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BlackRock Reports Full Year 2023 Diluted EPS of $36.51, or $37.77 as Adjusted

BlackRock Announces Agreement to Acquire Global Infrastructure Partners (“GIP”) – Creating a World Leading Infrastructure Investment Platform

BlackRock, Inc. (NYSE: BLK) today reported financial results for the three months and year ended December 31, 2023.

BlackRock’s acquisition of GIP will create a combined infrastructure platform of over $150 billion*, well positioned to meet fast-growing investor demand

$10 trillion in AUM following $289 billion of full year net inflows, including $96 billion in the fourth quarter

Flat full year revenue primarily driven by the negative impact of markets on average AUM, partially offset by higher technology services revenue

Restructuring charge of $61 million from initiative to reorganize specific platforms, primarily Aladdin and illiquid alternative investments, to stay ahead of client needs, excluded from as adjusted results

2% decrease in full year operating income

7% increase in full year diluted EPS also reflects significantly higher nonoperating income, partially offset by a higher effective tax rate in the current year

$4.5 billion returned to shareholders in 2023, including $1.5 billion of share repurchases

2% increase in quarterly cash dividend to $5.10 per share approved by Board of Directors

Laurence D. Fink, Chairman and CEO:

“BlackRock delivered differentiated organic growth and operating margin through historically challenging market and industry conditions in 2022 and 2023. As we’ve seen before, when investors were ready to put money back to work, they did it with BlackRock. Clients entrusted us with $289 billion of net inflows in 2023, including $96 billion in the fourth quarter. We enter 2024 with strong momentum – $10 trillion in AUM, accelerating flows, and an organization positioned for the future.

“Today, we are announcing two transformational changes in anticipation of the evolution we see ahead for asset management and the capital markets. The strategic re-architecture of our organization will simplify and improve how we work and deliver for clients. And our acquisition of GIP will propel our leadership in the fast-growing market for hard-asset infrastructure.

“Our clients’ needs have been our compass. Listening to them and applying that to our vision for the future of our industry drove our innovation in Aladdin, and how we led a revolution that made iShares ETFs ubiquitous.

“We always viewed ETFs as a technology, a technology that facilitated investing. And just as our Aladdin technology has become core to asset management, so too have ETFs. That’s why we believe embedding our ETF and Index business across the entire firm will accelerate the growth of iShares and every investment strategy at BlackRock.

“The combination of BlackRock infrastructure with GIP will make us the second largest private markets infrastructure manager with over $150 billion in total AUM, providing clients – especially those saving for retirement – with the high-coupon, inflation-protected, long-duration investments they need.

“We are incredibly excited about this next chapter in BlackRock’s history. This ambitious transformation of our firm positions us better than ever. Our clients, shareholders and employees will be its biggest beneficiaries.”

FINANCIAL RESULTS

 

 

NET FLOW HIGHLIGHTS(1)

(in millions,

Q4

 

 

Q4

 

 

Full Year

 

 

 

Q4

 

 

Full Year

except per share data)

2023

 

 

2022

 

 

2023

 

 

2022

 

 

(in billions)

2023

 

 

2023

AUM

$

10,008,995

 

 

$

8,594,485

 

 

$

10,008,995

 

 

$

8,594,485

 

 

Long-term net flows:

$

63

 

 

$

209

% change

 

16

%

 

 

 

 

 

16

%

 

 

 

 

 

 

 

 

 

 

 

Average AUM

$

9,384,929

 

 

$

8,417,215

 

 

$

9,220,700

 

 

$

8,948,570

 

 

By region:

 

 

 

 

% change

 

11

%

 

 

 

 

 

3

%

 

 

 

 

 

Americas

$

54

 

 

$

138

Total net flows

$

95,647

 

 

$

113,725

 

 

$

288,695

 

 

$

306,570

 

 

 

EMEA

 

8

 

 

 

27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APAC

 

1

 

 

 

44

GAAP basis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

4,631

 

 

$

4,337

 

 

$

17,859

 

 

$

17,873

 

 

By client type:

 

 

 

 

% change

 

7

%

 

 

 

 

 

-

%

 

 

 

 

 

 

 

 

 

 

 

Operating income

$

1,585

 

 

$

1,427

 

 

$

6,275

 

 

$

6,385

 

 

 

Retail:

$

(9

)

 

$

(8

% change

 

11

%

 

 

 

 

 

(2

)%

 

 

 

 

 

 

US

 

(6

)

 

 

(5

Operating margin

 

34.2

%

 

 

32.9

%

 

 

35.1

%

 

 

35.7

%

 

 

 

International

 

(3

)

 

 

(4

Net income(1)

$

1,375

 

 

$

1,259

 

 

$

5,502

 

 

$

5,178

 

 

 

 

 

 

 

 

 

% change

 

9

%

 

 

 

 

 

6

%

 

 

 

 

 

ETFs:

$

88

 

 

$

186

Diluted EPS

$

9.15

 

 

$

8.29

 

 

$

36.51

 

 

$

33.97

 

 

 

 

Core equity

 

32

 

 

 

83

% change

 

10

%

 

 

 

 

 

7

%

 

 

 

 

 

 

Strategic

 

28

 

 

 

104

Weighted-average

diluted shares

 

150.2

 

 

 

151.8

 

 

 

150.7

 

 

 

152.4

 

 

 

 

Precision

 

28

 

 

 

(1

% change

 

(1

)%

 

 

 

 

 

(1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Institutional:

$

(16

)

 

$

32

As Adjusted(2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

8

 

 

 

87

Operating income

$

1,716

 

 

$

1,577

 

 

$

6,593

 

 

$

6,711

 

 

 

 

Index

 

(24

)

 

 

(55

% change

 

9

%

 

 

 

 

 

(2

)%

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

41.6

%

 

 

41.2

%

 

 

41.7

%

 

 

42.8

%

 

 

 

 

 

 

 

 

Net income(1)

$

1,451

 

 

$

1,356

 

 

$

5,692

 

 

$

5,391

 

 

Cash management net flows

$

33

 

 

$

79

% change

 

7

%

 

 

 

 

 

6

%

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

$

9.66

 

 

$

8.93

 

 

$

37.77

 

 

$

35.36

 

 

 

 

 

 

 

 

 

% change

 

8

%

 

 

 

 

 

7

%

 

 

 

 

Total net flows

$

96

 

 

$

289

_________________________

 

 

 

 

 

 

 

 

_________________________

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

(2) See pages 10 through 12 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Combined infrastructure platform represents client assets (AUM and non-fee paying committed capital) of BlackRock and GIP as of December 31, 2023 and September 30, 2023, respectively.

BUSINESS RESULTS

Q4 2023

Q4 2023

Base fees(1)

Base fees(1)

December 31, 2023

and securities

Q4 2023

December 31, 2023

and securities

AUM

lending revenue

(in millions), (unaudited)

Net flows

AUM

lending revenue

% of Total

% of Total

RESULTS BY CLIENT TYPE

 

 

 

 

 

 

 

 

 

 

Retail

$

(8,959

)

$

929,697

 

$

993

 

 

9

%

 

28

%

ETFs

 

87,721

 

 

3,499,299

 

 

1,458

 

 

35

%

 

40

%

Institutional:

 

 

 

 

 

 

 

 

 

 

Active

 

7,511

 

 

1,912,673

 

 

691

 

 

19

%

 

19

%

Index

 

(23,576

)

 

2,902,489

 

 

223

 

 

29

%

 

6

%

Total institutional

 

(16,065

)

 

4,815,162

 

 

914

 

 

48

%

 

25

%

Long-term

 

62,697

 

 

9,244,158

 

 

3,365

 

 

92

%

 

93

%

Cash management

 

32,950

 

 

764,837

 

 

240

 

 

8

%

 

7

%

Total

$

95,647

 

$

10,008,995

 

$

3,605

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY INVESTMENT STYLE

 

 

 

 

 

 

 

 

 

 

Active

$

(5,762

)

$

2,621,178

 

$

1,631

 

 

26

%

 

45

%

Index and ETFs

 

68,459

 

 

6,622,980

 

 

1,734

 

 

66

%

 

48

%

Long-term

 

62,697

 

 

9,244,158

 

 

3,365

 

 

92

%

 

93

%

Cash management

 

32,950

 

 

764,837

 

 

240

 

 

8

%

 

7

%

Total

$

95,647

 

$

10,008,995

 

$

3,605

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY PRODUCT TYPE

 

 

 

 

 

 

 

 

 

 

Equity

$

34,086

 

$

5,293,344

 

$

1,769

 

 

52

%

 

49

%

Fixed income

 

32,180

 

 

2,804,026

 

 

864

 

 

28

%

 

24

%

Multi-asset

 

(1,051

)

 

870,804

 

 

299

 

 

9

%

 

8

%

Alternatives:

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

3,561

 

 

136,909

 

 

251

 

 

1

%

 

7

%

Liquid alternatives

 

(3,289

)

 

74,233

 

 

138

 

 

1

%

 

4

%

Currency and commodities

 

(2,790

)

 

64,842

 

 

44

 

 

1

%

 

1

%

Total Alternatives

 

(2,518

)

 

275,984

 

 

433

 

 

3

%

 

12

%

Long-term

 

62,697

 

 

9,244,158

 

 

3,365

 

 

92

%

 

93

%

Cash management

 

32,950

 

 

764,837

 

 

240

 

 

8

%

 

7

%

Total

$

95,647

 

$

10,008,995

 

$

3,605

 

 

100

%

 

100

%

  1. Base fees include investment advisory and administration fees.

INVESTMENT PERFORMANCE AT DECEMBER 31, 2023(1)

One-year period

Three-year period

Five-year period

Fixed income:

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

Taxable

84

%

78

%

92

%

Tax-exempt

75

%

61

%

45

%

Index AUM within or above applicable tolerance

98

%

97

%

97

%

Equity:

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

Fundamental

69

%

47

%

87

%

Systematic

87

%

83

%

89

%

Index AUM within or above applicable tolerance

96

%

99

%

100

%

  1. Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 14 for performance disclosure detail.

CAPITAL MANAGEMENT

BlackRock's Board of Directors approved a 2% increase in the quarterly cash dividend to $5.10 per share, payable March 22, 2024, to shareholders of record at the close of business on March 7, 2024.

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, January 12, 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, (313) 209-4913, or from outside the United States, (866) 400-0049, shortly before 7:30 a.m. and reference the BlackRock Conference Call (ID Number 3392098). 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, January 12, 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.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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

 

 

 

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

 

2023

 

 

Change

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administration fees

$

3,448

 

 

$

3,260

 

 

$

188

 

 

 

$

3,514

 

 

$

(66

)

 

Securities lending revenue

 

157

 

 

 

139

 

 

 

18

 

 

 

 

167

 

 

 

(10

)

 

Total investment advisory, administration fees

and securities lending revenue

 

3,605

 

 

 

3,399

 

 

 

206

 

 

 

 

3,681

 

 

 

(76

)

 

Investment advisory performance fees

 

311

 

 

 

228

 

 

 

83

 

 

 

 

70

 

 

 

241

 

 

Technology services revenue

 

379

 

 

 

353

 

 

 

26

 

 

 

 

407

 

 

 

(28

)

 

Distribution fees

 

303

 

 

 

314

 

 

 

(11

)

 

 

 

321

 

 

 

(18

)

 

Advisory and other revenue

 

33

 

 

 

43

 

 

 

(10

)

 

 

 

43

 

 

 

(10

)

 

Total revenue

 

4,631

 

 

 

4,337

 

 

 

294

 

 

 

 

4,522

 

 

 

109

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

1,503

 

 

 

1,430

 

 

 

73

 

 

 

 

1,420

 

 

 

83

 

 

Distribution and servicing costs

 

502

 

 

 

497

 

 

 

5

 

 

 

 

526

 

 

 

(24

)

 

Direct fund expense

 

318

 

 

 

275

 

 

 

43

 

 

 

 

354

 

 

 

(36

)

 

General and administration expense

 

624

 

 

 

580

 

 

 

44

 

 

 

 

546

 

 

 

78

 

 

Restructuring charge

 

61

 

 

 

91

 

 

 

(30

)

 

 

 

-

 

 

 

61

 

 

Amortization of intangible assets

 

38

 

 

 

37

 

 

 

1

 

 

 

 

39

 

 

 

(1

)

 

Total expense

 

3,046

 

 

 

2,910

 

 

 

136

 

 

 

 

2,885

 

 

 

161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,585

 

 

 

1,427

 

 

 

158

 

 

 

 

1,637

 

 

 

(52

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on investments

 

265

 

 

 

207

 

 

 

58

 

 

 

 

114

 

 

 

151

 

 

Interest and dividend income

 

159

 

 

 

72

 

 

 

87

 

 

 

 

139

 

 

 

20

 

 

Interest expense

 

(82

)

 

 

(54

)

 

 

(28

)

 

 

 

(82

)

 

 

-

 

 

Total nonoperating income (expense)

 

342

 

 

 

225

 

 

 

117

 

 

 

 

171

 

 

 

171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

1,927

 

 

 

1,652

 

 

 

275

 

 

 

 

1,808

 

 

 

119

 

 

Income tax expense

 

438

 

 

 

345

 

 

 

93

 

 

 

 

213

 

 

 

225

 

 

Net income

 

1,489

 

 

 

1,307

 

 

 

182

 

 

 

 

1,595

 

 

 

(106

)

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling

interests

 

114

 

 

 

48

 

 

 

66

 

 

 

 

(9

)

 

 

123

 

 

Net income attributable to BlackRock, Inc.

$

1,375

 

 

$

1,259

 

 

$

116

 

 

 

$

1,604

 

 

$

(229

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

148.7

 

 

 

150.0

 

 

 

(1.4

)

 

 

 

149.2

 

 

 

(0.5

)

 

Diluted

 

150.2

 

 

 

151.8

 

 

 

(1.6

)

 

 

 

150.5

 

 

 

(0.3

)

 

Earnings per share attributable to BlackRock,

Inc. common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

9.25

 

 

$

8.39

 

 

$

0.86

 

 

 

$

10.75

 

 

$

(1.50

)

 

Diluted

$

9.15

 

 

$

8.29

 

 

$

0.86

 

 

 

$

10.66

 

 

$

(1.51

)

 

Cash dividends declared and paid per share

$

5.00

 

 

$

4.88

 

 

$

0.12

 

 

 

$

5.00

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM (end of period)

$

10,008,995

 

 

$

8,594,485

 

 

$

1,414,510

 

 

 

$

9,100,825

 

 

$

908,170

 

 

Shares outstanding (end of period)

 

148.5

 

 

 

149.8

 

 

 

(1.3

)

 

 

 

148.9

 

 

 

(0.4

)

 

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

34.2

%

 

 

32.9

%

 

 

130

 

bps

 

 

36.2

%

 

 

(200

)

bps

Effective tax rate

 

24.2

%

 

 

21.5

%

 

 

270

 

bps

 

 

11.7

%

 

 

1,250

 

bps

As adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (1)

$

1,716

 

 

$

1,577

 

 

$

139

 

 

 

$

1,691

 

 

$

25

 

 

Operating margin (1)

 

41.6

%

 

 

41.2

%

 

 

40

 

bps

 

 

42.3

%

 

 

(70

)

bps

Nonoperating income (expense), less net income

(loss) attributable to noncontrolling

interests (2)

$

199

 

 

$

177

 

 

$

22

 

 

 

$

184

 

 

$

15

 

 

Net income attributable to BlackRock, Inc. (3)

$

1,451

 

 

$

1,356

 

 

$

95

 

 

 

$

1,642

 

 

$

(191

)

 

Diluted earnings attributable to BlackRock, Inc.

common stockholders per share (3)

$

9.66

 

 

$

8.93

 

 

$

0.73

 

 

 

$

10.91

 

 

$

(1.25

)

 

Effective tax rate

 

24.2

%

 

 

22.7

%

 

 

150

 

bps

 

 

12.4

%

 

 

1,180

 

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See pages 10 through 12 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.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

Revenue

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

securities lending revenue:

 

 

 

 

 

 

 

 

 

Investment advisory and administration fees

$

13,724

 

 

$

13,852

 

 

$

(128

)

 

Securities lending revenue

 

675

 

 

 

599

 

 

 

76

 

 

Total investment advisory, administration fees

and securities lending revenue

 

14,399

 

 

 

14,451

 

 

 

(52

)

 

Investment advisory performance fees

 

554

 

 

 

514

 

 

 

40

 

 

Technology services revenue

 

1,485

 

 

 

1,364

 

 

 

121

 

 

Distribution fees

 

1,262

 

 

 

1,381

 

 

 

(119

)

 

Advisory and other revenue

 

159

 

 

 

163

 

 

 

(4

)

 

Total revenue

 

17,859

 

 

 

17,873

 

 

 

(14

)

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

5,779

 

 

 

5,681

 

 

 

98

 

 

Distribution and servicing costs

 

2,051

 

 

 

2,179

 

 

 

(128

)

 

Direct fund expense

 

1,331

 

 

 

1,226

 

 

 

105

 

 

General and administration expense

 

2,211

 

 

 

2,160

 

 

 

51

 

 

Restructuring charge

 

61

 

 

 

91

 

 

 

(30

)

 

Amortization of intangible assets

 

151

 

 

 

151

 

 

 

-

 

 

Total expense

 

11,584

 

 

 

11,488

 

 

 

96

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

6,275

 

 

 

6,385

 

 

 

(110

)

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense)

 

 

 

 

 

 

 

 

 

Net gain (loss) on investments

 

699

 

 

 

(35

)

 

 

734

 

 

Interest and dividend income

 

473

 

 

 

152

 

 

 

321

 

 

Interest expense

 

(292

)

 

 

(212

)

 

 

(80

)

 

Total nonoperating income (expense)

 

880

 

 

 

(95

)

 

 

975

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

7,155

 

 

 

6,290

 

 

 

865

 

 

Income tax expense

 

1,479

 

 

 

1,296

 

 

 

183

 

 

Net income

 

5,676

 

 

 

4,994

 

 

 

682

 

 

Less:

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling

interests

 

174

 

 

 

(184

)

 

 

358

 

 

Net income attributable to BlackRock, Inc.

$

5,502

 

 

$

5,178

 

 

$

324

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

149.3

 

 

 

150.9

 

 

 

(1.6

)

 

Diluted

 

150.7

 

 

 

152.4

 

 

 

(1.7

)

 

Earnings per share attributable to BlackRock, Inc.

common stockholders

 

 

 

 

 

 

 

 

 

Basic

$

36.85

 

 

$

34.31

 

 

$

2.54

 

 

Diluted

$

36.51

 

 

$

33.97

 

 

$

2.54

 

 

Cash dividends declared and paid per share

$

20.00

 

 

$

19.52

 

 

$

0.48

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM (end of period)

$

10,008,995

 

 

$

8,594,485

 

 

$

1,414,510

 

 

Shares outstanding (end of period)

 

148.5

 

 

 

149.8

 

 

 

(1.3

)

 

GAAP:

 

 

 

 

 

 

 

 

 

Operating margin

 

35.1

%

 

 

35.7

%

 

 

(60

)

bps

Effective tax rate

 

21.2

%

 

 

20.0

%

 

 

120

 

bps

As adjusted:

 

 

 

 

 

 

 

 

 

Operating income (1)

$

6,593

 

 

$

6,711

 

 

$

(118

)

 

Operating margin (1)

 

41.7

%

 

 

42.8

%

 

 

(110

)

bps

Nonoperating income (expense), less net income

(loss) attributable to noncontrolling

interests (2)

$

648

 

 

$

89

 

 

$

559

 

 

Net income attributable to BlackRock, Inc. (3)

$

5,692

 

 

$

5,391

 

 

$

301

 

 

Diluted earnings attributable to BlackRock, Inc.

common stockholders per share (3)

$

37.77

 

 

$

35.36

 

 

$

2.41

 

 

Effective tax rate

 

21.4

%

 

 

20.7

%

 

 

70

 

bps

 

 

 

 

 

 

 

 

 

 

See pages 10 through 12 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.

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Current Quarter Component Changes by Client Type and Product Type

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

inflows

 

 

Market

 

 

 

 

 

December 31,

 

 

 

 

 

2023

 

 

(outflows)

 

 

change

 

 

FX impact(1)

 

 

2023

 

 

Average AUM(2)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

396,030

 

 

$

(370

)

 

$

36,080

 

 

$

3,994

 

 

$

435,734

 

 

$

407,368

 

Fixed income

 

300,232

 

 

 

(6,552

)

 

 

16,437

 

 

 

2,682

 

 

 

312,799

 

 

 

303,171

 

Multi-asset

 

129,177

 

 

 

(33

)

 

 

9,904

 

 

 

489

 

 

 

139,537

 

 

 

131,663

 

Alternatives

 

43,001

 

 

 

(2,004

)

 

 

303

 

 

 

327

 

 

 

41,627

 

 

 

42,041

 

Retail subtotal

 

868,440

 

 

 

(8,959

)

 

 

62,724

 

 

 

7,492

 

 

 

929,697

 

 

 

884,243

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,234,275

 

 

 

58,211

 

 

 

230,034

 

 

 

10,111

 

 

 

2,532,631

 

 

 

2,329,035

 

Fixed income

 

818,744

 

 

 

31,225

 

 

 

43,359

 

 

 

5,075

 

 

 

898,403

 

 

 

849,776

 

Multi-asset

 

7,716

 

 

 

746

 

 

 

614

 

 

 

64

 

 

 

9,140

 

 

 

8,251

 

Alternatives

 

57,674

 

 

 

(2,461

)

 

 

3,829

 

 

 

83

 

 

 

59,125

 

 

 

59,058

 

ETFs subtotal

 

3,118,409

 

 

 

87,721

 

 

 

277,836

 

 

 

15,333

 

 

 

3,499,299

 

 

 

3,246,120

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

167,917

 

 

 

704

 

 

 

14,966

 

 

 

3,101

 

 

 

186,688

 

 

 

174,135

 

Fixed income

 

771,581

 

 

 

6,012

 

 

 

52,739

 

 

 

6,491

 

 

 

836,823

 

 

 

792,981

 

Multi-asset

 

646,993

 

 

 

(1,244

)

 

 

62,463

 

 

 

8,970

 

 

 

717,182

 

 

 

667,841

 

Alternatives

 

166,771

 

 

 

2,039

 

 

 

1,239

 

 

 

1,931

 

 

 

171,980

 

 

 

168,608

 

Active subtotal

 

1,753,262

 

 

 

7,511

 

 

 

131,407

 

 

 

20,493

 

 

 

1,912,673

 

 

 

1,803,565

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,943,069

 

 

 

(24,459

)

 

 

190,759

 

 

 

28,922

 

 

 

2,138,291

 

 

 

1,998,882

 

Fixed income

 

685,648

 

 

 

1,495

 

 

 

46,049

 

 

 

22,809

 

 

 

756,001

 

 

 

709,186

 

Multi-asset

 

4,986

 

 

 

(520

)

 

 

437

 

 

 

42

 

 

 

4,945

 

 

 

4,747

 

Alternatives

 

3,330

 

 

 

(92

)

 

 

(15

)

 

 

29

 

 

 

3,252

 

 

 

3,307

 

Index subtotal

 

2,637,033

 

 

 

(23,576

)

 

 

237,230

 

 

 

51,802

 

 

 

2,902,489

 

 

 

2,716,122

 

Institutional subtotal

 

4,390,295

 

 

 

(16,065

)

 

 

368,637

 

 

 

72,295

 

 

 

4,815,162

 

 

 

4,519,687

 

Long-term

 

8,377,144

 

 

 

62,697

 

 

 

709,197

 

 

 

95,120

 

 

 

9,244,158

 

 

 

8,650,050

 

Cash management

 

723,681

 

 

 

32,950

 

 

 

2,770

 

 

 

5,436

 

 

 

764,837

 

 

 

734,879

 

Total

$

9,100,825

 

 

$

95,647

 

 

$

711,967

 

 

$

100,556

 

 

$

10,008,995

 

 

$

9,384,929

 

Current Quarter Component Changes by Investment Style and Product Type (Long-Term)

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

inflows

 

 

Market

 

 

 

 

 

December 31,

 

 

 

 

 

2023

 

 

(outflows)

 

 

change

 

 

FX impact(1)

 

 

2023

 

 

Average AUM(2)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

393,690

 

 

$

(5,489

)

 

$

34,238

 

 

$

5,009

 

 

$

427,448

 

 

$

402,817

 

Fixed income

 

1,046,705

 

 

 

970

 

 

 

67,480

 

 

 

8,267

 

 

 

1,123,422

 

 

 

1,070,626

 

Multi-asset

 

776,158

 

 

 

(1,278

)

 

 

72,367

 

 

 

9,458

 

 

 

856,705

 

 

 

799,493

 

Alternatives

 

209,769

 

 

 

35

 

 

 

1,542

 

 

 

2,257

 

 

 

213,603

 

 

 

210,648

 

Active subtotal

 

2,426,322

 

 

 

(5,762

)

 

 

175,627

 

 

 

24,991

 

 

 

2,621,178

 

 

 

2,483,584

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,234,275

 

 

 

58,211

 

 

 

230,034

 

 

 

10,111

 

 

 

2,532,631

 

 

 

2,329,035

 

Fixed income

 

818,744

 

 

 

31,225

 

 

 

43,359

 

 

 

5,075

 

 

 

898,403

 

 

 

849,776

 

Multi-asset

 

7,716

 

 

 

746

 

 

 

614

 

 

 

64

 

 

 

9,140

 

 

 

8,251

 

Alternatives

 

57,674

 

 

 

(2,461

)

 

 

3,829

 

 

 

83

 

 

 

59,125

 

 

 

59,058

 

ETFs subtotal

 

3,118,409

 

 

 

87,721

 

 

 

277,836

 

 

 

15,333

 

 

 

3,499,299

 

 

 

3,246,120

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,113,326

 

 

 

(18,636

)

 

 

207,567

 

 

 

31,008

 

 

 

2,333,265

 

 

 

2,177,568

 

Fixed income

 

710,756

 

 

 

(15

)

 

 

47,745

 

 

 

23,715

 

 

 

782,201

 

 

 

734,712

 

Multi-asset

 

4,998

 

 

 

(519

)

 

 

437

 

 

 

43

 

 

 

4,959

 

 

 

4,758

 

Alternatives

 

3,333

 

 

 

(92

)

 

 

(15

)

 

 

30

 

 

 

3,256

 

 

 

3,308

 

Non-ETF Index subtotal

 

2,832,413

 

 

 

(19,262

)

 

 

255,734

 

 

 

54,796

 

 

 

3,123,681

 

 

 

2,920,346

 

Index and ETFs subtotal

 

5,950,822

 

 

 

68,459

 

 

 

533,570

 

 

 

70,129

 

 

 

6,622,980

 

 

 

6,166,466

 

Long-term

$

8,377,144

 

 

$

62,697

 

 

$

709,197

 

 

$

95,120

 

 

$

9,244,158

 

 

$

8,650,050

 

Current Quarter Component Changes by Product Type (Long-Term)

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

inflows

 

 

Market

 

 

 

 

 

December 31,

 

 

 

 

 

2023

 

 

(outflows)

 

 

change

 

 

FX impact(1)

 

 

2023

 

 

Average AUM(2)

 

Equity

$

4,741,291

 

 

$

34,086

 

 

$

471,839

 

 

$

46,128

 

 

$

5,293,344

 

 

$

4,909,420

 

Fixed income

 

2,576,205

 

 

 

32,180

 

 

 

158,584

 

 

 

37,057

 

 

 

2,804,026

 

 

 

2,655,114

 

Multi-asset

 

788,872

 

 

 

(1,051

)

 

 

73,418

 

 

 

9,565

 

 

 

870,804

 

 

 

812,502

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

131,937

 

 

 

3,561

 

 

 

(205

)

 

 

1,616

 

 

 

136,909

 

 

 

133,889

 

Liquid alternatives

 

75,139

 

 

 

(3,289

)

 

 

1,805

 

 

 

578

 

 

 

74,233

 

 

 

74,188

 

Currency and commodities(3)

 

63,700

 

 

 

(2,790

)

 

 

3,756

 

 

 

176

 

 

 

64,842

 

 

 

64,937

 

Alternatives subtotal

 

270,776

 

 

 

(2,518

)

 

 

5,356

 

 

 

2,370

 

 

 

275,984

 

 

 

273,014

 

Long-term

$

8,377,144

 

 

$

62,697

 

 

$

709,197

 

 

$

95,120

 

 

$

9,244,158

 

 

$

8,650,050

 

  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.

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Year-over-Year Component Changes by Client Type and Product Type

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

 

 

 

Market

 

 

 

 

 

December 31,

 

 

 

 

 

2022

 

 

(outflows)

 

 

Acquisition(1)

 

 

change

 

 

FX impact(2)

 

 

2023

 

 

Average AUM(3)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

370,612

 

 

$

2,810

 

 

$

-

 

 

$

58,248

 

 

$

4,064

 

 

$

435,734

 

 

$

403,530

 

Fixed income

 

299,114

 

 

 

(2,471

)

 

 

-

 

 

 

11,821

 

 

 

4,335

 

 

 

312,799

 

 

 

306,232

 

Multi-asset

 

125,168

 

 

 

(236

)

 

 

-

 

 

 

14,022

 

 

 

583

 

 

 

139,537

 

 

 

131,236

 

Alternatives

 

48,581

 

 

 

(8,576

)

 

 

-

 

 

 

1,286

 

 

 

336

 

 

 

41,627

 

 

 

45,319

 

Retail subtotal

 

843,475

 

 

 

(8,473

)

 

 

-

 

 

 

85,377

 

 

 

9,318

 

 

 

929,697

 

 

 

886,317

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,081,742

 

 

 

81,223

 

 

 

-

 

 

 

362,885

 

 

 

6,781

 

 

 

2,532,631

 

 

 

2,262,361

 

Fixed income

 

758,093

 

 

 

111,956

 

 

 

-

 

 

 

24,544

 

 

 

3,810

 

 

 

898,403

 

 

 

824,832

 

Multi-asset

 

8,875

 

 

 

(746

)

 

 

-

 

 

 

949

 

 

 

62

 

 

 

9,140

 

 

 

8,024

 

Alternatives

 

60,900

 

 

 

(6,491

)

 

 

-

 

 

 

4,626

 

 

 

90

 

 

 

59,125

 

 

 

61,439

 

ETFs subtotal

 

2,909,610

 

 

 

185,942

 

 

 

-

 

 

 

393,004

 

 

 

10,743

 

 

 

3,499,299

 

 

 

3,156,656

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

168,734

 

 

 

(13,301

)

 

 

-

 

 

 

29,088

 

 

 

2,167

 

 

 

186,688

 

 

 

174,967

 

Fixed income

 

774,955

 

 

 

4,714

 

 

 

-

 

 

 

53,538

 

 

 

3,616

 

 

 

836,823

 

 

 

798,832

 

Multi-asset

 

544,469

 

 

 

85,665

 

 

 

-

 

 

 

79,644

 

 

 

7,404

 

 

 

717,182

 

 

 

642,051

 

Alternatives

 

153,433

 

 

 

10,028

 

 

 

2,177

 

 

 

4,925

 

 

 

1,417

 

 

 

171,980

 

 

 

162,871

 

Active subtotal

 

1,641,591

 

 

 

87,106

 

 

 

2,177

 

 

 

167,195

 

 

 

14,604

 

 

 

1,912,673

 

 

 

1,778,721

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,814,266

 

 

 

(82,222

)

 

 

-

 

 

 

401,047

 

 

 

5,200

 

 

 

2,138,291

 

 

 

1,979,704

 

Fixed income

 

704,661

 

 

 

28,888

 

 

 

-

 

 

 

17,774

 

 

 

4,678

 

 

 

756,001

 

 

 

713,802

 

Multi-asset

 

6,392

 

 

 

(1,896

)

 

 

-

 

 

 

559

 

 

 

(110

)

 

 

4,945

 

 

 

5,882

 

Alternatives

 

3,296

 

 

 

105

 

 

 

-

 

 

 

(138

)

 

 

(11

)

 

 

3,252

 

 

 

3,263

 

Index subtotal

 

2,528,615

 

 

 

(55,125

)

 

 

-

 

 

 

419,242

 

 

 

9,757

 

 

 

2,902,489

 

 

 

2,702,651

 

Institutional subtotal

 

4,170,206

 

 

 

31,981

 

 

 

2,177

 

 

 

586,437

 

 

 

24,361

 

 

 

4,815,162

 

 

 

4,481,372

 

Long-term

 

7,923,291

 

 

 

209,450

 

 

 

2,177

 

 

 

1,064,818

 

 

 

44,422

 

 

 

9,244,158

 

 

 

8,524,345

 

Cash management

 

671,194

 

 

 

79,245

 

 

 

-

 

 

 

8,732

 

 

 

5,666

 

 

 

764,837

 

 

 

696,355

 

Total

$

8,594,485

 

 

$

288,695

 

 

$

2,177

 

 

$

1,073,550

 

 

$

50,088

 

 

$

10,008,995

 

 

$

9,220,700

 

Year-over-Year Component Changes by Investment Style and Product Type (Long-Term)

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

 

 

 

Market

 

 

 

 

 

December 31,

 

 

 

 

 

2022

 

 

(outflows)

 

 

Acquisition(1)

 

 

change

 

 

FX impact(2)

 

 

2023

 

 

Average AUM(3)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

392,836

 

 

$

(26,772

)

 

$

-

 

 

$

57,431

 

 

$

3,953

 

 

$

427,448

 

 

$

409,687

 

Fixed income

 

1,053,083

 

 

 

(882

)

 

 

-

 

 

 

64,203

 

 

 

7,018

 

 

 

1,123,422

 

 

 

1,080,917

 

Multi-asset

 

669,629

 

 

 

85,424

 

 

 

-

 

 

 

93,665

 

 

 

7,987

 

 

 

856,705

 

 

 

773,278

 

Alternatives

 

202,012

 

 

 

1,451

 

 

 

2,177

 

 

 

6,210

 

 

 

1,753

 

 

 

213,603

 

 

 

208,189

 

Active subtotal

 

2,317,560

 

 

 

59,221

 

 

 

2,177

 

 

 

221,509

 

 

 

20,711

 

 

 

2,621,178

 

 

 

2,472,071

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,081,742

 

 

 

81,223

 

 

 

-

 

 

 

362,885

 

 

 

6,781

 

 

 

2,532,631

 

 

 

2,262,361

 

Fixed income

 

758,093

 

 

 

111,956

 

 

 

-

 

 

 

24,544

 

 

 

3,810

 

 

 

898,403

 

 

 

824,832

 

Multi-asset

 

8,875

 

 

 

(746

)

 

 

-

 

 

 

949

 

 

 

62

 

 

 

9,140

 

 

 

8,024

 

Alternatives

 

60,900

 

 

 

(6,491

)

 

 

-

 

 

 

4,626

 

 

 

90

 

 

 

59,125

 

 

 

61,439

 

ETFs subtotal

 

2,909,610

 

 

 

185,942

 

 

 

-

 

 

 

393,004

 

 

 

10,743

 

 

 

3,499,299

 

 

 

3,156,656

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,960,776

 

 

 

(65,941

)

 

 

-

 

 

 

430,952

 

 

 

7,478

 

 

 

2,333,265

 

 

 

2,148,514

 

Fixed income

 

725,647

 

 

 

32,013

 

 

 

-

 

 

 

18,930

 

 

 

5,611

 

 

 

782,201

 

 

 

737,949

 

Multi-asset

 

6,400

 

 

 

(1,891

)

 

 

-

 

 

 

560

 

 

 

(110

)

 

 

4,959

 

 

 

5,891

 

Alternatives

 

3,298

 

 

 

106

 

 

 

-

 

 

 

(137

)

 

 

(11

)

 

 

3,256

 

 

 

3,264

 

Non-ETF Index subtotal

 

2,696,121

 

 

 

(35,713

)

 

 

-

 

 

 

450,305

 

 

 

12,968

 

 

 

3,123,681

 

 

 

2,895,618

 

Index and ETFs subtotal

 

5,605,731

 

 

 

150,229

 

 

 

-

 

 

 

843,309

 

 

 

23,711

 

 

 

6,622,980

 

 

 

6,052,274

 

Long-term

$

7,923,291

 

 

$

209,450

 

 

$

2,177

 

 

$

1,064,818

 

 

$

44,422

 

 

$

9,244,158

 

 

$

8,524,345

 

Year-over-Year Component Changes by Product Type (Long-Term)

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

 

 

 

Market

 

 

 

 

 

December 31,

 

 

 

 

 

2022

 

 

(outflows)

 

 

Acquisition(1)

 

 

change

 

 

FX impact(2)

 

 

2023

 

 

Average AUM(3)

 

Equity

$

4,435,354

 

 

$

(11,490

)

 

$

-

 

 

$

851,268

 

 

$

18,212

 

 

$

5,293,344

 

 

$

4,820,562

 

Fixed income

 

2,536,823

 

 

 

143,087

 

 

 

-

 

 

 

107,677

 

 

 

16,439

 

 

 

2,804,026

 

 

 

2,643,698

 

Multi-asset

 

684,904

 

 

 

82,787

 

 

 

-

 

 

 

95,174

 

 

 

7,939

 

 

 

870,804

 

 

 

787,193

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

117,751

 

 

 

13,665

 

 

 

2,177

 

 

 

1,885

 

 

 

1,431

 

 

 

136,909

 

 

 

127,655

 

Liquid alternatives

 

80,654

 

 

 

(11,370

)

 

 

-

 

 

 

4,548

 

 

 

401

 

 

 

74,233

 

 

 

77,595

 

Currency and commodities(4)

 

67,805

 

 

 

(7,229

)

 

 

-

 

 

 

4,266

 

 

 

-

 

 

 

64,842

 

 

 

67,642

 

Alternatives subtotal

 

266,210

 

 

 

(4,934

)

 

 

2,177

 

 

 

10,699

 

 

 

1,832

 

 

 

275,984

 

 

 

272,892

 

Long-term

$

7,923,291

 

 

$

209,450

 

 

$

2,177

 

 

$

1,064,818

 

 

$

44,422

 

 

$

9,244,158

 

 

$

8,524,345

 

  1. Amounts include AUM attributable to the acquisition of Kreos Capital in August 2023 (the "Kreos 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.

SUMMARY OF REVENUE

 

Three Months

 

 

 

 

 

Three Months

 

 

 

 

 

 

 

 

 

 

 

Ended

 

 

 

 

 

Ended

 

 

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

 

 

September 30,

 

 

 

 

 

December 31,

 

 

 

 

(in millions), (unaudited)

2023

 

 

2022

 

 

Change

 

 

2023

 

 

Change

 

 

2023

 

 

2022

 

 

Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

$

484

 

 

$

478

 

 

$

6

 

 

$

510

 

 

$

(26

)

 

$

2,000

 

 

$

2,147

 

 

$

(147

)

ETFs

 

1,102

 

 

 

1,021

 

 

 

81

 

 

 

1,136

 

 

 

(34

)

 

 

4,418

 

 

 

4,345

 

 

 

73

 

Non-ETF Index

 

183

 

 

 

159

 

 

 

24

 

 

 

186

 

 

 

(3

)

 

 

743

 

 

 

711

 

 

 

32

 

Equity subtotal

 

1,769

 

 

 

1,658

 

 

 

111

 

 

 

1,832

 

 

 

(63

)

 

 

7,161

 

 

 

7,203

 

 

 

(42

)

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

468

 

 

 

462

 

 

 

6

 

 

 

479

 

 

 

(11

)

 

 

1,897

 

 

 

1,977

 

 

 

(80

)

ETFs

 

311

 

 

 

283

 

 

 

28

 

 

 

315

 

 

 

(4

)

 

 

1,230

 

 

 

1,122

 

 

 

108

 

Non-ETF Index

 

85

 

 

 

85

 

 

 

-

 

 

 

93

 

 

 

(8

)

 

 

353

 

 

 

396

 

 

 

(43

)

Fixed income subtotal

 

864

 

 

 

830

 

 

 

34

 

 

 

887

 

 

 

(23

)

 

 

3,480

 

 

 

3,495

 

 

 

(15

)

Multi-asset

 

299

 

 

 

293

 

 

 

6

 

 

 

308

 

 

 

(9

)

 

 

1,203

 

 

 

1,299

 

 

 

(96

)

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

251

 

 

 

194

 

 

 

57

 

 

 

231

 

 

 

20

 

 

 

889

 

 

 

741

 

 

 

148

 

Liquid alternatives

 

138

 

 

 

150

 

 

 

(12

)

 

 

143

 

 

 

(5

)

 

 

572

 

 

 

633

 

 

 

(61

)

Currency and commodities

 

44

 

 

 

47

 

 

 

(3

)

 

 

46

 

 

 

(2

)

 

 

185

 

 

 

216

 

 

 

(31

)

Alternatives subtotal

 

433

 

 

 

391

 

 

 

42

 

 

 

420

 

 

 

13

 

 

 

1,646

 

 

 

1,590

 

 

 

56

 

Long-term

 

3,365

 

 

 

3,172

 

 

 

193

 

 

 

3,447

 

 

 

(82

)

 

 

13,490

 

 

 

13,587

 

 

 

(97

)

Cash management

 

240

 

 

 

227

 

 

 

13

 

 

 

234

 

 

 

6

 

 

 

909

 

 

 

864

 

 

 

45

 

Total investment advisory, administration

fees and securities lending revenue

 

3,605

 

 

 

3,399

 

 

 

206

 

 

 

3,681

 

 

 

(76

)

 

 

14,399

 

 

 

14,451

 

 

 

(52

)

Investment advisory performance fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

61

 

 

 

36

 

 

 

25

 

 

 

17

 

 

 

44

 

 

 

99

 

 

 

49

 

 

 

50

 

Fixed income

 

2

 

 

 

6

 

 

 

(4

)

 

 

1

 

 

 

1

 

 

 

4

 

 

 

25

 

 

 

(21

)

Multi-asset

 

5

 

 

 

11

 

 

 

(6

)

 

 

5

 

 

 

-

 

 

 

28

 

 

 

25

 

 

 

3

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

149

 

 

 

115

 

 

 

34

 

 

 

24

 

 

 

125

 

 

 

273

 

 

 

296

 

 

 

(23

)

Liquid alternatives

 

94

 

 

 

60

 

 

 

34

 

 

 

23

 

 

 

71

 

 

 

150

 

 

 

119

 

 

 

31

 

Alternatives subtotal

 

243

 

 

 

175

 

 

 

68

 

 

 

47

 

 

 

196

 

 

 

423

 

 

 

415

 

 

 

8

 

Total investment advisory performance fees

 

311

 

 

 

228

 

 

 

83

 

 

 

70

 

 

 

241

 

 

 

554

 

 

 

514

 

 

 

40

 

Technology services revenue

 

379

 

 

 

353

 

 

 

26

 

 

 

407

 

 

 

(28

)

 

 

1,485

 

 

 

1,364

 

 

 

121

 

Distribution fees

 

303

 

 

 

314

 

 

 

(11

)

 

 

321

 

 

 

(18

)

 

 

1,262

 

 

 

1,381

 

 

 

(119

)

Advisory and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory

 

15

 

 

 

17

 

 

 

(2

)

 

 

21

 

 

 

(6

)

 

 

81

 

 

 

56

 

 

 

25

 

Other

 

18

 

 

 

26

 

 

 

(8

)

 

 

22

 

 

 

(4

)

 

 

78

 

 

 

107

 

 

 

(29

)

Total advisory and other revenue

 

33

 

 

 

43

 

 

 

(10

)

 

 

43

 

 

 

(10

)

 

 

159

 

 

 

163

 

 

 

(4

)

Total revenue

$

4,631

 

 

$

4,337

 

 

$

294

 

 

$

4,522

 

 

$

109

 

 

$

17,859

 

 

$

17,873

 

 

$

(14

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highlights

  • Investment advisory, administration fees and securities lending revenue increased $206 million from the fourth quarter of 2022, primarily driven by the impact of market beta on average AUM, positive organic base fee growth and higher securities lending revenue. Securities lending revenue of $157 million increased from $139 million in the fourth quarter of 2022, primarily reflecting higher spreads.



    Investment advisory, administration fees and securities lending revenue decreased $76 million from the third quarter of 2023, primarily driven by the negative impact of market beta on average AUM and lower securities lending revenue. Securities lending revenue of $157 million decreased from $167 million in the third quarter of 2023, primarily reflecting lower spreads.

  • Performance fees increased $83 million from the fourth quarter of 2022 and $241 million from the third quarter of 2023, reflecting higher revenue from alternatives and long-only products.
  • Technology services revenue increased $26 million from the fourth quarter of 2022, reflecting the onboarding of several large clients. Technology services annual contract value (“ACV”)(1) increased 10% from the fourth quarter of 2022.



    Technology services revenue decreased $28 million from the third quarter of 2023, reflecting third-quarter renewals of eFront on-premise licenses, for which a majority of the revenue is recognized at the time of renewal.

(1) See note (4) to the condensed consolidated statements of income and supplemental information on page 12 for more information on ACV.

SUMMARY OF OPERATING EXPENSE

 

 

Three Months

 

 

 

 

 

Three Months

 

 

 

 

 

 

 

 

 

 

 

Ended

 

 

 

 

 

Ended

 

 

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

 

 

September 30,

 

 

 

 

 

December 31,

 

 

 

 

(in millions), (unaudited)

2023

 

 

2022

 

 

Change

 

 

2023

 

 

Change

 

 

2023

 

 

2022

 

 

Change

 

Operating expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

$

1,503

 

 

$

1,430

 

 

$

73

 

 

$

1,420

 

 

$

83

 

 

$

5,779

 

 

$

5,681

 

 

$

98

 

Distribution and servicing costs

 

502

 

 

 

497

 

 

 

5

 

 

 

526

 

 

 

(24

)

 

 

2,051

 

 

 

2,179

 

 

 

(128

)

Direct fund expense

 

318

 

 

 

275

 

 

 

43

 

 

 

354

 

 

 

(36

)

 

 

1,331

 

 

 

1,226

 

 

 

105

 

General and administration expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing and promotional

 

100

 

 

 

100

 

 

 

-

 

 

 

82

 

 

 

18

 

 

 

344

 

 

 

331

 

 

 

13

 

Occupancy and office related

 

105

 

 

 

99

 

 

 

6

 

 

 

103

 

 

 

2

 

 

 

418

 

 

 

403

 

 

 

15

 

Portfolio services

 

68

 

 

 

71

 

 

 

(3

)

 

 

65

 

 

 

3

 

 

 

270

 

 

 

280

 

 

 

(10

)

Sub-advisory

 

22

 

 

 

17

 

 

 

5

 

 

 

20

 

 

 

2

 

 

 

81

 

 

 

80

 

 

 

1

 

Technology

 

186

 

 

 

151

 

 

 

35

 

 

 

145

 

 

 

41

 

 

 

607

 

 

 

600

 

 

 

7

 

Professional services

 

67

 

 

 

51

 

 

 

16

 

 

 

51

 

 

 

16

 

 

 

195

 

 

 

180

 

 

 

15

 

Communications

 

11

 

 

 

12

 

 

 

(1

)

 

 

12

 

 

 

(1

)

 

 

47

 

 

 

44

 

 

 

3

 

Foreign exchange remeasurement

 

(4

)

 

 

8

 

 

 

(12

)

 

 

(3

)

 

 

(1

)

 

 

(6

)

 

 

10

 

 

 

(16

)

Contingent consideration fair value

adjustments

 

2

 

 

 

1

 

 

 

1

 

 

 

-

 

 

 

2

 

 

 

3

 

 

 

3

 

 

 

-

 

Product launch costs

 

-

 

 

 

6

 

 

 

(6

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6

 

 

 

(6

)

Other general and administration

 

67

 

 

 

64

 

 

 

3

 

 

 

71

 

 

 

(4

)

 

 

252

 

 

 

223

 

 

 

29

 

Total general and administration expense

 

624

 

 

 

580

 

 

 

44

 

 

 

546

 

 

 

78

 

 

 

2,211

 

 

 

2,160

 

 

 

51

 

Restructuring charge

 

61

 

 

 

91

 

 

 

(30

)

 

 

-

 

 

 

61

 

 

 

61

 

 

 

91

 

 

 

(30

)

Amortization of intangible assets

 

38

 

 

 

37

 

 

 

1

 

 

 

39

 

 

 

(1

)

 

 

151

 

 

 

151

 

 

 

-

 

Total operating expense

$

3,046

 

 

$

2,910

 

 

$

136

 

 

$

2,885

 

 

$

161

 

 

$

11,584

 

 

$

11,488

 

 

$

96

 

Highlights

  • Employee compensation and benefits expense increased $73 million from the fourth quarter of 2022 and $83 million from the third quarter of 2023, reflecting higher incentive compensation, primarily as a result of higher performance fees, and higher severance.

  • Direct fund expense increased $43 million from the fourth quarter of 2022, primarily reflecting higher average index AUM.



    Direct fund expense decreased $36 million from the third quarter of 2023, primarily reflecting lower average index AUM and certain rebates that seasonally occur in the fourth quarter.
  • General and administrative expense increased $44 million from the fourth quarter of 2022, primarily due to higher technology and professional services expenses, partially offset by the impact of foreign exchange remeasurement.



    General and administrative expense increased $78 million from the third quarter of 2023, primarily due to higher technology, marketing and promotional and professional services expense.

  • A restructuring charge of $61 million, comprised of severance and compensation expense for accelerated vesting of previously granted deferred compensation awards, was recorded in the fourth quarter of 2023 in connection with initiatives to reorganize specific platforms, primarily Aladdin and alternative investments. The restructuring charge has been excluded from our “as adjusted” financial results. See pages 10 through 12 for the reconciliation to GAAP and notes (1) and (3) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items.

SUMMARY OF NONOPERATING INCOME (EXPENSE), LESS NET INCOME (LOSS) ATTRIBUTABLE TO

NONCONTROLLING INTERESTS

 

Three Months

 

 

 

 

 

Three Months

 

 

 

 

 

 

 

 

 

 

 

Ended

 

 

 

 

 

Ended

 

 

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

 

 

September 30,

 

 

 

 

 

December 31,

 

 

 

 

(in millions), (unaudited)

2023

 

 

2022

 

 

Change

 

 

2023

 

 

Change

 

 

2023

 

 

2022

 

 

Change

 

Nonoperating income (expense), GAAP basis

$

342

 

 

$

225

 

 

$

117

 

 

$

171

 

 

$

171

 

 

$

880

 

 

$

(95

)

 

$

975

 

Less: Net income (loss) attributable to

noncontrolling interests ("NCI")

 

114

 

 

 

48

 

 

 

66

 

 

 

(9

)

 

 

123

 

 

 

174

 

 

 

(184

)

 

 

358

 

Nonoperating income (expense), net of NCI

 

228

 

 

 

177

 

 

 

51

 

 

 

180

 

 

 

48

 

 

 

706

 

 

 

89

 

 

 

617

 

Less: Hedge gain (loss) on deferred cash

compensation plans(1)

 

29

 

 

 

-

 

 

 

29

 

 

 

(4

)

 

 

33

 

 

 

58

 

 

 

-

 

 

 

58

 

Nonoperating income (expense), net of NCI, as

adjusted(2)

$

199

 

 

$

177

 

 

$

22

 

 

$

184

 

 

$

15

 

 

$

648

 

 

$

89

 

 

$

559

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

 

 

 

 

Three Months

 

 

 

 

 

 

 

 

 

 

 

Ended

 

 

 

 

 

Ended

 

 

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

 

 

September 30,

 

 

 

 

 

December 31,

 

 

 

 

(in millions), (unaudited)

2023

 

 

2022

 

 

Change

 

 

2023

 

 

Change

 

 

2023

 

 

2022

 

 

Change

 

Net gain (loss) on investments, net of NCI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private equity

$

68

 

 

$

66

 

 

$

2

 

 

$

91

 

 

$

(23

)

 

$

349

 

 

$

88

 

 

$

261

 

Real assets

 

2

 

 

 

5

 

 

 

(3

)

 

 

3

 

 

 

(1

)

 

 

13

 

 

 

28

 

 

 

(15

)

Other alternatives(3)

 

17

 

 

 

5

 

 

 

12

 

 

 

22

 

 

 

(5

)

 

 

49

 

 

 

5

 

 

 

44

 

Other investments(4)

 

15

 

 

 

44

 

 

 

(29

)

 

 

46

 

 

 

(31

)

 

 

66

 

 

 

(201

)

 

 

267

 

Hedge gain (loss) on deferred cash

compensation plans(1)

 

29

 

 

 

-

 

 

 

29

 

 

 

(4

)

 

 

33

 

 

 

58

 

 

 

-

 

 

 

58

 

Subtotal

 

131

 

 

 

120

 

 

 

11

 

 

 

158

 

 

 

(27

)

 

 

535

 

 

 

(80

)

 

 

615

 

Other gains (losses)(5)

 

20

 

 

 

39

 

 

 

(19

)

 

 

(35

)

 

 

55

 

 

 

(10

)

 

 

229

 

 

 

(239

)

Total net gain (loss) on investments, net of NCI

 

151

 

 

 

159

 

 

 

(8

)

 

 

123

 

 

 

28

 

 

 

525

 

 

 

149

 

 

 

376

 

Interest and dividend income

 

159

 

 

 

72

 

 

 

87

 

 

 

139

 

 

 

20

 

 

 

473

 

��

 

152

 

 

 

321

 

Interest expense

 

(82

)

 

 

(54

)

 

 

(28

)

 

 

(82

)

 

 

-

 

 

 

(292

)

 

 

(212

)

 

 

(80

)

Net interest income (expense)

 

77

 

 

 

18

 

 

 

59

 

 

 

57

 

 

 

20

 

 

 

181

 

 

 

(60

)

 

 

241

 

Nonoperating income (expense), net of NCI

 

228

 

 

 

177

 

 

 

51

 

 

 

180

 

 

 

48

 

 

 

706

 

 

 

89

 

 

 

617

 

Less: Hedge gain (loss) on deferred cash

compensation plans(1)

 

29

 

 

 

-

 

 

 

29

 

 

 

(4

)

 

 

33

 

 

 

58

 

 

 

-

 

 

 

58

 

Nonoperating income (expense), net of NCI, as

adjusted(2)

$

199

 

 

$

177

 

 

$

22

 

 

$

184

 

 

$

15

 

 

$

648

 

 

$

89

 

 

$

559

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Amount relates to the gain (loss) 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 10 through 12.
  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. The amounts for the year ended December 31, 2022, primarily include nonoperating noncash pre-tax gains in connection with the Company's strategic minority investment in iCapital Network, Inc. of approximately $267 million. Additional amounts include noncash pre-tax gains (losses) related to the revaluation of certain other minority investments.

SUMMARY OF INCOME TAX EXPENSE

 

Three Months

 

 

 

 

Three Months

 

 

 

 

 

 

 

 

 

 

 

Ended

 

 

 

 

Ended

 

 

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

 

September 30,

 

 

 

 

 

December 31,

 

 

 

 

(in millions), (unaudited)

2023

 

 

2022

 

 

Change

 

2023

 

 

Change

 

 

2023

 

 

2022

 

 

Change

 

Income tax expense

$

438

 

 

$

345

 

 

$

93

 

 

$

213

 

 

$

225

 

 

$

1,479

 

 

$

1,296

 

 

$

183

 

Effective tax rate

 

24.2

%

 

 

21.5

%

 

270 bps

 

 

 

11.7

%

 

1,250 bps

 

 

 

21.2

%

 

 

20.0

%

 

120 bps

 

 

Highlights

  • Fourth quarter 2022 income tax expense included a $28 million net discrete tax benefit, of which $17 million is associated with the net noncash tax benefit related to the revaluation of certain deferred income tax liabilities.
  • Third quarter 2023 income tax expense included approximately $223 million of discrete tax benefits related to the resolution of certain outstanding tax matters.

RECONCILIATION OF GAAP OPERATING INCOME AND OPERATING MARGIN TO OPERATING INCOME AND

OPERATING MARGIN, AS ADJUSTED

 

 

Three Months Ended

 

 

Year Ended

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

(in millions), (unaudited)

 

2023

 

 

2022

 

 

2023

 

 

2023

 

 

2022

 

 

Operating income, GAAP basis

 

$

1,585

 

 

$

1,427

 

 

$

1,637

 

 

$

6,275

 

 

$

6,385

 

 

Non-GAAP expense adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense related to appreciation (depreciation)

on deferred cash compensation plans (a)

 

 

28

 

 

 

-

 

 

 

(3

)

 

 

57

 

 

 

-

 

 

Amortization of intangible assets (b)

 

 

38

 

 

 

37

 

 

 

39

 

 

 

151

 

 

 

151

 

 

Acquisition-related compensation costs (b)

 

 

2

 

 

 

6

 

 

 

6

 

 

 

17

 

 

 

24

 

 

Acquisition-related transaction costs (b)(1)

 

 

-

 

 

 

-

 

 

 

4

 

 

 

7

 

 

 

-

 

 

Contingent consideration fair value adjustments (b)

 

 

2

 

 

 

1

 

 

 

-

 

 

 

3

 

 

 

3

 

 

Lease costs - New York (c)

 

 

-

 

 

 

15

 

 

 

-

 

 

 

14

 

 

 

57

 

 

Restructuring charge (d)

 

 

61

 

 

 

91

 

 

 

-

 

 

 

61

 

 

 

91

 

 

Reduction of indemnification asset (e)(1)

 

 

-

 

 

 

-

 

 

 

8

 

 

 

8

 

 

 

-

 

 

Operating income, as adjusted (1)

 

 

1,716

 

 

 

1,577

 

 

 

1,691

 

 

 

6,593

 

 

 

6,711

 

 

Product launch costs and commissions

 

 

-

 

 

 

6

 

 

 

-

 

 

 

-

 

 

 

6

 

 

Operating income used for operating margin measurement

 

$

1,716

 

 

$

1,583

 

 

$

1,691

 

 

$

6,593

 

 

$

6,717

 

 

Revenue, GAAP basis

 

$

4,631

 

 

$

4,337

 

 

$

4,522

 

 

$

17,859

 

 

$

17,873

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution fees

 

 

(303

)

 

 

(314

)

 

 

(321

)

 

 

(1,262

)

 

 

(1,381

)

 

Investment advisory fees

 

 

(199

)

 

 

(183

)

 

 

(205

)

 

 

(789

)

 

 

(798

)

 

Revenue used for operating margin measurement

 

$

4,129

 

 

$

3,840

 

 

$

3,996

 

 

$

15,808

 

 

$

15,694

 

 

Operating margin, GAAP basis

 

 

34.2

%

 

 

32.9

%

 

 

36.2

%

 

 

35.1

%

 

 

35.7

%

 

Operating margin, as adjusted (1)

 

 

41.6

%

 

 

41.2

%

 

 

42.3

%

 

 

41.7

%

 

 

42.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Amounts included within general and administration expense.

See note (1) to the condensed consolidated statements of income and supplemental information on pages 11 and 12 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

 

 

Year Ended

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

(in millions), (unaudited)

 

2023

 

 

2022

 

 

2023

 

 

2023

 

 

2022

 

 

Nonoperating income (expense), GAAP basis

 

$

342

 

 

$

225

 

 

$

171

 

 

$

880

 

 

$

(95

)

 

Less: Net income (loss) attributable to NCI

 

 

114

 

 

 

48

 

 

 

(9

)

 

 

174

 

 

 

(184

)

 

Nonoperating income (expense), net of NCI

 

 

228

 

 

 

177

 

 

 

180

 

 

 

706

 

 

 

89

 

 

Less: Hedge gain (loss) on deferred cash compensation

plans (a)

 

 

29

 

 

 

-

 

 

 

(4

)

 

 

58

 

 

 

-

 

 

Nonoperating income (expense), less net income (loss)

attributable to NCI, as adjusted (2)

 

$

199

 

 

$

177

 

 

$

184

 

 

$

648

 

 

$

89

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes (1) and (2) to the condensed consolidated statements of income and supplemental information on pages 11 and 12 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

 

 

Year Ended

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

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

 

2023

 

 

2022

 

 

2023

 

 

2023

 

 

2022

 

 

Net income attributable to BlackRock, Inc., GAAP basis

 

$

1,375

 

 

$

1,259

 

 

$

1,604

 

 

$

5,502

 

 

$

5,178

 

 

Non-GAAP adjustments(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net impact of hedged deferred cash compensation plans (a)

 

 

(1

)

 

 

-

 

 

 

1

 

 

 

(1

)

 

 

-

 

 

Amortization of intangible assets (b)

 

 

28

 

 

 

27

 

 

 

30

 

 

 

114

 

 

 

114

 

 

Acquisition-related compensation costs (b)

 

 

1

 

 

 

5

 

 

 

4

 

 

 

12

 

 

 

19

 

 

Acquisition-related transaction costs (b)

 

 

-

 

 

 

-

 

 

 

3

 

 

 

5

 

 

 

-

 

 

Contingent consideration fair value adjustments (b)

 

 

2

 

 

 

1

 

 

 

-

 

 

 

3

 

 

 

3

 

 

Lease costs - New York (c)

 

 

-

 

 

 

12

 

 

 

-

 

 

 

11

 

 

 

43

 

 

Restructuring charge (d)

 

 

46

 

 

 

69

 

 

 

-

 

 

 

46

 

 

 

69

 

 

Income tax matters

 

 

-

 

 

 

(17

)

 

 

-

 

 

 

-

 

 

 

(35

)

 

Net income attributable to BlackRock, Inc., as adjusted (3)

 

$

1,451

 

 

$

1,356

 

 

$

1,642

 

 

$

5,692

 

 

$

5,391

 

 

Diluted weighted-average common shares outstanding

 

 

150.2

 

 

 

151.8

 

 

 

150.5

 

 

 

150.7

 

 

 

152.4

 

 

Diluted earnings per common share, GAAP basis

 

$

9.15

 

 

$

8.29

 

 

$

10.66

 

 

$

36.51

 

 

$

33.97

 

 

Diluted earnings per common share, as adjusted (3)

 

$

9.66

 

 

$

8.93

 

 

$

10.91

 

 

$

37.77

 

 

$

35.36

 

 

  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 12 for more information on as adjusted items.

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:
  1. Compensation expense related to appreciation (depreciation) on deferred cash compensation plans. Beginning in the first quarter of 2023, the Company updated its definition of operating income, as adjusted, to exclude compensation expense related to the market valuation changes on certain deferred cash compensation plans, which the Company began hedging economically in 2023. 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 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.
  2. Acquisition related costs. Acquisition related costs include adjustments related to amortization of intangible assets, other acquisition-related costs, including 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.
  3. Lease costs – New York. In 2022 and 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.
  4. Restructuring charge. In the fourth quarter of 2023, the Company recorded a restructuring charge, comprised of severance and compensation expense for accelerated vesting of previously granted deferred compensation awards, in connection with initiatives to reorganize specific platforms, primarily Aladdin and alternative investments. In the fourth quarter of 2022, the Company recorded a restructuring charge primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards in connection with an initiative to modify the size and shape of the workforce to align more closely with strategic priorities. Management believes excluding the impact of these restructuring charges when calculating operating income, as adjusted, is useful to assess the Company’s financial performance and ongoing operations, and enhances comparability among periods presented.
  5. Reduction of indemnification asset. 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 due to the resolution of certain tax matters. The $8 million general and administrative expense and $8 million tax benefit have been excluded from as adjusted results as there is no impact on BlackRock’s book value.
  • 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. 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.

See notes (1) and (2) above regarding operating income, as adjusted, for information on the updated presentation of non-GAAP adjustments. For each period presented, the non-GAAP adjustments were tax effected at the respective blended rates applicable to the adjustments. Amounts for income tax matters represent net noncash (benefit) 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 enhance 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. 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 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.

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) 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 AUM; (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 future acquisitions or divestitures, including the acquisition of GIP (the "GIP Transaction"); (7) BlackRock’s ability to integrate acquired businesses successfully, including the GIP Transaction; (8) risks related to the GIP Transaction, including the expected closing date of the GIP Transaction, the possibility that the GIP Transaction does not close, including, but not limited to, due to the failure to satisfy the closing conditions, the possibility that expected synergies and value creation from the GIP Transaction 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 GIP Transaction; (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 AI; (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 ESG 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 the Company; (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 the Company; (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 ETF 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.

PERFORMANCE NOTES

Past performance is not indicative of future results. Except as specified, the performance information shown is as of December 31, 2023 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 November 30, 2023. The performance data does not include accounts terminated prior to December 31, 2023 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 December 31, 2023 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.

Contacts

INVESTOR RELATIONS:

Caroline Rodda 212.810.3442

MEDIA RELATIONS:

Ed Sweeney 646.231.0268

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