BLK

BLACKROCK INC

Financial Services | Mega Cap

$11.00

EPS Forecast

$4,996

Revenue Forecast

The company already released most recent quarter's earnings. We will publish our AI's next quarter's forecast around 2024-12-31
EX-99.1 2 blk-ex991_6.htm EX-99.1 blk-ex991_6.htm

Exhibit 99.1

 

 

 

 

 

INVESTOR RELATIONS:

Caroline Rodda      212.810.3442

MEDIA RELATIONS:

Brian Beades      212.810.5596

 

 

BlackRock Reports Full Year 2022 Diluted EPS of $33.97, or $35.36 as adjusted

Fourth Quarter 2022 Diluted EPS of $8.29, or $8.93 as adjusted

 

New York, January 13, 2023 – BlackRock, Inc. (NYSE: BLK) today reported financial results for the three months and year ended December 31, 2022.

 

 

$146 billion of quarterly long-term net inflows, including $61 billion of active net inflows, with total net inflows of $114 billion reflecting net outflows from cash management

$393 billion of full year long-term net inflows, reflects 4% organic asset growth and positive organic base fee growth, led by record flows into bond ETFs, significant outsourcing mandates and growth in private markets

8% decrease in full year revenue primarily driven by the impact of significantly lower markets and dollar appreciation on average AUM and lower performance fees

Record full year net new sales of Aladdin and continued growth in technology services revenue despite the negative impact of foreign exchange movements

Restructuring charge of $91 million from initiative to modify the size and shape of the workforce to align more closely with strategic priorities, excluded from as adjusted results

14% decrease in full year operating income (13% as adjusted)

11% decrease in full year diluted EPS (13% as adjusted) also reflects a lower effective tax rate and lower nonoperating income in the current year

$4.9 billion returned to shareholders in 2022, including $1.9 billion of share repurchases

 

 

Laurence D. Fink, Chairman and CEO:

“BlackRock delivered over $300 billion of net inflows and positive organic base fee growth in 2022. These industry-leading results reflect the decisions by thousands of organizations and investors that continually place their trust in BlackRock. The consistency of our results – across all market environments – comes from our clients’ confidence in BlackRock’s performance, guidance, and fiduciary standards.

“BlackRock’s diversified investment and technology capabilities provide clients with more choice to address their unique risk preferences and priorities. In the United States alone, we generated $230 billion of long-term net inflows. Flows were positive across each of our three regions. iShares led the global ETF industry with $220 billion of net inflows, including record flows into bond ETFs. We continued to scale our private markets platform, raising $35 billion of capital, with particular strength in private credit and infrastructure. And we saw record net new sales of Aladdin, further underscoring its importance in periods of market volatility.

“We ended the year with strong momentum, generating $114 billion of fourth quarter net inflows, representing 3% annualized organic base fee growth, reflecting continued strength in ETFs and significant outsourcing mandates.

“Like our clients – pensions, insurers, governments, and individual savers – BlackRock’s focus remains on investing for the long term. The current environment offers incredible opportunities for long-term investors, and we enter 2023 well-positioned and confident in our ability to deliver for our clients, employees, and shareholders.”

 

FINANCIAL RESULTS

(in millions,

Q4

 

 

Q4

 

 

Full Year

 

except per share data)

2022

 

 

2021

 

 

2022

 

 

2021

 

AUM

$

8,594,485

 

 

$

10,010,143

 

 

$

8,594,485

 

 

$

10,010,143

 

% change

 

(14

)%

 

 

 

 

 

 

(14

)%

 

 

 

 

Average AUM

$

8,417,215

 

 

$

9,749,652

 

 

$

8,948,570

 

 

$

9,364,948

 

% change

 

(14

)%

 

 

 

 

 

 

(4

)%

 

 

 

 

Total net flows

$

113,725

 

 

$

211,736

 

 

$

306,570

 

 

$

539,654

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP basis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

4,337

 

 

$

5,106

 

 

$

17,873

 

 

$

19,374

 

% change

 

(15

)%

 

 

 

 

 

 

(8

)%

 

 

 

 

Operating income

$

1,427

 

 

$

2,039

 

 

$

6,385

 

 

$

7,450

 

% change

 

(30

)%

 

 

 

 

 

 

(14

)%

 

 

 

 

Operating margin

 

32.9

%

 

 

39.9

%

 

 

35.7

%

 

 

38.5

%

Net income(1)

$

1,259

 

 

$

1,643

 

 

$

5,178

 

 

$

5,901

 

% change

 

(23

)%

 

 

 

 

 

 

(12

)%

 

 

 

 

Diluted EPS

$

8.29

 

 

$

10.63

 

 

$

33.97

 

 

$

38.22

 

% change

 

(22

)%

 

 

 

 

 

 

(11

)%

 

 

 

 

Weighted-average

   diluted shares

 

151.8

 

 

 

154.6

 

 

 

152.4

 

 

 

154.4

 

% change

 

(2

)%

 

 

 

 

 

 

(1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Adjusted(2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

$

1,577

 

 

$

2,107

 

 

$

6,711

 

 

$

7,747

 

% change

 

(25

)%

 

 

 

 

 

 

(13

)%

 

 

 

 

Operating margin

 

41.2

%

 

 

46.6

%

 

 

42.8

%

 

 

46.8

%

Net income(1)

$

1,356

 

 

$

1,650

 

 

$

5,391

 

 

$

6,254

 

% change

 

(18

)%

 

 

 

 

 

 

(14

)%

 

 

 

 

Diluted EPS

$

8.93

 

 

$

10.68

 

 

$

35.36

 

 

$

40.51

 

% change

 

(16

)%

 

 

 

 

 

 

(13

)%

 

 

 

 

(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 10 through 12 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, to include new adjustments. Such measures have been recast for 2021 to reflect the inclusion of such new adjustments.

NET FLOW HIGHLIGHTS

 

 

 

Q4

Full Year

(in billions)

2022

2022

Long-term net flows:

$

146

 

 

$

393

 

 

 

 

 

 

 

 

 

 

 

 

 

By region:

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

104

 

 

$

233

 

 

 

EMEA

 

32

 

 

 

73

 

 

 

APAC

 

10

 

 

 

87

 

 

 

 

 

 

 

 

 

 

 

 

 

By client type:

 

 

 

 

 

 

 

 

 

 

 

 

Retail:

$

(15

)

 

$

(20

)

 

 

 

US

 

(9

)

 

 

(9

)

 

 

 

International

 

(6

)

 

 

(11

)

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

$

90

 

 

$

220

 

 

 

 

Core equity

 

12

 

 

 

64

 

 

 

 

Strategic

 

53

 

 

 

146

 

 

 

 

Precision

 

25

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Institutional:

$

71

 

 

$

192

 

 

 

 

Active

 

76

 

 

 

169

 

 

 

 

Index

 

(5

)

 

 

24

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash management net flows

$

(32

)

 

$

(77

)

 

 

 

 

 

 

 

 

 

 

 

 

Advisory net flows

$

-

 

 

$

(9

)

 

 

 

 

 

 

 

 

 

 

 

 

Total net flows

$

114

 

 

$

307

 

 

 

 

1

 

 

 

BUSINESS RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4 2022

 

 

 

 

 

 

 

 

Q4 2022

 

 

 

 

Base fees (1)

 

 

 

 

 

 

 

 

Base fees (1)

 

December 31, 2022

 

and securities

 

 

Q4 2022

 

December 31, 2022

 

and securities

 

AUM

 

lending revenue

 

(in millions), (unaudited)

Net flows

 

AUM

 

lending revenue

 

% of Total

 

% of Total

 

RESULTS BY CLIENT TYPE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

$

(14,826

)

$

843,475

 

$

1,021

 

 

10

%

 

30

%

ETFs

 

89,651

 

 

2,909,610

 

 

1,349

 

 

34

%

 

39

%

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

76,030

 

 

1,641,591

 

 

601

 

 

19

%

 

18

%

Index

 

(5,172

)

 

2,528,615

 

 

201

 

 

29

%

 

6

%

Total institutional

 

70,858

 

 

4,170,206

 

 

802

 

 

48

%

 

24

%

Long-term

 

145,683

 

 

7,923,291

 

 

3,172

 

 

92

%

 

93

%

Cash management

 

(31,958

)

 

671,194

 

 

227

 

 

8

%

 

7

%

Total

$

113,725

 

$

8,594,485

 

$

3,399

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY INVESTMENT STYLE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

$

61,376

 

$

2,317,560

 

$

1,576

 

 

27

%

 

46

%

Index and ETFs

 

84,307

 

 

5,605,731

 

 

1,596

 

 

65

%

 

47

%

Long-term

 

145,683

 

 

7,923,291

 

 

3,172

 

 

92

%

 

93

%

Cash management

 

(31,958

)

 

671,194

 

 

227

 

 

8

%

 

7

%

Total

$

113,725

 

$

8,594,485

 

$

3,399

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY PRODUCT TYPE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

29,718

 

$

4,435,354

 

$

1,658

 

 

51

%

 

49

%

Fixed income

 

115,515

 

 

2,536,823

 

 

830

 

 

30

%

 

24

%

Multi-asset

 

2,112

 

 

684,904

 

 

293

 

 

8

%

 

9

%

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

4,408

 

 

117,751

 

 

194

 

 

1

%

 

6

%

Liquid alternatives

 

(1,854

)

 

80,654

 

 

150

 

 

1

%

 

4

%

Currency and commodities

 

(4,216

)

 

67,805

 

 

47

 

 

1

%

 

1

%

Total Alternatives

 

(1,662

)

 

266,210

 

 

391

 

 

3

%

 

11

%

Long-term

 

145,683

 

 

7,923,291

 

 

3,172

 

 

92

%

 

93

%

Cash management

 

(31,958

)

 

671,194

 

 

227

 

 

8

%

 

7

%

Total

$

113,725

 

$

8,594,485

 

$

3,399

 

 

100

%

 

100

%

 

 

(1)

Base fees include investment advisory and administration fees.

INVESTMENT PERFORMANCE AT December 31, 2022(1)                                                       

 

One-year period

 

Three-year period

 

Five-year period

 

Fixed income:

 

 

 

 

 

 

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

 

 

 

 

 

 

Taxable

57%

 

83%

 

89%

 

Tax-exempt

31%

 

41%

 

44%

 

Index AUM within or above applicable tolerance

94%

 

90%

 

95%

 

Equity:

 

 

 

 

 

 

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

 

 

 

 

 

 

Fundamental

49%

 

62%

 

80%

 

Systematic

54%

 

76%

 

72%

 

Index AUM within or above applicable tolerance

97%

 

98%

 

98%

 

 

(1)

Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 13 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 Friday, January 13, 2023 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, (877) 502-9276, or from outside the United States, (313) 209-4906, shortly before 8:30 a.m. and reference the BlackRock Conference Call (ID Number 7681580). 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 11:30 a.m. (Eastern Time) on Friday, January 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 | 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

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

2022

 

 

2021

 

 

Change

 

 

 

2022

 

 

Change

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

  securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administration fees

$

3,260

 

 

$

3,832

 

 

$

(572

)

 

 

$

3,369

 

 

$

(109

)

 

Securities lending revenue

 

139

 

 

 

136

 

 

 

3

 

 

 

 

162

 

 

 

(23

)

 

Total investment advisory, administration fees and

  securities lending revenue

 

3,399

 

 

 

3,968

 

 

 

(569

)

 

 

 

3,531

 

 

 

(132

)

 

Investment advisory performance fees

 

228

 

 

 

329

 

 

 

(101

)

 

 

 

82

 

 

 

146

 

 

Technology services revenue

 

353

 

 

 

339

 

 

 

14

 

 

 

 

338

 

 

 

15

 

 

Distribution fees

 

314

 

 

 

411

 

 

 

(97

)

 

 

 

325

 

 

 

(11

)

 

Advisory and other revenue

 

43

 

 

 

59

 

 

 

(16

)

 

 

 

35

 

 

 

8

 

 

Total revenue

 

4,337

 

 

 

5,106

 

 

 

(769

)

 

 

 

4,311

 

 

 

26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

1,430

 

 

 

1,559

 

 

 

(129

)

 

 

 

1,339

 

 

 

91

 

 

Distribution and servicing costs

 

497

 

 

 

587

 

 

 

(90

)

 

 

 

536

 

 

 

(39

)

 

Direct fund expense

 

275

 

 

 

319

 

 

 

(44

)

 

 

 

318

 

 

 

(43

)

 

General and administration expense

 

580

 

 

 

564

 

 

 

16

 

 

 

 

554

 

 

 

26

 

 

Restructuring charge

 

91

 

 

 

-

 

 

 

91

 

 

 

 

-

 

 

 

91

 

 

Amortization of intangible assets

 

37

 

 

 

38

 

 

 

(1

)

 

 

 

38

 

 

 

(1

)

 

Total expense

 

2,910

 

 

 

3,067

 

 

 

(157

)

 

 

 

2,785

 

 

 

125

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,427

 

 

 

2,039

 

 

 

(612

)

 

 

 

1,526

 

 

 

(99

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on investments

 

207

 

 

 

75

 

 

 

132

 

 

 

 

174

 

 

 

33

 

 

Interest and dividend income

 

72

 

 

 

46

 

 

 

26

 

 

 

 

41

 

 

 

31

 

 

Interest expense

 

(54

)

 

 

(50

)

 

 

(4

)

 

 

 

(50

)

 

 

(4

)

 

Total nonoperating income (expense)

 

225

 

 

 

71

 

 

 

154

 

 

 

 

165

 

 

 

60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

1,652

 

 

 

2,110

 

 

 

(458

)

 

 

 

1,691

 

 

 

(39

)

 

Income tax expense

 

345

 

 

 

478

 

 

 

(133

)

 

 

 

330

 

 

 

15

 

 

Net income

 

1,307

 

 

 

1,632

 

 

 

(325

)

 

 

 

1,361

 

 

 

(54

)

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling

  interests

 

48

 

 

 

(11

)

 

 

59

 

 

 

 

(45

)

 

 

93

 

 

Net income attributable to BlackRock, Inc.

$

1,259

 

 

$

1,643

 

 

$

(384

)

 

 

$

1,406

 

 

$

(147

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

150,035,914

 

 

 

151,822,226

 

 

 

(1,786,312

)

 

 

 

150,644,985

 

 

 

(609,071

)

 

Diluted

 

151,839,446

 

 

 

154,564,198

 

 

 

(2,724,752

)

 

 

 

151,961,389

 

 

 

(121,943

)

 

Earnings per share attributable to BlackRock, Inc.

   common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

8.39

 

 

$

10.82

 

 

$

(2.43

)

 

 

$

9.33

 

 

$

(0.94

)

 

Diluted

$

8.29

 

 

$

10.63

 

 

$

(2.34

)

 

 

$

9.25

 

 

$

(0.96

)

 

Cash dividends declared and paid per share

$

4.88

 

 

$

4.13

 

 

$

0.75

 

 

 

$

4.88

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM (end of period)

$

8,594,485

 

 

$

10,010,143

 

 

$

(1,415,658

)

 

 

$

7,961,373

 

 

$

633,112

 

 

Shares outstanding (end of period)

 

149,756,492

 

 

 

151,684,491

 

 

 

(1,927,999

)

 

 

 

150,461,863

 

 

 

(705,371

)

 

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

32.9

%

 

 

39.9

%

 

 

(700

)

bps

 

 

35.4

%

 

 

(250

)

bps

Effective tax rate

 

21.5

%

 

 

22.6

%

 

 

(110

)

bps

 

 

19.0

%

 

 

250

 

bps

As adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (1)

$

1,577

 

 

$

2,107

 

 

$

(530

)

 

 

$

1,585

 

 

$

(8

)

 

Operating margin (1)

 

41.2

%

 

 

46.6

%

 

 

(540

)

bps

 

 

42.0

%

 

 

(80

)

bps

Nonoperating income (expense), less net income

     (loss) attributable to noncontrolling interests

$

177

 

 

$

82

 

 

$

95

 

 

 

$

210

 

 

$

(33

)

 

Net income attributable to BlackRock, Inc. (2)

$

1,356

 

 

$

1,650

 

 

$

(294

)

 

 

$

1,451

 

 

$

(95

)

 

Diluted earnings attributable to BlackRock, Inc.

     common stockholders per share (2)

$

8.93

 

 

$

10.68

 

 

$

(1.75

)

 

 

$

9.55

 

 

$

(0.62

)

 

Effective tax rate

 

22.7

%

 

 

24.6

%

 

 

(190

)

bps

 

 

19.2

%

 

 

350

 

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See pages 10 through 12 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, to include new adjustments. Such measures have been recast for 2021 to reflect the inclusion of such new adjustments.

3

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

2022

 

 

2021

 

 

Change

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

  securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administration fees

$

13,852

 

 

$

14,705

 

 

$

(853

)

 

Securities lending revenue

 

599

 

 

 

555

 

 

 

44

 

 

Total investment advisory, administration fees and

  securities lending revenue

 

14,451

 

 

 

15,260

 

 

 

(809

)

 

Investment advisory performance fees

 

514

 

 

 

1,143

 

 

 

(629

)

 

Technology services revenue

 

1,364

 

 

 

1,281

 

 

 

83

 

 

Distribution fees

 

1,381

 

 

 

1,521

 

 

 

(140

)

 

Advisory and other revenue

 

163

 

 

 

169

 

 

 

(6

)

 

Total revenue

 

17,873

 

 

 

19,374

 

 

 

(1,501

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

5,681

 

 

 

6,043

 

 

 

(362

)

 

Distribution and servicing costs

 

2,179

 

 

 

2,200

 

 

 

(21

)

 

Direct fund expense

 

1,226

 

 

 

1,313

 

 

 

(87

)

 

General and administration expense

 

2,160

 

 

 

2,221

 

 

 

(61

)

 

Restructuring charge

 

91

 

 

 

-

 

 

 

91

 

 

Amortization of intangible assets

 

151

 

 

 

147

 

 

 

4

 

 

Total expense

 

11,488

 

 

 

11,924

 

 

 

(436

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

6,385

 

 

 

7,450

 

 

 

(1,065

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on investments

 

(35

)

 

 

841

 

 

 

(876

)

 

Interest and dividend income

 

152

 

 

 

87

 

 

 

65

 

 

Interest expense

 

(212

)

 

 

(205

)

 

 

(7

)

 

Total nonoperating income (expense)

 

(95

)

 

 

723

 

 

 

(818

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

6,290

 

 

 

8,173

 

 

 

(1,883

)

 

Income tax expense

 

1,296

 

 

 

1,968

 

 

 

(672

)

 

Net income

 

4,994

 

 

 

6,205

 

 

 

(1,211

)

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling

  interests

 

(184

)

 

 

304

 

 

 

(488

)

 

Net income attributable to BlackRock, Inc.

$

5,178

 

 

$

5,901

 

 

$

(723

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

150,921,161

 

 

 

152,236,047

 

 

 

(1,314,886

)

 

Diluted

 

152,440,471

 

 

 

154,404,357

 

 

 

(1,963,886

)

 

Earnings per share attributable to BlackRock, Inc.

   common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

34.31

 

 

$

38.76

 

 

$

(4.45

)

 

Diluted

$

33.97

 

 

$

38.22

 

 

$

(4.25

)

 

Cash dividends declared and paid per share

$

19.52

 

 

$

16.52

 

 

$

3.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM (end of period)

$

8,594,485

 

 

$

10,010,143

 

 

$

(1,415,658

)

 

Shares outstanding (end of period)

 

149,756,492

 

 

 

151,684,491

 

 

 

(1,927,999

)

 

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

35.7

%

 

 

38.5

%

 

 

(280

)

bps

Effective tax rate

 

20.0

%

 

 

25.0

%

 

 

(500

)

bps

As adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (1)

$

6,711

 

 

$

7,747

 

 

$

(1,036

)

 

Operating margin (1)

 

42.8

%

 

 

46.8

%

 

 

(400

)

bps

Nonoperating income (expense), less net income

     (loss) attributable to noncontrolling interests

$

89

 

 

$

419

 

 

$

(330

)

 

Net income attributable to BlackRock, Inc. (2)

$

5,391

 

 

$

6,254

 

 

$

(863

)

 

Diluted earnings attributable to BlackRock, Inc.

     common stockholders per share (2)

$

35.36

 

 

$

40.51

 

 

$

(5.15

)

 

Effective tax rate

 

20.7

%

 

 

23.4

%

 

 

(270

)

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

See pages 10 through 12 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, to include new adjustments. Such measures have been recast for 2021 to reflect the inclusion of such new adjustments.

4

 

 

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Current Quarter Component Changes by Client Type and Product Type

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

inflows

 

 

Market

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2022

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

342,647

 

 

$

(5,023

)

 

$

26,565

 

 

$

6,423

 

 

$

370,612

 

 

$

365,372

 

Fixed income

 

294,977

 

 

 

(6,539

)

 

 

6,574

 

 

 

4,102

 

 

 

299,114

 

 

 

296,911

 

Multi-asset

 

120,814

 

 

 

(2,721

)

 

 

6,099

 

 

 

976

 

 

 

125,168

 

 

 

124,741

 

Alternatives

 

48,060

 

 

 

(543

)

 

 

469

 

 

 

595

 

 

 

48,581

 

 

 

48,345

 

Retail subtotal

 

806,498

 

 

 

(14,826

)

 

 

39,707

 

 

 

12,096

 

 

 

843,475

 

 

 

835,369

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,861,499

 

 

 

44,566

 

 

 

163,246

 

 

 

12,431

 

 

 

2,081,742

 

 

 

2,030,063

 

Fixed income

 

694,062

 

 

 

47,099

 

 

 

10,116

 

 

 

6,816

 

 

 

758,093

 

 

 

729,199

 

Multi-asset

 

7,273

 

 

 

1,198

 

 

 

373

 

 

 

31

 

 

 

8,875

 

 

 

8,044

 

Alternatives

 

58,576

 

 

 

(3,212

)

 

 

5,440

 

 

 

96

 

 

 

60,900

 

 

 

59,085

 

ETFs subtotal

 

2,621,410

 

 

 

89,651

 

 

 

179,175

 

 

 

19,374

 

 

 

2,909,610

 

 

 

2,826,391

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

150,409

 

 

 

3,962

 

 

 

9,901

 

 

 

4,462

 

 

 

168,734

 

 

 

164,737

 

Fixed income

 

685,194

 

 

 

65,171

 

 

 

16,031

 

 

 

8,559

 

 

 

774,955

 

 

 

731,422

 

Multi-asset

 

502,787

 

 

 

4,278

 

 

 

24,437

 

 

 

12,967

 

 

 

544,469

 

 

 

530,135

 

Alternatives

 

148,895

 

 

 

2,619

 

 

 

(655

)

 

 

2,574

 

 

 

153,433

 

 

 

150,652

 

Active subtotal

 

1,487,285

 

 

 

76,030

 

 

 

49,714

 

 

 

28,562

 

 

 

1,641,591

 

 

 

1,576,946

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,665,757

 

 

 

(13,787

)

 

 

122,320

 

 

 

39,976

 

 

 

1,814,266

 

 

 

1,787,364

 

Fixed income

 

676,030

 

 

 

9,784

 

 

 

(18,457

)

 

 

37,304

 

 

 

704,661

 

 

 

692,561

 

Multi-asset

 

6,571

 

 

 

(643

)

 

 

297

 

 

 

167

 

 

 

6,392

 

 

 

6,578

 

Alternatives

 

3,703

 

 

 

(526

)

 

 

67

 

 

 

52

 

 

 

3,296

 

 

 

3,561

 

Index subtotal

 

2,352,061

 

 

 

(5,172

)

 

 

104,227

 

 

 

77,499

 

 

 

2,528,615

 

 

 

2,490,064

 

Institutional subtotal

 

3,839,346

 

 

 

70,858

 

 

 

153,941

 

 

 

106,061

 

 

 

4,170,206

 

 

 

4,067,010

 

Long-term

 

7,267,254

 

 

 

145,683

 

 

 

372,823

 

 

 

137,531

 

 

 

7,923,291

 

 

 

7,728,770

 

Cash management

 

694,119

 

 

 

(31,958

)

 

 

1,360

 

 

 

7,673

 

 

 

671,194

 

 

 

688,445

 

Total

$

7,961,373

 

 

$

113,725

 

 

$

374,183

 

 

$

145,204

 

 

$

8,594,485

 

 

$

8,417,215

 

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

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

inflows

 

 

Market

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2022

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

359,587

 

 

$

(694

)

 

$

26,195

 

 

$

7,748

 

 

$

392,836

 

 

$

385,846

 

Fixed income

 

960,932

 

 

 

58,437

 

 

 

22,258

 

 

 

11,456

 

 

 

1,053,083

 

 

 

1,007,871

 

Multi-asset

 

623,594

 

 

 

1,557

 

 

 

30,536

 

 

 

13,942

 

 

 

669,629

 

 

 

654,868

 

Alternatives

 

196,953

 

 

 

2,076

 

 

 

(186

)

 

 

3,169

 

 

 

202,012

 

 

 

198,997

 

Active subtotal

 

2,141,066

 

 

 

61,376

 

 

 

78,803

 

 

 

36,315

 

 

 

2,317,560

 

 

 

2,247,582

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,861,499

 

 

 

44,566

 

 

 

163,246

 

 

 

12,431

 

 

 

2,081,742

 

 

 

2,030,063

 

Fixed income

 

694,062

 

 

 

47,099

 

 

 

10,116

 

 

 

6,816

 

 

 

758,093

 

 

 

729,199

 

Multi-asset

 

7,273

 

 

 

1,198

 

 

 

373

 

 

 

31

 

 

 

8,875

 

 

 

8,044

 

Alternatives

 

58,576

 

 

 

(3,212

)

 

 

5,440

 

 

 

96

 

 

 

60,900

 

 

 

59,085

 

ETFs subtotal

 

2,621,410

 

 

 

89,651

 

 

 

179,175

 

 

 

19,374

 

 

 

2,909,610

 

 

 

2,826,391

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,799,226

 

 

 

(14,154

)

 

 

132,591

 

 

 

43,113

 

 

 

1,960,776

 

 

 

1,931,627

 

Fixed income

 

695,269

 

 

 

9,979

 

 

 

(18,110

)

 

 

38,509

 

 

 

725,647

 

 

 

713,023

 

Multi-asset

 

6,578

 

 

 

(643

)

 

 

297

 

 

 

168

 

 

 

6,400

 

 

 

6,586

 

Alternatives

 

3,705

 

 

 

(526

)

 

 

67

 

 

 

52

 

 

 

3,298

 

 

 

3,561

 

Non-ETF Index subtotal

 

2,504,778

 

 

 

(5,344

)

 

 

114,845

 

 

 

81,842

 

 

 

2,696,121

 

 

 

2,654,797

 

Index and ETFs subtotal

 

5,126,188

 

 

 

84,307

 

 

 

294,020

 

 

 

101,216

 

 

 

5,605,731

 

 

 

5,481,188

 

Long-term

$

7,267,254

 

 

$

145,683

 

 

$

372,823

 

 

$

137,531

 

 

$

7,923,291

 

 

$

7,728,770

 

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

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

inflows

 

 

Market

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2022

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Equity

$

4,020,312

 

 

$

29,718

 

 

$

322,032

 

 

$

63,292

 

 

$

4,435,354

 

 

$

4,347,536

 

Fixed income

 

2,350,263

 

 

 

115,515

 

 

 

14,264

 

 

 

56,781

 

 

 

2,536,823

 

 

 

2,450,093

 

Multi-asset

 

637,445

 

 

 

2,112

 

 

 

31,206

 

 

 

14,141

 

 

 

684,904

 

 

 

669,498

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

111,729

 

 

 

4,408

 

 

 

(626

)

 

 

2,240

 

 

 

117,751

 

 

 

114,880

 

Liquid alternatives

 

81,418

 

 

 

(1,854

)

 

 

275

 

 

 

815

 

 

 

80,654

 

 

 

80,432

 

Currency and commodities(3)

 

66,087

 

 

 

(4,216

)

 

 

5,672

 

 

 

262

 

 

 

67,805

 

 

 

66,331

 

Alternatives subtotal

 

259,234

 

 

 

(1,662

)

 

 

5,321

 

 

 

3,317

 

 

 

266,210

 

 

 

261,643

 

Long-term

$

7,267,254

 

 

$

145,683

 

 

$

372,823

 

 

$

137,531

 

 

$

7,923,291

 

 

$

7,728,770

 

 

(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)

Amounts include commodity ETFs.

5

 

 

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

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

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

471,937

 

 

$

(103

)

 

$

(90,767

)

 

$

(10,455

)

 

$

370,612

 

 

$

401,582

 

Fixed income

 

365,306

 

 

 

(20,299

)

 

 

(41,706

)

 

 

(4,187

)

 

 

299,114

 

 

 

323,500

 

Multi-asset

 

155,461

 

 

 

(3,143

)

 

 

(26,064

)

 

 

(1,086

)

 

 

125,168

 

 

 

136,690

 

Alternatives

 

47,349

 

 

 

4,022

 

 

 

(2,271

)

 

 

(519

)

 

 

48,581

 

 

 

48,937

 

Retail subtotal

 

1,040,053

 

 

 

(19,523

)

 

 

(160,808

)

 

 

(16,247

)

 

 

843,475

 

 

 

910,709

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,447,248

 

 

 

100,756

 

 

 

(449,140

)

 

 

(17,122

)

 

 

2,081,742

 

 

 

2,163,108

 

Fixed income

 

745,373

 

 

 

122,893

 

 

 

(103,957

)

 

 

(6,216

)

 

 

758,093

 

 

 

719,931

 

Multi-asset

 

9,119

 

 

 

1,333

 

 

 

(1,441

)

 

 

(136

)

 

 

8,875

 

 

 

8,231

 

Alternatives

 

65,614

 

 

 

(4,647

)

 

 

70

 

 

 

(137

)

 

 

60,900

 

 

 

66,599

 

ETFs subtotal

 

3,267,354

 

 

 

220,335

 

 

 

(554,468

)

 

 

(23,611

)

 

 

2,909,610

 

 

 

2,957,869

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

199,980

 

 

 

9,882

 

 

 

(34,912

)

 

 

(6,216

)

 

 

168,734

 

 

 

175,567

 

Fixed income

 

767,402

 

 

 

114,742

 

 

 

(95,291

)

 

 

(11,898

)

 

 

774,955

 

 

 

715,600

 

Multi-asset

 

642,951

 

 

 

33,950

 

 

 

(112,028

)

 

 

(20,404

)

 

 

544,469

 

 

 

571,448

 

Alternatives

 

146,384

 

 

 

10,252

 

 

 

(243

)

 

 

(2,960

)

 

 

153,433

 

 

 

150,357

 

Active subtotal

 

1,756,717

 

 

 

168,826

 

 

 

(242,474

)

 

 

(41,478

)

 

 

1,641,591

 

 

 

1,612,972

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,223,195

 

 

 

(5,432

)

 

 

(341,087

)

 

 

(62,410

)

 

 

1,814,266

 

 

 

1,937,695

 

Fixed income

 

943,960

 

 

 

32,444

 

 

 

(203,501

)

 

 

(68,242

)

 

 

704,661

 

 

 

792,941

 

Multi-asset

 

8,963

 

 

 

(918

)

 

 

(1,285

)

 

 

(368

)

 

 

6,392

 

 

 

7,550

 

Alternatives

 

5,534

 

 

 

(2,482

)

 

 

569

 

 

 

(325

)

 

 

3,296

 

 

 

4,696

 

Index subtotal

 

3,181,652

 

 

 

23,612

 

 

 

(545,304

)

 

 

(131,345

)

 

 

2,528,615

 

 

 

2,742,882

 

Institutional subtotal

 

4,938,369

 

 

 

192,438

 

 

 

(787,778

)

 

 

(172,823

)

 

 

4,170,206

 

 

 

4,355,854

 

Long-term

 

9,245,776

 

 

 

393,250

 

 

 

(1,503,054

)

 

 

(212,681

)

 

 

7,923,291

 

 

 

8,224,432

 

Cash management

 

755,057

 

 

 

(77,374

)

 

 

1,071

 

 

 

(7,560

)

 

 

671,194

 

 

 

719,284

 

Advisory

 

9,310

 

 

 

(9,306

)

 

 

(4

)

 

 

-

 

 

 

-

 

 

 

4,854

 

Total

$

10,010,143

 

 

$

306,570

 

 

$

(1,501,987

)

 

$

(220,241

)

 

$

8,594,485

 

 

$

8,948,570

 

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

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

507,103

 

 

$

(2,672

)

 

$

(100,240

)

 

$

(11,355

)

 

$

392,836

 

 

$

426,141

 

Fixed income

 

1,107,085

 

 

 

92,721

 

 

 

(132,590

)

 

 

(14,133

)

 

 

1,053,083

 

 

 

1,016,918

 

Multi-asset

 

798,404

 

 

 

30,806

 

 

 

(138,092

)

 

 

(21,489

)

 

 

669,629

 

 

 

708,130

 

Alternatives

 

193,733

 

 

 

14,273

 

 

 

(2,516

)

 

 

(3,478

)

 

 

202,012

 

 

 

199,294

 

Active subtotal

 

2,606,325

 

 

 

135,128

 

 

 

(373,438

)

 

 

(50,455

)

 

 

2,317,560

 

 

 

2,350,483

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,447,248

 

 

 

100,756

 

 

 

(449,140

)

 

 

(17,122

)

 

 

2,081,742

 

 

 

2,163,108

 

Fixed income

 

745,373

 

 

 

122,893

 

 

 

(103,957

)

 

 

(6,216

)

 

 

758,093

 

 

 

719,931

 

Multi-asset

 

9,119

 

 

 

1,333

 

 

 

(1,441

)

 

 

(136

)

 

 

8,875

 

 

 

8,231

 

Alternatives

 

65,614

 

 

 

(4,647

)

 

 

70

 

 

 

(137

)

 

 

60,900

 

 

 

66,599

 

ETFs subtotal

 

3,267,354

 

 

 

220,335

 

 

 

(554,468

)

 

 

(23,611

)

 

 

2,909,610

 

 

 

2,957,869

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,388,009

 

 

 

7,019

 

 

 

(366,526

)

 

 

(67,726

)

 

 

1,960,776

 

 

 

2,088,703

 

Fixed income

 

969,583

 

 

 

34,166

 

 

 

(207,908

)

 

 

(70,194

)

 

 

725,647

 

 

 

815,123

 

Multi-asset

 

8,971

 

 

 

(917

)

 

 

(1,285

)

 

 

(369

)

 

 

6,400

 

 

 

7,558

 

Alternatives

 

5,534

 

 

 

(2,481

)

 

 

571

 

 

 

(326

)

 

 

3,298

 

 

 

4,696

 

Non-ETF Index subtotal

 

3,372,097

 

 

 

37,787

 

 

 

(575,148

)

 

 

(138,615

)

 

 

2,696,121

 

 

 

2,916,080

 

Index and ETFs subtotal

 

6,639,451

 

 

 

258,122

 

 

 

(1,129,616

)

 

 

(162,226

)

 

 

5,605,731

 

 

 

5,873,949

 

Long-term

$

9,245,776

 

 

$

393,250

 

 

$

(1,503,054

)

 

$

(212,681

)

 

$

7,923,291

 

 

$

8,224,432

 

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

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2021

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2022

 

 

Average AUM (2)

 

Equity

$

5,342,360

 

 

$

105,103

 

 

$

(915,906

)

 

$

(96,203

)

 

$

4,435,354

 

 

$

4,677,952

 

Fixed income

 

2,822,041

 

 

 

249,780

 

 

 

(444,455

)

 

 

(90,543

)

 

 

2,536,823

 

 

 

2,551,972

 

Multi-asset

 

816,494

 

 

 

31,222

 

 

 

(140,818

)

 

 

(21,994

)

 

 

684,904

 

 

 

723,919

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

102,579

 

 

 

16,052

 

 

 

1,112

 

 

 

(1,992

)

 

 

117,751

 

 

 

111,075

 

Liquid alternatives

 

87,348

 

 

 

(1,690

)

 

 

(3,710

)

 

 

(1,294

)

 

 

80,654

 

 

 

84,024

 

Currency and commodities(3)

 

74,954

 

 

 

(7,217

)

 

 

723

 

 

 

(655

)

 

 

67,805

 

 

 

75,490

 

Alternatives subtotal

 

264,881

 

 

 

7,145

 

 

 

(1,875

)

 

 

(3,941

)

 

 

266,210

 

 

 

270,589

 

Long-term

$

9,245,776

 

 

$

393,250

 

 

$

(1,503,054

)

 

$

(212,681

)

 

$

7,923,291

 

 

$

8,224,432

 

 

(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)

Amounts include commodity ETFs.

6

 

 

SUMMARY OF REVENUE

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Year

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

(in millions), (unaudited)

2022

 

 

2021

 

 

Change

 

 

2022

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

 

Investment advisory, administration fees and

   securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

$

478

 

 

$

680

 

 

$

(202

)

 

$

503

 

 

$

(25

)

 

$

2,147

 

 

$

2,571

 

 

$

(424

)

 

ETFs

 

1,021

 

 

 

1,222

 

 

 

(201

)

 

 

1,063

 

 

 

(42

)

 

 

4,345

 

 

 

4,658

 

 

 

(313

)

 

Non-ETF Index

 

159

 

 

 

190

 

 

 

(31

)

 

 

179

 

 

 

(20

)

 

 

711

 

 

 

771

 

 

 

(60

)

 

Equity subtotal

 

1,658

 

 

 

2,092

 

 

 

(434

)

 

 

1,745

 

 

 

(87

)

 

 

7,203

 

 

 

8,000

 

 

 

(797

)

 

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

462

 

 

 

560

 

 

 

(98

)

 

 

478

 

 

 

(16

)

 

 

1,977

 

 

 

2,191

 

 

 

(214

)

 

ETFs

 

283

 

 

 

308

 

 

 

(25

)

 

 

276

 

 

 

7

 

 

 

1,122

 

 

 

1,201

 

 

 

(79

)

 

Non-ETF Index

 

85

 

 

 

121

 

 

 

(36

)

 

 

91

 

 

 

(6

)

 

 

396

 

 

 

471

 

 

 

(75

)

 

Fixed income subtotal

 

830

 

 

 

989

 

 

 

(159

)

 

 

845

 

 

 

(15

)

 

 

3,495

 

 

 

3,863

 

 

 

(368

)

 

Multi-asset

 

293

 

 

 

373

 

 

 

(80

)

 

 

316

 

 

 

(23

)

 

 

1,299

 

 

 

1,414

 

 

 

(115

)

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

194

 

 

 

167

 

 

 

27

 

 

 

184

 

 

 

10

 

 

 

741

 

 

 

668

 

 

 

73

 

 

Liquid alternatives

 

150

 

 

 

169

 

 

 

(19

)

 

 

155

 

 

 

(5

)

 

 

633

 

 

 

629

 

 

 

4

 

 

Currency and commodities

 

47

 

 

 

53

 

 

 

(6

)

 

 

51

 

 

 

(4

)

 

 

216

 

 

 

216

 

 

 

-

 

 

Alternatives subtotal

 

391

 

 

 

389

 

 

 

2

 

 

 

390

 

 

 

1

 

 

 

1,590

 

 

 

1,513

 

 

 

77

 

 

Long-term

 

3,172

 

 

 

3,843

 

 

 

(671

)

 

 

3,296

 

 

 

(124

)

 

 

13,587

 

 

 

14,790

 

 

 

(1,203

)

 

Cash management

 

227

 

 

 

125

 

 

 

102

 

 

 

235

 

 

 

(8

)

 

 

864

 

 

 

470

 

 

 

394

 

 

Total investment advisory, administration

  fees and securities lending revenue

 

3,399

 

 

 

3,968

 

 

 

(569

)

 

 

3,531

 

 

 

(132

)

 

 

14,451

 

 

 

15,260

 

 

 

(809

)

 

Investment advisory performance fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

36

 

 

 

83

 

 

 

(47

)

 

 

(2

)

 

 

38

 

 

 

49

 

 

 

153

 

 

 

(104

)

 

Fixed income

 

6

 

 

 

17

 

 

 

(11

)

 

 

(3

)

 

 

9

 

 

 

25

 

 

 

48

 

 

 

(23

)

 

Multi-asset

 

11

 

 

 

15

 

 

 

(4

)

 

 

2

 

 

 

9

 

 

 

25

 

 

 

32

 

 

 

(7

)

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

115

 

 

 

61

 

 

 

54

 

 

 

79

 

 

 

36

 

 

 

296

 

 

 

208

 

 

 

88

 

 

Liquid alternatives

 

60

 

 

 

153

 

 

 

(93

)

 

 

6

 

 

 

54

 

 

 

119

 

 

 

702

 

 

 

(583

)

 

Alternatives subtotal

 

175

 

 

 

214

 

 

 

(39

)

 

 

85

 

 

 

90

 

 

 

415

 

 

 

910

 

 

 

(495

)

 

Total performance fees

 

228

 

 

 

329

 

 

 

(101

)

 

 

82

 

 

 

146

 

 

 

514

 

 

 

1,143

 

 

 

(629

)

 

Technology services revenue

 

353

 

 

 

339

 

 

 

14

 

 

 

338

 

 

 

15

 

 

 

1,364

 

 

 

1,281

 

 

 

83

 

 

Distribution fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retrocessions

 

237

 

 

 

302

 

 

 

(65

)

 

 

241

 

 

 

(4

)

 

 

1,026

 

 

 

1,098

 

 

 

(72

)

 

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

 

69

 

 

 

95

 

 

 

(26

)

 

 

75

 

 

 

(6

)

 

 

312

 

 

 

358

 

 

 

(46

)

 

Other

 

8

 

 

 

14

 

 

 

(6

)

 

 

9

 

 

 

(1

)

 

 

43

 

 

 

65

 

 

 

(22

)

 

Total distribution fees

 

314

 

 

 

411

 

 

 

(97

)

 

 

325

 

 

 

(11

)

 

 

1,381

 

 

 

1,521

 

 

 

(140

)

 

Advisory and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory

 

17

 

 

 

31

 

 

 

(14

)

 

 

8

 

 

 

9

 

 

 

56

 

 

 

68

 

 

 

(12

)

 

Other

 

26

 

 

 

28

 

 

 

(2

)

 

 

27

 

 

 

(1

)

 

 

107

 

 

 

101

 

 

 

6

 

 

Total advisory and other revenue

 

43

 

 

 

59

 

 

 

(16

)

 

 

35

 

 

 

8

 

 

 

163

 

 

 

169

 

 

 

(6

)

 

Total revenue

$

4,337

 

 

$

5,106

 

 

$

(769

)

 

$

4,311

 

 

$

26

 

 

$

17,873

 

 

$

19,374

 

 

$

(1,501

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highlights

•

Investment advisory, administration fees and securities lending revenue decreased $569 million from the fourth quarter of 2021, primarily driven by the negative impact of market beta and foreign exchange movements on average AUM, partially offset by the elimination of yield-related fee waivers on money market funds. Securities lending revenue of $139 million increased from $136 million in the fourth quarter of 2021.

Investment advisory, administration fees and securities lending revenue decreased $132 million from the third quarter of 2022, primarily driven by the negative impact of market beta and foreign exchange movements on average AUM. Securities lending revenue of $139 million decreased from $162 million in the third quarter of 2022, primarily reflecting lower spreads.

•

Performance fees decreased $101 million from the fourth quarter of 2021, reflecting lower revenue from liquid alternative and long-only products, partially offset by higher revenue from illiquid alternative products.

Performance fees increased $146 million from the third quarter of 2022, due to higher revenue from alternative and long-only products.

•

Technology services revenue increased $14 million from the fourth quarter of 2021 and $15 million from the third quarter of 2022, reflecting continued strong client demand for Aladdin, despite the negative impact of foreign exchange movements. Technology services annual contract value (“ACV”)(1) increased 8% from the fourth quarter of 2021, and was similarly impacted by foreign exchange headwinds.

 

(1)

See note (3) to the condensed consolidated statements of income and supplemental information on page 12 for more information on ACV.

7

 

 

SUMMARY OF OPERATING EXPENSE

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Year

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

(in millions), (unaudited)

2022

 

 

2021

 

 

Change

 

 

2022

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

 

Operating expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

$

1,430

 

 

$

1,559

 

 

$

(129

)

 

$

1,339

 

 

$

91

 

 

$

5,681

 

 

$

6,043

 

 

$

(362

)

 

Distribution and servicing costs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retrocessions

 

237

 

 

 

302

 

 

 

(65

)

 

 

241

 

 

 

(4

)

 

 

1,026

 

 

 

1,098

 

 

 

(72

)

 

12b-1 costs

 

68

 

 

 

93

 

 

 

(25

)

 

 

74

 

 

 

(6

)

 

 

306

 

 

 

350

 

 

 

(44

)

 

Other

 

192

 

 

 

192

 

 

 

-

 

 

 

221

 

 

 

(29

)

 

 

847

 

 

 

752

 

 

 

95

 

 

Total distribution and servicing costs

 

497

 

 

 

587

 

 

 

(90

)

 

 

536

 

 

 

(39

)

 

 

2,179

 

 

 

2,200

 

 

 

(21

)

 

Direct fund expense

 

275

 

 

 

319

 

 

 

(44

)

 

 

318

 

 

 

(43

)

 

 

1,226

 

 

 

1,313

 

 

 

(87

)

 

General and administration expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing and promotional

 

100

 

 

 

96

 

 

 

4

 

 

 

95

 

 

 

5

 

 

 

331

 

 

 

238

 

 

 

93

 

 

Occupancy and office related

 

99

 

 

 

114

 

 

 

(15

)

 

 

99

 

 

 

-

 

 

 

403

 

 

 

364

 

 

 

39

 

 

Portfolio services

 

71

 

 

 

68

 

 

 

3

 

 

 

73

 

 

 

(2

)

 

 

280

 

 

 

263

 

 

 

17

 

 

Sub-advisory

 

17

 

 

 

27

 

 

 

(10

)

 

 

21

 

 

 

(4

)

 

 

80

 

 

 

99

 

 

 

(19

)

 

Technology

 

151

 

 

 

135

 

 

 

16

 

 

 

156

 

 

 

(5

)

 

 

600

 

 

 

508

 

 

 

92

 

 

Professional services

 

51

 

 

 

57

 

 

 

(6

)

 

 

47

 

 

 

4

 

 

 

180

 

 

 

179

 

 

 

1

 

 

Communications

 

12

 

 

 

11

 

 

 

1

 

 

 

11

 

 

 

1

 

 

 

44

 

 

 

44

 

 

 

-

 

 

Foreign exchange remeasurement

 

8

 

 

 

1

 

 

 

7

 

 

 

3

 

 

 

5

 

 

 

10

 

 

 

4

 

 

 

6

 

 

Contingent consideration fair value

   adjustments

 

1

 

 

 

1

 

 

 

-

 

 

 

1

 

 

 

-

 

 

 

3

 

 

 

34

 

 

 

(31

)

 

Product launch costs

 

6

 

 

 

-

 

 

 

6

 

 

 

-

 

 

 

6

 

 

 

6

 

 

 

274

 

 

 

(268

)

 

Other general and administration

 

64

 

 

 

54

 

 

 

10

 

 

 

48

 

 

 

16

 

 

 

223

 

 

 

214

 

 

 

9

 

 

Total general and administration expense

 

580

 

 

 

564

 

 

 

16

 

 

 

554

 

 

 

26

 

 

 

2,160

 

 

 

2,221

 

 

 

(61

)

 

Restructuring charge

 

91

 

 

 

-

 

 

 

91

 

 

 

-

 

 

 

91

 

 

 

91

 

 

 

-

 

 

 

91

 

 

Amortization of intangible assets

 

37

 

 

 

38

 

 

 

(1

)

 

 

38

 

 

 

(1

)

 

 

151

 

 

 

147

 

 

 

4

 

 

Total operating expense

$

2,910

 

 

$

3,067

 

 

$

(157

)

 

$

2,785

 

 

$

125

 

 

$

11,488

 

 

$

11,924

 

 

$

(436

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highlights

•

Employee compensation and benefits expense decreased $129 million from the fourth quarter of 2021, primarily resulting from lower incentive compensation, driven by lower operating income, and the lower mark-to-market impact of certain deferred compensation programs.

Employee compensation and benefits expense increased $91 million from the third quarter of 2022, primarily reflecting higher incentive compensation driven by higher performance fees.

•

Direct fund expense decreased $44 million from the fourth quarter of 2021, primarily reflecting lower average index AUM.

Direct fund expense decreased $43 million from the third quarter of 2022, primarily reflecting lower average index AUM and certain rebates that seasonally occur in the fourth quarter.

•

General and administration expense increased $16 million from the fourth quarter of 2021, primarily driven by higher technology expense, the impact of foreign exchange remeasurement and higher product launch costs, partially offset by lower occupancy and office related expense, and lower sub-advisory expense.

General and administration expense increased $26 million from the third quarter of 2022.

•

A restructuring charge of $91 million, primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards, was recorded in the fourth quarter of 2022 in connection with an initiative to modify the size and shape of the workforce to align more closely with strategic priorities. The restructuring charge has been excluded from our “as adjusted” financial results. See pages 10 through 12 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.

 

 

8

 

 

 

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

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Year

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

(in millions), (unaudited)

2022

 

 

2021

 

 

Change

 

 

2022

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

 

Nonoperating income (expense), GAAP basis

$

225

 

 

$

71

 

 

$

154

 

 

$

165

 

 

$

60

 

 

$

(95

)

 

$

723

 

 

$

(818

)

 

Less: Net income (loss) attributable to

     noncontrolling interests ("NCI")

 

48

 

 

 

(11

)

 

 

59

 

 

 

(45

)

 

 

93

 

 

 

(184

)

 

 

304

 

 

 

(488

)

 

Nonoperating income (expense)(1)

$

177

 

 

$

82

 

 

$

95

 

 

$

210

 

 

$

(33

)

 

$

89

 

 

$

419

 

 

$

(330

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Year

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

(in millions), (unaudited)

2022

 

 

2021

 

 

Change

 

 

2022

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

 

Net gain (loss) on investments(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private equity

$

66

 

 

$

66

 

 

$

-

 

 

$

20

 

 

$

46

 

 

$

88

 

 

$

278

 

 

$

(190

)

 

Real assets

 

5

 

 

 

10

 

 

 

(5

)

 

 

9

 

 

 

(4

)

 

 

28

 

 

 

20

 

 

 

8

 

 

Other alternatives(2)

 

5

 

 

 

4

 

 

 

1

 

 

 

1

 

 

 

4

 

 

 

5

 

 

 

47

 

 

 

(42

)

 

Other investments(3)

 

44

 

 

 

(15

)

 

 

59

 

 

 

(58

)

 

 

102

 

 

 

(201

)

 

 

22

 

 

 

(223

)

 

Subtotal

 

120

 

 

 

65

 

 

 

55

 

 

 

(28

)

 

 

148

 

 

 

(80

)

 

 

367

 

 

 

(447

)

 

Other gains (losses)(4)

 

39

 

 

 

21

 

 

 

18

 

 

 

247

 

 

 

(208

)

 

 

229

 

 

 

170

 

 

 

59

 

 

Total net gain (loss) on investments(1)

 

159

 

 

 

86

 

 

 

73

 

 

 

219

 

 

 

(60

)

 

 

149

 

 

 

537

 

 

 

(388

)

 

Interest and dividend income

 

72

 

 

 

46

 

 

 

26

 

 

 

41

 

 

 

31

 

 

 

152

 

 

 

87

 

 

 

65

 

 

Interest expense

 

(54

)

 

 

(50

)

 

 

(4

)

 

 

(50

)

 

 

(4

)

 

 

(212

)

 

 

(205

)

 

 

(7

)

 

Net interest income (expense)

 

18

 

 

 

(4

)

 

 

22

 

 

 

(9

)

 

 

27

 

 

 

(60

)

 

 

(118

)

 

 

58

 

 

Nonoperating income (expense)(1)

$

177

 

 

$

82

 

 

$

95

 

 

$

210

 

 

$

(33

)

 

$

89

 

 

$

419

 

 

$

(330

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 11 through 12.

(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 investments.

(4)

The amounts for the year ended December 31, 2022 and 2021 primarily include nonoperating noncash pre-tax gains in connection with the Company’s strategic minority investment in iCapital Network, Inc. of approximately $267 million and $119 million, respectively. The amounts for the year ended December 31, 2021 also include nonoperating noncash pre-tax gains in connection with the Company’s strategic minority investment in Scalable Capital Limited of approximately $46 million. Additional amounts include noncash pre-tax gains (losses) related to the revaluation of certain other minority investments.

 

INCOME TAX EXPENSE

 

Three Months

 

 

 

 

 

Three Months

 

 

 

 

 

 

Year

 

 

 

 

 

 

 

Ended

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

September 30,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

(in millions), (unaudited)

2022

 

 

2021

 

 

Change

 

2022

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

 

Income tax expense

$

345

 

 

$

478

 

 

$

(133

)

 

$

330

 

 

$

15

 

 

$

1,296

 

 

$

1,968

 

 

$

(672

)

 

Effective tax rate

 

21.5

%

 

 

22.6

%

 

 

(110

) bps

 

 

19.0

%

 

 

250

bps

 

 

20.0

%

 

 

25.0

%

 

 

(500

) bps

 

 

Highlights

•

Fourth quarter 2022 income tax expense includes a $28 million net discrete tax benefit, of which $17 million is associated with the net noncash tax benefit related to the revaluation of certain deferred income tax liabilities.

•

Fourth quarter 2021 income tax expense includes a $45 million net noncash tax benefit related to the revaluation of certain deferred income tax liabilities.

•

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


9

 

 

 

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

 

 

Three Months Ended

 

 

Year Ended

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

(in millions), (unaudited)

 

2022

 

 

2021

 

 

2022

 

 

2022

 

 

2021

 

 

Operating income, GAAP basis

 

$

1,427

 

 

$

2,039

 

 

$

1,526

 

 

$

6,385

 

 

$

7,450

 

 

Non-GAAP expense adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charge

 

 

91

 

 

 

-

 

 

 

-

 

 

 

91

 

 

 

-

 

 

Amortization of intangible assets

 

 

37

 

 

 

38

 

 

 

38

 

 

 

151

 

 

 

147

 

 

Acquisition-related compensation costs

 

 

6

 

 

 

12

 

 

 

5

 

 

 

24

 

 

 

88

 

 

Contingent consideration fair value adjustments

 

 

1

 

 

 

1

 

 

 

1

 

 

 

3

 

 

 

34

 

 

Lease cost - Hudson Yards

 

 

15

 

 

 

17

 

 

 

15

 

 

 

57

 

 

 

28

 

 

Operating income, as adjusted (1)

 

 

1,577

 

 

 

2,107

 

 

 

1,585

 

 

 

6,711

 

 

 

7,747

 

 

Product launch costs and commissions

 

 

6

 

 

 

-

 

 

 

-

 

 

 

6

 

 

 

284

 

 

Operating income used for operating margin measurement

 

$

1,583

 

 

$

2,107

 

 

$

1,585

 

 

$

6,717

 

 

$

8,031

 

 

Revenue, GAAP basis

 

$

4,337

 

 

$

5,106

 

 

$

4,311

 

 

$

17,873

 

 

$

19,374

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution fees

 

 

(314

)

 

 

(411

)

 

 

(325

)

 

 

(1,381

)

 

 

(1,521

)

 

Investment advisory fees

 

 

(183

)

 

 

(176

)

 

 

(211

)

 

 

(798

)

 

 

(679

)

 

Revenue used for operating margin measurement

 

$

3,840

 

 

$

4,519

 

 

$

3,775

 

 

$

15,694

 

 

$

17,174

 

 

Operating margin, GAAP basis

 

 

32.9

%

 

 

39.9

%

 

 

35.4

%

 

 

35.7

%

 

 

38.5

%

 

Operating margin, as adjusted (1)

 

 

41.2

%

 

 

46.6

%

 

 

42.0

%

 

 

42.8

%

 

 

46.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See note (1) to the condensed consolidated statements of income and supplemental information on page 11 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

 

 

Year Ended

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

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

 

2022

 

 

2021

 

 

2022

 

 

2022

 

 

2021

 

 

Net income attributable to BlackRock, Inc., GAAP basis

 

$

1,259

 

 

$

1,643

 

 

$

1,406

 

 

$

5,178

 

 

$

5,901

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charge, net of tax

 

 

69

 

 

 

-

 

 

 

-

 

 

 

69

 

 

 

-

 

 

Amortization of intangible assets, net of tax

 

 

27

 

 

 

29

 

 

 

29

 

 

 

114

 

 

 

112

 

 

Acquisition-related compensation costs, net of tax

 

 

5

 

 

 

9

 

 

 

4

 

 

 

19

 

 

 

67

 

 

Contingent consideration fair value adjustments, net of tax

 

 

1

 

 

 

1

 

 

 

1

 

 

 

3

 

 

 

26

 

 

Lease cost - Hudson Yards, net of tax

 

 

12

 

 

 

13

 

 

 

11

 

 

 

43

 

 

 

22

 

 

Income tax matters

 

 

(17

)

 

 

(45

)

 

 

-

 

 

 

(35

)

 

 

126

 

 

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

 

$

1,356

 

 

$

1,650

 

 

$

1,451

 

 

$

5,391

 

 

$

6,254

 

 

Diluted weighted-average common shares outstanding

 

 

151.8

 

 

 

154.6

 

 

 

152.0

 

 

 

152.4

 

 

 

154.4

 

 

Diluted earnings per common share, GAAP basis

 

$

8.29

 

 

$

10.63

 

 

$

9.25

 

 

$

33.97

 

 

$

38.22

 

 

Diluted earnings per common share, as adjusted (2)

 

$

8.93

 

 

$

10.68

 

 

$

9.55

 

 

$

35.36

 

 

$

40.51

 

 

 

See note (2) to the condensed consolidated statements of income and supplemental information on page 12 for more information on as adjusted items.

 


10

 

 

 

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 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.

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 nonrecurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions. Such measures have been recast for 2021 to reflect the inclusion of such new adjustments. For further information, refer to the Current Report on Form 8-K furnished on April 13, 2022.

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 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. In the fourth quarter of 2022, the Company recorded a restructuring charge primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards in connection with an initiative to modify the size and shape of the workforce to align more closely with strategic priorities. In addition, the Company recorded an expense related to the lease of office space for its new headquarters located at 50 Hudson Yards in New York (“Lease cost – Hudson Yards”) from August 2021, when it obtained access to the building to begin its tenant improvements. The Company will begin cash lease payments related to the new headquarters in May 2023. As a result, the Company is recognizing lease expense for both its current and new headquarters until its current headquarters lease expires in April 2023. Management believes excluding the impact of the restructuring charge and Lease cost – Hudson Yards when calculating operating income, as adjusted, is useful to assess the Company’s financial performance, ongoing operations, and enhances comparability among periods presented.

•

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.

11

 

 

(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 nonrecurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions, restructuring charge, as well as previously reported Lease cost – Hudson Yards.

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.


 

12

 

 

 

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 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; (18) climate-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 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 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.

PERFORMANCE NOTES

Past performance is not indicative of future results. Except as specified, the performance information shown is as of December 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 November 30, 2022. The performance data does not include accounts terminated prior to December 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 December 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.

13