EX-99.1

EX-99.1 2 blk-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1


INVESTOR RELATIONS: Caroline Rodda 212.810.3442	MEDIA RELATIONS: Ed Sweeney 646.231.0268

BlackRock Reports Third Quarter 2023 Diluted EPS of $10.66, or $10.91 as adjusted
New York, October 13, 2023 – BlackRock, Inc. (NYSE: BLK) today reported financial results for the three and nine months ended September 30, 2023.

$3 billion of quarterly total net inflows reflect $49 billion of net outflows from lower-fee institutional index equity strategies, including $19 billion from a single international client
$1.1 trillion increase in AUM year-over-year includes $307 billion of net inflows, positive across ETFs, active, and cash management
5% increase in revenue year-over-year primarily driven by organic growth and the impact of market movements over the past twelve months on average AUM and higher technology services revenue 
7% increase in operating income year-over-year 
15% increase in diluted EPS year-over-year (14% as adjusted) also reflects a lower effective tax rate, partially offset by lower nonoperating income in the current quarter 
$375 million of share repurchases in the current quarter

Laurence D. Fink, Chairman and CEO:
“At BlackRock we are more connected with our clients than ever before, and I’m proud that clients have entrusted us with $307 billion of net inflows over the last twelve months, contributing to a  $1.1 trillion increase in AUM.
“For the first time in nearly two decades, clients are earning a real return in cash and can wait for more policy and market certainty before re-risking. This dynamic weighed on industry and BlackRock third quarter flows.
“We have seen periods of uncertainty like this before – as recently as 2016 and 2018. Then, as now, BlackRock stayed connected with our clients and across our platform. When investors were ready to put money back to work, they came to BlackRock, leading to record flows and share gains.
“The long-term trend of clients consolidating more of their portfolios with BlackRock is only accelerating, and underlying business momentum remains strong. In the first nine months of 2023, clients turned to BlackRock for solutions across their whole portfolio, driving net inflows of $98 billion in ETFs, $65 billion in active and $46 billion in cash.
“We’re delivering the benefits of scale to our clients and our shareholders, with margin expansion and 14% growth in adjusted EPS year-over-year. Technology services revenue grew 20% over the same time period, reflecting sustained demand for Aladdin and several large eFront renewals – continued affirmation of whole portfolio analytics as the future of asset management technology.
“We remain intensely focused on staying in front of our clients, positioning for a resurgence in allocation activity as rates stabilize, and laying the foundation for future growth. We see transformative opportunities ahead for our clients, and look forward to delivering differentiated growth for our investors and all of our stakeholders.”


FINANCIAL RESULTS							NET FLOW HIGHLIGHTS(1)
	Q3			Q3						Q3			YTD
(in millions, except per share data)	2023			2022			(in billions)			2023			2023
AUM	$	9,100,825		$	7,961,373		Long-term net flows:			$	(13	)	$	147
% change		14	%
Average AUM	$	9,396,597		$	8,478,729		By region:
% change		11	%					Americas		$	(6	)	$	84
Total net flows	$	2,569		$	16,907			EMEA			(17	)		19
								APAC			10			44
GAAP basis:
Revenue	$	4,522		$	4,311		By client type:
% change		5	%
Operating income	$	1,637		$	1,526			Retail:		$	(4	)	$	0.5
% change		7	%						US		(3	)		1
Operating margin		36.2	%		35.4	%			International		(1	)		(1	)
Net income(1)	$	1,604		$	1,406
% change		14	%					ETFs:		$	29		$	98
Diluted EPS	$	10.66		$	9.25				Core equity		34			51
% change		15	%						Strategic		8			77
Weighted-average diluted shares		150.5			152.0				Precision		(13	)		(30	)
% change		(1	)%
								Institutional:		$	(38	)	$	48
As Adjusted(2):									Active		(1	)		80
Operating income	$	1,691		$	1,585				Index		(36	)		(32	)
% change		7	%
Operating margin		42.3	%		42.0	%
Net income(1)	$	1,642		$	1,451		Cash management net flows			$	15		$	46
% change		13	%
Diluted EPS	$	10.91		$	9.55
% change		14	%				Total net flows			$	3		$	193
_________________________							_________________________
(1) Net income represents net income attributable to BlackRock, Inc. (2) See pages 11 through 13 for the reconciliation to GAAP and notes (1) through (3) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items. Beginning in the first quarter of 2023, BlackRock updated the definitions of its non- GAAP financial measures to exclude the impact of market valuation changes on certain deferred cash compensation plans which the Company began economically hedging in 2023.							(1) Totals may not add due to rounding.

BUSINESS RESULTS


											Q3 2023
						Q3 2023					Base fees(1)
						Base fees(1)		September 30, 2023			and securities
	Q3 2023			September 30, 2023		and securities		AUM			lending revenue
(in millions), (unaudited)	Net flows			AUM		lending revenue		% of Total			% of Total
RESULTS BY CLIENT TYPE
Retail	$	(3,585	)	$	868,440	$	1,046		10	%		28	%
ETFs		28,521			3,118,409		1,498		34	%		42	%
Institutional:
Active		(1,330	)		1,753,262		670		19	%		18	%
Index		(36,242	)		2,637,033		233		29	%		6	%
Total institutional		(37,572	)		4,390,295		903		48	%		24	%
Long-term		(12,636	)		8,377,144		3,447		92	%		94	%
Cash management		15,205			723,681		234		8	%		6	%
Total	$	2,569		$	9,100,825	$	3,681		100	%		100	%

RESULTS BY INVESTMENT STYLE
Active	$	(7,742	)	$	2,426,322	$	1,662		27	%		46	%
Index and ETFs		(4,894	)		5,950,822		1,785		65	%		48	%
Long-term		(12,636	)		8,377,144		3,447		92	%		94	%
Cash management		15,205			723,681		234		8	%		6	%
Total	$	2,569		$	9,100,825	$	3,681		100	%		100	%

RESULTS BY PRODUCT TYPE
Equity	$	(34,467	)	$	4,741,291	$	1,832		52	%		51	%
Fixed income		13,211			2,576,205		887		28	%		24	%
Multi-asset		12,797			788,872		308		9	%		8	%
Alternatives:
Illiquid alternatives		2,623			131,937		231		1	%		6	%
Liquid alternatives		(3,472	)		75,139		143		1	%		4	%
Currency and commodities		(3,328	)		63,700		46		1	%		1	%
Total Alternatives		(4,177	)		270,776		420		3	%		11	%
Long-term		(12,636	)		8,377,144		3,447		92	%		94	%
Cash management		15,205			723,681		234		8	%		6	%
Total	$	2,569		$	9,100,825	$	3,681		100	%		100	%

(1)

Base fees include investment advisory and administration fees.

INVESTMENT PERFORMANCE AT September 30, 2023(1)


	One-year period	Three-year period	Five-year period
Fixed income:
Actively managed AUM above benchmark or peer median
Taxable	72%	73%	89%
Tax-exempt	69%	80%	43%
Index AUM within or above applicable tolerance	98%	99%	99%
Equity:
Actively managed AUM above benchmark or peer median
Fundamental	73%	46%	79%
Systematic	81%	69%	72%
Index AUM within or above applicable tolerance	97%	99%	100%

(1)

Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 14 for performance disclosure detail.

TELECONFERENCE, WEBCAST AND PRESENTATION INFORMATION

Chairman and Chief Executive Officer, Laurence D. Fink, President, Robert S. Kapito, and Chief Financial Officer, Martin S. Small, will host a teleconference call for investors and analysts on Friday, October 13, 2023 at 7:30 a.m. (Eastern Time). Members of the public who are interested in participating in the teleconference should dial, from the United States, (313) 209-4906, or from outside the United States, (877) 400-0505, shortly before 7:30 a.m. and reference the BlackRock Conference Call (ID Number 7150040). A live, listen-only webcast will also be available via the investor relations section of www.blackrock.com.

The webcast will be available for replay by 10:30 a.m. (Eastern Time) on Friday, October 13, 2023. To access the replay of the webcast, please visit the investor relations section of www.blackrock.com.

ABOUT BLACKROCK

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

(in millions, except per share data), (unaudited)


											Three Months
	Three Months Ended										Ended
	September 30,										June 30,
	2023			2022			Change				2023			Change
Revenue
Investment advisory, administration fees and securities lending revenue:
Investment advisory and administration fees	$	3,514		$	3,369		$	145			$	3,427		$	87
Securities lending revenue		167			162			5				184			(17	)
Total investment advisory, administration fees and securities lending revenue		3,681			3,531			150				3,611			70
Investment advisory performance fees		70			82			(12	)			118			(48	)
Technology services revenue		407			338			69				359			48
Distribution fees		321			325			(4	)			319			2
Advisory and other revenue		43			35			8				56			(13	)
Total revenue		4,522			4,311			211				4,463			59

Expense
Employee compensation and benefits		1,420			1,339			81				1,429			(9	)
Distribution and servicing costs		526			536			(10	)			518			8
Direct fund expense		354			318			36				344			10
General and administration expense		546			554			(8	)			520			26
Amortization of intangible assets		39			38			1				37			2
Total expense		2,885			2,785			100				2,848			37

Operating income		1,637			1,526			111				1,615			22

Nonoperating income (expense)
Net gain (loss) on investments		114			174			(60	)			231			(117	)
Interest and dividend income		139			41			98				89			50
Interest expense		(82	)		(50	)		(32	)			(69	)		(13	)
Total nonoperating income (expense)		171			165			6				251			(80	)

Income before income taxes		1,808			1,691			117				1,866			(58	)
Income tax expense		213			330			(117	)			443			(230	)
Net income		1,595			1,361			234				1,423			172
Less:
Net income (loss) attributable to noncontrolling interests		(9	)		(45	)		36				57			(66	)
Net income attributable to BlackRock, Inc.	$	1,604		$	1,406		$	198			$	1,366		$	238

Weighted-average common shares outstanding
Basic		149.2			150.6			(1.5	)			149.6			(0.4	)
Diluted		150.5			152.0			(1.5	)			150.7			(0.2	)
Earnings per share attributable to BlackRock, Inc. common stockholders
Basic	$	10.75		$	9.33		$	1.42			$	9.13		$	1.62
Diluted	$	10.66		$	9.25		$	1.41			$	9.06		$	1.60
Cash dividends declared and paid per share	$	5.00		$	4.88		$	0.12			$	5.00		$	-

Supplemental information:

AUM (end of period)	$	9,100,825		$	7,961,373		$	1,139,452			$	9,425,212		$	(324,387	)
Shares outstanding (end of period)		148.9			150.5			(1.5	)			149.4			(0.4	)
GAAP:
Operating margin		36.2	%		35.4	%		80		bps		36.2	%		-		bps
Effective tax rate		11.7	%		19.0	%		(730	)	bps		24.5	%		(1,280	)	bps
As adjusted:
Operating income (1)	$	1,691		$	1,585		$	106			$	1,675		$	16
Operating margin (1)		42.3	%		42.0	%		30		bps		42.5	%		(20	)	bps
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests (2)	$	184		$	210		$	(26	)		$	178		$	6
Net income attributable to BlackRock, Inc. (3)	$	1,642		$	1,451		$	191			$	1,399		$	243
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (3)	$	10.91		$	9.55		$	1.36			$	9.28		$	1.63
Effective tax rate		12.4	%		19.2	%		(680	)	bps		24.5	%		(1,210	)	bps

See pages 11 through 13 for the reconciliation to GAAP and notes (1) through (3) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

(in millions, except per share data), (unaudited)



	Nine Months Ended
	September 30,
	2023			2022			Change
Revenue
Investment advisory, administration fees and securities lending revenue:
Investment advisory and administration fees	$	10,276		$	10,592		$	(316	)
Securities lending revenue		518			460			58
Total investment advisory, administration fees and securities lending revenue		10,794			11,052			(258	)
Investment advisory performance fees		243			286			(43	)
Technology services revenue		1,106			1,011			95
Distribution fees		959			1,067			(108	)
Advisory and other revenue		126			120			6
Total revenue		13,228			13,536			(308	)

Expense
Employee compensation and benefits		4,276			4,251			25
Distribution and servicing costs		1,549			1,682			(133	)
Direct fund expense		1,013			951			62
General and administration expense		1,587			1,580			7
Amortization of intangible assets		113			114			(1	)
Total expense		8,538			8,578			(40	)

Operating income		4,690			4,958			(268	)

Nonoperating income (expense)
Net gain (loss) on investments		434			(242	)		676
Interest and dividend income		314			80			234
Interest expense		(210	)		(158	)		(52	)
Total nonoperating income (expense)		538			(320	)		858

Income before income taxes		5,228			4,638			590
Income tax expense		1,041			951			90
Net income		4,187			3,687			500
Less:
Net income (loss) attributable to noncontrolling interests		60			(232	)		292
Net income attributable to BlackRock, Inc.	$	4,127		$	3,919		$	208

Weighted-average common shares outstanding
Basic		149.6			151.2			(1.7	)
Diluted		150.9			152.6			(1.8	)
Earnings per share attributable to BlackRock, Inc. common stockholders
Basic	$	27.60		$	25.92		$	1.68
Diluted	$	27.36		$	25.67		$	1.69
Cash dividends declared and paid per share	$	15.00		$	14.64		$	0.36

Supplemental information:

AUM (end of period)	$	9,100,825		$	7,961,373		$	1,139,452
Shares outstanding (end of period)		148.9			150.5			(1.5	)
GAAP:
Operating margin		35.5	%		36.6	%		(110	)	bps
Effective tax rate		20.1	%		19.5	%		60		bps
As adjusted:
Operating income (1)	$	4,877		$	5,134		$	(257	)
Operating margin (1)		41.8	%		43.3	%		(150	)	bps
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests (2)	$	449		$	(88	)	$	537
Net income attributable to BlackRock, Inc. (3)	$	4,241		$	4,035		$	206
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (3)	$	28.11		$	26.43		$	1.68
Effective tax rate		20.4	%		20.0	%		40		bps

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)


Current Quarter Component Changes by Client Type and Product Type
			Net
	June 30,		inflows					Market						September 30,
	2023		(outflows)			Acquisition(1)		change			FX impact(2)			2023		Average AUM(3)
Retail:
Equity	$	415,475	$	(815	)	$	-	$	(15,248	)	$	(3,382	)	$	396,030	$	413,957
Fixed income		309,449		(701	)		-		(6,668	)		(1,848	)		300,232		307,480
Multi-asset		133,546		395			-		(4,352	)		(412	)		129,177		133,226
Alternatives		45,160		(2,464	)		-		567			(262	)		43,001		44,179
Retail subtotal		903,630		(3,585	)		-		(25,701	)		(5,904	)		868,440		898,842
ETFs:
Equity		2,309,054		19,228			-		(87,140	)		(6,867	)		2,234,275		2,322,220
Fixed income		837,759		12,477			-		(27,962	)		(3,530	)		818,744		838,179
Multi-asset		7,892		159			-		(286	)		(49	)		7,716		7,898
Alternatives		61,227		(3,343	)		-		(167	)		(43	)		57,674		60,922
ETFs subtotal		3,215,932		28,521			-		(115,555	)		(10,489	)		3,118,409		3,229,219
Institutional:
Active:
Equity		178,057		(3,883	)		-		(3,874	)		(2,383	)		167,917		176,861
Fixed income		807,167		(12,349	)		-		(18,514	)		(4,723	)		771,581		794,925
Multi-asset		664,069		13,392			-		(23,497	)		(6,971	)		646,993		665,094
Alternatives		163,426		1,510			2,177		989			(1,331	)		166,771		165,936
Active subtotal		1,812,719		(1,330	)		2,177		(44,896	)		(15,408	)		1,753,262		1,802,816
Index:
Equity		2,058,758		(48,997	)		-		(47,733	)		(18,959	)		1,943,069		2,035,665
Fixed income		714,476		13,784			-		(26,213	)		(16,399	)		685,648		710,937
Multi-asset		6,420		(1,149	)		-		(241	)		(44	)		4,986		5,970
Alternatives		3,136		120			-		94			(20	)		3,330		3,307
Index subtotal		2,782,790		(36,242	)		-		(74,093	)		(35,422	)		2,637,033		2,755,879
Institutional subtotal		4,595,509		(37,572	)		2,177		(118,989	)		(50,830	)		4,390,295		4,558,695
Long-term		8,715,071		(12,636	)		2,177		(260,245	)		(67,223	)		8,377,144		8,686,756
Cash management		710,141		15,205			-		2,258			(3,923	)		723,681		709,841
Total	$	9,425,212	$	2,569		$	2,177	$	(257,987	)	$	(71,146	)	$	9,100,825	$	9,396,597
Current Quarter Component Changes by Investment Style and Product Type (Long-Term)
			Net
	June 30,		inflows					Market						September 30,
	2023		(outflows)			Acquisition(1)		change			FX impact(2)			2023		Average AUM(3)
Active:
Equity	$	418,663	$	(6,461	)	$	-	$	(14,556	)	$	(3,956	)	$	393,690	$	414,619
Fixed income		1,091,544		(14,111	)		-		(24,907	)		(5,821	)		1,046,705		1,076,883
Multi-asset		797,605		13,784			-		(27,848	)		(7,383	)		776,158		798,311
Alternatives		208,584		(954	)		2,177		1,555			(1,593	)		209,769		210,114
Active subtotal		2,516,396		(7,742	)		2,177		(65,756	)		(18,753	)		2,426,322		2,499,927
Index and ETFs:
ETFs:
Equity		2,309,054		19,228			-		(87,140	)		(6,867	)		2,234,275		2,322,220
Fixed income		837,759		12,477			-		(27,962	)		(3,530	)		818,744		838,179
Multi-asset		7,892		159			-		(286	)		(49	)		7,716		7,898
Alternatives		61,227		(3,343	)		-		(167	)		(43	)		57,674		60,922
ETFs subtotal		3,215,932		28,521			-		(115,555	)		(10,489	)		3,118,409		3,229,219
Non-ETF Index:
Equity		2,233,627		(47,234	)		-		(52,299	)		(20,768	)		2,113,326		2,211,864
Fixed income		739,548		14,845			-		(26,488	)		(17,149	)		710,756		736,459
Multi-asset		6,430		(1,146	)		-		(242	)		(44	)		4,998		5,979
Alternatives		3,138		120			-		95			(20	)		3,333		3,308
Non-ETF Index subtotal		2,982,743		(33,415	)		-		(78,934	)		(37,981	)		2,832,413		2,957,610
Index and ETFs subtotal		6,198,675		(4,894	)		-		(194,489	)		(48,470	)		5,950,822		6,186,829
Long-term	$	8,715,071	$	(12,636	)	$	2,177	$	(260,245	)	$	(67,223	)	$	8,377,144	$	8,686,756
Current Quarter Component Changes by Product Type (Long-Term)
			Net
	June 30,		inflows					Market						September 30,
	2023		(outflows)			Acquisition(1)		change			FX impact(2)			2023		Average AUM(3)
Equity	$	4,961,344	$	(34,467	)	$	-	$	(153,995	)	$	(31,591	)	$	4,741,291	$	4,948,703
Fixed income		2,668,851		13,211			-		(79,357	)		(26,500	)		2,576,205		2,651,521
Multi-asset		811,927		12,797			-		(28,376	)		(7,476	)		788,872		812,188
Alternatives:
Illiquid alternatives		127,678		2,623			2,177		606			(1,147	)		131,937		130,523
Liquid alternatives		78,056		(3,472	)		-		966			(411	)		75,139		76,795
Currency and commodities(4)		67,215		(3,328	)		-		(89	)		(98	)		63,700		67,026
Alternatives subtotal		272,949		(4,177	)		2,177		1,483			(1,656	)		270,776		274,344
Long-term	$	8,715,071	$	(12,636	)	$	2,177	$	(260,245	)	$	(67,223	)	$	8,377,144	$	8,686,756

(1)

Amounts include AUM attributable to the acquisition of Kreos Capital in August 2023 (the "Kreos Transaction").

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(3)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing four months.

(4)

Amounts include commodity ETFs.

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)


Year-to-Date Component Changes by Client Type and Product Type
			Net
	December 31,		inflows					Market						September 30,
	2022		(outflows)			Acquisition(1)		change			FX impact(2)			2023		Average AUM(3)
Retail:
Equity	$	370,612	$	3,180		$	-	$	22,167		$	71		$	396,030	$	401,244
Fixed income		299,114		4,081			-		(4,615	)		1,652			300,232		306,856
Multi-asset		125,168		(203	)		-		4,119			93			129,177		130,860
Alternatives		48,581		(6,571	)		-		981			10			43,001		46,398
Retail subtotal		843,475		487			-		22,652			1,826			868,440		885,358
ETFs:
Equity		2,081,742		23,013			-		132,850			(3,330	)		2,234,275		2,232,883
Fixed income		758,093		80,730			-		(18,815	)		(1,264	)		818,744		814,245
Multi-asset		8,875		(1,492	)		-		335			(2	)		7,716		7,902
Alternatives		60,900		(4,030	)		-		797			7			57,674		62,015
ETFs subtotal		2,909,610		98,221			-		115,167			(4,589	)		3,118,409		3,117,045
Institutional:
Active:
Equity		168,734		(14,005	)		-		14,122			(934	)		167,917		174,595
Fixed income		774,955		(1,297	)		-		798			(2,875	)		771,581		798,447
Multi-asset		544,469		86,908			-		17,181			(1,565	)		646,993		632,229
Alternatives		153,433		7,989			2,177		3,686			(514	)		166,771		160,966
Active subtotal		1,641,591		79,595			2,177		35,787			(5,888	)		1,753,262		1,766,237
Index:
Equity		1,814,266		(57,763	)		-		210,289			(23,723	)		1,943,069		1,968,370
Fixed income		704,661		27,392			-		(28,274	)		(18,131	)		685,648		712,834
Multi-asset		6,392		(1,376	)		-		122			(152	)		4,986		6,246
Alternatives		3,296		197			-		(123	)		(40	)		3,330		3,252
Index subtotal		2,528,615		(31,550	)		-		182,014			(42,046	)		2,637,033		2,690,702
Institutional subtotal		4,170,206		48,045			2,177		217,801			(47,934	)		4,390,295		4,456,939
Long-term		7,923,291		146,753			2,177		355,620			(50,697	)		8,377,144		8,459,342
Cash management		671,194		46,295			-		5,962			230			723,681		683,678
Total	$	8,594,485	$	193,048		$	2,177	$	361,582		$	(50,467	)	$	9,100,825	$	9,143,020
Year-to-Date Component Changes by Investment Style and Product Type (Long-Term)
			Net
	December 31,		inflows					Market						September 30,
	2022		(outflows)			Acquisition(1)		change			FX impact(2)			2023		Average AUM(3)
Active:
Equity	$	392,836	$	(21,284	)	$	-	$	23,194		$	(1,056	)	$	393,690	$	410,836
Fixed income		1,053,083		(1,852	)		-		(3,276	)		(1,250	)		1,046,705		1,081,613
Multi-asset		669,629		86,701			-		21,300			(1,472	)		776,158		763,080
Alternatives		202,012		1,417			2,177		4,667			(504	)		209,769		207,363
Active subtotal		2,317,560		64,982			2,177		45,885			(4,282	)		2,426,322		2,462,892
Index and ETFs:
ETFs:
Equity		2,081,742		23,013			-		132,850			(3,330	)		2,234,275		2,232,883
Fixed income		758,093		80,730			-		(18,815	)		(1,264	)		818,744		814,245
Multi-asset		8,875		(1,492	)		-		335			(2	)		7,716		7,902
Alternatives		60,900		(4,030	)		-		797			7			57,674		62,015
ETFs subtotal		2,909,610		98,221			-		115,167			(4,589	)		3,118,409		3,117,045
Non-ETF Index:
Equity		1,960,776		(47,304	)		-		223,384			(23,530	)		2,113,326		2,133,373
Fixed income		725,647		32,028			-		(28,815	)		(18,104	)		710,756		736,524
Multi-asset		6,400		(1,372	)		-		122			(152	)		4,998		6,255
Alternatives		3,298		198			-		(123	)		(40	)		3,333		3,253
Non-ETF Index subtotal		2,696,121		(16,450	)		-		194,568			(41,826	)		2,832,413		2,879,405
Index and ETFs subtotal		5,605,731		81,771			-		309,735			(46,415	)		5,950,822		5,996,450
Long-term	$	7,923,291	$	146,753		$	2,177	$	355,620		$	(50,697	)	$	8,377,144	$	8,459,342
Year-to-Date Component Changes by Product Type (Long-Term)
			Net
	December 31,		inflows					Market						September 30,
	2022		(outflows)			Acquisition(1)		change			FX impact(2)			2023		Average AUM(3)
Equity	$	4,435,354	$	(45,575	)	$	-	$	379,428		$	(27,916	)	$	4,741,291	$	4,777,092
Fixed income		2,536,823		110,906			-		(50,906	)		(20,618	)		2,576,205		2,632,382
Multi-asset		684,904		83,837			-		21,757			(1,626	)		788,872		777,237
Alternatives:
Illiquid alternatives		117,751		10,105			2,177		2,088			(184	)		131,937		125,590
Liquid alternatives		80,654		(8,082	)		-		2,744			(177	)		75,139		78,712
Currency and commodities(4)		67,805		(4,438	)		-		509			(176	)		63,700		68,329
Alternatives subtotal		266,210		(2,415	)		2,177		5,341			(537	)		270,776		272,631
Long-term	$	7,923,291	$	146,753		$	2,177	$	355,620		$	(50,697	)	$	8,377,144	$	8,459,342

(1)

Amounts include AUM attributable to the Kreos Transaction.

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(3)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing ten months.

(4)

Amounts include commodity ETFs.

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)


Year-over-Year Component Changes by Client Type and Product Type
			Net
	September 30,		inflows					Market					September 30,
	2022		(outflows)			Acquisition(1)		change			FX impact(2)		2023		Average AUM(3)
Retail:
Equity	$	342,647	$	(1,842	)	$	-	$	48,731		$	6,494	$	396,030	$	392,563
Fixed income		294,977		(2,458	)		-		1,958			5,755		300,232		304,392
Multi-asset		120,814		(2,924	)		-		10,217			1,070		129,177		129,414
Alternatives		48,060		(7,115	)		-		1,452			604		43,001		46,830
Retail subtotal		806,498		(14,339	)		-		62,358			13,923		868,440		873,199
ETFs:
Equity		1,861,499		67,578			-		296,097			9,101		2,234,275		2,182,103
Fixed income		694,062		127,829			-		(8,698	)		5,551		818,744		792,396
Multi-asset		7,273		(294	)		-		707			30		7,716		7,871
Alternatives		58,576		(7,241	)		-		6,236			103		57,674		61,199
ETFs subtotal		2,621,410		187,872			-		294,342			14,785		3,118,409		3,043,569
Institutional:
Active:
Equity		150,409		(10,044	)		-		24,024			3,528		167,917		172,013
Fixed income		685,194		63,873			-		16,830			5,684		771,581		779,631
Multi-asset		502,787		91,187			-		41,619			11,400		646,993		607,567
Alternatives		148,895		10,607			2,177		3,032			2,060		166,771		158,372
Active subtotal		1,487,285		155,623			2,177		85,505			22,672		1,753,262		1,717,583
Index:
Equity		1,665,757		(71,550	)		-		332,610			16,252		1,943,069		1,924,530
Fixed income		676,030		37,177			-		(46,732	)		19,173		685,648		707,225
Multi-asset		6,571		(2,019	)		-		419			15		4,986		6,336
Alternatives		3,703		(329	)		-		(56	)		12		3,330		3,343
Index subtotal		2,352,061		(36,721	)		-		286,241			35,452		2,637,033		2,641,434
Institutional subtotal		3,839,346		118,902			2,177		371,746			58,124		4,390,295		4,359,017
Long-term		7,267,254		292,435			2,177		728,446			86,832		8,377,144		8,275,785
Cash management		694,119		14,337			-		7,321			7,904		723,681		686,105
Total	$	7,961,373	$	306,772		$	2,177	$	735,767		$	94,736	$	9,100,825	$	8,961,890
Year-over-Year Component Changes by Investment Style and Product Type (Long-Term)
			Net
	September 30,		inflows					Market					September 30,
	2022		(outflows)			Acquisition(1)		change			FX impact(2)		2023		Average AUM(3)
Active:
Equity	$	359,587	$	(21,978	)	$	-	$	49,389		$	6,692	$	393,690	$	404,531
Fixed income		960,932		56,585			-		18,981			10,207		1,046,705		1,061,118
Multi-asset		623,594		88,259			-		51,835			12,470		776,158		736,973
Alternatives		196,953		3,491			2,177		4,484			2,664		209,769		205,200
Active subtotal		2,141,066		126,357			2,177		124,689			32,033		2,426,322		2,407,822
Index and ETFs:
ETFs:
Equity		1,861,499		67,578			-		296,097			9,101		2,234,275		2,182,103
Fixed income		694,062		127,829			-		(8,698	)		5,551		818,744		792,396
Multi-asset		7,273		(294	)		-		707			30		7,716		7,871
Alternatives		58,576		(7,241	)		-		6,236			103		57,674		61,199
ETFs subtotal		2,621,410		187,872			-		294,342			14,785		3,118,409		3,043,569
Non-ETF Index:
Equity		1,799,226		(61,458	)		-		355,976			19,582		2,113,326		2,084,575
Fixed income		695,269		42,007			-		(46,925	)		20,405		710,756		730,130
Multi-asset		6,578		(2,015	)		-		420			15		4,998		6,344
Alternatives		3,705		(328	)		-		(56	)		12		3,333		3,345
Non-ETF Index subtotal		2,504,778		(21,794	)		-		309,415			40,014		2,832,413		2,824,394
Index and ETFs subtotal		5,126,188		166,078			-		603,757			54,799		5,950,822		5,867,963
Long-term	$	7,267,254	$	292,435		$	2,177	$	728,446		$	86,832	$	8,377,144	$	8,275,785
Year-over-Year Component Changes by Product Type (Long-Term)
			Net
	September 30,		inflows					Market					September 30,
	2022		(outflows)			Acquisition(1)		change			FX impact(2)		2023		Average AUM(3)
Equity	$	4,020,312	$	(15,858	)	$	-	$	701,462		$	35,375	$	4,741,291	$	4,671,209
Fixed income		2,350,263		226,421			-		(36,642	)		36,163		2,576,205		2,583,644
Multi-asset		637,445		85,950			-		52,962			12,515		788,872		751,188
Alternatives:
Illiquid alternatives		111,729		14,513			2,177		1,463			2,055		131,937		122,897
Liquid alternatives		81,418		(9,937	)		-		3,021			637		75,139		79,092
Currency and commodities(4)		66,087		(8,654	)		-		6,180			87		63,700		67,755
Alternatives subtotal		259,234		(4,078	)		2,177		10,664			2,779		270,776		269,744
Long-term	$	7,267,254	$	292,435		$	2,177	$	728,446		$	86,832	$	8,377,144	$	8,275,785

(1)

Amounts include AUM attributable to the Kreos Transaction.

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(3)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

(4)

Amounts include commodity ETFs.

SUMMARY OF REVENUE


	Three Months								Three Months					Nine Months
	Ended								Ended					Ended
	September 30,								June 30,					September 30,
(in millions), (unaudited)	2023		2022			Change			2023		Change			2023		2022		Change
Revenue
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	510	$	503		$	7		$	506	$	4		$	1,516	$	1,669	$	(153	)
ETFs		1,136		1,063			73			1,102		34			3,316		3,324		(8	)
Non-ETF Index		186		179			7			197		(11	)		560		552		8
Equity subtotal		1,832		1,745			87			1,805		27			5,392		5,545		(153	)
Fixed income:
Active		479		478			1			482		(3	)		1,429		1,515		(86	)
ETFs		315		276			39			309		6			919		839		80
Non-ETF Index		93		91			2			88		5			268		311		(43	)
Fixed income subtotal		887		845			42			879		8			2,616		2,665		(49	)
Multi-asset		308		316			(8	)		300		8			904		1,006		(102	)
Alternatives:
Illiquid alternatives		231		184			47			206		25			638		547		91
Liquid alternatives		143		155			(12	)		146		(3	)		434		483		(49	)
Currency and commodities		46		51			(5	)		49		(3	)		141		169		(28	)
Alternatives subtotal		420		390			30			401		19			1,213		1,199		14
Long-term		3,447		3,296			151			3,385		62			10,125		10,415		(290	)
Cash management		234		235			(1	)		226		8			669		637		32
Total investment advisory, administration fees and securities lending revenue		3,681		3,531			150			3,611		70			10,794		11,052		(258	)
Investment advisory performance fees:
Equity		17		(2	)		19			15		2			38		13		25
Fixed income		1		(3	)		4			-		1			2		19		(17	)
Multi-asset		5		2			3			3		2			23		14		9
Alternatives:
Illiquid alternatives		24		79			(55	)		79		(55	)		124		181		(57	)
Liquid alternatives		23		6			17			21		2			56		59		(3	)
Alternatives subtotal		47		85			(38	)		100		(53	)		180		240		(60	)
Total investment advisory performance fees		70		82			(12	)		118		(48	)		243		286		(43	)
Technology services revenue		407		338			69			359		48			1,106		1,011		95
Distribution fees		321		325			(4	)		319		2			959		1,067		(108	)
Advisory and other revenue:
Advisory		21		8			13			31		(10	)		66		39		27
Other		22		27			(5	)		25		(3	)		60		81		(21	)
Total advisory and other revenue		43		35			8			56		(13	)		126		120		6
Total revenue	$	4,522	$	4,311		$	211		$	4,463	$	59		$	13,228	$	13,536	$	(308	)

Highlights

•

Investment advisory, administration fees and securities lending revenue increased $150 million from the third quarter of 2022, primarily driven by organic base fee growth and the impact of market and foreign exchange movements over the past twelve months on average AUM. Securities lending revenue of $167 million increased from $162 million in the third quarter of 2022.

Investment advisory, administration fees and securities lending revenue increased $70 million from the second quarter of 2023, primarily driven by higher average AUM and the effect of one additional day in the quarter, partially offset by lower securities lending revenue. Securities lending revenue of $167 million decreased from $184 million in the second quarter of 2023, primarily reflecting lower spreads.

•

Performance fees decreased $12 million from the third quarter of 2022 and $48 million from the second quarter of 2023, primarily reflecting lower revenue from illiquid alternative products, partially offset by higher revenue from long-only and liquid alternative products.

•

Technology services revenue increased $69 million from the third quarter of 2022 and $48 million from the second quarter of 2023, driven by sustained demand for our technology offerings. Current quarter technology services revenue also benefited from the impact of several large client renewals of eFront on-premise licenses, for which a majority of the revenue is recognized at the time of renewal. Technology services annual contract value (“ACV”)(1) increased 10% from the third quarter of 2022.

(1)

See note (4) to the condensed consolidated statements of income and supplemental information on page 13 for more information on ACV.

SUMMARY OF OPERATING EXPENSE


	Three Months								Three Months					Nine Months
	Ended								Ended					Ended
	September 30,								June 30,					September 30,
(in millions), (unaudited)	2023			2022		Change			2023		Change			2023			2022		Change
Operating expense
Employee compensation and benefits	$	1,420		$	1,339	$	81		$	1,429	$	(9	)	$	4,276		$	4,251	$	25
Distribution and servicing costs		526			536		(10	)		518		8			1,549			1,682		(133	)
Direct fund expense		354			318		36			344		10			1,013			951		62
General and administration expense:
Marketing and promotional		82			95		(13	)		82		-			244			231		13
Occupancy and office related		103			99		4			100		3			313			304		9
Portfolio services		65			73		(8	)		69		(4	)		202			209		(7	)
Sub-advisory		20			21		(1	)		19		1			59			63		(4	)
Technology		145			156		(11	)		141		4			421			449		(28	)
Professional services		51			47		4			35		16			128			129		(1	)
Communications		12			11		1			12		-			36			32		4
Foreign exchange remeasurement		(3	)		3		(6	)		2		(5	)		(2	)		2		(4	)
Contingent consideration fair value adjustments		-			1		(1	)		1		(1	)		1			2		(1	)
Other general and administration		71			48		23			59		12			185			159		26
Total general and administration expense		546			554		(8	)		520		26			1,587			1,580		7
Amortization of intangible assets		39			38		1			37		2			113			114		(1	)
Total operating expense	$	2,885		$	2,785	$	100		$	2,848	$	37		$	8,538		$	8,578	$	(40	)

Highlights

•

Employee compensation and benefits expense increased $81 million from the third quarter of 2022, reflecting higher base compensation, driven primarily by base salary increases, and higher incentive compensation primarily as a result of higher operating income.

•

Direct fund expense increased $36 million from the third quarter of 2022 and $10 million from the second quarter of 2023, primarily reflecting higher average index AUM.

•

General and administrative expense increased $26 million from the second quarter of 2023, primarily due to higher professional services expense and an $8 million reduction of a tax indemnification asset included within other general and administration expense (offset by an $8 million income tax benefit). Amounts related to the reduction of the indemnification asset have been excluded from as adjusted results, as there is no impact on BlackRock's book value. See pages 11 through 13 for the reconciliation to GAAP and notes (1) and (3) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items.

SUMMARY OF NONOPERATING INCOME (expense), less net income (loss) attributable TO noncontrolling interests


	Three Months									Three Months						Nine Months
	Ended									Ended						Ended
	September 30,									June 30,						September 30,
(in millions), (unaudited)	2023			2022			Change			2023			Change			2023			2022			Change
Nonoperating income (expense), GAAP basis	$	171		$	165		$	6		$	251		$	(80	)	$	538		$	(320	)	$	858
Less: Net income (loss) attributable to noncontrolling interests ("NCI")		(9	)		(45	)		36			57			(66	)		60			(232	)		292
Nonoperating income (expense), net of NCI		180			210			(30	)		194			(14	)		478			(88	)		566
Less: Hedge gain (loss) on deferred cash compensation plans(1)		(4	)		-			(4	)		16			(20	)		29			-			29
Nonoperating income (expense), net of NCI, as adjusted(2)	$	184		$	210		$	(26	)	$	178		$	6		$	449		$	(88	)	$	537

	Three Months									Three Months						Nine Months
	Ended									Ended						Ended
	September 30,									June 30,						September 30,
(in millions), (unaudited)	2023			2022			Change			2023			Change			2023			2022			Change
Net gain (loss) on investments, net of NCI
Private equity	$	91		$	20		$	71		$	151		$	(60	)	$	281		$	22		$	259
Real assets		3			9			(6	)		2			1			11			23			(12	)
Other alternatives(3)		22			1			21			4			18			32			-			32
Other investments(4)		46			(58	)		104			(7	)		53			51			(245	)		296
Hedge gain (loss) on deferred cash compensation plans(1)		(4	)		-			(4	)		16			(20	)		29			-			29
Subtotal		158			(28	)		186			166			(8	)		404			(200	)		604
Other gains (losses)(5)		(35	)		247			(282	)		8			(43	)		(30	)		190			(220	)
Total net gain (loss) on investments, net of NCI		123			219			(96	)		174			(51	)		374			(10	)		384
Interest and dividend income		139			41			98			89			50			314			80			234
Interest expense		(82	)		(50	)		(32	)		(69	)		(13	)		(210	)		(158	)		(52	)
Net interest income (expense)		57			(9	)		66			20			37			104			(78	)		182
Nonoperating income (expense), net of NCI		180			210			(30	)		194			(14	)		478			(88	)		566
Less: Hedge gain (loss) on deferred cash compensation plans(1)		(4	)		-			(4	)		16			(20	)		29			-			29
Nonoperating income (expense), net of NCI, as adjusted(2)	$	184		$	210		$	(26	)	$	178		$	6		$	449		$	(88	)	$	537

(1)

Amount relates to the gain (loss) from economically hedging certain BlackRock deferred cash compensation plans.

(2)

Management believes nonoperating income (expense), net of NCI, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating results, which ultimately impacts BlackRock’s book value. For more information on as adjusted items and the reconciliation to GAAP see notes to the condensed consolidated statements of income and supplemental information on pages 11 through 13.

(3)

Amounts primarily include net gains (losses) related to credit funds, direct hedge fund strategies and hedge fund solutions.

(4)

Amounts primarily include net gains (losses) related to BlackRock's seed investment portfolio, net of impact of certain hedges.

(5)

The amounts for the three and nine months ended September 30, 2022, primarily include nonoperating noncash pre-tax gains in connection with strategic minority investment in iCapital Network, Inc. of approximately $267 million. Additional amounts include noncash pre-tax gains (losses) related to the revaluation of certain other minority investments.

summary of INCOME TAX EXPENSE


	Three Months									Three Months							Nine Months
	Ended									Ended							Ended
	September 30,									June 30,							September 30,
(in millions), (unaudited)	2023			2022			Change			2023				Change			2023			2022			Change
Income tax expense	$	213		$	330		$	(117	)		$	443		$	(230	)	$	1,041		$	951		$	90
Effective tax rate		11.7	%		19.0	%		(730) bps				24.5	%		(1,280) bps			20.1	%		19.5	%		60 bps

Highlights

•

Third quarter 2023 and 2022 income tax expense included approximately $223 million and $93 million, respectively, of discrete tax benefits related to the resolution of certain outstanding tax matters.


RECONCILIATION OF GAAP OPERATING INCOME AND OPERATING MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS ADJUSTED
	Three Months Ended									Nine Months Ended
	September 30,						June 30,			September 30,
(in millions), (unaudited)	2023			2022			2023			2023			2022
Operating income, GAAP basis	$	1,637		$	1,526		$	1,615		$	4,690		$	4,958
Non-GAAP expense adjustments:
Compensation expense related to appreciation (depreciation) on deferred cash compensation plans (a)		(3	)		-			12			29			-
Amortization of intangible assets (b)		39			38			37			113			114
Acquisition-related compensation costs (b)		6			5			4			15			18
Acquisition-related transaction costs (b)(1)		4			-			3			7			-
Contingent consideration fair value adjustments (b)		-			1			1			1			2
Lease costs - New York (c)		-			15			3			14			42
Reduction of indemnification asset (d)(1)		8			-			-			8			-
Operating income, as adjusted (1)	$	1,691		$	1,585		$	1,675		$	4,877		$	5,134
Revenue, GAAP basis	$	4,522		$	4,311		$	4,463		$	13,228		$	13,536
Non-GAAP adjustments:
Distribution fees		(321	)		(325	)		(319	)		(959	)		(1,067	)
Investment advisory fees		(205	)		(211	)		(199	)		(590	)		(615	)
Revenue used for operating margin measurement	$	3,996		$	3,775		$	3,945		$	11,679		$	11,854
Operating margin, GAAP basis		36.2	%		35.4	%		36.2	%		35.5	%		36.6	%
Operating margin, as adjusted (1)		42.3	%		42.0	%		42.5	%		41.8	%		43.3	%

(1)

Amount included within general and administration expense.

See note (1) to the condensed consolidated statements of income and supplemental information on page 12 for more information on as adjusted items.


RECONCILIATION OF GAAP NONOPERATING INCOME (EXPENSE) TO NONOPERATING INCOME (EXPENSE), LESS NET INCOME (LOSS) ATTRIBUTABLE TO NCI, AS ADJUSTED
	Three Months Ended								Nine Months Ended
	September 30,						June 30,		September 30,
(in millions), (unaudited)	2023			2022			2023		2023		2022
Nonoperating income (expense), GAAP basis	$	171		$	165		$	251	$	538	$	(320	)
Less: Net income (loss) attributable to NCI		(9	)		(45	)		57		60		(232	)
Nonoperating income (expense), net of NCI		180			210			194		478		(88	)
Less : Hedge gain (loss) on deferred cash compensation plans (a)		(4	)		-			16		29		-
Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted (2)	$	184		$	210		$	178	$	449	$	(88	)

See notes (1) and (2) to the condensed consolidated statements of income and supplemental information on pages 12 and 13 for more information on as adjusted items.


RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO BLACKROCK TO NET INCOME ATTRIBUTABLE TO BLACKROCK, AS ADJUSTED
	Three Months Ended							Nine Months Ended
	September 30,				June 30,			September 30,
(in millions, except per share data), (unaudited)	2023		2022		2023			2023		2022
Net income attributable to BlackRock, Inc., GAAP basis	$	1,604	$	1,406	$	1,366		$	4,127	$	3,919
Non-GAAP adjustments(1):
Net impact of hedged deferred cash compensation plans (a)		1		-		(3	)		-		-
Amortization of intangible assets (b)		30		29		28			86		87
Acquisition-related compensation costs (b)		4		4		3			11		14
Acquisition-related transaction costs (b)		3		-		2			5		-
Contingent consideration fair value adjustments (b)		-		1		1			1		2
Lease costs - New York (c)		-		11		2			11		31
Income tax matters		-		-		-			-		(18	)
Net income attributable to BlackRock, Inc., as adjusted (3)	$	1,642	$	1,451	$	1,399		$	4,241	$	4,035
Diluted weighted-average common shares outstanding		150.5		152.0		150.7			150.9		152.6
Diluted earnings per common share, GAAP basis	$	10.66	$	9.25	$	9.06		$	27.36	$	25.67
Diluted earnings per common share, as adjusted (3)	$	10.91	$	9.55	$	9.28		$	28.11	$	26.43

(1)

Non-GAAP adjustments are net of tax excluding income tax matters.

See note (3) to the condensed consolidated statements of income and supplemental information on page 13 for more information on as adjusted items.

NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION (unaudited)

BlackRock reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”); however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. Adjustments to GAAP financial measures (“non-GAAP adjustments”) include certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow. Management reviews non-GAAP financial measures, in addition to GAAP financial measures, to assess ongoing operations and considers them to be helpful, for both management and investors, in evaluating BlackRock’s financial performance over time. Management also uses non-GAAP financial measures as a benchmark to compare its performance with other companies and to enhance comparability for the reporting periods presented. Non-GAAP financial measures may pose limitations because they do not include all of BlackRock’s revenue and expense. BlackRock’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Non-GAAP financial measures may not be comparable to other similarly titled measures of other companies.

Computations and reconciliations for all periods are derived from the condensed consolidated statements of income as follows:

(1) Operating income, as adjusted, and operating margin, as adjusted: Management believes operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRock’s financial performance over time, and, therefore, provide useful disclosure to investors. Management believes that operating margin, as adjusted, reflects the Company’s long-term ability to manage ongoing costs in relation to its revenues. The Company uses operating margin, as adjusted, to assess the Company’s financial performance, to determine the long-term and annual compensation of the Company’s senior-level employees and to evaluate the Company’s relative performance against industry peers. Furthermore, this metric eliminates margin variability arising from the accounting of revenues and expenses related to distributing different product structures in multiple distribution channels utilized by asset managers.

•

Operating income, as adjusted, includes the following non-GAAP expense adjustments:

(a)

Compensation expense related to appreciation (depreciation) on deferred cash compensation plans. Beginning in the first quarter of 2023, the Company updated its definition of operating income, as adjusted, to exclude compensation expense related to the market valuation changes on certain deferred cash compensation plans, which the Company began hedging economically in 2023. For these deferred cash compensation plans, the final value of the deferred amount to be distributed to employees in cash upon vesting is determined based on the returns on specified investment funds. The Company recognizes compensation expense for the appreciation (depreciation) of the deferred cash compensation liability in proportion to the vested amount of the award during a respective period, while the gain (loss) to economically hedge these plans is immediately recognized in nonoperating income (expense), which creates a timing difference impacting net income. This timing difference will reverse and offset to zero over the life of the award at the end of the multi-year vesting period. Management believes excluding market valuation changes related to the deferred cash compensation plans in the calculation of operating income, as adjusted, provides useful disclosure to both management and investors of the Company’s financial performance over time as these amounts are economically hedged, while also increasing comparability with other companies.

(b)

Acquisition related costs. Acquisition related costs include adjustments related to amortization of intangible assets, other acquisition-related costs, including compensation costs for nonrecurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions. Management believes excluding the impact of these expenses when calculating operating income, as adjusted, provides a helpful indication of the Company’s financial performance over time, thereby providing helpful information for both management and investors while also increasing comparability with other companies.

(c)

Lease costs – New York. In 2022 and 2023, the Company continued to recognize lease expense within general and administration expense for both its current headquarters located at 50 Hudson Yards in New York and prior headquarters until the Company's lease on its prior headquarters expired in April 2023. The Company began lease payments related to its current headquarters in May 2023, but began recording lease expense in August 2021 when it obtained access to the building to begin its tenant improvements. Prior to the Company’s move to its current headquarters in February 2023, the impact of lease costs related to 50 Hudson Yards was excluded from operating income, as adjusted. In February 2023, the Company completed the majority of its move to 50 Hudson Yards and no longer excluded the impact of these lease costs. Subsequently, from February 2023 through April 2023, the Company excluded the impact of lease costs related to the Company's prior headquarters. Management believes excluding the impact of these respective New York lease costs (“Lease costs – New York”) when calculating operating income, as adjusted, is useful to assess the Company’s financial performance and ongoing operations, and enhances comparability among periods presented.

(d)

Reduction of indemnification asset. In connection with a previous acquisition, BlackRock recorded an $8 million indemnification asset. Due to the resolution of certain tax matters in the current quarter, BlackRock recorded $8 million of general and administration expense to reflect the reduction of the indemnification asset and an offsetting $8 million tax benefit. The $8 million general and administrative expense and $8 million tax benefit have been excluded from as adjusted results as there is no impact on BlackRock’s book value.

•

Revenue used for calculating operating margin, as adjusted, is reduced to exclude all of the Company’s distribution fees, which are recorded as a separate line item on the condensed consolidated statements of income, as well as a portion of investment advisory fees received that is used to pay distribution and servicing costs. For certain products, based on distinct arrangements, distribution fees are collected by the Company and then passed-through to third-party client intermediaries. For other products, investment advisory fees are collected by the Company and a portion is passed-through to third-party client intermediaries. However, in both structures, the third-party client intermediary similarly owns the relationship with the retail client and is responsible for distributing the product and servicing the client. The amount of distribution and investment advisory fees fluctuates each period primarily based on a predetermined percentage of the value of AUM during the period. These fees also vary based on the type of investment product sold and the geographic location where it is sold. In addition, the Company may waive fees on certain products that could result in the reduction of payments to the third-party intermediaries.

(2) Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted: Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating contribution to its results and provides comparability of this information among reporting periods. Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, excludes the gain (loss) on the economic hedge of certain deferred cash compensation plans. As the gain (loss) on investments and derivatives used to hedge these compensation plans over time substantially offsets the compensation expense related to the market valuation changes on these deferred cash compensation plans, which is included in operating income, GAAP basis, management believes excluding the gain (loss) on the economic hedge of the deferred cash compensation plans when calculating nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, provides a useful measure for both management and investors of BlackRock’s nonoperating results that impact book value.

(3) Net income attributable to BlackRock, Inc., as adjusted: Management believes net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted, are useful measures of BlackRock’s profitability and financial performance. Net income attributable to BlackRock, Inc., as adjusted, equals net income attributable to BlackRock, Inc., GAAP basis, adjusted for certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.

See notes (1) and (2) above regarding operating income, as adjusted, for information on the updated presentation of non-GAAP adjustments. For each period presented, the non-GAAP adjustments were tax effected at the respective blended rates applicable to the adjustments. Amounts for income tax matters represent net noncash (benefit) expense primarily associated with the revaluation of certain deferred tax liabilities related to intangible assets and goodwill as a result of tax rate changes. These amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to enhance comparability among periods presented.

Per share amounts reflect net income attributable to BlackRock, Inc., as adjusted, divided by diluted weighted-average common shares outstanding.

(4) ACV: Management believes ACV is an effective metric for reviewing BlackRock’s technology services’ ongoing contribution to its operating results and provides comparability of this information among reporting periods while also providing a useful supplemental metric for both management and investors of BlackRock’s growth in technology services revenue over time, as it is linked to the net new business in technology services. ACV represents forward-looking, annualized estimated value of the recurring subscription fees under client contracts, assuming all client contracts that come up for renewal are renewed, unless we received a notice of termination, even though such notice may not be effective until a later date. ACV also includes the annualized estimated value of new sales, for existing and new clients, when we execute client contracts, even though the recurring fees may not be effective until a later date and excludes nonrecurring fees such as implementation and consulting fees.

FORWARD-LOOKING STATEMENTS

This earnings release, 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.

BlackRock has previously disclosed risk factors in its Securities and Exchange Commission (“SEC”) reports. These risk factors and those identified elsewhere in this earnings release, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (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 (“AUM”); (3) the relative and absolute investment performance of BlackRock’s investment products; (4) BlackRock’s ability to develop new products and services that address client preferences; (5) the impact of increased competition; (6) the impact of future acquisitions or divestitures; (7) BlackRock’s ability to integrate acquired businesses successfully; (8) the unfavorable resolution of legal proceedings; (9) the extent and timing of any share repurchases; (10) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and cybersecurity protection; (11) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; (12) the impact of legislative and regulatory actions and reforms, regulatory, supervisory or enforcement actions of government agencies and governmental scrutiny relating to BlackRock; (13) changes in law and policy and uncertainty pending any such changes; (14) any failure to effectively manage conflicts of interest; (15) damage to BlackRock’s reputation; (16) geopolitical unrest, terrorist activities, civil or international hostilities, including the war between Russia and Ukraine, and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (17) a pandemic or health crisis, and related impact on BlackRock’s business, operations and financial condition; (18) climate-related risks to BlackRock's business, products, operations and clients; (19) the ability to attract, train and retain highly qualified and diverse professionals; (20) fluctuations in the carrying value of BlackRock’s economic investments; (21) 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; (22) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (23) the failure by key third-party providers of BlackRock to fulfill their obligations to the Company; (24) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (25) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds (“ETF”) platform; (26) 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 (27) the impact of problems, instability or failure of other financial institutions or the failure or negative performance of products offered by other financial institutions.

BlackRock’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and BlackRock’s subsequent filings with the SEC, accessible on the SEC’s website at www.sec.gov and on BlackRock’s website at www.blackrock.com, discuss these factors in more detail and identify additional factors that can affect forward-looking statements. The information contained on the Company’s website is not a part of this earnings release.

PERFORMANCE NOTES

Past performance is not indicative of future results. Except as specified, the performance information shown is as of September 30, 2023 and is based on preliminary data available at that time. The performance data shown reflects information for all actively and passively managed equity and fixed income accounts, including US registered investment companies, European-domiciled retail funds and separate accounts for which performance data is available, including performance data for high net worth accounts available as of August 31, 2023. The performance data does not include accounts terminated prior to September 30, 2023 and accounts for which data has not yet been verified. If such accounts had been included, the performance data provided may have substantially differed from that shown.

Performance comparisons shown are gross-of-fees for institutional and high net worth separate accounts, and net-of-fees for retail funds. The performance tracking shown for index accounts is based on gross-of-fees performance and includes all institutional accounts and all iShares® funds globally using an index strategy. AUM information is based on AUM available as of September 30, 2023 for each account or fund in the asset class shown without adjustment for overlapping management of the same account or fund. Fund performance reflects the reinvestment of dividends and distributions.

Performance shown is derived from applicable benchmarks or peer median information, as selected by BlackRock, Inc. Peer medians are based in part on data either from Lipper, Inc. or Morningstar, Inc. for each included product.