BlackRock julkisti toisen neljänneksen tuloksensa

BlackRockin toisen neljänneksen liikevaihto oli 2 482 miljoonaa dollaria, missä on kasvua 11 prosenttia edellisvuoden vastaavaan neljännekseen verrattuna. Neljänneksen liikevoitto oli 849 miljoonaa dollaria. Yhtiön hallinnoimat varat olivat 3 857 miljardia dollaria. Kasvua vuodentakaiseen tilanteeseen oli 8 prosenttia.

BlackRockin pääjohtaja Laurence Fink ja talousjohtaja Gary Shedin kertovat tuloksesta telekonferenssissa tänään 18.7. klo 16.00 Suomen aikaa. Mukaan pääsee soittamalla numeroon +1 706 679 8281 vähän ennen aloitusaikaa ja antamalla tunnuksen 14878195. Tilaisuutta voi myös seurata internetissä www.blackrock.com, Investor relations -sivulla.

Alla lyhennetty versio tulostiedotteesta, alkuperäinen versio liitteenä.



BlackRock Reports Quarterly Diluted EPS of $4.19, or $4.15 as adjusted
$3.857 Trillion in assets under management at June 30, 2013, up 8% year over year

• Record base fees of $2.2 billion for the quarter
• Operating income growth of 2% from 2012, or 18% as adjusted, drove adjusted operating margin expansion
• Continued commitment to sound capital management with $250 million of quarterly share repurchases
• Funded new charitable foundation to focus on giving back to communities where BlackRock operates, including, among other things, helping to promote financial education for low-income families and individuals

New York, July 18, 2013 — BlackRock, Inc. (NYSE:BLK) today reported second quarter 2013 diluted EPS of $4.19, up 36% from a year ago. Revenue increased 11% from the second quarter 2012, reflecting growth in markets, long-dated net new business and higher performance fees. Operating income for the second quarter 2013 was $849 million with an operating margin of 34.2%. In connection with the PennyMac IPO during the second quarter 2013, the Company recorded a non-cash, non-operating pre-tax gain of $39 million related to the carrying value of the Company’s equity method investment. Subsequent to the PennyMac IPO, the Company contributed 6.1 million units of its PennyMac investment to a new Donor Advised Fund (“DAF”) (the “Charitable Contribution”). The Charitable Contribution resulted in an operating expense of $124 million, offset by an $80 million non-cash, non-operating pre-tax gain on the contributed units and a tax benefit of approximately $57 million.

As adjusted results(1): Second quarter 2013 diluted EPS of $4.15 improved 34% and operating income of $982 million rose 18% compared with the second quarter 2012. Diluted EPS included operating income of $4.10 per diluted share and net non-operating income of $0.05 per diluted share, including the $39 million non-cash, pre-tax gain related to the PennyMac IPO. The financial impact related to the Charitable Contribution has been excluded from as adjusted results. Operating margin of 41.3% in the second quarter 2013 rose 210 bps from the second quarter 2012. Compared with the first quarter 2013, operating margin rose 130 bps, reflecting growth in base fees, lower payroll taxes and lower organizational costs, partially offset by lower performance fees and higher brand campaign costs.

“Our second quarter results, which reflect adjusted operating income up 18% year-over-year, once again highlight the strength of our globally diversified multi-client platform that was built to deliver in all market environments,” commented Laurence D. Fink, Chairman and CEO of BlackRock. “During the quarter we generated record base fees and $11.9 billion in long-dated net new business across a broad range of products, including 11 funds that each raised more than $1 billion. These funds showcased the diversity of our offering, with representation across all major asset classes, client segments and geographies. Results were driven by global demand from retail and institutional clients for multi-asset class, unconstrained fixed income and retail alternative products. Our strong product capabilities in the retail alternative mutual fund space, coupled with our broad distribution platform, uniquely position us in this high growth segment, where second quarter net flows of $1.1 billion drove sequential quarter AUM growth of 72%.”

The table below presents AUM and a comparison of GAAP and as adjusted results for certain financial measures:



“While markets were volatile this quarter, not all investor behavior was uniform. Our largest institutional investors remain committed to their long-term investment strategies, while trading-oriented clients once again turned to iShares as a highly effective tool to quickly and efficiently adjust their market exposures. iShares flows were driven by clients stepping back from emerging markets equities and long duration fixed income, though outflows in those products were largely offset by flows into the Core Series and our Minimum Volatility suite, resulting in net outflows from iShares of $1 billion for the quarter. Our products provided liquidity and transparency for our clients worldwide, and the record volume of trading in certain of our products reflects our position as the premier provider of highly liquid ETFs.

“We are also seeing the early stages of a rotation within fixed income as investors increasingly focus on the duration of their fixed income portfolios, with flows moving into actively managed, unconstrained products. We have top quartile performance in these areas, with flagship funds like Multi-Asset Income and Strategic Income Opportunities each gathering more than $1 billion in new assets. We continue to leverage our diverse distribution capabilities to deliver superior products to our retail clients, and deepen and develop institutional relationships, as clients look to us to evaluate risk and provide solutions.

“As we highlighted at our inaugural Investor Day, we see a number of exciting growth opportunities across the firm and are continuing our commitment to finding innovative solutions to serve our clients’ needs in changing market conditions. This commitment to innovation is illustrated by the launch of our new iSharesBonds series in April combining the advantages of traditional bonds and ETFs and providing our clients a tool to simplify their fixed income portfolio while managing duration risk. In the second quarter, we also provided funding for a new charitable initiative that will launch in 2014 and deepen our commitment to public responsibility that has always been fundamental to our business.

“We have built a unique platform at BlackRock that is differentiated by the diversity of our clients, geographies and investment strategies, all underpinned with risk management powered by Aladdin. That platform drove more than $51 billion in long-dated net new business in the first half of the year, and we believe it positions us to continue to deliver both for our clients and our shareholders across market cycles.”

Second Quarter Business Highlights

The following table presents net inflows, AUM, base fees and business mix by client and product type:




Net long-term inflows of $10.5 billion and $3.7 billion from clients in EMEA and Asia-Pacific, respectively, were offset by net outflows of $2.3 billion from Americas (defined as the United States, Caribbean, Canada, Latin America and Iberia) clients. At June 30, 2013, BlackRock managed 61% of long-term AUM for investors in the Americas and 39% for international clients.

• Retail net long-term inflows of $5.1 billion globally included net inflows of $3.5 billion in the United States and $1.4 billion in EMEA. Growth was largely driven by a strong interest in unconstrained fixed income and multiasset income offerings. Flagship funds in these areas include our Strategic Income Opportunities and Multi-Asset Income funds, each of which raised over $1 billion in assets during the quarter. Alternative mutual funds also had a strong quarter, with $1.1 billion of net inflows, representing 72% AUM growth over the prior quarter.
• iShares net long-term outflows of $1.0 billion included U.S. iShares net long-term outflows of $3.6 billion due to outflows of $7.2 billion, $2.0 billion and $2.1 billion from our flagship emerging markets equity, fixed income and commodities funds, respectively. These outflows more than offset positive flows of $3.6 billion into the Core Series and $2.0 billion into Minimum Volatility equity funds in the United States and $2.2 billion of equity inflows into European iShares.
• Institutional active net long-term inflows of $1.3 billion reflected strong flows of $8.8 billion into multi-asset class products, driven by continued demand for our LifePath target date suite, which had net inflows of $4.0 billion. Flows were partially offset by combined equity and fixed income net outflows of $4.2 billion, and active currency redemptions of $2.0 billion.
• Institutional index net long-term inflows of $6.5 billion were primarily driven by demand for local currency fixed income products in EMEA and for global bond mandates in Asia-Pacific.

Cash management AUM decreased 3%, or $8.8 billion, to $252.6 billion.

Advisory AUM decreased 13% to $40.0 billion due to planned portfolio liquidations.

as of June 30, 2013 is presented in the following table:



Second Quarter Financial Highlights

PennyMac IPO. At March 31, 2013, BlackRock held an approximately one-third economic equity interest in Private National Mortgage Acceptance Company, LLC (“PNMAC”), which is accounted for as an equity method investment. On May 8, 2013, PennyMac Financial Services, Inc. (“PennyMac”) became the sole managing member of PNMAC in connection with an initial public offering of PennyMac (the “PennyMac IPO”). As a result of the PennyMac IPO, BlackRock recorded a non-cash, non-operating pre-tax gain of $39 million related to the carrying value of its equity method investment. BlackRock was not a seller in the PennyMac IPO.

Charitable Contribution. Subsequent to the PennyMac IPO, the Company made a Charitable Contribution of approximately six million units of its PennyMac investment to a new DAF in the second quarter. The fair value of the Charitable Contribution was $124 million and is included in general and administration expenses on the condensed consolidated statement of income. In connection with the Charitable Contribution, the Company also recorded a non-cash, non-operating pre-tax gain of $80 million related to the contributed investment and a tax benefit of approximately $57 million.

The Company will continue to account for its remaining approximately 20% interest (approximately 16 million units) in PennyMac as an equity method investment.

The general and administration expenses, non-operating gain and associated tax benefit related to the Charitable Contribution have been excluded from as adjusted results, among other items. For more information on as adjusted items and the reconciliation to GAAP, see notes to the Condensed Consolidated Statements of Income.

The new charitable fund will launch in 2014 and support BlackRock’s philanthropic initiatives to give back to the communities in which the Company operates, including, among other things, helping to promote financial education for low-income families and individuals.

Comparison of the Second Quarter 2013 to the Second Quarter 2012

The following discusses the Company’s results on a GAAP basis:

Operating income: Operating income was $849 million compared with $829 million in the prior year. The current quarter included the $124 million expense related to the Charitable Contribution.

Revenue of $2.5 billion increased $253 million from $2.2 billion in the prior year, primarily due to the following:

• Investment advisory, administration fees and securities lending revenue of $2.2 billion increased $187 million from the prior year due to growth in long-term average AUM. Securities lending fees were $136 million in the current quarter and $157 million in the prior year quarter. The decrease in securities lending fees was driven primarily by lower spreads.
• Performance fees of $89 million increased $48 million, primarily reflecting higher fees from alternative products.
• BlackRock Solutions® and advisory revenue totaled $138 million, including $98 million of revenue from the Aladdin® business, compared with $131 million in the prior year quarter, which included $95 million of Aladdin business revenue. The increase primarily reflected higher revenue from Aladdin mandates and higher one-time revenue from advisory assignments.

Total operating expenses of $1.6 billion increased $233 million and included the previously mentioned $124 million related to the Charitable Contribution. Results were primarily driven by the following:

• Employee compensation and benefits increased $78 million, reflecting higher incentive compensation driven by higher operating income, including higher performance fees.
• Direct fund expenses increased $18 million, reflecting an increase in average AUM where BlackRock pays certain non-advisory expenses of the funds.
• General and administration expenses increased $141 million, largely driven by the $124 million related to the Charitable Contribution.

Non-operating income (expense): Non-operating income, net of non-controlling interests, was $92 million compared with $46 million non-operating expense in the prior year quarter. The current quarter included the $39 million gain related to the PennyMac IPO, the $80 million gain related to the Charitable Contribution and $22 million of net positive marks, offset by $49 million of net interest expense.

Income tax expense: Income tax expense totaled $212 million and $229 million for the second quarter 2013 and 2012, respectively. The GAAP effective income tax rate was 22.5% compared with 29.3% for the prior year quarter. The current quarter included the approximately $57 million tax benefit recognized in connection with the Charitable Contribution. In addition, the current quarter included a tax benefit of approximately $29 million, primarily due to the realization of loss carryforwards.

The current quarter as adjusted effective tax rate of 27.3% excluded the $57 million tax benefit related to the Charitable Contribution and included the above mentioned tax benefit of $29 million. Excluding the $29 million tax benefit, the as adjusted effective tax rate was 30.2%.

Comparison of the Second Quarter 2013 to the First Quarter 2013

The following discusses the Company’s results on a GAAP basis:

Operating income: Operating income was $849 million compared with $909 million in the prior quarter. The current quarter included the $124 million expense related to the Charitable Contribution.

Revenue of $2.5 billion increased $33 million from $2.4 billion in the prior quarter, primarily due to the following:

• Investment advisory, administration fees and securities lending revenue of $2.2 billion increased $48 million, driven by higher long-term average AUM, the effect of one additional revenue day in the quarter and seasonally higher securities lending fees. Securities lending fees were $136 million and $112 million in the second quarter and first quarter, respectively. The increase in securities lending fees was driven by higher seasonal demand.
• Performance fees were $89 million compared with $108 million in the first quarter, primarily reflecting seasonally lower performance fees from alternative products.
• BlackRock Solutions and advisory revenue of $138 million, including $98 million of revenue from the Aladdin business, compared with $126 million in the first quarter, which included $99 million of Aladdin business revenue. The increase primarily reflected higher revenue from advisory assignments.

Total operating expenses of $1.6 billion increased $93 million and included the previously mentioned $124 million related to the Charitable Contribution. Results were primarily driven by the following:

• Employee compensation and benefits decreased $41 million, primarily reflecting lower organizational alignment costs and seasonally lower payroll taxes, partially offset by higher incentive compensation.
• General and administration expenses increased $134 million, primarily due to the $124 million related to the Charitable Contribution, higher brand campaign costs and foreign currency remeasurement. The increase was partially offset by the non-recurrence of closed-end fund launch costs of $16 million (excluding $2 million included in employee compensation and benefits expense) recorded in the previous quarter.

Non-operating income (expense): Non-operating income, net of non-controlling interests, was $92 million compared with $7 million in the first quarter. The current quarter included the $39 million gain related to the PennyMac IPO and the $80 million gain related to the Charitable Contribution, partially offset by lower positive marks primarily on distressed credit/mortgage funds and private equity fund co-investments.

Income tax expense: Income tax expense totaled $212 million and $284 million for the second quarter 2013 and first quarter 2013, respectively. The GAAP effective income tax rate was 22.5% compared with 31.0% for the first quarter. The current quarter included the approximately $57 million tax benefit recognized in connection with the Charitable Contribution. In addition, the current quarter included a tax benefit of approximately $29 million, primarily due to the realization of loss carryforwards.

Teleconference, Webcast and Presentation Information
Chairman and Chief Executive Officer, Laurence D. Fink, and Chief Financial Officer, Gary Shedlin, will host a teleconference call for investors and analysts on Thursday, July 18, 2013, at 9:00 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 9:00 a.m. and reference the BlackRock Conference Call (ID Number 14878195). 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 12:30 p.m. (Eastern Time) on Thursday, July 18, 2013 and ending at midnight on Thursday, August 1, 2013. To access the replay of the teleconference, callers from the United States should dial (800) 585-8367 and callers from outside the United States should dial (404) 537-3406 and enter the Conference ID Number 14878195. To access the webcast, please visit the investor relations section of www.blackrock.com.

About BlackRock
BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At June 30, 2013, BlackRock’s AUM was $3.857 trillion. BlackRock helps clients meet their goals and overcome challenges with a range of products that include separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, as of June 30, 2013, the firm had approximately 10,700 employees in 30 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company's website at www.blackrock.com.

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