SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
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| For the quarterly period ended September 30, 2002 | |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
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| For the transition period from ____________ to ____________. | |
Commission file number 001-15305
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BlackRock, Inc. |
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Delaware |
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51-0380803 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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40 East 52nd Street, New York, NY 10022 |
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(Address of principal executive offices) |
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(212) 754-5300 |
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(Registrant’s telephone number, including area code) |
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(Former name, former address and for new fiscal year, if changed since last report) |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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As of October 31, 2002, there were 17,501,696 shares of the registrant’s class A common stock outstanding and 47,325,060 shares of the registrant’s class B common stock outstanding.
BlackRock Inc.
Index to Form 10-Q
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| Item 1. |
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1 | |
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2 | |
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3 | |
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4 | |
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| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
13 | |
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| Item 3. |
39 | ||
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| Item 4. |
40 | ||
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| Item 6. |
41 | ||
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PART I – FINANCIAL INFORMATION
Item 1.
Financial Statements
BlackRock, Inc.
Consolidated Statements of Financial Condition
(Dollar amounts in thousands)
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September 30, |
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December 31, |
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(unaudited) |
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| Assets |
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| Cash and cash equivalents |
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$ |
213,675 |
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$ |
186,451 |
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| Accounts receivable |
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109,115 |
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94,090 |
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| Investments (cost: $188,237 and $143,600, respectively) |
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180,462 |
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139,126 |
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| Property and equipment, net |
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93,527 |
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70,510 |
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| Intangible assets, net |
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181,082 |
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181,688 |
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| Receivable from affiliates |
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2,729 |
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2,569 |
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| Other assets |
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8,984 |
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10,044 |
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Total assets |
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$ |
789,574 |
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$ |
684,478 |
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| Liabilities and stockholders’ equity |
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| Accrued compensation |
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$ |
140,847 |
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$ |
146,019 |
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| Accounts payable and accrued liabilities |
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Affiliate |
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16,655 |
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15,972 |
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Other |
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18,540 |
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19,075 |
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| Acquired management contract obligation |
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6,578 |
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7,344 |
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| Other liabilities |
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11,030 |
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9,951 |
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Total liabilities |
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193,650 |
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198,361 |
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| Stockholders’ equity |
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| Common stock, class A, 17,484,583 and 15,916,944 shares issued, respectively |
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175 |
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159 |
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| Common stock, class B, 47,606,341 and 48,674,607 shares issued, respectively |
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476 |
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487 |
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| Additional paid - in capital |
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197,695 |
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184,041 |
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| Retained earnings |
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406,899 |
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307,498 |
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| Unearned compensation |
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(1,881 |
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(1,927 |
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| Accumulated other comprehensive loss |
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(3,527 |
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(3,537 |
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| Treasury stock, class B, at cost, 280,087 and 125,633 shares issued, respectively |
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(3,913 |
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(604 |
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Total stockholders’ equity |
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595,924 |
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486,117 |
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| Total liabilities and stockholders’ equity |
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$ |
789,574 |
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$ |
684,478 |
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See accompanying notes to consolidated financial statements.
- 1 -
PART I – FINANCIAL INFORMATION (continued)
Item
1. Financial Statements (continued)
BlackRock, Inc.
Consolidated Statements of Income
(Dollar amounts in thousands, except share data)
(unaudited)
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Three months ended |
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Nine months ended |
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2002 |
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2001 |
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2002 |
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2001 |
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| Revenue |
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| Investment advisory and administration fees |
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Mutual funds |
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$ |
52,009 |
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$ |
52,751 |
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$ |
162,004 |
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$ |
162,458 |
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Separate accounts |
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70,149 |
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71,430 |
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235,420 |
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213,439 |
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| Other income |
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Affiliate |
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1,250 |
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1,250 |
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3,750 |
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3,750 |
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Other |
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13,724 |
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9,351 |
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38,766 |
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24,106 |
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| Total revenue |
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137,132 |
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134,782 |
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439,940 |
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403,753 |
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| Expense |
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| Employee compensation and benefits |
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50,156 |
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53,932 |
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178,372 |
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164,896 |
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| Fund administration and servicing costs - affiliates |
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7,831 |
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15,016 |
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32,925 |
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47,428 |
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| General and administration |
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Affiliate |
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2,265 |
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2,102 |
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6,052 |
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5,806 |
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Other |
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21,183 |
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18,587 |
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61,852 |
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50,622 |
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| Amortization of intangible assets |
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201 |
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2,613 |
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603 |
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7,841 |
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| Total expense |
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81,636 |
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92,250 |
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279,804 |
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276,593 |
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| Operating income |
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55,496 |
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42,532 |
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160,136 |
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127,160 |
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| Non-operating income (expense) |
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| Investment income |
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408 |
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2,890 |
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7,443 |
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7,384 |
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| Interest expense |
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(164 |
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(172 |
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(519 |
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(574 |
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| Total non-operating income |
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244 |
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2,718 |
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6,924 |
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6,810 |
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| Income before income taxes |
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55,740 |
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45,250 |
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167,060 |
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133,970 |
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| Income taxes |
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22,575 |
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17,874 |
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67,659 |
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54,868 |
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| Net income |
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$ |
33,165 |
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$ |
27,376 |
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$ |
99,401 |
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$ |
79,102 |
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| Earnings per share |
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Basic |
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$ |
0.51 |
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$ |
0.43 |
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$ |
1.54 |
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$ |
1.23 |
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Diluted |
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$ |
0.51 |
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$ |
0.42 |
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$ |
1.52 |
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$ |
1.22 |
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| Weighted-average shares outstanding |
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Basic |
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64,798,908 |
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64,284,768 |
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64,725,309 |
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64,231,342 |
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Diluted |
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65,338,340 |
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64,947,840 |
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65,303,080 |
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64,897,087 |
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See accompanying notes to consolidated financial statements.
- 2 -
PART I – FINANCIAL INFORMATION (continued)
Item
1. Financial Statements (continued)
BlackRock, Inc.
Consolidated Statements of Cash Flows
(Dollar amounts in thousands)
(unaudited)
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Nine months ended |
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2002 |
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2001 |
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| Cash flows from operating activities |
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| Net income |
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$ |
99,401 |
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$ |
79,102 |
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| Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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15,951 |
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18,899 |
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Stock-based compensation |
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4,104 |
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3,784 |
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Deferred income taxes |
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12,039 |
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2,619 |
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Tax benefit from stock-based compensation |
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6,668 |
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5,230 |
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Purchase of investments, trading, net |
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(17,350 |
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Net loss on investments |
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621 |
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Changes in operating assets and liabilities: |
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