UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 16, 2020 (January 15, 2020)

BLACKROCK, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	001-33099	32-0174431
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

55 East 52nd Street, New York, New York	10055
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 810-5300

(Former name or former address, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $.01 par value	BLK	New York Stock Exchange
1.250% Notes due 2025	BLK25	New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 8.01 Other Events.

First Quarter 2019 Results

On January 15, 2019, BlackRock, Inc. (the “Company”) reported results of operations for the three months and year ended December 31, 2019.

FINANCIAL RESULTS

	Q4			Q4			Full Year
(in millions, except per share data)	2019			2018			2019			2018
AUM	$	7,429,633		$	5,975,818		$	7,429,633		$	5,975,818
% change		24	%					24	%
Average AUM	$	7,191,159		$	6,187,713		$	6,750,119		$	6,313,273
% change		16	%					7	%
Total net flows	$	128,839		$	49,773		$	428,736		$	123,629
GAAP basis:
Revenue	$	3,977		$	3,434		$	14,539		$	14,198
% change		16	%					2	%
Operating income	$	1,538		$	1,246		$	5,551		$	5,457
% change		23	%					2	%
Operating margin		38.7	%		36.3	%		38.2	%		38.4	%
Net income(1)	$	1,301		$	927		$	4,476		$	4,305
% change		40	%					4	%
Diluted EPS	$	8.29		$	5.78		$	28.43		$	26.58
% change		43	%					7	%
Weighted average diluted shares		156.9			160.5			157.5			161.9
% change		(2	)%					(3	)%
As Adjusted:
Operating income(2)	$	1,538		$	1,310		$	5,551		$	5,531
% change		17	%					0	%
Operating margin(2)		43.5	%		43.5	%		43.7	%		44.3	%
Net income(1) (2)	$	1,309		$	975		$	4,484		$	4,361
% change		34	%					3	%
Diluted EPS(2)	$	8.34		$	6.08		$	28.48		$	26.93
% change		37	%					6	%

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

⁽²⁾ See notes (1) through (3) to the condensed consolidated statements of income and supplemental information on pages 16-17 for more information on as adjusted items and the reconciliation to GAAP.

2

Net flow highlights

	Q4			Full Year
(in billions)	2019			2019
Long-term net flows:	$	99.0		$	335.7
By region:
Americas	$	52.3		$	217.7
EMEA		35.1			93.4
APAC		11.6			24.6
By client type:
Retail:	$	8.0		$	15.8
US		8.2			23.4
International		(0.2	)		(7.6	)
iShares®:	$	75.2		$	183.5
Core		27.0			84.5
Non-Core		48.2			99.0
Institutional:	$	15.8		$	136.4
Active		15.3			99.5
Index		0.5			36.9
Cash management net flows	$	29.8		$	93.0
Total net flows	$	128.8		$	428.7

Business RESULTS

(in millions), (unaudited)	Q4 2019 Net flows		December 31,  2019 AUM		Q4 2019 Base fees(1)		December 31, 2019 AUM % of Total			Q4 2019 Base fees(1) % of Total
RESULTS BY CLIENT TYPE
Retail	$	8,010	$	703,297	$	877		9	%		27	%
iShares ETFs		75,202		2,240,065		1,194		30	%		39	%
Institutional:
Active		15,296		1,338,670		577		18	%		19	%
Index		528		2,599,882		270		36	%		9	%
Total institutional		15,824		3,938,552		847		54	%		28	%
Long-term		99,036		6,881,914		2,918		93	%		94	%
Cash management		29,799		545,949		171		7	%		6	%
Advisory		4		1,770		—		—			—
Total	$	128,839	$	7,429,633	$	3,089		100	%		100	%
RESULTS BY INVESTMENT STYLE
Active	$	20,566	$	1,947,222	$	1,437		27	%		46	%
Index and iShares ETFs		78,470		4,934,692		1,481		66	%		48	%
Long-term		99,036		6,881,914		2,918		93	%		94	%
Cash management		29,799		545,949		171		7	%		6	%
Advisory		4		1,770		—		—			—
Total	$	128,839	$	7,429,633	$	3,089		100	%		100	%
RESULTS BY PRODUCT TYPE
Equity	$	38,600	$	3,820,329	$	1,481		52	%		47	%
Fixed income		38,275		2,315,392		861		31	%		28	%
Multi-asset		14,957		568,121		296		8	%		10	%
Alternatives		7,204		178,072		280		2	%		9	%
Long-term		99,036		6,881,914		2,918		93	%		94	%
Cash management		29,799		545,949		171		7	%		6	%
Advisory		4		1,770		—		—			—
Total	$	128,839	$	7,429,633	$	3,089		100	%		100	%

⁽¹⁾ Base fees include investment advisory, administration fees and securities lending revenue.

3

INVESTMENT PERFORMANCE AT December 31, 2019⁽¹⁾

	One- year period		Three- year period		Five- year period
Fixed income:
Actively managed AUM above benchmark or peer median
Taxable		87%		86%		89%
Tax-exempt		61%		79%		77%
Index AUM within or above applicable tolerance		95%		98%		91%
Equity:
Actively managed AUM above benchmark or peer median
Fundamental		71%		76%		82%
Systematic		54%		84%		82%
Index AUM within or above applicable tolerance		97%		98%		99%

⁽¹⁾ Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 18 “Performance Notes” for performance disclosure detail.

4

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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

	Three Months										Three Months
	Ended										Ended
	December 31,										September 30,
	2019			2018			Change				2019			Change
Revenue
Investment advisory, administration fees and securities lending revenue	$	3,089		$	2,779		$	310			$	2,980		$	109
Investment advisory performance fees		239			100			139				121			118
Technology services revenue		274			203			71				259			15
Distribution fees		270			271			(1	)			270			—
Advisory and other revenue		105			81			24				62			43
Total revenue		3,977			3,434			543				3,692			285
Expense
Employee compensation and benefits		1,212			1,020			192				1,111			101
Distribution and servicing costs		438			420			18				427			11
Direct fund expense		245			224			21				239			6
General and administration		515			449			66				385			130
Restructuring charge		—			60			(60	)			—			—
Amortization of intangible assets		29			15			14				28			1
Total expense		2,439			2,188			251				2,190			249
Operating income		1,538			1,246			292				1,502			36
Nonoperating income (expense)
Net gain (loss) on investments		118			(67	)		185				(7	)		125
Interest and dividend income		29			41			(12	)			19			10
Interest expense		(51	)		(46	)		(5	)			(54	)		3
Total nonoperating income (expense)		96			(72	)		168				(42	)		138
Income before income taxes		1,634			1,174			460				1,460			174
Income tax expense		300			247			53				341			(41	)
Net income		1,334			927			407				1,119			215
Less:
Net income (loss) attributable to noncontrolling interests		33			—			33				—			33
Net income attributable to BlackRock, Inc.	$	1,301		$	927		$	374			$	1,119		$	182
Weighted-average common shares outstanding
Basic		155,195,733			158,859,998			(3,664,265	)			155,280,877			(85,144	)
Diluted		156,894,201			160,450,266			(3,556,065	)			156,447,387			446,814
Earnings per share attributable to BlackRock, Inc. common stockholders (3)
Basic	$	8.38		$	5.84		$	2.54			$	7.21		$	1.17
Diluted	$	8.29		$	5.78		$	2.51			$	7.15		$	1.14
Cash dividends declared and paid per share	$	3.30		$	3.13		$	0.17			$	3.30		$	—
Supplemental information:
AUM (end of period)	$	7,429,633		$	5,975,818		$	1,453,815			$	6,963,932		$	465,701
Shares outstanding (end of period)		155,198,968			158,520,147			(3,321,179	)			155,173,103			25,865
GAAP:
Operating margin		38.7	%		36.3	%		240		bps		40.7	%		(200	)	bps
Effective tax rate		18.8	%		21.0	%		(220	)	bps		23.3	%		(450	)	bps
As adjusted:
Operating income (1)	$	1,538		$	1,310		$	228			$	1,502		$	36
Operating margin (1)		43.5	%		43.5	%		—		bps		46.0	%		(250	)	bps
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests	$	63		$	(72	)	$	135			$	(42	)	$	105
Net income attributable to BlackRock, Inc. (2)	$	1,309		$	975		$	334			$	1,119		$	190
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (2) (3)	$	8.34		$	6.08		$	2.26			$	7.15		$	1.19
Effective tax rate		18.3	%		21.2	%		(290	)	bps		23.3	%		(500	)	bps

See pages 15-17 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.

5

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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

	Year Ended
	December 31,
	2019			2018			Change
Revenue
Investment advisory, administration fees and securities lending revenue	$	11,777		$	11,553		$	224
Investment advisory performance fees		450			412			38
Technology services revenue		974			785			189
Distribution fees		1,069			1,155			(86	)
Advisory and other revenue		269			293			(24	)
Total revenue		14,539			14,198			341
Expense
Employee compensation and benefits		4,470			4,320			150
Distribution and servicing costs		1,685			1,675			10
Direct fund expense		978			998			(20	)
General and administration		1,758			1,638			120
Restructuring charge		—			60			(60	)
Amortization of intangible assets		97			50			47
Total expense		8,988			8,741			247
Operating income		5,551			5,457			94
Nonoperating income (expense)
Net gain (loss) on investments		342			1			341
Interest and dividend income		97			104			(7	)
Interest expense		(203	)		(184	)		(19	)
Total nonoperating income (expense)		236			(79	)		315
Income before income taxes		5,787			5,378			409
Income tax expense		1,261			1,076			185
Net income		4,526			4,302			224
Less:
Net income (loss) attributable to noncontrolling interests		50			(3	)		53
Net income attributable to BlackRock, Inc.	$	4,476		$	4,305		$	171
Weighted-average common shares outstanding
Basic		156,014,343			160,301,116			(4,286,773	)
Diluted		157,459,546			161,948,732			(4,489,186	)
Earnings per share attributable to BlackRock, Inc. common stockholders (3)
Basic	$	28.69		$	26.86		$	1.83
Diluted	$	28.43		$	26.58		$	1.85
Cash dividends declared and paid per share	$	13.20		$	12.02		$	1.18
Supplemental information:
AUM (end of period)	$	7,429,633		$	5,975,818		$	1,453,815
Shares outstanding (end of period)		155,198,968			158,520,147			(3,321,179	)
GAAP:
Operating margin		38.2	%		38.4	%		(20	)bps
Effective tax rate		22.0	%		20.0	%		200	bps
As adjusted:
Operating income (1)	$	5,551		$	5,531		$	20
Operating margin (1)		43.7	%		44.3	%		(60	)bps
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests	$	186		$	(76	)	$	262
Net income attributable to BlackRock, Inc. (2)	$	4,484		$	4,361		$	123
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (2) (3)	$	28.48		$	26.93		$	1.55
Effective tax rate		21.9	%		20.0	%		190	bps

See pages 15-17 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.

6

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Current Quarter Component Changes by Client Type and Product Type

	September 30, 2019		Net inflows (outflows)			Market change			FX impact (1)		December 31, 2019		Average AUM(2)
Retail:
Equity	$	231,645	$	1,936		$	15,060		$	3,772	$	252,413	$	241,634
Fixed income		297,186		4,992			750			2,337		305,265		300,769
Multi-asset		116,040		(588	)		4,461			526		120,439		118,157
Alternatives		23,247		1,670			88			175		25,180		24,208
Retail subtotal		668,118		8,010			20,359			6,810		703,297		684,768
iShares ETFs:
Equity		1,468,711		49,072			110,039			5,150		1,632,972		1,547,724
Fixed income		539,260		24,963			(1,649	)		3,216		565,790		552,267
Multi-asset		4,659		380			163			8		5,210		4,915
Alternatives		34,188		787			1,082			36		36,093		35,032
iShares ETFs subtotal		2,046,818		75,202			109,635			8,410		2,240,065		2,139,938
Institutional:
Active:
Equity		128,723		523			9,963			1,909		141,118		134,375
Fixed income		649,883		(5,148	)		1,436			5,197		651,368		651,702
Multi-asset		398,937		15,219			14,486			5,591		434,233		414,661
Alternatives		105,521		4,702			305			1,423		111,951		109,011
Active subtotal		1,283,064		15,296			26,190			14,120		1,338,670		1,309,749
Index:
Equity		1,659,424		(12,931	)		129,642			17,691		1,793,826		1,727,068
Fixed income		781,102		13,468			(28,566	)		26,965		792,969		788,927
Multi-asset		8,085		(54	)		205			3		8,239		8,106
Alternatives		4,570		45			152			81		4,848		4,705
Index subtotal		2,453,181		528			101,433			44,740		2,599,882		2,528,806
Institutional subtotal		3,736,245		15,824			127,623			58,860		3,938,552		3,838,555
Long-term		6,451,181		99,036			257,617			74,080		6,881,914		6,663,261
Cash management		510,984		29,799			1,008			4,158		545,949		526,145
Advisory (3)		1,767		4			(15	)		14		1,770		1,753
Total	$	6,963,932	$	128,839		$	258,610		$	78,252	$	7,429,633	$	7,191,159

7

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

	September 30, 2019		Net inflows (outflows)			Market change			FX impact (1)		December 31, 2019		Average AUM(2)
Active:
Equity	$	290,519	$	685		$	21,444		$	3,497	$	316,145	$	302,416
Fixed income		931,179		(1,126	)		2,545			6,677		939,275		935,823
Multi-asset		514,973		14,635			18,947			6,117		554,672		532,816
Alternatives		128,766		6,372			394			1,598		137,130		133,219
Active subtotal		1,865,437		20,566			43,330			17,889		1,947,222		1,904,274
Index and iShares ETFs:
iShares ETFs:
Equity		1,468,711		49,072			110,039			5,150		1,632,972		1,547,724
Fixed income		539,260		24,963			(1,649	)		3,216		565,790		552,267
Multi-asset		4,659		380			163			8		5,210		4,915
Alternatives		34,188		787			1,082			36		36,093		35,032
iShares ETFs subtotal		2,046,818		75,202			109,635			8,410		2,240,065		2,139,938
Non-ETF Index:
Equity		1,729,273		(11,157	)		133,221			19,875		1,871,212		1,800,661
Fixed income		796,992		14,438			(28,925	)		27,822		810,327		805,575
Multi-asset		8,089		(58	)		205			3		8,239		8,108
Alternatives		4,572		45			151			81		4,849		4,705
Non-ETF Index subtotal		2,538,926		3,268			104,652			47,781		2,694,627		2,619,049
Index and iShares ETFs subtotal		4,585,744		78,470			214,287			56,191		4,934,692		4,758,987
Long-term	$	6,451,181	$	99,036		$	257,617		$	74,080	$	6,881,914	$	6,663,261

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

	September 30, 2019		Net inflows (outflows)		Market change			FX impact (1)		December 31, 2019		Average AUM(2)
Equity	$	3,488,503	$	38,600	$	264,704		$	28,522	$	3,820,329	$	3,650,801
Fixed income		2,267,431		38,275		(28,029	)		37,715		2,315,392		2,293,665
Multi-asset		527,721		14,957		19,315			6,128		568,121		545,839
Alternatives:
Illiquid alternatives		70,516		4,066		(152	)		919		75,349		72,738
Liquid alternatives		55,544		2,294		519			691		59,048		57,768
Currency and commodities(4)		41,466		844		1,260			105		43,675		42,450
Alternatives subtotal		167,526		7,204		1,627			1,715		178,072		172,956
Long-term	$	6,451,181	$	99,036	$	257,617		$	74,080	$	6,881,914	$	6,663,261

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

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

⁽³⁾ Advisory AUM represents long-term portfolio liquidation assignments.

⁽⁴⁾ Amounts include commodity iShares ETFs.

8

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

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

	December 31, 2018		Net inflows (outflows)			Market change			FX impact (1)			December 31, 2019		Average AUM(2)
Retail:
Equity	$	205,714	$	(652	)	$	45,820		$	1,531		$	252,413	$	229,688
Fixed income		271,588		21,222			11,882			573			305,265		289,632
Multi-asset		113,417		(9,291	)		16,138			175			120,439		117,366
Alternatives		20,131		4,531			506			12			25,180		22,384
Retail subtotal		610,850		15,810			74,346			2,291			703,297		659,070
iShares ETFs:
Equity		1,274,262		64,705			292,840			1,165			1,632,972		1,453,395
Fixed income		427,596		112,345			25,878			(29	)		565,790		503,266
Multi-asset		4,485		113			601			11			5,210		4,489
Alternatives		25,082		6,329			4,664			18			36,093		29,767
iShares ETFs subtotal		1,731,425		183,492			323,983			1,165			2,240,065		1,990,917
Institutional:
Active:
Equity		110,976		1,852			27,547			743			141,118		124,722
Fixed income		538,961		55,006			55,358			2,043			651,368		611,383
Multi-asset		336,237		28,785			68,410			801			434,233		385,495
Alternatives		93,805		13,813			3,852			481			111,951		103,369
Active subtotal		1,079,979		99,456			155,167			4,068			1,338,670		1,224,969
Index:
Equity		1,444,873		(37,552	)		380,101			6,404			1,793,826		1,640,715
Fixed income		646,272		75,006			55,969			15,722			792,969		733,371
Multi-asset		7,745		(718	)		1,203			9			8,239		8,095
Alternatives		4,340		166			272			70			4,848		4,580
Index subtotal		2,103,230		36,902			437,545			22,205			2,599,882		2,386,761
Institutional subtotal		3,183,209		136,358			592,712			26,273			3,938,552		3,611,730
Long-term		5,525,484		335,660			991,041			29,729			6,881,914		6,261,717
Cash management		448,565		93,074			3,054			1,256			545,949		486,636
Advisory (3)		1,769		2			(19	)		18			1,770		1,766
Total	$	5,975,818	$	428,736		$	994,076		$	31,003		$	7,429,633	$	6,750,119

9

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

			Net
	December 31, 2018		inflows (outflows)			Market change		FX impact (1)			December 31, 2019		Average AUM(2)
Active:
Equity	$	258,205	$	(2,918	)	$	59,701	$	1,157		$	316,145	$	286,461
Fixed income		795,985		74,972			66,150		2,168			939,275		885,170
Multi-asset		449,654		19,494			84,549		975			554,672		502,860
Alternatives		113,936		18,344			4,357		493			137,130		125,753
Active subtotal		1,617,780		109,892			214,757		4,793			1,947,222		1,800,244
Index and iShares ETFs:
iShares ETFs
Equity		1,274,262		64,705			292,840		1,165			1,632,972		1,453,395
Fixed income		427,596		112,345			25,878		(29	)		565,790		503,266
Multi-asset		4,485		113			601		11			5,210		4,489
Alternatives		25,082		6,329			4,664		18			36,093		29,767
iShares ETFs subtotal		1,731,425		183,492			323,983		1,165			2,240,065		1,990,917
Non-ETF Index
Equity		1,503,358		(33,434	)		393,767		7,521			1,871,212		1,708,664
Fixed income		660,836		76,262			57,059		16,170			810,327		749,216
Multi-asset		7,745		(718	)		1,202		10			8,239		8,096
Alternatives		4,340		166			273		70			4,849		4,580
Non-ETF Index subtotal		2,176,279		42,276			452,301		23,771			2,694,627		2,470,556
Index and iShares ETFs subtotal		3,907,704		225,768			776,284		24,936			4,934,692		4,461,473
Long-term	$	5,525,484	$	335,660		$	991,041	$	29,729		$	6,881,914	$	6,261,717

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

	December 31, 2018		Net inflows (outflows)		Market change		FX impact (1)		December 31, 2019		Average AUM(2)
Equity	$	3,035,825	$	28,353	$	746,308	$	9,843	$	3,820,329	$	3,448,520
Fixed income		1,884,417		263,579		149,087		18,309		2,315,392		2,137,652
Multi-asset		461,884		18,889		86,352		996		568,121		515,445
Alternatives:
Illiquid alternatives		59,827		14,103		1,101		318		75,349		68,030
Liquid alternatives		51,718		3,957		3,224		149		59,048		55,088
Currency and commodities(4)		31,813		6,779		4,969		114		43,675		36,982
Alternatives subtotal		143,358		24,839		9,294		581		178,072		160,100
Long-term	$	5,525,484	$	335,660	$	991,041	$	29,729	$	6,881,914	$	6,261,717

⁽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 thirteen months.

⁽³⁾ Advisory AUM represents long-term portfolio liquidation assignments.

⁽⁴⁾ Amounts include commodity iShares ETFs

10

SUMMARY OF REVENUE

	Three Months							Three Months					Year
	Ended							Ended					Ended
	December 31,							September 30,					December 31,
(in millions), (unaudited)	2019		2018		Change			2019		Change			2019		2018		Change
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	403	$	385	$	18		$	391	$	12		$	1,554	$	1,654	$	(100	)
iShares ETFs		906		827		79			872		34			3,495		3,549		(54	)
Non-ETF Index		172		153		19			168		4			667		685		(18	)
Equity subtotal		1,481		1,365		116			1,431		50			5,716		5,888		(172	)
Fixed income:
Active		491		466		25			496		(5	)		1,918		1,840		78
iShares ETFs		258		205		53			251		7			963		825		138
Non-ETF Index		112		95		17			98		14			405		387		18
Fixed income subtotal		861		766		95			845		16			3,286		3,052		234
Multi-asset		296		287		9			288		8			1,148		1,176		(28	)
Alternatives:
Illiquid alternatives		138		99		39			122		16			488		348		140
Liquid alternatives		112		94		18			105		7			413		384		29
Currency and commodities		30		23		7			30		—			108		98		10
Alternatives subtotal		280		216		64			257		23			1,009		830		179
Long-term		2,918		2,634		284			2,821		97			11,159		10,946		213
Cash management		171		145		26			159		12			618		607		11
Total base fees		3,089		2,779		310			2,980		109			11,777		11,553		224
Investment advisory performance fees:
Equity		31		23		8			1		30			36		91		(55	)
Fixed income		8		6		2			—		8			10		8		2
Multi-asset		12		4		8			1		11			19		19		—
Alternatives:
Illiquid alternatives		96		48		48			5		91			136		70		66
Liquid alternatives		92		19		73			114		(22	)		249		224		25
Alternatives subtotal		188		67		121			119		69			385		294		91
Total performance fees		239		100		139			121		118			450		412		38
Technology services revenue		274		203		71			259		15			974		785		189
Distribution fees:
Retrocessions		167		168		(1	)		166		1			658		709		(51	)
12b-1 fees (US mutual fund distribution fees)		91		93		(2	)		90		1			358		406		(48	)
Other		12		10		2			14		(2	)		53		40		13
Total distribution fees		270		271		(1	)		270		—			1,069		1,155		(86	)
Advisory and other revenue:
Advisory		37		33		4			21		16			99		113		(14	)
Other		68		48		20			41		27			170		180		(10	)
Total advisory and other revenue		105		81		24			62		43			269		293		(24	)
Total revenue	$	3,977	$	3,434	$	543		$	3,692	$	285		$	14,539	$	14,198	$	341

Highlights

• Investment advisory, administration fees and securities lending revenue increased $310 million from the fourth quarter of 2018, primarily driven by the positive impact of market beta, organic growth and higher securities lending revenue, partially offset by strategic pricing changes to certain products. Securities lending revenue of $169 million increased from $129 million in the fourth quarter of 2018, primarily reflecting higher lending spreads and higher average balances of securities on loan.

11

Investment advisory, administration fees and securities lending revenue increased $109 million from the third quarter of 2019, driven by the impact of higher average AUM. Securities lending revenue of $169 million increased from $150 million in the third quarter of 2019.

• Performance fees increased $139 million from the fourth quarter of 2018, primarily reflecting higher revenue from liquid and illiquid alternative products.

Performance fees increased $118 million from the third quarter of 2019, primarily reflecting higher revenue from illiquid alternative and long-only equity products.

• Technology services revenue increased $71 million from the fourth quarter of 2018 and $15 million from the third quarter of 2019, primarily reflecting the impact of the eFront acquisition and higher revenue from Aladdin^®.

• Advisory and other revenue increased $24 million from the fourth quarter of 2018 and $43 million from the third quarter of 2019, primarily reflecting higher transition management and advisory assignments.

SUMMARY OF OPERATING EXPENSE

	Three Months							Three Months					Year
	Ended							Ended					Ended
	December 31,							September 30,					December 31,
(in millions), (unaudited)	2019		2018		Change			2019			Change		2019		2018		Change
Operating expense
Employee compensation and benefits	$	1,212	$	1,020	$	192		$	1,111		$	101	$	4,470	$	4,320	$	150
Distribution and servicing costs:
Retrocessions		167		168		(1	)		166			1		658		709		(51	)
12b-1 costs		89		92		(3	)		89			—		354		399		(45	)
Other		182		160		22			172			10		673		567		106
Total distribution and servicing costs		438		420		18			427			11		1,685		1,675		10
Direct fund expense		245		224		21			239			6		978		998		(20	)
General and administration:
Marketing and promotional		109		108		1			79			30		350		361		(11	)
Occupancy and office related		83		73		10			75			8		307		293		14
Portfolio services		70		68		2			64			6		261		271		(10	)
Technology		83		62		21			70			13		289		234		55
Professional services		46		47		(1	)		38			8		161		158		3
Communications		10		9		1			10			—		39		37		2
Foreign exchange remeasurement		13		4		9			(2	)		15		31		16		15
Contingent consideration fair value adjustments		35		31		4			(1	)		36		53		65		(12	)
Product launch costs		—		—		—			—			—		59		12		47
Other general and administration		66		47		19			52			14		208		191		17
Total general and administration expense		515		449		66			385			130		1,758		1,638		120
Restructuring charge		—		60		(60	)		—			—		—		60		(60	)
Amortization of intangible assets		29		15		14			28			1		97		50		47
Total operating expense	$	2,439	$	2,188	$	251		$	2,190		$	249	$	8,988	$	8,741	$	247

Highlights

• Employee compensation and benefits expense increased $192 million from the fourth quarter of 2018, primarily reflecting higher headcount and higher incentive compensation, driven by higher operating income, higher performance fees and higher deferred compensation expense.

12

Employee compensation and benefits expense increased $101 million from the third quarter of 2019, primarily reflecting higher incentive compensation, driven by higher operating income and higher performance fees.

• Direct fund expense increased $21 million from the fourth quarter of 2018, reflecting higher average AUM.

• General and administration expense increased $66 million from the fourth quarter of 2018, primarily due to higher technology expense, higher occupancy and office related expense, and the impact of foreign exchange remeasurement.

General and administration expense increased $130 million from the third quarter of 2019, primarily due to higher contingent consideration fair value adjustments, seasonally higher marketing and promotional expense, higher technology expense and the impact of foreign exchange remeasurement.

• Amortization of intangible assets expense increased $14 million from the fourth quarter of 2018, primarily reflecting amortization of intangible assets acquired in the eFront acquisition.

INCOME TAX EXPENSE

	Three Months										Three Months							Year
	Ended										Ended							Ended
	December 31,										September 30,							December 31,
(in millions), (unaudited)	2019			2018			Change				2019			Change				2019			2018			Change
Income tax expense	$	300		$	247		$	53			$	341		$	(41	)		$	1,261		$	1,076		$	185
Effective tax rate		18.8	%		21.0	%		(220	)	bps		23.3	%		(450	)	bps		22.0	%		20.0	%		200	bps

Highlights

• Fourth quarter 2019 income tax expense includes $21 million of discrete tax benefits.

13

SUMMARY AND RECONCILIATION OF U.S. GAAP NONOPERATING INCOME (EXPENSE) TO NONOPERATING INCOME (EXPENSE), AS ADJUSTED

	Three Months									Three Months						Year
	Ended									Ended						Ended
	December 31,									September 30,						December 31,
(in millions), (unaudited)	2019			2018			Change			2019			Change			2019			2018			Change
Nonoperating income (expense), GAAP basis	$	96		$	(72	)	$	168		$	(42	)	$	138		$	236		$	(79	)	$	315
Less: Net income (loss) attributable to noncontrolling interests (“NCI”)		33			—			33			—			33			50			(3	)		53
Nonoperating income (expense), as adjusted(1)(2)	$	63		$	(72	)	$	135		$	(42	)	$	105		$	186		$	(76	)	$	262
	Three Months									Three Months						Year
	Ended									Ended						Ended
	December 31,									September 30,						December 31,
(in millions), (unaudited)	2019			2018			Change			2019			Change			2019			2018			Change
Net gain (loss) on investments(1)(2)
Private equity	$	9		$	(15	)	$	24		$	6		$	3		$	47		$	(5	)	$	52
Real assets		(1	)		2			(3	)		12			(13	)		21			26			(5	)
Other alternatives(3)		1			(3	)		4			3			(2	)		19			2			17
Other investments(4)		40			(50	)		90			—			40			144			(70	)		214
Subtotal		49			(66	)		115			21			28			231			(47	)		278
Other gains (losses)(5)		36			(1	)		37			(28	)		64			61			51			10
Total net gain (loss) on investments(1)(2)		85			(67	)		152			(7	)		92			292			4			288
Interest and dividend income		29			41			(12	)		19			10			97			104			(7	)
Interest expense		(51	)		(46	)		(5	)		(54	)		3			(203	)		(184	)		(19	)
Net interest expense		(22	)		(5	)		(17	)		(35	)		13			(106	)		(80	)		(26	)
Nonoperating income (expense), as adjusted(1)(2)	$	63		$	(72	)	$	135		$	(42	)	$	105		$	186		$	(76	)	$	262

⁽¹⁾ Net of net income (loss) attributable to NCI. Amounts also include net gain (loss) on consolidated VIEs. 

⁽²⁾ Management believes nonoperating income (expense), as adjusted, is an effective measure for reviewing BlackRock’s nonoperating results. For more information on other as adjusted items and the reconciliation to GAAP see notes (1) through (3) to the condensed consolidated statements of income and supplemental information on pages 15-17.

⁽³⁾ Amounts primarily include net gains (losses) related to direct hedge fund strategies and hedge fund solutions.

⁽⁴⁾ Amounts primarily include net gains (losses) related to equity and fixed income investments.

⁽⁵⁾ Amounts for the three months and year ended December 31, 2019 and 2018 primarily include noncash pre-tax gains (losses) related to the revaluation of certain minority strategic investments. Amounts for the year ended December 31, 2018 also include a $40 million pre-tax gain related to the sale of BlackRock’s minority interest in DSP BlackRock Investment Managers Pvt. Ltd. to the DSP Group in August 2018.

14

RECONCILIATION OF U.S. 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)	2019			2018			2019			2019			2018
Operating income, GAAP basis	$	1,538		$	1,246		$	1,502		$	5,551		$	5,457
Non-GAAP expense adjustments:
Restructuring charge		—			60			—			—			60
PNC LTIP funding obligation		—			4			—			—			14
Operating income, as adjusted (1)		1,538			1,310			1,502			5,551			5,531
Product launch costs and commissions		—			—			—			61			13
Operating income used for operating margin measurement	$	1,538		$	1,310		$	1,502		$	5,612		$	5,544
Revenue, GAAP basis	$	3,977		$	3,434		$	3,692		$	14,539		$	14,198
Non-GAAP adjustments:
Distribution fees		(270	)		(271	)		(270	)		(1,069	)		(1,155	)
Investment advisory fees		(168	)		(149	)		(157	)		(616	)		(520	)
Revenue used for operating margin measurement	$	3,539		$	3,014		$	3,265		$	12,854		$	12,523
Operating margin, GAAP basis		38.7	%		36.3	%		40.7	%		38.2	%		38.4	%
Operating margin, as adjusted (1)		43.5	%		43.5	%		46.0	%		43.7	%		44.3	%

See note (1) to the condensed consolidated statements of income and supplemental information on page 16 for more information on as adjusted items and the reconciliation to GAAP.

RECONCILIATION OF U.S. 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)	2019		2018			2019		2019		2018
Net income attributable to BlackRock, Inc., GAAP basis	$	1,301	$	927		$	1,119	$	4,476	$	4,305
Non-GAAP adjustments:
Restructuring charge, net of tax		—		47			—		—		47
PNC LTIP funding obligation, net of tax		—		3			—		—		12
Income tax matters		8		(2	)		—		8		(3	)
Net income attributable to BlackRock, Inc., as adjusted (2)	$	1,309	$	975		$	1,119	$	4,484	$	4,361
Diluted weighted-average common shares outstanding (3)		156.9		160.5			156.4		157.5		161.9
Diluted earnings per common share, GAAP basis (3)	$	8.29	$	5.78		$	7.15	$	28.43	$	26.58
Diluted earnings per common share, as adjusted (2) (3)	$	8.34	$	6.08		$	7.15	$	28.48	$	26.93

See notes (2) and (3) to the condensed consolidated statements of income and supplemental information on page 17 for more information on as adjusted items and the reconciliation to GAAP.

15

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

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

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

Computations for all periods are derived from the condensed consolidated statements of income as follows:

(1) Operating income, as adjusted, and operating margin, as adjusted: Management believes operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRock’s financial performance over time, and, therefore, provide useful disclosure to investors. Management believes that operating margin, as adjusted, reflects the Company’s long-term ability to manage ongoing costs in relation to its revenues. The Company uses operating margin, as adjusted, to assess the Company’s financial performance and to determine the long-term and annual compensation of the Company’s senior-level employees. Furthermore, this metric is used to evaluate the Company’s relative performance against industry peers, as it eliminates margin variability arising from the accounting of revenues and expenses related to distributing different product structures in multiple distribution channels utilized by asset managers.

• Operating income, as adjusted, includes non-GAAP expense adjustments. In 2018, a restructuring charge, primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards, has been excluded to provide more meaningful analysis of BlackRock’s ongoing operations and to ensure comparability among periods presented. In addition, in 2018, the portion of compensation expense associated with certain long-term incentive plans (“LTIP”) funded, or to be funded, through share distributions to participants of BlackRock stock held by The PNC Financial Services Group, Inc. (“PNC”) has been excluded because it ultimately does not impact 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.

16

(2) Net income attributable to BlackRock, Inc., as adjusted: Management believes net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted, are useful measures of BlackRock’s profitability and financial performance. Net income attributable to BlackRock, Inc., as adjusted, equals net income attributable to BlackRock, Inc., GAAP basis, adjusted for significant nonrecurring items, charges that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.

See aforementioned discussion regarding operating income, as adjusted, and operating margin, as adjusted, for information on the PNC LTIP funding obligation and restructuring charge.

For each period presented, the non-GAAP adjustments related to the restructuring charge and PNC LTIP funding obligation were tax effected at the respective blended rates applicable to the adjustment. Amounts for income tax matters represent net noncash (benefits) expense primarily associated with the revaluation of certain deferred tax liabilities related to intangible assets and goodwill as a result of tax rate changes. Amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to ensure comparability among periods presented.

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

(3) Nonvoting participating preferred stock is considered to be a common stock equivalent for purposes of determining basic and diluted earnings per share calculations.

forward-looking statements

This filing, 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 filing, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management; (3) the relative and absolute investment performance of BlackRock’s investment products; (4) the impact of increased competition; (5) the impact of future acquisitions or divestitures; (6) the unfavorable resolution of legal proceedings; (7) the extent and timing of any share repurchases; (8) the impact, extent and timing of technological changes and the adequacy of intellectual property, information and cyber security protection; (9) the potential for human error in connection with BlackRock’s operational systems; (10) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock or PNC; (11) changes in law and policy and uncertainty pending any such changes; (12) terrorist activities, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (13) the ability to attract and retain highly talented professionals; (14) fluctuations in the carrying value of BlackRock’s economic investments; (15) the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products or transactions, which could affect the value

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proposition to clients and, generally, the tax position of the Company; (16) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (17) the failure by a key vendor of BlackRock to fulfill its obligations to the Company; (18) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds platform; (19) 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 (20) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions.

BlackRock’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and BlackRock’s subsequent filings with the SEC, accessible on the SEC’s website at www.sec.gov and on BlackRock’s website at www.blackrock.com, discuss these factors in more detail and identify additional factors that can affect forward-looking statements. The information contained on the Company’s website is not a part of this filing.

performance notes

Past performance is not indicative of future results. Except as specified, the performance information shown is as of December 31, 2019 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, 2019. The performance data does not include accounts terminated prior to December 31, 2019 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, 2019 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.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		BlackRock, Inc.
		(Registrant)
	By:	/s/ Gary S. Shedlin
Date: January 16, 2020		Chief Financial Officer and
		Senior Managing Director
		Gary S. Shedlin

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