BlackRock Inc. - FORM 8-K - EX-99.1 - EARNINGS RELEASE DATED JULY 14, 2021

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8-K - 8-K - BlackRock Inc.	blk-8k_20210714.htm
EX-99.2 - SECOND QUARTER 2021 EARNINGS - EARNINGS RELEASE SUPPLEMENT - BlackRock Inc.	blk-ex992_7.htm

Exhibit 99.1

INVESTOR RELATIONS:

Caroline Rodda 212.810.3442

MEDIA RELATIONS:

Brian Beades 212.810.5596

BlackRock Reports Second Quarter 2021 Diluted EPS of $8.92, or $10.03 as adjusted

New York, July 14, 2021 – BlackRock, Inc. (NYSE: BLK) today reported financial results for the three and six months ended June 30, 2021.

$81 billion of quarterly total net inflows, driven by continued momentum across the platform, reflect a previously announced $58 billion low-fee institutional index outflow related to a single client

$63 billion of active net inflows, once again positive across all product types, including equity, fixed income, multi-asset and alternatives

32% increase in revenue year-over-year reflects significant market gains as well as strong organic growth, higher performance fees and 14% growth in technology services revenue

37% increase in operating income year-over-year

14% increase in diluted EPS (28% as adjusted) year-over-year also reflects lower nonoperating income and a higher effective tax rate in the current quarter

Consistent capital management with $300 million of quarterly share repurchases

Laurence D. Fink, Chairman and CEO:

“BlackRock’s comprehensive investment and technology platform continues to evolve ahead of our clients’ needs. Strong annualized organic base fee growth of 10% in the second quarter was driven by our top-performing active platform and industry-leading iShares ETF franchise. We also delivered 14% year-over-year growth in technology services revenue.

“Our longstanding approach to invest for the future positions our platform to better serve clients and generate more consistent organic growth. In sustainability, we are investing in products, data and analytics and technology to help investors capture the opportunity and manage the risks presented by sustainable factors. This is resonating with our clients and we generated $35 billion of sustainable net inflows in the quarter. Through our wealth and ETF businesses, we are driving the democratization of personalized portfolios at scale. And we are bringing together the breadth of our investment platform, portfolio construction expertise and Aladdin technology to serve clients’ whole portfolios in a way that no other asset manager can.

“Our commitment to helping more and more people experience financial well-being guides our long-term strategy and how we use our voice on behalf of our stakeholders. We will continue to invest and evolve so we can deliver value for our clients, employees, shareholders and the communities where we operate.”

FINANCIAL RESULTS

	Q2			Q2
(in millions, except per share data)	2021			2020
AUM	$	9,495,993		$	7,317,949
% change		30	%
Average AUM	$	9,317,092		$	6,975,779
% change		34	%
Total net flows	$	80,960		$	100,217

GAAP basis:
Revenue	$	4,820		$	3,648
% change		32	%
Operating income	$	1,931		$	1,406
% change		37	%
Operating margin		40.1	%		38.5	%
Net income⁽¹⁾	$	1,378		$	1,214
% change		14	%
Diluted EPS	$	8.92		$	7.85
% change		14	%
Weighted-average diluted shares		154.4			154.7
% change		0	%

As Adjusted:
Operating income⁽²⁾	$	1,931		$	1,406
% change		37	%
Operating margin⁽²⁾		44.9	%		43.7	%
Net income^{(1) (2)}	$	1,549		$	1,214
% change		28	%
Diluted EPS⁽²⁾	$	10.03		$	7.85
% change		28	%

⁽¹⁾	Net income represents net income attributable to BlackRock, Inc.

⁽²⁾	See notes (1) through (3) to the condensed consolidated statements of income and supplemental information on pages 11 and 12 for more information on as adjusted items and the reconciliation to GAAP.

NET FLOW HIGHLIGHTS

			Q2			YTD
(in billions)			2021			2021
Long-term net flows:			$	60		$	192

By region:

	Americas		$	2		$	74
	EMEA			61			100
	APAC			(3	)		18

By client type:

	Retail:		$	21		$	58
		US		10			33
		International		11			25

	ETFs:		$	75		$	144
		Core equity		23			51
		Strategic		39			57
		Precision		13			36

	Institutional:		$	(37	)	$	(9	)
		Active		43			60
		Index		(80	)		(69	)

Cash management net flows			$	23		$	63

Advisory net flows			$	(2	)	$	(2	)

Total net flows			$	81		$	253

BUSINESS RESULTS

											Q2 2021
						Q2 2021					Base fees⁽¹⁾
						Base fees⁽¹⁾		June 30, 2021			and securities
	Q2 2021			June 30, 2021		and securities		AUM			lending revenue
(in millions), (unaudited)	Net flows			AUM		lending revenue		% of Total			% of Total
RESULTS BY CLIENT TYPE
Retail	$	21,386		$	995,483	$	1,231		10	%		34	%
ETFs		75,147			3,031,505		1,505		32	%		40	%
Institutional:
Active		43,469			1,624,049		657		17	%		17	%
Index		(80,298	)		3,097,073		273		33	%		7	%
Total institutional		(36,829	)		4,721,122		930		50	%		24	%
Long-term		59,704			8,748,110		3,666		92	%		98	%
Cash management		23,339			727,603		91		8	%		2	%
Advisory⁽²⁾		(2,083	)		20,280		-		-			-
Total	$	80,960		$	9,495,993	$	3,757		100	%		100	%

RESULTS BY INVESTMENT STYLE
Active	$	62,750		$	2,446,632	$	1,842		26	%		49	%
Index and ETFs		(3,046	)		6,301,478		1,824		66	%		49	%
Long-term		59,704			8,748,110		3,666		92	%		98	%
Cash management		23,339			727,603		91		8	%		2	%
Advisory⁽²⁾		(2,083	)		20,280		-		-			-
Total	$	80,960		$	9,495,993	$	3,757		100	%		100	%

RESULTS BY PRODUCT TYPE
Equity	$	(26,453	)	$	5,034,391	$	1,995		52	%		54	%
Fixed income		41,290			2,712,165		955		29	%		25	%
Multi-asset		36,137			748,770		344		8	%		9	%
Alternatives		8,730			252,784		372		3	%		10	%
Long-term		59,704			8,748,110		3,666		92	%		98	%
Cash management		23,339			727,603		91		8	%		2	%
Advisory⁽²⁾		(2,083	)		20,280		-		-			-
Total	$	80,960		$	9,495,993	$	3,757		100	%		100	%

⁽¹⁾	Base fees include investment advisory and administration fees.

⁽²⁾

Approximately $2.2 billion of ETFs AUM held in advisory accounts associated with the Federal Reserve Bank of New York (“FRBNY”) assignment as of June 30, 2021 (disclosed via FRBNY reporting as of July 13, 2021) are included within ETF AUM or Fixed Income AUM above. These holdings are excluded from Advisory AUM.

INVESTMENT PERFORMANCE AT June 30, 2021⁽¹⁾

	One-year period	Three-year period	Five-year period
Fixed income:
Actively managed AUM above benchmark or peer median
Taxable	81%	84%	93%
Tax-exempt	77%	65%	79%
Index AUM within or above applicable tolerance	83%	93%	94%
Equity:
Actively managed AUM above benchmark or peer median
Fundamental	50%	84%	87%
Systematic	69%	60%	97%
Index AUM within or above applicable tolerance	94%	97%	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 Wednesday, July 14, 2021 at 8:30 a.m. (Eastern Time). Members of the public who are interested in participating in the teleconference should dial, from the United States, (800) 374-0176, or from outside the United States, (706) 679-8281, shortly before 8:30 a.m. and reference the BlackRock Conference Call (ID Number 6479566). A live, listen-only webcast will also be available via the investor relations section of www.blackrock.com.

Both the teleconference and webcast will be available for replay by 11:30 a.m. (Eastern Time) on Wednesday, July 14, 2021 and ending at midnight on Wednesday, July 28, 2021. To access the replay of the teleconference, callers from the United States should dial (855) 859-2056 and callers from outside the United States should dial (404) 537-3406 and enter the Conference ID Number 6479566. To access the webcast, please visit the investor relations section of www.blackrock.com.

ABOUT BLACKROCK

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate | Twitter: @blackrock | LinkedIn: www.linkedin.com/company/blackrock.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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

										Three Months
	Three Months Ended									Ended
	June 30,									March 31,
	2021			2020			Change			2021			Change
Revenue
Investment advisory, administration fees and securities lending revenue:
Investment advisory and administration fees	$	3,617		$	2,756		$	861		$	3,465		$	152
Securities lending revenue		140			210			(70	)		127			13
Total Investment advisory, administration fees and securities lending revenue		3,757			2,966			791			3,592			165
Investment advisory performance fees		340			112			228			129			211
Technology services revenue		316			278			38			306			10
Distribution fees		369			253			116			340			29
Advisory and other revenue		38			39			(1	)		31			7
Total revenue		4,820			3,648			1,172			4,398			422

Expense
Employee compensation and benefits		1,548			1,152			396			1,409			139
Distribution and servicing costs		523			429			94			505			18
Direct fund expense		320			246			74			320			-
General and administration expense		461			388			73			585			(124	)
Amortization of intangible assets		37			27			10			34			3
Total expense		2,889			2,242			647			2,853			36

Operating income		1,931			1,406			525			1,545			386

Nonoperating income (expense)
Net gain (loss) on investments		314			398			(84	)		82			232
Interest and dividend income		8			10			(2	)		19			(11	)
Interest expense		(52	)		(51	)		(1	)		(55	)		3
Total nonoperating income (expense)		270			357			(87	)		46			224

Income before income taxes		2,201			1,763			438			1,591			610
Income tax expense		654			361			293			318			336
Net income		1,547			1,402			145			1,273			274
Less:
Net income (loss) attributable to noncontrolling interests		169			188			(19	)		74			95
Net income attributable to BlackRock, Inc.	$	1,378		$	1,214		$	164		$	1,199		$	179

Weighted-average common shares outstanding
Basic		152,443,039			153,732,878			(1,289,839	)		152,567,453			(124,414	)
Diluted		154,417,581			154,712,032			(294,451	)		154,301,812			115,769
Earnings per share attributable to BlackRock, Inc. common stockholders
Basic	$	9.04		$	7.90		$	1.14		$	7.86		$	1.18
Diluted	$	8.92		$	7.85		$	1.07		$	7.77		$	1.15
Cash dividends declared and paid per share	$	4.13		$	3.63		$	0.50		$	4.13		$	-

Supplemental information:

AUM (end of period)	$	9,495,993		$	7,317,949		$	2,178,044		$	9,007,411		$	488,582
Shares outstanding (end of period)		152,298,784			152,460,239			(161,455	)		152,635,930			(337,146	)
GAAP:
Operating margin		40.1	%		38.5	%		160	bps		35.1	%		500	bps
Effective tax rate		32.2	%		22.9	%		930	bps		20.9	%		1,130	bps
As adjusted:
Operating income (1)	$	1,931		$	1,406		$	525		$	1,545		$	386
Operating margin (1)		44.9	%		43.7	%		120	bps		44.4	%		50	bps
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests (2)	$	101		$	169		$	(68	)	$	(28	)	$	129
Net income attributable to BlackRock, Inc. (3)	$	1,549		$	1,214		$	335		$	1,199		$	350
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (3)	$	10.03		$	7.85		$	2.18		$	7.77		$	2.26
Effective tax rate		23.8	%		22.9	%		90	bps		20.9	%		290	bps

See pages 11-12 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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


	Six Months Ended
	June 30,
	2021			2020			Change
Revenue
Investment advisory, administration fees and securities lending revenue:
Investment advisory and administration fees	$	7,082		$	5,653		$	1,429
Securities lending revenue		267			368			(101	)
Total Investment advisory, administration fees and securities lending revenue		7,349			6,021			1,328
Investment advisory performance fees		469			153			316
Technology services revenue		622			552			70
Distribution fees		709			529			180
Advisory and other revenue		69			103			(34	)
Total revenue		9,218			7,358			1,860

Expense
Employee compensation and benefits		2,957			2,289			668
Distribution and servicing costs		1,028			874			154
Direct fund expense		640			523			117
General and administration expense		1,046			1,530			(484	)
Amortization of intangible assets		71			52			19
Total expense		5,742			5,268			474

Operating income		3,476			2,090			1,386

Nonoperating income (expense)
Net gain (loss) on investments		396			358			38
Interest and dividend income		27			25			2
Interest expense		(107	)		(97	)		(10	)
Total nonoperating income (expense)		316			286			30

Income before income taxes		3,792			2,376			1,416
Income tax expense		972			347			625
Net income		2,820			2,029			791
Less:
Net income (loss) attributable to noncontrolling interests		243			9			234
Net income attributable to BlackRock, Inc.	$	2,577		$	2,020		$	557

Weighted-average common shares outstanding
Basic		152,504,902			154,488,079			(1,983,177	)
Diluted		154,359,353			155,556,187			(1,196,834	)
Earnings per share attributable to BlackRock, Inc. common stockholders
Basic	$	16.90		$	13.08		$	3.82
Diluted	$	16.69		$	12.99		$	3.70
Cash dividends declared and paid per share	$	8.26		$	7.26		$	1.00

Supplemental information:

AUM (end of period)	$	9,495,993		$	7,317,949		$	2,178,044
Shares outstanding (end of period)		152,298,784			152,460,239			(161,455	)
GAAP:
Operating margin		37.7	%		28.4	%		930	bps
Effective tax rate		27.4	%		14.7	%		1,270	bps
As adjusted:
Operating income (1)	$	3,476		$	2,679		$	797
Operating margin (1)		44.7	%		42.7	%		200	bps
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests (2)	$	73		$	155		$	(82	)
Net income attributable to BlackRock, Inc. (3)	$	2,748		$	2,246		$	502
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (3)	$	17.80		$	14.44		$	3.36
Effective tax rate		22.6	%		20.7	%		190	bps

See pages 11-12 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Current Quarter Component Changes by Client Type and Product Type
			Net
	March 31,		inflows			Market						June 30,
	2021		(outflows)			change			FX impact⁽¹⁾			2021		Average AUM⁽²⁾
Retail:
Equity	$	407,715	$	9,866		$	28,643		$	103		$	446,327	$	431,075
Fixed income		349,640		6,689			2,480			671			359,480		355,500
Multi-asset		139,115		879			7,161			73			147,228		144,138
Alternatives		37,707		3,952			748			41			42,448		40,310
Retail subtotal		934,177		21,386			39,032			888			995,483		971,023
ETFs:
Equity		2,077,818		51,376			126,762			1,872			2,257,828		2,186,497
Fixed income		667,829		21,710			9,639			831			700,009		686,205
Multi-asset		6,958		379			310			16			7,663		7,359
Alternatives		60,919		1,682			3,380			24			66,005		65,379
ETFs subtotal		2,813,524		75,147			140,091			2,743			3,031,505		2,945,440
Institutional:
Active:
Equity		176,081		(3,958	)		11,876			175			184,174		181,046
Fixed income		692,474		9,058			14,558			581			716,671		706,642
Multi-asset		522,220		35,148			26,086			1,128			584,582		549,152
Alternatives		133,655		3,221			1,708			38			138,622		136,351
Active subtotal		1,524,430		43,469			54,228			1,922			1,624,049		1,573,191
Index:
Equity		2,084,167		(83,737	)		143,764			1,868			2,146,062		2,127,456
Fixed income		910,517		3,833			21,230			425			936,005		931,252
Multi-asset		9,079		(269	)		500			(13	)		9,297		9,193
Alternatives		5,387		(125	)		451			(4	)		5,709		5,671
Index subtotal		3,009,150		(80,298	)		165,945			2,276			3,097,073		3,073,572
Institutional subtotal		4,533,580		(36,829	)		220,173			4,198			4,721,122		4,646,763
Long-term		8,281,281		59,704			399,296			7,829			8,748,110		8,563,226
Cash management		703,916		23,339			(84	)		432			727,603		732,270
Advisory⁽³⁾		22,214		(2,083	)		141			8			20,280		21,596
Total	$	9,007,411	$	80,960		$	399,353		$	8,269		$	9,495,993	$	9,317,092
Current Quarter Component Changes by Investment Style and Product Type (Long-Term)
			Net
	March 31,		inflows			Market						June 30,
	2021		(outflows)			change			FX impact⁽¹⁾			2021		Average AUM⁽²⁾
Active:
Equity	$	443,780	$	4,182		$	31,012		$	266		$	479,240	$	465,115
Fixed income		1,021,168		15,370			16,743			1,236			1,054,517		1,040,682
Multi-asset		661,333		36,026			33,246			1,201			731,806		693,285
Alternatives		171,361		7,172			2,457			79			181,069		176,660
Active subtotal		2,297,642		62,750			83,458			2,782			2,446,632		2,375,742
Index and ETFs:
ETFs:
Equity		2,077,818		51,376			126,762			1,872			2,257,828		2,186,497
Fixed income		667,829		21,710			9,639			831			700,009		686,205
Multi-asset		6,958		379			310			16			7,663		7,359
Alternatives		60,919		1,682			3,380			24			66,005		65,379
ETFs subtotal		2,813,524		75,147			140,091			2,743			3,031,505		2,945,440
Non-ETF Index:
Equity		2,224,183		(82,011	)		153,271			1,880			2,297,323		2,274,462
Fixed income		931,463		4,210			21,525			441			957,639		952,712
Multi-asset		9,081		(268	)		501			(13	)		9,301		9,198
Alternatives		5,388		(124	)		450			(4	)		5,710		5,672
Non-ETF Index subtotal		3,170,115		(78,193	)		175,747			2,304			3,269,973		3,242,044
Index and ETFs subtotal		5,983,639		(3,046	)		315,838			5,047			6,301,478		6,187,484
Long-term	$	8,281,281	$	59,704		$	399,296		$	7,829		$	8,748,110	$	8,563,226
Current Quarter Component Changes by Product Type (Long-Term)
			Net
	March 31,		inflows			Market						June 30,
	2021		(outflows)			change			FX impact⁽¹⁾			2021		Average AUM⁽²⁾
Equity	$	4,745,781	$	(26,453	)	$	311,045		$	4,018		$	5,034,391	$	4,926,074
Fixed income		2,620,460		41,290			47,907			2,508			2,712,165		2,679,599
Multi-asset		677,372		36,137			34,057			1,204			748,770		709,842
Alternatives:
Illiquid alternatives		92,207		3,347			352			55			95,961		94,238
Liquid alternatives		76,266		3,319			1,945			30			81,560		79,138
Currency and commodities⁽⁴⁾		69,195		2,064			3,990			14			75,263		74,335
Alternatives subtotal		237,668		8,730			6,287			99			252,784		247,711
Long-term	$	8,281,281	$	59,704		$	399,296		$	7,829		$	8,748,110	$	8,563,226

⁽¹⁾	Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

⁽²⁾	Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing four months.

⁽³⁾

Advisory AUM represents mandates linked to purchases and disposition of assets and portfolios on behalf of official institutions and long-term portfolio liquidation assignments. Approximately $2.2 billion of ETFs AUM held in advisory accounts associated with the FRBNY assignment as of June 30, 2021 (disclosed via FRBNY reporting as of July 13, 2021) are included within Fixed Income ETFs AUM or Fixed Income AUM above. These holdings are excluded from Advisory AUM in the first table above.

⁽⁴⁾	Amounts include commodity ETFs.

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Year-to-Date Component Changes by Client Type and Product Type
			Net
	December 31,		inflows					Market						June 30,
	2020		(outflows)			Acquisition⁽¹⁾		change			FX impact⁽²⁾			2021		Average AUM⁽³⁾
Retail:
Equity	$	338,434	$	24,199		$	41,324	$	43,286		$	(916	)	$	446,327	$	401,271
Fixed income		340,468		21,486			-		(1,300	)		(1,174	)		359,480		350,847
Multi-asset		132,624		4,874			-		9,837			(107	)		147,228		139,864
Alternatives		34,391		7,337			-		787			(67	)		42,448		38,207
Retail subtotal		845,917		57,896			41,324		52,610			(2,264	)		995,483		930,189
ETFs:
Equity		1,905,101		117,798			-		238,644			(3,715	)		2,257,828		2,080,914
Fixed income		690,033		23,315			-		(11,332	)		(2,007	)		700,009		685,500
Multi-asset		6,268		945			-		420			30			7,663		6,948
Alternatives		67,605		1,578			-		(3,151	)		(27	)		66,005		66,467
ETFs subtotal		2,669,007		143,636			-		224,581			(5,719	)		3,031,505		2,839,829
Institutional:
Active:
Equity		169,522		(3,491	)		-		18,964			(821	)		184,174		176,544
Fixed income		716,269		11,322			-		(7,836	)		(3,084	)		716,671		707,256
Multi-asset		511,242		43,631			-		32,733			(3,024	)		584,582		532,983
Alternatives		127,429		8,540			-		3,124			(471	)		138,622		133,087
Active subtotal		1,524,462		60,002			-		46,985			(7,400	)		1,624,049		1,549,870
Index:
Equity		2,006,749		(115,099	)		-		264,295			(9,883	)		2,146,062		2,076,052
Fixed income		927,718		46,006			-		(25,587	)		(12,132	)		936,005		925,527
Multi-asset		8,599		439			-		499			(240	)		9,297		8,872
Alternatives		5,617		(538	)		-		685			(55	)		5,709		5,619
Index subtotal		2,948,683		(69,192	)		-		239,892			(22,310	)		3,097,073		3,016,070
Institutional subtotal		4,473,145		(9,190	)		-		286,877			(29,710	)		4,721,122		4,565,940
Long-term		7,988,069		192,342			41,324		564,068			(37,693	)		8,748,110		8,335,958
Cash management		666,252		62,529			-		(211	)		(967	)		727,603		697,856
Advisory⁽⁴⁾		22,359		(2,269	)		-		176			14			20,280		21,952
Total	$	8,676,680	$	252,602		$	41,324	$	564,033		$	(38,646	)	$	9,495,993	$	9,055,766
Year-to-Date Component Changes by Investment Style and Product Type (Long-Term)
			Net
	December 31,		inflows					Market						June 30,
	2020		(outflows)			Acquisition⁽¹⁾		change			FX impact⁽²⁾			2021		Average AUM⁽³⁾
Active:
Equity	$	410,189	$	25,202		$	-	$	45,605		$	(1,756	)	$	479,240	$	445,721
Fixed income		1,035,015		32,122			-		(8,317	)		(4,303	)		1,054,517		1,036,594
Multi-asset		643,864		48,504			-		42,569			(3,131	)		731,806		672,842
Alternatives		161,819		15,876			-		3,912			(538	)		181,069		171,293
Active subtotal		2,250,887		121,704			-		83,769			(9,728	)		2,446,632		2,326,450
Index and ETFs:
ETFs:
Equity		1,905,101		117,798			-		238,644			(3,715	)		2,257,828		2,080,914
Fixed income		690,033		23,315			-		(11,332	)		(2,007	)		700,009		685,500
Multi-asset		6,268		945			-		420			30			7,663		6,948
Alternatives		67,605		1,578			-		(3,151	)		(27	)		66,005		66,467
ETFs subtotal		2,669,007		143,636			-		224,581			(5,719	)		3,031,505		2,839,829
Non-ETF Index:
Equity		2,104,516		(119,593	)		41,324		280,940			(9,864	)		2,297,323		2,208,146
Fixed income		949,440		46,692			-		(26,406	)		(12,087	)		957,639		947,036
Multi-asset		8,601		440			-		500			(240	)		9,301		8,877
Alternatives		5,618		(537	)		-		684			(55	)		5,710		5,620
Non-ETF Index subtotal		3,068,175		(72,998	)		41,324		255,718			(22,246	)		3,269,973		3,169,679
Index and ETFs subtotal		5,737,182		70,638			41,324		480,299			(27,965	)		6,301,478		6,009,508
Long-term	$	7,988,069	$	192,342		$	41,324	$	564,068		$	(37,693	)	$	8,748,110	$	8,335,958
Year-to-Date Component Changes by Product Type (Long-Term)
			Net
	December 31,		inflows					Market						June 30,
	2020		(outflows)			Acquisition⁽¹⁾		change			FX impact⁽²⁾			2021		Average AUM⁽³⁾
Equity	$	4,419,806	$	23,407		$	41,324	$	565,189		$	(15,335	)	$	5,034,391	$	4,734,781
Fixed income		2,674,488		102,129			-		(46,055	)		(18,397	)		2,712,165		2,669,130
Multi-asset		658,733		49,889			-		43,489			(3,341	)		748,770		688,667
Alternatives:
Illiquid alternatives		85,770		9,572			-		952			(333	)		95,961		90,987
Liquid alternatives		73,218		5,673			-		2,736			(67	)		81,560		77,169
Currency and commodities⁽⁵⁾		76,054		1,672			-		(2,243	)		(220	)		75,263		75,224
Alternatives subtotal		235,042		16,917			-		1,445			(620	)		252,784		243,380
Long-term	$	7,988,069	$	192,342		$	41,324	$	564,068		$	(37,693	)	$	8,748,110	$	8,335,958

⁽¹⁾	Amounts include AUM attributable to the acquisition of Aperio Group, LLC on February 1, 2021 (the “Aperio Transaction”).

⁽²⁾	Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

⁽³⁾	Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing seven months.

⁽⁴⁾

⁽⁵⁾	Amounts include commodity ETFs.

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Year-over-Year Component Changes by Client Type and Product Type
			Net
	June 30,		inflows					Market						June 30,
	2020		(outflows)			Acquisition⁽¹⁾		change			FX impact⁽²⁾			2021		Average AUM⁽³⁾
Retail:
Equity	$	254,104	$	47,302		$	41,324	$	97,009		$	6,588		$	446,327	$	345,277
Fixed income		301,160		44,028			-		9,401			4,891			359,480		334,847
Multi-asset		111,934		9,296			-		25,148			850			147,228		130,418
Alternatives		27,956		12,141			-		1,923			428			42,448		34,768
Retail subtotal		695,154		112,767			41,324		133,481			12,757			995,483		845,310
ETFs:
Equity		1,470,314		197,907			-		578,981			10,626			2,257,828		1,858,812
Fixed income		634,098		56,540			-		2,637			6,734			700,009		675,322
Multi-asset		5,074		1,516			-		997			76			7,663		6,250
Alternatives		53,111		7,760			-		5,006			128			66,005		65,259
ETFs subtotal		2,162,597		263,723			-		587,621			17,564			3,031,505		2,605,643
Institutional:
Active:
Equity		133,932		(2,308	)		-		49,350			3,200			184,174		163,639
Fixed income		666,693		26,849			-		14,142			8,987			716,671		698,882
Multi-asset		426,553		52,413			-		93,379			12,237			584,582		499,070
Alternatives		114,432		14,021			-		7,477			2,692			138,622		126,717
Active subtotal		1,341,610		90,975			-		164,348			27,116			1,624,049		1,488,308
Index:
Equity		1,660,875		(169,247	)		-		623,656			30,778			2,146,062		1,937,458
Fixed income		809,141		107,780			-		(19,713	)		38,797			936,005		894,457
Multi-asset		7,801		242			-		1,296			(42	)		9,297		8,576
Alternatives		4,519		(94	)		-		1,176			108			5,709		5,244
Index subtotal		2,482,336		(61,319	)		-		606,415			69,641			3,097,073		2,845,735
Institutional subtotal		3,823,946		29,656			-		770,763			96,757			4,721,122		4,334,043
Long-term		6,681,697		406,146			41,324		1,491,865			127,078			8,748,110		7,784,996
Cash management		619,351		99,239			-		(157	)		9,170			727,603		673,619
Advisory⁽⁴⁾		16,901		2,853			-		479			47			20,280		20,975
Total	$	7,317,949	$	508,238		$	41,324	$	1,492,187		$	136,295		$	9,495,993	$	8,479,590
Year-over-Year Component Changes by Investment Style and Product Type (Long-Term)
			Net
	June 30,		inflows					Market						June 30,
	2020		(outflows)			Acquisition⁽¹⁾		change			FX impact⁽²⁾			2021		Average AUM⁽³⁾
Active:
Equity	$	312,809	$	43,888		$	-	$	116,600		$	5,943		$	479,240	$	400,020
Fixed income		950,143		68,072			-		23,910			12,392			1,054,517		1,013,129
Multi-asset		538,489		61,704			-		118,526			13,087			731,806		629,486
Alternatives		142,387		26,160			-		9,402			3,120			181,069		161,484
Active subtotal		1,943,828		199,824			-		268,438			34,542			2,446,632		2,204,119
Index and ETFs:
ETFs:
Equity		1,470,314		197,907			-		578,981			10,626			2,257,828		1,858,812
Fixed income		634,098		56,540			-		2,637			6,734			700,009		675,322
Multi-asset		5,074		1,516			-		997			76			7,663		6,250
Alternatives		53,111		7,760			-		5,006			128			66,005		65,259
ETFs subtotal		2,162,597		263,723			-		587,621			17,564			3,031,505		2,605,643
Non-ETF Index:
Equity		1,736,102		(168,141	)		41,324		653,415			34,623			2,297,323		2,046,354
Fixed income		826,851		110,585			-		(20,080	)		40,283			957,639		915,057
Multi-asset		7,799		247			-		1,297			(42	)		9,301		8,578
Alternatives		4,520		(92	)		-		1,174			108			5,710		5,245
Non-ETF Index subtotal		2,575,272		(57,401	)		41,324		635,806			74,972			3,269,973		2,975,234
Index and ETFs subtotal		4,737,869		206,322			41,324		1,223,427			92,536			6,301,478		5,580,877
Long-term	$	6,681,697	$	406,146		$	41,324	$	1,491,865		$	127,078		$	8,748,110	$	7,784,996
Year-over-Year Component Changes by Product Type (Long-Term)
			Net
	June 30,		inflows					Market						June 30,
	2020		(outflows)			Acquisition⁽¹⁾		change			FX impact⁽²⁾			2021		Average AUM⁽³⁾
Equity	$	3,519,225	$	73,654		$	41,324	$	1,348,996		$	51,192		$	5,034,391	$	4,305,186
Fixed income		2,411,092		235,197			-		6,467			59,409			2,712,165		2,603,508
Multi-asset		551,362		63,467			-		120,820			13,121			748,770		644,314
Alternatives:
Illiquid alternatives		76,607		16,303			-		1,570			1,481			95,961		85,690
Liquid alternatives		63,120		9,262			-		7,496			1,682			81,560		72,848
Currency and commodities⁽⁵⁾		60,291		8,263			-		6,516			193			75,263		73,450
Alternatives subtotal		200,018		33,828			-		15,582			3,356			252,784		231,988
Long-term	$	6,681,697	$	406,146		$	41,324	$	1,491,865		$	127,078		$	8,748,110	$	7,784,996

⁽¹⁾	Amounts include AUM attributable to the Aperio Transaction.

⁽²⁾	Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

⁽³⁾	Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

⁽⁴⁾

⁽⁵⁾	Amounts include commodity ETFs.

SUMMARY OF REVENUE

	Three Months							Three Months					Six Months
	Ended							Ended					Ended
	June 30,							March 31,					June 30,
(in millions), (unaudited)	2021		2020		Change			2021		Change			2021		2020		Change
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	641	$	381	$	260		$	576	$	65		$	1,217	$	779	$	438
ETFs		1,156		792		364			1,068		88			2,224		1,671		553
Non-ETF Index		198		178		20			176		22			374		341		33
Equity subtotal		1,995		1,351		644			1,820		175			3,815		2,791		1,024
Fixed income:
Active		545		464		81			525		20			1,070		945		125
ETFs		294		261		33			295		(1	)		589		520		69
Non-ETF Index		116		129		(13	)		113		3			229		241		(12	)
Fixed income subtotal		955		854		101			933		22			1,888		1,706		182
Multi-asset		344		270		74			328		16			672		563		109
Alternatives:
Illiquid alternatives		167		128		39			168		(1	)		335		276		59
Liquid alternatives		150		117		33			147		3			297		229		68
Currency and commodities		55		35		20			53		2			108		67		41
Alternatives subtotal		372		280		92			368		4			740		572		168
Long-term		3,666		2,755		911			3,449		217			7,115		5,632		1,483
Cash management		91		211		(120	)		143		(52	)		234		389		(155	)
Total investment advisory, administration fees and securities lending revenue		3,757		2,966		791			3,592		165			7,349		6,021		1,328
Investment advisory performance fees:
Equity		36		23		13			26		10			62		25		37
Fixed income		15		2		13			14		1			29		4		25
Multi-asset		9		2		7			8		1			17		3		14
Alternatives:
Illiquid alternatives		90		32		58			7		83			97		49		48
Liquid alternatives		190		53		137			74		116			264		72		192
Alternatives subtotal		280		85		195			81		199			361		121		240
Total performance fees		340		112		228			129		211			469		153		316
Technology services revenue		316		278		38			306		10			622		552		70
Distribution fees:
Retrocessions		264		162		102			238		26			502		331		171
12b-1 fees (US mutual fund distribution fees)		87		78		9			85		2			172		169		3
Other		18		13		5			17		1			35		29		6
Total distribution fees		369		253		116			340		29			709		529		180
Advisory and other revenue:
Advisory		9		17		(8	)		15		(6	)		24		34		(10	)
Other		29		22		7			16		13			45		69		(24	)
Total advisory and other revenue		38		39		(1	)		31		7			69		103		(34	)
Total revenue	$	4,820	$	3,648	$	1,172		$	4,398	$	422		$	9,218	$	7,358	$	1,860

Highlights

•

Investment advisory, administration fees and securities lending revenue increased $791 million from the second quarter of 2020, primarily driven by the positive impact of market beta and foreign exchange movements on average AUM and strong organic base fee growth, partially offset by the impact of yield-related fee waivers on certain money market funds and strategic pricing changes to certain products, and lower securities lending revenue. Securities lending revenue of $140 million decreased from $210 million in the second quarter of 2020, primarily reflecting lower spreads, partially offset by higher average balances of securities on loan.

Investment advisory, administration fees and securities lending revenue increased $165 million from the first quarter of 2021, primarily driven by organic growth, the positive impact of market beta and foreign exchange movements on average AUM, and the effect of one additional day in the quarter, partially offset by higher yield-related fee waivers on certain money market funds. Securities lending revenue of $140 million increased from $127 million in the first quarter of 2021.

•	Performance fees increased $228 million from the second quarter of 2020 and $211 million from the first quarter of 2021, primarily reflecting higher revenue from liquid and illiquid alternative products.

•	Technology services revenue increased $38 million from the second quarter of 2020, primarily reflecting higher revenue from Aladdin^®. Technology services annual contract value⁽¹⁾ (“ACV”) increased 16% from the second quarter of 2020.

(1)

ACV represents forward-looking recurring subscription fees under client contracts for the next twelve months at the end of a respective quarter, assuming all client contracts that come up for renewal are renewed. ACV excludes nonrecurring fees such as implementation and consulting fees. See note (4) in the supplemental information on page 12 for more information on ACV.

SUMMARY OF OPERATING EXPENSE

	Three Months									Three Months					Six Months
	Ended									Ended					Ended
	June 30,									March 31,					June 30,
(in millions), (unaudited)	2021			2020			Change			2021		Change			2021		2020		Change
Operating expense
Employee compensation and benefits	$	1,548		$	1,152		$	396		$	1,409	$	139		$	2,957	$	2,289	$	668
Distribution and servicing costs:
Retrocessions		264			162			102			238		26			502		331		171
12b-1 costs		85			75			10			83		2			168		164		4
Other		174			192			(18	)		184		(10	)		358		379		(21	)
Total distribution and servicing costs		523			429			94			505		18			1,028		874		154
Direct fund expense		320			246			74			320		-			640		523		117
General and administration expense:
Marketing and promotional		53			39			14			35		18			88		108		(20	)
Occupancy and office related		80			80			-			79		1			159		158		1
Portfolio services		87			65			22			87		-			174		130		44
Technology		129			92			37			104		25			233		180		53
Professional services		41			41			-			39		2			80		85		(5	)
Communications		11			14			(3	)		11		-			22		26		(4	)
Foreign exchange remeasurement		(2	)		1			(3	)		4		(6	)		2		6		(4	)
Contingent consideration fair value adjustments		1			(2	)		3			3		(2	)		4		23		(19	)
Product launch costs		-			-			-			178		(178	)		178		84		94
Charitable Contribution		-			-			-			-		-			-		589		(589	)
Other general and administration		61			58			3			45		16			106		141		(35	)
Total general and administration expense		461			388			73			585		(124	)		1,046		1,530		(484	)
Amortization of intangible assets		37			27			10			34		3			71		52		19
Total operating expense	$	2,889		$	2,242		$	647		$	2,853	$	36		$	5,742	$	5,268	$	474

Highlights

•

Employee compensation and benefits expense increased $396 million from the second quarter of 2020, primarily reflecting higher incentive compensation, driven by higher operating income and performance fees, and higher deferred compensation, reflecting the impact of additional grants associated with prior-year compensation and certain previous acquisition-related compensation arrangements.

Employee compensation and benefits expense increased $139 million from the first quarter of 2021, primarily reflecting higher incentive compensation, driven in part by higher performance fees, partially offset by lower seasonal payroll taxes in the current quarter.

•	Direct fund expense increased $74 million from the second quarter of 2020, primarily reflecting higher average AUM.

•	General and administration expense increased $73 million from the second quarter of 2020, largely driven by higher technology, portfolio services, and marketing and promotional expense.

General and administration expense decreased $124 million from the first quarter of 2021, primarily driven by $178 million of product launch costs incurred in the first quarter of 2021, partially offset by higher technology and marketing and promotional expense.

•	Amortization of intangible assets expense increased $10 million from the second quarter of 2020, primarily reflecting amortization of intangible assets related to the Aperio Transaction.

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

	Three Months									Three Months						Six Months
	Ended									Ended						Ended
	June 30,									March 31,						June 30,
(in millions), (unaudited)	2021			2020			Change			2021			Change			2021			2020			Change
Nonoperating income (expense), GAAP basis	$	270		$	357		$	(87	)	$	46		$	224		$	316		$	286		$	30
Less: Net income (loss) attributable to noncontrolling interests ("NCI")		169			188			(19	)		74			95			243			9			234
Nonoperating income (expense)⁽¹⁾	$	101		$	169		$	(68	)	$	(28	)	$	129		$	73		$	277		$	(204	)

	Three Months									Three Months						Six Months
	Ended									Ended						Ended
	June 30,									March 31,						June 30,
(in millions), (unaudited)	2021			2020			Change			2021			Change			2021			2020			Change
Net gain (loss) on investments⁽¹⁾
Private equity	$	66		$	8		$	58		$	22		$	44		$	88		$	(10	)	$	98
Real assets		3			-			3			3			-			6			5			1
Other alternatives⁽²⁾		17			21			(4	)		13			4			30			(4	)		34
Other investments⁽³⁾		48			130			(82	)		(3	)		51			45			(20	)		65
Subtotal		134			159			(25	)		35			99			169			(29	)		198
Gain related to the Charitable Contribution		-			-			-			-			-			-			122			(122	)
Other gains (losses)⁽⁴⁾		11			51			(40	)		(27	)		38			(16	)		256			(272	)
Total net gain (loss) on investments⁽¹⁾		145			210			(65	)		8			137			153			349			(196	)
Interest and dividend income		8			10			(2	)		19			(11	)		27			25			2
Interest expense		(52	)		(51	)		(1	)		(55	)		3			(107	)		(97	)		(10	)
Net interest expense		(44	)		(41	)		(3	)		(36	)		(8	)		(80	)		(72	)		(8	)
Nonoperating income (expense)⁽¹⁾	$	101		$	169		$	(68	)	$	(28	)	$	129		$	73		$	277		$	(204	)

⁽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 as adjusted items and the reconciliation to GAAP see note (2) to the condensed consolidated statements of income and supplemental information on pages 11 and 12.

⁽²⁾	Amounts primarily include net gains (losses) related to direct hedge fund strategies and hedge fund solutions.

⁽³⁾	Amounts primarily include net gains (losses) related to unhedged equity, fixed income and multi-asset investments.

⁽⁴⁾

The amount for the six months ended June 30, 2020 includes a nonoperating pre-tax gain of approximately $240 million in connection with a recapitalization of iCapital Network, Inc. Additional amounts include noncash pre-tax gains (losses) related to the revaluation of certain other corporate minority investments.

INCOME TAX EXPENSE

	Three Months									Three Months							Six Months
	Ended									Ended							Ended
	June 30,									March 31,							June 30,
(in millions), (unaudited)	2021			2020			Change			2021				Change			2021			2020			Change
Income tax expense	$	654		$	361		$	293			$	318		$	336		$	972		$	347		$	625
Effective tax rate		32.2	%		22.9	%		930	bps			20.9	%		1,130	bps		27.4	%		14.7	%		1,270	bps

Highlights

•	Second quarter 2021 tax expense included $171 million of noncash net expense related to the revaluation of certain deferred tax assets and liabilities as a result of legislation enacted in the United Kingdom increasing its corporate tax rate.

•	First quarter 2021 income tax expense included $39 million of discrete tax benefit related to stock-based compensation awards that vested in the first quarter of 2021.

RECONCILIATION OF US GAAP OPERATING INCOME AND OPERATING MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS ADJUSTED
	Three Months Ended									Six Months Ended
	June 30,						March 31,			June 30,
(in millions), (unaudited)	2021			2020			2021			2021			2020
Operating income, GAAP basis	$	1,931		$	1,406		$	1,545		$	3,476		$	2,090
Non-GAAP expense adjustment:
Charitable Contribution		-			-			-			-			589
Operating income, as adjusted (1)		1,931			1,406			1,545			3,476			2,679
Product launch costs and commissions		-			-			185			185			87
Operating income used for operating margin measurement	$	1,931		$	1,406		$	1,730		$	3,661		$	2,766
Revenue, GAAP basis	$	4,820		$	3,648		$	4,398		$	9,218		$	7,358
Non-GAAP adjustments:
Distribution fees		(369	)		(253	)		(340	)		(709	)		(529	)
Investment advisory fees		(154	)		(176	)		(165	)		(319	)		(345	)
Revenue used for operating margin measurement	$	4,297		$	3,219		$	3,893		$	8,190		$	6,484
Operating margin, GAAP basis		40.1	%		38.5	%		35.1	%		37.7	%		28.4	%
Operating margin, as adjusted (1)		44.9	%		43.7	%		44.4	%		44.7	%		42.7	%

See note (1) to the condensed consolidated statements of income and supplemental information on page 12 for more information on as adjusted items and the reconciliation to GAAP.

RECONCILIATION OF US GAAP NONOPERATING INCOME (EXPENSE) TO NONOPERATING INCOME (EXPENSE), LESS NET INCOME (LOSS) ATTRIBUTABLE TO NCI, AS ADJUSTED
	Three Months Ended							Six Months Ended
	June 30,				March 31,			June 30,
(in millions), (unaudited)	2021		2020		2021			2021		2020
Nonoperating income (expense), GAAP basis	$	270	$	357	$	46		$	316	$	286
Less: Net income (loss) attributable to NCI		169		188		74			243		9
Nonoperating income (expense), net of NCI		101		169		(28	)		73		277
Less: Gain related to the Charitable Contribution		-		-		-			-		122
Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted (2)	$	101	$	169	$	(28	)	$	73	$	155

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

RECONCILIATION OF US GAAP NET INCOME ATTRIBUTABLE TO BLACKROCK TO NET INCOME ATTRIBUTABLE TO BLACKROCK, AS ADJUSTED
	Three Months Ended						Six Months Ended
	June 30,				March 31,		June 30,
(in millions, except per share data), (unaudited)	2021		2020		2021		2021		2020
Net income attributable to BlackRock, Inc., GAAP basis	$	1,378	$	1,214	$	1,199	$	2,577	$	2,020
Non-GAAP adjustments:
Charitable Contribution, net of tax		-		-		-		-		226
Income tax matters		171		-		-		171		-
Net income attributable to BlackRock, Inc., as adjusted (3)	$	1,549	$	1,214	$	1,199	$	2,748	$	2,246
Diluted weighted-average common shares outstanding		154.4		154.7		154.3		154.4		155.6
Diluted earnings per common share, GAAP basis	$	8.92	$	7.85	$	7.77	$	16.69	$	12.99
Diluted earnings per common share, as adjusted (3)	$	10.03	$	7.85	$	7.77	$	17.80	$	14.44

See note (3) to the condensed consolidated statements of income and supplemental information on page 12 for more information on as adjusted items and the reconciliation to GAAP.

NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION (unaudited)

BlackRock reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”); however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. Management reviews non-GAAP financial measures to assess ongoing operations and considers them to be helpful, for both management and investors, in evaluating BlackRock’s financial performance over time. Management also uses non-GAAP financial measures as a benchmark to compare its performance with other companies and to enhance the comparability of this information for the reporting periods presented. Non-GAAP measures may pose limitations because they do not include all of BlackRock’s revenue and expense. BlackRock’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Non-GAAP measures may not be comparable to other similarly titled measures of other companies.

Management uses both GAAP and non-GAAP financial measures in evaluating BlackRock’s financial performance. Adjustments to GAAP financial measures (“non-GAAP adjustments”) include certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.

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 and to determine the long-term and annual compensation of the Company’s senior-level employees. Furthermore, this metric is used to evaluate the Company’s relative performance against industry peers, as it 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 a non-GAAP expense adjustment. During the six months ended June 30, 2020, the Company contributed its remaining 20% stake in PennyMac Financial Services, Inc. (the “Charitable Contribution”). The Charitable Contribution expense of $589 million has been excluded from operating income, as adjusted, due to its nonrecurring nature.

•

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

•

Revenue used for calculating operating margin, as adjusted, is reduced to exclude all of the Company’s distribution fees, which are recorded as a separate line item on the condensed consolidated statements of income, as well as a portion of investment advisory fees received that is used to pay distribution and servicing costs. For certain products, based on distinct arrangements, distribution fees are collected by the Company and then passed-through to third-party client intermediaries. For other products, investment advisory fees are collected by the Company and a portion is passed-through to third-party client intermediaries. However, in both structures, the third-party client intermediary similarly owns the relationship with the retail client and is responsible for distributing the product and servicing the client. The amount of distribution and investment advisory fees fluctuates each period primarily based on a predetermined percentage of the value of AUM during the period. These fees also vary based on the type of investment product sold and the geographic location where it is sold. In addition, the Company may waive fees on certain products that could result in the reduction of payments to the third-party intermediaries.

(2) Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted: Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating contribution to its results and provides comparability of this information among reporting periods. Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, provides a useful measure, for both management and investors, of BlackRock’s nonoperating results, which ultimately impact BlackRock’s book value. During the six months ended June 30, 2020, the noncash, nonoperating pre-tax gain of $122 million related to the Charitable Contribution has been excluded from nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, due to its nonrecurring nature.

(3) 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 aforementioned discussion regarding operating income, as adjusted, operating margin, as adjusted, and nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, for information on the Charitable Contribution.

The six months ended June 30, 2020 included a discrete tax benefit of $241 million that was recognized in connection with the Charitable Contribution. The discrete tax benefit has been excluded from as adjusted results due to the nonrecurring nature of the Charitable Contribution. Amounts for income tax matters represent net noncash (benefits) expense primarily associated with the revaluation of certain deferred tax liabilities related to intangible assets and goodwill as a result of tax rate changes. These amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to ensure comparability among periods presented.

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

(4) 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.

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, information and cyber security 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) terrorist activities, civil unrest, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (18) the ability to attract and retain highly talented professionals; (19) fluctuations in the carrying value of BlackRock’s economic investments; (20) 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; (21) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (22) the failure by a key vendor of BlackRock to fulfill its obligations to the Company; (23) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (24) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds platform; (25) 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 (26) 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 June 30, 2021 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 May 31, 2021. The performance data does not include accounts terminated prior to June 30, 2021 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 June 30, 2021 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.

BlackRock Inc. - FORM 8-K - EX-99.1 - EARNINGS RELEASE DATED JULY 14, 2021 - July 14, 2021

Attached files

BlackRock Inc. Reports