Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - BlackRock Inc. | d658461d8k.htm |
| EX-99.1 - EARNINGS RELEASE DATED JANUARY 16, 2014 ISSUED BY THE COMPANY - BlackRock Inc. | d658461dex991.htm |
 Q4
2013 Earnings Earnings Release Supplement
January 16, 2014
Exhibit 99.2 |
 1
Important Notes
This
presentation,
and
other
statements
that
BlackRock,
Inc.
(“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.
In
addition
to
risk
factors
previously
disclosed
in
BlackRock’s
Securities
and
Exchange
Commission
(“SEC”)
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
of
business
initiatives
and
strategies;
(2)
changes
and
volatility
in
political,
economic
or
industry
conditions,
the
interest
rate
environment,
foreign
exchange
rates
or
financial
and
capital
markets,
which
could
result
in
changes
in
demand
for
products
or
services
or
in
the
value
of
assets
under
management;
(3)
the
relative
and
absolute
investment
performance
of
BlackRock’s
investment
products;
(4)
the
impact
of
increased
competition;
(5)
the
impact
of
future
acquisitions
or
divestitures;
(6)
the
unfavorable
resolution
of
legal
proceedings;
(7)
the
extent
and
timing
of
any
share
repurchases;
(8)
the
impact,
extent
and
timing
of
technological
changes
and
the
adequacy
of
intellectual
property,
information
and
cyber
security
protection;
(9)
the
impact
of
legislative
and
regulatory
actions
and
reforms,
including
the
Dodd-Frank
Wall
Street
Reform
and
Consumer
Protection
Act,
and
regulatory,
supervisory
or
enforcement
actions
of
government
agencies
relating
to
BlackRock
or
The
PNC
Financial
Services
Group,
Inc.
(“PNC”);
(10)
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;
(11)
the
ability
to
attract
and
retain
highly
talented
professionals;
(12)
fluctuations
in
the
carrying
value
of
BlackRock’s
economic
investments;
(13)
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
BlackRock;
(14)
BlackRock’s
success
in
maintaining
the
distribution
of
its
products;
(15)
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
(16)
the
impact
of
problems
at
other
financial
institutions
or
the
failure
or
negative
performance
of
products
at
other
financial
institutions.
This
presentation
also
includes
non-GAAP
financial
measures.
You
can
find
our
presentations
on
the
most
directly
comparable
GAAP
financial
measures
calculated
in
accordance
with
GAAP
and
our
reconciliations
in
the
appendix
to
this
earnings
release
supplement,
our
current
earnings
release
dated
January
16,
2014,
and
BlackRock’s
other
periodic
reports,
which
are
available
on
BlackRock’s
web
site
at
www.blackrock.com. |
 2
Table of Contents
Operating and Net Income/Diluted EPS, as adjusted
Page 3
Operating Margin, as adjusted
Page 4
Q4 2013 Mix by Product, Client Type, Style and Region
Page 5
Major Market Indices and Exchange Rates
Page 6
Year-over-Year: Q4 2013 vs. Q4 2012
Pages 7-11
Sequential Quarters: Q4 2013 vs. Q3 2013
Pages 12-16
Nonoperating and Capital Management
Pages 17-19
Appendix
Pages 20-22 |
 3
EPS and operating income up 24% and 10% year-over-year, respectively
Operating and Net Income, as adjusted ($ in millions)
Diluted Earnings Per Share, as adjusted
For
further
information
and
reconciliation
between
GAAP
and
as
adjusted,
see
the
appendix,
notes
(a)
through
(f)
in
the
current
earnings
release
as
well
as
previously
filed
Form
10-Ks,
10-Qs
and
8-Ks.
Operating Income
Net Income
•
Base fees and performance fees drove year-over-year and sequential
results •
Q4
performance
fees
reflected
strong
performance
in
alternatives
products,
a
seasonally
higher
number
of
funds
with
performance
measurement
locks
and
a
significant
fee
associated
with
the
partial
liquidation
of
a
closed-end
opportunistic
mortgage
fund
Full Year 2012
Operating Income = $3,574
Net Income = $2,438
Full Year 2013
Operating Income = $4,024
Net Income = $2,882
Full Year 2012 = $13.68
Full Year 2013 = $16.58 |
 4
Full year 2013 margin improvement
Operating Margin, as adjusted
For
further
information
and
reconciliation
between
GAAP
and
as
adjusted,
see
the
appendix,
notes
(a)
through
(f)
in
the
current
earnings
release
as
well
as
previously
filed
Form
10-Ks,
10-Qs
and
8-Ks. |
 5
A broadly diversified business across clients, products and geographies
Q4 2013 Long-term Base Fees of $2.203 billion
Long-term Assets Under Management of $4.012 trillion at December 31, 2013
Product Type
Client Type
Style
Region
Alternatives 3%
Alternatives 8%
Multi-asset
9%
Multi-asset
13%
Fixed Income
31%
Fixed Income
22%
Equity
57%
Equity
57%
iShares
23%
iShares
35%
Retail
12%
Retail
35%
Institutional
65%
Institutional
30%
AUM
Base Fees
AUM
Base Fees
Index
42%
Index
10%
iShares
23%
iShares
35%
Asia-Pacific 8%
Asia-Pacific 8%
EMEA
31%
EMEA
29%
Americas
61%
Americas
63%
Active
35%
Active
55%
AUM
Base Fees
AUM
Base Fees |
 6
Major market indices and exchange rates
Spot
Average Level
% Change
Q4 2013 vs.
December 31,
2013
September 30,
2013
% Change
Q4 2013
Q4 2012
Q3 2013
Q4 2012
Q3 2013
Equity Indices:
Domestic
S&P 500
1,848
1,682
10%
1,770
1,418
1,673
25%
6%
Global
MSCI Barra World Index
1,661
1,544
8%
1,602
1,312
1,511
22%
6%
MSCI Europe Index
112
106
6%
109
94
104
16%
5%
MSCI AC Asia Pacific Index
141
139
1%
141
124
135
14%
4%
MSCI Emerging Markets Index
1,003
987
2%
1,011
1,009
956
-%
6%
S&P Global Natural Resources
3,503
3,354
4%
3,418
3,391
3,262
1%
5%
Fixed Income Index:
Barclays U.S. Aggregate Bond Index
1,807
1,810
-%
1,814
1,843
1,795
(2%)
1%
Foreign Exchange Rates:
GBP to USD
1.66
1.62
2%
1.62
1.61
1.55
1%
5%
EUR to USD
1.38
1.35
2%
1.36
1.30
1.32
5%
3%
Source: Bloomberg |
 Year-over-year
Q4 2013 vs. Q4 2012
*
*
*
*
*
*
*
*
*
*
* |
 8
Operating Income, as adjusted –
Q4 2013 Compared to Q4 2012
Operating income reflects growth in base fees
For further information and reconciliation between GAAP and as adjusted, see the
appendix and notes (a) through (f) in the current earnings release.
Increasing Revenue
Increasing Expenses
•
Q4
performance
fees
reflected
strong
performance
in
alternatives
products
•
BlackRock
Solutions
primarily
reflects
growth
in
Aladdin
revenue |
 9
Revenue reflects positive markets, flows and continued strong performance fees
Q4 2013 Compared to Q4 2012
Total Revenue
Q4 2012
$2.54 billion
Decreasing Revenue
Increasing Revenue
Q4 2013
$2.78 billion
•
BlackRock Solutions primarily
reflects growth in Aladdin
revenue
•
Securities lending fees reflect lower spreads consistent with industry trends,
partially offset by higher on-loan balances •
Other revenue reflects lower earnings from certain strategic investments
|
 10
Growth in base fees reflects higher average AUM driven by markets and organic
growth Q4 2013
$2.28 billion
Q4 2013 Compared to Q4 2012
Base fees (including securities lending)
Q4 2012
$2.08 billion
Decreasing Base Fees
Increasing Base Fees |
 11
Expenses driven by higher revenue-related costs
Q4 2013
$1.63 billion
Increasing Expenses
Expenses, as adjusted, by Category
Q4 2013 Compared to Q4 2012, as adjusted
For
further
information
and
reconciliation
between
GAAP
and
as
adjusted,
see
the
appendix
and
notes
(a)
through
(f)
in
the
current
earnings
release.
Q4 2012
$1.50 billion
•
General and administration expenses impacted by various lease exit costs
|
 Sequential Quarters
Q4 2013 vs. Q3 2013
*
*
*
*
*
*
*
*
*
* |
 13
Operating income reflects growth in base fees and strong performance fees
Operating Income, as adjusted –
Q4 2013 Compared to Q3 2013
For
further
information
and
reconciliation
between
GAAP
and
as
adjusted,
see
the
appendix
and
notes
(a)
through
(f)
in
the
current
earnings
release.
Increasing Expenses
Increasing Revenue
•
Q4
performance
fees
reflected
strong
performance
in
alternatives
products,
a
seasonally
higher
number
of
funds
with
performance
measurement
locks
and
a
significant
fee
associated
with
the
partial
liquidation
of
a
closed-end
opportunistic
mortgage
fund
•
Expenses
driven
by
higher
revenue-related
costs
and
general
and
administration
expenses |
 14
Revenue reflects positive markets and flows and seasonally strong performance
fees Q4 2013 Compared to Q3 2013
Increasing Revenue
Total Revenue
Q3 2013
$2.47 billion
Q4 2013
$2.78 billion
•
Q4
performance
fees
reflected
strong
performance
in
alternatives
products,
a
seasonally
higher
number
of
funds
with
performance
measurement
locks
and
a
significant
fee
associated
with
the
partial
liquidation
of
a
closed-end
opportunistic
mortgage
fund |
 15
Growth in base fees reflects higher average AUM driven by markets and organic
growth Q4 2013
$2.28 billion
Base Fees (including securities lending)
Q4 2013 Compared to Q3 2013
Q3 2013
$2.15 billion
Increasing Base Fees
Decreasing Base Fees |
 16
Expenses driven by higher revenue-related costs and general and administration
expenses Q4 2013
$1.63 billion
Increasing Expenses
Expenses, as adjusted, by Category
Q4 2013 Compared to Q3 2013, as adjusted
Q3 2013
$1.49 billion
For
further
information
and
reconciliation
between
GAAP
and
as
adjusted,
see
the
appendix
and
notes
(a)
through
(f)
in
the
current
earnings
release.
•
General
and
administration
expenses
driven
by
higher
marketing
and
promotional
costs,
various
lease
exit
costs,
higher
professional
services
expenses
and
other
general
and
administration
expenses,
including
foreign
currency
exchange
movements |
 Nonoperating and Capital Management
*
*
*
*
*
*
*
*
*
* |
 18
Q4 2013 $13 million Nonoperating Income by Category, as adjusted
Q4 2013 nonoperating income
$17
$12
$7
$20
$5
($48)
($60)
($50)
($40)
($30)
($20)
($10)
$0
$10
$20
$30
$40
Private Equity
Real Estate
Distressed Credit/
Mortgage Funds
Hedge Funds/
Funds of Hedge
Funds
Other Investments
Net Interest
Expense
For further information and reconciliation between GAAP and as adjusted, see the
appendix and notes (a) through (f) in the current earnings release. Net
Interest Expense Investment Gains
$61 million Net Investment Gain |
 19
Continued commitment to sound capital management
Operating cash flow
Share repurchases
Amounts above exclude repurchases of employee tax withholdings related to employee
stock transactions. Total payout ratio
Dividends and Dividend Payout Ratio
Payout ratio = (Dividends declared + share repurchases) / GAAP Net income.
For
further
information
and
reconciliation
between
GAAP
and
as
adjusted,
see
previously
filed
Form
10-Ks,
Form
10-
Qs
and
8-Ks
and
the
appendix
to
this
earnings
release
supplement.
Dividend
payout
ratio
=
Dividends
declared
/
GAAP
net
income.
GAAP
as
adjusted
Amount includes $1.0 billion
May 2012 buyback of 6.4
million shares from Barclays
Amount includes $1.0 billion
May 2012 buyback of 6.4
million shares from Barclays |
 Appendix
*
*
*
*
*
*
*
*
*
* |
 21
Quarterly operating income, nonoperating income (expense) and net income –
GAAP and
as adjusted
2012
2013
(in millions)
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Operating Income
GAAP
$815
$829
$875
$1,005
$909
$849
$966
$1,133
Non-GAAP Adjustments
10
3
1
36
12
133
12
10
As Adjusted
$825
$832
$876
$1,041
$921
$982
$978
$1,143
Nonoperating Income (Expense)
GAAP
$23
($40)
$30
($67)
$41
$69
($18)
$24
Non-GAAP Adjustments
(8)
(3)
(17)
40
(38)
(57)
(3)
(11)
As Adjusted
$15
($43)
$13
($27)
$3
$12
($21)
$13
Net Income
GAAP
$572
$554
$642
$690
$632
$729
$730
$841
Non-GAAP Adjustments
3
4
(32)
5
5
(7)
(58)
10
As Adjusted
$575
$558
$610
$695
$637
$722
$672
$851
Non-GAAP adjustments include amounts related to the PennyMac Charitable
Contribution, U.K. lease exit costs, a contribution to short-term investment
funds (“STIFs”), PNC LTIP funding obligation, compensation related to
appreciation (depreciation) on certain deferred compensation plans and noncash
income tax changes, as applicable.
For further information and reconciliation between GAAP and as adjusted, see notes
(a) through (f) in the current earnings release as well as previously filed Form 10-Ks, 10-Qs and 8-Ks. |
 22
Cash Flow GAAP and As Adjusted
(in millions)
2010
2011
2012
EST
2013
Operating Cash Flows
Operating Cash flows, GAAP basis
$2,488
$2,826
$2,240
$3,700
Less: Non-GAAP adjustments
(1)
(77)
178
(483)
200
Operating Cash flows, as Adjusted
$2,565
$2,648
$2,723
$3,500
Investing Cash Flows
Investing Cash flows, GAAP basis
($627)
($204)
($266)
($500)
Less: Non-GAAP adjustments
(1)
(52)
24
(211)
-
Investing Cash flows, as Adjusted
($575)
($228)
($55)
($500)
Financing Cash Flows
Financing Cash flows, GAAP basis
($3,170)
($2,485)
($944)
($3,400)
Less: Non-GAAP adjustments
(1)
110
(71)
631
(200)
Financing Cash flows, as Adjusted
($3,280)
($2,414)
($1,575)
($3,200)
(1)
Non-GAAP
adjustments
include
the
impact
on
cash
flows
of
consolidated
sponsored
investment
funds
and
consolidated
VIEs
. |
 *
*
*
*
*
*
*
*
*
XXXXXXXX |