BlackRock Inc. - FORM 8-K - EX-99.2 - FOURTH QUARTER 2010 EARNINGS - PRESS RELEASE SUPPLEMENT

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8-K - FORM 8-K - BlackRock Inc.	d8k.htm
EX-99.1 - PRESS RELEASE - BlackRock Inc.	dex991.htm

Q4 2010 Earnings

Press Release Supplement

25 January 2011

Exhibit 99.2

$307

$302

$400

$561

$727

$741

$737

$962

2009

2010

$670

$537

$293

$239

$110

$379

$469

$463

$3.42

$0.81

$2.40

$2.37

$2.10

$2.39

$2.75

$1.75

2009

2010

Strong quarterly financial performance marked by record income and EPS

Operating and Net Income, as Adjusted ($ in millions)

Diluted Earnings Per Share, as Adjusted

Reconciliation between GAAP and as Adjusted is provided in the appendix

Operating Income

Net Income

$1,518

$1,662

$1,570

$3,167

2007

2008

2009

2010

$1,021

$856

$1,077

$2,139

$7.99

$6.30

$10.94

$7.13

2007

2008

2009

2010

Record full year income and EPS

Operating and Net Income, as Adjusted ($ in millions)

Diluted Earnings Per Share, as Adjusted

Reconciliation between GAAP and as Adjusted is provided in the appendix

Operating Income

Net Income

Full year 2010 operating margin expanded by 1.1 points versus full year 2009, and approximately 2.5 points versus 2009

BLK/BGI ProForma

39.3% FY 2010

We have expanded margins while investing in the business

Operating Margins, as Adjusted

For further information and reconciliation between GAAP and as Adjusted, see note (a) in the current earnings release as well as previously filed Forms 10-K, 10-Q and 8-K’s

40.7%

38.4%

37.4%

38.7%

38.2%

36.8%

38.9%

38.8%

2007

2008

2009

Pro Forma

2010

Equity markets have been volatile; positive tailwinds for 2011

S&P 500

Q3 2010 Spot to Spot

Q4 2010 Spot to Spot

2010

Average:

1,140

(up

20%

vs.

2009

Average)

Q1 2009 Q2 2009 Q3 2009 Q4 2009

Q1 2010 Q2 2010 Q3 2010

Q4 2010

Q4 2009 Spot to Spot

On average, equity markets in Q4 2010 were 10% higher than Q3 2010 and 11% higher than Q4 2009

On average, equity markets in 2010 were 20% higher than 2009

2009 Average: 948

Q3 Avg: 1,096

Q4 Avg: 1,205

(up 10% vs. Q3-10)

(up 11% vs. Q4-09)

Q4 Avg: 1,089

9/30/09 close: 1,057

12/31/09 close: 1,115

(up 5% vs. 9/30/09)

9/30/10 close: 1,141

(up 11% vs. 6/30/10)

600

700

800

900

1,000

1,100

1,200

1,300

Apr-09

Jul-09

Oct-09

12/31/10 close: 1,258

(up 10% vs. 9/30/10)

6/30/10 close: 1,031

Improved operating results and positive movement on the investment portfolio

$0.67

Increasing EPS

For further information and reconciliation between GAAP and as Adjusted, see notes (a) through (f) in the current earnings release

Decreasing EPS

Q4-10 Compared to Q3-10, as Adjusted

Non-Operating EPS

Operating EPS

Total EPS:

$2.75

Total EPS:

$3.42

Operating

EPS:

Operating

EPS:

$2.61

($0.07)

$0.74

$3.35

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

Q3-10 EPS

Operating EPS

Non-Operating EPS

Q4-10 EPS

Non-Operating

EPS: $0.14

Non-Operating

EPS: $0.07

Strong investment performance drove revenue growth

$401 million

Increasing Revenue

79%

13%

Base Fees

Performance Fees

BRS and Advisory

Other Revenue

$2.49 billion

Q4-10 Total Revenue

Q4-10 Compared to Q3-10

$2,493

$2,092

$157

$212

$32

$1,600

$2,000

$2,400

$2,800

Q3-10

Performance Fees

Base Fees

BRS & Other

Q4-10

$1,200

$1,400

Higher G&A and AUM / revenue-linked expenses

$1,531

$1,355

($3)

$10

$96

$72

Q3-10

G&A

Compensation

& Benefits

Direct Fund Exp

Distribution

& Servicing

Deferred

Commissions

Q4-10

AUM / Revenue related: $80 million

Increasing Expenses

Decreasing Expenses

52%

27%

Employee Comp & Benefits

Distribution & Servicing Costs

Amort. of Deferred Sales Commissions

Direct Fund Expenses

General & Administration

Amortization of Intangibles

$1.53 billion

Q4-10 Expense, as Adjusted, by Category

Q4-10 Compared to Q3-10, as Adjusted

For further information and reconciliation between GAAP and as Adjusted, see note (a) in the current earnings release

Total Revenue, Q4-10 compared to Q3-10

Total revenue increased $401 million or 19%

in Q4-10 from Q3-10

•

Q3 Total Revenue: $2,092 million

•

Q4 Total Revenue: $2,493 million

$1,000

$1,600

$1,800

Base fees substantially higher primarily due to improved markets

$157 million

Decreasing Base Fees

Increasing Base Fees

11%

14%

24%

Active Fixed Income

iShares/ ETP Fixed Income

Institutional Index Fixed Income

Active Equity

iShares/ ETP Equity

Institutional Index Equity

Multi-Asset

Alternatives

Cash

Q4-10 Base Fees

Q4-10 Compared to Q3-10

$1.95 billion

$1,951

$1,794

($6)

$11

$13

$33

$41

$55

$1,600

$1,800

$2,000

Q3-10

iShares/

ETP Equity

Active

Equity

Multi-

Asset

Institutional

Index

Equity

Alternatives

Active

Fixed

Income

iShares/

ETP Fixed

Income

Institutional

Index Fixed

Income

Cash

Q4-10

For

further

information

and

reconciliation

between

GAAP

and

Adjusted,

see

note

(b)

the

current

earnings

release

well

previously

filed

Form

10-Q’s

Continued investment gains driven by markets

$16

$20

$13

($25)

$10

$20

$30

$40

$50

Distressed

Credit/ Mortgage

Private Equity

Hedge Funds/

Funds of Hedge

Funds

Real Estate

Other

Investments

Net Interest

Expense

Q4-10

$45 million

Q4 Investment Gain, as Adjusted, by Category

Q4-10 Non-Operating Income by Category, as Adjusted

Net Interest Expense

Investment Gain

Non-Operating Income

$45 million Investment Gain

35%

16%

11%

29%

Distressed Credit/ Mortgage

Private Equity

Hedge Funds/ Funds of Hedge Funds

Real Estate

Other Investments

Substantial free cash flow

To be reinvested in the business and available for dividends

$4.00

$3.12

$2.68

$1.68

$1.20

$1.00

$0.80

33%

83%

64%

50%

56%

53%

48%

44%

2010

2009

2008

2007

2006

2005

2004

2003*

Dividend

Payout Ratio

2010 Share Repurchase = 0.9 million shares

* 2003 dividend has been annualized

Payout ratio = (dividends + share repurchases) / GAAP net income

N/A 2/26/04 2/15/05 2/17/06

2/27/07 2/15/08 N/A 2/25/10

Dividend Change

Declared:

Appendix

$962

$737

$400

$302

$307

$561

$727

$741

$271

$261

$357

$389

$654

$697

$707

$940

2009

2010

GAAP

As Adjusted

Quarterly operating income –

GAAP and As Adjusted

Operating Income ($ in millions)

Non-GAAP Adjustments ($ in millions)

Non-GAAP adjustments include BGI transaction / integration costs, PNC LTIP funding obligation, Merrill Lynch

compensation contribution, Restructuring charges, and Compensation related to appreciation (depreciation) on deferred

compensation plans

$22

$30

$44

$73

$172

$43

$36

$41

2009

2010

For further information and reconciliation between GAAP and as Adjusted, see note (a) in the current earnings release as well as previously filed Form 10-Q’s

$1,570

$1,662

$1,518

$3,167

$1,294

$1,593

$1,278

$2,998

2007

2008

2009

2010

GAAP

As Adjusted

Annual operating income –

GAAP and As Adjusted

Operating Income ($ in millions)

Non-GAAP Adjustments ($ in millions)

Non-GAAP adjustments include MLIM integration costs, Quellos integration costs, BGI transaction / integration costs, PNC

LTIP funding obligation, Merrill Lynch compensation contribution, Restructuring charges, Termination of closed-end fund

administration and servicing arrangements and Compensation related to appreciation (depreciation) on deferred

compensation plans

$169

$224

$69

$292

2007

2008

2009

2010

For

further

information

and

reconciliation

between

GAAP

and

Adjusted,

see

note

(a)

the

current

earnings

release

well

previously

filed

Form

10-Q’s

$670

$463

$469

$379

$110

$239

$293

$537

$218

$317

$256

$423

$432

$551

$657

$84

2009

2010

Quarterly net income –

GAAP and As Adjusted

$13

$31

$46

$123

($14)

$26

$21

($24)

2009

2010

Net Income ($ in millions)

Non-GAAP Adjustments ($ in millions)

Non-GAAP adjustments include BGI transaction / integration costs, PNC LTIP funding obligation, Merrill Lynch

compensation

contribution,

Restructuring

charges,

and

Income

tax

law

changes

GAAP

As Adjusted

For further information and reconciliation between GAAP and as Adjusted, see notes (c) and (d) in the current earnings release as well as previously filed Form 10-Q’s

$1,021

$856

$1,077

$2,139

$784

$875

$2,063

$993

2007

2008

2009

2010

$76

$84

$72

$146

2007

2008

2009

2010

Annual net income –

GAAP and As Adjusted

Net Income ($ in millions)

Non-GAAP Adjustments ($ in millions)

Non-GAAP adjustments include MLIM integration costs, Quellos integration costs, BGI transaction / integration costs, PNC

LTIP funding obligation, Merrill Lynch compensation contribution, Restructuring charges, Termination of closed-end fund

administration and servicing arrangements and Income tax law changes

GAAP

As Adjusted

For further information and reconciliation between GAAP and as Adjusted, see notes (c) and (d) in the current earnings release as well as previously filed Form 10-Q’s

$78

$77

$78

$18

($75)

($179)

2009

2010

$20

$39

$52

$42

($153)

$13

($6)

($28)

GAAP

As Adjusted

Quarterly non-operating income –

GAAP and As Adjusted

Non-Operating Income ($ in millions)

Non-GAAP Adjustments ($ in millions)

Non-GAAP adjustments include net income (loss) attributable to NCI, and compensation expense related to (appreciation)

depreciation on deferred compensation plans

($39)

$47

($8)

($5)

($26)

$26

($35)

2009

2010

$18

For further information and reconciliation between GAAP and as Adjusted, see note (b) in the current earnings release as well as previously filed Form 10-Q’s

Annual non-operating income –

GAAP and As Adjusted

Non-Operating Income ($ in millions)

Non-GAAP Adjustments ($ in millions)

Non-GAAP adjustments include net income (loss) attributable to NCI, and compensation expense related to (appreciation)

depreciation on deferred compensation plans

For further information and reconciliation between GAAP and as Adjusted, see note (b) in the current earnings release as well as previously filed Form 10-Q’s

Forward-looking statements

This presentation, and other statements that BlackRock may make, may contain forward-looking statements

within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or

business performance, strategies or expectations. Forward-looking statements are typically identified by words

or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,”

“anticipate, ” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,”

“maintain, ” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,”

“would, ” “should,” “could,” “may” or 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.

Forward-looking statements

In addition to risk factors previously disclosed in BlackRock’s Securities and Exchange Commission reports and

those identified elsewhere in this presentation the following factors, among others, could cause actual results to

differ materially from forward-looking statements or historical performance:

(1)

the

introduction,

withdrawal,

success

and

timing

business

initiatives

and

strategies;

(2)

changes

and

volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or

financial and capital markets, which could result in changes in demand for products or services or in the value

of assets under management; (3) the relative and absolute investment performance of BlackRock’s investment

products; (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact

of future acquisitions or divestitures; (7) the unfavorable resolution of legal proceedings; (8) the extent and

timing of any share repurchases; (9) the impact, extent and timing of technological changes and the adequacy

of intellectual property protection; (10) the impact of legislative and regulatory actions and reforms, including the

recently approved Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulatory, supervisory or

enforcement actions of government agencies relating to BlackRock, Barclays, Bank of America, Merrill Lynch or

PNC; (11) terrorist activities, international hostilities and natural disasters, which may adversely affect the

general economy, domestic and local financial and capital markets, specific industries or BlackRock; (12) the

ability to attract and retain highly talented professionals; (13) fluctuations in the carrying value of BlackRock’s

economic investments; (14) the impact of changes to tax legislation and, generally, the tax position of the

Company; (15) BlackRock’s success in maintaining the distribution of its products; (16) the impact of BlackRock

electing to provide support to its products from time to time; (17) the impact of problems at other financial

institutions or the failure or negative performance of products at other financial institutions; and (18) the ability

of BlackRock to integrate the operations of BGI.

BlackRock Inc. - FORM 8-K - EX-99.2 - FOURTH QUARTER 2010 EARNINGS - PRESS RELEASE SUPPLEMENT - January 25, 2011

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