EX-99.1 2 blk-ex991_6.htm EARNINGS RELEASE DATED APRIL 13, 2022 blk-ex991_6.htm

Exhibit 99.1

v

 

 

 

 

INVESTOR RELATIONS:

Caroline Rodda      212.810.3442

MEDIA RELATIONS:

Brian Beades      212.810.5596

 

 

BlackRock Reports First Quarter 2022 Diluted EPS of $9.35, or $9.52 as adjusted

 

New York, April 13, 2022  –  BlackRock, Inc. (NYSE: BLK) today reported financial results for the three months ended March 31, 2022.

 

 

$114 billion of quarterly long-term net inflows reflect strength of broad-based platform with positive flows across all product types, investment styles and regions

$86 billion of quarterly total net inflows also reflect seasonal outflows from cash management

7% increase in revenue year-over-year driven by strong organic growth and 11% growth in technology services revenue, partially offset by lower performance fees

14% increase in operating income year-over-year includes the impact of $178 million of fund launch costs in the first quarter of 2021

20% increase in diluted EPS (18% as adjusted) year-over-year also reflects a lower effective tax rate and a lower diluted share count, partially offset by lower nonoperating income, in the current quarter

$500 million of share repurchases in the quarter and 18% increase in quarterly cash dividend to $4.88 per share

 

Laurence D. Fink, Chairman and CEO:

“BlackRock generated $114 billion of long-term net inflows in the first quarter, with positive flows across all product types, investment styles and regions, demonstrating the breadth of our asset management platform. Our ETFs delivered $56 billion of net inflows, as clients increasingly use them to efficiently allocate capital, access liquidity and manage risk. Active net inflows of $20 billion were led by LifePath target-date strategies and strong demand for alternatives.

“Aladdin’s comprehensive value proposition is resonating more than ever and becoming a key component of the whole portfolio solutions we deliver for clients – technology services saw 13% ACV growth.

“BlackRock is increasingly the partner of choice globally as clients look to build deeper and more comprehensive relationships. We announced another significant client mandate during the quarter that exemplifies our One BlackRock approach – bringing together investment expertise, operational excellence and world-class technology.  I am incredibly excited by the opportunities ahead of us and believe BlackRock is well-positioned to continue generating durable, differentiated organic growth and delivering value for all of our stakeholders.

“As the world continues to face geopolitical and economic uncertainty, our investments over the years to build BlackRock’s all-weather platform position us well to advise our clients and help them pursue their long-term financial goals.”

 

FINANCIAL RESULTS

 

Q1

 

 

Q1

 

(in millions, except per share data)

2022

 

 

2021

 

AUM

$

9,569,513

 

 

$

9,007,411

 

% change

 

6

%

 

 

 

 

Average AUM

$

9,669,202

 

 

$

8,782,351

 

% change

 

10

%

 

 

 

 

Total net flows

$

86,364

 

 

$

171,643

 

 

 

 

 

 

 

 

 

GAAP basis:

 

 

 

 

 

 

 

Revenue

$

4,699

 

 

$

4,398

 

% change

 

7

%

 

 

 

 

Operating income

$

1,764

 

 

$

1,545

 

% change

 

14

%

 

 

 

 

Operating margin

 

37.5

%

 

 

35.1

%

Net income(1)

$

1,436

 

 

$

1,199

 

% change

 

20

%

 

 

 

 

Diluted EPS

$

9.35

 

 

$

7.77

 

% change

 

20

%

 

 

 

 

Weighted-average diluted shares

 

153.5

 

 

 

154.3

 

% change

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

As Adjusted:

 

 

 

 

 

 

 

Operating income(2)

$

1,822

 

 

$

1,599

 

% change

 

14

%

 

 

 

 

Operating margin(2)

 

44.2

%

 

 

45.8

%

Net income(1) (2)

$

1,462

 

 

$

1,240

 

% change

 

18

%

 

 

 

 

Diluted EPS(2)

$

9.52

 

 

$

8.04

 

% change

 

18

%

 

 

 

 

(1)

Net income represents net income attributable to BlackRock, Inc.

(2)

See notes (1) and (2) to the condensed consolidated statements of income and supplemental information on pages 9 through 13 for more information on as adjusted items and the reconciliation to GAAP. Beginning in the first quarter of 2022, BlackRock updated the definitions of operating income, as adjusted, operating margin, as adjusted, and net income attributable to BlackRock, Inc., as adjusted.  Such measures have been recast for 2021 to reflect the inclusion of such new adjustments.

NET FLOW HIGHLIGHTS

 

 

 

Q1

 

(in billions)

2022

LTM(1)

Long-term net flows:

$

114

 

 

$

440

 

 

 

 

 

 

 

 

 

 

 

 

 

By region:

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

28

 

 

$

226

 

 

 

EMEA

 

45

 

 

 

125

 

 

 

APAC

 

41

 

 

 

89

 

 

 

 

 

 

 

 

 

 

 

 

 

By client type:

 

 

 

 

 

 

 

 

 

 

 

 

Retail:

$

10

 

 

$

76

 

 

 

 

US

 

8

 

 

 

45

 

 

 

 

International

 

2

 

 

 

31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

$

56

 

 

$

293

 

 

 

 

Core equity

 

33

 

 

 

114

 

 

 

 

Strategic

 

15

 

 

 

134

 

 

 

 

Precision

 

8

 

 

 

45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Institutional:

$

47

 

 

$

71

 

 

 

 

Active

 

16

 

 

 

169

 

 

 

 

Index

 

31

 

 

 

(98

)

 

 

 

 

 

 

 

 

 

 

 

 

Cash management net flows

$

(27

)

 

$

28

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory net flows

$

-

 

 

$

(13

)

 

 

 

 

 

 

 

 

 

 

 

 

Total net flows

$

86

 

 

$

454

 

 

(1)

Amounts represent last twelve months net flows from April 1, 2021 to March 31, 2022.

 

 

1

 

 

 

BUSINESS RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1 2022

 

 

 

 

 

 

 

 

 

Q1 2022

 

 

 

 

Base fees (1)

 

 

 

 

 

 

 

 

 

Base fees (1)

 

March 31, 2022

 

and securities

 

 

 

Q1 2022

 

March 31, 2022

 

and securities

 

AUM

 

lending revenue

 

 

(in millions), (unaudited)

Net flows

 

AUM

 

lending revenue

 

% of Total

 

% of Total

 

 

RESULTS BY CLIENT TYPE

Retail

$

10,164

 

$

989,123

 

$

1,224

 

 

10

%

 

32

%

 

ETFs

 

56,207

 

 

3,150,496

 

 

1,501

 

 

33

%

 

39

%

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

16,398

 

 

1,676,167

 

 

675

 

 

17

%

 

18

%

 

Index

 

30,975

 

 

3,019,763

 

 

263

 

 

32

%

 

7

%

 

Total institutional

 

47,373

 

 

4,695,930

 

 

938

 

 

49

%

 

25

%

 

Long-term

 

113,744

 

 

8,835,549

 

 

3,663

 

 

92

%

 

96

%

 

Cash management

 

(27,095

)

 

724,939

 

 

170

 

 

8

%

 

4

%

 

Advisory

 

(285

)

 

9,025

 

 

-

 

 

-

 

 

-

 

 

Total

$

86,364

 

$

9,569,513

 

$

3,833

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY INVESTMENT STYLE

Active

$

20,040

 

$

2,479,139

 

$

1,851

 

 

26

%

 

49

%

 

Index and ETFs

 

93,704

 

 

6,356,410

 

 

1,812

 

 

66

%

 

47

%

 

Long-term

 

113,744

 

 

8,835,549

 

 

3,663

 

 

92

%

 

96

%

 

Cash management

 

(27,095

)

 

724,939

 

 

170

 

 

8

%

 

4

%

 

Advisory

 

(285

)

 

9,025

 

 

-

 

 

-

 

 

-

 

 

Total

$

86,364

 

$

9,569,513

 

$

3,833

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY PRODUCT TYPE

Equity

$

76,024

 

$

5,119,044

 

$

1,961

 

 

53

%

 

52

%

 

Fixed income

 

7,522

 

 

2,645,871

 

 

941

 

 

28

%

 

25

%

 

Multi-asset

 

17,672

 

 

785,181

 

 

359

 

 

8

%

 

9

%

 

Alternatives

 

12,526

 

 

285,453

 

 

402

 

 

3

%

 

10

%

 

Long-term

 

113,744

 

 

8,835,549

 

 

3,663

 

 

92

%

 

96

%

 

Cash management

 

(27,095

)

 

724,939

 

 

170

 

 

8

%

 

4

%

 

Advisory

 

(285

)

 

9,025

 

 

-

 

 

-

 

 

-

 

 

Total

$

86,364

 

$

9,569,513

 

$

3,833

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Base fees include investment advisory and administration fees.

INVESTMENT PERFORMANCE AT March 31, 2022(1)

 

 

One-year period

Three-year period

Five-year period

Fixed income:

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

Taxable

53%

86%

90%

Tax-exempt

68%

60%

74%

Index AUM within or above applicable tolerance

95%

97%

95%

Equity:

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

Fundamental

40%

81%

83%

Systematic

58%

66%

87%

Index AUM within or above applicable tolerance

95%

98%

99%

 

(1)

Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 15 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, Gary S. Shedlin, will host a teleconference call for investors and analysts on Wednesday, April 13, 2022 at 8:30 a.m. (Eastern Time). Members of the public who are interested in participating in the teleconference should dial, from the United States, (800) 374-0176, or from outside the United States, (706) 679-8281, shortly before 8:30 a.m. and reference the BlackRock Conference Call (ID Number 4390466). A live, listen-only webcast will also be available via the investor relations section of www.blackrock.com.

Both the teleconference and webcast will be available for replay by 11:30 a.m. (Eastern Time) on Wednesday, April 13, 2022 and ending at midnight on Wednesday, April 27, 2022. To access the replay of the teleconference, callers from the United States should dial (855) 859-2056 and callers from outside the United States should dial (404) 537-3406 and enter the Conference ID Number 4390466. To access 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 | Twitter: @blackrock | LinkedIn: www.linkedin.com/company/blackrock.

2

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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

 

 

 

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2022

 

 

2021

 

 

Change

 

 

2021

 

 

Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

  securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administration fees

$

3,695

 

 

$

3,465

 

 

$

230

 

 

$

3,832

 

 

$

(137

)

Securities lending revenue

 

138

 

 

 

127

 

 

 

11

 

 

 

136

 

 

 

2

 

Total investment advisory, administration fees and

  securities lending revenue

 

3,833

 

 

 

3,592

 

 

 

241

 

 

 

3,968

 

 

 

(135

)

Investment advisory performance fees

 

98

 

 

 

129

 

 

 

(31

)

 

 

329

 

 

 

(231

)

Technology services revenue

 

341

 

 

 

306

 

 

 

35

 

 

 

339

 

 

 

2

 

Distribution fees

 

381

 

 

 

340

 

 

 

41

 

 

 

411

 

 

 

(30

)

Advisory and other revenue

 

46

 

 

 

31

 

 

 

15

 

 

 

59

 

 

 

(13

)

Total revenue

 

4,699

 

 

 

4,398

 

 

 

301

 

 

 

5,106

 

 

 

(407

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

1,498

 

 

 

1,409

 

 

 

89

 

 

 

1,559

 

 

 

(61

)

Distribution and servicing costs

 

574

 

 

 

505

 

 

 

69

 

 

 

587

 

 

 

(13

)

Direct fund expense

 

329

 

 

 

320

 

 

 

9

 

 

 

319

 

 

 

10

 

General and administration expense

 

496

 

 

 

585

 

 

 

(89

)

 

 

564

 

 

 

(68

)

Amortization of intangible assets

 

38

 

 

 

34

 

 

 

4

 

 

 

38

 

 

 

-

 

Total expense

 

2,935

 

 

 

2,853

 

 

 

82

 

 

 

3,067

 

 

 

(132

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,764

 

 

 

1,545

 

 

 

219

 

 

 

2,039

 

 

 

(275

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on investments

 

(102

)

 

 

82

 

 

 

(184

)

 

 

75

 

 

 

(177

)

Interest and dividend income

 

18

 

 

 

19

 

 

 

(1

)

 

 

46

 

 

 

(28

)

Interest expense

 

(54

)

 

 

(55

)

 

 

1

 

 

 

(50

)

 

 

(4

)

Total nonoperating income (expense)

 

(138

)

 

 

46

 

 

 

(184

)

 

 

71

 

 

 

(209

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

1,626

 

 

 

1,591

 

 

 

35

 

 

 

2,110

 

 

 

(484

)

Income tax expense

 

263

 

 

 

318

 

 

 

(55

)

 

 

478

 

 

 

(215

)

Net income

 

1,363

 

 

 

1,273

 

 

 

90

 

 

 

1,632

 

 

 

(269

)

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling

  interests

 

(73

)

 

 

74

 

 

 

(147

)

 

 

(11

)

 

 

(62

)

Net income attributable to BlackRock, Inc.

$

1,436

 

 

$

1,199

 

 

$

237

 

 

$

1,643

 

 

$

(207

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

151,732,845

 

 

 

152,567,453

 

 

 

(834,608

)

 

 

151,822,226

 

 

 

(89,381

)

Diluted

 

153,530,395

 

 

 

154,301,812

 

 

 

(771,417

)

 

 

154,564,198

 

 

 

(1,033,803

)

Earnings per share attributable to BlackRock, Inc.

   common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

9.46

 

 

$

7.86

 

 

$

1.60

 

 

$

10.82

 

 

$

(1.36

)

Diluted

$

9.35

 

 

$

7.77

 

 

$

1.58

 

 

$

10.63

 

 

$

(1.28

)

Cash dividends declared and paid per share

$

4.88

 

 

$

4.13

 

 

$

0.75

 

 

$

4.13

 

 

$

0.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM (end of period)

$

9,569,513

 

 

$

9,007,411

 

 

$

562,102

 

 

$

10,010,143

 

 

$

(440,630

)

Shares outstanding (end of period)

 

151,725,643

 

 

 

152,635,930

 

 

 

(910,287

)

 

 

151,684,491

 

 

 

41,152

 

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

37.5

%

 

 

35.1

%

 

 

240

  bps

 

 

39.9

%

 

 

(240

) bps

Effective tax rate

 

15.5

%

 

 

20.9

%

 

 

(540

) bps

 

 

22.6

%

 

 

(710

) bps

As adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (1)

$

1,822

 

 

$

1,599

 

 

$

223

 

 

$

2,107

 

 

$

(285

)

Operating margin (1)

 

44.2

%

 

 

45.8

%

 

 

(160

) bps

 

 

46.6

%

 

 

(240

) bps

Nonoperating income (expense), less net income

     (loss) attributable to noncontrolling interests

$

(65

)

 

$

(28

)

 

$

(37

)

 

$

82

 

 

$

(147

)

Net income attributable to BlackRock, Inc. (2)

$

1,462

 

 

$

1,240

 

 

$

222

 

 

$

1,650

 

 

$

(188

)

Diluted earnings attributable to BlackRock, Inc.

     common stockholders per share (2)

$

9.52

 

 

$

8.04

 

 

$

1.48

 

 

$

10.68

 

 

$

(1.16

)

Effective tax rate

 

16.8

%

 

 

20.9

%

 

 

(410

) bps

 

 

24.6

%

 

 

(780

) bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See pages 9 through 13 for the reconciliation to GAAP and notes (1) and (2) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items. Beginning in the first quarter of 2022, BlackRock updated the definitions of operating income, as adjusted, operating margin, as adjusted, and net income attributable to BlackRock, Inc., as adjusted.  Such measures have been recast for 2021 to reflect the inclusion of such new adjustments.

 

3

 

 

 

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Current Quarter Component Changes by Client Type and Product Type

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

471,937

 

 

$

6,202

 

 

$

(29,379

)

 

$

(2,717

)

 

$

446,043

 

 

$

448,767

 

Fixed income

 

365,306

 

 

 

(1,896

)

 

 

(18,752

)

 

 

(946

)

 

 

343,712

 

 

 

353,889

 

Multi-asset

 

155,461

 

 

 

2,978

 

 

 

(8,685

)

 

 

(274

)

 

 

149,480

 

 

 

151,053

 

Alternatives

 

47,349

 

 

 

2,880

 

 

 

(196

)

 

 

(145

)

 

 

49,888

 

 

 

48,585

 

Retail subtotal

 

1,040,053

 

 

 

10,164

 

 

 

(57,012

)

 

 

(4,082

)

 

 

989,123

 

 

 

1,002,294

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,447,248

 

 

 

41,170

 

 

 

(135,834

)

 

 

(2,163

)

 

 

2,350,421

 

 

 

2,356,531

 

Fixed income

 

745,373

 

 

 

8,150

 

 

 

(39,128

)

 

 

(1,628

)

 

 

712,767

 

 

 

723,773

 

Multi-asset

 

9,119

 

 

 

69

 

 

 

(491

)

 

 

19

 

 

 

8,716

 

 

 

8,747

 

Alternatives

 

65,614

 

 

 

6,818

 

 

 

6,173

 

 

 

(13

)

 

 

78,592

 

 

 

70,614

 

ETFs subtotal

 

3,267,354

 

 

 

56,207

 

 

 

(169,280

)

 

 

(3,785

)

 

 

3,150,496

 

 

 

3,159,665

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

199,980

 

 

 

1,831

 

 

 

(11,743

)

 

 

(1,246

)

 

 

188,822

 

 

 

191,121

 

Fixed income

 

767,402

 

 

 

(2,893

)

 

 

(43,230

)

 

 

(3,054

)

 

 

718,225

 

 

 

743,349

 

Multi-asset

 

642,951

 

 

 

14,131

 

 

 

(35,697

)

 

 

(3,542

)

 

 

617,843

 

 

 

625,565

 

Alternatives

 

146,384

 

 

 

3,329

 

 

 

2,091

 

 

 

(527

)

 

 

151,277

 

 

 

149,754

 

Active subtotal

 

1,756,717

 

 

 

16,398

 

 

 

(88,579

)

 

 

(8,369

)

 

 

1,676,167

 

 

 

1,709,789

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,223,195

 

 

 

26,821

 

 

 

(101,545

)

 

 

(14,713

)

 

 

2,133,758

 

 

 

2,127,884

 

Fixed income

 

943,960

 

 

 

4,161

 

 

 

(57,212

)

 

 

(19,742

)

 

 

871,167

 

 

 

911,671

 

Multi-asset

 

8,963

 

 

 

494

 

 

 

(198

)

 

 

(117

)

 

 

9,142

 

 

 

8,726

 

Alternatives

 

5,534

 

 

 

(501

)

 

 

756

 

 

 

(93

)

 

 

5,696

 

 

 

5,517

 

Index subtotal

 

3,181,652

 

 

 

30,975

 

 

 

(158,199

)

 

 

(34,665

)

 

 

3,019,763

 

 

 

3,053,798

 

Institutional subtotal

 

4,938,369

 

 

 

47,373

 

 

 

(246,778

)

 

 

(43,034

)

 

 

4,695,930

 

 

 

4,763,587

 

Long-term

 

9,245,776

 

 

 

113,744

 

 

 

(473,070

)

 

 

(50,901

)

 

 

8,835,549

 

 

 

8,925,546

 

Cash management

 

755,057

 

 

 

(27,095

)

 

 

(628

)

 

 

(2,395

)

 

 

724,939

 

 

 

734,531

 

Advisory (3)

 

9,310

 

 

 

(285

)

 

 

-

 

 

 

-

 

 

 

9,025

 

 

 

9,125

 

Total

$

10,010,143

 

 

$

86,364

 

 

$

(473,698

)

 

$

(53,296

)

 

$

9,569,513

 

 

$

9,669,202

 

 

Current Quarter Component Changes by Investment Style and Product Type (Long-Term)

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

507,103

 

 

$

1,999

 

 

$

(33,529

)

 

$

(2,724

)

 

$

472,849

 

 

$

479,629

 

Fixed income

 

1,107,085

 

 

 

(5,277

)

 

 

(60,478

)

 

 

(3,517

)

 

 

1,037,813

 

 

 

1,072,960

 

Multi-asset

 

798,404

 

 

 

17,109

 

 

 

(44,381

)

 

 

(3,817

)

 

 

767,315

 

 

 

776,610

 

Alternatives

 

193,733

 

 

 

6,209

 

 

 

1,892

 

 

 

(672

)

 

 

201,162

 

 

 

198,338

 

Active subtotal

 

2,606,325

 

 

 

20,040

 

 

 

(136,496

)

 

 

(10,730

)

 

 

2,479,139

 

 

 

2,527,537

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,447,248

 

 

 

41,170

 

 

 

(135,834

)

 

 

(2,163

)

 

 

2,350,421

 

 

 

2,356,531

 

Fixed income

 

745,373

 

 

 

8,150

 

 

 

(39,128

)

 

 

(1,628

)

 

 

712,767

 

 

 

723,773

 

Multi-asset

 

9,119

 

 

 

69

 

 

 

(491

)

 

 

19

 

 

 

8,716

 

 

 

8,747

 

Alternatives

 

65,614

 

 

 

6,818

 

 

 

6,173

 

 

 

(13

)

 

 

78,592

 

 

 

70,614

 

ETFs subtotal

 

3,267,354

 

 

 

56,207

 

 

 

(169,280

)

 

 

(3,785

)

 

 

3,150,496

 

 

 

3,159,665

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,388,009

 

 

 

32,855

 

 

 

(109,138

)

 

 

(15,952

)

 

 

2,295,774

 

 

 

2,288,143

 

Fixed income

 

969,583

 

 

 

4,649

 

 

 

(58,716

)

 

 

(20,225

)

 

 

895,291

 

 

 

935,949

 

Multi-asset

 

8,971

 

 

 

494

 

 

 

(199

)

 

 

(116

)

 

 

9,150

 

 

 

8,734

 

Alternatives

 

5,534

 

 

 

(501

)

 

 

759

 

 

 

(93

)

 

 

5,699

 

 

 

5,518

 

Non-ETF Index subtotal

 

3,372,097

 

 

 

37,497

 

 

 

(167,294

)

 

 

(36,386

)

 

 

3,205,914

 

 

 

3,238,344

 

Index and ETFs subtotal

 

6,639,451

 

 

 

93,704

 

 

 

(336,574

)

 

 

(40,171

)

 

 

6,356,410

 

 

 

6,398,009

 

Long-term

$

9,245,776

 

 

$

113,744

 

 

$

(473,070

)

 

$

(50,901

)

 

$

8,835,549

 

 

$

8,925,546

 

 

Current Quarter Component Changes by Product Type (Long-Term)

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Equity

$

5,342,360

 

 

$

76,024

 

 

$

(278,501

)

 

$

(20,839

)

 

$

5,119,044

 

 

$

5,124,303

 

Fixed income

 

2,822,041

 

 

 

7,522

 

 

 

(158,322

)

 

 

(25,370

)

 

 

2,645,871

 

 

 

2,732,682

 

Multi-asset

 

816,494

 

 

 

17,672

 

 

 

(45,071

)

 

 

(3,914

)

 

 

785,181

 

 

 

794,091

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

102,579

 

 

 

3,873

 

 

 

3,208

 

 

 

(519

)

 

 

109,141

 

 

 

106,925

 

Liquid alternatives

 

87,348

 

 

 

1,908

 

 

 

(1,859

)

 

 

(71

)

 

 

87,326

 

 

 

87,196

 

Currency and commodities(4)

 

74,954

 

 

 

6,745

 

 

 

7,475

 

 

 

(188

)

 

 

88,986

 

 

 

80,349

 

Alternatives subtotal

 

264,881

 

 

 

12,526

 

 

 

8,824

 

 

 

(778

)

 

 

285,453

 

 

 

274,470

 

Long-term

$

9,245,776

 

 

$

113,744

 

 

$

(473,070

)

 

$

(50,901

)

 

$

8,835,549

 

 

$

8,925,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

(2)

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

(3)

Advisory AUM represents mandates linked to purchases and disposition of assets and portfolios on behalf of official institutions and long-term portfolio liquidation assignments.

(4)

Amounts include commodity ETFs.

4

 

 

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Year-over-Year Component Changes by Client Type and Product Type

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

407,715

 

 

$

33,928

 

 

$

10,287

 

 

$

(5,887

)

 

$

446,043

 

 

$

446,567

 

Fixed income

 

349,640

 

 

 

18,177

 

 

 

(21,686

)

 

 

(2,419

)

 

 

343,712

 

 

 

357,330

 

Multi-asset

 

139,115

 

 

 

11,562

 

 

 

(568

)

 

 

(629

)

 

 

149,480

 

 

 

149,461

 

Alternatives

 

37,707

 

 

 

12,078

 

 

 

409

 

 

 

(306

)

 

 

49,888

 

 

 

44,551

 

Retail subtotal

 

934,177

 

 

 

75,745

 

 

 

(11,558

)

 

 

(9,241

)

 

 

989,123

 

 

 

997,909

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,077,818

 

 

 

197,603

 

 

 

83,560

 

 

 

(8,560

)

 

 

2,350,421

 

 

 

2,288,811

 

Fixed income

 

667,829

 

 

 

85,404

 

 

 

(36,053

)

 

 

(4,413

)

 

 

712,767

 

 

 

710,392

 

Multi-asset

 

6,958

 

 

 

1,769

 

 

 

(13

)

 

 

2

 

 

 

8,716

 

 

 

8,120

 

Alternatives

 

60,919

 

 

 

8,477

 

 

 

9,228

 

 

 

(32

)

 

 

78,592

 

 

 

67,029

 

ETFs subtotal

 

2,813,524

 

 

 

293,253

 

 

 

56,722

 

 

 

(13,003

)

 

 

3,150,496

 

 

 

3,074,352

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

176,081

 

 

 

7,468

 

 

 

8,021

 

 

 

(2,748

)

 

 

188,822

 

 

 

186,121

 

Fixed income

 

692,474

 

 

 

59,043

 

 

 

(26,264

)

 

 

(7,028

)

 

 

718,225

 

 

 

726,296

 

Multi-asset

 

522,220

 

 

 

88,628

 

 

 

17,578

 

 

 

(10,583

)

 

 

617,843

 

 

 

598,147

 

Alternatives

 

133,655

 

 

 

13,793

 

 

 

5,162

 

 

 

(1,333

)

 

 

151,277

 

 

 

142,739

 

Active subtotal

 

1,524,430

 

 

 

168,932

 

 

 

4,497

 

 

 

(21,692

)

 

 

1,676,167

 

 

 

1,653,303

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,084,167

 

 

 

(111,155

)

 

 

191,838

 

 

 

(31,092

)

 

 

2,133,758

 

 

 

2,143,929

 

Fixed income

 

910,517

 

 

 

14,396

 

 

 

(16,287

)

 

 

(37,459

)

 

 

871,167

 

 

 

933,864

 

Multi-asset

 

9,079

 

 

 

(208

)

 

 

511

 

 

 

(240

)

 

 

9,142

 

 

 

9,471

 

Alternatives

 

5,387

 

 

 

(990

)

 

 

1,45 6

 

 

 

(157

)

 

 

5,696

 

 

 

5,625

 

Index subtotal

 

3,009,150

 

 

 

(97,957

)

 

 

177,518

 

 

 

(68,948

)

 

 

3,019,763

 

 

 

3,092,889

 

Institutional subtotal

 

4,533,580

 

 

 

70,975

 

 

 

182,015

 

 

 

(90,640

)

 

 

4,695,930

 

 

 

4,746,192

 

Long-term

 

8,281,281

 

 

 

439,973

 

 

 

227,179

 

 

 

(112,884

)

 

 

8,835,549

 

 

 

8,818,453

 

Cash management

 

703,916

 

 

 

27,759

 

 

 

(1,640

)

 

 

(5,096

)

 

 

724,939

 

 

 

728,633

 

Advisory (3)

 

22,214

 

 

 

(13,356

)

 

 

160

 

 

 

7

 

 

 

9,025

 

 

 

13,606

 

Total

$

9,007,411

 

 

$

454,376

 

 

$

225,699

 

 

$

(117,973

)

 

$

9,569,513

 

 

$

9,560,692

 

 

Year-over-Year Component Changes by Investment Style and Product Type (Long-Term)

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

443,780

 

 

$

29,750

 

 

$

5,568

 

 

$

(6,249

)

 

$

472,849

 

 

$

477,970

 

Fixed income

 

1,021,168

 

 

 

72,016

 

 

 

(46,740

)

 

 

(8,631

)

 

 

1,037,813

 

 

 

1,060,789

 

Multi-asset

 

661,333

 

 

 

100,186

 

 

 

17,008

 

 

 

(11,212

)

 

 

767,315

 

 

 

747,602

 

Alternatives

 

171,361

 

 

 

25,870

 

 

 

5,570

 

 

 

(1,639

)

 

 

201,162

 

 

 

187,289

 

Active subtotal

 

2,297,642

 

 

 

227,822

 

 

 

(18,594

)

 

 

(27,731

)

 

 

2,479,139

 

 

 

2,473,650

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,077,818

 

 

 

197,603

 

 

 

83,560

 

 

 

(8,560

)

 

 

2,350,421

 

 

 

2,288,811

 

Fixed income

 

667,829

 

 

 

85,404

 

 

 

(36,053

)

 

 

(4,413

)

 

 

712,767

 

 

 

710,392

 

Multi-asset

 

6,958

 

 

 

1,769

 

 

 

(13

)

 

 

2

 

 

 

8,716

 

 

 

8,120

 

Alternatives

 

60,919

 

 

 

8,477

 

 

 

9,228

 

 

 

(32

)

 

 

78,592

 

 

 

67,029

 

ETFs subtotal

 

2,813,524

 

 

 

293,253

 

 

 

56,722

 

 

 

(13,003

)

 

 

3,150,496

 

 

 

3,074,352

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,224,183

 

 

 

(99,509

)

 

 

204,578

 

 

 

(33,478

)

 

 

2,295,774

 

 

 

2,298,647

 

Fixed income

 

931,463

 

 

 

19,600

 

 

 

(17,497

)

 

 

(38,275

)

 

 

895,291

 

 

 

956,701

 

Multi-asset

 

9,081

 

 

 

(204

)

 

 

513

 

 

 

(240

)

 

 

9,150

 

 

 

9,477

 

Alternatives

 

5,388

 

 

 

(989

)

 

 

1,457

 

 

 

(157

)

 

 

5,699

 

 

 

5,626

 

Non-ETF Index subtotal

 

3,170,115

 

 

 

(81,102

)

 

 

189,051

 

 

 

(72,150

)

 

 

3,205,914

 

 

 

3,270,451

 

Index and ETFs subtotal

 

5,983,639

 

 

 

212,151

 

 

 

245,773

 

 

 

(85,153

)

 

 

6,356,410

 

 

 

6,344,803

 

Long-term

$

8,281,281

 

 

$

439,973

 

 

$

227,179

 

 

$

(112,884

)

 

$

8,835,549

 

 

$

8,818,453

 

 

Year-over-Year Component Changes by Product Type (Long-Term)

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Equity

$

4,745,781

 

 

$

127,844

 

 

$

293,706

 

 

$

(48,287

)

 

$

5,119,044

 

 

$

5,065,428

 

Fixed income

 

2,620,460

 

 

 

177,020

 

 

 

(100,290

)

 

 

(51,319

)

 

 

2,645,871

 

 

 

2,727,882

 

Multi-asset

 

677,372

 

 

 

101,751

 

 

 

17,508

 

 

 

(11,450

)

 

 

785,181

 

 

 

765,199

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

92,207

 

 

 

13,769

 

 

 

4,356

 

 

 

(1,191

)

 

 

109,141

 

 

 

99,781

 

Liquid alternatives

 

76,266

 

 

 

10,880

 

 

 

480

 

 

 

(300

)

 

 

87,326

 

 

 

83,773

 

Currency and commodities(4)

 

69,195

 

 

 

8,709

 

 

 

11,419

 

 

 

(337

)

 

 

88,986

 

 

 

76,390

 

Alternatives subtotal

 

237,668

 

 

 

33,358

 

 

 

16,255

 

 

 

(1,828

)

 

 

285,453

 

 

 

259,944

 

Long-term

$

8,281,281

 

 

$

439,973

 

 

$

227,179

 

 

$

(112,884

)

 

$

8,835,549

 

 

$

8,818,453

 

 

(1)

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

(2)

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

(3)

Advisory AUM represents mandates linked to purchases and disposition of assets and portfolios on behalf of official institutions and long-term portfolio liquidation assignments.

(4)

Amounts include commodity ETFs.

5

 

 

SUMMARY OF REVENUE

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

(in millions), (unaudited)

2022

 

 

2021

 

 

Change

 

 

2021

 

 

Change

 

Investment advisory, administration fees and

   securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

$

616

 

 

$

576

 

 

$

40

 

 

$

680

 

 

$

(64

)

ETFs

 

1,158

 

 

 

1,068

 

 

 

90

 

 

 

1,222

 

 

 

(64

)

Non-ETF Index

 

187

 

 

 

176

 

 

 

11

 

 

 

190

 

 

 

(3

)

Equity subtotal

 

1,961

 

 

 

1,820

 

 

 

141

 

 

 

2,092

 

 

 

(131

)

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

534

 

 

 

525

 

 

 

9

 

 

 

560

 

 

 

(26

)

ETFs

 

289

 

 

 

295

 

 

 

(6

)

 

 

308

 

 

 

(19

)

Non-ETF Index

 

118

 

 

 

113

 

 

 

5

 

 

 

121

 

 

 

(3

)

Fixed income subtotal

 

941

 

 

 

933

 

 

 

8

 

 

 

989

 

 

 

(48

)

Multi-asset

 

359

 

 

 

328

 

 

 

31

 

 

 

373

 

 

 

(14

)

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

179

 

 

 

168

 

 

 

11

 

 

 

167

 

 

 

12

 

Liquid alternatives

 

167

 

 

 

147

 

 

 

20

 

 

 

169

 

 

 

(2

)

Currency and commodities

 

56

 

 

 

53

 

 

 

3

 

 

 

53

 

 

 

3

 

Alternatives subtotal

 

402

 

 

 

368

 

 

 

34

 

 

 

389

 

 

 

13

 

Long-term

 

3,663

 

 

 

3,449

 

 

 

214

 

 

 

3,843

 

 

 

(180

)

Cash management

 

170

 

 

 

143

 

 

 

27

 

 

 

125

 

 

 

45

 

Total investment advisory, administration fees

  and securities lending revenue

 

3,833

 

 

 

3,592

 

 

 

241

 

 

 

3,968

 

 

 

(135

)

Investment advisory performance fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

12

 

 

 

26

 

 

 

(14

)

 

 

83

 

 

 

(71

)

Fixed income

 

9

 

 

 

14

 

 

 

(5

)

 

 

17

 

 

 

(8

)

Multi-asset

 

5

 

 

 

8

 

 

 

(3

)

 

 

15

 

 

 

(10

)

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

37

 

 

 

7

 

 

 

30

 

 

 

61

 

 

 

(24

)

Liquid alternatives

 

35

 

 

 

74

 

 

 

(39

)

 

 

153

 

 

 

(118

)

Alternatives subtotal

 

72

 

 

 

81

 

 

 

(9

)

 

 

214

 

 

 

(142

)

Total performance fees

 

98

 

 

 

129

 

 

 

(31

)

 

 

329

 

 

 

(231

)

Technology services revenue

 

341

 

 

 

306

 

 

 

35

 

 

 

339

 

 

 

2

 

Distribution fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retrocessions

 

279

 

 

 

238

 

 

 

41

 

 

 

302

 

 

 

(23

)

12b-1 fees (US mutual fund distribution fees)

 

88

 

 

 

85

 

 

 

3

 

 

 

95

 

 

 

(7

)

Other

 

14

 

 

 

17

 

 

 

(3

)

 

 

14

 

 

 

-

 

Total distribution fees

 

381

 

 

 

340

 

 

 

41

 

 

 

411

 

 

 

(30

)

Advisory and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory

 

16

 

 

 

15

 

 

 

1

 

 

 

31

 

 

 

(15

)

Other

 

30

 

 

 

16

 

 

 

14

 

 

 

28

 

 

 

2

 

Total advisory and other revenue

 

46

 

 

 

31

 

 

 

15

 

 

 

59

 

 

 

(13

)

Total revenue

$

4,699

 

 

$

4,398

 

 

$

301

 

 

$

5,106

 

 

$

(407

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highlights

 

•

Investment advisory, administration fees and securities lending revenue increased $241 million from the first quarter of 2021 primarily driven by organic base fee growth. Securities lending revenue of $138 million increased from $127 million in the first quarter of 2021, primarily reflecting higher spreads and higher average balances of securities on loan.

Investment advisory, administration fees and securities lending revenue decreased $135 million from the fourth quarter of 2021, primarily driven by the negative impact of market beta and foreign exchange movements on average AUM, the effect of two less days in the quarter, partially offset by organic base fee growth and lower yield-related fee waivers on certain money market funds. Securities lending revenue of $138 million increased from $136 million in the fourth quarter of 2021.

•

Performance fees decreased $31 million from the first quarter of 2021, primarily reflecting lower revenue from liquid alternative and long-only products, partially offset by higher revenue from illiquid alternative products.

Performance fees decreased $231 million from the fourth quarter of 2021, primarily reflecting a seasonally higher number of funds with a performance measurement period that ended in the fourth quarter of 2021.

•

Technology services revenue increased $35 million from the first quarter of 2021, primarily reflecting higher revenue from Aladdin®. Technology services annual contract value (“ACV”)(1) increased 13% from the first quarter of 2021.

 

 

 

(1)

See note (3) to the condensed consolidated statements of income and supplemental information on page 11 for more information on ACV.

 

6

 

 

 

SUMMARY OF OPERATING EXPENSE

 

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

(in millions), (unaudited)

2022

 

 

2021

 

 

Change

 

 

2021

 

 

Change

 

Operating expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

$

1,498

 

 

$

1,409

 

 

$

89

 

 

$

1,559

 

 

$

(61

)

Distribution and servicing costs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retrocessions

 

279

 

 

 

238

 

 

 

41

 

 

 

302

 

 

 

(23

)

12b-1 costs

 

86

 

 

 

83

 

 

 

3

 

 

 

93

 

 

 

(7

)

Other

 

209

 

 

 

184

 

 

 

25

 

 

 

192

 

 

 

17

 

Total distribution and servicing costs

 

574

 

 

 

505

 

 

 

69

 

 

 

587

 

 

 

(13

)

Direct fund expense

 

329

 

 

 

320

 

 

 

9

 

 

 

319

 

 

 

10

 

General and administration expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing and promotional

 

60

 

 

 

35

 

 

 

25

 

 

 

96

 

 

 

(36

)

Occupancy and office related

 

99

 

 

 

79

 

 

 

20

 

 

 

114

 

 

 

(15

)

Portfolio services

 

69

 

 

 

65

 

 

 

4

 

 

 

68

 

 

 

1

 

Sub-advisory

 

22

 

 

 

22

 

 

 

-

 

 

 

27

 

 

 

(5

)

Technology

 

145

 

 

 

104

 

 

 

41

 

 

 

135

 

 

 

10

 

Professional services

 

40

 

 

 

39

 

 

 

1

 

 

 

57

 

 

 

(17

)

Communications

 

11

 

 

 

11

 

 

 

-

 

 

 

11

 

 

 

-

 

Foreign exchange remeasurement

 

(3

)

 

 

4

 

 

 

(7

)

 

 

1

 

 

 

(4

)

Contingent consideration fair value adjustments

 

1

 

 

 

3

 

 

 

(2

)

 

 

1

 

 

 

-

 

Product launch costs

 

-

 

 

 

178

 

 

 

(178

)

 

 

-

 

 

 

-

 

Other general and administration

 

52

 

 

 

45

 

 

 

7

 

 

 

54

 

 

 

(2

)

Total general and administration expense

 

496

 

 

 

585

 

 

 

(89

)

 

 

564

 

 

 

(68

)

Amortization of intangible assets

 

38

 

 

 

34

 

 

 

4

 

 

 

38

 

 

 

-

 

Total operating expense

$

2,935

 

 

$

2,853

 

 

$

82

 

 

$

3,067

 

 

$

(132

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highlights

•

Employee compensation and benefits expense increased $89 million from the first quarter of 2021, reflecting higher base compensation, driven primarily by higher base salary increases, partially offset by lower incentive compensation, driven in part by the lower mark-to-market impact of certain deferred compensation programs.

Employee compensation and benefits expense decreased $61 million from the fourth quarter of 2021, primarily due to lower incentive compensation, driven primarily by lower performance fees and the lower mark-to-market impact of certain deferred compensation programs, partially offset by higher base compensation and higher seasonal payroll taxes.

•

General and administration expense decreased $89 million from the first quarter of 2021, primarily driven by $178 million of product launch costs incurred in the first quarter of 2021, partially offset by higher technology and marketing and promotional expense. The increase also reflected higher occupancy and office related expense, including $12 million of noncash occupancy expense related to the lease of office space for the Company’s future headquarters located at 50 Hudson Yards in New York (“Lease cost – Hudson Yards”), which it expects to begin to occupy in late 2022 (and begin lease payments in May 2023). Lease cost – Hudson Yards has been excluded from our “as adjusted” financial results. See pages 9 through 13 for the reconciliation to GAAP and notes (1) and (2) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items.

General and administration expense decreased $68 million from the fourth quarter of 2021, primarily reflecting seasonally lower marketing and promotional expense and lower professional services and occupancy and office related expense, partially offset by higher technology expense.

7

 

 

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

 

 

 

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

(in millions), (unaudited)

 

2022

 

 

2021

 

 

Change

 

 

2021

 

 

Change

 

Nonoperating income (expense), GAAP basis

 

$

(138

)

 

$

46

 

 

$

(184

)

 

$

71

 

 

$

(209

)

Less: Net income (loss) attributable to

     noncontrolling interests ("NCI")

 

 

(73

)

 

 

74

 

 

 

(147

)

 

 

(11

)

 

 

(62

)

Nonoperating income (expense)(1)

 

$

(65

)

 

$

(28

)

 

$

(37

)

 

$

82

 

 

$

(147

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

(in millions), (unaudited)

 

2022

 

 

2021

 

 

Change

 

 

2021

 

 

Change

 

Net gain (loss) on investments(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private equity

 

$

10

 

 

$

22

 

 

$

(12

)

 

$

66

 

 

$

(56

)

Real assets

 

 

13

 

 

 

3

 

 

 

10

 

 

 

10

 

 

 

3

 

Other alternatives(2)

 

 

4

 

 

 

13

 

 

 

(9

)

 

 

4

 

 

 

-

 

Other investments(3)

 

 

(75

)

 

 

(3

)

 

 

(72

)

 

 

(15

)

 

 

(60

)

Subtotal

 

 

(48

)

 

 

35

 

 

 

(83

)

 

 

65

 

 

 

(113

)

Other gains (losses)

 

 

19

 

 

 

(27

)

 

 

46

 

 

 

21

 

 

 

(2

)

Total net gain (loss) on investments(1)

 

 

(29

)

 

 

8

 

 

 

(37

)

 

 

86

 

 

 

(115

)

Interest and dividend income

 

 

18

 

 

 

19

 

 

 

(1

)

 

 

46

 

 

 

(28

)

Interest expense

 

 

(54

)

 

 

(55

)

 

 

1

 

 

 

(50

)

 

 

(4

)

Net interest expense

 

 

(36

)

 

 

(36

)

 

 

-

 

 

 

(4

)

 

 

(32

)

Nonoperating income (expense)(1)

 

$

(65

)

 

$

(28

)

 

$

(37

)

 

$

82

 

 

$

(147

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Net of net income (loss) attributable to NCI. Management believes nonoperating income (expense), as adjusted, is an effective measure for reviewing BlackRock’s nonoperating results, which ultimately impacts BlackRock’s book value. For more information on other as adjusted items see notes (1) and (2) to the condensed consolidated statements of income and supplemental information on pages 9 through 13.

(2)

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

(3)

Amounts primarily include net gains (losses) related to unhedged equity, fixed income and multi-asset investments.

 

INCOME TAX EXPENSE

 

 

Three Months

 

 

 

 

 

Three Months

 

 

 

 

 

 

Ended

 

 

 

 

 

Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

December 31,

 

 

 

 

 

(in millions), (unaudited)

2022

 

 

2021

 

 

Change

 

2021

 

 

Change

 

Income tax expense

$

263

 

 

$

318

 

 

$

(55

)

 

$

478

 

 

$

(215

)

Effective tax rate

 

15.5

%

 

 

20.9

%

 

 

(540

) bps

 

 

22.6

%

 

 

(710

) bps

 

Highlights

•

First quarter 2022 income tax expense included $133 million of discrete tax benefits related to stock-based compensation awards that vested in the first quarter and the resolution of certain outstanding tax matters.  First quarter 2021 income tax expense included $39 million of discrete tax benefits related to stock-based compensation awards.

In addition, first quarter 2022 and fourth quarter 2021 income tax expense included $18 million and $45 million, respectively, of net noncash tax benefits related to the revaluation of certain deferred income tax liabilities.


8

 

 

 

 

RECONCILIATION OF US GAAP OPERATING INCOME AND OPERATING MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS ADJUSTED

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

(in millions), (unaudited)

 

2022

 

 

2021

 

 

2021

 

Operating income, GAAP basis

 

$

1,764

 

 

$

1,545

 

 

$

2,039

 

Non-GAAP expense adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

38

 

 

 

34

 

 

 

38

 

Acquisition-related compensation costs

 

 

7

 

 

 

17

 

 

 

12

 

Contingent consideration fair value adjustments

 

 

1

 

 

 

3

 

 

 

1

 

Lease cost - Hudson Yards

 

 

12

 

 

 

-

 

 

 

17

 

Operating income, as adjusted (1)

 

 

1,822

 

 

 

1,599

 

 

 

2,107

 

Product launch costs and commissions

 

 

-

 

 

 

185

 

 

 

-

 

Operating income used for operating margin measurement

 

$

1,822

 

 

$

1,784

 

 

$

2,107

 

Revenue, GAAP basis

 

$

4,699

 

 

$

4,398

 

 

$

5,106

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Distribution fees

 

 

(381

)

 

 

(340

)

 

 

(411

)

Investment advisory fees

 

 

(193

)

 

 

(165

)

 

 

(176

)

Revenue used for operating margin measurement

 

$

4,125

 

 

$

3,893

 

 

$

4,519

 

Operating margin, GAAP basis

 

 

37.5

%

 

 

35.1

%

 

 

39.9

%

Operating margin, as adjusted (1)

 

 

44.2

%

 

 

45.8

%

 

 

46.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

See note (1) to the condensed consolidated statements of income and supplemental information on page 10 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

 

 

 

March 31,

 

 

December 31,

 

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

 

2022

 

 

2021

 

 

2021

 

Net income attributable to BlackRock, Inc., GAAP basis

 

$

1,436

 

 

$

1,199

 

 

$

1,643

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets, net of tax

 

 

29

 

 

 

26

 

 

 

29

 

Acquisition-related compensation costs, net of tax

 

 

5

 

 

 

13

 

 

 

9

 

Contingent consideration fair value adjustments, net of tax

 

 

1

 

 

 

2

 

 

 

1

 

Lease cost - Hudson Yards, net of tax

 

 

9

 

 

 

-

 

 

 

13

 

Income tax matters

 

 

(18

)

 

 

-

 

 

 

(45

)

Net income attributable to BlackRock, Inc., as adjusted (2)

 

$

1,462

 

 

$

1,240

 

 

$

1,650

 

Diluted weighted-average common shares outstanding

 

 

153.5

 

 

 

154.3

 

 

 

154.6

 

Diluted earnings per common share, GAAP basis

 

$

9.35

 

 

$

7.77

 

 

$

10.63

 

Diluted earnings per common share, as adjusted (2)

 

$

9.52

 

 

$

8.04

 

 

$

10.68

 

 

See note (2) to the condensed consolidated statements of income and supplemental information on page 11 for more information on as adjusted items.

 


9

 

 

 

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. Management reviews non-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 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 measures may not be comparable to other similarly titled measures of other companies.

Management uses both GAAP and non-GAAP financial measures in evaluating BlackRock’s financial performance.  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.

Beginning in the first quarter of 2022, the Company updated its definition of operating income, as adjusted, operating margin, as adjusted, and net income attributable to BlackRock, Inc., as adjusted, to include adjustments related to amortization of intangible assets, other acquisition-related costs, including compensation costs for non-recurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions. Such measures have been recast for 2021 and 2020 to reflect the inclusion of such new adjustments. See pages 12 and 13 for more information.

Computations 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 non-GAAP expense adjustments. Beginning in the first quarter of 2022, the Company updated its definition of operating income, as adjusted, to include adjustments related to amortization of intangible assets, other acquisition-related costs, including compensation costs for non-recurring 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. In addition, as previously reported in 2021, the Company recorded expense related to the lease of office space for its future headquarters located at 50 Hudson Yards in New York (“Lease cost – Hudson Yards”) from August 2021.  While the Company expects to begin to occupy the new office space in late 2022 (and begin cash lease payments in May 2023), the Company was required to record lease expense when it obtained access to the building to begin its tenant improvements.  As a result, the Company is recognizing lease expense for both its current and future headquarters until its current headquarters lease expires in April 2023.  Management believes removing Lease cost – Hudson Yards when calculating operating income, as adjusted, is useful to assess the Company’s financial performance and enhances comparability among periods presented. In 2020, the Charitable Contribution expense of $589 million has been excluded from operating income, as adjusted, due to its nonrecurring nature.

•

Operating income used for measuring operating margin, as adjusted, is equal to operating income, as adjusted, excluding the impact of product launch costs (e.g. closed-end fund launch costs) and related commissions. Management believes the exclusion of such costs and related commissions is useful because these costs can fluctuate considerably and revenue associated with the expenditure of these costs will not fully impact BlackRock’s results until future periods.

•

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.

10

 

 

(2) 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 significant nonrecurring items, charges that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.

See note (1) above regarding operating income, as adjusted, and operating margin, as adjusted, for information on the updated presentation of non-GAAP expense adjustments related to amortization of intangible assets, other acquisition-related costs, including compensation costs for non-recurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions, as well as previously reported Lease cost – Hudson Yards and Charitable Contribution.

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

(3) 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.


 

11

 

 

 

RECAST OF 2021 AS ADJUSTED OPERATING INCOME, OPERATING MARGIN, NET INCOME ATTRIBUTABLE TO BLACKROCK, INC. AND EARNINGS PER SHARE

 

Reconciliation of 2021 U.S. GAAP operating income and operating margin to operating income and operating margin, as adjusted

 

  Year Ended December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

March 31

 

 

June 30

 

 

September 30

 

 

December 31

 

 

December 31

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

(in millions), (unaudited)

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

Operating income, GAAP basis

$

1,545

 

 

$

1,545

 

 

$

1,931

 

 

$

1,931

 

 

$

1,935

 

 

$

1,935

 

 

$

2,039

 

 

$

2,039

 

 

$

7,450

 

 

$

7,450

 

Non-GAAP expense adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

34

 

 

 

-

 

 

37

 

 

 

-

 

 

38

 

 

 

-

 

 

38

 

 

 

-

 

 

 

147

 

 

 

-

 

Acquisition-related compensation costs

17

 

 

 

-

 

 

47

 

 

 

-

 

 

12

 

 

 

-

 

 

12

 

 

 

-

 

 

 

88

 

 

 

-

 

Contingent consideration fair value adjustments

3

 

 

 

-

 

 

1

 

 

 

-

 

 

29

 

 

 

-

 

 

1

 

 

 

-

 

 

 

34

 

 

 

-

 

Lease cost - Hudson Yards

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

11

 

 

11

 

 

17

 

 

17

 

 

28

 

 

28

 

Operating income, as adjusted (1)

 

1,599

 

 

 

1,545

 

 

 

2,016

 

 

 

1,931

 

 

 

2,025

 

 

 

1,946

 

 

 

2,107

 

 

 

2,056

 

 

 

7,747

 

 

 

7,478

 

Product launch costs and commissions

 

185

 

 

 

185

 

 

 

-

 

 

 

-

 

 

 

99

 

 

 

99

 

 

 

-

 

 

 

-

 

 

 

284

 

 

 

284

 

Operating income used for operating margin measurement

$

1,784

 

 

$

1,730

 

 

$

2,016

 

 

$

1,931

 

 

$

2,124

 

 

$

2,045

 

 

$

2,107

 

 

$

2,056

 

 

$

8,031

 

 

$

7,762

 

Revenue, GAAP basis

$

4,398

 

 

$

4,398

 

 

$

4,820

 

 

$

4,820

 

 

$

5,050

 

 

$

5,050

 

 

$

5,106

 

 

$

5,106

 

 

$

19,374

 

 

$

19,374

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution fees

 

(340

)

 

 

(340

)

 

 

(369

)

 

 

(369

)

 

 

(401

)

 

 

(401

)

 

 

(411

)

 

 

(411

)

 

 

(1,521

)

 

 

(1,521

)

Investment advisory fees

 

(165

)

 

 

(165

)

 

 

(154

)

 

 

(154

)

 

 

(184

)

 

 

(184

)

 

 

(176

)

 

 

(176

)

 

 

(679

)

 

 

(679

)

Revenue used for operating margin measurement

$

3,893

 

 

$

3,893

 

 

$

4,297

 

 

$

4,297

 

 

$

4,465

 

 

$

4,465

 

 

$

4,519

 

 

$

4,519

 

 

$

17,174

 

 

$

17,174

 

Operating margin, GAAP basis

 

35.1

%

 

 

35.1

%

 

 

40.1

%

 

 

40.1

%

 

 

38.3

%

 

 

38.3

%

 

 

39.9

%

 

 

39.9

%

 

 

38.5

%

 

 

38.5

%

Operating margin, as adjusted (1)

 

45.8

%

 

 

44.4

%

 

 

46.9

%

 

 

44.9

%

 

 

47.6

%

 

 

45.8

%

 

 

46.6

%

 

 

45.5

%

 

 

46.8

%

 

 

45.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See note (1) on page 10 for more information on as adjusted items.

 

Reconciliation of 2021 U.S. GAAP net income attributable to BlackRock, Inc. and earnings per share to net income attributable to BlackRock, Inc. and earnings per share, as adjusted

 

  Year Ended December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

March 31

 

 

June 30

 

 

September 30

 

 

December 31

 

 

December 31

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

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

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

Net income attributable to BlackRock, Inc., GAAP basis

$

1,199

 

 

$

1,199

 

 

$

1,378

 

 

$

1,378

 

 

$

1,681

 

 

$

1,681

 

 

$

1,643

 

 

$

1,643

 

 

$

5,901

 

 

$

5,901

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets, net of tax

 

26

 

 

 

-

 

 

 

28

 

 

 

-

 

 

 

29

 

 

 

-

 

 

 

29

 

 

 

-

 

 

 

112

 

 

 

-

 

Acquisition-related compensation costs, net of tax

 

13

 

 

 

-

 

 

 

36

 

 

 

-

 

 

 

9

 

 

 

-

 

 

 

9

 

 

 

-

 

 

 

67

 

 

 

-

 

Contingent consideration fair value adjustments, net of tax

 

2

 

 

 

-

 

 

 

1

 

 

 

-

 

 

 

22

 

 

 

-

 

 

 

1

 

 

 

-

 

 

 

26

 

 

 

-

 

Lease cost - Hudson Yards, net of tax

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9

 

 

 

9

 

 

 

13

 

 

 

13

 

 

 

22

 

 

 

22

 

Income tax matters

 

-

 

 

 

-

 

 

 

171

 

 

 

171

 

 

 

-

 

 

 

-

 

 

 

(45

)

 

 

(45

)

 

 

126

 

 

 

126

 

Net income attributable to BlackRock, Inc., as adjusted (2)

$

1,240

 

 

$

1,199

 

 

$

1,614

 

 

$

1,549

 

 

$

1,750

 

 

$

1,690

 

 

$

1,650

 

 

$

1,611

 

 

$

6,254

 

 

$

6,049

 

Diluted weighted-average common shares outstanding

 

154.3

 

 

 

154.3

 

 

 

154.4

 

 

 

154.4

 

 

 

154.3

 

 

 

154.3

 

 

 

154.6

 

 

 

154.6

 

 

 

154.4

 

 

 

154.4

 

Diluted earnings per common share, GAAP basis

$

7.77

 

 

$

7.77

 

 

$

8.92

 

 

$

8.92

 

 

$

10.89

 

 

$

10.89

 

 

$

10.63

 

 

$

10.63

 

 

$

38.22

 

 

$

38.22

 

Diluted earnings per common share, as adjusted (2)

$

8.04

 

 

$

7.77

 

 

$

10.45

 

 

$

10.03

 

 

$

11.34

 

 

$

10.95

 

 

$

10.68

 

 

$

10.42

 

 

$

40.51

 

 

$

39.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See note (2) on page 11 for more information on as adjusted items.

12

 

 

RECAST OF 2020 AS ADJUSTED OPERATING INCOME, OPERATING MARGIN, NET INCOME ATTRIBUTABLE TO BLACKROCK, INC. AND EARNINGS PER SHARE

 

Reconciliation of 2020 U.S. GAAP operating income and operating margin to operating income and operating margin, as adjusted

 

  Year Ended December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

March 31

 

 

June 30

 

 

September 30

 

 

December 31

 

 

December 31

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

(in millions), (unaudited)

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

Operating income, GAAP basis

$

684

 

 

$

684

 

 

$

1,406

 

 

$

1,406

 

 

$

1,757

 

 

$

1,757

 

 

$

1,848

 

 

$

1,848

 

 

$

5,695

 

 

$

5,695

 

Non-GAAP expense adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

25

 

 

 

-

 

 

27

 

 

 

-

 

 

27

 

 

 

-

 

 

27

 

 

 

-

 

 

106

 

 

 

-

 

Acquisition-related compensation costs

12

 

 

 

-

 

 

 

(3

)

 

 

-

 

 

9

 

 

 

-

 

 

2

 

 

 

-

 

 

20

 

 

 

-

 

Contingent consideration fair value adjustments

25

 

 

 

-

 

 

 

(2

)

 

 

-

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

23

 

 

 

-

 

Charitable Contribution

589

 

 

589

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

589

 

 

589

 

Operating income, as adjusted (1)

 

1,335

 

 

 

1,273

 

 

 

1,428

 

 

 

1,406

 

 

 

1,793

 

 

 

1,757

 

 

 

1,877

 

 

 

1,848

 

 

 

6,433

 

 

 

6,284

 

Product launch costs and commissions

 

87

 

 

 

87

 

 

 

-

 

 

 

-

 

 

 

83

 

 

 

83

 

 

 

2

 

 

 

2

 

 

 

172

 

 

 

172

 

Operating income used for operating margin measurement

$

1,422

 

 

$

1,360

 

 

$

1,428

 

 

$

1,406

 

 

$

1,876

 

 

$

1,840

 

 

$

1,879

 

 

$

1,850

 

 

$

6,605

 

 

$

6,456

 

Revenue, GAAP basis

$

3,710

 

 

$

3,710

 

 

$

3,648

 

 

$

3,648

 

 

$

4,369

 

 

$

4,369

 

 

$

4,478

 

 

$

4,478

 

 

$

16,205

 

 

$

16,205

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution fees

 

(276

)

 

 

(276

)

 

 

(253

)

 

 

(253

)

 

 

(288

)

 

 

(288

)

 

 

(314

)

 

 

(314

)

 

 

(1,131

)

 

 

(1,131

)

Investment advisory fees

 

(169

)

 

 

(169

)

 

 

(176

)

 

 

(176

)

 

 

(168

)

 

 

(168

)

 

 

(191

)

 

 

(191

)

 

 

(704

)

 

 

(704

)

Revenue used for operating margin measurement

$

3,265

 

 

$

3,265

 

 

$

3,219

 

 

$

3,219

 

 

$

3,913

 

 

$

3,913

 

 

$

3,973

 

 

$

3,973

 

 

$

14,370

 

 

$

14,370

 

Operating margin, GAAP basis

 

18.4

%

 

 

18.4

%

 

 

38.5

%

 

 

38.5

%

 

 

40.2

%

 

 

40.2

%

 

 

41.3

%

 

 

41.3

%

 

 

35.1

%

 

 

35.1

%

Operating margin, as adjusted (1)

 

43.6

%

 

 

41.7

%

 

 

44.4

%

 

 

43.7

%

 

 

48.0

%

 

 

47.0

%

 

 

47.3

%

 

 

46.6

%

 

 

46.0

%

 

 

44.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See note (1) on page 10 for more information on as adjusted items.

 

Reconciliation of 2020 U.S. GAAP net income attributable to BlackRock, Inc. and earnings per share to net income attributable to BlackRock, Inc. and earnings per share, as adjusted

 

  Year Ended December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year ended

 

 

March 31

 

 

June 30

 

 

September 30

 

 

December 31

 

 

December 31

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

Recast

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

for Updated

 

 

 

 

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

 

Non-GAAP

 

 

Previously

 

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

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

 

Adjustments

 

 

Reported

 

Net income attributable to BlackRock, Inc., GAAP basis

$

806

 

 

$

806

 

 

$

1,214

 

 

$

1,214

 

 

$

1,364

 

 

$

1,364

 

 

$

1,548

 

 

$

1,548

 

 

$

4,932

 

 

$

4,932

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets, net of tax

 

19

 

 

 

-

 

 

 

21

 

 

 

-

 

 

 

21

 

 

 

-

 

 

 

21

 

 

 

-

 

 

 

82

 

 

 

-

 

Acquisition-related compensation costs, net of tax

 

10

 

 

 

-

 

 

 

(2

)

 

 

-

 

 

 

7

 

 

 

-

 

 

 

1

 

 

 

-

 

 

 

16

 

 

 

-

 

Contingent consideration fair value adjustments, net of tax

 

19

 

 

 

-

 

 

 

(2

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

17

 

 

 

-

 

Charitable Contribution, net of tax

 

226

 

 

 

226

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

226

 

 

 

226

 

Income tax matters

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

54

 

 

 

54

 

 

 

25

 

 

 

25

 

 

 

79

 

 

 

79

 

Net income attributable to BlackRock, Inc., as adjusted (2)

$

1,080

 

 

$

1,032

 

 

$

1,231

 

 

$

1,214

 

 

$

1,446

 

 

$

1,418

 

 

$

1,595

 

 

$

1,573

 

 

$

5,352

 

 

$

5,237

 

Diluted weighted-average common shares outstanding

 

156.4

 

 

 

156.4

 

 

 

154.7

 

 

 

154.7

 

 

 

153.7

 

 

 

153.7

 

 

 

154.5

 

 

 

154.5

 

 

 

154.8

 

 

 

154.8

 

Diluted earnings per common share, GAAP basis

$

5.15

 

 

$

5.15

 

 

$

7.85

 

 

$

7.85

 

 

$

8.87

 

 

$

8.87

 

 

$

10.02

 

 

$

10.02

 

 

$

31.85

 

 

$

31.85

 

Diluted earnings per common share, as adjusted (2)

$

6.90

 

 

$

6.60

 

 

$

7.96

 

 

$

7.85

 

 

$

9.41

 

 

$

9.22

 

 

$

10.32

 

 

$

10.18

 

 

$

34.57

 

 

$

33.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See note (2) on page 11 for more information on as adjusted items.

 

 

13

 

 

 

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) a pandemic or health crisis, including the COVID-19 pandemic, and its continued impact on financial institutions, the global economy or capital markets, as well as BlackRock’s products, clients, vendors and employees, and BlackRock’s results of operations, the full extent of which may be unknown; (2) the introduction, withdrawal, success and timing of business initiatives and strategies; (3) 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”); (4) the relative and absolute investment performance of BlackRock’s investment products; (5) BlackRock’s ability to develop new products and services that address client preferences; (6) the impact of increased competition; (7) the impact of future acquisitions or divestitures; (8) BlackRock’s ability to integrate acquired businesses successfully; (9) the unfavorable resolution of legal proceedings; (10) the extent and timing of any share repurchases; (11) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and cybersecurity protection; (12) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; (13) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock; (14) changes in law and policy and uncertainty pending any such changes; (15) any failure to effectively manage conflicts of interest; (16) damage to BlackRock’s reputation; (17) geopolitical unrest, terrorist activities, civil or international hostilities, including the military conflict 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; (18) climate change-related risks to BlackRock's business, products, operations and clients; (19) the ability to attract and retain highly talented 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 its 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 at other financial institutions or the failure or negative performance of products at 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.


14

 

 

 

PERFORMANCE NOTES

 

Past performance is not indicative of future results. Except as specified, the performance information shown is as of March 31, 2022 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 February 28, 2022. The performance data does not include accounts terminated prior to March 31, 2022 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 March 31, 2022 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.

15