EX-99.12blk-ex99_1.htmEX-99.1 EX-99.1
Exhibit 99.1
INVESTOR RELATIONS:
Caroline Rodda 212.810.3442
MEDIA RELATIONS:
Ed Sweeney 646.231.0268
BlackRock Reports Third Quarter 2024 Diluted EPS of $10.90, or $11.46 as adjusted
New York, October 11, 2024 – BlackRock, Inc. (NYSE: BLK) today reported financial results for the three and nine months ended September 30, 2024.
$360 billion of year-to-date total net inflows reflect continued strength of broad-based platform, and surpass full year net inflows of 2022 and 2023
Record $221 billion of quarterly total net inflows represent 8% annualized organic asset growth and were positive across client type, product type, active and index, and regions
$11.5 trillion in AUM, up $2.4 trillion year-over-year, driven by $456 billion of net inflows and positive market movements
15% increase in revenue year-over-year, driven by the positive impact of markets on average AUM, organic base fee growth, and higher performance fees
23% increase in operating income year-over-year (26% as adjusted)
2% increase in diluted EPS year-over-year (5% as adjusted) also reflects a higher effective tax rate in the current quarter
$375 million of share repurchases in the current quarter
Closed acquisition of Global Infrastructure Partners ("GIP") on October 1st, adding $116 billion of client AUM and $70 billion of fee-paying AUM
Laurence D. Fink, Chairman and CEO:
“Our strategy is ambitious, and our strategy is working. The assets we manage on behalf of our clients reached a new high, ending the third quarter at $11.5 trillion, having grown $2.4 trillion over the last twelve months. In that time, clients have entrusted BlackRock with $456 billion of net inflows, including a record $221 billion in the third quarter. Third quarter organic base fee growth of 5% and technology services ACV growth of 15% are each at multi-year highs.
“We are effectively leveraging our technology, scale, and global footprint to deliver profitable growth. Quarterly revenue and operating income both set new records, up 15% and 26% year-over-year, respectively. Our 45.8% operating margin is up 350 basis points.
“Through coordinated investments and initiatives, we are evolving our private markets capabilities to best serve our clients. We’re already seeing the power of BlackRock and GIP together as we drive access to the enormous investment potential of infrastructure, especially to support AI innovation. We believe the model portfolio solution we are building will democratize retail access to private markets. And our planned acquisition of Preqin will enhance data and risk analytics needed to support growing private markets allocations.
“Our relentless focus on clients, growth mindset and willingness to evolve has generated a compounded annual total return of over 20% for our shareholders since our IPO 25 years ago, well in excess of broader markets. The opportunities ahead of us have never been greater, and we look forward to driving growth for our clients, shareholders and employees in the years to come.”
FINANCIAL RESULTS
NET FLOW HIGHLIGHTS(1)
Q3
Q3
Q3
YTD
(in millions, except per share data)
2024
2023
(in billions)
2024
2024
AUM
$
11,475,362
$
9,100,825
Long-term net flows:
$
160
$
288
% change
26
%
Average AUM
$
11,070,964
$
9,396,597
By region:
% change
18
%
Americas
$
111
$
200
Total net flows
$
221,180
$
2,569
EMEA
20
76
APAC
29
12
GAAP basis:
Revenue
$
5,197
$
4,522
By client type:
% change
15
%
Operating income
$
2,006
$
1,637
Retail:
$
7
$
20
% change
23
%
US
7
16
Operating margin
38.6
%
36.2
%
International
-
4
Net income(1)
$
1,631
$
1,604
% change
2
%
ETFs:
$
97
$
248
Diluted EPS
$
10.90
$
10.66
Core equity
32
101
% change
2
%
Strategic
45
96
Weighted-average diluted shares
149.6
150.5
Precision
20
51
% change
(1
)%
Institutional:
$
56
$
20
As Adjusted(2):
Active
27
39
Operating income
$
2,128
$
1,691
Index
29
(19
)
% change
26
%
Operating margin
45.8
%
42.3
%
Net income(1)
$
1,715
$
1,642
Cash management net flows
$
61
$
72
% change
4
%
Diluted EPS
$
11.46
$
10.91
% change
5
%
Total net flows
$
221
$
360
_________________________
_________________________
(1) Net income represents net income attributable to BlackRock, Inc.
(2) See pages 11 through 13 for the reconciliation to GAAP and notes (1) through (3) to the
condensed consolidated statements of income and supplemental information for more
information on as adjusted items.
(1) Totals may not add due to rounding.
1
BUSINESS RESULTS
Q3 2024
Q3 2024
Base fees(1)
Base fees(1)
September 30, 2024
and securities
Q3 2024
September 30, 2024
and securities
AUM
lending revenue
(in millions), (unaudited)
Net flows
AUM
lending revenue
% of Total
% of Total
RESULTS BY CLIENT TYPE
Retail
$
6,863
$
1,041,201
$
1,085
9
%
27
%
ETFs
97,409
4,188,335
1,726
37
%
42
%
Institutional:
Active
26,695
2,110,944
720
18
%
18
%
Index
29,206
3,285,495
235
29
%
6
%
Total institutional
55,901
5,396,439
955
47
%
24
%
Long-term
160,173
10,625,975
3,766
93
%
93
%
Cash management
61,007
849,387
264
7
%
7
%
Total
$
221,180
$
11,475,362
$
4,030
100
%
100
%
RESULTS BY INVESTMENT STYLE
Active
$
28,045
$
2,871,791
$
1,739
25
%
43
%
Index and ETFs
132,128
7,754,184
2,027
68
%
50
%
Long-term
160,173
10,625,975
3,766
93
%
93
%
Cash management
61,007
849,387
264
7
%
7
%
Total
$
221,180
$
11,475,362
$
4,030
100
%
100
%
RESULTS BY PRODUCT TYPE
Equity
$
74,144
$
6,280,999
$
2,060
55
%
51
%
Fixed income
62,740
3,023,694
940
26
%
23
%
Multi-asset
17,814
1,001,515
325
9
%
8
%
Alternatives:
Illiquid alternatives
1,527
141,409
235
1
%
6
%
Liquid alternatives
(851
)
75,990
143
1
%
3
%
Currency and commodities(2)
4,799
102,368
63
1
%
2
%
Total alternatives
5,475
319,767
441
3
%
11
%
Long-term
160,173
10,625,975
3,766
93
%
93
%
Cash management
61,007
849,387
264
7
%
7
%
Total
$
221,180
$
11,475,362
$
4,030
100
%
100
%
(1)
Base fees include investment advisory and administration fees.
(2)
Amounts include commodity ETFs and exchange-traded products ("ETPs").
INVESTMENT PERFORMANCE AT September 30, 2024(1)
One-year period
Three-year period
Five-year period
Fixed income:
Actively managed AUM above benchmark or peer median
Taxable
81%
79%
87%
Tax-exempt
56%
50%
52%
Index AUM within or above applicable tolerance
98%
100%
100%
Equity:
Actively managed AUM above benchmark or peer median
Fundamental
41%
44%
66%
Systematic
93%
91%
92%
Index AUM within or above applicable tolerance
93%
100%
100%
(1)
Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 15 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, Martin S. Small, will host a teleconference call for investors and analysts on Friday, October 11, 2024 at 7:30 a.m. (Eastern Time). Members of the public who are interested in participating in the teleconference should dial, from the United States, (786) 460-7166, or from outside the United States, (888) 600-4862, shortly before 7:30 a.m. and reference the BlackRock Conference Call (ID Number 3678546). A live, listen-only webcast will also be available via the investor relations section of www.blackrock.com.
The webcast will be available for replay by 10:30 a.m. (Eastern Time) on Friday, October 11, 2024. To access the replay of the webcast, please visit the investor relations section of www.blackrock.com.
ABOUT BLACKROCK
BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate.
2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION
(in millions, except per share data), (unaudited)
Three Months
Three Months Ended
Ended
September 30,
June 30,
2024
2023
Change
2024
Change
Revenue
Investment advisory, administration fees and
securities lending revenue:
Investment advisory and administration fees
$
3,881
$
3,514
$
367
$
3,721
$
160
Securities lending revenue
149
167
(18
)
154
(5
)
Total investment advisory, administration fees
and securities lending revenue
4,030
3,681
349
3,875
155
Investment advisory performance fees
388
70
318
164
224
Technology services revenue
403
407
(4
)
395
8
Distribution fees
323
321
2
318
5
Advisory and other revenue
53
43
10
53
-
Total revenue
5,197
4,522
675
4,805
392
Expense
Employee compensation and benefits
1,578
1,420
158
1,503
75
Sales, asset and account expense:
Distribution and servicing costs
549
526
23
539
10
Direct fund expense
379
354
25
358
21
Sub-advisory and other
34
28
6
32
2
Total sales, asset and account expense
962
908
54
929
33
General and administration expense
562
518
44
534
28
Amortization and impairment of intangible assets
89
39
50
39
50
Total expense
3,191
2,885
306
3,005
186
Operating income
2,006
1,637
369
1,800
206
Nonoperating income (expense)
Net gain (loss) on investments
177
114
63
162
15
Interest and dividend income
236
139
97
178
58
Interest expense
(154
)
(82
)
(72
)
(126
)
(28
)
Total nonoperating income (expense)
259
171
88
214
45
Income before income taxes
2,265
1,808
457
2,014
251
Income tax expense
574
213
361
477
97
Net income
1,691
1,595
96
1,537
154
Less:
Net income (loss) attributable to noncontrolling
interests
60
(9
)
69
42
18
Net income attributable to BlackRock, Inc.
$
1,631
$
1,604
$
27
$
1,495
$
136
Weighted-average common shares outstanding
Basic
148.0
149.2
(1.1
)
148.4
(0.4
)
Diluted
149.6
150.5
(0.9
)
149.7
(0.0
)
Earnings per share attributable to BlackRock,
Inc. common stockholders
Basic
$
11.02
$
10.75
$
0.27
$
10.07
$
0.95
Diluted
$
10.90
$
10.66
$
0.24
$
9.99
$
0.91
Cash dividends declared and paid per share
$
5.10
$
5.00
$
0.10
$
5.10
$
-
Supplemental information:
AUM (end of period)
$
11,475,362
$
9,100,825
$
2,374,537
$
10,645,721
$
829,641
Shares outstanding (end of period)
148.0
148.9
(1.0
)
148.2
(0.2
)
GAAP:
Operating margin
38.6
%
36.2
%
240
bps
37.5
%
110
bps
Effective tax rate
26.0
%
11.7
%
1,430
bps
24.2
%
180
bps
As adjusted:
Operating income (1)
$
2,128
$
1,691
$
437
$
1,881
$
247
Operating margin (1)
45.8
%
42.3
%
350
bps
44.1
%
170
bps
Nonoperating income (expense), less net income
(loss) attributable to noncontrolling
interests (2)
$
190
$
184
$
6
$
165
$
25
Net income attributable to BlackRock, Inc. (3)
$
1,715
$
1,642
$
73
$
1,550
$
165
Diluted earnings attributable to BlackRock, Inc.
common stockholders per share (3)
$
11.46
$
10.91
$
0.55
$
10.36
$
1.10
Effective tax rate
26.0
%
12.4
%
1,360
bps
24.2
%
180
bps
See pages 11 through 13 for the reconciliation to accounting principles generally accepted in the United States ("GAAP") and notes (1) through (3) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items. Beginning in the first quarter of 2024, BlackRock, Inc. updated the presentation of the Company’s expense line items within the condensed consolidated statements of income by including a new “sales, asset and account expense” income statement caption. Such expense line items have been recast for 2023 to conform to this new presentation. For a recast of 2023 expense line items, see page 12 of Exhibit 99.1 to the Current Report on Form 8-K furnished on April 12, 2024.
3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION
(in millions, except per share data), (unaudited)
Nine Months Ended
September 30,
2024
2023
Change
Revenue
Investment advisory, administration fees and
securities lending revenue:
Investment advisory and administration fees
$
11,229
$
10,276
$
953
Securities lending revenue
454
518
(64
)
Total investment advisory, administration fees
and securities lending revenue
11,683
10,794
889
Investment advisory performance fees
756
243
513
Technology services revenue
1,175
1,106
69
Distribution fees
951
959
(8
)
Advisory and other revenue
165
126
39
Total revenue
14,730
13,228
1,502
Expense
Employee compensation and benefits
4,661
4,276
385
Sales, asset and account expense:
Distribution and servicing costs
1,606
1,549
57
Direct fund expense
1,075
1,013
62
Sub-advisory and other
98
81
17
Total sales, asset and account expense
2,779
2,643
136
General and administration expense
1,625
1,506
119
Amortization and impairment of intangible assets
166
113
53
Total expense
9,231
8,538
693
Operating income
5,499
4,690
809
Nonoperating income (expense)
Net gain (loss) on investments
510
434
76
Interest and dividend income
555
314
241
Interest expense
(372
)
(210
)
(162
)
Total nonoperating income (expense)
693
538
155
Income before income taxes
6,192
5,228
964
Income tax expense
1,341
1,041
300
Net income
4,851
4,187
664
Less:
Net income (loss) attributable to noncontrolling
interests
152
60
92
Net income attributable to BlackRock, Inc.
$
4,699
$
4,127
$
572
Weighted-average common shares outstanding
Basic
148.4
149.6
(1.2
)
Diluted
149.8
150.9
(1.1
)
Earnings per share attributable to BlackRock, Inc.
common stockholders
Basic
$
31.67
$
27.60
$
4.07
Diluted
$
31.37
$
27.36
$
4.01
Cash dividends declared and paid per share
$
15.30
$
15.00
$
0.30
Supplemental information:
AUM (end of period)
$
11,475,362
$
9,100,825
$
2,374,537
Shares outstanding (end of period)
148.0
148.9
(1.0
)
GAAP:
Operating margin
37.3
%
35.5
%
180
bps
Effective tax rate
22.2
%
20.1
%
210
bps
As adjusted:
Operating income (1)
$
5,784
$
4,877
$
907
Operating margin (1)
44.1
%
41.8
%
230
bps
Nonoperating income (expense), less net income
(loss) attributable to noncontrolling
interests (2)
$
494
$
449
$
45
Net income attributable to BlackRock, Inc. (3)
$
4,738
$
4,241
$
497
Diluted earnings attributable to BlackRock, Inc.
common stockholders per share (3)
$
31.63
$
28.11
$
3.52
Effective tax rate
24.5
%
20.4
%
410
bps
See pages 11 through 13 for the reconciliation to GAAP and notes (1) through (3) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items. Beginning in the first quarter of 2024, BlackRock, Inc. updated the presentation of the Company’s expense line items within the condensed consolidated statements of income by including a new “sales, asset and account expense” income statement caption. Such expense line items have been recast for 2023 to conform to this new presentation. For a recast of 2023 expense line items, see page 12 of Exhibit 99.1 to the Current Report on Form 8-K furnished on April 12, 2024.
4
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
Current Quarter Component Changes by Client Type and Product Type
Net
June 30,
inflows
Market
September 30,
2024
(outflows)
change
FX impact(1)
2024
Average AUM(2)
Retail:
Equity
$
490,427
$
5,234
$
19,005
$
6,604
$
521,270
$
506,725
Fixed income
313,632
2,718
7,127
768
324,245
318,285
Multi-asset
147,719
(1,304
)
7,209
454
154,078
150,787
Alternatives
40,374
215
638
381
41,608
40,911
Retail subtotal
992,152
6,863
33,979
8,207
1,041,201
1,016,708
ETFs:
Equity
2,830,268
44,548
174,748
12,276
3,061,840
2,951,255
Fixed income
931,217
47,810
34,440
5,709
1,019,176
979,055
Multi-asset
9,204
314
472
46
10,036
9,605
Alternatives
85,085
4,737
7,394
67
97,283
91,437
ETFs subtotal
3,855,774
97,409
217,054
18,098
4,188,335
4,031,352
Institutional:
Active:
Equity
208,177
3,743
8,173
5,268
225,361
216,753
Fixed income
823,716
3,504
36,659
9,506
873,385
852,571
Multi-asset
761,194
18,866
42,870
11,045
833,975
793,568
Alternatives
175,145
582
431
2,065
178,223
176,059
Active subtotal
1,968,232
26,695
88,133
27,884
2,110,944
2,038,951
Index:
Equity
2,298,263
20,619
109,142
44,504
2,472,528
2,387,641
Fixed income
747,319
8,708
12,778
38,083
806,888
778,392
Multi-asset
3,295
(62
)
130
63
3,426
3,348
Alternatives
2,644
(59
)
11
57
2,653
2,603
Index subtotal
3,051,521
29,206
122,061
82,707
3,285,495
3,171,984
Institutional subtotal
5,019,753
55,901
210,194
110,591
5,396,439
5,210,935
Long-term
9,867,679
160,173
461,227
136,896
10,625,975
10,258,995
Cash management
778,042
61,007
3,092
7,246
849,387
811,969
Total
$
10,645,721
$
221,180
$
464,319
$
144,142
$
11,475,362
$
11,070,964
Current Quarter Component Changes by Investment Style and Product Type (Long-Term)
Net
June 30,
inflows
Market
September 30,
2024
(outflows)
change
FX impact(1)
2024
Average AUM(2)
Active:
Equity
$
466,518
$
2,733
$
14,916
$
8,026
$
492,193
$
479,372
Fixed income
1,112,578
6,954
43,054
9,153
1,171,739
1,145,337
Multi-asset
908,897
17,561
50,079
11,498
988,035
944,338
Alternatives
215,513
797
1,068
2,446
219,824
216,968
Active subtotal
2,703,506
28,045
109,117
31,123
2,871,791
2,786,015
Index and ETFs:
ETFs:
Equity
2,830,268
44,548
174,748
12,276
3,061,840
2,951,255
Fixed income
931,217
47,810
34,440
5,709
1,019,176
979,055
Multi-asset
9,204
314
472
46
10,036
9,605
Alternatives
85,085
4,737
7,394
67
97,283
91,437
ETFs subtotal
3,855,774
97,409
217,054
18,098
4,188,335
4,031,352
Non-ETF index:
Equity
2,530,349
26,863
121,404
48,350
2,726,966
2,631,747
Fixed income
772,089
7,976
13,510
39,204
832,779
803,911
Multi-asset
3,311
(61
)
130
64
3,444
3,365
Alternatives
2,650
(59
)
12
57
2,660
2,605
Non-ETF index subtotal
3,308,399
34,719
135,056
87,675
3,565,849
3,441,628
Index and ETFs subtotal
7,164,173
132,128
352,110
105,773
7,754,184
7,472,980
Long-term
$
9,867,679
$
160,173
$
461,227
$
136,896
$
10,625,975
$
10,258,995
Current Quarter Component Changes by Product Type (Long-Term)
Net
June 30,
inflows
Market
September 30,
2024
(outflows)
change
FX impact(1)
2024
Average AUM(2)
Equity
$
5,827,135
$
74,144
$
311,068
$
68,652
$
6,280,999
$
6,062,374
Fixed income
2,815,884
62,740
91,004
54,066
3,023,694
2,928,303
Multi-asset
921,412
17,814
50,681
11,608
1,001,515
957,308
Alternatives:
Illiquid alternatives
137,868
1,527
226
1,788
141,409
139,173
Liquid alternatives
75,483
(851
)
821
537
75,990
75,532
Currency and commodities(3)
89,897
4,799
7,427
245
102,368
96,305
Alternatives subtotal
303,248
5,475
8,474
2,570
319,767
311,010
Long-term
$
9,867,679
$
160,173
$
461,227
$
136,896
$
10,625,975
$
10,258,995
(1)
Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.
(2)
Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing four months.
(3)
Amounts include commodity ETFs and ETPs.
5
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
Year-to-Date Component Changes by Client Type and Product Type
Net
December 31,
inflows
Market
September 30,
2023
(outflows)
Acquisition(1)
change
FX impact(2)
2024
Average AUM(3)
Retail:
Equity
$
435,734
$
15,411
$
4,074
$
61,467
$
4,584
$
521,270
$
476,890
Fixed income
312,799
7,517
-
6,306
(2,377
)
324,245
315,181
Multi-asset
139,537
(1,904
)
-
16,329
116
154,078
145,865
Alternatives
41,627
(1,306
)
-
1,078
209
41,608
41,077
Retail subtotal
929,697
19,718
4,074
85,180
2,532
1,041,201
979,013
ETFs:
Equity
2,532,631
125,756
-
402,936
517
3,061,840
2,769,010
Fixed income
898,403
100,506
-
18,665
1,602
1,019,176
932,580
Multi-asset
9,140
(45
)
-
994
(53
)
10,036
9,178
Alternatives
59,125
21,574
-
16,587
(3
)
97,283
79,853
ETFs subtotal
3,499,299
247,791
-
439,182
2,063
4,188,335
3,790,621
Institutional:
Active:
Equity
186,688
7,431
-
28,443
2,799
225,361
204,027
Fixed income
836,823
(1,334
)
-
35,143
2,753
873,385
840,954
Multi-asset
717,182
31,043
-
80,939
4,811
833,975
755,639
Alternatives
171,980
2,182
-
3,169
892
178,223
174,049
Active subtotal
1,912,673
39,322
-
147,694
11,255
2,110,944
1,974,669
Index:
Equity
2,138,291
(49,596
)
-
373,927
9,906
2,472,528
2,283,907
Fixed income
756,001
33,196
-
9,321
8,370
806,888
756,389
Multi-asset
4,945
(1,723
)
-
205
(1
)
3,426
3,813
Alternatives
3,252
(755
)
-
147
9
2,653
2,791
Index subtotal
2,902,489
(18,878
)
-
383,600
18,284
3,285,495
3,046,900
Institutional subtotal
4,815,162
20,444
-
531,294
29,539
5,396,439
5,021,569
Long-term
9,244,158
287,953
4,074
1,055,656
34,134
10,625,975
9,791,203
Cash management
764,837
71,982
-
8,084
4,484
849,387
779,369
Total
$
10,008,995
$
359,935
$
4,074
$
1,063,740
$
38,618
$
11,475,362
$
10,570,572
Year-to-Date Component Changes by Investment Style and Product Type (Long-Term)
Net
December 31,
inflows
Market
September 30,
2023
(outflows)
Acquisition(1)
change
FX impact(2)
2024
Average AUM(3)
Active:
Equity
$
427,448
$
1,724
$
4,074
$
54,677
$
4,270
$
492,193
$
457,176
Fixed income
1,123,422
7,604
-
41,139
(426
)
1,171,739
1,130,958
Multi-asset
856,705
29,133
-
97,271
4,926
988,035
901,490
Alternatives
213,603
873
-
4,247
1,101
219,824
215,123
Active subtotal
2,621,178
39,334
4,074
197,334
9,871
2,871,791
2,704,747
Index and ETFs:
ETFs:
Equity
2,532,631
125,756
-
402,936
517
3,061,840
2,769,010
Fixed income
898,403
100,506
-
18,665
1,602
1,019,176
932,580
Multi-asset
9,140
(45
)
-
994
(53
)
10,036
9,178
Alternatives
59,125
21,574
-
16,587
(3
)
97,283
79,853
ETFs subtotal
3,499,299
247,791
-
439,182
2,063
4,188,335
3,790,621
Non-ETF index:
Equity
2,333,265
(28,478
)
-
409,160
13,019
2,726,966
2,507,648
Fixed income
782,201
31,775
-
9,631
9,172
832,779
781,566
Multi-asset
4,959
(1,717
)
-
202
-
3,444
3,827
Alternatives
3,256
(752
)
-
147
9
2,660
2,794
Non-ETF index subtotal
3,123,681
828
-
419,140
22,200
3,565,849
3,295,835
Index and ETFs subtotal
6,622,980
248,619
-
858,322
24,263
7,754,184
7,086,456
Long-term
$
9,244,158
$
287,953
$
4,074
$
1,055,656
$
34,134
$
10,625,975
$
9,791,203
Year-to-Date Component Changes by Product Type (Long-Term)
Net
December 31,
inflows
Market
September 30,
2023
(outflows)
Acquisition(1)
change
FX impact(2)
2024
Average AUM(3)
Equity
$
5,293,344
$
99,002
$
4,074
$
866,773
$
17,806
$
6,280,999
$
5,733,834
Fixed income
2,804,026
139,885
-
69,435
10,348
3,023,694
2,845,104
Multi-asset
870,804
27,371
-
98,467
4,873
1,001,515
914,495
Alternatives:
Illiquid alternatives
136,909
4,727
-
(1,056
)
829
141,409
137,718
Liquid alternatives
74,233
(3,774
)
-
5,241
290
75,990
75,139
Currency and commodities(4)
64,842
20,742
-
16,796
(12
)
102,368
84,913
Alternatives subtotal
275,984
21,695
-
20,981
1,107
319,767
297,770
Long-term
$
9,244,158
$
287,953
$
4,074
$
1,055,656
$
34,134
$
10,625,975
$
9,791,203
(1)
Amounts include AUM attributable to the acquisition of SpiderRock Advisors, LLC in May 2024 (the "SpiderRock 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 ten months.
(4)
Amounts include commodity ETFs and ETPs.
6
ASSETS UNDER MANAGEMENT
(in millions), (unaudited)
Year-over-Year Component Changes by Client Type and Product Type
Net
September 30,
inflows
Market
September 30,
2023
(outflows)
Acquisition(1)
change
FX impact(2)
2024
Average AUM(3)
Retail:
Equity
$
396,030
$
15,041
$
4,074
$
97,548
$
8,577
$
521,270
$
458,663
Fixed income
300,232
965
-
22,742
306
324,245
311,669
Multi-asset
129,177
(1,937
)
-
26,233
605
154,078
141,981
Alternatives
43,001
(3,311
)
-
1,383
535
41,608
41,333
Retail subtotal
868,440
10,758
4,074
147,906
10,023
1,041,201
953,646
ETFs:
Equity
2,234,275
183,966
-
632,970
10,629
3,061,840
2,651,816
Fixed income
818,744
131,732
-
62,024
6,676
1,019,176
909,731
Multi-asset
7,716
701
-
1,608
11
10,036
8,896
Alternatives
57,674
19,112
-
20,417
80
97,283
75,049
ETFs subtotal
3,118,409
335,511
-
717,019
17,396
4,188,335
3,645,492
Institutional:
Active:
Equity
167,917
8,135
-
43,409
5,900
225,361
196,163
Fixed income
771,581
4,677
-
87,883
9,244
873,385
826,510
Multi-asset
646,993
29,799
-
143,402
13,781
833,975
731,583
Alternatives
166,771
4,221
-
4,408
2,823
178,223
172,534
Active subtotal
1,753,262
46,832
-
279,102
31,748
2,110,944
1,926,790
Index:
Equity
1,943,069
(74,055
)
-
564,686
38,828
2,472,528
2,207,409
Fixed income
685,648
34,692
-
55,369
31,179
806,888
741,895
Multi-asset
4,986
(2,243
)
-
641
42
3,426
4,013
Alternatives
3,330
(846
)
-
131
38
2,653
2,914
Index subtotal
2,637,033
(42,452
)
-
620,827
70,087
3,285,495
2,956,231
Institutional subtotal
4,390,295
4,380
-
899,929
101,835
5,396,439
4,883,021
Long-term
8,377,144
350,649
4,074
1,764,854
129,254
10,625,975
9,482,159
Cash management
723,681
104,933
-
10,853
9,920
849,387
766,798
Total
$
9,100,825
$
455,582
$
4,074
$
1,775,707
$
139,174
$
11,475,362
$
10,248,957
Year-over-Year Component Changes by Investment Style and Product Type (Long-Term)
Net
September 30,
inflows
Market
September 30,
2023
(outflows)
Acquisition(1)
change
FX impact(2)
2024
Average AUM(3)
Active:
Equity
$
393,690
$
(3,764
)
$
4,074
$
88,915
$
9,278
$
492,193
$
442,736
Fixed income
1,046,705
8,574
-
108,618
7,842
1,171,739
1,112,973
Multi-asset
776,158
27,855
-
169,637
14,385
988,035
873,550
Alternatives
209,769
908
-
5,789
3,358
219,824
213,864
Active subtotal
2,426,322
33,573
4,074
372,959
34,863
2,871,791
2,643,123
Index and ETFs:
ETFs:
Equity
2,234,275
183,966
-
632,970
10,629
3,061,840
2,651,816
Fixed income
818,744
131,732
-
62,024
6,676
1,019,176
909,731
Multi-asset
7,716
701
-
1,608
11
10,036
8,896
Alternatives
57,674
19,112
-
20,417
80
97,283
75,049
ETFs subtotal
3,118,409
335,511
-
717,019
17,396
4,188,335
3,645,492
Non-ETF index:
Equity
2,113,326
(47,115
)
-
616,728
44,027
2,726,966
2,419,499
Fixed income
710,756
31,760
-
57,376
32,887
832,779
767,101
Multi-asset
4,998
(2,236
)
-
639
43
3,444
4,027
Alternatives
3,333
(844
)
-
133
38
2,660
2,917
Non-ETF index subtotal
2,832,413
(18,435
)
-
674,876
76,995
3,565,849
3,193,544
Index and ETFs subtotal
5,950,822
317,076
-
1,391,895
94,391
7,754,184
6,839,036
Long-term
$
8,377,144
$
350,649
$
4,074
$
1,764,854
$
129,254
$
10,625,975
$
9,482,159
Year-over-Year Component Changes by Product Type (Long-Term)
Net
September 30,
inflows
Market
September 30,
2023
(outflows)
Acquisition(1)
change
FX impact(2)
2024
Average AUM(3)
Equity
$
4,741,291
$
133,087
$
4,074
$
1,338,613
$
63,934
$
6,280,999
$
5,514,051
Fixed income
2,576,205
172,066
-
228,018
47,405
3,023,694
2,789,805
Multi-asset
788,872
26,320
-
171,884
14,439
1,001,515
886,473
Alternatives:
Illiquid alternatives
131,937
8,289
-
(1,261
)
2,444
141,409
136,603
Liquid alternatives
75,139
(7,063
)
-
7,046
868
75,990
74,916
Currency and commodities(4)
63,700
17,950
-
20,554
164
102,368
80,311
Alternatives subtotal
270,776
19,176
-
26,339
3,476
319,767
291,830
Long-term
$
8,377,144
$
350,649
$
4,074
$
1,764,854
$
129,254
$
10,625,975
$
9,482,159
(1)
Amounts include AUM attributable to the SpiderRock 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)
Amounts include commodity ETFs and ETPs.
7
SUMMARY OF REVENUE
Three Months
Three Months
Nine Months
Ended
Ended
Ended
September 30,
June 30,
September 30,
(in millions), (unaudited)
2024
2023
Change
2024
Change
2024
2023
Change
Revenue
Investment advisory, administration fees and
securities lending revenue:
Equity:
Active
$
553
$
510
$
43
$
539
$
14
$
1,608
$
1,516
$
92
ETFs
1,309
1,136
173
1,250
59
3,749
3,316
433
Non-ETF index
198
186
12
190
8
575
560
15
Equity subtotal
2,060
1,832
228
1,979
81
5,932
5,392
540
Fixed income:
Active
493
479
14
481
12
1,458
1,429
29
ETFs
354
315
39
326
28
1,007
919
88
Non-ETF index
93
93
-
88
5
273
268
5
Fixed income subtotal
940
887
53
895
45
2,738
2,616
122
Multi-asset
325
308
17
313
12
952
904
48
Alternatives:
Illiquid alternatives
235
231
4
241
(6
)
716
638
78
Liquid alternatives
143
143
-
141
2
422
434
(12
)
Currency and commodities(1)
63
46
17
59
4
167
141
26
Alternatives subtotal
441
420
21
441
-
1,305
1,213
92
Long-term
3,766
3,447
319
3,628
138
10,927
10,125
802
Cash management
264
234
30
247
17
756
669
87
Total investment advisory, administration
fees and securities lending revenue
4,030
3,681
349
3,875
155
11,683
10,794
889
Investment advisory performance fees:
Equity
13
17
(4
)
28
(15
)
49
38
11
Fixed income
3
1
2
5
(2
)
12
2
10
Multi-asset
1
5
(4
)
11
(10
)
14
23
(9
)
Alternatives:
Illiquid alternatives
7
24
(17
)
68
(61
)
200
124
76
Liquid alternatives
364
23
341
52
312
481
56
425
Alternatives subtotal
371
47
324
120
251
681
180
501
Total investment advisory performance fees
388
70
318
164
224
756
243
513
Technology services revenue
403
407
(4
)
395
8
1,175
1,106
69
Distribution fees
323
321
2
318
5
951
959
(8
)
Advisory and other revenue:
Advisory
11
21
(10
)
11
-
35
66
(31
)
Other
42
22
20
42
-
130
60
70
Total advisory and other revenue
53
43
10
53
-
165
126
39
Total revenue
$
5,197
$
4,522
$
675
$
4,805
$
392
$
14,730
$
13,228
$
1,502
(1)
Amounts include commodity ETFs and ETPs.
Highlights
•
Investment advisory and administration fees and securities lending revenue increased $349 million from the third quarter of 2023 and $155 million from the second quarter of 2024, primarily driven by positive organic base fee growth and the impact of market beta on average AUM, partially offset by lower securities lending revenue. The increase in revenue from the second quarter of 2024 also reflected the impact of one additional day in the quarter.
Securities lending revenue of $149 million decreased from $167 million in the third quarter of 2023 and $154 million in the second quarter of 2024, primarily reflecting lower spreads partially offset by higher average balances of securities on loan.
•
Performance fees increased $318 million from the third quarter of 2023 and $224 million from the second quarter of 2024, primarily driven by strong performance in the third quarter of 2024 from a single hedge fund with an annual performance measurement period that ends in the third quarter, partially offset by lower revenue from illiquid alternatives.
•
Technology services revenue decreased $4 million from the third quarter of 2023, due to the revenue impact linked to several large client renewals of their eFront “on-premises” licenses during the third quarter of 2023. Technology services annual contract value (“ACV”)(1) increased 15% from the third quarter of 2023, driven by sustained demand for a full range of Aladdin technology offerings.
Technology services revenue increased $8 million from the second quarter of 2024, reflecting successful client go-lives.
(1)
See note (4) to the condensed consolidated statements of income and supplemental information on page 13 for more information on ACV.
8
SUMMARY OF OPERATING EXPENSE
Three Months
Three Months
Nine Months
Ended
Ended
Ended
September 30,
June 30,
September 30,
(in millions), (unaudited)
2024
2023
Change
2024
Change
2024
2023
Change
Operating expense
Employee compensation and benefits
$
1,578
$
1,420
$
158
$
1,503
$
75
$
4,661
$
4,276
$
385
Sales, asset and account expense(1):
Distribution and servicing costs
549
526
23
539
10
1,606
1,549
57
Direct fund expense
379
354
25
358
21
1,075
1,013
62
Sub-advisory and other
34
28
6
32
2
98
81
17
Total sales, asset and account expense
962
908
54
929
33
2,779
2,643
136
General and administration expense:
Marketing and promotional
64
74
(10
)
76
(12
)
222
222
-
Occupancy and office related
105
103
2
102
3
308
313
(5
)
Portfolio services
65
65
-
63
2
194
202
(8
)
Technology
175
145
30
157
18
492
421
71
Professional services
67
51
16
64
3
189
128
61
Communications
10
12
(2
)
9
1
29
36
(7
)
Foreign exchange remeasurement
3
(3
)
6
2
1
7
(2
)
9
Contingent consideration fair value
adjustments
(2
)
-
(2
)
1
(3
)
(8
)
1
(9
)
Other general and administration
75
71
4
60
15
192
185
7
Total general and administration expense
562
518
44
534
28
1,625
1,506
119
Amortization and impairment of intangible
assets
89
39
50
39
50
166
113
53
Total operating expense
$
3,191
$
2,885
$
306
$
3,005
$
186
$
9,231
$
8,538
$
693
(1)
Beginning in the first quarter of 2024, BlackRock, Inc. updated the presentation of the Company’s expense line items within the condensed consolidated statements of income by including a new “sales, asset and account expense” income statement caption. Such expense line items have been recast for 2023 to conform to this new presentation. For a recast of 2023 expense line items, see page 12 of Exhibit 99.1 to the Current Report on Form 8-K furnished on April 12, 2024.
Highlights
•
Employee compensation and benefits expense increased $158 million from the third quarter of 2023 and $75 million from the second quarter of 2024, reflecting higher incentive compensation, primarily as a result of higher performance fees and operating income.
•
Sales, asset and account expense increased $54 million from the third quarter of 2023 and $33 million from the second quarter of 2024, driven by higher distribution and servicing costs and direct fund expense, primarily reflecting higher average AUM.
•
General and administration expense increased $44 million from the third quarter of 2023 and $28 million from the second quarter of 2024, primarily due to higher technology expense and higher professional services expense, including higher acquisition-related transaction costs, partially offset by lower marketing and promotional expense.
•
Amortization and impairment of intangible assets expense increased $50 million from the third quarter of 2023 and the second quarter of 2024, driven by a $50 million noncash impairment charge related to certain of the Company’s indefinite-lived management contracts. Amortization and impairment of intangible assets is excluded from the Company’s “as adjusted” financial results. See pages 11 through 13 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.
9
SUMMARY OF NONOPERATING INCOME (expense), less net income (loss) attributable TO noncontrolling interests
Three Months
Three Months
Nine Months
Ended
Ended
Ended
September 30,
June 30,
September 30,
(in millions), (unaudited)
2024
2023
Change
2024
Change
2024
2023
Change
Nonoperating income (expense), GAAP basis
$
259
$
171
$
88
$
214
$
45
$
693
$
538
$
155
Less: Net income (loss) attributable to
noncontrolling interests ("NCI")
60
(9
)
69
42
18
152
60
92
Nonoperating income (expense), net of NCI
199
180
19
172
27
541
478
63
Less: Hedge gain (loss) on deferred cash
compensation plans(1)
9
(4
)
13
7
2
47
29
18
Nonoperating income (expense), net of NCI, as
adjusted(2)
$
190
$
184
$
6
$
165
$
25
$
494
$
449
$
45
Three Months
Three Months
Nine Months
Ended
Ended
Ended
September 30,
June 30,
September 30,
(in millions), (unaudited)
2024
2023
Change
2024
Change
2024
2023
Change
Net gain (loss) on investments, net of NCI
Private equity
$
9
$
91
$
(82
)
$
15
$
(6
)
$
32
$
281
$
(249
)
Real assets
13
3
10
9
4
19
11
8
Other alternatives(3)
9
22
(13
)
10
(1
)
33
32
1
Other investments(4)
20
46
(26
)
34
(14
)
85
51
34
Hedge gain (loss) on deferred cash
compensation plans(1)
9
(4
)
13
7
2
47
29
18
Subtotal
60
158
(98
)
75
(15
)
216
404
(188
)
Other income/gain (expense/loss)(5)
57
(35
)
92
45
12
142
(30
)
172
Total net gain (loss) on investments, net of NCI
117
123
(6
)
120
(3
)
358
374
(16
)
Interest and dividend income
236
139
97
178
58
555
314
241
Interest expense
(154
)
(82
)
(72
)
(126
)
(28
)
(372
)
(210
)
(162
)
Net interest income (expense)
82
57
25
52
30
183
104
79
Nonoperating income (expense), net of NCI
199
180
19
172
27
541
478
63
Less: Hedge gain (loss) on deferred cash
compensation plans(1)
9
(4
)
13
7
2
47
29
18
Nonoperating income (expense), net of NCI, as
adjusted(2)
$
190
$
184
$
6
$
165
$
25
$
494
$
449
$
45
(1)
Amounts relate to the gains (losses) from economically hedging certain BlackRock deferred cash compensation plans.
(2)
Management believes nonoperating income (expense), net of NCI, 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 notes to the condensed consolidated statements of income and supplemental information on pages 11 through 13.
(3)
Amounts primarily include net gains (losses) related to credit funds, direct hedge fund strategies and hedge fund solutions.
(4)
Amounts primarily include net gains (losses) related to BlackRock's seed investment portfolio, net of impact of certain hedges.
(5)
Amounts for the three and nine months ended September 30, 2024 include a pre-tax gain of approximately $66 million in connection with a transaction related to a minority investment in EquiLend Holdings, LLC. Amount for the nine months ended September 30, 2024 includes a noncash pre-tax gain in connection with the SpiderRock Transaction of approximately $19 million. In addition, amounts for the three and nine months ended September 30, 2024, include earnings (losses) from certain equity method minority investments, which the Company recorded within nonoperating income (expense) beginning in the first quarter of 2024 and noncash pre-tax gains (losses) related to the revaluation of certain minority investments.
summary of INCOME TAX EXPENSE
Three Months
Three Months
Nine Months
Ended
Ended
Ended
September 30,
June 30,
September 30,
(in millions), (unaudited)
2024
2023
Change
2024
Change
2024
2023
Change
Income tax expense
$
574
$
213
$
361
$
477
$
97
$
1,341
$
1,041
$
300
Effective tax rate
26.0
%
11.7
%
1,430 bps
24.2
%
180 bps
22.2
%
20.1
%
210 bps
Highlights
•
Third quarter 2023 income tax expense included approximately $223 million of discrete tax benefits related to the resolution of certain outstanding tax matters.
10
RECONCILIATION OF GAAP OPERATING INCOME AND OPERATING MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS ADJUSTED
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
(in millions), (unaudited)
2024
2023
2024
2024
2023
Operating income, GAAP basis
$
2,006
$
1,637
$
1,800
$
5,499
$
4,690
Non-GAAP expense adjustments:
Compensation expense related to appreciation (depreciation)
on deferred cash compensation plans (a)
7
(3
)
9
43
29
Amortization and impairment of intangible assets (b)
89
39
39
166
113
Acquisition-related compensation costs (b)
11
6
19
32
15
Acquisition-related transaction costs (b)(1)
17
4
13
52
7
Contingent consideration fair value adjustments (b)
(2
)
-
1
(8
)
1
Lease costs - New York (c)
-
-
-
-
14
Reduction of indemnification asset (d)(1)
-
8
-
-
8
Operating income, as adjusted (1)
$
2,128
$
1,691
$
1,881
$
5,784
$
4,877
Revenue, GAAP basis
$
5,197
$
4,522
$
4,805
$
14,730
$
13,228
Non-GAAP adjustments:
Distribution fees
(323
)
(321
)
(318
)
(951
)
(959
)
Investment advisory fees
(226
)
(205
)
(221
)
(655
)
(590
)
Revenue used for operating margin measurement
$
4,648
$
3,996
$
4,266
$
13,124
$
11,679
Operating margin, GAAP basis
38.6
%
36.2
%
37.5
%
37.3
%
35.5
%
Operating margin, as adjusted (1)
45.8
%
42.3
%
44.1
%
44.1
%
41.8
%
(1)
Amounts included within general and administration expense.
See note (1) to the condensed consolidated statements of income and supplemental information on pages 12 and 13 for more information on as adjusted items.
RECONCILIATION OF GAAP NONOPERATING INCOME (EXPENSE) TO NONOPERATING INCOME (EXPENSE), LESS NET INCOME (LOSS) ATTRIBUTABLE TO NCI, AS ADJUSTED
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
(in millions), (unaudited)
2024
2023
2024
2024
2023
Nonoperating income (expense), GAAP basis
$
259
$
171
$
214
$
693
$
538
Less: Net income (loss) attributable to NCI
60
(9
)
42
152
60
Nonoperating income (expense), net of NCI
199
180
172
541
478
Less: Hedge gain (loss) on deferred cash compensation
plans (a)
9
(4
)
7
47
29
Nonoperating income (expense), less net income (loss)
attributable to NCI, as adjusted (2)
$
190
$
184
$
165
$
494
$
449
See notes (1) and (2) to the condensed consolidated statements of income and supplemental information on pages 12 and 13 for more information on as adjusted items.
RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO BLACKROCK TO NET INCOME ATTRIBUTABLE TO BLACKROCK, AS ADJUSTED
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
(in millions, except per share data), (unaudited)
2024
2023
2024
2024
2023
Net income attributable to BlackRock, Inc., GAAP basis
$
1,631
$
1,604
$
1,495
$
4,699
$
4,127
Non-GAAP adjustments(1):
Net impact of hedged deferred cash compensation plans (a)
(2
)
1
2
(3
)
-
Amortization and impairment of intangible assets (b)
67
30
29
124
86
Acquisition-related compensation costs (b)
8
4
13
23
11
Acquisition-related transaction costs (b)
13
3
10
38
5
Contingent consideration fair value adjustments (b)
(2
)
-
1
(6
)
1
Lease costs - New York (c)
-
-
-
-
11
Income tax matters
-
-
-
(137
)
-
Net income attributable to BlackRock, Inc., as adjusted (3)
$
1,715
$
1,642
$
1,550
$
4,738
$
4,241
Diluted weighted-average common shares outstanding
149.6
150.5
149.7
149.8
150.9
Diluted earnings per common share, GAAP basis
$
10.90
$
10.66
$
9.99
$
31.37
$
27.36
Diluted earnings per common share, as adjusted (3)
$
11.46
$
10.91
$
10.36
$
31.63
$
28.11
(1)
Non-GAAP adjustments, excluding income tax matters, are net of tax.
See note (3) to the condensed consolidated statements of income and supplemental information on page 13 for more information on as adjusted items.
11
NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION (unaudited)
BlackRock reports its financial results in accordance with GAAP; however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. Adjustments to GAAP financial measures (“non-GAAP adjustments”) include certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow. Management reviews non-GAAP financial measures, in addition to GAAP financial measures, to assess ongoing operations and considers them to be helpful, for both management and investors, in evaluating BlackRock’s financial performance over time. Management also uses non-GAAP financial measures as a benchmark to compare its performance with other companies and to enhance comparability for the reporting periods presented.
Non-GAAP financial 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 financial measures may not be comparable to other similarly titled measures of other companies.
Computations and reconciliations for all periods are derived from the condensed consolidated statements of income as follows:
(1) Operating income, as adjusted, and operating margin, as adjusted: Management believes operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRock’s financial performance over time, and, therefore, provide useful disclosure to investors. Management believes that operating margin, as adjusted, reflects the Company’s long-term ability to manage ongoing costs in relation to its revenues. The Company uses operating margin, as adjusted, to assess the Company’s financial performance, to determine the long-term and annual compensation of the Company’s senior-level employees and to evaluate the Company’s relative performance against industry peers. Furthermore, this metric eliminates margin variability arising from the accounting of revenues and expenses related to distributing different product structures in multiple distribution channels utilized by asset managers.
•
Operating income, as adjusted, includes the following non-GAAP expense adjustments:
(a)
Compensation expense related to appreciation (depreciation) on deferred cash compensation plans. The Company excludes compensation expense related to the market valuation changes on certain deferred cash compensation plans, which the Company hedges economically. For these deferred cash compensation plans, the final value of the deferred amount to be distributed to employees in cash upon vesting is determined based on the returns on specified investment funds. The Company recognizes compensation expense for the appreciation (depreciation) of the deferred cash compensation liability in proportion to the vested amount of the award during a respective period, while the net gain (loss) to economically hedge these plans is immediately recognized in nonoperating income (expense), which creates a timing difference impacting net income.
This timing difference will reverse and offset to zero over the life of the award at the end of the multi-year vesting period. Management believes excluding market valuation changes related to the deferred cash compensation plans in the calculation of operating income, as adjusted, provides useful disclosure to both management and investors of the Company’s financial performance over time as these amounts are economically hedged, while also increasing comparability with other companies.
(b)
Acquisition-related costs. Acquisition related costs include adjustments related to amortization and noncash impairment of intangible assets, other acquisition-related costs, including professional services expense and compensation costs for nonrecurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions. Management believes excluding the impact of these expenses when calculating operating income, as adjusted, provides a helpful indication of the Company’s financial performance over time, thereby providing helpful information for both management and investors while also increasing comparability with other companies.
(c)
Lease costs – New York. In 2023, the Company continued to recognize lease expense within general and administration expense for both its current headquarters located at 50 Hudson Yards in New York and prior headquarters until the Company's lease on its prior headquarters expired in April 2023. The Company began lease payments related to its current headquarters in May 2023, but began recording lease expense in August 2021 when it obtained access to the building to begin its tenant improvements. Prior to the Company’s move to its current headquarters in February 2023, the impact of lease costs related to 50 Hudson Yards was excluded from operating income, as adjusted.
In February 2023, the Company completed the majority of its move to 50 Hudson Yards and no longer excluded the impact of these lease costs. Subsequently, from February 2023 through April 2023, the Company excluded the impact of lease costs related to the Company's prior headquarters. Management believes excluding the impact of these respective New York lease costs (“Lease costs – New York”) when calculating operating income, as adjusted, is useful to assess the Company’s financial performance and ongoing operations, and enhances comparability among periods presented.
12
(d)
Reduction of indemnification asset. In connection with a previous acquisition, BlackRock recorded an $8 million indemnification asset. Due to the resolution of certain tax matters in the third quarter of 2023, BlackRock recorded $8 million of general and administration expense to reflect the reduction of the indemnification asset and an offsetting $8 million tax benefit. The $8 million general and administrative expense and $8 million tax benefit have been excluded from as adjusted results as there was no impact on BlackRock’s book value.
•
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. Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, excludes the gain (loss) on the economic hedge of certain deferred cash compensation plans. As the gain (loss) on investments and derivatives used to hedge these compensation plans over time substantially offsets the compensation expense related to the market valuation changes on these deferred cash compensation plans, which is included in operating income, GAAP basis, management believes excluding the gain (loss) on the economic hedge of the deferred cash compensation plans when calculating 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 that impact book value.
(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 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.
For each period presented, the non-GAAP adjustments were tax effected at the respective blended rates applicable to the adjustments. Amount for income tax matters in 2024 includes a discrete tax benefit of $137 million recognized in connection with the reorganization and establishment of a more efficient global intellectual property and technology platform and corporate structure. This discrete tax benefit has been excluded from as adjusted results due to the nonrecurring nature of the intellectual property reorganization.
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. ACV represents forward-looking, annualized estimated value of the recurring subscription fees under client contracts, assuming all client contracts that come up for renewal are renewed, unless we have received a notice of termination, even though such notice may not be effective until a later date. ACV also includes the annualized estimated value of new sales, for existing and new clients, when we execute client contracts, even though the recurring fees may not be effective until a later date and excludes nonrecurring fees such as implementation and consulting fees.
13
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 and may contain information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. 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) 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) BlackRock’s ability to develop new products and services that address client preferences; (5) the impact of increased competition; (6) the impact of recent or future acquisitions or divestitures, including the acquisitions of GIP and Preqin Holding Limited (“Preqin” and together with GIP, the “Transactions”); (7) BlackRock’s ability to integrate acquired businesses successfully, including the Transactions; (8) risks related to the Transactions, including the possibility that the Preqin acquisition does not close, including, but not limited to, due to the failure to satisfy closing conditions, the possibility that expected synergies and value creation from either of the Transactions will not be realized, or will not be realized within the expected time period, and impacts to business and operational relationships related to disruptions from the Transactions; (9) the unfavorable resolution of legal proceedings; (10) the extent and timing of any share repurchases; (11) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and cybersecurity protection; (12) the failure to effectively manage the development and use of artificial intelligence; (13) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; (14) the impact of legislative and regulatory actions and reforms, regulatory, supervisory or enforcement actions of government agencies and governmental scrutiny relating to BlackRock; (15) changes in law and policy and uncertainty pending any such changes; (16) any failure to effectively manage conflicts of interest; (17) damage to BlackRock’s reputation; (18) increasing focus from stakeholders regarding environmental, social and governance matters; (19) geopolitical unrest, terrorist activities, civil or international hostilities, and other events outside BlackRock’s control, including wars, natural disasters and health crises, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (20) climate-related risks to BlackRock’s business, products, operations and clients; (21) the ability to attract, train and retain highly qualified and diverse professionals; (22) fluctuations in the carrying value of BlackRock’s economic investments; (23) the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products, which could affect the value proposition to clients and, generally, the tax position of BlackRock; (24) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (25) the failure by key third-party providers of BlackRock to fulfill their obligations to BlackRock; (26) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (27) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds platform; (28) 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 (29) the impact of problems, instability or failure of other financial institutions or the failure or negative performance of products offered by 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.
14
PERFORMANCE NOTES
Past performance is not indicative of future results. Except as specified, the performance information shown is as of September 30, 2024 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 August 31, 2024. The performance data does not include accounts terminated prior to September 30, 2024 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 September 30, 2024 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.
15
Mentions · how they’re counted
| Category | Underlined | Word counter | Model’s count |
|---|---|---|---|
| AI AI, artificial intelligence, generative AI, machine learning, large language model, LLM | 2 | — | — |
| Layoffs layoffs, RIF, headcount reduction, workforce optimization, restructuring | 0 | — | — |
| Recession recession, downturn, contraction, slowdown | 0 | — | — |
| Tariffs tariff, trade war, trade barriers, trade restrictions, trade policy | 0 | — | — |
| Buybacks share repurchase, buyback program | 2 | — | — |
Underlines use the same word lists the scores use. AI, recession and tariffs follow Palanor’s word counter, so those counts match it exactly on the same text. Layoffs and buybacks use the terms the model was given. The model’s count is an estimate by meaning, not by string, so it can differ from the underlines.
Source: SEC EDGAR · public domain · Highlights by Palanor