shares $275 $275 $275 $275 $300 $275 $275 $275 $275 165.9 166.3 166.6 167.4 168.6 168.7 169.1 169.7 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Share Repurchases Weighted average diluted shares 164.9 |
     Major market
indices and exchange rates 5
Source: Bloomberg (1) Revenue weighted composite index calculated by BlackRock to approximate the impact of market fluctuations on BlackRock’s equity base fees
. The index is derived from publicly available market indices that
represent applicable AUM benchmarks for each equity portfolio, as selected by BlackRock.
The market impact information for each equity portfolio used to calculate the index may be substantially different from that shown. Index does not include portfolios that do not have an applicable market index. Index does not reflect BlackRock’s investment
performance, and is not indicative of past or future results.
3/31/2016 12/31/2016 3/31/2017 12/31/2016 3/31/2016 Q1 2016 Q4 2016 Q1 2017 Q4 2016 Q1 2016 Equity Indices: Domestic S&P 500 2,060 2,239 2,363 6% 15% 1,952 2,186 2,324 6% 19% Global MSCI Barra World Index 1,648 1,751 1,854 6% 13% 1,569 1,718 1,819 6% 16% MSCI Europe Index 114 123 129 5% 13% 113 117 125 7% 11% MSCI AC Asia Pacific Index 129 135 147 9% 14% 123 137 143 4% 16% MSCI Emerging Markets Index 837 862 958 11% 14% 757 877 927 6% 22% S&P Global Natural Resources 2,592 3,123 3,210 3% 24% 2,342 3,010 3,233 7% 38% BLK Equity Index (1) 7% 13% 6% 16% Fixed Income Index: Barclays U.S. Aggregate Bond Index 1,984 1,976 1,993 1% -% 1,956 1,994 1,982 (1)% 1% Foreign Exchange Rates: GBP to USD 1.44 1.23 1.26 2% (13)% 1.43 1.24 1.24 -% (13)% EUR to USD 1.14 1.05 1.07 2% (6)% 1.10 1.08 1.07 (1)% (3)% Average % Change Q1 2017 vs. Spot % Change 3/31/2017 vs. |
 Quarterly
revenue Q1 2017 Compared to Q1 2016
$200 million Total Revenue Q1 2017 Compared to Q4 2016 $(66) million Percentage Change Year-over-Year Sequential Base Fees ex. SL 8% 2% Securities lending (5)% 2% Performance fees 106% (46)% Technology and risk management revenue 12% 1% Distribution fees (36)% (22)% Advisory and other revenue (25)% (46)% Total 8% (2)% Q1 2017 $2,824 million 6 85% 5% 2% 6% 2% Base Fees ex. securities lending Securities lending Performance fees Technology and risk management revenue Advisory and other revenue $2,624 $2,824 $178 $36 $17 $(4) $(7) $(20) Q1 2016 Base fees ex sec lending Performance fees Technology and risk management revenue Distribution fees Securities lending Advisory and other revenue Q1 2017 $2,890 $2,824 $41 $3 $1 $(2) $(50) $(59) Q4 2016 Base fees ex sec lending Securities lending Technology and risk management revenue Distribution fees Advisory and other revenue Performance fees Q1 2017 |
 Quarterly
investment advisory, administration fees and securities lending
revenue Q1 2017 Compared to Q1 2016 Investment advisory, administration fees and securities lending revenue $171 million Q1 2017 Compared to Q4 2016 $44 million Q1 2017: $2,530 million Q1 2016 $2,359 million Q4 2016: $2,486 million 7 16% 27% 7% 17% 7% 3% 11% 7% 5% 16% 29% 6% 16% 7% 3% 11% 7% 5% 17% 26% 7% 17% 6% 3% 12% 8% 4% Active Equity iShares ETFs Equity Non- ETF Index Equity Active Fixed Income iShares ETFs Fixed Income Non-ETF Index Fixed Income Multi-Asset Alternatives Cash $2,359 $2,530 $98 $33 $24 $16 $15 $15 $(3) $(12) $(15) Q1 2016 iShares ETFs EQ iShares ETFs FI Cash Active EQ Active FI Non-ETF FI Non-ETF EQ Multi- Asset Alts Q1 2017 $2,486 $2,530 $40 $12 $9 $5 $1 $(2) $(5) $(6) $(10) Q4 2016 iShares ETFs EQ Active EQ Cash Non-ETF FI iShares ETFs FI Alts Non-ETF EQ Multi- Asset Active FI Q1 2017 |
 Quarterly
expense Expense, as adjusted, by category
Q1 2017 Compared to Q1 2016, as adjusted
Expense, as adjusted, includes non-GAAP adjustments related to PNC LTIP funding obligation of $4 million in the first quarter of 2017, $8 million in first quarter of 2016 and $7 million in the fourth quarter of 2016. Expense, as adjusted, also includes a non-GAAP adjustment for a restructuring charge of $76 million in the first quarter of 2016. For further information, see notes (1) through (3) in the current earnings release. $96 million Q1 2017 Compared to Q4 2016, as adjusted $15 million Percentage Change Year-over-Year Sequential Employee comp. & benefits 8% 4% Distribution & servicing costs 21% 7% Amort. of deferred sales commissions (50)% (29)% Direct fund expense 11% 14% General & administration (5)% (15)% Amortization of intangibles -% 4% Total 6% 1% Q1 2017 $1,673 million 8 61% 7% 12% 18% 2% Employee comp. & benefits Distribution & servicing costs Direct fund expense General & administration Amortization of intangibles $1,577 $1,673 $20 $20 $78 $(17) $(5) Q1 2016 G&A Amort - def sales comm Direct fund Distribution & servicing Comp & benefits Q1 2017 $1,658 $1,673 $1 $8 $25 $37 $(54) $(2) Q4 2016 G&A Amort - def sales comm Amort - intang assets Distribution & servicing Direct fund Comp & benefits Q1 2017 |
 Reconciliation between GAAP and as adjusted ($ 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 (3) in the current earnings release as well as
previously filed Form 10-Ks, 10-Qs and 8-Ks. 9
2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Operating Income GAAP 1,067 $ 1,238 $ 1,222 $ 1,137 $ 963 $ 1,173 $ 1,209 $ 1,225 $ 1,147 $ Non-GAAP adjustments 10 10 5 6 84 6 7 7 4 As Adjusted 1,077 $ 1,248 $ 1,227 $ 1,143 $ 1,047 $ 1,179 $ 1,216 $ 1,232 $ 1,151 $ Nonoperating Income (Expense) GAAP 16 $ (41) $ (48) $ 11 $ (48) $ (25) $ 1 $
(38) $ (7) $
Non-GAAP adjustments
(5) (9) 16 (10) 10 (6) (2) - (9) As Adjusted 11 $ (50) $ (32) $ 1 $
(38) $ (31) $ (1) $
(38) $ (16) $ Net Income GAAP 822 $ 819 $ 843 $ 861 $ 657 $ 789 $ 875 $ 851 $ 862 $ Non-GAAP adjustments 8 19 1 (60) 54 8 (21) 1 3 As Adjusted 830 $ 838 $ 844 $ 801 $ 711 $ 797 $ 854 $ 852 $ 865 $ 2015 2016 |
 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 The PNC Financial Services Group, Inc.; (11) changes in law and policy accompanying the new administration and uncertainty pending any such changes; (12) 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; (13) the ability to attract and retain highly talented professionals; (14) fluctuations in the carrying value of BlackRock’s economic investments; (15) 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; (16) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (17) the failure by a key vendor of BlackRock to fulfill its obligations to the Company; (18) any disruption to the operations of third parties whose functions are integral to BlackRock’s ETF platform; (19) 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 (20) 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 19, 2017, and BlackRock’s other periodic reports, which are available on BlackRock’s website at www.blackrock.com.
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