UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2014
or
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File No. 001-33099
BlackRock, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 32-0174431 | |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
55 East 52nd Street, New York, NY 10055
(Address of Principal Executive Offices)
(212) 810-5300
(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Name of each exchange on which registered | |
Common Stock, $.01 par value | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known, seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The aggregate market value of the voting common stock and nonvoting common stock equivalents held by nonaffiliates of the registrant as of June 30, 2014 was approximately $52.6 billion.
As of January 31, 2015, there were 165,405,059 shares of the registrants common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference herein:
Portions of the definitive Proxy Statement of BlackRock, Inc. to be filed pursuant to Regulation 14A of the general rules and regulations under the Securities Exchange Act of 1934, as amended, for the 2015 annual meeting of stockholders to be held on May 28, 2015 (Proxy Statement) are incorporated by reference into Part III of this Form 10-K.
BlackRock, Inc.
PART I
1
FINANCIAL HIGHLIGHTS
(in millions, except per share data) | 2014 | 2013 | 2012 | 2011 | 2010 | 5-Year CAGR(4) |
||||||||||||||||||
Total revenue |
$ | 11,081 | $ | 10,180 | $ | 9,337 | $ | 9,081 | $ | 8,612 | 19 | % | ||||||||||||
Operating income |
$ | 4,474 | $ | 3,857 | $ | 3,524 | $ | 3,249 | $ | 2,998 | 28 | % | ||||||||||||
Operating margin |
40.4 | % | 37.9 | % | 37.7 | % | 35.8 | % | 34.8 | % | 8 | % | ||||||||||||
Nonoperating income (expense)(1) |
$ | (49 | ) | $ | 97 | $ | (36 | ) | $ | (116 | ) | $ | 36 | n/a | ||||||||||
Net income attributable to BlackRock, Inc. |
$ | 3,294 | $ | 2,932 | $ | 2,458 | $ | 2,337 | $ | 2,063 | 30 | % | ||||||||||||
Diluted earnings per common share |
$ | 19.25 | $ | 16.87 | $ | 13.79 | $ | 12.37 | $ | 10.55 | 26 | % |
(in millions, except per share data) | 2014 | 2013 | 2012 | 2011 | 2010 | 5-Year CAGR(4) |
||||||||||||||||||
As adjusted(2): |
||||||||||||||||||||||||
Operating income |
$ | 4,563 | $ | 4,024 | $ | 3,574 | $ | 3,392 | $ | 3,167 | 24 | % | ||||||||||||
Operating margin(2) |
42.9 | % | 41.4 | % | 40.4 | % | 39.7 | % | 39.3 | % | 2 | % | ||||||||||||
Nonoperating income (expense)(1) |
$ | (56 | ) | $ | 7 | $ | (42 | ) | $ | (113 | ) | $ | 25 | n/a | ||||||||||
Net income attributable to BlackRock, Inc. (3) |
$ | 3,310 | $ | 2,882 | $ | 2,438 | $ | 2,239 | $ | 2,139 | 27 | % | ||||||||||||
Diluted earnings per common share(3) |
$ | 19.34 | $ | 16.58 | $ | 13.68 | $ | 11.85 | $ | 10.94 | 22 | % |
n/a | not applicable |
(1) | Net of net income (loss) attributable to noncontrolling interests (NCI) (redeemable and nonredeemable). |
(2) | BlackRock reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP); however, management believes evaluating the Companys ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. |
See Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Financial Measures, for further information on non-GAAP financial measures and for as adjusted items for 2014, 2013 and 2012. In 2011, operating income, as adjusted, included U.K. lease exit costs which represent costs to exit two locations in London and restructuring charges. In 2010, operating income, as adjusted, excluded certain expenses incurred related to the integration of the acquisition of Barclays Global Investors (BGI). In 2011 and 2010, 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 PNC has been excluded because it ultimately does not impact BlackRocks book value. Compensation expense associated with appreciation (depreciation) on investments related to certain BlackRock deferred compensation plans has been excluded as returns on investments set aside for these plans, which substantially offset this expense, are reported in nonoperating income (expense). |
(3) | Net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted exclude the after-tax impact of the items listed above and also include the effect on deferred income tax expense attributable to changes in corporate income tax rates as a result of income tax law changes and a state tax election. |
(4) | Percentage represents compounded annual growth rate (CAGR) over a five-year period (2009-2014). |
ASSETS UNDER MANAGEMENT
The Companys AUM by product type for the years 2010 through 2014 is presented below.
December 31, | ||||||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | 2011 | 2010 | 5-Year CAGR(1) |
||||||||||||||||||
Equity |
$ | 2,451,111 | $ | 2,317,695 | $ | 1,845,501 | $ | 1,560,106 | $ | 1,694,467 | 10 | % | ||||||||||||
Fixed income |
1,393,653 | 1,242,186 | 1,259,322 | 1,247,722 | 1,141,324 | 6 | % | |||||||||||||||||
Multi-asset |
377,837 | 341,214 | 267,748 | 225,170 | 185,587 | 22 | % | |||||||||||||||||
Alternatives |
111,240 | 111,114 | 109,795 | 104,948 | 109,738 | 2 | % | |||||||||||||||||
Long-term |
4,333,841 | 4,012,209 | 3,482,366 | 3,137,946 | 3,131,116 | 9 | % | |||||||||||||||||
Cash management |
296,353 | 275,554 | 263,743 | 254,665 | 279,175 | (3 | )% | |||||||||||||||||
Advisory |
21,701 | 36,325 | 45,479 | 120,070 | 150,677 | (33 | )% | |||||||||||||||||
Total |
$ | 4,651,895 | $ | 4,324,088 | $ | 3,791,588 | $ | 3,512,681 | $ | 3,560,968 | 7 | % |
(1) | Percentage represents CAGR over a five-year period (2009-2014). |
2
Component changes in AUM by product type for the five years ended December 31, 2014 are presented below.
(in millions) | December 31, 2009 |
Net Inflows (Outflows) |
Adjustment/ Acquisition(1) |
Market Change |
FX Impact |
December 31, 2014 |
5-Year CAGR |
|||||||||||||||||||||
Equity |
$ | 1,536,055 | $ | 270,872 | $ | (125,860 | ) | $ | 831,522 | $ | (61,478 | ) | $ | 2,451,111 | 10 | % | ||||||||||||
Fixed income |
1,055,627 | 82,232 | (14,270 | ) | 297,702 | (27,638 | ) | 1,393,653 | 6 | % | ||||||||||||||||||
Multi-asset |
142,029 | 156,003 | 9,499 | 83,397 | (13,091 | ) | 377,837 | 22 | % | |||||||||||||||||||
Alternatives |
102,101 | (11,759 | ) | 18,956 | 4,298 | (2,356 | ) | 111,240 | 2 | % | ||||||||||||||||||
Long-term |
2,835,812 | 497,348 | (111,675 | ) | 1,216,919 | (104,563 | ) | 4,333,841 | 9 | % | ||||||||||||||||||
Cash management |
349,277 | (43,523 | ) | (5,914 | ) | 3,182 | (6,669 | ) | 296,353 | (3 | )% | |||||||||||||||||
Advisory |
161,167 | (137,078 | ) | (10 | ) | 1,136 | (3,514 | ) | 21,701 | (33 | )% | |||||||||||||||||
Total |
$ | 3,346,256 | $ | 316,747 | $ | (117,599 | ) | $ | 1,221,237 | $ | (114,746 | ) | $ | 4,651,895 | 7 | % |
(1) | Amounts include acquisition adjustments and reclassification of certain AUM acquired from BGI in December 2009. Amounts also include AUM acquired from Swiss Re Private Equity Partners (SRPEP) in September 2012, Claymore Investments, Inc. (Claymore) in March 2012, Credit Suisses ETF franchise (Credit Suisse ETF Transaction) in July 2013 and MGPA in October 2013, and other reclassifications to conform to current period combined AUM policy and presentation. Amounts also include BGI merger-related outflows due to manager concentration considerations prior to the third quarter of 2011 and outflows from scientific active equity performance prior to the second quarter of 2011. As a result of client investment manager concentration limits and the scientific active equity performance, outflows were expected to occur for a period of time subsequent to the close of the transaction. |
The Company considers the categorization of its AUM by client type, product type, investment style and client region useful to understanding its business. The following discussion of the Companys AUM will be organized as follows:
Client Type | Product Type | Client Region | ||
¨ Retail |
¨ Equity | ¨ Americas | ||
¨ iShares |
¨ Fixed Income | ¨ Europe, the Middle East and Africa (EMEA) | ||
¨ Institutional |
¨ Multi-asset | ¨ Asia-Pacific | ||
¨ Alternatives | ||||
¨ Cash Management |
3
AUM by investment style and client type at December 31, 2014 is presented below.
(in millions) | Retail | iShares | Institutional | Total | ||||||||||||
Active |
$ | 494,455 | $ | | $ | 959,160 | $ | 1,453,615 | ||||||||
Non-ETF Index |
39,874 | | 1,816,124 | 1,855,998 | ||||||||||||
iShares |
| 1,024,228 | | 1,024,228 | ||||||||||||
Long-term |
534,329 | 1,024,228 | 2,775,284 | 4,333,841 | ||||||||||||
Cash management |
41,841 | | 254,512 | 296,353 | ||||||||||||
Advisory |
| | 21,701 | 21,701 | ||||||||||||
Total AUM |
$ | 576,170 | $ | 1,024,228 | $ | 3,051,497 | $ | 4,651,895 |
Retail
Component changes in retail AUM for 2014 are presented below.
(in millions) | December 31, 2013 |
Net Inflows | Market Change |
FX |
December 31, 2014 |
|||||||||||||||
Equity |
$ | 203,035 | $ | 1,582 | $ | 1,831 | $ | (6,003 | ) | $ | 200,445 | |||||||||
Fixed income |
151,475 | 36,995 | 3,698 | (2,348 | ) | 189,820 | ||||||||||||||
Multi-asset class |
117,054 | 13,366 | (4,080 | ) | (999 | ) | 125,341 | |||||||||||||
Alternatives |
16,213 | 3,001 | 152 | (643 | ) | 18,723 | ||||||||||||||
Total Retail |
$ | 487,777 | $ | 54,944 | $ | 1,601 | $ | (9,993 | ) | $ | 534,329 |
4
iShares
iShares is the leading ETF provider in the world, with $1.0 trillion of AUM at December 31, 2014 and was the top asset gatherer globally in 20141 with $100.6 billion of net inflows for an organic growth rate of 11%. Equity net inflows of $59.6 billion were driven by flows into the Core Series and into funds with broad U.S. equity market exposures, partially offset by outflows from emerging markets products. Fixed income net inflows of $40.0 billion were diversified across exposures and product lines, with European-listed iShares raising $16.6 billion, or 41%, of fixed income net inflows. iShares multi-asset class and alternatives funds contributed a combined $1.0 billion of net inflows, primarily into commodities. iShares represented 24% of long-term AUM at December 31, 2014 and 35% of long-term base fees for 2014.
Component changes in iShares AUM for 2014 are presented below.
(in millions) | December 31, 2013 |
Net Inflows |
Market Change |
FX |
December 31, 2014 |
|||||||||||||||
Equity |
$ | 718,135 | $ | 59,626 | $ | 26,517 | $ | (14,211 | ) | $ | 790,067 | |||||||||
Fixed income |
178,835 | 40,007 | 4,905 | (6,076 | ) | 217,671 | ||||||||||||||
Multi-asset class |
1,310 | 439 | 37 | (13 | ) | 1,773 | ||||||||||||||
Alternatives(1) |
16,092 | 529 | (1,722 | ) | (182 | ) | 14,717 | |||||||||||||
Total iShares |
$ | 914,372 | $ | 100,601 | $ | 29,737 | $ | (20,482 | ) | $ | 1,024,228 |
(1) | Amounts include commodity iShares. |
Component changes in Institutional AUM for 2014 are presented below.
(in millions) | December 31, 2013 | Net Inflows (Outflows) |
Market Change |
FX |
December 31, 2014 | |||||||||||||||
Active: |
||||||||||||||||||||
Equity |
$ | 138,726 | $ | (18,648 | ) | $ | 9,935 | $ | (4,870 | ) | $ | 125,143 | ||||||||
Fixed income |
505,109 | (6,943 | ) | 34,062 | (13,638 | ) | 518,590 | |||||||||||||
Multi-asset class |
215,276 | 15,835 | 23,435 | (11,633 | ) | 242,913 | ||||||||||||||
Alternatives |
73,299 | (664 | ) | 1,494 | (1,615 | ) | 72,514 | |||||||||||||
Active subtotal |
932,410 | (10,420 | ) | 68,926 | (31,756 | ) | 959,160 | |||||||||||||
Index: |
||||||||||||||||||||
Equity |
1,257,799 | 9,860 | 102,549 | (34,752 | ) | 1,335,456 | ||||||||||||||
Fixed income |
406,767 | 26,347 | 56,086 | (21,628 | ) | 467,572 | ||||||||||||||
Multi-asset class |
7,574 | (735 | ) | 1,652 | (681 | ) | 7,810 | |||||||||||||
Alternatives |
5,510 | 656 | (693 | ) | (187 | ) | 5,286 | |||||||||||||
Index subtotal |
1,677,650 | 36,128 | 159,594 | (57,248 | ) | 1,816,124 | ||||||||||||||
Total Institutional |
$ | 2,610,060 | $ | 25,708 | $ | 228,520 | $ | (89,004 | ) | $ | 2,775,284 |
5
PRODUCT TYPE
Component changes in AUM by product type and investment style for 2014 are presented below.
(in millions) | December 31, 2013 | Net Inflows (Outflows) |
Market Change |
FX |
December 31, 2014 | |||||||||||||||
Equity: |
||||||||||||||||||||
Active |
$ | 317,262 | $ | (24,882 | ) | $ | 9,867 | $ | (9,445 | ) | $ | 292,802 | ||||||||
iShares |
718,135 | 59,626 | 26,517 | (14,211 | ) | 790,067 | ||||||||||||||
Non-ETF index |
1,282,298 | 17,676 | 104,448 | (36,180 | ) | 1,368,242 | ||||||||||||||
Equity subtotal |
2,317,695 | 52,420 | 140,832 | (59,836 | ) | 2,451,111 | ||||||||||||||
Fixed income: |
||||||||||||||||||||
Active |
652,209 | 27,694 | 36,942 | (15,521 | ) | 701,324 | ||||||||||||||
iShares |
178,835 | 40,007 | 4,905 | (6,076 | ) | 217,671 | ||||||||||||||
Non-ETF index |
411,142 | 28,705 | 56,904 | (22,093 | ) | 474,658 | ||||||||||||||
Fixed income subtotal |
1,242,186 | 96,406 | 98,751 | (43,690 | ) | 1,393,653 | ||||||||||||||
Multi-asset class |
341,214 | 28,905 | 21,044 | (13,326 | ) | 377,837 | ||||||||||||||
Alternatives: |
||||||||||||||||||||
Core |
85,026 | 3,061 | 1,808 | (1,889 | ) | 88,006 | ||||||||||||||
Currency and commodities |
26,088 | 461 | (2,577 | ) | (738 | ) | 23,234 | |||||||||||||
Alternatives subtotal |
111,114 | 3,522 | (769 | ) | (2,627 | ) | 111,240 | |||||||||||||
Long-term |
4,012,209 | 181,253 | 259,858 | (119,479 | ) | 4,333,841 | ||||||||||||||
Cash management |
275,554 | 25,696 | 715 | (5,612 | ) | 296,353 | ||||||||||||||
Advisory |
36,325 | (13,173 | ) | 1,109 | (2,560 | ) | 21,701 | |||||||||||||
Total AUM |
$ | 4,324,088 | $ | 193,776 | $ | 261,682 | $ | (127,651 | ) | $ | 4,651,895 |
6
Component changes in multi-asset class AUM for 2014 are presented below.
(in millions) | December 31, 2013 | Net Inflows (Outflows) |
Market Change | FX Impact |
December 31, 2014 | |||||||||||||||
Asset allocation and balanced |
$ | 169,604 | $ | 18,387 | $ | (827 | ) | $ | (4,132 | ) | $ | 183,032 | ||||||||
Target date/risk |
111,408 | 10,992 | 7,083 | (872 | ) | 128,611 | ||||||||||||||
Fiduciary |
60,202 | (474 | ) | 14,788 | (8,322 | ) | 66,194 | |||||||||||||
Multi-asset |
$ | 341,214 | $ | 28,905 | $ | 21,044 | $ | (13,326 | ) | $ | 377,837 |
7
Component changes in alternatives AUM for 2014 are presented below.
(in millions) | December 31, 2013 |
Net Inflows (Outflows) |
Market change |
FX impact |
December 31, 2014 |
Memo Return of |
||||||||||||||||||
Core: |
||||||||||||||||||||||||
Alternative Solutions |
$ | 131 | $ | 378 | $ | 25 | $ | (6 | ) | $ | 528 | $ | | |||||||||||
Hedge Funds: |
||||||||||||||||||||||||
Direct Hedge Fund Strategies |
31,525 | 1,539 | (28 | ) | (1,040 | ) | 31,996 | | ||||||||||||||||
Hedge Fund Solutions |
16,941 | 1,981 | 756 | (95 | ) | 19,583 | (229 | ) | ||||||||||||||||
Hedge Funds Subtotal |
48,466 | 3,520 | 728 | (1,135 | ) | 51,579 | (229 | ) | ||||||||||||||||
Illiquid and Opportunistic: |
||||||||||||||||||||||||
Private Equity Solutions |
11,895 | 732 | (92 | ) | (195 | ) | 12,340 | (565 | ) | |||||||||||||||
Opportunistic Private Equity and Credit Strategies |
522 | 249 | 31 | | 802 | (247 | ) | |||||||||||||||||
Illiquid and Opportunistic Subtotal |
12,417 | 981 | (61 | ) | (195 | ) | 13,142 | (812 | ) | |||||||||||||||
Real Assets: |
||||||||||||||||||||||||
Real Estate |
23,407 | (2,031 | ) | 1,177 | (552 | ) | 22,001 | (2,370 | ) | |||||||||||||||
Infrastructure |
605 | 213 | (61 | ) | (1 | ) | 756 | |||||||||||||||||
Real Assets Subtotal |
24,012 | (1,818 | ) | 1,116 | (553 | ) | 22,757 | (2,370 | ) | |||||||||||||||
Core Subtotal |
85,026 | 3,061 | 1,808 | (1,889 | ) | 88,006 | (3,411 | ) | ||||||||||||||||
Currency and commodities |
26,088 | 461 | (2,577 | ) | (738 | ) | 23,234 | | ||||||||||||||||
Alternatives |
$ | 111,114 | $ | 3,522 | $ | (769) | $ | (2,627) | $ | 111,240 | $ | (3,411) |
(1) | Return of capital is included in outflows. |
8
AUM by product type and client region at December 31, 2014 is presented below.
(in millions) | Americas | EMEA | Asia-Pacific | Total | ||||||||||||
Equity |
$ | 1,583,532 | $ | 655,985 | $ | 211,594 | $ | 2,451,111 | ||||||||
Fixed income |
774,296 | 502,324 | 117,033 | 1,393,653 | ||||||||||||
Multi-asset class |
237,436 | 119,353 | 21,048 | 377,837 | ||||||||||||
Alternatives |
56,668 | 36,817 | 17,755 | 111,240 | ||||||||||||
Long-term |
2,651,932 | 1,314,479 | 367,430 | 4,333,841 | ||||||||||||
Cash management |
199,887 | 92,795 | 3,671 | 296,353 | ||||||||||||
Advisory |
15,534 | 6,167 | | 21,701 | ||||||||||||
Total |
$ | 2,867,353 | $ | 1,413,441 | $ | 371,101 | $ | 4,651,895 |
Component changes in AUM by client region for 2014 are presented below.
(in millions) | December 31, 2013 | Net Inflows | Market Change | FX Impact | December 31, 2014 | |||||||||||||||
Americas |
$ | 2,655,529 | $ | 109,142 | $ | 114,734 | $ | (12,052 | ) | $ | 2,867,353 | |||||||||
EMEA |
1,335,777 | 53,935 | 114,446 | (90,717 | ) | 1,413,441 | ||||||||||||||
Asia-Pacific |
332,782 | 30,699 | 32,502 | (24,882 | ) | 371,101 | ||||||||||||||
Total |
$ | 4,324,088 | $ | 193,776 | $ | 261,682 | $ | (127,651 | ) | $ | 4,651,895 |
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
ISSUER PURCHASES OF EQUITY SECURITIES
During the three months ended December 31, 2014, the Company made the following purchases of its common stock, which is registered pursuant to Section 12(b) of the Exchange Act.
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1) |
|||||||||||||
October 1, 2014 through October 31, 2014 |
275,496 | (2) | $ | 322.87 | 273,317 | 3,822,099 | ||||||||||
November 1, 2014 through November 30, 2014 |
412,392 | (2) | $ | 349.79 | 411,970 | 3,410,129 | ||||||||||
December 1, 2014 through December 31, 2014 |
65,410 | (2) | $ | 356.69 | 49,662 | 3,360,467 | ||||||||||
Total |
753,298 | $ | 340.54 | 734,949 |
(1) | In January 2015, the Board of Directors approved an increase in the availability of shares that may be repurchased under the Companys existing share repurchase program to allow for the repurchase of up to a total of 9.4 million additional shares of BlackRock common stock with no stated expiration date. |
(2) | Includes purchases made by the Company primarily to satisfy income tax withholding obligations of employees and members of the Companys Board of Directors related to the vesting of certain restricted stock or restricted stock unit awards and purchases made by the Company as part of the publicly announced share repurchase program. |
25
Item 6. Selected Financial Data
The selected financial data presented below has been derived in part from, and should be read in conjunction with, the consolidated financial statements of BlackRock and Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-K.
Year ended December 31, | ||||||||||||||||||||
(in millions, except per share data) | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
Income statement data: |
||||||||||||||||||||
Revenue |
||||||||||||||||||||
Related parties(1) |
$ | 6,994 | $ | 6,260 | $ | 5,501 | $ | 5,431 | $ | 5,025 | ||||||||||
Other third parties |
4,087 | 3,920 | 3,836 | 3,650 | 3,587 | |||||||||||||||
Total revenue |
11,081 | 10,180 | 9,337 | 9,081 | 8,612 | |||||||||||||||
Expense |
||||||||||||||||||||
Restructuring charges |
| | | 32 | | |||||||||||||||
Other operating expenses |
6,607 | 6,323 | 5,813 | 5,800 | 5,614 | |||||||||||||||
Total expenses |
6,607 | 6,323 | 5,813 | 5,832 | 5,614 | |||||||||||||||
Operating income |
4,474 | 3,857 | 3,524 | 3,249 | 2,998 | |||||||||||||||
Total nonoperating income (expense) |
(79 | ) | 116 | (54 | ) | (114 | ) | 23 | ||||||||||||
Income before income taxes |
4,395 | 3,973 | 3,470 | 3,135 | 3,021 | |||||||||||||||
Income tax expense |
1,131 | 1,022 | 1,030 | 796 | 971 | |||||||||||||||
Net income |
3,264 | 2,951 | 2,440 | 2,339 | 2,050 | |||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests |
(30 | ) | 19 | (18 | ) | 2 | (13 | ) | ||||||||||||
Net income attributable to BlackRock, Inc. |
$ | 3,294 | $ | 2,932 | $ | 2,458 | $ | 2,337 | $ | 2,063 | ||||||||||
Per share data:(2) |
||||||||||||||||||||
Basic earnings |
$ | 19.58 | $ | 17.23 | $ | 14.03 | $ | 12.56 | $ | 10.67 | ||||||||||
Diluted earnings |
$ | 19.25 | $ | 16.87 | $ | 13.79 | $ | 12.37 | $ | 10.55 | ||||||||||
Book value(3) |
$ | 164.06 | $ | 156.69 | $ | 148.20 | $ | 140.07 | $ | 136.09 | ||||||||||
Cash dividends declared and paid per share |
$ | 7.72 | $ | 6.72 | $ | 6.00 | $ | 5.50 | $ | 4.00 |
(1) | BlackRocks related party revenue includes fees for services provided to registered investment companies that it manages, which include mutual funds and exchange-traded funds, as a result of the Companys advisory relationship. In addition, equity method investments are considered related parties due to the Companys influence over the financial and operating policies of the investee. See Note 16 to the consolidated financial statements for more information on related parties. |
(2) | Participating preferred stock is considered to be a common stock equivalent for purposes of earnings per share calculations. |
(3) | Total BlackRock stockholders equity, excluding appropriated retained earnings, divided by total common and preferred shares outstanding at December 31 of the respective year-end. |
26
December 31, | ||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
Balance sheet data: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 5,723 | $ | 4,390 | $ | 4,606 | $ | 3,506 | $ | 3,367 | ||||||||||
Goodwill and intangible assets, net |
30,305 | 30,481 | 30,312 | 30,148 | 30,317 | |||||||||||||||
Total assets(1) |
239,808 | 219,873 | 200,451 | 179,896 | 178,459 | |||||||||||||||
Less: |
||||||||||||||||||||
Separate account assets(2) |
161,287 | 155,113 | 134,768 | 118,871 | 121,137 | |||||||||||||||
Collateral held under securities lending agreements(2) |
33,654 | 21,788 | 23,021 | 20,918 | 17,638 | |||||||||||||||
Consolidated investment vehicles(3) |
3,787 | 2,714 | 2,813 | 2,006 | 1,610 | |||||||||||||||
Adjusted total assets |
$ | 41,080 | $ | 40,258 | $ | 39,849 | $ | 38,101 | $ | 38,074 | ||||||||||
Short-term borrowings |
$ | | $ | | $ | 100 | $ | 100 | $ | 100 | ||||||||||
Convertible debentures |
| | | | 67 | |||||||||||||||
Long-term borrowings |
4,938 | 4,939 | 5,687 | 4,690 | 3,192 | |||||||||||||||
Total borrowings |
$ | 4,938 | $ | 4,939 | $ | 5,787 | $ | 4,790 | $ | 3,359 | ||||||||||
Total BlackRock, Inc. stockholders equity |
$ | 27,366 | $ | 26,460 | $ | 25,403 | $ | 25,048 | $ | 26,094 | ||||||||||
Assets under management: |
||||||||||||||||||||
Equity: |
||||||||||||||||||||
Active |
$ | 292,802 | $ | 317,262 | $ | 287,215 | $ | 275,156 | $ | 334,532 | ||||||||||
iShares |
790,067 | 718,135 | 534,648 | 419,651 | 448,160 | |||||||||||||||
Non-ETF index |
1,368,242 | 1,282,298 | 1,023,638 | 865,299 | 911,775 | |||||||||||||||
Equity subtotal |
2,451,111 | 2,317,695 | 1,845,501 | 1,560,106 | 1,694,467 | |||||||||||||||
Fixed income: |
||||||||||||||||||||
Active |
701,324 | 652,209 | 656,331 | 614,804 | 592,303 | |||||||||||||||
iShares |
217,671 | 178,835 | 192,852 | 153,802 | 123,091 | |||||||||||||||
Non-ETF index |
474,658 | 411,142 | 410,139 | 479,116 | 425,930 | |||||||||||||||
Fixed income subtotal |
1,393,653 | 1,242,186 | 1,259,322 | 1,247,722 | 1,141,324 | |||||||||||||||
Multi-asset |
377,837 | 341,214 | 267,748 | 225,170 | 185,587 | |||||||||||||||
Alternatives: |
||||||||||||||||||||
Core |
88,006 | 85,026 | 68,367 | 63,647 | 63,603 | |||||||||||||||
Currency and commodities(4) |
23,234 | 26,088 | 41,428 | 41,301 | 46,135 | |||||||||||||||
Alternatives subtotal |
111,240 | 111,114 | 109,795 | 104,948 | 109,738 | |||||||||||||||
Long-term |
4,333,841 | 4,012,209 | 3,482,366 | 3,137,946 | 3,131,116 | |||||||||||||||
Cash management |
296,353 | 275,554 | 263,743 | 254,665 | 279,175 | |||||||||||||||
Advisory(5) |
21,701 | 36,325 | 45,479 | 120,070 | 150,677 | |||||||||||||||
Total |
$ | 4,651,895 | $ | 4,324,088 | $ | 3,791,588 | $ | 3,512,681 | $ | 3,560,968 |
(1) | Includes separate account assets that are segregated funds held for purposes of funding individual and group pension contracts and collateral held under securities lending agreements related to these assets that have equal and offsetting amounts recorded in liabilities and ultimately do not impact BlackRocks stockholders equity or cash flows. |
(2) | Equal and offsetting amounts, related to separate account assets and collateral held under securities lending agreements, are recorded in liabilities. |
(3) | Includes assets held by consolidated variable interest entities and consolidated sponsored investments funds. |
(4) | Amounts include commodity iShares. |
(5) | Advisory AUM represents long-term portfolio liquidation assignments. |
27
28
EXECUTIVE SUMMARY
(in millions, except per share data) | 2014 | 2013 | 2012 | |||||||||
GAAP basis: |
||||||||||||
Total revenue |
$ | 11,081 | $ | 10,180 | $ | 9,337 | ||||||
Total expense |
6,607 | 6,323 | 5,813 | |||||||||
Operating income |
$ | 4,474 | $ | 3,857 | $ | 3,524 | ||||||
Operating margin |
40.4 | % | 37.9 | % | 37.7 | % | ||||||
Nonoperating income (expense), less net income (loss) attributable to
noncontrolling |
(49 | ) | 97 | (36 | ) | |||||||
Income tax expense |
(1,131 | ) | (1,022 | ) | (1,030 | ) | ||||||
Net income attributable to BlackRock |
$ | 3,294 | $ | 2,932 | $ | 2,458 | ||||||
% attributable to common shares |
100.0 | % | 100.0 | % | 99.9 | % | ||||||
Net income attributable to common shares |
$ | 3,294 | $ | 2,932 | $ | 2,455 | ||||||
Diluted earnings per common share |
$ | 19.25 | $ | 16.87 | $ | 13.79 | ||||||
Effective tax rate |
25.6 | % | 25.8 | % | 29.5 | % | ||||||
As adjusted(2): |
||||||||||||
Total revenue |
$ | 11,081 | $ | 10,180 | $ | 9,337 | ||||||
Total expense |
6,518 | 6,156 | 5,763 | |||||||||
Operating income |
$ | 4,563 | $ | 4,024 | $ | 3,574 | ||||||
Operating margin |
42.9 | % | 41.4 | % | 40.4 | % | ||||||
Nonoperating income (expense), less net income (loss) attributable to
noncontrolling |
(56 | ) | 7 | (42 | ) | |||||||
Income tax expense |
(1,197 | ) | (1,149 | ) | (1,094 | ) | ||||||
Net income attributable to BlackRock |
$ | 3,310 | $ | 2,882 | $ | 2,438 | ||||||
% attributable to common shares |
100.0 | % | 100.0 | % | 99.9 | % | ||||||
Net income attributable to common shares |
$ | 3,310 | $ | 2,882 | $ | 2,435 | ||||||
Diluted earnings per common share |
$ | 19.34 | $ | 16.58 | $ | 13.68 | ||||||
Effective tax rate |
26.6 | % | 28.5 | % | 31.0 | % | ||||||
Other: |
||||||||||||
Assets under management (end of period) |
$ | 4,651,895 | $ | 4,324,088 | $ | 3,791,588 | ||||||
Diluted weighted-average common shares outstanding(3) |
171,112,261 | 173,828,902 | 178,017,679 | |||||||||
Common and preferred shares outstanding (end of period) |
166,921,863 | 168,724,763 | 171,215,729 | |||||||||
Book value per share(4) |
$ | 164.06 | $ | 156.69 | $ | 148.20 | ||||||
Cash dividends declared and paid per share |
$ | 7.72 | $ | 6.72 | $ | 6.00 |
(1) | Net of net income (loss) attributable to noncontrolling interests (NCI) (redeemable and nonredeemable). |
(2) | As adjusted items are described in more detail in Non-GAAP Financial Measures. |
(3) | Nonvoting participating preferred shares are considered to be common stock equivalents for purposes of determining basic and diluted earnings per share calculations. In addition, unvested restricted stock units (RSUs) that contain nonforfeitable rights to dividends are not included for 2012 as they were deemed to be participating securities in accordance with accounting principles generally accepted in the United States (GAAP). Upon vesting of the participating RSUs, the shares were added to the weighted-average shares outstanding that resulted in an increase to the percentage of net income attributable to common shares. The Companys remaining participating securities vested in January 2013. |
(4) | Total BlackRock stockholders equity, excluding an appropriated retained deficit of $19 million for 2014 and appropriated retained earnings of $22 million and $29 million for 2013 and 2012, respectively, divided by total common and preferred shares outstanding at December 31 of the respective year-end. |
29
30
Computations for all periods are derived from the consolidated statements of income as follows:
(1) Operating income, as adjusted, and operating margin, as adjusted:
Operating income, as adjusted, equals operating income, GAAP basis, excluding certain items management deems nonrecurring, recurring infrequently or transactions that ultimately will not impact BlackRocks book value. Management believes operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRocks financial performance over time and, therefore, provide useful disclosure to investors.
(in millions) | 2014 | 2013 | 2012 | |||||||||
Operating income, GAAP basis |
$ | 4,474 | $ | 3,857 | $ | 3,524 | ||||||
Non-GAAP expense adjustments: |
||||||||||||
PNC LTIP funding obligation |
32 | 33 | 22 | |||||||||
Reduction of indemnification asset |
50 | | | |||||||||
Charitable Contribution |
| 124 | | |||||||||
U.K. lease exit costs |
| | (8 | ) | ||||||||
Contribution to STIFs |
| | 30 | |||||||||
Compensation expense related to appreciation (depreciation) on deferred compensation plans |
7 | 10 | 6 | |||||||||
Operating income, as adjusted |
4,563 | 4,024 | 3,574 | |||||||||
Closed-end fund launch costs |
10 | 16 | 22 | |||||||||
Closed-end fund launch commissions |
1 | 2 | 3 | |||||||||
Operating income used for operating margin measurement |
$ | 4,574 | $ | 4,042 | $ | 3,599 | ||||||
Revenue, GAAP basis |
$ | 11,081 | $ | 10,180 | $ | 9,337 | ||||||
Non-GAAP adjustments: |
||||||||||||
Distribution and servicing costs |
(364 | ) | (353 | ) | (364 | ) | ||||||
Amortization of deferred sales commissions |
(56 | ) | (52 | ) | (55 | ) | ||||||
Revenue used for operating margin measurement |
$ | 10,661 | $ | 9,775 | $ | 8,918 | ||||||
Operating margin, GAAP basis |
40.4 | % | 37.9 | % | 37.7 | % | ||||||
Operating margin, as adjusted |
42.9 | % | 41.4 | % | 40.4 | % |
31
(3) Net income attributable to BlackRock, as adjusted:
Management believes net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted, are useful measures of BlackRocks 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 BlackRocks book value or certain tax items that do not impact cash flow.
(in millions, except per share data) | 2014 | 2013 | 2012 | |||||||||
Net income attributable to BlackRock, GAAP basis |
$ | 3,294 | $ | 2,932 | $ | 2,458 | ||||||
Non-GAAP adjustments, net of tax: |
||||||||||||
PNC LTIP funding obligation |
25 | 23 | 14 | |||||||||
Income tax matters |
(9 | ) | (69 | ) | (50 | ) | ||||||
Amount related to the Charitable Contribution |
| (4 | ) | | ||||||||
U.K. lease exit costs |
| | (5 | ) | ||||||||
Contribution to STIFs |
| | 21 | |||||||||
Net income attributable to BlackRock, as adjusted |
$ | 3,310 | $ | 2,882 | $ | 2,438 | ||||||
Allocation of net income, as adjusted, to common shares(4) |
$ | 3,310 | $ | 2,882 | $ | 2,435 | ||||||
Diluted weighted-average common shares outstanding(5) |
171.1 | 173.8 | 178.0 | |||||||||
Diluted earnings per common share, GAAP basis(5) |
$ | 19.25 | $ | 16.87 | $ | 13.79 | ||||||
Diluted earnings per common share, as adjusted(5) |
$ | 19.34 | $ | 16.58 | $ | 13.68 |
See aforementioned discussion regarding operating income, as adjusted, and operating margin, as adjusted, for information on the PNC LTIP funding obligation, Charitable Contribution, U.K. lease exit costs and contribution to STIFs.
32
For each period presented, the non-GAAP adjustments, including the PNC LTIP funding obligation, U.K. lease exit costs and contribution to STIFs were tax effected at the respective blended rates applicable to the adjustments. Amounts for 2013 included a tax benefit of approximately $48 million recognized in connection with the Charitable Contribution. The tax benefit has been excluded from net income attributable to BlackRock, Inc., as adjusted due to the nonrecurring nature of the Charitable Contribution.
Non-GAAP adjustments for 2014, 2013 and 2012 reflected the revaluation of deferred income tax liabilities related to intangible assets and/or goodwill. The amount for 2014 included a $9 million net noncash tax benefit arising primarily from state and local income tax changes. The amount for 2013 included a $69 million noncash tax benefit, primarily related to legislation enacted in the United Kingdom and state and local income tax changes. The amount for 2012 included a $50 million noncash tax benefit, primarily related to the effect of legislation enacted in the United Kingdom and the state and local income tax effect resulting from changes in the Companys organizational structure. Such amounts for 2014, 2013 and 2012 have been excluded from as adjusted results as they will not have a cash flow impact and to ensure comparability among periods presented.
(4) | Amounts for 2012 exclude net income attributable to participating securities (see below). |
(5) | Nonvoting participating preferred stock is considered to be a common stock equivalent for purposes of determining basic and diluted earnings per share calculations. |
Prior to 2013, certain unvested RSUs were not included in diluted weighted-average common shares outstanding as they were deemed participating securities. Average outstanding participating securities were 0.2 million in 2012. For further information, see Note 21, Earnings per Share, to the consolidated financial statements. |
Assets Under Management
AUM for reporting purposes generally is based upon how investment advisory and administration fees are calculated for each portfolio. Net asset values, total assets, committed assets or other measures may be used to determine portfolio AUM.
AUM and Net Inflows (Outflows) by Client Type
AUM | Net Inflows (Outflows) | |||||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | 2014 | 2013 | 2012(1) | ||||||||||||||||||
Retail |
$ | 534,329 | $ | 487,777 | $ | 403,484 | $ | 54,944 | $ | 38,804 | $ | 11,556 | ||||||||||||
iShares |
1,024,228 | 914,372 | 752,706 | 100,601 | 63,971 | 85,167 | ||||||||||||||||||
Institutional: |
||||||||||||||||||||||||
Active |
959,160 | 932,410 | 884,695 | (10,420 | ) | (928 | ) | (24,046 | ) | |||||||||||||||
Index |
1,816,124 | 1,677,650 | 1,441,481 | 36,128 | 15,266 | (75,142 | ) | |||||||||||||||||
Institutional subtotal |
2,775,284 | 2,610,060 | 2,326,176 | 25,708 | 14,338 | (99,188 | ) | |||||||||||||||||
Long-term |
4,333,841 | 4,012,209 | 3,482,366 | 181,253 | 117,113 | (2,465 | ) | |||||||||||||||||
Cash management |
296,353 | 275,554 | 263,743 | 25,696 | 10,056 | 5,048 | ||||||||||||||||||
Advisory(2) |
21,701 | 36,325 | 45,479 | (13,173 | ) | (7,442 | ) | (74,540 | ) | |||||||||||||||
Total |
$ | 4,651,895 | $ | 4,324,088 | $ | 3,791,588 | $ | 193,776 | $ | 119,727 | $ | (71,957 | ) |
AUM and Net Inflows (Outflows) by Product Type
AUM | Net Inflows (Outflows) | |||||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | 2014 | 2013 | 2012(1) | ||||||||||||||||||
Equity |
$ | 2,451,111 | $ | 2,317,695 | $ | 1,845,501 | $ | 52,420 | $ | 69,257 | $ | 54,016 | ||||||||||||
Fixed income |
1,393,653 | 1,242,186 | 1,259,322 | 96,406 | 11,508 | (66,829 | ) | |||||||||||||||||
Multi-asset |
377,837 | 341,214 | 267,748 | 28,905 | 42,298 | 15,817 | ||||||||||||||||||
Alternatives |
||||||||||||||||||||||||
Core |
88,006 | 85,026 | 68,367 | 3,061 | 2,703 | (3,922 | ) | |||||||||||||||||
Currency and commodities(3) |
23,234 | 26,088 | 41,428 | 461 | (8,653 | ) | (1,547 | ) | ||||||||||||||||
Subtotal |
111,240 | 111,114 | 109,795 | 3,522 | (5,950 | ) | (5,469 | ) | ||||||||||||||||
Long-term |
4,333,841 | 4,012,209 | 3,482,366 | 181,253 | 117,113 | (2,465 | ) | |||||||||||||||||
Cash management |
296,353 | 275,554 | 263,743 | 25,696 | 10,056 | 5,048 | ||||||||||||||||||
Advisory(2) |
21,701 | 36,325 | 45,479 | (13,173 | ) | (7,442 | ) | (74,540 | ) | |||||||||||||||
Total |
$ | 4,651,895 | $ | 4,324,088 | $ | 3,791,588 | $ | 193,776 | $ | 119,727 | $ | (71,957 | ) |
(1) | Amounts include the effect of two single client low-fee institutional index fixed income outflows of $36.0 billion and $74.2 billion. |
(2) | Advisory AUM represents long-term portfolio liquidation assignments. Outflows include planned client distributions. |
(3) | Amounts include commodity iShares. |
33
The following table presents the component changes in BlackRocks AUM for 2014, 2013 and 2012.
December 31, | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | |||||||||
Beginning assets under management |
$ | 4,324,088 | $ | 3,791,588 | $ | 3,512,681 | ||||||
Net inflows (outflows) |
||||||||||||
Long-term(1) |
181,253 | 117,113 | (2,465 | ) | ||||||||
Cash management |
25,696 | 10,056 | 5,048 | |||||||||
Advisory(2) |
(13,173 | ) | (7,442 | ) | (74,540 | ) | ||||||
Total net inflows (outflows) |
193,776 | 119,727 | (71,957 | ) | ||||||||
Acquisitions(3) |
| 26,932 | 13,742 | |||||||||
Market change |
261,682 | 398,707 | 321,377 | |||||||||
FX impact(4) |
(127,651 | ) | (12,866 | ) | 15,745 | |||||||
Total change |
327,807 | 532,500 | 278,907 | |||||||||
Ending assets under management |
$ | 4,651,895 | $ | 4,324,088 | $ | 3,791,588 |
(1) | In 2012, amounts include the effect of two single client low-fee institutional index fixed income outflows of $36.0 billion and $74.2 billion. |
(2) | Advisory AUM represents long-term portfolio liquidation assignments. Outflows include planned client distributions. |
(3) | Amounts include AUM acquired from the Companys acquisition of MGPA in October 2013 of $11.0 billion, the Credit Suisse ETF franchise in July 2013 (the Credit Suisse ETF Transaction) of $16.0 billion, the Swiss Re Private Equity Partners acquisition (the SRPEP Transaction) in September 2012 of $6.2 billion and the Claymore Investments, Inc. acquisition (the Claymore Transaction) in March 2012 of $7.6 billion. |
(4) | Foreign exchange reflects the impact of converting non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. |
BlackRock has historically grown aggregate AUM through organic growth and acquisitions. Management believes that the Company will be able to continue to grow AUM by focusing on strong investment performance, efficient delivery of beta for index products, client service, developing new products and optimizing distribution capabilities.
Component Changes in AUM for 2014
The following table presents the component changes in AUM by client type and product for 2014.
(in millions) | December 31, 2013 |
Net inflows (outflows) |
Market change |
FX impact(1) |
December 31, 2014 |
Full Year Average AUM(2) |
||||||||||||||||||
Retail: |
||||||||||||||||||||||||
Equity |
$ | 203,035 | $ | 1,582 | $ | 1,831 | $ | (6,003 | ) | $ | 200,445 | $ | 207,280 | |||||||||||
Fixed income |
151,475 | 36,995 | 3,698 | (2,348 | ) | 189,820 | 170,490 | |||||||||||||||||
Multi-asset |
117,054 | 13,366 | (4,080 | ) | (999 | ) | 125,341 | 123,619 | ||||||||||||||||
Alternatives |
16,213 | 3,001 | 152 | (643 | ) | 18,723 | 18,487 | |||||||||||||||||
Retail subtotal |
487,777 | 54,944 | 1,601 | (9,993 | ) | 534,329 | 519,876 | |||||||||||||||||
iShares: |
||||||||||||||||||||||||
Equity |
718,135 | 59,626 | 26,517 | (14,211 | ) | 790,067 | 751,830 | |||||||||||||||||
Fixed income |
178,835 | 40,007 | 4,905 | (6,076 | ) | 217,671 | 199,410 | |||||||||||||||||
Multi-asset |
1,310 | 439 | 37 | (13 | ) | 1,773 | 1,535 | |||||||||||||||||
Alternatives |
16,092 | 529 | (1,722 | ) | (182 | ) | 14,717 | 16,453 | ||||||||||||||||
iShares subtotal |
914,372 | 100,601 | 29,737 | (20,482 | ) | 1,024,228 | 969,228 | |||||||||||||||||
Institutional: |
||||||||||||||||||||||||
Active: |
||||||||||||||||||||||||
Equity |
138,726 | (18,648 | ) | 9,935 | (4,870 | ) | 125,143 | 131,779 | ||||||||||||||||
Fixed income |
505,109 | (6,943 | ) | 34,062 | (13,638 | ) | 518,590 | 515,411 | ||||||||||||||||
Multi-asset |
215,276 | 15,835 | 23,435 | (11,633 | ) | 242,913 | 233,729 | |||||||||||||||||
Alternatives |
73,299 | (664 | ) | 1,494 | (1,615 | ) | 72,514 | 73,075 | ||||||||||||||||
Active subtotal |
932,410 | (10,420 | ) | 68,926 | (31,756 | ) | 959,160 | 953,994 | ||||||||||||||||
Index: |
||||||||||||||||||||||||
Equity |
1,257,799 | 9,860 | 102,549 | (34,752 | ) | 1,335,456 | 1,305,930 | |||||||||||||||||
Fixed income |
406,767 | 26,347 | 56,086 | (21,628 | ) | 467,572 | 440,047 | |||||||||||||||||
Multi-asset |
7,574 | (735 | ) | 1,652 | (681 | ) | 7,810 | 7,001 | ||||||||||||||||
Alternatives |
5,510 | 656 | (693 | ) | (187 | ) | 5,286 | 6,061 | ||||||||||||||||
Index subtotal |
1,677,650 | 36,128 | 159,594 | (57,248 | ) | 1,816,124 | 1,759,039 | |||||||||||||||||
Institutional subtotal |
2,610,060 | 25,708 | 228,520 | (89,004 | ) | 2,775,284 | 2,713,033 | |||||||||||||||||
Long-term |
4,012,209 | 181,253 | 259,858 | (119,479 | ) | 4,333,841 | $ 4,202,137 | |||||||||||||||||
Cash management |
275,554 | 25,696 | 715 | (5,612 | ) | 296,353 | ||||||||||||||||||
Advisory(3) |
36,325 | (13,173 | ) | 1,109 | (2,560 | ) | 21,701 | |||||||||||||||||
Total |
$ | 4,324,088 | $ | 193,776 | $ | 261,682 | $ | (127,651 | ) | $ | 4,651,895 |
(1) | Foreign exchange reflects the impact of converting non-U.S. dollar denominated AUM into U.S. 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. |
34
The following table presents component changes in AUM by product for 2014.
(in millions) | December 31, 2013 |
Net inflows (outflows) |
Market change |
FX impact(1) |
December 31, 2014 |
Full Year Average AUM(2) |
||||||||||||||||||
Equity: |
||||||||||||||||||||||||
Active |
$ | 317,262 | $ | (24,882 | ) | $ | 9,867 | $ | (9,445 | ) | $ | 292,802 | $ | 310,551 | ||||||||||
iShares |
718,135 | 59,626 | 26,517 | (14,211 | ) | 790,067 | 751,830 | |||||||||||||||||
Non-ETF index |
1,282,298 | 17,676 | 104,448 | (36,180 | ) | 1,368,242 | 1,334,438 | |||||||||||||||||
Equity subtotal |
2,317,695 | 52,420 | 140,832 | (59,836 | ) | 2,451,111 | 2,396,819 | |||||||||||||||||
Fixed income: |
||||||||||||||||||||||||
Active |
652,209 | 27,694 | 36,942 | (15,521 | ) | 701,324 | 680,078 | |||||||||||||||||
iShares |
178,835 | 40,007 | 4,905 | (6,076 | ) | 217,671 | 199,410 | |||||||||||||||||
Non-ETF index |
411,142 | 28,705 | 56,904 | (22,093 | ) | 474,658 | 445,870 | |||||||||||||||||
Fixed income subtotal |
1,242,186 | 96,406 | 98,751 | (43,690 | ) | 1,393,653 | 1,325,358 | |||||||||||||||||
Multi-asset |
341,214 | 28,905 | 21,044 | (13,326 | ) | 377,837 | 365,884 | |||||||||||||||||
Alternatives: |
||||||||||||||||||||||||
Core |
85,026 | 3,061 | 1,808 | (1,889 | ) | 88,006 | 87,689 | |||||||||||||||||
Currency and commodities(3) |
26,088 | 461 | (2,577 | ) | (738 | ) | 23,234 | 26,387 | ||||||||||||||||
Alternatives subtotal |
111,114 | 3,522 | (769 | ) | (2,627 | ) | 111,240 | 114,076 | ||||||||||||||||
Long-term |
4,012,209 | 181,253 | 259,858 | (119,479 | ) | 4,333,841 | $ | 4,202,137 | ||||||||||||||||
Cash management |
275,554 | 25,696 | 715 | (5,612 | ) | 296,353 | ||||||||||||||||||
Advisory(4) |
36,325 | (13,173 | ) | 1,109 | (2,560 | ) | 21,701 | |||||||||||||||||
Total |
$ | 4,324,088 | $ | 193,776 | $ | 261,682 | $ | (127,651 | ) | $ | 4,651,895 |
(1) | Foreign exchange reflects the impact of converting non-U.S. dollar denominated AUM into U.S. 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) | Amounts include commodity iShares. |
(4) | Advisory AUM represents long-term portfolio liquidation assignments. |
35
Component Changes in AUM for 2013
The following table presents the component changes in AUM by client type and product for 2013.
(in millions) | December 31, 2012 |
Net inflows (outflows) |
Adjustments(1) | Acquisitions(2) | Market change |
FX impact(3) |
December 31, 2013 |
Full Year Average AUM(4) |
||||||||||||||||||||||||
Retail: |
||||||||||||||||||||||||||||||||
Equity |
$ | 164,748 | $ | 3,641 | $ | 13,066 | $ | | $ | 20,743 | $ | 837 | $ | 203,035 | $ | 173,886 | ||||||||||||||||
Fixed income |
138,425 | 14,197 | 3,897 | | (5,338 | ) | 294 | 151,475 | 143,929 | |||||||||||||||||||||||
Multi-asset |
90,626 | 14,821 | 2,663 | | 9,039 | (95 | ) | 117,054 | 102,276 | |||||||||||||||||||||||
Alternatives |
9,685 | 6,145 | | 136 | 136 | 111 | 16,213 | 12,585 | ||||||||||||||||||||||||
Retail subtotal |
403,484 | 38,804 | 19,626 | 136 | 24,580 | 1,147 | 487,777 | 432,676 | ||||||||||||||||||||||||
iShares: |
||||||||||||||||||||||||||||||||
Equity |
534,648 | 74,119 | | 13,021 | 95,335 | 1,012 | 718,135 | 620,113 | ||||||||||||||||||||||||
Fixed income |
192,852 | (7,450 | ) | | 1,294 | (8,477 | ) | 616 | 178,835 | 186,264 | ||||||||||||||||||||||
Multi-asset |
869 | 355 | | | 96 | (10 | ) | 1,310 | 1,115 | |||||||||||||||||||||||
Alternatives |
24,337 | (3,053 | ) | | 1,645 | (6,863 | ) | 26 | 16,092 | 20,084 | ||||||||||||||||||||||
iShares subtotal |
752,706 | 63,971 | | 15,960 | 80,091 | 1,644 | 914,372 | 827,576 | ||||||||||||||||||||||||
Institutional: |
||||||||||||||||||||||||||||||||
Active: |
||||||||||||||||||||||||||||||||
Equity |
129,024 | (16,504 | ) | | | 27,930 | (1,724 | ) | 138,726 | 131,254 | ||||||||||||||||||||||
Fixed income |
518,102 | (3,560 | ) | | | (6,247 | ) | (3,186 | ) | 505,109 | 504,769 | |||||||||||||||||||||
Multi-asset |
166,708 | 28,955 | 3,335 | | 14,193 | 2,085 | 215,276 | 184,958 | ||||||||||||||||||||||||
Alternatives |
70,861 | (9,819 | ) | | 10,836 | 2,593 | (1,172 | ) | 73,299 | 68,364 | ||||||||||||||||||||||
Active subtotal |
884,695 | (928 | ) | 3,335 | 10,836 | 38,469 | (3,997 | ) | 932,410 | 889,345 | ||||||||||||||||||||||
Index: |
||||||||||||||||||||||||||||||||
Equity |
1,017,081 | 8,001 | (18,238 | ) | | 260,333 | (9,378 | ) | 1,257,799 | 1,145,499 | ||||||||||||||||||||||
Fixed income |
409,943 | 8,321 | (4,723 | ) | | (4,840 | ) | (1,934 | ) | 406,767 | 405,502 | |||||||||||||||||||||
Multi-asset |
9,545 | (1,833 | ) | | | 476 | (614 | ) | 7,574 | 8,913 | ||||||||||||||||||||||
Alternatives |
4,912 | 777 | | | (259 | ) | 80 | 5,510 | 5,440 | |||||||||||||||||||||||
Index subtotal |
1,441,481 | 15,266 | (22,961 | ) | | 255,710 | (11,846 | ) | 1,677,650 | 1,565,354 | ||||||||||||||||||||||
Institutional subtotal |
2,326,176 | 14,338 | (19,626 | ) | 10,836 | 294,179 | (15,843 | ) | 2,610,060 | 2,454,699 | ||||||||||||||||||||||
Long-term |
3,482,366 | 117,113 | | 26,932 | 398,850 | (13,052 | ) | 4,012,209 | $ | 3,714,951 | ||||||||||||||||||||||
Cash management |
263,743 | 10,056 | | | 395 | 1,360 | 275,554 | |||||||||||||||||||||||||
Advisory(5) |
45,479 | (7,442 | ) | | | (538 | ) | (1,174 | ) | 36,325 | ||||||||||||||||||||||
Total |
$ | 3,791,588 | $ | 119,727 | $ | | $ | 26,932 | $ | 398,707 | $ | (12,866 | ) | $ | 4,324,088 |
(1) | Amounts include $19.6 billion of AUM related to fund ranges reclassed from institutional to retail and $6.0 billion of AUM reclassed from non-ETF index equity and fixed income to multi-asset. |
(2) | Amounts represent $16.0 billion of AUM acquired in the Credit Suisse ETF Transaction in July 2013 and $11.0 billion of AUM acquired in the MGPA acquisition in October 2013. |
(3) | Foreign exchange reflects the impact of converting non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. |
(4) | Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months. |
(5) | Advisory AUM represents long-term portfolio liquidation assignments. Outflows include planned client distributions. |
36
The following table presents component changes in AUM by product for 2013.
(in millions) | December 31, 2012 |
Net inflows (outflows) |
Adjustments(1) | Acquisitions(2) | Market change |
FX impact(3) |
December 31, 2013 |
Full Year Average AUM(4) |
||||||||||||||||||||||||
Equity: |
||||||||||||||||||||||||||||||||
Active |
$ | 287,215 | $ (15,377 | ) | $ | | $ | | $ | 46,530 | $ | (1,106 | ) | $ | 317,262 | $ | 295,776 | |||||||||||||||
iShares |
534,648 | 74,119 | | 13,021 | 95,335 | 1,012 | 718,135 | 620,113 | ||||||||||||||||||||||||
Non-ETF index |
1,023,638 | 10,515 | (5,172 | ) | | 262,476 | (9,159 | ) | 1,282,298 | 1,154,863 | ||||||||||||||||||||||
Equity subtotal |
1,845,501 | 69,257 | (5,172 | ) | 13,021 | 404,341 | (9,253 | ) | 2,317,695 | 2,070,752 | ||||||||||||||||||||||
Fixed income: |
||||||||||||||||||||||||||||||||
Active |
656,331 | 10,443 | | | (11,584 | ) | (2,981 | ) | 652,209 | 648,143 | ||||||||||||||||||||||
iShares |
192,852 | (7,450 | ) | | 1,294 | (8,477 | ) | 616 | 178,835 | 186,264 | ||||||||||||||||||||||
Non-ETF index |
410,139 | 8,515 | (826 | ) | | (4,841 | ) | (1,845 | ) | 411,142 | 406,057 | |||||||||||||||||||||
Fixed income subtotal |
1,259,322 | 11,508 | (826 | ) | 1,294 | (24,902 | ) | (4,210 | ) | 1,242,186 | 1,240,464 | |||||||||||||||||||||
Multi-asset |
267,748 | 42,298 | 5,998 | | 23,804 | 1,366 | 341,214 | 297,262 | ||||||||||||||||||||||||
Alternatives: |
||||||||||||||||||||||||||||||||
Core |
68,367 | 2,703 | | 10,972 | 3,012 | (28) | 85,026 | 73,827 | ||||||||||||||||||||||||
Currency and commodities(5) |
41,428 | (8,653 | ) | | 1,645 | (7,405 | ) | (927 | ) | 26,088 | 32,646 | |||||||||||||||||||||
Alternatives subtotal |
109,795 | (5,950 | ) | | 12,617 | (4,393 | ) | (955 | ) | 111,114 | 106,473 | |||||||||||||||||||||
Long-term |
3,482,366 | 117,113 | | 26,932 | 398,850 | (13,052 | ) | 4,012,209 | $ | 3,714,951 | ||||||||||||||||||||||
Cash management |
263,743 | 10,056 | | | 395 | 1,360 | 275,554 | |||||||||||||||||||||||||
Advisory(6) |
45,479 | (7,442 | ) | | | (538 | ) | (1,174 | ) | 36,325 | ||||||||||||||||||||||
Total |
$ | 3,791,588 | $ | 119,727 | $ | | $ | 26,932 | $ | 398,707 | $ | (12,866 | ) | $ | 4,324,088 |
(1) | Amounts include $6.0 billion of AUM reclassed from non-ETF index equity and fixed income to multi-asset. |
(2) | Amounts represent $16.0 billion of AUM acquired in the Credit Suisse ETF Transaction in July 2013 and $11.0 billion of AUM acquired in the MGPA acquisition in October 2013. |
(3) | Foreign exchange reflects the impact of converting non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. |
(4) | Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months. |
(5) | Advisory AUM represents long-term portfolio liquidation assignments. Outflows include planned client distributions. |
(6) | Amounts include commodity iShares. |
37
38
Revenue
The following table presents the Companys revenue for 2014, 2013 and 2012.
(in millions) | 2014 | 2013 | 2012 | |||||||||
Investment advisory, administration fees and securities lending revenue: |
||||||||||||
Equity: |
||||||||||||
Active |
$ | 1,844 | $ | 1,741 | $ | 1,753 | ||||||
iShares |
2,705 | 2,390 | 1,941 | |||||||||
Non-ETF index |
677 | 594 | 552 | |||||||||
Equity subtotal |
5,226 | 4,725 | 4,246 | |||||||||
Fixed income: |
||||||||||||
Active |
1,396 | 1,269 | 1,182 | |||||||||
iShares |
484 | 464 | 441 | |||||||||
Non-ETF index |
260 | 238 | 229 | |||||||||
Fixed income subtotal |
2,140 | 1,971 | 1,852 | |||||||||
Multi-asset |
1,204 | 1,039 | 957 | |||||||||
Alternatives: |
||||||||||||
Core |
638 | 576 | 525 | |||||||||
Currency and commodities |
89 | 107 | 131 | |||||||||
Alternatives subtotal |
727 | 683 | 656 | |||||||||
Long-term |
9,297 | 8,418 | 7,711 | |||||||||
Cash management |
292 | 321 | 361 | |||||||||
Total base fees |
9,589 | 8,739 | 8,072 | |||||||||
Investment advisory performance fees: |
||||||||||||
Equity |
111 | 91 | 88 | |||||||||
Fixed income |
31 | 25 | 48 | |||||||||
Multi-asset |
32 | 24 | 15 | |||||||||
Alternatives |
376 | 421 | 312 | |||||||||
Total |
550 | 561 | 463 | |||||||||
BlackRock Solutions and advisory |
635 | 577 | 518 | |||||||||
Distribution fees |
70 | 73 | 71 | |||||||||
Other revenue |
237 | 230 | 213 | |||||||||
Total revenue |
$ | 11,081 | $ | 10,180 | $ | 9,337 |
The table below lists the asset type mix of investment advisory, administration fees and securities lending revenue (collectively base fees) and mix of average AUM by asset class:
Mix of Base Fees | Mix of Average AUM by Asset Class(1) | |||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||||||
Equity: |
||||||||||||||||||||||||||
Active |
18 | % | 20 | % | 22 | % | 7 | % | 7 | % | 8 | % | ||||||||||||||
iShares |
28 | % | 26 | % | 23 | % | 17 | % | 16 | % | 13 | % | ||||||||||||||
Non-ETF index |
7 | % | 7 | % | 7 | % | 30 | % | 29 | % | 26 | % | ||||||||||||||
Equity subtotal |
53 | % | 53 | % | 52 | % | 54 | % | 52 | % | 47 | % | ||||||||||||||
Fixed income: |
||||||||||||||||||||||||||
Active |
15 | % | 15 | % | 15 | % | 15 | % | 16 | % | 18 | % | ||||||||||||||
iShares |
5 | % | 5 | % | 5 | % | 4 | % | 5 | % | 5 | % | ||||||||||||||
Non-ETF index |
3 | % | 3 | % | 3 | % | 10 | % | 10 | % | 13 | % | ||||||||||||||
Fixed income subtotal |
23 | % | 23 | % | 23 | % | 29 | % | 31 | % | 36 | % | ||||||||||||||
Multi-asset |
13 | % | 12 | % | 12 | % | 8 | % | 7 | % | 7 | % | ||||||||||||||
Alternatives: |
||||||||||||||||||||||||||
Core |
7 | % | 7 | % | 7 | % | 2 | % | 2 | % | 2 | % | ||||||||||||||
Currency and commodities |
1 | % | 1 | % | 2 | % | 1 | % | 1 | % | 1 | % | ||||||||||||||
Alternatives subtotal |
8 | % | 8 | % | 9 | % | 3 | % | 3 | % | 3 | % | ||||||||||||||
Long-term |
97 | % | 96 | % | 96 | % | 94 | % | 93 | % | 93 | % | ||||||||||||||
Cash management |
3 | % | 4 | % | 4 | % | 6 | % | 7 | % | 7 | % | ||||||||||||||
Total excluding Advisory AUM |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(1) | Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months. |
39
40
Expense
The following table presents the Companys expenses for 2014, 2013 and 2012.
(in millions) | 2014 | 2013 | 2012 | |||||||||
Expense, GAAP: |
||||||||||||
Employee compensation and benefits |
$ | 3,829 | $ | 3,560 | $ | 3,287 | ||||||
Distribution and servicing costs |
364 | 353 | 364 | |||||||||
Amortization of deferred sales commissions |
56 | 52 | 55 | |||||||||
Direct fund expense |
748 | 657 | 591 | |||||||||
General and administration: |
||||||||||||
Marketing and promotional |
413 | 409 | 384 | |||||||||
Occupancy and office related |
267 | 277 | 248 | |||||||||
Portfolio services |
215 | 203 | 196 | |||||||||
Technology |
164 | 160 | 150 | |||||||||
Professional services |
126 | 128 | 114 | |||||||||
Communications |
39 | 37 | 39 | |||||||||
Regulatory, filing and license fees |
36 | 31 | 17 | |||||||||
Closed-end fund launch costs |
10 | 16 | 22 | |||||||||
Charitable Contribution |
| 124 | | |||||||||
Reduction of indemnification asset |
50 | | | |||||||||
Other general and administration |
133 | 155 | 189 | |||||||||
Total general and administration expense |
1,453 | 1,540 | 1,359 | |||||||||
Amortization of intangible assets |
157 | 161 | 157 | |||||||||
Total expense, GAAP |
$ | 6,607 | $ | 6,323 | $ | 5,813 | ||||||
Less non-GAAP expense adjustments: |
||||||||||||
Employee compensation and benefits: |
||||||||||||
PNC LTIP funding obligation |
32 | 33 | 22 | |||||||||
Compensation expense related to appreciation (depreciation) on deferred compensation plans |
7 | 10 | 6 | |||||||||
Subtotal |
39 | 43 | 28 | |||||||||
General and administration: |
||||||||||||
Reduction of indemnification asset |
50 | | | |||||||||
Charitable Contribution |
| 124 | | |||||||||
U.K. lease exit costs |
| | (8 | ) | ||||||||
Contribution to STIFs |
| | 30 | |||||||||
Subtotal |
50 | 124 | 22 | |||||||||
Total non-GAAP expense adjustments |
89 | 167 | 50 | |||||||||
Expense, as adjusted: |
||||||||||||
Employee compensation and benefits |
3,790 | 3,517 | 3,259 | |||||||||
Distribution and servicing costs |
364 | 353 | 364 | |||||||||
Amortization of deferred sales commissions |
56 | 52 | 55 | |||||||||
Direct fund expense |
748 | 657 | 591 | |||||||||
General and administration |
1,403 | 1,416 | 1,337 | |||||||||
Amortization of intangible assets |
157 | 161 | 157 | |||||||||
Total expense, as adjusted |
$ | 6,518 | $ | 6,156 | $ | 5,763 |
41
42
The components of nonoperating income (expense), less net income (loss) attributable to NCI for 2014, 2013 and 2012 were as follows:
(in millions) | 2014 | 2013 | 2012 | |||||||||
Net gain (loss) on investments(1) |
||||||||||||
Private equity |
$ | 69 | $ | 52 | $ | 36 | ||||||
Real estate |
16 | 24 | 14 | |||||||||
Distressed credit/mortgage funds/opportunistic funds |
34 | 40 | 69 | |||||||||
Hedge funds/funds of hedge funds |
21 | 25 | 20 | |||||||||
Other investments(2) |
7 | 16 | (2 | ) | ||||||||
Subtotal |
147 | 157 | 137 | |||||||||
Gain related to the PennyMac IPO |
| 39 | | |||||||||
Gain related to the Charitable Contribution |
| 80 | | |||||||||
Investments related to deferred compensation plans |
7 | 10 | 6 | |||||||||
Total net gain (loss) on investments |
154 | 286 | 143 | |||||||||
Interest and dividend income |
29 | 22 | 36 | |||||||||
Interest expense |
(232 | ) | (211 | ) | (215 | ) | ||||||
Net interest expense |
(203 | ) | (189 | ) | (179 | ) | ||||||
Total nonoperating income (expense)(1) |
(49 | ) | 97 | (36 | ) | |||||||
Gain related to the Charitable Contribution |
| (80 | ) | | ||||||||
Compensation expense related to (appreciation) depreciation on deferred compensation plans |
(7 | ) | (10 | ) | (6 | ) | ||||||
Nonoperating income (expense), as adjusted(1) |
$ | (56 | ) | $ | 7 | $ | (42 | ) |
(1) | Net of net income (loss) attributable to NCI. |
(2) | Amount included net gains (losses) related to equity and fixed income investments, and BlackRocks seed capital hedging program. |
Income Tax Expense
GAAP | As adjusted | |||||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||
Income before income taxes(1) |
$ | 4,425 | $ | 3,954 | $ | 3,488 | $ | 4,507 | $ | 4,031 | $ | 3,532 | ||||||||||||
Income tax expense |
$ | 1,131 | $ | 1,022 | $ | 1,030 | $ | 1,197 | $ | 1,149 | $ | 1,094 | ||||||||||||
Effective tax rate |
25.6 | % | 25.8 | % | 29.5 | % | 26.6 | % | 28.5 | % | 31.0 | % |
(1) | Net of net income (loss) attributable to NCI. |
43
44
December 31, 2014 | ||||||||||||||||||||
Segregated client assets generating advisory fees in which BlackRock has no economic interest or liability |
||||||||||||||||||||
(in millions) | GAAP Basis |
Separate Account Assets/ Collateral |
Consolidated VIEs |
Consolidated Sponsored Investment Funds |
As Adjusted |
|||||||||||||||
Assets |
||||||||||||||||||||
Cash and cash equivalents |
$ | 5,723 | $ | | $ | | $ | 120 | $ | 5,603 | ||||||||||
Accounts receivable |
2,120 | | | | 2,120 | |||||||||||||||
Investments |
1,921 | | | 17 | 1,904 | |||||||||||||||
Assets of consolidated VIEs |
3,630 | | 3,630 | | | |||||||||||||||
Separate account assets and collateral held under securities lending agreements |
194,941 | 194,941 | | | | |||||||||||||||
Other assets(1) |
1,168 | | | 20 | 1,148 | |||||||||||||||
Subtotal |
209,503 | 194,941 | 3,630 | 157 | 10,775 | |||||||||||||||
Goodwill and intangible assets, net |
30,305 | | | | 30,305 | |||||||||||||||
Total assets |
$ | 239,808 | $ | 194,941 | $ | 3,630 | $ | 157 | $ | 41,080 | ||||||||||
Liabilities |
||||||||||||||||||||
Accrued compensation and benefits |
$ | 1,865 | $ | | $ | | $ | | $ | 1,865 | ||||||||||
Accounts payable and accrued liabilities |
1,035 | | | | 1,035 | |||||||||||||||
Liabilities of consolidated VIEs |
3,634 | | 3,634 | | | |||||||||||||||
Borrowings |
4,938 | | | | 4,938 | |||||||||||||||
Separate account liabilities and collateral liabilities under securities lending agreements |
194,941 | 194,941 | | | | |||||||||||||||
Deferred income tax liabilities |
4,989 | | | | 4,989 | |||||||||||||||
Other liabilities |
886 | | | 18 | 868 | |||||||||||||||
Total liabilities |
212,288 | 194,941 | 3,634 | 18 | 13,695 | |||||||||||||||
Equity |
||||||||||||||||||||
Total stockholders equity(2) |
27,366 | | (19 | ) | | 27,385 | ||||||||||||||
Noncontrolling interests |
154 | | 15 | 139 | | |||||||||||||||
Total equity |
27,520 | | (4 | ) | 139 | 27,385 | ||||||||||||||
Total liabilities and equity |
$ | 239,808 | $ | 194,941 | $ | 3,630 | $ | 157 | $ | 41,080 |
(1) | Amounts include property and equipment and other assets. |
(2) | GAAP amount includes $19 million of an appropriated retained deficit related solely to consolidated CLOs in which the Company has no equity exposure. |
45
(in millions) | December 31, 2014 |
December 31, 2013 |
||||||
Total investments, GAAP |
$ | 1,921 | $ | 2,151 | ||||
Investments held by consolidated sponsored investment funds(1) |
(713 | ) | (826 | ) | ||||
Net exposure to consolidated investment funds |
696 | 732 | ||||||
Total investments, as adjusted |
1,904 | 2,057 | ||||||
Federal Reserve Bank stock |
(92 | ) | (90 | ) | ||||
Carried interest |
(85 | ) | (103 | ) | ||||
Deferred compensation investments |
(85 | ) | (97 | ) | ||||
Hedged investments |
(323 | ) | (184 | ) | ||||
Total economic investment exposure |
$ | 1,319 | $ | 1,583 |
(1) | At December 31, 2014 and 2013, approximately $713 million and $826 million, respectively, of BlackRocks total GAAP investments were held in sponsored investment funds that were deemed to be controlled by BlackRock in accordance with GAAP, and, therefore, are consolidated even though BlackRock may not economically own a majority of such funds. |
The following table represents the carrying value of the Companys economic investment exposure, by asset type, at December 31, 2014 and 2013:
(in millions) | December 31, 2014 |
December 31, 2013 |
||||||
Private equity |
$ | 314 | $ | 328 | ||||
Real estate |
117 | 125 | ||||||
Distressed credit/mortgage funds/opportunistic funds |
61 | 148 | ||||||
Hedge funds/funds of hedge funds |
228 | 348 | ||||||
Other investments(1) |
599 | 634 | ||||||
Total economic investment exposure |
$ | 1,319 | $ | 1,583 |
(1) | Other investments primarily include seed investments in fixed income and equity funds/strategies as well as U.K. government securities held for regulatory purposes. |
As adjusted investment activity for 2014 was as follows:
(in millions) | ||||
Investments, as adjusted, December 31, 2013 |
$ | 2,057 | ||
Purchases/capital contributions |
787 | |||
Sales/maturities |
(833 | ) | ||
Distributions(1) |
(255 | ) | ||
Market valuations/earnings from equity method investments |
166 | |||
Carried interest capital allocations |
(18 | ) | ||
Investments, as adjusted, December 31, 2014 |
$ | 1,904 |
(1) | Amounts include distributions representing return of capital and return on investments. |
46
The following table represents investments, as adjusted at December 31, 2014:
(in millions) | Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant (Level 3) |
Other Investments Not Held at Fair Value(1) |
Investments at December 31, 2014 |
|||||||||||||||
Total investments, as adjusted(2) |
$ | 691 | $ | 470 | $ | 470 | $ | 273 | $ | 1,904 |
(1) | Amount includes investments held at cost or amortized cost, carried interest and certain equity method investments, which include sponsored investment funds, which are not accounted for under a fair value measure. Certain equity method investees do not account for both their financial assets and financial liabilities under fair value measures, therefore, the Companys investment in such equity method investees may not represent fair value. |
(2) | Amounts include cash and cash equivalents, other assets and liabilities that are consolidated from non-VIE sponsored investment funds. See Note 5, Fair Value Disclosures, to the consolidated financial statements contained in Part II, Item 8 of this filing, for total GAAP investments. |
The following table presents a reconciliation of the consolidated statements of cash flows presented on a GAAP basis to the consolidated statements of cash flows, excluding the impact of the cash flows of consolidated sponsored investment funds and consolidated VIEs:
(in millions) | GAAP Basis |
Impact on Cash Flows of Consolidated Sponsored Investment Funds |
Impact on Cash Flows of Consolidated VIEs |
Cash Flows Excluding Impact of Consolidated Sponsored Investment Funds and VIEs |
||||||||||||
Cash and cash equivalents, December 31, 2012 |
$ | 4,606 | $ | 133 | $ | | $ | 4,473 | ||||||||
Cash flows from operating activities |
3,642 | (137 | ) | 286 | 3,493 | |||||||||||
Cash flows from investing activities |
(483 | ) | 39 | | (522 | ) | ||||||||||
Cash flows from financing activities |
(3,392 | ) | 79 | (286 | ) | (3,185 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents |
17 | | | 17 | ||||||||||||
Net change in cash and cash equivalents |
(216 | ) | (19 | ) | | (197 | ) | |||||||||
Cash and cash equivalents, December 31, 2013 |
$ | 4,390 | $ | 114 | $ | | $ | 4,276 | ||||||||
Cash flows from operating activities |
3,081 | (103 | ) | (431 | ) | 3,615 | ||||||||||
Cash flows from investing activities |
239 | (174 | ) | | 413 | |||||||||||
Cash flows from financing activities |
(1,855 | ) | 283 | 431 | (2,569) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents |
(132 | ) | | | (132 | ) | ||||||||||
Net change in cash and cash equivalents |
1,333 | 6 | | 1,327 | ||||||||||||
Cash and cash equivalents, December 31, 2014 |
$ | 5,723 | $ | 120 | $ | | $ | 5,603 |
47
48
Long-term Borrowings.
The carrying value of long-term borrowings at December 31, 2014 included the following:
(in millions) | Maturity Amount | Carrying Value | Maturity | |||||||
1.375% Notes |
$ | 750 | $ | 750 | June 2015 | |||||
6.25% Notes |
700 | 699 | September 2017 | |||||||
5.00% Notes |
1,000 | 998 | December 2019 | |||||||
4.25% Notes |
750 | 747 | May 2021 | |||||||
3.375% Notes |
750 | 747 | June 2022 | |||||||
3.50% Notes |
1,000 | 997 | March 2024 | |||||||
Total Long-term Borrowings |
$ | 4,950 | $ | 4,938 |
Contractual Obligations, Commitments and Contingencies
The following table sets forth contractual obligations, commitments and contingencies by year of payment at December 31, 2014:
(in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | |||||||||||||||||||||
Contractual obligations and commitments: |
||||||||||||||||||||||||||||
Long-term borrowings(1): |
||||||||||||||||||||||||||||
Principal |
$ | 750 | $ | | $ | 700 | $ | | $ | 1,000 | $ | 2,500 | $ | 4,950 | ||||||||||||||
Interest |
191 | 186 | 186 | 142 | 142 | 269 | 1,116 | |||||||||||||||||||||
Operating leases |
126 | 111 | 112 | 111 | 105 | 613 | 1,178 | |||||||||||||||||||||
Purchase obligations |
168 | 68 | 11 | 1 | | | 248 | |||||||||||||||||||||
Investment commitments |
161 | | | | | | 161 | |||||||||||||||||||||
Total contractual obligations and commitments |
1,396 | 365 | 1,009 | 254 | 1,247 | 3,382 | 7,653 | |||||||||||||||||||||
Contingent obligations: |
||||||||||||||||||||||||||||
Contingent distribution obligations |
189 | 189 | | | | | 378 | |||||||||||||||||||||
Contingent payments related to business acquisitions(2) |
5 | 10 | 7 | 19 | 9 | 11 | 61 | |||||||||||||||||||||
Total contractual obligations, commitments and contingent obligations(3) |
$ | 1,590 | $ | 564 | $ | 1,016 | $ | 273 | $ | 1,256 | $ | 3,393 | $ | 8,092 |
49
50
51
52
53
54
55
Managements Report on Internal Control Over Financial Reporting
Management of BlackRock, Inc. (the Company) is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the Companys principal executive and principal financial officers, or persons performing similar functions, and affected by the Companys board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:
| pertain to the maintenance of records that, in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
| provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with the authorizations of management and directors of the Company; and |
| provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on the financial statements. |
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of effectiveness of the internal control over financial reporting to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Companys internal control over financial reporting as of December 31, 2014 based on the criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, 2014, the Companys internal control over financial reporting is effective.
The Companys independent registered public accounting firm has issued an attestation report on the effectiveness of the Companys internal control over financial reporting.
February 27, 2015
56
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of BlackRock, Inc.:
We have audited the internal control over financial reporting of BlackRock, Inc. and subsidiaries (the Company) as of December 31, 2014, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Companys management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Managements Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Companys internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A companys internal control over financial reporting is a process designed by, or under the supervision of, the companys principal executive and principal financial officers, or persons performing similar functions, and effected by the companys board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial condition as of December 31, 2014 and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended of the Company and our report dated February 27, 2015 expressed an unqualified opinion on those consolidated financial statements.
/s/ Deloitte & Touche LLP
New York, New York
February 27, 2015
57
58
Exhibit No. |
Description | |||
3.1 | (1) | Amended and Restated Certificate of Incorporation of BlackRock. | ||
3.2 | (2) | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of BlackRock, Inc. | ||
3.3 | (3) | Amended and Restated Bylaws of BlackRock. | ||
3.4 | (1) | Certificate of Designations of Series A Convertible Participating Preferred Stock of BlackRock. | ||
3.5 | (4) | Certificate of Designations of Series B Convertible Participating Preferred Stock of BlackRock. | ||
3.6 | (4) | Certificate of Designations of Series C Convertible Participating Preferred Stock of BlackRock. | ||
3.7 | (5) | Certificate of Designations of Series D Convertible Participating Preferred Stock of BlackRock. | ||
4.1 | (6) | Specimen of Common Stock Certificate. | ||
4.2 | (7) | Indenture, dated September 17, 2007, between BlackRock and The Bank of New York, as trustee, relating to senior debt securities. | ||
4.3 | (8) | Form of 6.25% Notes due 2017. | ||
4.4 | (9) | Form of 5.00% Notes due 2019. | ||
4.5 | (10) | Form of 4.25% Notes due 2021. | ||
4.6 | (11) | Form of 1.375% Notes due 2015. | ||
4.7 | (11) | Form of 3.375% Notes due 2022. | ||
4.8 | (12) | Form of 3.500% Notes due 2024. | ||
10.1 | (13) | BlackRock, Inc. Amended and Restated 1999 Stock Award and Incentive Plan. + | ||
10.2 | (14) | Amendment No. 1 to the Amended and Restated BlackRock, Inc. 1999 Stock Award and Incentive Plan. + | ||
10.3 | (14) | Amendment No. 2 to the Amended and Restated BlackRock, Inc. 1999 Stock Award and Incentive Plan. + | ||
10.4 | (15) | Amended and Restated BlackRock, Inc. 1999 Annual Incentive Performance Plan. + | ||
10.5 | (16) | Amendment No. 1 to the BlackRock, Inc. Amended and Restated 1999 Annual Incentive Performance Plan.+ | ||
10.6 | (17) | Form of Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+ | ||
10.7 | (18) | Form of Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units for long-term incentive awards under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+ | ||
10.8 | (1) | Form of Stock Option Agreement expected to be used in connection with future grants of Stock Options under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+ | ||
10.9 | (1) | Form of Restricted Stock Agreement expected to be used in connection with future grants of Restricted Stock under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+ | ||
10.10 | (1) | Form of Directors Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+ | ||
10.11 | (6) | BlackRock, Inc. Voluntary Deferred Compensation Plan, as amended and restated as of January 1, 2005.+ | ||
10.12 | (6) | Registration Rights Agreement, dated as of September 29, 2006, among BlackRock, Merrill Lynch & Co., Inc. and The PNC Financial Service Group, Inc. | ||
10.13 | (18) | Share Surrender Agreement, dated October 10, 2002 (the Share Surrender Agreement), among Old BlackRock, PNC Asset Management, Inc. and The PNC Financial Services Group, Inc.+ | ||
10.14 | (19) | First Amendment, dated as of February 15, 2006, to the Share Surrender Agreement.+ | ||
10.15 | (20) | Second Amendment, dated as of June 11, 2007, to the Share Surrender Agreement.+ | ||
10.16 | (4) | Third Amendment, dated as of February 27, 2009, to the Share Surrender Agreement.+ | ||
10.17 | (21) | Fourth Amendment, dated as of August 7, 2012, to the Share Surrender Agreement.+ | ||
10.18 | (22) | Five-Year Revolving Credit Agreement, dated as of March 10, 2011, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender and L/C agent, Sumitomo Mitsui Banking Corporation, as Japanese Yen lender, a group of lenders, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Citibank, N.A., as syndication agent and Bank of America, N.A., Barclays Bank PLC, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc., as documentation agents. | ||
10.19 | (23) | Amendment No. 1, dated as of March 30, 2012, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein. | ||
10.20 | (24) | Amendment No. 2, dated as of March 28, 2013, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein. | ||
10.21 | (25) | Amendment No. 3, dated as of March 28, 2014, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein. |
59
Exhibit No. | Description | |||
10.22 | (26) | Second Amended and Restated Global Distribution Agreement, dated as of November 15, 2010, among BlackRock and Merrill Lynch & Co., Inc. | ||
10.23 | (3) | Amended and Restated Implementation and Stockholder Agreement, dated as of February 27, 2009, between The PNC Financial Services Group, Inc. and BlackRock. | ||
10.24 | (27) | Amendment No. 1, dated as of June 11, 2009, to the Amended and Restated Implementation and Stockholder Agreement between The PNC Financial Services Group, Inc. and BlackRock. | ||
10.25 | (28) | Lease Agreement, dated as of February 17, 2010, among BlackRock Investment Management (UK) Limited and Mourant & Co Trustees Limited and Mourant Property Trustees Limited as Trustees of the Drapers Gardens Unit Trust for the lease of Drapers Gardens, 12 Throgmorton Avenue, London, EC2, United Kingdom. | ||
10.26 | (29) | Letter Agreement, dated February 12, 2013, between Gary S. Shedlin and BlackRock. + | ||
10.27 | Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Barclays Capital Inc., dated as of December 23, 2014. | |||
10.28 | Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Citigroup Global Markets Inc., dated as of December 23, 2014. | |||
10.29 | Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Merrill Lynch, Pierce, Fenner & Smith Incorporated, dated as of January 6, 2015. | |||
10.30 | Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Credit Suisse Securities (USA) LLC dated as of January 6, 2015. | |||
12.1 | Computation of Ratio of Earnings to Fixed Charges. | |||
21.1 | Subsidiaries of Registrant. | |||
23.1 | Deloitte & Touche LLP Consent. | |||
31.1 | Section 302 Certification of Chief Executive Officer. | |||
31.2 | Section 302 Certification of Chief Financial Officer. | |||
32.1 | Section 906 Certification of Chief Executive Officer and Chief Financial Officer. | |||
101.INS | XBRL Instance Document. | |||
101.SCH | XBRL Taxonomy Extension Schema Document. | |||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
(1) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on October 5, 2006. |
(2) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on May 25, 2012. |
(3) | Incorporated by reference to BlackRocks Annual Report on Form 10-K for the year ended December 31, 2012. |
(4) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on February 27, 2009. |
(5) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on December 3, 2009. |
(6) | Incorporated by reference to BlackRocks Registration Statement on Form S-8 (Registration No. 333-137708) filed on September 29, 2006. |
(7) | Incorporated by reference to BlackRocks Annual Report on Form 10-K for the year ended December 31, 2007. |
(8) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on September 17, 2007. |
(9) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on December 10, 2009. |
(10) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on May 25, 2011. |
(11) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on May 31, 2012. |
(12) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on March 18, 2014. |
(13) | Incorporated by reference to BlackRocks Quarterly Report on Form 10-Q for the quarter ended June 30, 2010. |
(14) | Incorporated by reference to BlackRocks Registration Statement on Form S-8 (Registration No. 333-197764) filed on July 31, 2014. |
(15) | Incorporated by reference to Old BlackRocks Annual Report on Form 10-K for the year ended December 31, 2002. |
(16) | Incorporated by reference to Old BlackRocks Current Report on Form 8-K filed on May 24, 2006. |
(17) | Incorporated by reference to BlackRocks Annual Report on Form 10-K for the year ended December 31, 2008. |
(18) | Incorporated by reference to Old BlackRocks Quarterly Report on Form 10-Q for the quarter ended September 30, 2002. |
(19) | Incorporated by reference to Old BlackRocks Current Report on Form 8-K filed on February 22, 2006. |
(20) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on June 15, 2007. |
(21) | Incorporated by reference to BlackRocks Quarterly Report on Form 10-Q for the quarter ended June 30, 2012. |
(22) | Incorporated by reference to BlackRocks Current Report on Form 8-K/A filed on August 24, 2012. |
60
(23) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on April 4, 2012. |
(24) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on April 3, 2013. |
(25) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on March 28, 2014. |
(26) | Incorporated by reference to BlackRocks Current Report on Form 8-K/A filed on August 24, 2012. |
(27) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on June 17, 2009. |
(28) | Incorporated by reference to BlackRocks Annual Report on Form 10-K for the year ended December 31, 2009. |
(29) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on February 19, 2013. |
+ | Denotes compensatory plans or arrangements. |
| Confidential treatment has been granted for certain portions of this exhibit, which portions have been omitted and filed separately with the Securities and Exchange Commission. |
61
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BLACKROCK, INC.
By: | /s/ LAURENCE D. FINK | |
Laurence D. Fink | ||
Chairman, Chief Executive Officer and Director |
February 27, 2015
Each of the officers and directors of BlackRock, Inc. whose signature appears below, in so signing, also makes, constitutes and appoints Laurence D. Fink, Gary S. Shedlin, Matthew J. Mallow, Daniel R. Waltcher and J. Russell McGranahan, his or her true and lawful attorneys-in-fact, with full power and substitution, for him or her in any and all capacities, to execute and cause to be filed with the Securities and Exchange Commission any and all amendments to the Annual Report on Form 10-K, with exhibits thereto and other documents connected therewith and to perform any acts necessary to be done in order to file such documents, and hereby ratifies and confirms all that said attorney-in-fact or his or her substitute or substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
/S/ LAURENCE D. FINK
Laurence D. Fink |
Chairman, Chief Executive Officer and Director (Principal Executive Officer) | February 27, 2015 | ||
/S/ GARY SHEDLIN
Gary S. Shedlin |
Senior Managing Director and Chief Financial Officer (Principal Financial Officer) | February 27, 2015 | ||
/S/ JOSEPH FELICIANI, JR.
Joseph Feliciani, Jr. |
Managing Director and Chief Accounting Officer (Principal Accounting Officer) | February 27, 2015 | ||
/S/ ABDLATIF Y. AL-HAMAD
|
Director | February 27, 2015 | ||
Abdlatif Y. Al-Hamad | ||||
/S/ MATHIS CABIALLAVETTA
|
Director | February 27, 2015 | ||
Mathis Cabiallavetta | ||||
/S/ PAMELA DALEY
|
Director | February 27, 2015 | ||
Pamela Daley | ||||
/S/ WILLIAM S. DEMCHAK
|
Director | February 27, 2015 | ||
William S. Demchak | ||||
/S/ JESSICA EINHORN
|
Director | February 27, 2015 | ||
Jessica Einhorn | ||||
/S/ FABRIZIO FREDA
|
Director | February 27, 2015 | ||
Fabrizio Freda | ||||
/S/ MURRY S. GERBER
|
Director | February 27, 2015 | ||
Murry S. Gerber | ||||
/S/ ROBERT S. KAPITO
|
Director | February 27, 2015 | ||
Robert S. Kapito | ||||
/S/ DAVID H. KOMANSKY
|
Director | February 27, 2015 | ||
David H. Komansky | ||||
/S/ SIR DERYCK MAUGHAN
|
Director | February 27, 2015 | ||
Sir Deryck Maughan | ||||
/S/ CHERYL D. MILLS
|
Director | February 27, 2015 | ||
Cheryl D. Mills | ||||
/S/ THOMAS H. OBRIEN
|
Director | February 27, 2015 | ||
Thomas H. OBrien |
62
Signature | Title | Date | ||
/S/ IVAN G. SEIDENBERG
|
Director | February 27, 2015 | ||
Ivan G. Seidenberg | ||||
/S/ MARCO ANTONIO SLIM DOMIT
|
Director | February 27, 2015 | ||
Marco Antonio Slim Domit | ||||
/S/ JOHN S. VARLEY
|
Director | February 27, 2015 | ||
John S. Varley | ||||
/S/ SUSAN L. WAGNER
|
Director | February 27, 2015 | ||
Susan L. Wagner |
63
F-2 | ||
F-3 | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-9 | ||
F-10 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of BlackRock, Inc.:
We have audited the accompanying consolidated statements of financial condition of BlackRock, Inc. and subsidiaries (the Company) as of December 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2014. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of BlackRock, Inc. and subsidiaries at December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Companys internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2015 expressed an unqualified opinion on the Companys internal control over financial reporting.
/s/ Deloitte & Touche LLP
New York, New York
February 27, 2015
F-2
BlackRock, Inc.
Consolidated Statements of Financial Condition
(in millions, except shares and per share data) | December 31, 2014 |
December 31, 2013 |
||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 5,723 | $ | 4,390 | ||||
Accounts receivable |
2,120 | 2,247 | ||||||
Investments |
1,921 | 2,151 | ||||||
Assets of consolidated variable interest entities: |
||||||||
Cash and cash equivalents |
278 | 161 | ||||||
Bank loans, other investments and other assets |
3,352 | 2,325 | ||||||
Separate account assets |
161,287 | 155,113 | ||||||
Separate account collateral held under securities lending agreements |
33,654 | 21,788 | ||||||
Property and equipment (net of accumulated depreciation of $587 and $611 at December 31, |
467 | 525 | ||||||
Intangible assets (net of accumulated amortization of $1,040 and $1,057 at December 31, |
17,344 | 17,501 | ||||||
Goodwill |
12,961 | 12,980 | ||||||
Other assets |
701 | 692 | ||||||
Total assets |
$ | 239,808 | $ | 219,873 | ||||
Liabilities |
||||||||
Accrued compensation and benefits |
$ | 1,865 | $ | 1,747 | ||||
Accounts payable and accrued liabilities |
1,035 | 1,084 | ||||||
Liabilities of consolidated variable interest entities: |
||||||||
Borrowings |
3,389 | 2,369 | ||||||
Other liabilities |
245 | 74 | ||||||
Borrowings |
4,938 | 4,939 | ||||||
Separate account liabilities |
161,287 | 155,113 | ||||||
Separate account collateral liabilities under securities lending agreements |
33,654 | 21,788 | ||||||
Deferred income tax liabilities |
4,989 | 5,085 | ||||||
Other liabilities |
886 | 1,004 | ||||||
Total liabilities |
212,288 | 193,203 | ||||||
Commitments and contingencies (Note 13) |
||||||||
Temporary equity |
||||||||
Redeemable noncontrolling interests |
35 | 54 | ||||||
Permanent Equity |
||||||||
BlackRock, Inc. stockholders equity |
||||||||
Common stock, $ 0.01 par value; |
2 | 2 | ||||||
Shares authorized: 500,000,000 at December 31, 2014 and 2013; Shares issued: 171,252,185 at December 31, 2014 and 2013; Shares outstanding: 164,786,788 and 166,589,688 at December 31, 2014 and 2013, respectively; |
||||||||
Series B nonvoting participating preferred stock, $0.01 par value; |
| | ||||||
Shares authorized: 150,000,000 at December 31, 2014 and 2013; Shares issued and outstanding: 823,188 at December 31, 2014 and 2013; |
||||||||
Series C nonvoting participating preferred stock, $0.01 par value; |
| | ||||||
Shares authorized: 6,000,000 at December 31, 2014 and 2013; Shares issued and outstanding: 1,311,887 at December 31, 2014 and 2013 |
||||||||
Additional paid-in capital |
19,386 | 19,473 | ||||||
Retained earnings |
10,164 | 8,208 | ||||||
Appropriated retained earnings |
(19 | ) | 22 | |||||
Accumulated other comprehensive loss |
(273 | ) | (35 | ) | ||||
Treasury stock, common, at cost (6,465,397 and 4,662,497 shares held at December 31, 2014 and 2013, respectively) |
(1,894 | ) | (1,210 | ) | ||||
Total BlackRock, Inc. stockholders equity |
27,366 | 26,460 | ||||||
Nonredeemable noncontrolling interests |
104 | 135 | ||||||
Nonredeemable noncontrolling interests of consolidated variable interest entities |
15 | 21 | ||||||
Total permanent equity |
27,485 | 26,616 | ||||||
Total liabilities, temporary equity and permanent equity |
$ | 239,808 | $ | 219,873 |
See accompanying notes to consolidated financial statements.
F-3
BlackRock, Inc.
Consolidated Statements of Income
Year ended December 31, | ||||||||||||
(in millions, except shares and per share data) | 2014 | 2013 | 2012 | |||||||||
Revenue |
||||||||||||
Investment advisory, administration fees and securities lending revenue |
||||||||||||
Related parties |
$ | 6,738 | $ | 5,991 | $ | 5,292 | ||||||
Other third parties |
2,851 | 2,748 | 2,780 | |||||||||
Total investment advisory, administration fees and securities lending revenue |
9,589 | 8,739 | 8,072 | |||||||||
Investment advisory performance fees |
550 | 561 | 463 | |||||||||
BlackRock Solutions and advisory |
635 | 577 | 518 | |||||||||
Distribution fees |
70 | 73 | 71 | |||||||||
Other revenue |
237 | 230 | 213 | |||||||||
Total revenue |
11,081 | 10,180 | 9,337 | |||||||||
Expense |
||||||||||||
Employee compensation and benefits |
3,829 | 3,560 | 3,287 | |||||||||
Distribution and servicing costs |
364 | 353 | 364 | |||||||||
Amortization of deferred sales commissions |
56 | 52 | 55 | |||||||||
Direct fund expenses |
748 | 657 | 591 | |||||||||
General and administration |
1,453 | 1,540 | 1,359 | |||||||||
Amortization of intangible assets |
157 | 161 | 157 | |||||||||
Total expense |
6,607 | 6,323 | 5,813 | |||||||||
Operating income |
4,474 | 3,857 | 3,524 | |||||||||
Nonoperating income (expense) |
||||||||||||
Net gain (loss) on investments |
165 | 305 | 163 | |||||||||
Net gain (loss) on consolidated variable interest entities |
(41 | ) | | (38 | ) | |||||||
Interest and dividend income |
29 | 22 | 36 | |||||||||
Interest expense |
(232 | ) | (211 | ) | (215 | ) | ||||||
Total nonoperating income (expense) |
(79 | ) | 116 | (54 | ) | |||||||
Income before income taxes |
4,395 | 3,973 | 3,470 | |||||||||
Income tax expense |
1,131 | 1,022 | 1,030 | |||||||||
Net income |
3,264 | 2,951 | 2,440 | |||||||||
Less: |
||||||||||||
Net income (loss) attributable to redeemable noncontrolling interests |
2 | (1 | ) | 9 | ||||||||
Net income (loss) attributable to nonredeemable noncontrolling interests |
(32 | ) | 20 | (27 | ) | |||||||
Net income attributable to BlackRock, Inc. |
$ | 3,294 | $ | 2,932 | $ | 2,458 | ||||||
Earnings per share attributable to BlackRock, Inc. common stockholders: |
||||||||||||
Basic |
$ | 19.58 | $ | 17.23 | $ | 14.03 | ||||||
Diluted |
$ | 19.25 | $ | 16.87 | $ | 13.79 | ||||||
Cash dividends declared and paid per share |
$ | 7.72 | $ | 6.72 | $ | 6.00 | ||||||
Weighted-average common shares outstanding: |
||||||||||||
Basic |
168,225,154 | 170,185,870 | 174,961,018 | |||||||||
Diluted |
171,112,261 | 173,828,902 | 178,017,679 |
See accompanying notes to consolidated financial statements.
F-4
BlackRock, Inc.
Consolidated Statements of Comprehensive Income
Year ended December 31, | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | |||||||||
Net income |
$ | 3,264 | $ | 2,951 | $ | 2,440 | ||||||
Other comprehensive income: |
||||||||||||
Change in net unrealized gains (losses) from available-for-sale investments, net of tax: |
||||||||||||
Unrealized holding gains (losses), net of tax(1) |
3 | 4 | 26 | |||||||||
Less: reclassification adjustment included in net income(1) |
8 | 13 | 6 | |||||||||
Net change from available-for-sale investments, net of tax |
(5 | ) | (9 | ) | 20 | |||||||
Benefit plans, net(1) |
(2 | ) | 10 | (5 | ) | |||||||
Foreign currency translation adjustments |
(231 | ) | 23 | 53 | ||||||||
Other comprehensive income (loss) |
(238 | ) | 24 | 68 | ||||||||
Comprehensive income |
3,026 | 2,975 | 2,508 | |||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests |
(30 | ) | 19 | (18 | ) | |||||||
Comprehensive income attributable to BlackRock, Inc. |
$ | 3,056 | $ | 2,956 | $ | 2,526 |
(1) | The tax benefit (expense) was not material in 2014, 2013 and 2012. |
See accompanying notes to consolidated financial statements.
F-5
BlackRock, Inc.
Consolidated Statements of Changes in Equity
(in millions) | Addi tional Paid-in Capital(1) |
Retained Earnings |
Appro priated Retained Earnings |
Accum ulated Other Compre hensive Income (Loss) |
Common Shares Held in Escrow |
Treasury Stock Common |
Total Stock holders Equity |
Non redeemable Non controlling Interests |
Non redeemable Non controlling Interests of Conso lidated VIEs |
Total Permanent Equity |
Redeemable Non controlling Interests / Temporary Equity(2) |
|||||||||||||||||||||||||||||||||
December 31, 2011 |
$ | 20,276 | $ | 5,046 | $ | 72 | $ | (127 | ) | $ | (1 | ) | $ | (218 | ) | $ | 25,048 | $ | 184 | $ | 38 | $ | 25,270 | $ | 92 | |||||||||||||||||||
Net income |
| 2,458 | | | | | 2,458 | 11 | (38 | ) | 2,431 | 9 | ||||||||||||||||||||||||||||||||
Allocation of losses of consolidated collateralized loan obligations |
| | (43 | ) | | | | (43 | ) | | 43 | | | |||||||||||||||||||||||||||||||
Release of common stock from escrow |
(1 | ) | | | | 1 | | | | | | | ||||||||||||||||||||||||||||||||
Dividends paid |
| (1,060 | ) | | | | | (1,060 | ) | | | (1,060 | ) | | ||||||||||||||||||||||||||||||
Stock-based compensation |
451 | | | | | | 451 | | | 451 | | |||||||||||||||||||||||||||||||||
Merrill Lynch cash capital contribution |
7 | | | | | | 7 | | | 7 | | |||||||||||||||||||||||||||||||||
Issuance of common shares related to employee stock transactions |
(376 | ) | | | | | 432 | 56 | | | 56 | | ||||||||||||||||||||||||||||||||
Employee tax withholdings related to employee stock transactions |
| | | | | (146 | ) | (146 | ) | | | (146 | ) | | ||||||||||||||||||||||||||||||
Shares repurchased |
(1,000 | ) | | | | | (500 | ) | (1,500 | ) | | | (1,500 | ) | | |||||||||||||||||||||||||||||
Net tax benefit (shortfall) from stock-based compensation |
64 | | | | | | 64 | | | 64 | | |||||||||||||||||||||||||||||||||
Subscriptions (redemptions/ distributions) noncontrolling interest holders |
| | | | | | | (33 | ) | (10 | ) | (43 | ) | 343 | ||||||||||||||||||||||||||||||
Net consolidations (deconsolidations) of sponsored investment funds |
| | | | | | | (7 | ) | (6 | ) | (13 | ) | (412 | ) | |||||||||||||||||||||||||||||
Other comprehensive income (loss) |
| | | 68 | | | 68 | | | 68 | | |||||||||||||||||||||||||||||||||
December 31, 2012 |
$ | 19,421 | $ | 6,444 | $ | 29 | $ | (59 | ) | $ | | $ | (432 | ) | $ | 25,403 | $ | 155 | $ | 27 | $ | 25,585 | $ | 32 |
(1) | Amount includes $2 million and $1 million of common stock at December 31, 2012 and 2011, respectively. |
(2) | Amounts include $89 million of redemptions and $89 million of net consolidations related to consolidated variable interest entities (VIEs). |
See accompanying notes to consolidated financial statements.
F-6
BlackRock, Inc.
Consolidated Statements of Changes in Equity
(in millions) | Addi tional Paid-in Capital(1) |
Retained Earnings |
Appro priated Retained Earnings |
Accu mulated Other Compre hensive Income (Loss) |
Treasury Stock Common |
Total BlackRock Stock holders Equity |
Non redeemable Non controlling Interests |
Non redeemable Non controlling Interests of Consolidated VIEs |
Total Permanent Equity |
Redeemable No ncontrolling Interests / Temporary Equity |
||||||||||||||||||||||||||||||
December 31, 2012 |
$ | 19,421 | $ | 6,444 | $ | 29 | $ | (59 | ) | $ | (432 | ) | $ | 25,403 | $ | 155 | $ | 27 | $ | 25,585 | $ | 32 | ||||||||||||||||||
Net income |
| 2,932 | | | | 2,932 | 20 | | 2,952 | (1 | ) | |||||||||||||||||||||||||||||
Consolidation of a collateralized loan obligation |
| | (4 | ) | | | (4 | ) | | | (4 | ) | | |||||||||||||||||||||||||||
Allocation of gains (losses) of consolidated collateralized loan obligations |
| | (3 | ) | | | (3 | ) | | 3 | | | ||||||||||||||||||||||||||||
Dividends paid |
| (1,168 | ) | | | | (1,168 | ) | | | (1,168 | ) | | |||||||||||||||||||||||||||
Stock-based compensation |
447 | | | | 1 | 448 | | | 448 | | ||||||||||||||||||||||||||||||
Issuance of common shares related to employee stock transactions |
(429 | ) | | | | 464 | 35 | | | 35 | | |||||||||||||||||||||||||||||
Employee tax withholdings related to employee stock transactions |
| | | | (243 | ) | (243 | ) | | | (243 | ) | | |||||||||||||||||||||||||||
Shares repurchased |
| | | | (1,000 | ) | (1,000 | ) | | | (1,000 | ) | | |||||||||||||||||||||||||||
Net tax benefit (shortfall) from stock-based compensation |
36 | | | | | 36 | | | 36 | | ||||||||||||||||||||||||||||||
Subscriptions (redemptions/distributions) noncontrolling interest holders |
| | | | | | (59 | ) | 125 | 66 | 137 | |||||||||||||||||||||||||||||
Net consolidations (deconsolidations) of sponsored investment funds |
| | | | | | 19 | (134 | ) | (115 | ) | (114 | ) | |||||||||||||||||||||||||||
Other comprehensive income (loss) |
| | | 24 | | 24 | | | 24 | | ||||||||||||||||||||||||||||||
December 31, 2013 |
$ | 19,475 | $ | 8,208 | $ | 22 | $ | (35) | $ | (1,210) | $ | 26,460 | $ | 135 | $ | 21 | $ | 26,616 | $ | 54 |
(1) | Amounts include $2 million of common stock at both December 31, 2013 and 2012. |
See accompanying notes to consolidated financial statements.
F-7
BlackRock, Inc.
Consolidated Statements of Changes in Equity
(in millions) | Additional Paid-in Capital(1) |
Retained Earnings |
Appro Retained Earnings |
Accumulated Other Compre Income (Loss) |
Treasury Stock Common |
Total BlackRock Stock Equity |
Non Non Interests |
Non redeemable Non controlling Interests of Consolidated VIEs |
Total Permanent Equity |
Redeemable Non controlling Interests / Temporary Equity(2) |
||||||||||||||||||||||||||||||
December 31, 2013 |
$ | 19,475 | $ | 8,208 | $ | 22 | $ | (35 | ) | $ | (1,210 | ) | $ | 26,460 | $ | 135 | $ | 21 | $ | 26,616 | $ | 54 | ||||||||||||||||||
Net income |
| 3,294 | | | | 3,294 | 9 | (41 | ) | 3,262 | 2 | |||||||||||||||||||||||||||||
Allocation of gains (losses) of consolidated collateralized loan obligations |
| | (41 | ) | | | (41 | ) | | 41 | | | ||||||||||||||||||||||||||||
Dividends paid |
| (1,338 | ) | | | | (1,338 | ) | | | (1,338 | ) | | |||||||||||||||||||||||||||
Stock-based compensation |
453 | | | | | 453 | | | 453 | | ||||||||||||||||||||||||||||||
Issuance of common shares related to employee stock transactions |
(646 | ) | | | | 660 | 14 | | | 14 | | |||||||||||||||||||||||||||||
Employee tax withholdings related to employee stock transactions |
| | | | (344 | ) | (344 | ) | | | (344 | ) | | |||||||||||||||||||||||||||
Shares repurchased |
| | | | (1,000 | ) | (1,000 | ) | | | (1,000 | ) | | |||||||||||||||||||||||||||
Net tax benefit (shortfall) from stock-based compensation |
106 | | | | | 106 | | | 106 | | ||||||||||||||||||||||||||||||
Subscriptions (redemptions/distributions) noncontrolling interest holders |
| | | | | | (40 | ) | (6 | ) | (46 | ) | 248 | |||||||||||||||||||||||||||
Net consolidations (deconsolidations) of sponsored investment funds |
| | | | | | | | | (269 | ) | |||||||||||||||||||||||||||||
Other comprehensive income (loss) |
| | | (238 | ) | | (238 | ) | | | (238 | ) | | |||||||||||||||||||||||||||
December 31, 2014 |
$ | 19,388 | $ | 10,164 | $ | (19 | ) | $ | (273 | ) | $ | (1,894 | ) | $ | 27,366 | $ | 104 | $ | 15 | $ | 27,485 | $ | 35 |
(1) | Amounts include $2 million of common stock at both December 31, 2014 and 2013. |
(2) | Amounts include $75 million of redemptions and $75 million of net consolidations related to consolidated VIEs. |
See accompanying notes to consolidated financial statements.
F-8
BlackRock, Inc.
Consolidated Statements of Cash Flows
(in millions) | Year ended December 31, | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Cash flows from operating activities |
||||||||||||
Net income |
$ | 3,264 | $ | 2,951 | $ | 2,440 | ||||||
Adjustments to reconcile net income to cash flows from operating activities: |
||||||||||||
Depreciation and amortization |
278 | 291 | 295 | |||||||||
Amortization of deferred sales commissions |
56 | 52 | 55 | |||||||||
Stock-based compensation |
453 | 448 | 451 | |||||||||
Deferred income tax expense (benefit) |
(104 | ) | (193 | ) | (61 | ) | ||||||
Net (gains) losses on nontrading investments |
(37 | ) | (73 | ) | (43 | ) | ||||||
Purchases of investments within consolidated sponsored investment funds |
(160 | ) | (195 | ) | (108 | ) | ||||||
Proceeds from sales and maturities of investments within consolidated sponsored investment funds |
137 | 145 | 96 | |||||||||
Gain related to PennyMac initial public offering |
| (39 | ) | | ||||||||
Gain related to the charitable contribution |
| (80 | ) | | ||||||||
Charitable contribution |
| 124 | | |||||||||
Assets and liabilities of consolidated VIEs: |
||||||||||||
Change in cash and cash equivalents |
168 | 143 | (24 | ) | ||||||||
Net (gains) losses within consolidated VIEs |
41 | | 38 | |||||||||
Net (purchases) proceeds within consolidated VIEs |
(599 | ) | 142 | (203 | ) | |||||||
(Earnings) losses from equity method investees |
(158 | ) | (158 | ) | (175 | ) | ||||||
Distributions of earnings from equity method investees |
57 | 80 | 42 | |||||||||
Other adjustments |
5 | 10 | (4 | ) | ||||||||
Changes in operating assets and liabilities: |
||||||||||||
Accounts receivable |
78 | 14 | (292 | ) | ||||||||
Investments, trading |
(416 | ) | (218 | ) | (664 | ) | ||||||
Other assets |
(1 | ) | (92 | ) | (10 | ) | ||||||
Accrued compensation and benefits |
101 | 203 | 138 | |||||||||
Accounts payable and accrued liabilities |
(69 | ) | 7 | 114 | ||||||||
Other liabilities |
(13 | ) | 80 | 155 | ||||||||
Cash flows from operating activities |
3,081 | 3,642 | 2,240 | |||||||||
Cash flows from investing activities |
||||||||||||
Purchases of investments |
(369 | ) | (412 | ) | (402 | ) | ||||||
Proceeds from sales and maturities of investments |
654 | 286 | 695 | |||||||||
Distributions of capital from equity method investees |
143 | 83 | 73 | |||||||||
Net consolidations (deconsolidations) of sponsored investment funds |
(123 | ) | (48 | ) | (215 | ) | ||||||
Acquisitions, net of cash acquired |
| (298 | ) | (267 | ) | |||||||
Purchases of property and equipment |
(66 | ) | (94 | ) | (150 | ) | ||||||
Cash flows from investing activities |
239 | (483 | ) | (266 | ) | |||||||
Cash flows from financing activities |
||||||||||||
Repayments of short-term borrowings |
| (100 | ) | | ||||||||
Repayments of long-term borrowings |
(1,000 | ) | (750 | ) | (500 | ) | ||||||
Proceeds from long-term borrowings |
997 | | 1,495 | |||||||||
Cash dividends paid |
(1,338 | ) | (1,168 | ) | (1,060 | ) | ||||||
Proceeds from stock options exercised |
4 | 28 | 47 | |||||||||
Repurchases of common stock |
(1,344 | ) | (1,243 | ) | (1,645 | ) | ||||||
Net proceeds from (repayments of) borrowings by consolidated VIEs |
512 | (410 | ) | 331 | ||||||||
Net (redemptions/distributions paid)/subscriptions received from noncontrolling interest holders |
202 | 203 | 300 | |||||||||
Excess tax benefit from stock-based compensation |
106 | 41 | 74 | |||||||||
Other financing activities |
6 | 7 | 14 | |||||||||
Cash flows from financing activities |
(1,855 | ) | (3,392 | ) | (944 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents |
(132 | ) | 17 | 70 | ||||||||
Net increase (decrease) in cash and cash equivalents |
1,333 | (216 | ) | 1,100 | ||||||||
Cash and cash equivalents, beginning of year |
4,390 | 4,606 | 3,506 | |||||||||
Cash and cash equivalents, end of year |
$ | 5,723 | $ | 4,390 | $ | 4,606 | ||||||
Supplemental disclosure of cash flow information: |
||||||||||||
Cash paid for: |
||||||||||||
Interest |
$ | 216 | $ | 202 | $ | 201 | ||||||
Interest on borrowings of consolidated VIEs |
$ | 142 | $ | 102 | $ | 75 | ||||||
Income taxes (net of refunds) |
$ | 1,227 | $ | 1,064 | $ | 976 | ||||||
Supplemental schedule of noncash investing and financing transactions: |
||||||||||||
Issuance of common stock |
$ | 646 | $ | 429 | $ | 378 | ||||||
Increase (decrease) in noncontrolling interests due to net consolidation (deconsolidation) of sponsored investment funds |
$ | (269 | ) | $ | (229 | ) | $ | (425 | ) | |||
Increase (decrease) in borrowings due to consolidation of VIEs |
$ | 585 | $ | 363 | $ | 406 |
See accompanying notes to consolidated financial statements.
F-9
F-10
F-11
F-12
F-13
F-14
F-15
F-16
F-17
F-18
5. Fair Value Disclosures
Fair Value Hierarchy
Assets and liabilities measured at fair value on a recurring basis and other assets not held at fair value
December 31, 2014 (in millions) |
Quoted Prices in Active Markets for (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Other Assets Not Held at Fair Value(1) |
December 31, 2014 |
|||||||||||||||
Assets: |
||||||||||||||||||||
Investments |
||||||||||||||||||||
Available-for-sale: |
||||||||||||||||||||
Equity securities of sponsored investment funds |
$ | 198 | $ | 3 | $ | | $ | | $ | 201 | ||||||||||
Held-to-maturity debt securities |
| | | 79 | 79 | |||||||||||||||
Trading: |
||||||||||||||||||||
Deferred compensation plan mutual funds |
64 | | | | 64 | |||||||||||||||
Equity/Multi-asset mutual funds |
239 | | | | 239 | |||||||||||||||
Debt securities / fixed income mutual funds |
11 | 222 | | | 233 | |||||||||||||||
Total trading |
314 | 222 | | | 536 | |||||||||||||||
Other investments: |
||||||||||||||||||||
Consolidated sponsored investment funds private / public equity(2) |
11 | 11 | 248 | | 270 | |||||||||||||||
Equity method: |
||||||||||||||||||||
Hedge funds / Funds of hedge funds |
| 213 | 64 | 5 | 282 | |||||||||||||||
Private equity investments |
| | 107 | | 107 | |||||||||||||||
Real estate funds |
| 21 | 88 | 8 | 117 | |||||||||||||||
Fixed income mutual funds |
29 | | | | 29 | |||||||||||||||
Other |
98 | | | | 98 | |||||||||||||||
Total equity method |
127 | 234 | 259 | 13 | 633 | |||||||||||||||
Deferred compensation plan equity method investments |
| | 21 | | 21 | |||||||||||||||
Cost method investments |
| | | 96 | 96 | |||||||||||||||
Carried interest |
| | | 85 | 85 | |||||||||||||||
Total investments |
650 | 470 | 528 | 273 | 1,921 | |||||||||||||||
Separate account assets |
113,566 | 46,866 | | 855 | 161,287 | |||||||||||||||
Separate account collateral held under securities lending agreements: |
||||||||||||||||||||
Equity securities |
30,387 | | | | 30,387 | |||||||||||||||
Debt securities |
| 3,267 | | | 3,267 | |||||||||||||||
Total separate account collateral held under securities lending agreements |
30,387 | 3,267 | | | 33,654 | |||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||
Bank loans and other assets |
| 2,958 | 302 | 32 | 3,292 | |||||||||||||||
Bonds |
| 29 | 18 | | 47 | |||||||||||||||
Private / public equity(3) |
| 3 | 10 | | 13 | |||||||||||||||
Total assets of consolidated VIEs |
| 2,990 | 330 | 32 | 3,352 | |||||||||||||||
Total |
$ | 144,603 | $ | 53,593 | $ | 858 | $ | 1,160 | $ | 200,214 | ||||||||||
Liabilities: |
||||||||||||||||||||
Borrowings of consolidated VIEs |
$ | | $ | | $ | 3,389 | $ | | $ | 3,389 | ||||||||||
Separate account collateral liabilities under securities lending agreements |
30,387 | 3,267 | | | 33,654 | |||||||||||||||
Other liabilities(4) |
| 5 | 39 | | 44 | |||||||||||||||
Total |
$ | 30,387 | $ | 3,272 | $ | 3,428 | $ | | $ | 37,087 |
(1) | Amounts are comprised of investments held at cost or amortized cost, carried interest and certain equity method investments, which include sponsored investment funds and other assets, which are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and liabilities under fair value measures; therefore, the Companys investment in such equity method investees may not represent fair value. |
(2) | Level 3 amounts include $168 million and $80 million of underlying third-party private equity funds and direct investments in private equity companies held by private equity funds, respectively. |
(3) | Level 3 amounts include $10 million of underlying third-party private equity funds held by a consolidated private equity fund of fund. |
(4) | Amounts include a derivative (see Note 7, Derivatives and Hedging, for more information) and contingent liabilities related to the acquisitions of the Credit Suisse ETF franchise and MGPA (see Note 13, Commitments and Contingencies, for more information). |
F-19
Assets and liabilities measured at fair value on a recurring basis and other assets not held at fair value
December 31, 2013 (in millions) |
Quoted Prices Markets for (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Other Assets Not Held at Fair Value(1) |
December 31, 2013 |
|||||||||||||||
Assets: |
||||||||||||||||||||
Investments |
||||||||||||||||||||
Available-for-sale: |
||||||||||||||||||||
Equity securities of sponsored investment funds |
$ | 180 | $ | | $ | | $ | | $ | 180 | ||||||||||
Other securities |
| 3 | | | 3 | |||||||||||||||
Total available-for-sale |
180 | 3 | | | 183 | |||||||||||||||
Held-to-maturity debt securities |
| | | 83 | 83 | |||||||||||||||
Trading: |
||||||||||||||||||||
Deferred compensation plan mutual funds |
58 | | | | 58 | |||||||||||||||
Equity/Multi-asset mutual funds |
184 | | | | 184 | |||||||||||||||
Debt securities / fixed income mutual funds |
31 | 213 | | | 244 | |||||||||||||||
Total trading |
273 | 213 | | | 486 | |||||||||||||||
Other investments: |
||||||||||||||||||||
Consolidated sponsored investment funds: |
||||||||||||||||||||
Hedge funds / Funds of funds |
| 135 | 24 | | 159 | |||||||||||||||
Private / public equity(2) |
5 | 13 | 223 | 41 | 282 | |||||||||||||||
Total consolidated sponsored investment funds |
5 | 148 | 247 | 41 | 441 | |||||||||||||||
Equity method: |
||||||||||||||||||||
Hedge funds / Funds of hedge funds |
| 177 | 99 | 63 | 339 | |||||||||||||||
Private equity investments |
| | 101 | | 101 | |||||||||||||||
Real estate funds |
| 20 | 98 | 7 | 125 | |||||||||||||||
Fixed income mutual funds |
113 | | | | 113 | |||||||||||||||
Equity/Multi-asset, alternative mutual funds |
19 | | | | 19 | |||||||||||||||
Total equity method |
132 | 197 | 298 | 70 | 697 | |||||||||||||||
Deferred compensation plan equity method investments |
| 10 | 29 | | 39 | |||||||||||||||
Cost method investments |
| | | 119 | 119 | |||||||||||||||
Carried interest |
| | | 103 | 103 | |||||||||||||||
Total investments |
590 | 571 | 574 | 416 | 2,151 | |||||||||||||||
Separate account assets |
113,382 | 40,841 | | 890 | 155,113 | |||||||||||||||
Separate account collateral held under securities lending agreements: |
||||||||||||||||||||
Equity securities |
20,856 | | | | 20,856 | |||||||||||||||
Debt securities |
| 932 | | | 932 | |||||||||||||||
Total separate account collateral held under securities lending agreements |
20,856 | 932 | | | 21,788 | |||||||||||||||
Other assets(3) |
| 39 | | | 39 | |||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||
Bank loans and other assets |
| 2,047 | 129 | 19 | 2,195 | |||||||||||||||
Bonds |
| 71 | 35 | | 106 | |||||||||||||||
Private / public equity(4) |
| 10 | 14 | | 24 | |||||||||||||||
Total assets of consolidated VIEs |
| 2,128 | 178 | 19 | 2,325 | |||||||||||||||
Total |
$ | 134,828 | $ | 44,511 | $ | 752 | $ | 1,325 | $ | 181,416 | ||||||||||
Liabilities: |
||||||||||||||||||||
Borrowings of consolidated VIEs |
$ | | $ | | $ | 2,369 | $ | | $ | 2,369 | ||||||||||
Separate account collateral liabilities under securities lending agreements |
20,856 | 932 | | | 21,788 | |||||||||||||||
Other liabilities(5) |
18 | 4 | 42 | | 64 | |||||||||||||||
Total |
$ | 20,874 | $ | 936 | $ | 2,411 | $ | | $ | 24,221 |
(1) | Amounts are comprised of investments held at cost or amortized cost, carried interest and certain equity method investments, which include sponsored investment funds and other assets, which are not accounted for under a fair value measure. Certain equity method investees do not account for both their financial assets and liabilities under fair value measures; therefore, the Companys investment in such equity method investees may not represent fair value. |
F-20
(2) | Level 3 amounts include $195 million and $28 million of underlying third-party private equity funds and direct investments in private equity companies held by private equity funds, respectively. |
(3) | Amount includes company-owned and split-dollar life insurance policies and unrealized gains on forward foreign currency exchange contracts. |
(4) | Level 3 amounts include $14 million of underlying third-party private equity funds held by a sponsored private equity fund of fund. |
(5) | Amounts include a derivative (see Note 7, Derivatives and Hedging, for more information), securities sold short within consolidated sponsored investment funds and contingent liabilities related to the acquisitions of the Credit Suisse ETF franchise and MGPA (see Note 13, Commitments and Contingencies, for more information). |
F-21
Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for 2014
(in millions) | December 31, 2013 |
Realized and unrealized gains (losses) in earnings and OCI |
Purchases | Sales and maturities |
Issuances and other settlements(1) |
Transfers into Level 3 |
Transfers out of Level 3 |
December 31, 2014 |
Total net unrealized gains (losses) included in earnings(3) |
|||||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||||||
Investments: |
||||||||||||||||||||||||||||||||||||
Consolidated sponsored investment funds: |
||||||||||||||||||||||||||||||||||||
Hedge funds / Funds of funds |
$ | 24 | $ | | $ | | $ | (23 | ) | $ | (1 | ) | $ | | $ | | $ | | $ | | ||||||||||||||||
Private equity |
223 | 12 | 45 | (72 | ) | (1 | ) | 41 | (2) | | 248 | 7 | ||||||||||||||||||||||||
Equity method: |
||||||||||||||||||||||||||||||||||||
Hedge funds / Funds of hedge funds |
99 | 5 | 19 | (19 | ) | (40 | ) | | | 64 | 5 | |||||||||||||||||||||||||
Private equity investments |
101 | 15 | 17 | | (26 | ) | | | 107 | 15 | ||||||||||||||||||||||||||
Real estate funds |
98 | 13 | 8 | (5 | ) | (26 | ) | | | 88 | 12 | |||||||||||||||||||||||||
Deferred compensation plan equity method investments |
29 | | | | (8 | ) | | | 21 | | ||||||||||||||||||||||||||
Total Level 3 investments |
574 | 45 | 89 | (119 | ) | (102 | ) | 41 | | 528 | 39 | |||||||||||||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||
Bank loans |
129 | (9 | ) | 210 | (96 | ) | 46 | 302 | (280 | ) | 302 | |||||||||||||||||||||||||
Bonds |
35 | | | (17 | ) | | | | 18 | |||||||||||||||||||||||||||
Private equity |
14 | 1 | | (5 | ) | | | | 10 | |||||||||||||||||||||||||||
Total Level 3 assets of consolidated VIEs |
178 | (8 | ) | 210 | (118 | ) | 46 | 302 | (280 | ) | 330 | n/a | (4) | |||||||||||||||||||||||
Total Level 3 assets |
$ | 752 | $ | 37 | $ | 299 | $ | (237 | ) | $ | (56 | ) | $ | 343 | $ | (280 | ) | $ | 858 | $ | 39 | |||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||||||
Borrowings of consolidated VIEs |
$ | 2,369 | $ | 77 | $ | | $ | | $ | 1,097 | $ | | $ | | $ | 3,389 | n/a | (4) | ||||||||||||||||||
Other liabilities |
42 | (1 | ) | | | (4 | ) | | | 39 | n/a | |||||||||||||||||||||||||
Total Level 3 liabilities |
$ | 2,411 | $ | 76 | $ | | $ | | $ | 1,093 | $ | | $ | | $ | 3,428 |
n/a | not applicable |
(1) | Amount primarily includes distributions from equity method investees and loans and net proceeds from borrowings of consolidated VIEs. |
(2) | Includes investments previously held at cost. |
(3) | Earnings attributable to the change in unrealized gains (losses) relating to assets still held at the reporting date. |
(4) | The net gain (loss) on consolidated VIEs is solely attributable to noncontrolling interests on the consolidated statements of income. |
F-22
Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for 2013
(in millions) | December 31, 2012 |
Realized and unrealized gains (losses) in earnings and OCI |
Purchases | Sales and maturities |
Issuances and other settlements(1) |
Transfers into Level 3 |
Transfers out of Level 3 |
December 31, 2013 |
Total net unrealized gains (losses) included in earnings(2) |
|||||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||||||
Investments: |
||||||||||||||||||||||||||||||||||||
Available-for-sale: |
||||||||||||||||||||||||||||||||||||
Equity securities of sponsored investment funds |
$ | 1 | $ | | $ | | $ | | $ | (1 | ) | $ | | $ | | $ | | $ | | |||||||||||||||||
Consolidated sponsored investment funds: |
||||||||||||||||||||||||||||||||||||
Hedge funds / Funds of funds |
73 | 8 | 12 | (19 | ) | (34 | ) | | (16 | ) | 24 | 4 | ||||||||||||||||||||||||
Private equity |
266 | 37 | 16 | (82 | ) | | | (14 | ) | 223 | 25 | |||||||||||||||||||||||||
Equity method: |
||||||||||||||||||||||||||||||||||||
Hedge funds / Funds of hedge funds |
161 | 16 | 7 | (11 | ) | (74 | ) | | | 99 | 9 | |||||||||||||||||||||||||
Private equity investments |
90 | 21 | 14 | (10 | ) | (14 | ) | | | 101 | 21 | |||||||||||||||||||||||||
Real estate funds |
88 | 20 | 7 | | (17 | ) | | | 98 | 20 | ||||||||||||||||||||||||||
Deferred compensation plan equity method investments |
| | | | 29 | | | 29 | | |||||||||||||||||||||||||||
Total Level 3 investments |
679 | 102 | 56 | (122 | ) | (111 | ) | | (30 | ) | 574 | 79 | ||||||||||||||||||||||||
Separate account assets: |
2 | | | (2 | ) | | | | | n/a | (3) | |||||||||||||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||
Bank loans |
106 | | 109 | (60 | ) | 16 | 117 | (159 | ) | 129 | ||||||||||||||||||||||||||
Bonds |
46 | 1 | 4 | (16 | ) | | | | 35 | |||||||||||||||||||||||||||
Private equity |
22 | 2 | | (7 | ) | | | (3 | ) | 14 | ||||||||||||||||||||||||||
Funds of hedge funds |
| | 134 | | (134 | ) | | | | |||||||||||||||||||||||||||
Total Level 3 assets of consolidated VIEs |
174 | 3 | 247 | (83 | ) | (118 | ) | 117 | (162 | ) | 178 | n/a | (4) | |||||||||||||||||||||||
Total Level 3 assets |
$ | 855 | $ | 105 | $ | 303 | $ | (207 | ) | $ | (229 | ) | $ | 117 | $ | (192 | ) | $ | 752 | $ | 79 | |||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||||||
Borrowings of consolidated VIEs |
$ | 2,402 | $ | (14 | ) | $ | | $ | | $ | (47 | ) | $ | | $ | | $ | 2,369 | n/a | (4) | ||||||||||||||||
Other liabilities |
| | | | 42 | | | 42 | | |||||||||||||||||||||||||||
Total Level 3 liabilities |
$ | 2,402 | $ | (14 | ) | $ | | $ | | $ | (5 | ) | $ | | $ | | $ | 2,411 |
n/a | not applicable |
(1) | Amounts include distributions from equity method investees, repayments of borrowings of consolidated VIEs, loans and borrowings related to the consolidation of one additional CLO, elimination of investment related to a deconsolidation of a consolidated VIE and a reclassification of an investment from a consolidated sponsored investment fund to an equity method investment due to a change in ownership percentage. Amounts also include the acquisition of deferred compensation plan equity method investments and contingent liabilities related to the acquisitions of Credit Suisses ETF franchise and MGPA. |
(2) | Earnings attributable to the change in unrealized gains (losses) relating to assets still held at the reporting date. |
(3) | The net investment income attributable to separate account assets accrues directly to the contract owners and is not reported on the consolidated statements of income. |
(4) | The net gain (loss) on consolidated VIEs is solely attributable to noncontrolling interests on the consolidated statements of income. |
F-23
Disclosures of Fair Value for Financial Instruments Not Held at Fair Value. At December 31, 2014 and 2013, the fair value of the Companys financial instruments not held at fair value are categorized in the table below.
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
(in millions) | Carrying Amount |
Estimated Fair Value |
Carrying Amount |
Estimated Fair Value |
Fair Value Hierarchy |
|||||||||||||||
Financial Assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 5,723 | $ | 5,723 | $ | 4,390 | $ | 4,390 | Level 1 | (1),(2) | ||||||||||
Accounts receivable |
2,120 | 2,120 | 2,247 | 2,247 | Level 1 | (3) | ||||||||||||||
Cash and cash equivalents of consolidated VIEs |
278 | 278 | 161 | 161 | Level 1 | (1) | ||||||||||||||
Financial Liabilities: |
||||||||||||||||||||
Accounts payable and accrued liabilities |
1,035 | 1,035 | 1,084 | 1,084 | Level 1 | (3) | ||||||||||||||
Long-term borrowings |
4,938 | 5,309 | 4,939 | 5,284 | Level 2 | (4) |
(1) | Cash and cash equivalents are carried at either cost or amortized cost, which approximates fair value due to their short-term maturities. |
(2) | At December 31, 2014 and 2013, approximately $100 million and $64 million, respectively, of money market funds were recorded within cash and cash equivalents on the consolidated statements of financial condition. Money market funds are valued based on quoted market prices, or $1.00 per share, which generally is the NAV of the fund. |
(3) | The carrying amounts of accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short-term nature. |
(4) | Long-term borrowings are recorded at amortized cost. The fair value of the long-term borrowings, including the current portion of long-term borrowings, is estimated using market prices at the end of December 2014 and 2013, respectively. See Note 12, Borrowings, for the fair value of each of the Companys long-term borrowings. |
Investments in Certain Entities that Calculate Net Asset Value Per Share
As a practical expedient to value certain investments that do not have a readily determinable fair value and have attributes of an investment company, the Company uses NAV as the fair value. The following tables list information regarding all investments that use a fair value measurement to account for both their financial assets and financial liabilities in their calculation of a NAV per share (or equivalent).
December 31, 2014
(in millions) | Ref | Fair Value | Total Unfunded Commitments |
Redemption Frequency |
Redemption Notice Period |
|||||||||||||||
Consolidated sponsored investment funds: |
||||||||||||||||||||
Private equity funds of funds |
(a | ) | $ | 168 | $ | 22 | n/r | n/r | ||||||||||||
Equity method:(1) |
||||||||||||||||||||
Hedge funds/funds of hedge funds |
(b | ) | 277 | 39 |
|
Monthly Quarterly n/r |
(29%) (48%) (23%) |
1 90 days | ||||||||||||
Private equity funds |
(c | ) | 107 | 61 | n/r | n/r | ||||||||||||||
Real estate funds |
(d | ) | 109 | 1 |
|
Quarterly n/r |
(19%) (81%) |
60 days | ||||||||||||
Deferred compensation plan investments |
(e | ) | 21 | 5 | n/r | n/r | ||||||||||||||
Consolidated VIEs: |
||||||||||||||||||||
Private equity fund |
(f | ) | 10 | 1 | n/r | n/r | ||||||||||||||
Total |
$ | 692 | $ | 129 |
F-24
December 31, 2013
(in millions) | Ref | Fair Value | Total Unfunded Commitments |
Redemption Frequency |
Redemption Notice Period |
|||||||||||||||
Consolidated sponsored investment funds: |
||||||||||||||||||||
Private equity funds of funds |
(a | ) | $ | 195 | $ | 23 | n/r | n/r | ||||||||||||
Other funds of hedge funds |
(g | ) | 155 | |
|
Monthly Quarterly n/r |
(13%), (78%), (9%) |
30 90 days | ||||||||||||
Equity method:(1) |
||||||||||||||||||||
Hedge funds/funds of hedge funds |
(b | ) | 276 | 84 |
|
Monthly Quarterly n/r |
(55%), (11%) (34%) |
15 90 days | ||||||||||||
Private equity funds |
(c | ) | 101 | 62 | n/r | n/r | ||||||||||||||
Real estate funds |
(d | ) | 118 | 12 |
|
Quarterly n/r |
(17%) (83%) |
60 days | ||||||||||||
Deferred compensation plan investments |
(e | ) | 39 | 7 |
|
Monthly Quarterly n/r |
(8%), (18%) (74%) |
60 90 days | ||||||||||||
Consolidated VIEs: |
||||||||||||||||||||
Private equity fund |
(f | ) | 14 | 1 | n/r | n/r | ||||||||||||||
Total |
$ | 898 | $ | 189 |
n/r | not redeemable |
(1) | Comprised of equity method investments, which include investment companies, which account for their financial assets and most financial liabilities under fair value measures; therefore, the Companys investment in such equity method investees approximates fair value. |
(a) | This category includes the underlying third-party private equity funds within consolidated BlackRock sponsored private equity funds of funds. The fair values of the investments in the third-party funds have been estimated using capital accounts representing the Companys ownership interest in each fund in the portfolio as well as other performance inputs. These investments are not subject to redemption; however, for certain funds, the Company may sell or transfer its interest, which may need approval by the general partner of the underlying funds. Due to the nature of the investments in this category, the Company reduces its investment by distributions that are received through the realization of the underlying assets of the funds. It is estimated that the underlying assets of these funds will be liquidated over a weighted-average period of approximately seven years at both December 31, 2014 and 2013. The total remaining unfunded commitments to other third-party funds were $22 million and $23 million at December 31, 2014 and 2013, respectively. The Company had contractual obligations to the consolidated funds of $31 million and $30 million at December 31, 2014 and 2013, respectively. |
(b) | This category includes hedge funds and funds of hedge funds that invest primarily in equities, fixed income securities, distressed credit, opportunistic and mortgage instruments and other third-party hedge funds. The fair values of the investments have been estimated using the NAV of the Companys ownership interest in partners capital. It was estimated that the investments in the funds that are not subject to redemption will be liquidated over a weighted-average period of approximately two and three years at December 31, 2014 and 2013, respectively. |
(c) | This category includes several private equity funds that initially invest in nonmarketable securities of private companies, which ultimately may become public in the future. The fair values of these investments have been estimated using capital accounts representing the Companys ownership interest in the funds as well as other performance inputs. The Companys investment in each fund is not subject to redemption and is normally returned through distributions as a result of the liquidation of the underlying assets of the private equity funds. It was estimated that the investments in these funds will be liquidated over a weighted-average period of approximately four years and five years at December 31, 2014 and 2013, respectively. |
(d) | This category includes several real estate funds that invest directly in real estate and real estate related assets. The fair values of the investments have been estimated using capital accounts representing the Companys ownership interest in the funds. A majority of the Companys investments are not subject to redemption or are not currently redeemable and are normally returned through distributions as a result of the liquidation of the underlying assets of the real estate funds. It is estimated that the investments in these funds not subject to redemptions will be liquidated over a weighted-average period of approximately seven years at both December 31, 2014 December 31, 2013. |
(e) | This category includes investments in several real estate funds and certain hedge funds that invest in energy and health science related equity securities. The fair values of the investments in this category have been estimated using capital accounts representing the Companys ownership interest in partners capital as well as performance inputs. The investments in hedge funds will be redeemed upon settlement of certain deferred compensation liabilities. The real estate investments are not subject to redemption; however, distributions as a result of the liquidation of the underlying assets will be used to settle certain deferred compensation liabilities over time. |
(f) | This category includes the underlying third-party private equity funds within one consolidated BlackRock sponsored private equity fund of funds. The fair values of the investments in the third-party funds have been estimated using capital accounts representing the Companys ownership interest in each fund in the portfolio as well as other performance inputs. These investments are not subject to redemption; however, for certain funds the Company may sell or transfer its interest, which may need approval by the general partner of the underlying third-party funds. Due to the nature of the investments in this category, the Company reduces its investment by distributions that are received through the realization of the underlying assets of the funds. It is estimated that the underlying assets of these funds will be liquidated over a weighted-average period of approximately one year at December 31, 2014 and two years at December 31, 2013. Total remaining unfunded commitments to other third-party funds were not material at both December 31, 2014 and 2013, which commitments are required to be funded by capital contributions from noncontrolling interest holders. |
(g) | At December 31, 2013, this category included consolidated funds of hedge funds that invested in multiple strategies to diversify risks. The fair values of the investments had been estimated using the NAV of the funds ownership interest in partners capital of each fund in the portfolio. Certain of the underlying funds could be redeemed as long as there were no restrictions in place. The underlying funds that were currently restricted from redemptions within one year would become redeemable in approximately 12 to 24 months. This category also included a consolidated offshore feeder fund that invested in a master fund with multiple alternative investment strategies. The fair value of this investment had been estimated using the NAV of the master offshore fund held by the feeder fund. The investment was currently subject to restrictions in place by the underlying master fund. |
F-25
F-26
Non-Consolidated VIEs. At December 31, 2014 and 2013, the Companys carrying value of assets and liabilities pertaining to its variable interests in VIEs and its maximum risk of loss related to VIEs for which it was the sponsor or in which it held a variable interest, but for which it was not the PB, was as follows:
(in millions) | Variable Interests on the Consolidated Statement of Financial Condition |
|||||||||||||||
At December 31, 2014 | Investments | Advisory Fee Receivables |
Other Net Assets (Liabilities) |
Maximum Risk of Loss(1) |
||||||||||||
CDOs/CLOs |
$ | | $ | 2 | $ | (5 | ) | $ | 19 | |||||||
Other sponsored investment funds: |
||||||||||||||||
Collective trusts |
| 191 | | 191 | ||||||||||||
Other |
57 | 177 | (3 | ) | 234 | |||||||||||
Total |
$ | 57 | $ | 370 | $ | (8 | ) | $ | 444 | |||||||
At December 31, 2013 |
||||||||||||||||
CDOs/CLOs |
$ | | $ | 1 | $ | (4 | ) | $ | 18 | |||||||
Other sponsored investment funds: |
||||||||||||||||
Collective trusts |
| 184 | | 184 | ||||||||||||
Other |
37 | 137 | (6 | ) | 174 | |||||||||||
Total |
$ | 37 | $ | 322 | $ | (10 | ) | $ | 376 |
(1) | At December 31, 2014 and 2013, BlackRocks maximum risk of loss associated with these VIEs primarily related to collecting advisory fee receivables and BlackRocks investments. |
F-27
F-28
10. Intangible Assets
Intangible assets at December 31, 2014 and 2013 consisted of the following:
(in millions) | Remaining Weighted- Average Estimated Useful Life |
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
||||||||||||
At December 31, 2014 |
||||||||||||||||
Indefinite-lived intangible assets: |
||||||||||||||||
Management contracts |
N/A | $ | 15,579 | $ | | $ | 15,579 | |||||||||
Trade names / trademarks |
N/A | 1,403 | | 1,403 | ||||||||||||
License |
N/A | 6 | | 6 | ||||||||||||
Total indefinite-lived intangible assets |
16,988 | | 16,988 | |||||||||||||
Finite-lived intangible assets: |
||||||||||||||||
Management contracts |
3.8 | 1,390 | 1,036 | 354 | ||||||||||||
Intellectual property |
3.6 | 6 | 4 | 2 | ||||||||||||
Total finite-lived intangible assets |
3.8 | 1,396 | 1,040 | 356 | ||||||||||||
Total intangible assets |
$ | 18,384 | $ | 1,040 | $ | 17,344 | ||||||||||
At December 31, 2013 |
||||||||||||||||
Indefinite-lived intangible assets: |
||||||||||||||||
Management contracts |
N/A | $ | 15,582 | $ | | $ | 15,582 | |||||||||
Trade names / trademarks |
N/A | 1,403 | | 1,403 | ||||||||||||
License |
N/A | 6 | | 6 | ||||||||||||
Total indefinite-lived intangible assets |
16,991 | | 16,991 | |||||||||||||
Finite-lived intangible assets: |
||||||||||||||||
Management contracts |
4.3 | 1,561 | 1,054 | 507 | ||||||||||||
Intellectual property |
4.6 | 6 | 3 | 3 | ||||||||||||
Total finite-lived intangible assets |
4.3 | 1,567 | 1,057 | 510 | ||||||||||||
Total intangible assets |
$ | 18,558 | $ | 1,057 | $ | 17,501 |
N/A | Not Applicable |
F-29
Long-Term Borrowings
The carrying value and fair value of long-term borrowings estimated using market prices at December 31, 2014 included the following:
(in millions) | Maturity Amount | Unamortized Discount |
Carrying Value | Fair Value | ||||||||||||
1.375% Notes due 2015 |
$ | 750 | $ | | $ | 750 | $ | 753 | ||||||||
6.25% Notes due 2017 |
700 | (1 | ) | 699 | 785 | |||||||||||
5.00% Notes due 2019 |
1,000 | (2 | ) | 998 | 1,134 | |||||||||||
4.25% Notes due 2021 |
750 | (3 | ) | 747 | 825 | |||||||||||
3.375% Notes due 2022 |
750 | (3 | ) | 747 | 783 | |||||||||||
3.50% Notes due 2024 |
1,000 | (3 | ) | 997 | 1,029 | |||||||||||
Total Long-term Borrowings |
$ | 4,950 | $ | (12 | ) | $ | 4,938 | $ | 5,309 |
F-30
F-31
F-32
F-33
F-34
F-35
F-36
Actual | For Capital Adequacy Purposes |
To Be Well Capitalized Under Prompt Corrective Action Provisions |
||||||||||||||||||||||
(in millions) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
December 31, 2014 |
||||||||||||||||||||||||
Total capital (to risk weighted assets) |
$ | 775 | 142.0 | % | $ | 44 | 8.0 | % | $ | 56 | 10.0 | % | ||||||||||||
Tier 1 capital (to risk weighted assets) |
$ | 775 | 142.0 | % | $ | 22 | 4.0 | % | $ | 33 | 6.0 | % | ||||||||||||
Tier 1 capital (to average assets) |
$ | 775 | 72.1 | % | $ | 43 | 4.0 | % | $ | 54 | 5.0 | % | ||||||||||||
December 31, 2013 |
||||||||||||||||||||||||
Total capital (to risk weighted assets) |
$ | 660 | 112.7 | % | $ | 47 | 8.0 | % | $ | 59 | 10.0 | % | ||||||||||||
Tier 1 capital (to risk weighted assets) |
$ | 660 | 112.7 | % | $ | 23 | 4.0 | % | $ | 35 | 6.0 | % | ||||||||||||
Tier 1 capital (to average assets) |
$ | 660 | 63.4 | % | $ | 42 | 4.0 | % | $ | 52 | 5.0 | % |
18. Accumulated Other Comprehensive Income (Loss)
The following table presents changes in AOCI by component for 2014 and 2013:
(in millions) | Unrealized Gains (Losses) on Available-for-sale Investments |
Benefit Plans | Foreign Currency Translation Adjustments |
Total(1) | ||||||||||||
December 31, 2012 |
$ | 16 | $ | (4 | ) | $ | (71 | ) | $ | (59 | ) | |||||
Other comprehensive income (loss) before |
4 | 10 | 23 | 37 | ||||||||||||
Amount reclassified from AOCI(2),(3) |
(13 | ) | | | (13 | ) | ||||||||||
Net other comprehensive income (loss) for 2013 |
(9 | ) | 10 | 23 | 24 | |||||||||||
December 31, 2013 |
$ | 7 | $ | 6 | $ | (48 | ) | $ | (35 | ) | ||||||
Other comprehensive income (loss) before |
3 | (2 | ) | (231 | ) | (230 | ) | |||||||||
Amount reclassified from AOCI(2),(3) |
(8 | ) | | | (8 | ) | ||||||||||
Net other comprehensive income (loss) for 2014 |
(5 | ) | (2 | ) | (231 | ) | (238 | ) | ||||||||
December 31, 2014 |
$ | 2 | $ | 4 | $ | (279 | ) | $ | (273 | ) |
(1) | All amounts are net of tax. |
(2) | The tax benefit (expense) was not material for 2014 and 2013. |
(3) | The pre-tax amount reclassified from AOCI was included in net gain (loss) on investments on the consolidated statements of income. |
F-37
F-38
The Companys common and preferred shares issued and outstanding and related activity consist of the following:
Shares Issued | Shares Outstanding | |||||||||||||||||||||||||||||||
Common Shares |
Escrow Common Shares |
Treasury Common Shares |
Series B Preferred |
Series C Preferred |
Common Shares |
Series B Preferred |
Series C Preferred |
|||||||||||||||||||||||||
December 31, 2011 |
139,880,380 | (3,603 | ) | (1,413,642 | ) | 38,328,737 | 1,517,237 | 138,463,135 | 38,328,737 | 1,517,237 | ||||||||||||||||||||||
Exchange of Series B Preferred for common shares |
31,159,513 | | | (31,159,513 | ) | | 31,159,513 | (31,159,513 | ) | | ||||||||||||||||||||||
Shares repurchased |
(31,516 | ) | | (2,726,600 | ) | (6,346,036 | ) | | (2,758,116 | ) | (6,346,036 | ) | | |||||||||||||||||||
Net issuance of common shares related to employee stock transactions |
247,411 | | 1,763,361 | | | 2,010,772 | | | ||||||||||||||||||||||||
Release of common shares from escrow |
(3,603 | ) | 3,603 | | | | | | | |||||||||||||||||||||||
December 31, 2012 |
171,252,185 | | (2,376,881 | ) | 823,188 | 1,517,237 | 168,875,304 | 823,188 | 1,517,237 | |||||||||||||||||||||||
Shares repurchased |
| | (3,689,845 | ) | | | (3,689,845 | ) | | | ||||||||||||||||||||||
Net issuance of common shares related to employee stock transactions |
| | 1,404,229 | | | 1,404,229 | | | ||||||||||||||||||||||||
PNC LTIP capital contribution |
| | | | (205,350 | ) | | | (205,350 | ) | ||||||||||||||||||||||
December 31, 2013 |
171,252,185 | | (4,662,497 | ) | 823,188 | 1,311,887 | 166,589,688 | 823,188 | 1,311,887 | |||||||||||||||||||||||
Shares repurchased |
| | (3,175,088 | ) | | | (3,175,088 | ) | | | ||||||||||||||||||||||
Net issuance of common shares related to employee stock transactions |
| | 1,372,188 | | | 1,372,188 | | | ||||||||||||||||||||||||
December 31, 2014 |
171,252,185 | | (6,465,397 | ) | 823,188 | 1,311,887 | 164,786,788 | 823,188 | 1,311,887 |
F-39
A reconciliation of income tax expense with expected federal income tax expense computed at the applicable federal income tax rate of 35% is as follows:
(in millions) | 2014 | % | 2013 | % | 2012 | % | ||||||||||||||||||
Statutory income tax expense |
$ | 1,549 | 35 | % | $ | 1,383 | 35 | % | $ | 1,221 | 35 | % | ||||||||||||
Increase (decrease) in income taxes resulting from: |
||||||||||||||||||||||||
State and local taxes (net of federal benefit) |
51 | 1 | 39 | 1 | 49 | 2 | ||||||||||||||||||
Impact of foreign, state, and local tax rate changes on deferred taxes |
(4 | ) | | (69 | ) | (2 | ) | (50 | ) | (2 | ) | |||||||||||||
Effect of foreign tax rates |
(434 | ) | (10 | ) | (329 | ) | (8 | ) | (221 | ) | (5 | ) | ||||||||||||
Other |
(31 | ) | | (2 | ) | | 31 | | ||||||||||||||||
Income tax expense |
$ | 1,131 | 26 | % | $ | 1,022 | 26 | % | $ | 1,030 | 30 | % |
F-40
F-41
F-42
23. Selected Quarterly Financial Data (unaudited)
(in millions, except shares and per share data) | ||||||||||||||||
2014 | 1st Quarter | 2nd Quarter(1),(4) | 3rd Quarter(2),(5) | 4th Quarter(3) | ||||||||||||
Revenue |
$ | 2,670 | $ | 2,778 | $ | 2,849 | $ | 2,784 | ||||||||
Operating income |
$ | 1,051 | $ | 1,122 | $ | 1,157 | $ | 1,144 | ||||||||
Net income |
$ | 744 | $ | 841 | $ | 873 | $ | 806 | ||||||||
Net income attributable to BlackRock |
$ | 756 | $ | 808 | $ | 917 | $ | 813 | ||||||||
Earnings per share attributable to BlackRock, Inc. common stockholders: |
||||||||||||||||
Basic |
$ | 4.47 | $ | 4.79 | $ | 5.46 | $ | 4.86 | ||||||||
Diluted |
$ | 4.40 | $ | 4.72 | $ | 5.37 | $ | 4.77 | ||||||||
Weighted-average common shares outstanding: |
||||||||||||||||
Basic |
169,081,421 | 168,712,221 | 167,933,040 | 167,197,844 | ||||||||||||
Diluted |
171,933,803 | 171,150,153 | 170,778,766 | 170,367,445 | ||||||||||||
Dividend declared per share |
$ | 1.93 | $ | 1.93 | $ | 1.93 | $ | 1.93 | ||||||||
Common stock price per share: |
||||||||||||||||
High |
$ | 323.89 | $ | 319.85 | $ | 336.47 | $ | 364.40 | ||||||||
Low |
$ | 286.39 | $ | 293.71 | $ | 301.10 | $ | 303.91 | ||||||||
Close |
$ | 314.48 | $ | 319.60 | $ | 328.32 | $ | 357.56 |
2013 | ||||||||||||||||
Revenue |
$ | 2,449 | $ | 2,482 | $ | 2,472 | $ | 2,777 | ||||||||
Operating income |
$ | 909 | $ | 849 | $ | 966 | $ | 1,133 | ||||||||
Net income |
$ | 666 | $ | 706 | $ | 729 | $ | 850 | ||||||||
Net income attributable to BlackRock |
$ | 632 | $ | 729 | $ | 730 | $ | 841 | ||||||||
Earnings per share attributable to BlackRock, Inc. common stockholders: |
||||||||||||||||
Basic |
$ | 3.69 | $ | 4.27 | $ | 4.30 | $ | 4.98 | ||||||||
Diluted |
$ | 3.62 | $ | 4.19 | $ | 4.21 | $ | 4.86 | ||||||||
Weighted-average common shares outstanding: |
||||||||||||||||
Basic |
171,301,800 | 170,648,731 | 169,811,633 | 169,010,606 | ||||||||||||
Diluted |
174,561,132 | 173,873,583 | 173,371,508 | 172,999,529 | ||||||||||||
Dividend declared per share |
$ | 1.68 | $ | 1.68 | $ | 1.68 | $ | 1.68 | ||||||||
Common stock price per share: |
||||||||||||||||
High |
$ | 258.70 | $ | 291.69 | $ | 286.62 | $ | 316.47 | ||||||||
Low |
$ | 212.77 | $ | 245.30 | $ | 255.26 | $ | 262.75 | ||||||||
Close |
$ | 256.88 | $ | 256.85 | $ | 270.62 | $ | 316.47 |
(1) | The second quarter of 2014 included a $23 million net noncash tax expense, primarily associated with the revaluation of certain deferred income tax liabilities arising from the state and local tax effect of changes in the Companys organizational structure. In addition, the second quarter of 2014 benefited from an improvement in the geographic mix of earnings and included a $34 million net tax benefit related to several favorable nonrecurring items. |
(2) | The third quarter of 2014 included a $32 million noncash tax benefit, primarily associated with the revaluation of certain deferred income tax liabilities related to intangible assets and goodwill as a result of domestic state and local tax changes. |
In addition, the third quarter of 2014 included a $94 million tax benefit, primarily due to the resolution of certain outstanding tax matters related to the acquisition of BGI. In connection with the acquisition, BlackRock recorded a $50 million indemnification asset for unrecognized tax benefits. Due to the resolution of such tax matters, BlackRock recorded $50 million of general and administration expense to reflect the reduction of the indemnification asset and an offsetting $50 million tax benefit. |
(3) | The fourth quarter of 2014 benefited from $39 million of nonrecurring tax items. |
(4) | In the second quarter of 2013 in connection with the PennyMac IPO the Company recorded a noncash, nonoperating pre-tax gain of $39 million related to the carrying value of its equity method investment. In connection with the Charitable Contribution, the Company recorded an expense of $124 million and a noncash, nonoperating pre-tax gain of $80 million related to the contributed investment. For further information, see Note 11, Other Assets. |
In addition, the second quarter of 2013 included a tax benefit of approximately $57 million recognized in connection with the Charitable Contribution and a tax benefit of approximately $29 million, primarily due to the realization of tax loss carryforwards. |
(5) | The third quarter of 2013 included a $64 million net noncash tax benefit primarily related to the revaluation of certain deferred income tax liabilities, including the effect of legislation enacted in the United Kingdom and domestic state and local income tax changes. |
F-43
As used in this exhibit list, BlackRock refers to BlackRock, Inc. (formerly named New BlackRock, Inc. and previously, New Boise, Inc.) (Commission File No. 001-33099) and Old BlackRock refers to BlackRock Holdco 2, Inc. (formerly named BlackRock, Inc.) (Commission File No. 001-15305), which is the predecessor of BlackRock. The following exhibits are filed as part of this Annual Report on Form 10-K:
EXHIBIT INDEX
Please note that the agreements included as exhibits to this Form 10-K are included to provide information regarding their terms and are not intended to provide any other factual or disclosure information about BlackRock or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement that have been made solely for the benefit of the other parties to the applicable agreement and may not describe the actual state of affairs as of the date they were made or at any other time.
Exhibit No. |
Description | |
3.1(1) | Amended and Restated Certificate of Incorporation of BlackRock. | |
3.2(2) | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of BlackRock, Inc. | |
3.3(3) | Amended and Restated Bylaws of BlackRock. | |
3.4(1) | Certificate of Designations of Series A Convertible Participating Preferred Stock of BlackRock. | |
3.5(4) | Certificate of Designations of Series B Convertible Participating Preferred Stock of BlackRock. | |
3.6(4) | Certificate of Designations of Series C Convertible Participating Preferred Stock of BlackRock. | |
3.7(5) | Certificate of Designations of Series D Convertible Participating Preferred Stock of BlackRock. | |
4.1(6) | Specimen of Common Stock Certificate. | |
4.2(7) | Indenture, dated September 17, 2007, between BlackRock and The Bank of New York, as trustee, relating to senior debt securities. | |
4.3(8) | Form of 6.25% Notes due 2017. | |
4.4(9) | Form of 5.00% Notes due 2019. | |
4.5(10) | Form of 4.25% Notes due 2021. | |
4.6(11) | Form of 1.375% Notes due 2015. | |
4.7(11) | Form of 3.375% Notes due 2022. | |
4.8(12) | Form of 3.500% Notes due 2024. | |
10.1(13) | BlackRock, Inc. Amended and Restated 1999 Stock Award and Incentive Plan. + | |
10.2(14) | Amendment No. 1 to the Amended and Restated BlackRock, Inc. 1999 Stock Award and Incentive Plan. + | |
10.3(14) | Amendment No. 2 to the Amended and Restated BlackRock, Inc. 1999 Stock Award and Incentive Plan. + | |
10.4(15) | Amended and Restated BlackRock, Inc. 1999 Annual Incentive Performance Plan. + | |
10.5(16) | Amendment No. 1 to the BlackRock, Inc. Amended and Restated 1999 Annual Incentive Performance Plan.+ | |
10.6(17) | Form of Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+ | |
10.7(18) | Form of Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units for long-term incentive awards under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+ | |
10.8(1) | Form of Stock Option Agreement expected to be used in connection with future grants of Stock Options under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+ | |
10.9(1) | Form of Restricted Stock Agreement expected to be used in connection with future grants of Restricted Stock under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+ | |
10.10(1) | Form of Directors Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+ | |
10.11(6) | BlackRock, Inc. Voluntary Deferred Compensation Plan, as amended and restated as of January 1, 2005.+ | |
10.12(6) | Registration Rights Agreement, dated as of September 29, 2006, among BlackRock, Merrill Lynch & Co., Inc. and The PNC Financial Service Group, Inc. | |
10.13(18) | Share Surrender Agreement, dated October 10, 2002 (the Share Surrender Agreement), among Old BlackRock, PNC Asset Management, Inc. and The PNC Financial Services Group, Inc.+ | |
10.14(19) | First Amendment, dated as of February 15, 2006, to the Share Surrender Agreement.+ | |
10.15(20) | Second Amendment, dated as of June 11, 2007, to the Share Surrender Agreement.+ | |
10.16(4) | Third Amendment, dated as of February 27, 2009, to the Share Surrender Agreement.+ | |
10.17(21) | Fourth Amendment, dated as of August 7, 2012, to the Share Surrender Agreement.+ |
Exhibit No. |
Description | |
10.18(22) | Five-Year Revolving Credit Agreement, dated as of March 10, 2011, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender and L/C agent, Sumitomo Mitsui Banking Corporation, as Japanese Yen lender, a group of lenders, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Citibank, N.A., as syndication agent and Bank of America, N.A., Barclays Bank PLC, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc., as documentation agents. | |
10.19(23) | Amendment No. 1, dated as of March 30, 2012, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein. | |
10.20(24) | Amendment No. 2, dated as of March 28, 2013, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein. | |
10.21(25) | Amendment No. 3, dated as of March 28, 2014, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein. | |
10.22(26) | Second Amended and Restated Global Distribution Agreement, dated as of November 15, 2010, among BlackRock and Merrill Lynch & Co., Inc. | |
10.23(3) | Amended and Restated Implementation and Stockholder Agreement, dated as of February 27, 2009, between The PNC Financial Services Group, Inc. and BlackRock. | |
10.24(27) | Amendment No. 1, dated as of June 11, 2009, to the Amended and Restated Implementation and Stockholder Agreement between The PNC Financial Services Group, Inc. and BlackRock. | |
10.25(28) | Lease Agreement, dated as of February 17, 2010, among BlackRock Investment Management (UK) Limited and Mourant & Co Trustees Limited and Mourant Property Trustees Limited as Trustees of the Drapers Gardens Unit Trust for the lease of Drapers Gardens, 12 Throgmorton Avenue, London, EC2, United Kingdom. | |
10.26(29) | Letter Agreement, dated February 12, 2013, between Gary S. Shedlin and BlackRock. + | |
10.27 | Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Barclays Capital Inc., dated as of December 23, 2014. | |
10.28 | Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Citigroup Global Markets Inc., dated as of December 23, 2014. | |
10.29 | Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Merrill Lynch, Pierce, Fenner & Smith Incorporated, dated as of January 6, 2015. | |
10.30 | Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Credit Suisse Securities (USA) LLC dated as of January 6, 2015. | |
12.1 | Computation of Ratio of Earnings to Fixed Charges. | |
21.1 | Subsidiaries of Registrant. | |
23.1 | Deloitte & Touche LLP Consent. | |
31.1 | Section 302 Certification of Chief Executive Officer. | |
31.2 | Section 302 Certification of Chief Financial Officer. | |
32.1 | Section 906 Certification of Chief Executive Officer and Chief Financial Officer. | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
(1) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on October 5, 2006. |
(2) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on May 25, 2012. |
(3) | Incorporated by reference to BlackRocks Annual Report on Form 10-K for the year ended December 31, 2012. |
(4) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on February 27, 2009. |
(5) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on December 3, 2009. |
(6) | Incorporated by reference to BlackRocks Registration Statement on Form S-8 (Registration No. 333-137708) filed on September 29, 2006. |
(7) | Incorporated by reference to BlackRocks Annual Report on Form 10-K for the year ended December 31, 2007. |
(8) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on September 17, 2007. |
(9) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on December 10, 2009. |
(10) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on May 25, 2011. |
(11) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on May 31, 2012. |
(12) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on March 18, 2014. |
(13) | Incorporated by reference to BlackRocks Quarterly Report on Form 10-Q for the quarter ended June 30, 2010. |
(14) | Incorporated by reference to BlackRocks Registration Statement on Form S-8 (Registration No. 333-197764) filed on July 31, 2014. |
(15) | Incorporated by reference to Old BlackRocks Annual Report on Form 10-K for the year ended December 31, 2002. |
(16) | Incorporated by reference to Old BlackRocks Current Report on Form 8-K filed on May 24, 2006. |
(17) | Incorporated by reference to BlackRocks Annual Report on Form 10-K for the year ended December 31, 2008. |
(18) | Incorporated by reference to Old BlackRocks Quarterly Report on Form 10-Q for the quarter ended September 30, 2002. |
(19) | Incorporated by reference to Old BlackRocks Current Report on Form 8-K filed on February 22, 2006. |
(20) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on June 15, 2007. |
(21) | Incorporated by reference to BlackRocks Quarterly Report on Form 10-Q for the quarter ended June 30, 2012. |
(22) | Incorporated by reference to BlackRocks Current Report on Form 8-K/A filed on August 24, 2012. |
(23) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on April 4, 2012. |
(24) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on April 3, 2013. |
(25) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on March 28, 2014. |
(26) | Incorporated by reference to BlackRocks Current Report on Form 8-K/A filed on August 24, 2012. |
(27) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on June 17, 2009. |
(28) | Incorporated by reference to BlackRocks Annual Report on Form 10-K for the year ended December 31, 2009. |
(29) | Incorporated by reference to BlackRocks Current Report on Form 8-K filed on February 19, 2013. |
+ | Denotes compensatory plans or arrangements. |
| Confidential treatment has been granted for certain portions of this exhibit, which portions have been omitted and filed separately with the Securities and Exchange Commission. |
Exhibit 10.27
Amended and Restated
Commercial Paper Dealer Agreement
4(a)(2) Program
Between:
BlackRock, Inc., as Issuer
and
Barclays Capital Inc., as Dealer
Concerning Notes to be issued pursuant to an Issuing and Paying Agency Agreement dated as of December 23, 2014 between the Issuer and Citibank, N.A., as Issuing and Paying Agent.
Dated as of December 23, 2014
This agreement (as amended, supplemented or otherwise modified and in effect from time to time, this Agreement), which amends and restates the Commercial Paper Dealer Agreement, dated as of October 14, 2009, sets forth the understandings between the Issuer and the Dealer, each named on the cover page hereof, in connection with the issuance and sale by the Issuer of its short-term promissory notes in substantially the form of Exhibit D hereto (the Notes) through the Dealer.
Certain terms used in this Agreement are defined in Section 6 hereof.
The Addendum to this Agreement, and any Annexes or Exhibits described in this Agreement or such Addendum, are hereby incorporated into this Agreement and made fully a part hereof.
1. | Offers, Sales and Resales of Notes. |
1.1 | While (i) the Issuer has and shall have no obligation to sell the Notes to the Dealer or to permit the Dealer to arrange any sale of the Notes for the account of the Issuer, and (ii) the Dealer has and shall have no obligation to purchase the Notes from the Issuer or to arrange any sale of the Notes for the account of the Issuer, the parties hereto agree that in any case where the Dealer purchases Notes from the Issuer, or arranges for the sale of Notes by the Issuer, such Notes will be purchased or sold by the Dealer in reliance on the representations, warranties, covenants and agreements of the Issuer contained herein or made pursuant hereto and on the terms and conditions and in the manner provided herein. |
1.2 | So long as this Agreement shall remain in effect, and in addition to the limitations contained in Section 1.7 hereof, the Issuer shall not, without the consent of the Dealer, offer, solicit or accept offers to purchase, or sell, any Notes except (a) in transactions with one or more dealers which may from time to time after the date hereof become dealers with respect to the Notes by executing with the Issuer one or more agreements which contain provisions substantially identical to those contained in Section 1 of this Agreement, of which the Issuer hereby undertakes to provide the Dealer prompt notice or (b) in transactions with the other dealers listed on the Addendum hereto, which are executing agreements with the Issuer which contain provisions substantially identical to Section 1 of this Agreement contemporaneously herewith. In no event shall the Issuer offer, solicit or accept offers to purchase, or sell, any Notes directly on its own behalf in transactions with persons other than broker-dealers as specifically permitted in this Section 1.2. |
1.3 | The Notes shall be in a minimum denomination of $250,000 or integral multiples of $1,000 in excess thereof, will bear such interest rates, if interest bearing, or will be sold at such discount from their face amounts, as shall be agreed upon by the Dealer and the Issuer, shall have a maturity not exceeding 397 days from the date of issuance and may have such terms as are specified in Exhibit C hereto or the Private Placement Memorandum, a pricing supplement or as otherwise agreed upon by the applicable purchaser and the Issuer. The Notes shall not contain any provision for extension, renewal or automatic rollover. |
1
1.4 | The authentication and issuance of, and payment for, the Notes shall be effected in accordance with the Issuing and Paying Agency Agreement, and the Notes shall be either individual physical certificates or book-entry notes evidenced by one or more master notes (each, a Master Note) registered in the name of The Depository Trust Company (DTC) or its nominee, in the form or forms annexed hereto as Exhibit D. |
1.5 | If the Issuer and the Dealer shall agree on the terms of the purchase of any Note by the Dealer or the sale of any Note arranged by the Dealer (including, but not limited to, agreement with respect to the date of issue, purchase price, principal amount, maturity and interest rate or interest rate index and margin (in the case of interest-bearing Notes) or discount thereof (in the case of Notes issued on a discount basis), and appropriate compensation for the Dealers services hereunder) pursuant to this Agreement, the Issuer shall cause such Note to be issued and delivered in accordance with the terms of the Issuing and Paying Agency Agreement and payment for such Note shall be made by the purchaser thereof, either directly or through the Dealer, to the Issuing and Paying Agent, for the account of the Issuer. Except as otherwise agreed, in the event that the Dealer is acting as an agent and a purchaser shall either fail to accept delivery of or make payment for a Note on the date fixed for settlement, the Dealer shall promptly notify the Issuer, and if the Dealer has theretofore paid the Issuer for the Note, the Issuer will promptly return such funds to the Dealer against its return of the Note to the Issuer, in the case of a certificated Note, and upon notice of such failure in the case of a book-entry Note. If such failure occurred for any reason other than default by the Dealer, the Issuer shall reimburse the Dealer on an equitable basis for the Dealers loss of the use of such funds for the period such funds were credited to the Issuers account. |
1.6 | The Dealer and the Issuer hereby establish and agree to observe the following procedures in connection with offers, sales and subsequent resales or other transfers of the Notes: |
(a) | Offers and sales of the Notes by or through the Dealer shall be made only to: (i) investors reasonably believed by the Dealer to be Qualified Institutional Buyers or Institutional Accredited Investors and (ii) non-bank fiduciaries or agents that will be purchasing Notes for one or more accounts, each of which is reasonably believed by the Dealer to be an Institutional Accredited Investor. |
(b) | Resales and other transfers of the Notes by the holders thereof shall be made only in accordance with the restrictions in the legend described in clause (e) below. |
(c) | No general solicitation or general advertising shall be used in connection with the offering of the Notes. Without limiting the generality of the foregoing, without the prior written approval of the Dealer (which shall not be unreasonably withheld or delayed), the Issuer shall not issue any press release or place or publish any tombstone or other advertisement relating to the Notes. |
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(d) | No sale of Notes to any one purchaser shall be for less than $250,000 principal or face amount, and no Note shall be issued in a smaller principal or face amount. If the purchaser is a non-bank fiduciary acting on behalf of others, each person for whom such purchaser is acting must purchase at least $250,000 principal or face amount of Notes. |
(e) | Offers and sales of the Notes shall be subject to the restrictions described in the legend appearing on Exhibit A hereto. A legend substantially to the effect of such Exhibit A shall appear as part of the Private Placement Memorandum used in connection with offers and sales of Notes hereunder, as well as on each individual certificate representing a Note and each Master Note representing book-entry Notes offered and sold pursuant to this Agreement. |
(f) | To insure that potential purchasers of Notes have received the then-current Private Placement Memorandum prior to purchasing Notes, the Dealer shall furnish or shall have furnished to each purchaser of Notes for which it has acted as the Dealer a copy of the then-current Private Placement Memorandum unless such purchaser has previously received a copy of the Private Placement Memorandum as then in effect. The Private Placement Memorandum shall expressly state that any person to whom Notes are offered shall have an opportunity to ask questions of, and receive information from, the Issuer and the Dealer and shall provide the names, addresses and telephone numbers of the persons from whom information regarding the Issuer may be obtained. |
(g) | The Issuer agrees, for the benefit of the Dealer and each of the holders and prospective purchasers from time to time of the Notes that, if at any time the Issuer shall not be subject to Section 13 or 15(d) of the Exchange Act, the Issuer will furnish, upon request and at its expense, to the Dealer and to holders and prospective purchasers of Notes information required by Rule 144A(d)(4)(i) in compliance with Rule 144A(d). |
(h) | In the event that any Note offered or to be offered by the Dealer would be ineligible for resale under Rule 144A, the Issuer shall immediately notify the Dealer (by telephone, confirmed in writing) of such fact and shall promptly prepare and deliver to the Dealer an amendment or supplement to the Private Placement Memorandum describing the Notes that are ineligible, the reason for such ineligibility and any other relevant information relating thereto. |
(i) | The Issuer represents that it is not currently issuing commercial paper in the United States market in reliance upon the exemption provided by Section 3(a)(3) of the Securities Act. The Issuer agrees that, if it shall issue commercial paper after the date hereof in reliance upon such exemption (a) the proceeds from the sale of the Notes will be segregated from the proceeds of the sale of any such commercial paper by being placed in a separate account; (b) the Issuer will institute appropriate corporate procedures to ensure that the offers and sales of notes issued by the Issuer pursuant to the Section 3(a)(3) exemption are not integrated with offerings and sales of Notes hereunder; and (c) the Issuer will comply with each of the requirements of Section 3(a)(3) of the Securities Act in selling commercial paper or other short-term debt securities other than the Notes in the United States. |
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1.7 | The Issuer hereby represents and warrants to the Dealer, in connection with offers, sales and resales of Notes by the Issuer, as follows: |
(a) | The Issuer hereby confirms to the Dealer that (except as permitted by Section 1.6(i)) within the preceding six months neither the Issuer nor any person other than the Dealer or the other dealers referred to in Section 1.2 hereof acting on behalf of the Issuer has offered or sold any Notes, or any substantially similar security of the Issuer (including, without limitation, medium-term notes issued by the Issuer), to, or solicited offers to buy any such security from, any person other than the Dealer or the other dealers referred to in Section 1.2 hereof. The Issuer also agrees that (except as permitted by Section 1.6(i)), as long as the Notes are being offered for sale by the Dealer and the other dealers referred to in Section 1.2 hereof as contemplated hereby and until at least six months after the offer of Notes hereunder has been terminated, neither the Issuer nor any person other than the Dealer or the other dealers referred to in Section 1.2 hereof (except as contemplated by Section 1.2 hereof) will offer the Notes or any substantially similar security of the Issuer for sale to, or solicit offers to buy any such security from, any person other than the Dealer or the other dealers referred to in Section 1.2 hereof, it being understood that such agreement is made with a view to bringing the offer and sale of the Notes within the exemption provided by Section 4(a)(2) of the Securities Act and shall survive any termination of this Agreement. The Issuer hereby represents and warrants that it has not taken or omitted to take, and will not take or omit to take, any action that would cause the offering and sale of Notes hereunder to be integrated with any other offering of securities, whether such offering is made by the Issuer or some other party or parties. |
(b) | The Issuer represents and agrees that the proceeds of the sale of the Notes are not currently contemplated to be used for the purpose of buying, carrying or trading securities within the meaning of Regulation T and the interpretations thereunder by the Board of Governors of the Federal Reserve System. In the event that the Issuer determines to use such proceeds for the purpose of buying, carrying or trading securities, whether in connection with an acquisition of another company or otherwise, the Issuer shall give the Dealer at least five business days prior written notice to that effect. The Issuer shall also give the Dealer prompt notice of the actual date that it commences to purchase securities with the proceeds of the Notes. Thereafter, in the event that the Dealer purchases Notes as principal and does not resell such Notes on the day of such purchase, to the extent necessary to comply with Regulation T and the interpretations thereunder, the Dealer will sell such Notes either (i) only to offerees it reasonably believes to be Qualified Institutional Buyers or to Qualified Institutional Buyers it reasonably believes are acting for other Qualified Institutional Buyers, in each case in accordance with Rule 144A or (ii) in a manner which would not cause a violation of Regulation T and the interpretations thereunder. |
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2. | Representations and Warranties of Issuer. |
The Issuer represents and warrants that:
2.1 | The Issuer is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, has the power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted and is duly qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization, except where the failure to be so qualified or in good standing could not be reasonably expected to result in a Material Adverse Effect. The Issuer has all the requisite power and authority to execute, deliver and perform its obligations under the Notes, this Agreement and the Issuing and Paying Agency Agreement. |
2.2 | This Agreement and the Issuing and Paying Agency Agreement have been duly authorized, executed and delivered by the Issuer and constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law). |
2.3 | The Notes have been duly authorized, and when issued as provided in the Issuing and Paying Agency Agreement, will be duly and validly issued and will constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law). |
2.4 | The offer and sale of the Notes by the Issuer in the manner contemplated hereby do not require registration of the Notes under the Securities Act, pursuant to the exemption from registration contained in Section 4(a)(2) thereof, and no indenture in respect of the Notes is required to be qualified under the Trust Indenture Act of 1939, as amended. |
2.5 | The Notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness of the Issuer. |
2.6 | No consent or action of, or filing or registration with, any governmental or public regulatory body or authority, including the SEC, is required to authorize, or is otherwise required in connection with the execution, delivery or performance of, this Agreement, the Notes or the Issuing and Paying Agency Agreement, except as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes. |
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2.7 | The execution, delivery and performance by the Issuer of this Agreement and the Issuing and Paying Agency Agreement, and the issuance of the Notes in accordance with the Issuing and Paying Agency Agreement, each in accordance with its respective terms, and the transactions contemplated hereby and thereby do not and will not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental Approval relating to the Issuer where the failure to obtain such Governmental Approval could reasonably be expected to have a Material Adverse Effect, (ii) violate any Applicable Law relating to the Issuer except where such violation could not reasonably be expected to have a Material Adverse Effect, (iii) conflict with, result in a breach of or constitute a default under the articles of incorporation or bylaws of the Issuer, (iv) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which the Issuer is a party or by which any of its properties may be bound or any Governmental Approval relating to the Issuer, which could reasonably be expected to have a Material Adverse Effect, (v) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Issuer or (vi) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement, the Notes or the Issuing and Paying Agency Agreement other than consents, authorizations, filings or other acts or consents which have been obtained or made and are in full force and effect or for which the failure to obtain or make could not reasonably be expected to have a Material Adverse Effect. |
2.8 | Except for matters disclosed in any filings made by the Issuer with the SEC, there are no actions, suits or proceedings pending nor, to the knowledge of the Issuer, threatened against or in any other way relating adversely to or affecting the Issuer or any of its properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that has had or could reasonably be expected to have a Material Adverse Effect. |
2.9 | The Issuer is not an investment company within the meaning of the Investment Company Act of 1940, as amended. |
2.10 | Neither the Private Placement Memorandum nor the Company Information contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. |
2.11 | Each (a) issuance of Notes by the Issuer hereunder and (b) amendment or supplement of the Private Placement Memorandum shall be deemed a representation and warranty by the Issuer to the Dealer, as of the date thereof, that, both before and after giving effect to such issuance and after giving effect to such amendment or supplement, (i) the representations and warranties given by the Issuer set forth in this Section 2 remain true and correct on and as of such date as if made on and as of such date, (ii) in the case of an issuance of Notes, the Notes being issued on such date have been duly and validly issued and constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in |
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accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law), (iii) in the case of an issuance of Notes, since the date of the most recent Private Placement Memorandum, there has been no material adverse change in the financial condition or operations of the Issuer which, if not publicly available, has not been disclosed to the Dealer in writing and (iv) the Issuer is not in default under any of its obligations hereunder, under the Issuing and Paying Agency Agreement or the Notes that is reasonably likely to result in a Material Adverse Effect. |
3. | Covenants and Agreements of Issuer. |
The Issuer covenants and agrees that:
3.1 | The Issuer will give the Dealer prompt notice (but in any event prior to any subsequent issuance of Notes hereunder) of any amendment to, modification of or waiver with respect to, the Notes or the Issuing and Paying Agency Agreement, including a complete copy of any such amendment, modification or waiver. |
3.2 | The Issuer shall, whenever there shall occur any change, development or occurrence in relation to the Issuer that would have a Material Adverse Effect (including any receipt by the Issuer, from any nationally recognized statistical rating organization that has provided a rating to the Notes, of any notice of a downgrading in such rating that is publicly available), promptly, and in any event prior to any subsequent issuance of Notes hereunder, notify the Dealer (by telephone, confirmed in writing) of such change, development or occurrence. |
3.3 | The Issuer shall from time to time furnish to the Dealer such non-public information as the Dealer may reasonably request, regarding (i) the Issuers operations and financial condition, (ii) the due authorization and execution of the Notes and (iii) the Issuers ability to pay the Notes as they mature; provided that the disclosure of such information shall not be reasonably likely to cause the Issuer to be in violation of any Applicable Law or otherwise violate the terms of any confidentiality agreement to which the Issuer is subject. |
3.4 | The Issuer will take all such action as the Dealer may reasonably request to ensure that each offer and each sale of the Notes will comply with any applicable state Blue Sky laws; provided, however, that the Issuer shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified or subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. |
3.5 | The Issuer will not be in default of any of its obligations hereunder, under the Notes or under the Issuing and Paying Agency Agreement, at any time that any of the Notes are outstanding. |
3.6 | The Issuer shall not issue Notes hereunder until the Dealer shall have received (a) one or more opinions of counsel to the Issuer, addressed to the Dealer, |
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satisfactory in form and substance to the Dealer, (b) a copy of the executed Issuing and Paying Agency Agreement as then in effect, (c) a copy of resolutions adopted by the Board of Directors of the Issuer, satisfactory in form and substance to the Dealer and certified by the Secretary or similar officer of the Issuer, authorizing execution and delivery by the Issuer of this Agreement, the Issuing and Paying Agency Agreement and the Notes and consummation by the Issuer of the transactions contemplated hereby and thereby, (d) prior to the issuance of any book-entry Notes represented by a master note registered in the name of DTC or its nominee, a copy of the executed Letter of Representations among the Issuer, the Issuing and Paying Agent and DTC and of the executed master note, (e) prior to the issuance of any Notes in physical form, a copy of such form (unless attached to this Agreement or the Issuing and Paying Agency Agreement), (f) confirmation of the then current ratings assigned to the Notes by each nationally recognized statistical rating organization then rating the Notes and (g) such other certificates, opinions, letters and documents as the Dealer shall have reasonably requested. |
3.7 | The Issuer shall reimburse the Dealer for all of the Dealers reasonable out-of-pocket expenses related to this Agreement, including reasonable expenses incurred in connection with its preparation and negotiation, and the transactions contemplated hereby (including, but not limited to, the printing and distribution of the Private Placement Memorandum), and, if applicable, for the reasonable fees and out-of-pocket expenses of the Dealers counsel. |
4. | Disclosure. |
4.1 | The Private Placement Memorandum and its contents (other than the Dealer Information) shall be the sole responsibility of the Issuer. The Private Placement Memorandum shall contain a statement expressly offering an opportunity for each prospective purchaser to ask questions of, and receive answers from, the Issuer concerning the offering of Notes and to obtain relevant additional information which the Issuer possesses or can acquire without unreasonable effort or expense. | |||
4.2 | The Issuer agrees to promptly furnish the Dealer the Company Information as it becomes available. | |||
4.3 | (a) | The Issuer further agrees to notify the Dealer promptly upon the occurrence of any event relating to or affecting the Issuer that would cause the Company Information then in existence to include an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they are made, not misleading. | ||
(b) | In the event that the Issuer gives the Dealer notice pursuant to Section 4.3(a) and the Dealer notifies the Issuer that it then has Notes it is holding in inventory, (i) the Issuer agrees promptly to supplement or amend the Private Placement Memorandum so that the Private Placement Memorandum, as amended or supplemented, shall not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not |
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misleading, and the Issuer shall make such supplement or amendment available to the Dealer prior to any further sale or resale of Notes or (ii) the Issuer shall repurchase any such Note held in inventory at a price equal to the face amount thereof discounted on a ratable basis based on the Issuers market rate reflecting the remaining period to maturity in relation to the original term. | ||||
(c) | In the event that (i) the Issuer gives the Dealer notice pursuant to Section 4.3(a), (ii) the Dealer does not notify the Issuer that it is then holding Notes in inventory and (iii) the Issuer chooses not to promptly amend or supplement the Private Placement Memorandum in the manner described in clause (b) above, then all solicitations and sales of Notes shall be suspended until such time as the Issuer has so amended or supplemented the Private Placement Memorandum, and made such amendment or supplement available to the Dealer. | |||
(d) | Without limiting the generality of Section 4.3(a), the Issuer shall review, amend and supplement the Private Placement Memorandum on a periodic basis, but no less than at least once annually, to incorporate current financial information of the Issuer to the extent necessary to ensure that the information provided in the Private Placement Memorandum is accurate and complete. |
5. | Indemnification and Contribution. |
5.1 | The Issuer will indemnify and hold harmless the Dealer, each individual, corporation, partnership, trust, association or other entity controlling the Dealer, any affiliate of the Dealer or any such controlling entity and their respective directors, officers, employees, partners, incorporators, shareholders, servants, trustees and agents (hereinafter the Indemnitees) against any and all liabilities, penalties, suits, causes of action, losses, damages, claims, costs and expenses (including, without limitation, fees and disbursements of counsel) or judgments of whatever kind or nature (each a Claim), imposed upon, incurred by or asserted against the Indemnitees arising out of or based upon (i) any allegation that the Private Placement Memorandum, the Company Information or any information provided by the Issuer to the Dealer included (as of any relevant time) or includes an untrue statement of a material fact or omitted (as of any relevant time) or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (ii) arising out of or based upon the breach by the Issuer of any agreement, covenant or representation made in or pursuant to this Agreement. This indemnification shall not apply to the extent that the Claim arises out of or is based upon Dealer Information or is determined to have resulted from an Indemnitees gross negligence or willful misconduct. |
5.2 | Provisions relating to claims made for indemnification under this Section 5 are set forth on Exhibit B to this Agreement. |
5.3 | In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in this Section 5 is held to be unavailable or insufficient to hold harmless the Indemnitees, although applicable in accordance with the terms of this Section 5, the Issuer shall contribute to the aggregate costs |
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incurred by the Dealer in connection with any Claim in the proportion of the respective economic interests of the Issuer and the Dealer; provided, however, that such contribution by the Issuer shall be in an amount such that the aggregate costs incurred by the Dealer do not exceed the aggregate of the commissions and fees earned by the Dealer hereunder with respect to the issue or issues of Notes to which such Claim relates. The respective economic interests shall be calculated by reference to the aggregate proceeds to the Issuer of the Notes issued hereunder and the aggregate commissions and fees earned by the Dealer hereunder. |
6. | Definitions. |
6.1 | Claim shall have the meaning set forth in Section 5.1. |
6.2 | Company Information at any given time shall mean the Private Placement Memorandum and information incorporated by reference therein together with, to the extent applicable, (i) the Issuers most recent report on Form 10-K filed with the SEC and each report on Form 10-Q or 8-K filed by the Issuer with the SEC since the most recent Form 10-K, (ii) the Issuers most recent annual audited financial statements and each interim financial statement or report prepared subsequent thereto, if not included in item (i) above, (iii) the Issuers and its affiliates other publicly available recent reports, including, but not limited to, any publicly available filings or reports provided to their respective shareholders, (iv) any other information or disclosure prepared pursuant to Section 4.3 hereof and (v) any information prepared or approved by the Issuer for dissemination to investors or potential investors in the Notes. |
6.3 | Dealer Information shall mean material concerning the Dealer provided by the Dealer in writing expressly for inclusion in the Private Placement Memorandum. |
6.4 | Exchange Act shall mean the U.S. Securities Exchange Act of 1934, as amended. |
6.5 | Governmental Approval shall mean all authorizations, consents, approvals, permits, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities. |
6.6 | Governmental Authority shall mean the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank). |
6.7 | Indemnitee shall have the meaning set forth in Section 5.1. |
6.8 | Institutional Accredited Investor shall mean an institutional investor that is an accredited investor within the meaning of Rule 501 under the Securities Act and that has such knowledge and experience in financial and business matters that it is capable of evaluating and bearing the economic risk of an investment in the Notes, including, but not limited to, a bank, as defined in Section 3(a)(2) of the Securities Act, or a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity. |
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6.9 | Issuing and Paying Agency Agreement shall mean the issuing and paying agency agreement described on the cover page of this Agreement, as such agreement may be amended or supplemented from time to time. |
6.10 | Issuing and Paying Agent shall mean the party designated as such on the cover page of this Agreement, as issuing and paying agent under the Issuing and Paying Agency Agreement, or any successor thereto in accordance with the Issuing and Paying Agency Agreement. |
6.11 | Material Adverse Effect shall mean a material adverse effect on (a) the business, operations or financial condition of the Issuer and its subsidiaries taken as a whole or (b) the ability of the Issuer to perform its obligations under this Agreement, the Notes and the Issuing and Paying Agency Agreement. |
6.12 | Non-bank fiduciary or agent shall mean a fiduciary or agent other than (a) a bank, as defined in Section 3(a)(2) of the Securities Act, or (b) a savings and loan association, as defined in Section 3(a)(5)(A) of the Securities Act. |
6.13 | Person shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity. |
6.14 | Private Placement Memorandum shall mean offering materials prepared in accordance with Section 4 (including materials referred to therein or incorporated by reference therein, if any) provided to purchasers and prospective purchasers of the Notes, and shall include amendments and supplements thereto which may be prepared from time to time in accordance with this Agreement (other than any amendment or supplement that has been completely superseded by a later amendment or supplement). |
6.15 | Qualified Institutional Buyer shall have the meaning assigned to that term in Rule 144A under the Securities Act. |
6.16 | Rule 144A shall mean Rule 144A under the Securities Act. |
6.17 | SEC shall mean the U.S. Securities and Exchange Commission. |
6.18 | Securities Act shall mean the U.S. Securities Act of 1933, as amended. |
7. | General |
7.1 | Unless otherwise expressly provided herein, all notices under this Agreement to parties hereto shall be in writing and shall be effective when received at the address of the respective party set forth in the Addendum to this Agreement. |
7.2 | This Agreement shall be governed by and construed in accordance with the laws of the State of New York. |
7.3 | The Issuer agrees that any suit, action or proceeding brought by the Issuer against the Dealer in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes shall be brought solely in the United States federal |
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courts located in the Borough of Manhattan or the courts of the State of New York located in the Borough of Manhattan. EACH OF THE DEALER AND THE ISSUER WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. |
7.4 | This Agreement may be terminated, at any time, by the Issuer, upon one business days prior notice to such effect to the Dealer, or by the Dealer upon one business days prior notice to such effect to the Issuer. Any such termination, however, shall not affect the obligations of the Issuer under Sections 3.7, 5 and 7.3 hereof or the respective representations, warranties, agreements, covenants, rights or responsibilities of the parties made or arising prior to the termination of this Agreement. |
7.5 | This Agreement is not assignable by either party hereto without the written consent of the other party; provided, however, with reasonably prompt notice to the Issuer, the Dealer may assign its rights and obligations under this Agreement to any affiliate of the Dealer. |
7.6 | This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. |
7.7 | This Agreement is for the exclusive benefit of the parties hereto, and their respective permitted successors and assigns hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. |
7.8 | The parties hereto agree that the Issuer may, in accordance with the terms of this Section 7.8, from time to time replace the party which is then acting as Issuing and Paying Agent (the Current Issuing and Paying Agent) with another party (such other party, the Replacement Issuing and Paying Agent), and enter into an agreement with the Replacement Issuing and Paying Agent covering the provision of issuing and paying agency functions in respect of the Notes by the Replacement Issuing and Paying Agent (the Replacement Issuing and Paying Agency Agreement) (any such replacement, a Replacement). |
Notwithstanding anything to the contrary herein, including without limitation Sections 6.9 and 6.10 hereof, from and after the effective date of any Replacement, except to the extent that the Issuing and Paying Agency Agreement provides that the Current Issuing and Paying Agent will continue to act in respect of Notes outstanding as of the effective date of such Replacement, the Issuing and Paying Agent for the Notes shall be deemed to be the Replacement Issuing and Paying Agent, all references to the Issuing and Paying Agent hereunder shall be deemed to refer to the Replacement Issuing and Paying Agent, and all references to the Issuing and Paying Agency Agreement hereunder shall be deemed to refer to the Replacement Issuing and Paying Agency Agreement.
From and after the effective date of any Replacement, the Issuer shall not issue any Notes hereunder unless and until the Dealer shall have received: (i) a copy of the executed Replacement Issuing and Paying Agency Agreement, (ii) a copy of
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the executed Letter of Representations among the Issuer, the Replacement Issuing and Paying Agent and DTC, (iii) a copy of the executed Master Note authenticated by the Replacement Issuing and Paying Agent and registered in the name of DTC or its nominee, (iv) an amendment or supplement to the Private Placement Memorandum describing the Replacement Issuing and Paying Agent as the Issuing and Paying Agent for the Notes, and reflecting any other changes thereto necessary in light of the Replacement so that the Private Placement Memorandum, as amended or supplemented, satisfies the requirements of this Agreement, and (v) a legal opinion of counsel to the Issuer, addressed to the Dealer, satisfactory in form and substance reasonably satisfactory to the Dealer, as to (a) the due authorization, delivery, validity and enforceability of Notes issued pursuant to the Replacement Issuing and Paying Agency Agreement, and (b) such other matters as the Dealer may reasonably request.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.
BLACKROCK, INC., as Issuer | BARCLAYS CAPITAL INC., as Dealer | |||||||
By: | /s/ Philippe Matsumoto |
By: | /s/ Christopher R. Conetta | |||||
Name: | Philippe Matsumoto | Name: | Christopher R. Conetta | |||||
Title: | Treasurer and Managing Director | Title: | Managing Director |
Amended and Restated
Commercial Paper Dealer Agreement
Addendum
The following additional clauses shall apply to the Agreement and be deemed a part thereof.
1. | The other dealers referred to in clause (b) of Section 1.2 of the Agreement are Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated. |
2. | The addresses of the respective parties for purposes of notices under Section 7.1 are as follows: |
For the Issuer:
Address: 40 East 52nd Street, New York, New York 10022
Attention: Philippe Matsumoto
Email address: Philippe.Matsumoto@blackrock.com
Telephone number: (212) 810-3767
Fax number: (212) 810-3144
with a copy to
Attention: Armando Gochuico
Email address: Armando.Gochuico@blackrock.com
Fax number: 212-810-3144
For the Dealer:
Address: 745 Seventh Avenue, 4th Floor, New York, NY 10019
Attention: Commercial Paper Product Management
Telephone number: (212) 412-2112
Fax number: (212) 520-0593
2
Exhibit A
Form of Legend for Private Placement Memorandum and Notes
THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERS AND SALES THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER WILL BE DEEMED TO REPRESENT THAT (I) IT HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER AND THE NOTES, (II) IT IS NOT ACQUIRING SUCH NOTE WITH A VIEW TO ANY DISTRIBUTION THEREOF AND (III) IT IS EITHER (A) AN INSTITUTIONAL INVESTOR THAT IS (1) AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a) UNDER THE ACT (AN INSTITUTIONAL ACCREDITED INVESTOR) AND (2) PURCHASING NOTES FOR (i) ITS OWN ACCOUNT, (ii) A BANK (AS DEFINED IN SECTION 3(a)(2) OF THE ACT) OR A SAVINGS AND LOAN ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A) OF THE ACT) ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY OR (iii) A FIDUCIARY OR AGENT (OTHER THAN A U.S. BANK OR SAVINGS AND LOAN ASSOCIATION) PURCHASING NOTES FOR ONE OR MORE ACCOUNTS EACH OF WHICH ACCOUNTS IS SUCH AN INSTITUTIONAL ACCREDITED INVESTOR; OR (B) A QUALIFIED INSTITUTIONAL BUYER (QIB) WITHIN THE MEANING OF RULE 144A UNDER THE ACT THAT IS ACQUIRING NOTES FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH ACCOUNTS IS A QIB; AND THE PURCHASER ACKNOWLEDGES THAT IT IS AWARE THAT THE SELLER MAY RELY UPON THE EXEMPTION FROM THE REGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE 144A. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER THEREOF SHALL ALSO BE DEEMED TO AGREE THAT ANY RESALE OR OTHER TRANSFER THEREOF WILL BE MADE ONLY (A) IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (1) TO THE ISSUER OR TO A PLACEMENT AGENT DESIGNATED BY THE ISSUER AS A PLACEMENT AGENT FOR THE NOTES (COLLECTIVELY, THE PLACEMENT AGENTS), NONE OF WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2) THROUGH A PLACEMENT AGENT TO AN INSTITUTIONAL ACCREDITED INVESTOR OR A QIB, OR (3) TO A QIB IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF RULE 144A AND (B) IN MINIMUM AMOUNTS OF $250,000.
Ex. A-1
Exhibit B
Further Provisions Relating to Indemnification
(a) | The Issuer agrees to reimburse each Indemnitee for all expenses (including reasonable fees and disbursements of internal and external counsel) as they are incurred by it in connection with investigating or defending any loss, claim, damage, liability or action in respect of which indemnification may be sought under Section 5 of the Agreement (whether or not it is a party to any such proceedings). |
(b) | Promptly after receipt by an Indemnitee of notice of the existence of a Claim, such Indemnitee will, if a claim in respect thereof is to be made against the Issuer, notify the Issuer in writing of the existence thereof; provided that (i) the omission so to notify the Issuer will not relieve the Issuer from any liability which it may have hereunder unless and except to the extent it did not otherwise learn of such Claim and such failure results in the forfeiture by the Issuer of substantial rights and defenses, and (ii) the omission so to notify the Issuer will not relieve it from liability which it may have to an Indemnitee otherwise than on account of this indemnity agreement. In case any such Claim is made against any Indemnitee and it notifies the Issuer of the existence thereof, the Issuer will be entitled to participate therein, and to the extent that it may elect by written notice delivered to the Indemnitee, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnitee; provided that if the defendants in any such Claim include both the Indemnitee and the Issuer, and the Indemnitee shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Issuer, the Issuer shall not have the right to direct the defense of such Claim on behalf of such Indemnitee, and the Indemnitee shall have the right to select separate counsel to assert such legal defenses on behalf of such Indemnitee. Upon receipt of notice from the Issuer to such Indemnitee of the Issuers election so to assume the defense of such Claim and approval by the Indemnitee of counsel, the Issuer will not be liable to such Indemnitee for expenses incurred thereafter by the Indemnitee in connection with the defense thereof (other than reasonable costs of investigation) unless (i) the Indemnitee shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the Issuer shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel in the jurisdiction in which any Claim is brought), approved by the Dealer, representing the Indemnitee who is party to such Claim), (ii) the Issuer shall not have employed counsel reasonably satisfactory to the Indemnitee to represent the Indemnitee within a reasonable time after notice of existence of the Claim or (iii) the Issuer has authorized in writing the employment of counsel for the Indemnitee. The indemnity, reimbursement and contribution obligations of the Issuer hereunder shall be in addition to any other liability the Issuer may otherwise have to an Indemnitee and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Issuer and any Indemnitee. The Issuer agrees that without the Dealers prior written consent, it will not settle, compromise or consent to the entry of any judgment in any Claim in respect of which indemnification may be sought under the indemnification provision of the Agreement (whether or not the Dealer |
Ex. B-1
or any other Indemnitee is an actual or potential party to such Claim), unless such settlement, compromise or consent (i) includes an unconditional release of each Indemnitee from all liability arising out of such Claim and (ii) does not include a statement as to or an admission of fault, culpability or failure to act, by or on behalf of any Indemnitee. |
Ex. B-2
Exhibit C
Statement of Terms for Interest Bearing Commercial Paper Notes of [Name of Issuer]
THE PROVISIONS SET FORTH BELOW ARE QUALIFIED TO THE EXTENT APPLICABLE BY THE TRANSACTION SPECIFIC [PRICING] [PRIVATE PLACEMENT MEMORANDUM] SUPPLEMENT (THE SUPPLEMENT) (IF ANY) SENT TO EACH PURCHASER AT THE TIME OF THE TRANSACTION.
1. General. (a) The obligations of the Issuer to which these terms apply (each a Note) are represented by one or more Master Notes (each, a Master Note) issued in the name of (or of a nominee for) The Depository Trust Company (DTC), which Master Note includes the terms and provisions for the Issuers Interest-Bearing Commercial Paper Notes that are set forth in this Statement of Terms, since this Statement of Terms constitutes an integral part of the Underlying Records as defined and referred to in the Master Note.
(b) Business Day means any day other than a Saturday or Sunday that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, executive order or regulation to be closed in New York City and, with respect to LIBOR Notes (as defined below) is also a London Business Day. London Business Day means, a day, other than a Saturday or Sunday, on which dealings in deposits in U.S. dollars are transacted in the London interbank market.
2. Interest. (a) Each Note will bear interest at a fixed rate (a Fixed Rate Note) or at a floating rate (a Floating Rate Note).
(b) The Supplement sent to each holder of such Note will describe the following terms: (i) whether such Note is a Fixed Rate Note or a Floating Rate Note and whether such Note is an Original Issue Discount Note (as defined below); (ii) the date on which such Note will be issued (the Issue Date); (iii) the Stated Maturity Date (as defined below); (iv) if such Note is a Fixed Rate Note, the rate per annum at which such Note will bear interest, if any, and the Interest Payment Dates; (v) if such Note is a Floating Rate Note, the Base Rate, the Index Maturity, the Interest Reset Dates, the Interest Payment Dates and the Spread and/or Spread Multiplier, if any (all as defined below), and any other terms relating to the particular method of calculating the interest rate for such Note; and (vi) any other terms applicable specifically to such Note. Original Issue Discount Note means a Note which has a stated redemption price at the Stated Maturity Date that exceeds its Issue Price by more than a specified de minimis amount and which the Supplement indicates will be an Original Issue Discount Note.
(c) Each Fixed Rate Note will bear interest from its Issue Date at the rate per annum specified in the Supplement until the principal amount thereof is paid or made available for payment. Interest on each Fixed Rate Note will be payable on the dates specified in the Supplement (each an Interest Payment Date for a Fixed Rate Note) and on the Maturity Date (as defined below). Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-day months.
If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be payable on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Ex. C-1
(d) The interest rate on each Floating Rate Note for each Interest Reset Period (as defined below) will be determined by reference to an interest rate basis (a Base Rate) plus or minus a number of basis points (one basis point equals one-hundredth of a percentage point) (the Spread), if any, and/or multiplied by a certain percentage (the Spread Multiplier), if any, until the principal thereof is paid or made available for payment. The Supplement will designate which of the following Base Rates is applicable to the related Floating Rate Note: (a) the CD Rate (a CD Rate Note), (b) the Commercial Paper Rate (a Commercial Paper Rate Note), (c) the Federal Funds Rate (a Federal Funds Rate Note), (d) LIBOR (a LIBOR Note), (e) the Prime Rate (a Prime Rate Note), (f) the Treasury Rate (a Treasury Rate Note) or (g) such other Base Rate as may be specified in such Supplement.
The rate of interest on each Floating Rate Note will be reset daily, weekly, monthly, quarterly or semi-annually (the Interest Reset Period). The date or dates on which interest will be reset (each an Interest Reset Date) will be, unless otherwise specified in the Supplement, in the case of Floating Rate Notes which reset daily, each Business Day, in the case of Floating Rate Notes (other than Treasury Rate Notes) that reset weekly, the Wednesday of each week; in the case of Treasury Rate Notes that reset weekly, the Tuesday of each week; in the case of Floating Rate Notes that reset monthly, the third Wednesday of each month; in the case of Floating Rate Notes that reset quarterly, the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes that reset semiannually, the third Wednesday of the two months specified in the Supplement. If any Interest Reset Date for any Floating Rate Note is not a Business Day, such Interest Reset Date will be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Interest on each Floating Rate Note will be payable monthly, quarterly or semiannually (the Interest Payment Period) and on the Maturity Date. Unless otherwise specified in the Supplement, and except as provided below, the date or dates on which interest will be payable (each an Interest Payment Date for a Floating Rate Note) will be, in the case of Floating Rate Notes with a monthly Interest Payment Period, on the third Wednesday of each month; in the case of Floating Rate Notes with a quarterly Interest Payment Period, on the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes with a semiannual Interest Payment Period, on the third Wednesday of the two months specified in the Supplement. In addition, the Maturity Date will also be an Interest Payment Date.
If any Interest Payment Date for any Floating Rate Note (other than an Interest Payment Date occurring on the Maturity Date) would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. If the Maturity Date of a Floating Rate Note falls on a day that is not a Business Day, the payment of principal and interest will be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after such maturity.
Ex. C-2
Interest payments on each Interest Payment Date for Floating Rate Notes will include accrued interest from and including the Issue Date or from and including the last date in respect of which interest has been paid, as the case may be, to, but excluding, such Interest Payment Date. On the Maturity Date, the interest payable on a Floating Rate Note will include interest accrued to, but excluding, the Maturity Date. Accrued interest will be calculated by multiplying the principal amount of a Floating Rate Note by an accrued interest factor. This accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal) for each such day will be computed by dividing the interest rate applicable to such day by 360, in the cases where the Base Rate is the CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR or Prime Rate, or by the actual number of days in the year, in the case where the Base Rate is the Treasury Rate. The interest rate in effect on each day will be (i) if such day is an Interest Reset Date, the interest rate with respect to the Interest Determination Date (as defined below) pertaining to such Interest Reset Date, or (ii) if such day is not an Interest Reset Date, the interest rate with respect to the Interest Determination Date pertaining to the next preceding Interest Reset Date, subject in either case to any adjustment by a Spread and/or a Spread Multiplier.
The Interest Determination Date where the Base Rate is the CD Rate or the Commercial Paper Rate will be the second Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Federal Funds Rate or the Prime Rate will be the Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is LIBOR will be the second London Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Treasury Rate will be the day of the week in which such Interest Reset Date falls when Treasury Bills are normally auctioned. Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is held on the following Tuesday or the preceding Friday. If an auction is so held on the preceding Friday, such Friday will be the Interest Determination Date pertaining to the Interest Reset Date occurring in the next succeeding week.
The Index Maturity is the period to maturity of the instrument or obligation from which the applicable Base Rate is calculated.
The Calculation Date, where applicable, shall be the earlier of (i) the tenth calendar day following the applicable Interest Determination Date or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity Date.
All times referred to herein reflect New York City time, unless otherwise specified.
The Issuer shall specify in writing to the Issuing and Paying Agent which party will be the calculation agent (the Calculation Agent) with respect to the Floating Rate Notes. The Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate which will become effective on the next Interest Reset Date with respect to such Floating Rate Note to the Issuing and Paying Agent as soon as the interest rate with respect to such Floating Rate Note has been determined and as soon as practicable after any change in such interest rate.
Ex. C-3
All percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five-one millionths of a percentage point rounded upwards. For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655). All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded, in the case of U.S. dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with one-half cent or unit being rounded upwards).
CD Rate Notes
CD Rate means the rate on any Interest Determination Date for negotiable U.S. dollar certificates of deposit having the Index Maturity as published in the source specified in the Supplement.
If the above rate is not published by 3:00 p.m., New York City time, on the Calculation Date, the CD Rate will be the rate on such Interest Determination Date published under the caption specified in the Supplement in another recognized electronic source used for the purpose of displaying the applicable rate.
If such rate is not published in either the source specified on the Supplement or another recognized electronic source by 3:00 p.m., New York City time, on the Calculation Date, the Calculation Agent will determine the CD Rate to be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such Interest Determination Date of three leading nonbank dealers1 in negotiable U.S. dollar certificates of deposit in New York City selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing in the market for negotiable certificates of deposit with a remaining maturity closest to the Index Maturity in the denomination of $5,000,000.
If fewer than the three dealers selected by the Calculation Agent are quoting as set forth above, the CD Rate will remain the CD Rate then in effect on such Interest Determination Date.
Commercial Paper Rate Notes
Commercial Paper Rate means the Money Market Yield (calculated as described below) of the rate on any Interest Determination Date for commercial paper having the Index Maturity, as published by the Board of Governors of the Federal Reserve System (FRB) in Statistical Release H.15(519), Selected Interest Rates or any successor publication of the FRB (H.15(519)) under the heading Commercial Paper-[Financial][Nonfinancial].
If the above rate is not published in H.15(519) by 3:00 p.m., New York City time, on the Calculation Date, then the Commercial Paper Rate will be the Money Market Yield of the rate on such Interest Determination Date for commercial paper of the Index Maturity published in the daily update of H.15(519), available through the world wide website of the FRB at http://www.federalreserve.gov/releases/h15/Update, or any successor site or publication or other recognized electronic source used for the purpose of displaying the applicable rate (H.15 Daily Update) under the heading Commercial Paper-[Financial][Nonfinancial].
1 | Such nonbank dealers referred to in this Statement of Terms may include affiliates of the Dealer. |
Ex. C-4
If by 3:00 p.m. on such Calculation Date such rate is not published in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Commercial Paper Rate to be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m. on such Interest Determination Date of three leading dealers of U.S. dollar commercial paper in New York City selected by the Calculation Agent for commercial paper of the Index Maturity placed for an industrial issuer whose bond rating is AA, or the equivalent, from a nationally recognized statistical rating organization.
If the dealers selected by the Calculation Agent are not quoting as mentioned above, the Commercial Paper Rate with respect to such Interest Determination Date will remain the Commercial Paper Rate then in effect on such Interest Determination Date.
Money Market Yield will be a yield calculated in accordance with the following formula:
D x 360 |
x 100
|
|||||
Money Market Yield = |
|
|||||
360 - (D x M) |
where D refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and M refers to the actual number of days in the interest period for which interest is being calculated.
Federal Funds Rate Notes
Federal Funds Rate means the rate on any Interest Determination Date for federal funds as published in H.15(519) under the heading Federal Funds (Effective) and displayed on Reuters Page (as defined below) FEDFUNDS1 (or any other page as may replace the specified page on that service) (Reuters Page FEDFUNDS1) under the heading EFFECT.
If the above rate does not appear on Reuters Page FEDFUNDS1or is not so published by 3:00 p.m. on the Calculation Date, the Federal Funds Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update under the heading Federal Funds/(Effective).
If such rate is not published as described above by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Federal Funds Rate to be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by each of three leading brokers of Federal Funds transactions in New York City selected by the Calculation Agent prior to 9:00 a.m. on such Interest Determination Date.
Ex. C-5
If the brokers selected by the Calculation Agent are not quoting as mentioned above, the Federal Funds Rate will remain the Federal Funds Rate then in effect on such Interest Determination Date.
Reuters Page means the display on the Reuters 3000 Xtra Service, or any successor service, on the page or pages specified in this Statement of Terms or the Supplement, or any replacement page on that service.
LIBOR Notes
The London Interbank offered rate (LIBOR) means, with respect to any Interest Determination Date, the rate for deposits in U.S. dollars having the Index Maturity that appears on the Designated LIBOR Page as of 11:00 a.m., London time, on such Interest Determination Date.
If no rate appears, LIBOR will be determined on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are offered to prime banks in the London interbank market by four major banks in such market selected by the Calculation Agent for a term equal to the Index Maturity and in principal amount equal to an amount that in the Calculation Agents judgment is representative for a single transaction in U.S. dollars in such market at such time (a Representative Amount). The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such interest period will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in New York City, on such Interest Determination Date by three major banks in New York City, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks, for a term equal to the Index Maturity and in a Representative Amount; provided, however, that if fewer than three banks so selected by the Calculation Agent are providing such quotations, the then existing LIBOR rate will remain in effect for such Interest Payment Period.
Designated LIBOR Page means the display on the Reuters 3000 Xtra Service (or any successor service) on the LIBOR01 page (or any other page as may replace such page on such service) for the purpose of displaying the London interbank rates of major banks.
Prime Rate Notes
Prime Rate means the rate on any Interest Determination Date as published in H.15(519) under the heading Bank Prime Loan.
If the above rate is not published in H.15(519) prior to 3:00 p.m. on the Calculation Date, then the Prime Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update opposite the caption Bank Prime Loan.
If the rate is not published prior to 3:00 p.m. on the Calculation Date in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME1 Page (as defined below) as such banks prime rate or base lending rate as of 11:00 a.m., on that Interest Determination Date.
Ex. C-6
If fewer than four such rates referred to above are so published by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on such Interest Determination Date by three major banks in New York City selected by the Calculation Agent.
If the banks selected are not quoting as mentioned above, the Prime Rate will remain the Prime Rate in effect on such Interest Determination Date.
Reuters Screen US PRIME1 Page means the display designated as page US PRIME1 on the Reuters Monitor Money Rates Service (or such other page as may replace the US PRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks).
Treasury Rate Notes
Treasury Rate means:
(1) the rate from the auction held on the Interest Determination Date (the Auction) of direct obligations of the United States (Treasury Bills) having the Index Maturity specified in the Supplement under the caption INVEST RATE on the display on the Reuters Page designated as USAUCTION10 (or any other page as may replace that page on that service) or the Reuters Page designated as USAUCTION11 (or any other page as may replace that page on that service), or
(2) if the rate referred to in clause (1) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, under the caption U.S. Government Securities/Treasury Bills/Auction High, or
(3) if the rate referred to in clause (2) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury, or
(4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption U.S. Government Securities/Treasury Bills/Secondary Market, or
(5) if the rate referred to in clause (4) not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, under the caption U.S. Government Securities/Treasury Bills/Secondary Market, or
(6) if the rate referred to in clause (5) is not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m. on that Interest Determination Date, of three primary United States government securities dealers selected by the Calculation Agent, for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified in the Supplement, or
Ex. C-7
(7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date.
Bond Equivalent Yield means a yield (expressed as a percentage) calculated in accordance with the following formula:
D x N |
x 100
|
|||||
Bond Equivalent Yield = |
|
|||||
360 - (D x M) |
where D refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, N refers to 365 or 366, as the case may be, and M refers to the actual number of days in the applicable Interest Reset Period.
3. | Final Maturity. The Stated Maturity Date for any Note will be the date so specified in the Supplement, which shall be no later than 397 days from the date of issuance. On its Stated Maturity Date, or any date prior to the Stated Maturity Date on which the particular Note becomes due and payable by the declaration of acceleration, each such date being referred to as a Maturity Date, the principal amount of such Note, together with accrued and unpaid interest thereon, will be immediately due and payable. |
4. | Events of Default. The occurrence of any of the following shall constitute an Event of Default with respect to a Note: (i) default in any payment of principal of or interest on such Note (including on a redemption thereof); (ii) the Issuer makes any compromise arrangement with its creditors generally including the entering into any form of moratorium with its creditors generally; (iii) a court having jurisdiction shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or there shall be appointed a receiver, administrator, liquidator, custodian, trustee or sequestrator (or similar officer) with respect to the whole or substantially the whole of the assets of the Issuer and any such decree, order or appointment is not removed, discharged or withdrawn within 60 days thereafter; or (iv) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, administrator, liquidator, assignee, custodian, trustee or sequestrator (or similar official), with respect to the whole or substantially the whole of the assets of the Issuer or make any general assignment for the benefit of creditors. Upon the occurrence of an Event of Default, the principal of such Note (together with interest accrued and unpaid thereon) shall become, without any notice or demand, immediately due and payable.2 |
5. | Obligation Absolute. No provision of the Issuing and Paying Agency Agreement under which the Notes are issued shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on each Note at the times, place and rate, and in the coin or currency, herein prescribed. |
6. | Supplement. Any term contained in the Supplement shall supersede any conflicting term contained herein. |
2 | Unlike single payment notes, where a default arises only at the stated maturity, interest-bearing notes with multiple payment dates should contain a default provision permitting acceleration of the maturity if the Issuer defaults on an interest payment. |
Ex. C-8
Exhibit D
Note
[See attached]
Exhibit 10.28
Amended and Restated
Commercial Paper Dealer Agreement
4(a)(2) Program
Between:
BlackRock, Inc., as Issuer
and
Citigroup Global Markets Inc., as Dealer
Concerning Notes to be issued pursuant to an Issuing and Paying Agency Agreement dated as of December 23, 2014 between the Issuer and Citibank, N.A., as Issuing and Paying Agent.
Dated as of December 23, 2014
This agreement (as amended, supplemented or otherwise modified and in effect from time to time, this Agreement), which amends and restates the Commercial Paper Dealer Agreement, dated as of October 14, 2009, sets forth the understandings between the Issuer and the Dealer, each named on the cover page hereof, in connection with the issuance and sale by the Issuer of its short-term promissory notes in substantially the form of Exhibit D hereto (the Notes) through the Dealer.
Certain terms used in this Agreement are defined in Section 6 hereof.
The Addendum to this Agreement, and any Annexes or Exhibits described in this Agreement or such Addendum, are hereby incorporated into this Agreement and made fully a part hereof.
1. | Offers, Sales and Resales of Notes. |
1.1 | While (i) the Issuer has and shall have no obligation to sell the Notes to the Dealer or to permit the Dealer to arrange any sale of the Notes for the account of the Issuer, and (ii) the Dealer has and shall have no obligation to purchase the Notes from the Issuer or to arrange any sale of the Notes for the account of the Issuer, the parties hereto agree that in any case where the Dealer purchases Notes from the Issuer, or arranges for the sale of Notes by the Issuer, such Notes will be purchased or sold by the Dealer in reliance on the representations, warranties, covenants and agreements of the Issuer contained herein or made pursuant hereto and on the terms and conditions and in the manner provided herein. |
1.2 | So long as this Agreement shall remain in effect, and in addition to the limitations contained in Section 1.7 hereof, the Issuer shall not, without the consent of the Dealer, offer, solicit or accept offers to purchase, or sell, any Notes except (a) in transactions with one or more dealers which may from time to time after the date hereof become dealers with respect to the Notes by executing with the Issuer one or more agreements which contain provisions substantially identical to those contained in Section 1 of this Agreement, of which the Issuer hereby undertakes to provide the Dealer prompt notice or (b) in transactions with the other dealers listed on the Addendum hereto, which are executing agreements with the Issuer which contain provisions substantially identical to Section 1 of this Agreement contemporaneously herewith. In no event shall the Issuer offer, solicit or accept offers to purchase, or sell, any Notes directly on its own behalf in transactions with persons other than broker-dealers as specifically permitted in this Section 1.2. |
1.3 | The Notes shall be in a minimum denomination of $250,000 or integral multiples of $1,000 in excess thereof, will bear such interest rates, if interest bearing, or will be sold at such discount from their face amounts, as shall be agreed upon by the Dealer and the Issuer, shall have a maturity not exceeding 397 days from the date of issuance and may have such terms as are specified in Exhibit C hereto or the Private Placement Memorandum, a pricing supplement or as otherwise agreed upon by the applicable purchaser and the Issuer. The Notes shall not contain any provision for extension, renewal or automatic rollover. |
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1.4 | The authentication and issuance of, and payment for, the Notes shall be effected in accordance with the Issuing and Paying Agency Agreement, and the Notes shall be either individual physical certificates or book-entry notes evidenced by one or more master notes (each, a Master Note) registered in the name of The Depository Trust Company (DTC) or its nominee, in the form or forms annexed hereto as Exhibit D. |
1.5 | If the Issuer and the Dealer shall agree on the terms of the purchase of any Note by the Dealer or the sale of any Note arranged by the Dealer (including, but not limited to, agreement with respect to the date of issue, purchase price, principal amount, maturity and interest rate or interest rate index and margin (in the case of interest-bearing Notes) or discount thereof (in the case of Notes issued on a discount basis), and appropriate compensation for the Dealers services hereunder) pursuant to this Agreement, the Issuer shall cause such Note to be issued and delivered in accordance with the terms of the Issuing and Paying Agency Agreement and payment for such Note shall be made by the purchaser thereof, either directly or through the Dealer, to the Issuing and Paying Agent, for the account of the Issuer. Except as otherwise agreed, in the event that the Dealer is acting as an agent and a purchaser shall either fail to accept delivery of or make payment for a Note on the date fixed for settlement, the Dealer shall promptly notify the Issuer, and if the Dealer has theretofore paid the Issuer for the Note, the Issuer will promptly return such funds to the Dealer against its return of the Note to the Issuer, in the case of a certificated Note, and upon notice of such failure in the case of a book-entry Note. If such failure occurred for any reason other than default by the Dealer, the Issuer shall reimburse the Dealer on an equitable basis for the Dealers loss of the use of such funds for the period such funds were credited to the Issuers account. |
1.6 | The Dealer and the Issuer hereby establish and agree to observe the following procedures in connection with offers, sales and subsequent resales or other transfers of the Notes: |
(a) | Offers and sales of the Notes by or through the Dealer shall be made only to: (i) investors reasonably believed by the Dealer to be Qualified Institutional Buyers or Institutional Accredited Investors and (ii) non-bank fiduciaries or agents that will be purchasing Notes for one or more accounts, each of which is reasonably believed by the Dealer to be an Institutional Accredited Investor. |
(b) | Resales and other transfers of the Notes by the holders thereof shall be made only in accordance with the restrictions in the legend described in clause (e) below. |
(c) | No general solicitation or general advertising shall be used in connection with the offering of the Notes. Without limiting the generality of the foregoing, without the prior written approval of the Dealer (which shall not be unreasonably withheld or delayed), the Issuer shall not issue any press release or place or publish any tombstone or other advertisement relating to the Notes. |
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(d) | No sale of Notes to any one purchaser shall be for less than $250,000 principal or face amount, and no Note shall be issued in a smaller principal or face amount. If the purchaser is a non-bank fiduciary acting on behalf of others, each person for whom such purchaser is acting must purchase at least $250,000 principal or face amount of Notes. |
(e) | Offers and sales of the Notes shall be subject to the restrictions described in the legend appearing on Exhibit A hereto. A legend substantially to the effect of such Exhibit A shall appear as part of the Private Placement Memorandum used in connection with offers and sales of Notes hereunder, as well as on each individual certificate representing a Note and each Master Note representing book-entry Notes offered and sold pursuant to this Agreement. |
(f) | The Dealer shall furnish or shall have furnished to each purchaser of Notes for which it has acted as the Dealer a copy of the then-current Private Placement Memorandum unless such purchaser has previously received a copy of the Private Placement Memorandum as then in effect. The Private Placement Memorandum shall expressly state that any person to whom Notes are offered shall have an opportunity to ask questions of, and receive information from, the Issuer and the Dealer and shall provide the names, addresses and telephone numbers of the persons from whom information regarding the Issuer may be obtained. |
(g) | The Issuer agrees, for the benefit of the Dealer and each of the holders and prospective purchasers from time to time of the Notes that, if at any time the Issuer shall not be subject to Section 13 or 15(d) of the Exchange Act, the Issuer will furnish, upon request and at its expense, to the Dealer and to holders and prospective purchasers of Notes information required by Rule 144A(d)(4)(i) in compliance with Rule 144A(d). |
(h) | In the event that any Note offered or to be offered by the Dealer would be ineligible for resale under Rule 144A, the Issuer shall immediately notify the Dealer (by telephone, confirmed in writing) of such fact and shall promptly prepare and deliver to the Dealer an amendment or supplement to the Private Placement Memorandum describing the Notes that are ineligible, the reason for such ineligibility and any other relevant information relating thereto. |
(i) | The Issuer represents that it is not currently issuing commercial paper in the United States market in reliance upon the exemption provided by Section 3(a)(3) of the Securities Act. The Issuer agrees that, if it shall issue commercial paper after the date hereof in reliance upon such exemption (a) the proceeds from the sale of the Notes will be segregated from the proceeds of the sale of any such commercial paper by being placed in a separate account; (b) the Issuer will institute appropriate corporate procedures to ensure that the offers and sales of notes issued by the Issuer pursuant to the Section 3(a)(3) exemption are not integrated with offerings and sales of Notes hereunder; and (c) the Issuer will comply with each of the requirements of Section 3(a)(3) of the Securities Act in selling commercial paper or other short-term debt securities other than the Notes in the United States. |
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1.7 | The Issuer hereby represents and warrants to the Dealer, in connection with offers, sales and resales of Notes by the Issuer, as follows: |
(a) | The Issuer hereby confirms to the Dealer that (except as permitted by Section 1.6(i)) within the preceding six months neither the Issuer nor any person other than the Dealer or the other dealers referred to in Section 1.2 hereof acting on behalf of the Issuer has offered or sold any Notes, or any substantially similar security of the Issuer (including, without limitation, medium-term notes issued by the Issuer), to, or solicited offers to buy any such security from, any person other than the Dealer or the other dealers referred to in Section 1.2 hereof. The Issuer also agrees that (except as permitted by Section 1.6(i)), as long as the Notes are being offered for sale by the Dealer and the other dealers referred to in Section 1.2 hereof as contemplated hereby and until at least six months after the offer of Notes hereunder has been terminated, neither the Issuer nor any person other than the Dealer or the other dealers referred to in Section 1.2 hereof (except as contemplated by Section 1.2 hereof) will offer the Notes or any substantially similar security of the Issuer for sale to, or solicit offers to buy any such security from, any person other than the Dealer or the other dealers referred to in Section 1.2 hereof, it being understood that such agreement is made with a view to bringing the offer and sale of the Notes within the exemption provided by Section 4(a)(2) of the Securities Act and shall survive any termination of this Agreement. The Issuer hereby represents and warrants that it has not taken or omitted to take, and will not take or omit to take, any action that would cause the offering and sale of Notes hereunder to be integrated with any other offering of securities, whether such offering is made by the Issuer or some other party or parties. |
(b) | The Issuer represents and agrees that the proceeds of the sale of the Notes are not currently contemplated to be used for the purpose of buying, carrying or trading securities within the meaning of Regulation T and the interpretations thereunder by the Board of Governors of the Federal Reserve System. In the event that the Issuer determines to use such proceeds for the purpose of buying, carrying or trading securities, whether in connection with an acquisition of another company or otherwise, the Issuer shall give the Dealer at least five business days prior written notice to that effect. The Issuer shall also give the Dealer prompt notice of the actual date that it commences to purchase securities with the proceeds of the Notes. Thereafter, in the event that the Dealer purchases Notes as principal and does not resell such Notes on the day of such purchase, to the extent necessary to comply with Regulation T and the interpretations thereunder, the Dealer will sell such Notes either (i) only to offerees it reasonably believes to be Qualified Institutional Buyers or to Qualified Institutional Buyers it reasonably believes are acting for other Qualified Institutional Buyers, in each case in accordance with Rule 144A or (ii) in a manner which would not cause a violation of Regulation T and the interpretations thereunder. |
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2. | Representations and Warranties of Issuer. |
The Issuer represents and warrants that:
2.1 | The Issuer is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, has the power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted and is duly qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization, except where the failure to be so qualified or in good standing could not be reasonably expected to result in a Material Adverse Effect. The Issuer has all the requisite power and authority to execute, deliver and perform its obligations under the Notes, this Agreement and the Issuing and Paying Agency Agreement. |
2.2 | This Agreement and the Issuing and Paying Agency Agreement have been duly authorized, executed and delivered by the Issuer and constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law). |
2.3 | The Notes have been duly authorized, and when issued as provided in the Issuing and Paying Agency Agreement, will be duly and validly issued and will constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law). |
2.4 | The offer and sale of the Notes by the Issuer in the manner contemplated hereby do not require registration of the Notes under the Securities Act, pursuant to the exemption from registration contained in Section 4(a)(2) thereof, and no indenture in respect of the Notes is required to be qualified under the Trust Indenture Act of 1939, as amended. |
2.5 | The Notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness of the Issuer. |
2.6 | No consent or action of, or filing or registration with, any governmental or public regulatory body or authority, including the SEC, is required to authorize, or is otherwise required in connection with the execution, delivery or performance of, this Agreement, the Notes or the Issuing and Paying Agency Agreement, except as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes. |
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2.7 | The execution, delivery and performance by the Issuer of this Agreement and the Issuing and Paying Agency Agreement, and the issuance of the Notes in accordance with the Issuing and Paying Agency Agreement, each in accordance with its respective terms, and the transactions contemplated hereby and thereby do not and will not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental Approval relating to the Issuer where the failure to obtain such Governmental Approval could reasonably be expected to have a Material Adverse Effect, (ii) violate any Applicable Law relating to the Issuer except where such violation could not reasonably be expected to have a Material Adverse Effect, (iii) conflict with, result in a breach of or constitute a default under the articles of incorporation or bylaws of the Issuer, (iv) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which the Issuer is a party or by which any of its properties may be bound or any Governmental Approval relating to the Issuer, which could reasonably be expected to have a Material Adverse Effect, (v) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Issuer or (vi) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement, the Notes or the Issuing and Paying Agency Agreement other than consents, authorizations, filings or other acts or consents which have been obtained or made and are in full force and effect or for which the failure to obtain or make could not reasonably be expected to have a Material Adverse Effect. |
2.8 | Except for matters disclosed in any filings made by the Issuer with the SEC, there are no actions, suits or proceedings pending nor, to the knowledge of the Issuer, threatened against or in any other way relating adversely to or affecting the Issuer or any of its properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that has had or could reasonably be expected to have a Material Adverse Effect. |
2.9 | The Issuer is not an investment company within the meaning of the Investment Company Act of 1940, as amended. |
2.10 | Neither the Private Placement Memorandum nor the Company Information contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. |
2.11 | Each (a) issuance of Notes by the Issuer hereunder and (b) amendment or supplement of the Private Placement Memorandum shall be deemed a representation and warranty by the Issuer to the Dealer, as of the date thereof, that, both before and after giving effect to such issuance and after giving effect to such amendment or supplement, (i) the representations and warranties given by the Issuer set forth in this Section 2 remain true and correct on and as of such date as if made on and as of such date, (ii) in the case of an issuance of Notes, the Notes being issued on such date have been duly and validly issued and constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in |
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accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law), (iii) in the case of an issuance of Notes, since the date of the most recent Private Placement Memorandum, there has been no material adverse change in the financial condition or operations of the Issuer which, if not publicly available, has not been disclosed to the Dealer in writing and (iv) the Issuer is not in default under any of its obligations hereunder, under the Issuing and Paying Agency Agreement or the Notes that is reasonably likely to result in a Material Adverse Effect. |
3. | Covenants and Agreements of Issuer. |
The Issuer covenants and agrees that:
3.1 | The Issuer will give the Dealer prompt notice (but in any event prior to any subsequent issuance of Notes hereunder) of any amendment to, modification of or waiver with respect to, the Notes or the Issuing and Paying Agency Agreement, including a complete copy of any such amendment, modification or waiver. |
3.2 | The Issuer shall, whenever there shall occur any change, development or occurrence in relation to the Issuer that would have a Material Adverse Effect (including any receipt by the Issuer, from any nationally recognized statistical rating organization that has provided a rating to the Notes, of any notice of a downgrading in such rating that is publicly available), promptly, and in any event prior to any subsequent issuance of Notes hereunder, notify the Dealer (by telephone, confirmed in writing) of such change, development or occurrence. |
3.3 | The Issuer shall from time to time furnish to the Dealer such non-public information as the Dealer may reasonably request, regarding (i) the Issuers operations and financial condition, (ii) the due authorization and execution of the Notes and (iii) the Issuers ability to pay the Notes as they mature; provided that the disclosure of such information shall not be reasonably likely to cause the Issuer to be in violation of any Applicable Law or otherwise violate the terms of any confidentiality agreement to which the Issuer is subject. |
3.4 | The Issuer will take all such action as the Dealer may reasonably request to ensure that each offer and each sale of the Notes will comply with any applicable state Blue Sky laws; provided, however, that the Issuer shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified or subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. |
3.5 | The Issuer will not be in default of any of its obligations hereunder, under the Notes or under the Issuing and Paying Agency Agreement, at any time that any of the Notes are outstanding. |
3.6 | The Issuer shall not issue Notes hereunder until the Dealer shall have received (a) one or more opinions of counsel to the Issuer, addressed to the Dealer, |
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satisfactory in form and substance to the Dealer, (b) a copy of the executed Issuing and Paying Agency Agreement as then in effect, (c) a copy of resolutions adopted by the Board of Directors of the Issuer, satisfactory in form and substance to the Dealer and certified by the Secretary or similar officer of the Issuer, authorizing execution and delivery by the Issuer of this Agreement, the Issuing and Paying Agency Agreement and the Notes and consummation by the Issuer of the transactions contemplated hereby and thereby, (d) prior to the issuance of any book-entry Notes represented by a master note registered in the name of DTC or its nominee, a copy of the executed Letter of Representations among the Issuer, the Issuing and Paying Agent and DTC and of the executed master note, (e) prior to the issuance of any Notes in physical form, a copy of such form (unless attached to this Agreement or the Issuing and Paying Agency Agreement), (f) confirmation of the then current ratings assigned to the Notes by each nationally recognized statistical rating organization then rating the Notes and (g) such other certificates, opinions, letters and documents as the Dealer shall have reasonably requested. |
3.7 | The Issuer shall reimburse the Dealer for all of the Dealers reasonable out-of-pocket expenses related to this Agreement, including reasonable expenses incurred in connection with its preparation and negotiation, and the transactions contemplated hereby (including, but not limited to, the printing and distribution of the Private Placement Memorandum), and, if applicable, for the reasonable fees and out-of-pocket expenses of the Dealers counsel. |
3.8 | The Issuer shall not file a Form D (as referenced in Rule 503 under the Securities Act) at any time in respect of the offer or sale of the Notes. |
4. | Disclosure. |
4.1 | The Private Placement Memorandum and its contents (other than the Dealer Information) shall be the sole responsibility of the Issuer. The Private Placement Memorandum shall contain a statement expressly offering an opportunity for each prospective purchaser to ask questions of, and receive answers from, the Issuer concerning the offering of Notes and to obtain relevant additional information which the Issuer possesses or can acquire without unreasonable effort or expense. | |||
4.2 | The Issuer agrees to promptly furnish the Dealer the Company Information as it becomes available. | |||
4.3 | (a) | The Issuer further agrees to notify the Dealer promptly upon the occurrence of any event relating to or affecting the Issuer that would cause the Company Information then in existence to include an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they are made, not misleading. | ||
(b) | In the event that the Issuer gives the Dealer notice pursuant to Section 4.3(a) and the Dealer notifies the Issuer that it then has Notes it is holding in inventory, (i) the Issuer agrees promptly to supplement or amend the Private Placement Memorandum so that the Private Placement Memorandum, as |
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amended or supplemented, shall not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Issuer shall make such supplement or amendment available to the Dealer prior to any further sale or resale of Notes or (ii) the Issuer shall repurchase any such Note held in inventory at a price equal to the face amount thereof discounted on a ratable basis based on the Issuers market rate reflecting the remaining period to maturity in relation to the original term. | ||||
(c) | In the event that (i) the Issuer gives the Dealer notice pursuant to Section 4.3(a), (ii) the Dealer does not notify the Issuer that it is then holding Notes in inventory and (iii) the Issuer chooses not to promptly amend or supplement the Private Placement Memorandum in the manner described in clause (b) above, then all solicitations and sales of Notes shall be suspended until such time as the Issuer has so amended or supplemented the Private Placement Memorandum, and made such amendment or supplement available to the Dealer. | |||
(d) | Without limiting the generality of Section 4.3(a), the Issuer shall review, amend and supplement the Private Placement Memorandum on a periodic basis, but no less than at least once annually, to incorporate current financial information of the Issuer to the extent necessary to ensure that the information provided in the Private Placement Memorandum is accurate and complete. |
5. | Indemnification and Contribution. |
5.1 | The Issuer will indemnify and hold harmless the Dealer, each individual, corporation, partnership, trust, association or other entity controlling the Dealer, any affiliate of the Dealer or any such controlling entity and their respective directors, officers, employees, partners, incorporators, shareholders, servants, trustees and agents (hereinafter the Indemnitees) against any and all liabilities, penalties, suits, causes of action, losses, damages, claims, costs and expenses (including, without limitation, fees and disbursements of counsel) or judgments of whatever kind or nature (each a Claim), imposed upon, incurred by or asserted against the Indemnitees arising out of or based upon (i) any allegation that the Private Placement Memorandum, the Company Information or any information provided by the Issuer to the Dealer included (as of any relevant time) or includes an untrue statement of a material fact or omitted (as of any relevant time) or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (ii) arising out of or based upon the breach by the Issuer of any agreement, covenant or representation made in or pursuant to this Agreement. This indemnification shall not apply to the extent that the Claim arises out of or is based upon Dealer Information or is determined to have resulted from an Indemnitees gross negligence or willful misconduct. |
5.2 | Provisions relating to claims made for indemnification under this Section 5 are set forth on Exhibit B to this Agreement. |
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5.3 | In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in this Section 5 is held to be unavailable or insufficient to hold harmless the Indemnitees, although applicable in accordance with the terms of this Section 5, the Issuer shall contribute to the aggregate costs incurred by the Dealer in connection with any Claim in the proportion of the respective economic interests of the Issuer and the Dealer; provided, however, that such contribution by the Issuer shall be in an amount such that the aggregate costs incurred by the Dealer do not exceed the aggregate of the commissions and fees earned by the Dealer hereunder with respect to the issue or issues of Notes to which such Claim relates. The respective economic interests shall be calculated by reference to the aggregate proceeds to the Issuer of the Notes issued hereunder and the aggregate commissions and fees earned by the Dealer hereunder. |
6. | Definitions. |
6.1 | Claim shall have the meaning set forth in Section 5.1. |
6.2 | Company Information at any given time shall mean the Private Placement Memorandum and information incorporated by reference therein together with, to the extent applicable, (i) the Issuers most recent report on Form 10-K filed with the SEC and each report on Form 10-Q or 8-K filed by the Issuer with the SEC since the most recent Form 10-K, (ii) the Issuers most recent annual audited financial statements and each interim financial statement or report prepared subsequent thereto, if not included in item (i) above, (iii) the Issuers and its affiliates other publicly available recent reports, including, but not limited to, any publicly available filings or reports provided to their respective shareholders, (iv) any other information or disclosure prepared pursuant to Section 4.3 hereof and (v) any information prepared or approved by the Issuer for dissemination to investors or potential investors in the Notes. |
6.3 | Dealer Information shall mean material concerning the Dealer provided by the Dealer in writing expressly for inclusion in the Private Placement Memorandum. |
6.4 | Exchange Act shall mean the U.S. Securities Exchange Act of 1934, as amended. |
6.5 | Governmental Approval shall mean all authorizations, consents, approvals, permits, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities. |
6.6 | Governmental Authority shall mean the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank). |
6.7 | Indemnitee shall have the meaning set forth in Section 5.1. |
6.8 | Institutional Accredited Investor shall mean an institutional investor that is an accredited investor within the meaning of Rule 501 under the Securities Act and that has such knowledge and experience in financial and business matters that it is |
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capable of evaluating and bearing the economic risk of an investment in the Notes, including, but not limited to, a bank, as defined in Section 3(a)(2) of the Securities Act, or a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity. |
6.9 | Issuing and Paying Agency Agreement shall mean the issuing and paying agency agreement described on the cover page of this Agreement, as such agreement may be amended or supplemented from time to time. |
6.10 | Issuing and Paying Agent shall mean the party designated as such on the cover page of this Agreement, as issuing and paying agent under the Issuing and Paying Agency Agreement, or any successor thereto in accordance with the Issuing and Paying Agency Agreement. |
6.11 | Material Adverse Effect shall mean a material adverse effect on (a) the business, operations or financial condition of the Issuer and its subsidiaries taken as a whole or (b) the ability of the Issuer to perform its obligations under this Agreement, the Notes and the Issuing and Paying Agency Agreement. |
6.12 | Non-bank fiduciary or agent shall mean a fiduciary or agent other than (a) a bank, as defined in Section 3(a)(2) of the Securities Act, or (b) a savings and loan association, as defined in Section 3(a)(5)(A) of the Securities Act. |
6.13 | Person shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity. |
6.14 | Private Placement Memorandum shall mean offering materials prepared in accordance with Section 4 (including materials referred to therein or incorporated by reference therein, if any) provided to purchasers and prospective purchasers of the Notes, and shall include amendments and supplements thereto which may be prepared from time to time in accordance with this Agreement (other than any amendment or supplement that has been completely superseded by a later amendment or supplement). |
6.15 | Qualified Institutional Buyer shall have the meaning assigned to that term in Rule 144A under the Securities Act. |
6.16 | Rule 144A shall mean Rule 144A under the Securities Act. |
6.17 | SEC shall mean the U.S. Securities and Exchange Commission. |
6.18 | Securities Act shall mean the U.S. Securities Act of 1933, as amended. |
7. | General |
7.1 | Unless otherwise expressly provided herein, all notices under this Agreement to parties hereto shall be in writing and shall be effective when received at the address of the respective party set forth in the Addendum to this Agreement. |
7.2 | This Agreement shall be governed by and construed in accordance with the laws of the State of New York. |
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7.3 | The Issuer agrees that any suit, action or proceeding brought by the Issuer against the Dealer in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes shall be brought solely in the United States federal courts located in the Borough of Manhattan or the courts of the State of New York located in the Borough of Manhattan. EACH OF THE DEALER AND THE ISSUER WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. |
7.4 | This Agreement may be terminated, at any time, by the Issuer, upon one business days prior notice to such effect to the Dealer, or by the Dealer upon one business days prior notice to such effect to the Issuer. Any such termination, however, shall not affect the obligations of the Issuer under Sections 3.7, 5 and 7.3 hereof or the respective representations, warranties, agreements, covenants, rights or responsibilities of the parties made or arising prior to the termination of this Agreement. |
7.5 | This Agreement is not assignable by either party hereto without the written consent of the other party; provided, however, with reasonably prompt notice to the Issuer, the Dealer may assign its rights and obligations under this Agreement to any affiliate of the Dealer. |
7.6 | This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. |
7.7 | This Agreement is for the exclusive benefit of the parties hereto, and their respective permitted successors and assigns hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. |
7.8 | The parties hereto agree that the Issuer may, in accordance with the terms of this Section 7.8, from time to time replace the party which is then acting as Issuing and Paying Agent (the Current Issuing and Paying Agent) with another party (such other party, the Replacement Issuing and Paying Agent), and enter into an agreement with the Replacement Issuing and Paying Agent covering the provision of issuing and paying agency functions in respect of the Notes by the Replacement Issuing and Paying Agent (the Replacement Issuing and Paying Agency Agreement) (any such replacement, a Replacement). |
Notwithstanding anything to the contrary herein, including without limitation Sections 6.9 and 6.10 hereof, from and after the effective date of any Replacement, except to the extent that the Issuing and Paying Agency Agreement provides that the Current Issuing and Paying Agent will continue to act in respect of Notes outstanding as of the effective date of such Replacement, the Issuing and Paying Agent for the Notes shall be deemed to be the Replacement Issuing and Paying Agent, all references to the Issuing and Paying Agent hereunder shall be deemed to refer to the Replacement Issuing and Paying Agent, and all references to the Issuing and Paying Agency Agreement hereunder shall be deemed to refer to the Replacement Issuing and Paying Agency Agreement.
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From and after the effective date of any Replacement, the Issuer shall not issue any Notes hereunder unless and until the Dealer shall have received: (i) a copy of the executed Replacement Issuing and Paying Agency Agreement, (ii) a copy of the executed Letter of Representations among the Issuer, the Replacement Issuing and Paying Agent and DTC, (iii) a copy of the executed Master Note authenticated by the Replacement Issuing and Paying Agent and registered in the name of DTC or its nominee, (iv) an amendment or supplement to the Private Placement Memorandum describing the Replacement Issuing and Paying Agent as the Issuing and Paying Agent for the Notes, and reflecting any other changes thereto necessary in light of the Replacement so that the Private Placement Memorandum, as amended or supplemented, satisfies the requirements of this Agreement, and (v) a legal opinion of counsel to the Issuer, addressed to the Dealer, satisfactory in form and substance reasonably satisfactory to the Dealer, as to (a) the due authorization, delivery, validity and enforceability of Notes issued pursuant to the Replacement Issuing and Paying Agency Agreement, and (b) such other matters as the Dealer may reasonably request.
[Signature Page Follows]
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.
BLACKROCK, INC., as Issuer | CITIGROUP GLOBAL MARKETS INC., as Dealer | |||||||
By: | /s/ Philippe Matsumoto |
By: | /s/ Jean-Luc Sinniger | |||||
Name: | Philippe Matsumoto | Name: | Jean-Luc Sinniger | |||||
Title: | Treasurer and Managing Director | Title: | Director |
Amended and Restated
Commercial Paper Dealer Agreement
Addendum
The following additional clauses shall apply to the Agreement and be deemed a part thereof.
1. | The other dealers referred to in clause (b) of Section 1.2 of the Agreement are Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated. |
2. | The addresses of the respective parties for purposes of notices under Section 7.1 are as follows: |
For the Issuer:
Address: 40 East 52nd Street, New York, New York 10022
Attention: Philippe Matsumoto
Email address: Philippe.Matsumoto@blackrock.com
Telephone number: (212) 810-3767
Fax number: (212) 810-3144
with a copy to
Attention: Armando Gochuico
Email address: Armando.Gochuico@blackrock.com
Fax number: 212-810-3144
For the Dealer:
Address: 390 Greenwich Street, 4th Floor, New York, New York 10013
Attention: Money Markets Origination
Telephone number: (212) 723-6669
Fax number: (212) 723-8624
Exhibit A
Form of Legend for Private Placement Memorandum and Notes
THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERS AND SALES THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER WILL BE DEEMED TO REPRESENT THAT (I) IT HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER AND THE NOTES, (II) IT IS NOT ACQUIRING SUCH NOTE WITH A VIEW TO ANY DISTRIBUTION THEREOF AND (III) IT IS EITHER (A) AN INSTITUTIONAL INVESTOR THAT IS (1) AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a) UNDER THE ACT (AN INSTITUTIONAL ACCREDITED INVESTOR) AND (2) PURCHASING NOTES FOR (i) ITS OWN ACCOUNT, (ii) A BANK (AS DEFINED IN SECTION 3(a)(2) OF THE ACT) OR A SAVINGS AND LOAN ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A) OF THE ACT) ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY OR (iii) A FIDUCIARY OR AGENT (OTHER THAN A U.S. BANK OR SAVINGS AND LOAN ASSOCIATION) PURCHASING NOTES FOR ONE OR MORE ACCOUNTS EACH OF WHICH ACCOUNTS IS SUCH AN INSTITUTIONAL ACCREDITED INVESTOR; OR (B) A QUALIFIED INSTITUTIONAL BUYER (QIB) WITHIN THE MEANING OF RULE 144A UNDER THE ACT THAT IS ACQUIRING NOTES FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH ACCOUNTS IS A QIB; AND THE PURCHASER ACKNOWLEDGES THAT IT IS AWARE THAT THE SELLER MAY RELY UPON THE EXEMPTION FROM THE REGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE 144A. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER THEREOF SHALL ALSO BE DEEMED TO AGREE THAT ANY RESALE OR OTHER TRANSFER THEREOF WILL BE MADE ONLY (A) IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (1) TO THE ISSUER OR TO A PLACEMENT AGENT DESIGNATED BY THE ISSUER AS A PLACEMENT AGENT FOR THE NOTES (COLLECTIVELY, THE PLACEMENT AGENTS), NONE OF WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2) THROUGH A PLACEMENT AGENT TO AN INSTITUTIONAL ACCREDITED INVESTOR OR A QIB, OR (3) TO A QIB IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF RULE 144A AND (B) IN MINIMUM AMOUNTS OF $250,000.
Ex. A-1
Exhibit B
Further Provisions Relating to Indemnification
(a) | The Issuer agrees to reimburse each Indemnitee for all expenses (including reasonable fees and disbursements of internal and external counsel) as they are incurred by it in connection with investigating or defending any loss, claim, damage, liability or action in respect of which indemnification may be sought under Section 5 of the Agreement (whether or not it is a party to any such proceedings). |
(b) | Promptly after receipt by an Indemnitee of notice of the existence of a Claim, such Indemnitee will, if a claim in respect thereof is to be made against the Issuer, notify the Issuer in writing of the existence thereof; provided that (i) the omission so to notify the Issuer will not relieve the Issuer from any liability which it may have hereunder unless and except to the extent it did not otherwise learn of such Claim and such failure results in the forfeiture by the Issuer of substantial rights and defenses, and (ii) the omission so to notify the Issuer will not relieve it from liability which it may have to an Indemnitee otherwise than on account of this indemnity agreement. In case any such Claim is made against any Indemnitee and it notifies the Issuer of the existence thereof, the Issuer will be entitled to participate therein, and to the extent that it may elect by written notice delivered to the Indemnitee, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnitee; provided that if the defendants in any such Claim include both the Indemnitee and the Issuer, and the Indemnitee shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Issuer, the Issuer shall not have the right to direct the defense of such Claim on behalf of such Indemnitee, and the Indemnitee shall have the right to select separate counsel to assert such legal defenses on behalf of such Indemnitee. Upon receipt of notice from the Issuer to such Indemnitee of the Issuers election so to assume the defense of such Claim and approval by the Indemnitee of counsel, the Issuer will not be liable to such Indemnitee for expenses incurred thereafter by the Indemnitee in connection with the defense thereof (other than reasonable costs of investigation) unless (i) the Indemnitee shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the Issuer shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel in the jurisdiction in which any Claim is brought), approved by the Dealer, representing the Indemnitee who is party to such Claim), (ii) the Issuer shall not have employed counsel reasonably satisfactory to the Indemnitee to represent the Indemnitee within a reasonable time after notice of existence of the Claim or (iii) the Issuer has authorized in writing the employment of counsel for the Indemnitee. The indemnity, reimbursement and contribution obligations of the Issuer hereunder shall be in addition to any other liability the Issuer may otherwise have to an Indemnitee and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Issuer and any Indemnitee. The Issuer agrees that without the Dealers prior written consent, it will not settle, compromise or consent to the entry of any judgment in any Claim in respect of which indemnification may be sought under the indemnification provision of the Agreement (whether or not the Dealer |
Ex. B-1
or any other Indemnitee is an actual or potential party to such Claim), unless such settlement, compromise or consent (i) includes an unconditional release of each Indemnitee from all liability arising out of such Claim and (ii) does not include a statement as to or an admission of fault, culpability or failure to act, by or on behalf of any Indemnitee. |
Ex. B-2
Exhibit C
Statement of Terms for Interest Bearing Commercial Paper Notes of [Name of Issuer]
THE PROVISIONS SET FORTH BELOW ARE QUALIFIED TO THE EXTENT APPLICABLE BY THE TRANSACTION SPECIFIC [PRICING] [PRIVATE PLACEMENT MEMORANDUM] SUPPLEMENT (THE SUPPLEMENT) (IF ANY) SENT TO EACH PURCHASER AT THE TIME OF THE TRANSACTION.
1. | General. (a) The obligations of the Issuer to which these terms apply (each a Note) are represented by one or more Master Notes (each, a Master Note) issued in the name of (or of a nominee for) The Depository Trust Company (DTC), which Master Note includes the terms and provisions for the Issuers Interest-Bearing Commercial Paper Notes that are set forth in this Statement of Terms, since this Statement of Terms constitutes an integral part of the Underlying Records as defined and referred to in the Master Note. |
(b) Business Day means any day other than a Saturday or Sunday that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, executive order or regulation to be closed in New York City and, with respect to LIBOR Notes (as defined below) is also a London Business Day. London Business Day means, a day, other than a Saturday or Sunday, on which dealings in deposits in U.S. dollars are transacted in the London interbank market.
2. | Interest. (a) Each Note will bear interest at a fixed rate (a Fixed Rate Note) or at a floating rate (a Floating Rate Note). |
(b) The Supplement sent to each holder of such Note will describe the following terms: (i) whether such Note is a Fixed Rate Note or a Floating Rate Note and whether such Note is an Original Issue Discount Note (as defined below); (ii) the date on which such Note will be issued (the Issue Date); (iii) the Stated Maturity Date (as defined below); (iv) if such Note is a Fixed Rate Note, the rate per annum at which such Note will bear interest, if any, and the Interest Payment Dates; (v) if such Note is a Floating Rate Note, the Base Rate, the Index Maturity, the Interest Reset Dates, the Interest Payment Dates and the Spread and/or Spread Multiplier, if any (all as defined below), and any other terms relating to the particular method of calculating the interest rate for such Note; and (vi) any other terms applicable specifically to such Note. Original Issue Discount Note means a Note which has a stated redemption price at the Stated Maturity Date that exceeds its Issue Price by more than a specified de minimis amount and which the Supplement indicates will be an Original Issue Discount Note.
(c) Each Fixed Rate Note will bear interest from its Issue Date at the rate per annum specified in the Supplement until the principal amount thereof is paid or made available for payment. Interest on each Fixed Rate Note will be payable on the dates specified in the Supplement (each an Interest Payment Date for a Fixed Rate Note) and on the Maturity Date (as defined below). Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-day months.
Ex. C-1
If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be payable on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
(d) The interest rate on each Floating Rate Note for each Interest Reset Period (as defined below) will be determined by reference to an interest rate basis (a Base Rate) plus or minus a number of basis points (one basis point equals one-hundredth of a percentage point) (the Spread), if any, and/or multiplied by a certain percentage (the Spread Multiplier), if any, until the principal thereof is paid or made available for payment. The Supplement will designate which of the following Base Rates is applicable to the related Floating Rate Note: (a) the CD Rate (a CD Rate Note), (b) the Commercial Paper Rate (a Commercial Paper Rate Note), (c) the Federal Funds Rate (a Federal Funds Rate Note), (d) LIBOR (a LIBOR Note), (e) the Prime Rate (a Prime Rate Note), (f) the Treasury Rate (a Treasury Rate Note) or (g) such other Base Rate as may be specified in such Supplement.
The rate of interest on each Floating Rate Note will be reset daily, weekly, monthly, quarterly or semi-annually (the Interest Reset Period). The date or dates on which interest will be reset (each an Interest Reset Date) will be, unless otherwise specified in the Supplement, in the case of Floating Rate Notes which reset daily, each Business Day, in the case of Floating Rate Notes (other than Treasury Rate Notes) that reset weekly, the Wednesday of each week; in the case of Treasury Rate Notes that reset weekly, the Tuesday of each week; in the case of Floating Rate Notes that reset monthly, the third Wednesday of each month; in the case of Floating Rate Notes that reset quarterly, the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes that reset semiannually, the third Wednesday of the two months specified in the Supplement. If any Interest Reset Date for any Floating Rate Note is not a Business Day, such Interest Reset Date will be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Interest on each Floating Rate Note will be payable monthly, quarterly or semiannually (the Interest Payment Period) and on the Maturity Date. Unless otherwise specified in the Supplement, and except as provided below, the date or dates on which interest will be payable (each an Interest Payment Date for a Floating Rate Note) will be, in the case of Floating Rate Notes with a monthly Interest Payment Period, on the third Wednesday of each month; in the case of Floating Rate Notes with a quarterly Interest Payment Period, on the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes with a semiannual Interest Payment Period, on the third Wednesday of the two months specified in the Supplement. In addition, the Maturity Date will also be an Interest Payment Date.
If any Interest Payment Date for any Floating Rate Note (other than an Interest Payment Date occurring on the Maturity Date) would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business
Ex. C-2
Day. If the Maturity Date of a Floating Rate Note falls on a day that is not a Business Day, the payment of principal and interest will be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after such maturity.
Interest payments on each Interest Payment Date for Floating Rate Notes will include accrued interest from and including the Issue Date or from and including the last date in respect of which interest has been paid, as the case may be, to, but excluding, such Interest Payment Date. On the Maturity Date, the interest payable on a Floating Rate Note will include interest accrued to, but excluding, the Maturity Date. Accrued interest will be calculated by multiplying the principal amount of a Floating Rate Note by an accrued interest factor. This accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal) for each such day will be computed by dividing the interest rate applicable to such day by 360, in the cases where the Base Rate is the CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR or Prime Rate, or by the actual number of days in the year, in the case where the Base Rate is the Treasury Rate. The interest rate in effect on each day will be (i) if such day is an Interest Reset Date, the interest rate with respect to the Interest Determination Date (as defined below) pertaining to such Interest Reset Date, or (ii) if such day is not an Interest Reset Date, the interest rate with respect to the Interest Determination Date pertaining to the next preceding Interest Reset Date, subject in either case to any adjustment by a Spread and/or a Spread Multiplier.
The Interest Determination Date where the Base Rate is the CD Rate or the Commercial Paper Rate will be the second Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Federal Funds Rate or the Prime Rate will be the Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is LIBOR will be the second London Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Treasury Rate will be the day of the week in which such Interest Reset Date falls when Treasury Bills are normally auctioned. Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is held on the following Tuesday or the preceding Friday. If an auction is so held on the preceding Friday, such Friday will be the Interest Determination Date pertaining to the Interest Reset Date occurring in the next succeeding week.
The Index Maturity is the period to maturity of the instrument or obligation from which the applicable Base Rate is calculated.
The Calculation Date, where applicable, shall be the earlier of (i) the tenth calendar day following the applicable Interest Determination Date or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity Date.
All times referred to herein reflect New York City time, unless otherwise specified.
Ex. C-3
The Issuer shall specify in writing to the Issuing and Paying Agent which party will be the calculation agent (the Calculation Agent) with respect to the Floating Rate Notes. The Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate which will become effective on the next Interest Reset Date with respect to such Floating Rate Note to the Issuing and Paying Agent as soon as the interest rate with respect to such Floating Rate Note has been determined and as soon as practicable after any change in such interest rate.
All percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five-one millionths of a percentage point rounded upwards. For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655). All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded, in the case of U.S. dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with one-half cent or unit being rounded upwards).
CD Rate Notes
CD Rate means the rate on any Interest Determination Date for negotiable certificates of deposit having the Index Maturity as published by the Board of Governors of the Federal Reserve System (the FRB) in Statistical Release H.15(519), Selected Interest Rates or any successor publication of the FRB (H.15(519)) under the heading CDs (Secondary Market).
If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, the CD Rate will be the rate on such Interest Determination Date set forth in the daily update of H.15(519), available through the world wide website of the FRB at http://www.federalreserve.gov/releases/h15/Update, or any successor site or publication or other recognized electronic source used for the purpose of displaying the applicable rate (H.15 Daily Update) under the caption CDs (Secondary Market).
If such rate is not published in either H.15(519) or H.15 Daily Update by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the CD Rate to be the arithmetic mean of the secondary market offered rates as of 10:00 a.m. on such Interest Determination Date of three leading nonbank dealers1 in negotiable U.S. dollar certificates of deposit in New York City selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing in the market for negotiable certificates of deposit with a remaining maturity closest to the Index Maturity in the denomination of $5,000,000.
If the dealers selected by the Calculation Agent are not quoting as set forth above, the CD Rate will remain the CD Rate then in effect on such Interest Determination Date.
1 | Such nonbank dealers referred to in this Statement of Terms may include affiliates of the Dealer. |
Ex. C-4
Commercial Paper Rate Notes
Commercial Paper Rate means the Money Market Yield (calculated as described below) of the rate on any Interest Determination Date for commercial paper having the Index Maturity, as published in H.15(519) under the heading Commercial Paper-Nonfinancial.
If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, then the Commercial Paper Rate will be the Money Market Yield of the rate on such Interest Determination Date for commercial paper of the Index Maturity as published in H.15 Daily Update under the heading Commercial Paper-Nonfinancial.
If by 3:00 p.m. on such Calculation Date such rate is not published in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Commercial Paper Rate to be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m. on such Interest Determination Date of three leading dealers of U.S. dollar commercial paper in New York City selected by the Calculation Agent for commercial paper of the Index Maturity placed for an industrial issuer whose bond rating is AA, or the equivalent, from a nationally recognized statistical rating organization.
If the dealers selected by the Calculation Agent are not quoting as mentioned above, the Commercial Paper Rate with respect to such Interest Determination Date will remain the Commercial Paper Rate then in effect on such Interest Determination Date.
Money Market Yield will be a yield calculated in accordance with the following formula:
where D refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and M refers to the actual number of days in the interest period for which interest is being calculated.
Federal Funds Rate Notes
Federal Funds Rate means the rate on any Interest Determination Date for Federal Funds as published in Reuters (or any successor service) on page FEDFUNDS1 under the heading EFFECT (or any other page as may replace the specified page on that service) (Reuters Page FEDFUNDS1).
If the above rate does not appear on Reuters Page FEDFUNDS1 or is not so published by 3:00 p.m. on the Calculation Date, the Federal Funds Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update under the heading Federal Funds/(Effective).
Ex. C-5
If such rate is not published as described above by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Federal Funds Rate to be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by each of three leading brokers of Federal Funds transactions in New York City selected by the Calculation Agent prior to 9:00 a.m. on such Interest Determination Date.
If the brokers selected by the Calculation Agent are not quoting as mentioned above, the Federal Funds Rate will remain the Federal Funds Rate then in effect on such Interest Determination Date.
LIBOR Notes
The London Interbank offered rate (LIBOR) means, with respect to any Interest Determination Date, the rate for deposits in U.S. dollars having the Index Maturity that appears on the Designated LIBOR Page as of 11:00 a.m., London time, on such Interest Determination Date.
If no rate appears, LIBOR will be determined on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are offered to prime banks in the London interbank market by four major banks in such market selected by the Calculation Agent for a term equal to the Index Maturity and in principal amount equal to an amount that in the Calculation Agents judgment is representative for a single transaction in U.S. dollars in such market at such time (a Representative Amount). The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such interest period will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in New York City, on such Interest Determination Date by three major banks in New York City, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks, for a term equal to the Index Maturity and in a Representative Amount; provided, however, that if fewer than three banks so selected by the Calculation Agent are providing such quotations, the then existing LIBOR rate will remain in effect for such Interest Payment Period.
Designated LIBOR Page means Reuters Screen LIBOR01 Page or any replacement page or pages on which London interbank rates of major banks for the Index Currency are displayed.
Prime Rate Notes
Prime Rate means the rate on any Interest Determination Date as published in H.15(519) under the heading Bank Prime Loan.
If the above rate is not published in H.15(519) prior to 3:00 p.m. on the Calculation Date, then the Prime Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update opposite the caption Bank Prime Loan.
Ex. C-6
If the rate is not published prior to 3:00 p.m. on the Calculation Date in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME1 Page (as defined below) as such banks prime rate or base lending rate as of 11:00 a.m., on that Interest Determination Date.
If fewer than four such rates referred to above are so published by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on such Interest Determination Date by three major banks in New York City selected by the Calculation Agent.
If the banks selected are not quoting as mentioned above, the Prime Rate will remain the Prime Rate in effect on such Interest Determination Date.
Reuters Screen US Prime1 Page means the display designated as page USPrime1 of the Reuters Service, or any successor service, or any replacement page or pages on that service, for the purpose of displaying prime rates or base lending rates of major U.S. banks.
Treasury Rate Notes
Treasury Rate means:
(1) the rate from the auction held on the Interest Determination Date (the Auction) of direct obligations of the United States (Treasury Bills) having the Index Maturity specified in the applicable pricing supplement above under the caption INVESTMENT RATE, as that rate appears on Reuters Screen USAUCTION10 or USAUCTION11 Page under the heading Investment Rate (or any other page as may replace the specified page on that service or a successor service), or
(2) if the rate referred to in clause (1) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, under the caption U.S. Government Securities/Treasury Bills/Auction High, or
(3) if the rate referred to in clause (2) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury, or
(4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption U.S. Government Securities/Treasury Bills/Secondary Market, or
Ex. C-7
(5) if the rate referred to in clause (4) not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, under the caption U.S. Government Securities/Treasury Bills/Secondary Market, or
(6) if the rate referred to in clause (5) is not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m. on that Interest Determination Date, of three primary United States government securities dealers selected by the Calculation Agent, for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified in the Supplement, or
(7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date.
Bond Equivalent Yield means a yield (expressed as a percentage) calculated in accordance with the following formula:
where D refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, N refers to 365 or 366, as the case may be, and M refers to the actual number of days in the applicable Interest Reset Period.
3. | Final Maturity. The Stated Maturity Date for any Note will be the date so specified in the Supplement, which shall be no later than 397 days from the date of issuance. On its Stated Maturity Date, or any date prior to the Stated Maturity Date on which the particular Note becomes due and payable by the declaration of acceleration, each such date being referred to as a Maturity Date, the principal amount of each Note, together with accrued and unpaid interest thereon, will be immediately due and payable. |
4. | Events of Default. The occurrence of any of the following shall constitute an Event of Default with respect to a Note: (i) default in any payment of principal of or interest on such Note (including on a redemption thereof); (ii) the Issuer makes any compromise arrangement with its creditors generally including the entering into any form of moratorium with its creditors generally; (iii) a court having jurisdiction shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or there shall be appointed a receiver, administrator, liquidator, custodian, trustee or sequestrator (or similar officer) with respect to the whole or substantially the whole of the assets of the Issuer and any such decree, order or appointment is not removed, discharged or withdrawn within 60 days thereafter; or (iv) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an |
Ex. C-8
involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, administrator, liquidator, assignee, custodian, trustee or sequestrator (or similar official), with respect to the whole or substantially the whole of the assets of the Issuer or make any general assignment for the benefit of creditors. Upon the occurrence of an Event of Default, the principal of each obligation evidenced by such Note (together with interest accrued and unpaid thereon) shall become, without any notice or demand, immediately due and payable.2 |
5. | Obligation Absolute. No provision of the Issuing and Paying Agency Agreement under which the Notes are issued shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on each Note at the times, place and rate, and in the coin or currency, herein prescribed. |
6. | Supplement. Any term contained in the Supplement shall supercede any conflicting term contained herein. |
2 | Unlike single payment notes, where a default arises only at the stated maturity, interest-bearing notes with multiple payment dates should contain a default provision permitting acceleration of the maturity if the Issuer defaults on an interest payment. |
Ex. C-9
Exhibit D
Note
[See attached]
Exhibit 10.29
Amended and Restated
Commercial Paper Dealer Agreement
4(a)(2) Program
Between:
BlackRock, Inc., as Issuer
and
Merrill Lynch, Pierce, Fenner & Smith Incorporated (as successor to Banc of America Securities LLC), as Dealer
Concerning Notes to be issued pursuant to an Issuing and Paying Agency Agreement dated as of December 23, 2014 between the Issuer and Citibank, N.A., as Issuing and Paying Agent.
Dated as of January 6, 2015
This agreement (as amended, supplemented or otherwise modified and in effect from time to time, this Agreement), which amends and restates the Commercial Paper Dealer Agreement, dated as of October 14, 2009, sets forth the understandings between the Issuer and the Dealer, each named on the cover page hereof, in connection with the issuance and sale by the Issuer of its short-term promissory notes in substantially the form of Exhibit D hereto (the Notes) through the Dealer.
Certain terms used in this Agreement are defined in Section 6 hereof.
The Addendum to this Agreement, and any Annexes or Exhibits described in this Agreement or such Addendum, are hereby incorporated into this Agreement and made fully a part hereof.
1. | Offers, Sales and Resales of Notes. |
1.1 | While (i) the Issuer has and shall have no obligation to sell the Notes to the Dealer or to permit the Dealer to arrange any sale of the Notes for the account of the Issuer, and (ii) the Dealer has and shall have no obligation to purchase the Notes from the Issuer or to arrange any sale of the Notes for the account of the Issuer, the parties hereto agree that in any case where the Dealer purchases Notes from the Issuer, or arranges for the sale of Notes by the Issuer, such Notes will be purchased or sold by the Dealer in reliance on the representations, warranties, covenants and agreements of the Issuer contained herein or made pursuant hereto and on the terms and conditions and in the manner provided herein. |
1.2 | So long as this Agreement shall remain in effect, and in addition to the limitations contained in Section 1.7 hereof, the Issuer shall not, without the consent of the Dealer, offer, solicit or accept offers to purchase, or sell, any Notes except (a) in transactions with one or more dealers which may from time to time after the date hereof become dealers with respect to the Notes by executing with the Issuer one or more agreements which contain provisions substantially identical to those contained in Section 1 of this Agreement, of which the Issuer hereby undertakes to provide the Dealer prompt notice or (b) in transactions with the other dealers listed on the Addendum hereto, which are executing agreements with the Issuer which contain provisions substantially identical to Section 1 of this Agreement contemporaneously herewith. In no event shall the Issuer offer, solicit or accept offers to purchase, or sell, any Notes directly on its own behalf in transactions with persons other than broker-dealers as specifically permitted in this Section 1.2. |
1.3 | The Notes shall be in a minimum denomination of $250,000 or integral multiples of $1,000 in excess thereof, will bear such interest rates, if interest bearing, or will be sold at such discount from their face amounts, as shall be agreed upon by the Dealer and the Issuer, shall have a maturity not exceeding 397 days from the date of issuance and may have such terms as are specified in Exhibit C hereto or the Private Placement Memorandum, a pricing supplement or as otherwise agreed upon by the applicable purchaser and the Issuer. The Notes shall not contain any provision for extension, renewal or automatic rollover. |
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1.4 | The authentication and issuance of, and payment for, the Notes shall be effected in accordance with the Issuing and Paying Agency Agreement, and the Notes shall be either individual physical certificates or book-entry notes evidenced by one or more master notes (each, a Master Note) registered in the name of The Depository Trust Company (DTC) or its nominee, in the form or forms annexed hereto as Exhibit D. |
1.5 | If the Issuer and the Dealer shall agree on the terms of the purchase of any Note by the Dealer or the sale of any Note arranged by the Dealer (including, but not limited to, agreement with respect to the date of issue, purchase price, principal amount, maturity and interest rate or interest rate index and margin (in the case of interest-bearing Notes) or discount thereof (in the case of Notes issued on a discount basis), and appropriate compensation for the Dealers services hereunder) pursuant to this Agreement, the Issuer shall cause such Note to be issued and delivered in accordance with the terms of the Issuing and Paying Agency Agreement and payment for such Note shall be made by the purchaser thereof, either directly or through the Dealer, to the Issuing and Paying Agent, for the account of the Issuer. Except as otherwise agreed, in the event that the Dealer is acting as an agent and a purchaser shall either fail to accept delivery of or make payment for a Note on the date fixed for settlement, the Dealer shall promptly notify the Issuer, and if the Dealer has theretofore paid the Issuer for the Note, the Issuer will promptly return such funds to the Dealer against its return of the Note to the Issuer, in the case of a certificated Note, and upon notice of such failure in the case of a book-entry Note. If such failure occurred for any reason other than default by the Dealer, the Issuer shall reimburse the Dealer on an equitable basis for the Dealers loss of the use of such funds for the period such funds were credited to the Issuers account. |
1.6 | The Dealer and the Issuer hereby establish and agree to observe the following procedures in connection with offers, sales and subsequent resales or other transfers of the Notes: |
(a) | Offers and sales of the Notes by or through the Dealer shall be made only to: (i) investors reasonably believed by the Dealer to be Qualified Institutional Buyers or Institutional Accredited Investors and (ii) non-bank fiduciaries or agents that will be purchasing Notes for one or more accounts, each of which is reasonably believed by the Dealer to be an Institutional Accredited Investor. |
(b) | Resales and other transfers of the Notes by the holders thereof shall be made only in accordance with the restrictions in the legend described in clause (e) below. |
(c) | No general solicitation or general advertising shall be used in connection with the offering of the Notes. Without limiting the generality of the foregoing, without the prior written approval of the Dealer (which shall not be unreasonably withheld or delayed), the Issuer shall not issue any press release or place or publish any tombstone or other advertisement relating to the Notes. |
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(d) | No sale of Notes to any one purchaser shall be for less than $250,000 principal or face amount, and no Note shall be issued in a smaller principal or face amount. If the purchaser is a non-bank fiduciary acting on behalf of others, each person for whom such purchaser is acting must purchase at least $250,000 principal or face amount of Notes. |
(e) | Offers and sales of the Notes shall be subject to the restrictions described in the legend appearing on Exhibit A hereto. A legend substantially to the effect of such Exhibit A shall appear as part of the Private Placement Memorandum used in connection with offers and sales of Notes hereunder, as well as on each individual certificate representing a Note and each Master Note representing book-entry Notes offered and sold pursuant to this Agreement. |
(f) | To insure that potential purchasers of Notes have received the then-current Private Placement Memorandum prior to purchasing Notes, the Dealer shall furnish or shall have furnished to each purchaser of Notes for which it has acted as the Dealer a copy of the then-current Private Placement Memorandum unless such purchaser has previously received a copy of the Private Placement Memorandum as then in effect. The Private Placement Memorandum shall expressly state that any person to whom Notes are offered shall have an opportunity to ask questions of, and receive information from, the Issuer and the Dealer and shall provide the names, addresses and telephone numbers of the persons from whom information regarding the Issuer may be obtained. |
(g) | The Issuer agrees, for the benefit of the Dealer and each of the holders and prospective purchasers from time to time of the Notes that, if at any time the Issuer shall not be subject to Section 13 or 15(d) of the Exchange Act, the Issuer will furnish, upon request and at its expense, to the Dealer and to holders and prospective purchasers of Notes information required by Rule 144A(d)(4)(i) in compliance with Rule 144A(d). |
(h) | In the event that any Note offered or to be offered by the Dealer would be ineligible for resale under Rule 144A, the Issuer shall immediately notify the Dealer (by telephone, confirmed in writing) of such fact and shall promptly prepare and deliver to the Dealer an amendment or supplement to the Private Placement Memorandum describing the Notes that are ineligible, the reason for such ineligibility and any other relevant information relating thereto. |
(i) | The Issuer represents that it is not currently issuing commercial paper in the United States market in reliance upon the exemption provided by Section 3(a)(3) of the Securities Act. The Issuer agrees that, if it shall issue commercial paper after the date hereof in reliance upon such exemption (a) the proceeds from the sale of the Notes will be segregated from the proceeds of the sale of any such commercial paper by being placed in a separate account; (b) the Issuer will institute appropriate corporate procedures to ensure that the offers and sales of notes issued by the Issuer pursuant to the Section 3(a)(3) exemption are not integrated with offerings and sales of Notes hereunder; and (c) the Issuer will comply with each of the requirements of Section 3(a)(3) of the Securities Act in selling commercial paper or other short-term debt securities other than the Notes in the United States. |
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1.7 | The Issuer hereby represents and warrants to the Dealer, in connection with offers, sales and resales of Notes by the Issuer, as follows: |
(a) | The Issuer hereby confirms to the Dealer that (except as permitted by Section 1.6(i)) within the preceding six months neither the Issuer nor any person other than the Dealer or the other dealers referred to in Section 1.2 hereof acting on behalf of the Issuer has offered or sold any Notes, or any substantially similar security of the Issuer (including, without limitation, medium-term notes issued by the Issuer), to, or solicited offers to buy any such security from, any person other than the Dealer or the other dealers referred to in Section 1.2 hereof. The Issuer also agrees that (except as permitted by Section 1.6(i)), as long as the Notes are being offered for sale by the Dealer and the other dealers referred to in Section 1.2 hereof as contemplated hereby and until at least six months after the offer of Notes hereunder has been terminated, neither the Issuer nor any person other than the Dealer or the other dealers referred to in Section 1.2 hereof (except as contemplated by Section 1.2 hereof) will offer the Notes or any substantially similar security of the Issuer for sale to, or solicit offers to buy any such security from, any person other than the Dealer or the other dealers referred to in Section 1.2 hereof, it being understood that such agreement is made with a view to bringing the offer and sale of the Notes within the exemption provided by Section 4(a)(2) of the Securities Act and shall survive any termination of this Agreement. The Issuer hereby represents and warrants that it has not taken or omitted to take, and will not take or omit to take, any action that would cause the offering and sale of Notes hereunder to be integrated with any other offering of securities, whether such offering is made by the Issuer or some other party or parties. |
(b) | The Issuer represents and agrees that the proceeds of the sale of the Notes are not currently contemplated to be used for the purpose of buying, carrying or trading securities within the meaning of Regulation T and the interpretations thereunder by the Board of Governors of the Federal Reserve System. In the event that the Issuer determines to use such proceeds for the purpose of buying, carrying or trading securities, whether in connection with an acquisition of another company or otherwise, the Issuer shall give the Dealer at least five business days prior written notice to that effect. The Issuer shall also give the Dealer prompt notice of the actual date that it commences to purchase securities with the proceeds of the Notes. Thereafter, in the event that the Dealer purchases Notes as principal and does not resell such Notes on the day of such purchase, to the extent necessary to comply with Regulation T and the interpretations thereunder, the Dealer will sell such Notes either (i) only to offerees it reasonably believes to be Qualified Institutional Buyers or to Qualified Institutional Buyers it reasonably believes are acting for other Qualified Institutional Buyers, in each case in accordance with Rule 144A or (ii) in a manner which would not cause a violation of Regulation T and the interpretations thereunder. |
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2. | Representations and Warranties of Issuer. |
The Issuer represents and warrants that:
2.1 | The Issuer is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, has the power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted and is duly qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization, except where the failure to be so qualified or in good standing could not be reasonably expected to result in a Material Adverse Effect. The Issuer has all the requisite power and authority to execute, deliver and perform its obligations under the Notes, this Agreement and the Issuing and Paying Agency Agreement. |
2.2 | This Agreement and the Issuing and Paying Agency Agreement have been duly authorized, executed and delivered by the Issuer and constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law). |
2.3 | The Notes have been duly authorized, and when issued as provided in the Issuing and Paying Agency Agreement, will be duly and validly issued and will constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law). |
2.4 | The offer and sale of the Notes by the Issuer in the manner contemplated hereby do not require registration of the Notes under the Securities Act, pursuant to the exemption from registration contained in Section 4(a)(2) thereof, and no indenture in respect of the Notes is required to be qualified under the Trust Indenture Act of 1939, as amended. |
2.5 | The Notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness of the Issuer. |
2.6 | No consent or action of, or filing or registration with, any governmental or public regulatory body or authority, including the SEC, is required to authorize, or is otherwise required in connection with the execution, delivery or performance of, this Agreement, the Notes or the Issuing and Paying Agency Agreement, except as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes. |
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2.7 | The execution, delivery and performance by the Issuer of this Agreement and the Issuing and Paying Agency Agreement, and the issuance of the Notes in accordance with the Issuing and Paying Agency Agreement, each in accordance with its respective terms, and the transactions contemplated hereby and thereby do not and will not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental Approval relating to the Issuer where the failure to obtain such Governmental Approval could reasonably be expected to have a Material Adverse Effect, (ii) violate any Applicable Law relating to the Issuer except where such violation could not reasonably be expected to have a Material Adverse Effect, (iii) conflict with, result in a breach of or constitute a default under the articles of incorporation or bylaws of the Issuer, (iv) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which the Issuer is a party or by which any of its properties may be bound or any Governmental Approval relating to the Issuer, which could reasonably be expected to have a Material Adverse Effect, (v) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Issuer or (vi) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement, the Notes or the Issuing and Paying Agency Agreement other than consents, authorizations, filings or other acts or consents which have been obtained or made and are in full force and effect or for which the failure to obtain or make could not reasonably be expected to have a Material Adverse Effect. |
2.8 | Except for matters disclosed in any filings made by the Issuer with the SEC, there are no actions, suits or proceedings pending nor, to the knowledge of the Issuer, threatened against or in any other way relating adversely to or affecting the Issuer or any of its properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that has had or could reasonably be expected to have a Material Adverse Effect. |
2.9 | The Issuer is not an investment company within the meaning of the Investment Company Act of 1940, as amended. |
2.10 | Neither the Private Placement Memorandum nor the Company Information contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. |
2.11 | Each (a) issuance of Notes by the Issuer hereunder and (b) amendment or supplement of the Private Placement Memorandum shall be deemed a representation and warranty by the Issuer to the Dealer, as of the date thereof, that, both before and after giving effect to such issuance and after giving effect to such amendment or supplement, (i) the representations and warranties given by the Issuer set forth in this Section 2 remain true and correct on and as of such date as if made on and as of such date, (ii) in the case of an issuance of Notes, the Notes being issued on such date have been duly and validly issued and constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in |
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accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law), (iii) in the case of an issuance of Notes, since the date of the most recent Private Placement Memorandum, there has been no material adverse change in the financial condition or operations of the Issuer which, if not publicly available, has not been disclosed to the Dealer in writing and (iv) the Issuer is not in default under any of its obligations hereunder, under the Issuing and Paying Agency Agreement or the Notes that is reasonably likely to result in a Material Adverse Effect. |
3. | Covenants and Agreements of Issuer. |
The Issuer covenants and agrees that:
3.1 | The Issuer will give the Dealer prompt notice (but in any event prior to any subsequent issuance of Notes hereunder) of any amendment to, modification of or waiver with respect to, the Notes or the Issuing and Paying Agency Agreement, including a complete copy of any such amendment, modification or waiver. |
3.2 | The Issuer shall, whenever there shall occur any change, development or occurrence in relation to the Issuer that would have a Material Adverse Effect (including any receipt by the Issuer, from any nationally recognized statistical rating organization that has provided a rating to the Notes, of any notice of a downgrading in such rating that is publicly available), promptly, and in any event prior to any subsequent issuance of Notes hereunder, notify the Dealer (by telephone, confirmed in writing) of such change, development or occurrence. |
3.3 | The Issuer shall from time to time furnish to the Dealer such non-public information as the Dealer may reasonably request, regarding (i) the Issuers operations and financial condition, (ii) the due authorization and execution of the Notes and (iii) the Issuers ability to pay the Notes as they mature; provided that the disclosure of such information shall not be reasonably likely to cause the Issuer to be in violation of any Applicable Law or otherwise violate the terms of any confidentiality agreement to which the Issuer is subject. |
3.4 | The Issuer will take all such action as the Dealer may reasonably request to ensure that each offer and each sale of the Notes will comply with any applicable state Blue Sky laws; provided, however, that the Issuer shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified or subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. |
3.5 | The Issuer will not be in default of any of its obligations hereunder, under the Notes or under the Issuing and Paying Agency Agreement, at any time that any of the Notes are outstanding. |
3.6 | The Issuer shall not issue Notes hereunder until the Dealer shall have received (a) one or more opinions of counsel to the Issuer, addressed to the Dealer, |
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satisfactory in form and substance to the Dealer, (b) a copy of the executed Issuing and Paying Agency Agreement as then in effect, (c) a copy of resolutions adopted by the Board of Directors of the Issuer, satisfactory in form and substance to the Dealer and certified by the Secretary or similar officer of the Issuer, authorizing execution and delivery by the Issuer of this Agreement, the Issuing and Paying Agency Agreement and the Notes and consummation by the Issuer of the transactions contemplated hereby and thereby, (d) prior to the issuance of any book-entry Notes represented by a master note registered in the name of DTC or its nominee, a copy of the executed Letter of Representations among the Issuer, the Issuing and Paying Agent and DTC and of the executed master note, (e) prior to the issuance of any Notes in physical form, a copy of such form (unless attached to this Agreement or the Issuing and Paying Agency Agreement), (f) confirmation of the then current ratings assigned to the Notes by each nationally recognized statistical rating organization then rating the Notes and (g) such other certificates, opinions, letters and documents as the Dealer shall have reasonably requested. |
3.7 | The Issuer shall reimburse the Dealer for all of the Dealers reasonable out-of-pocket expenses related to this Agreement, including reasonable expenses incurred in connection with its preparation and negotiation, and the transactions contemplated hereby (including, but not limited to, the printing and distribution of the Private Placement Memorandum), and, if applicable, for the reasonable fees and out-of-pocket expenses of the Dealers counsel. |
3.8 | The Issuer shall not file a Form D (as referenced in Rule 503 under the Securities Act) at any time in respect of the offer or sale of the Notes. |
4. | Disclosure. |
4.1 | The Private Placement Memorandum and its contents (other than the Dealer Information) shall be the sole responsibility of the Issuer. The Private Placement Memorandum shall contain a statement expressly offering an opportunity for each prospective purchaser to ask questions of, and receive answers from, the Issuer concerning the offering of Notes and to obtain relevant additional information which the Issuer possesses or can acquire without unreasonable effort or expense. | |||
4.2 | The Issuer agrees to promptly furnish the Dealer the Company Information as it becomes available. | |||
4.3 | (a) | The Issuer further agrees to notify the Dealer promptly upon the occurrence of any event relating to or affecting the Issuer that would cause the Company Information then in existence to include an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they are made, not misleading. | ||
(b) | In the event that the Issuer gives the Dealer notice pursuant to Section 4.3(a) and the Dealer notifies the Issuer that it then has Notes it is holding in inventory, (i) the Issuer agrees promptly to supplement or amend the Private Placement Memorandum so that the Private Placement Memorandum, as |
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amended or supplemented, shall not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Issuer shall make such supplement or amendment available to the Dealer prior to any further sale or resale of Notes or (ii) the Issuer shall repurchase any such Note held in inventory at a price equal to the face amount thereof discounted on a ratable basis based on the Issuers market rate reflecting the remaining period to maturity in relation to the original term. | ||||
(c) | In the event that (i) the Issuer gives the Dealer notice pursuant to Section 4.3(a), (ii) the Dealer does not notify the Issuer that it is then holding Notes in inventory and (iii) the Issuer chooses not to promptly amend or supplement the Private Placement Memorandum in the manner described in clause (b) above, then all solicitations and sales of Notes shall be suspended until such time as the Issuer has so amended or supplemented the Private Placement Memorandum, and made such amendment or supplement available to the Dealer. | |||
(d) | Without limiting the generality of Section 4.3(a), the Issuer shall review, amend and supplement the Private Placement Memorandum on a periodic basis, but no less than at least once annually, to incorporate current financial information of the Issuer to the extent necessary to ensure that the information provided in the Private Placement Memorandum is accurate and complete. |
5. | Indemnification and Contribution. |
5.1 | The Issuer will indemnify and hold harmless the Dealer, each individual, corporation, partnership, trust, association or other entity controlling the Dealer, any affiliate of the Dealer or any such controlling entity and their respective directors, officers, employees, partners, incorporators, shareholders, servants, trustees and agents (hereinafter the Indemnitees) against any and all liabilities, penalties, suits, causes of action, losses, damages, claims, costs and expenses (including, without limitation, fees and disbursements of counsel) or judgments of whatever kind or nature (each a Claim), imposed upon, incurred by or asserted against the Indemnitees arising out of or based upon (i) any allegation that the Private Placement Memorandum, the Company Information or any information provided by the Issuer to the Dealer included (as of any relevant time) or includes an untrue statement of a material fact or omitted (as of any relevant time) or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (ii) arising out of or based upon the breach by the Issuer of any agreement, covenant or representation made in or pursuant to this Agreement. This indemnification shall not apply to the extent that the Claim arises out of or is based upon Dealer Information or is determined to have resulted from an Indemnitees gross negligence or willful misconduct. |
5.2 | Provisions relating to claims made for indemnification under this Section 5 are set forth on Exhibit B to this Agreement. |
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5.3 | In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in this Section 5 is held to be unavailable or insufficient to hold harmless the Indemnitees, although applicable in accordance with the terms of this Section 5, the Issuer shall contribute to the aggregate costs incurred by the Dealer in connection with any Claim in the proportion of the respective economic interests of the Issuer and the Dealer; provided, however, that such contribution by the Issuer shall be in an amount such that the aggregate costs incurred by the Dealer do not exceed the aggregate of the commissions and fees earned by the Dealer hereunder with respect to the issue or issues of Notes to which such Claim relates. The respective economic interests shall be calculated by reference to the aggregate proceeds to the Issuer of the Notes issued hereunder and the aggregate commissions and fees earned by the Dealer hereunder. |
6. | Definitions. |
6.1 | Claim shall have the meaning set forth in Section 5.1. |
6.2 | Company Information at any given time shall mean the Private Placement Memorandum and information incorporated by reference therein together with, to the extent applicable, (i) the Issuers most recent report on Form 10-K filed with the SEC and each report on Form 10-Q or 8-K filed by the Issuer with the SEC since the most recent Form 10-K, (ii) the Issuers most recent annual audited financial statements and each interim financial statement or report prepared subsequent thereto, if not included in item (i) above, (iii) the Issuers and its affiliates other publicly available recent reports, including, but not limited to, any publicly available filings or reports provided to their respective shareholders, (iv) any other information or disclosure prepared pursuant to Section 4.3 hereof and (v) any information prepared or approved by the Issuer for dissemination to investors or potential investors in the Notes. |
6.3 | Dealer Information shall mean material concerning the Dealer provided by the Dealer in writing expressly for inclusion in the Private Placement Memorandum. |
6.4 | Exchange Act shall mean the U.S. Securities Exchange Act of 1934, as amended. |
6.5 | Governmental Approval shall mean all authorizations, consents, approvals, permits, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities. |
6.6 | Governmental Authority shall mean the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank). |
6.7 | Indemnitee shall have the meaning set forth in Section 5.1. |
6.8 | Institutional Accredited Investor shall mean an institutional investor that is an accredited investor within the meaning of Rule 501 under the Securities Act and that has such knowledge and experience in financial and business matters that it is |
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capable of evaluating and bearing the economic risk of an investment in the Notes, including, but not limited to, a bank, as defined in Section 3(a)(2) of the Securities Act, or a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity. |
6.9 | Issuing and Paying Agency Agreement shall mean the issuing and paying agency agreement described on the cover page of this Agreement, as such agreement may be amended or supplemented from time to time. |
6.10 | Issuing and Paying Agent shall mean the party designated as such on the cover page of this Agreement, as issuing and paying agent under the Issuing and Paying Agency Agreement, or any successor thereto in accordance with the Issuing and Paying Agency Agreement. |
6.11 | Material Adverse Effect shall mean a material adverse effect on (a) the business, operations or financial condition of the Issuer and its subsidiaries taken as a whole or (b) the ability of the Issuer to perform its obligations under this Agreement, the Notes and the Issuing and Paying Agency Agreement. |
6.12 | Non-bank fiduciary or agent shall mean a fiduciary or agent other than (a) a bank, as defined in Section 3(a)(2) of the Securities Act, or (b) a savings and loan association, as defined in Section 3(a)(5)(A) of the Securities Act. |
6.13 | Person shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity. |
6.14 | Private Placement Memorandum shall mean offering materials prepared in accordance with Section 4 (including materials referred to therein or incorporated by reference therein, if any) provided to purchasers and prospective purchasers of the Notes, and shall include amendments and supplements thereto which may be prepared from time to time in accordance with this Agreement (other than any amendment or supplement that has been completely superseded by a later amendment or supplement). |
6.15 | Qualified Institutional Buyer shall have the meaning assigned to that term in Rule 144A under the Securities Act. |
6.16 | Rule 144A shall mean Rule 144A under the Securities Act. |
6.17 | SEC shall mean the U.S. Securities and Exchange Commission. |
6.18 | Securities Act shall mean the U.S. Securities Act of 1933, as amended. |
7. | General |
7.1 | Unless otherwise expressly provided herein, all notices under this Agreement to parties hereto shall be in writing and shall be effective when received at the address of the respective party set forth in the Addendum to this Agreement. |
7.2 | This Agreement shall be governed by and construed in accordance with the laws of the State of New York. |
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7.3 | The Issuer agrees that any suit, action or proceeding brought by the Issuer against the Dealer in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes shall be brought solely in the United States federal courts located in the Borough of Manhattan or the courts of the State of New York located in the Borough of Manhattan. EACH OF THE DEALER AND THE ISSUER WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. |
7.4 | This Agreement may be terminated, at any time, by the Issuer, upon one business days prior notice to such effect to the Dealer, or by the Dealer upon one business days prior notice to such effect to the Issuer. Any such termination, however, shall not affect the obligations of the Issuer under Sections 3.7, 5 and 7.3 hereof or the respective representations, warranties, agreements, covenants, rights or responsibilities of the parties made or arising prior to the termination of this Agreement. |
7.5 | This Agreement is not assignable by either party hereto without the written consent of the other party; provided, however, with reasonably prompt notice to the Issuer, the Dealer may assign its rights and obligations under this Agreement to any affiliate of the Dealer. |
7.6 | This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. |
7.7 | This Agreement is for the exclusive benefit of the parties hereto, and their respective permitted successors and assigns hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. |
7.8 | The parties hereto agree that the Issuer may, in accordance with the terms of this Section 7.8, from time to time replace the party which is then acting as Issuing and Paying Agent (the Current Issuing and Paying Agent) with another party (such other party, the Replacement Issuing and Paying Agent), and enter into an agreement with the Replacement Issuing and Paying Agent covering the provision of issuing and paying agency functions in respect of the Notes by the Replacement Issuing and Paying Agent (the Replacement Issuing and Paying Agency Agreement) (any such replacement, a Replacement). |
Notwithstanding anything to the contrary herein, including without limitation Sections 6.9 and 6.10 hereof, from and after the effective date of any Replacement, except to the extent that the Issuing and Paying Agency Agreement provides that the Current Issuing and Paying Agent will continue to act in respect of Notes outstanding as of the effective date of such Replacement, the Issuing and Paying Agent for the Notes shall be deemed to be the Replacement Issuing and Paying Agent, all references to the Issuing and Paying Agent hereunder shall be deemed to refer to the Replacement Issuing and Paying Agent, and all references to the Issuing and Paying Agency Agreement hereunder shall be deemed to refer to the Replacement Issuing and Paying Agency Agreement.
12
From and after the effective date of any Replacement, the Issuer shall not issue any Notes hereunder unless and until the Dealer shall have received: (i) a copy of the executed Replacement Issuing and Paying Agency Agreement, (ii) a copy of the executed Letter of Representations among the Issuer, the Replacement Issuing and Paying Agent and DTC, (iii) a copy of the executed Master Note authenticated by the Replacement Issuing and Paying Agent and registered in the name of DTC or its nominee, (iv) an amendment or supplement to the Private Placement Memorandum describing the Replacement Issuing and Paying Agent as the Issuing and Paying Agent for the Notes, and reflecting any other changes thereto necessary in light of the Replacement so that the Private Placement Memorandum, as amended or supplemented, satisfies the requirements of this Agreement, and (v) a legal opinion of counsel to the Issuer, addressed to the Dealer, satisfactory in form and substance reasonably satisfactory to the Dealer, as to (a) the due authorization, delivery, validity and enforceability of Notes issued pursuant to the Replacement Issuing and Paying Agency Agreement, and (b) such other matters as the Dealer may reasonably request.
[Signature Page Follows]
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.
BLACKROCK, INC., as Issuer | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Dealer | |||||||
By: | /s/ Philippe Matsumoto |
By: | /s/ Robert J. Little | |||||
Name: | Philippe Matsumoto | Name: | Robert J. Little | |||||
Title: | Treasurer and Managing Director | Title: | Managing Director |
Amended and Restated
Commercial Paper Dealer Agreement
Addendum
The following additional clauses shall apply to the Agreement and be deemed a part thereof.
1. | The other dealers referred to in clause (b) of Section 1.2 of the Agreement are Barclays Capital Inc., Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC. |
2. | The addresses of the respective parties for purposes of notices under Section 7.1 are as follows: |
For the Issuer:
Address: 40 East 52nd Street, New York, New York 10022
Attention: Philippe Matsumoto
Email address: Philippe.Matsumoto@blackrock.com
Telephone number: (212) 810-3767
Fax number: (212) 810-3144
with a copy to
Attention: Armando Gochuico
Email address: Armando.Gochuico@blackrock.com
Fax number: 212-810-3144
For the Dealer:
Address: One Bryant Park, 8th Floor, New York, New York 10036
Attention: Short Term Fixed Income Origination; Robert Little
Telephone number: (646) 855-9781
Fax number: (404) 720-1652
2
Exhibit A
Form of Legend for Private Placement Memorandum and Notes
THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERS AND SALES THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER WILL BE DEEMED TO REPRESENT THAT (I) IT HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER AND THE NOTES, (II) IT IS NOT ACQUIRING SUCH NOTE WITH A VIEW TO ANY DISTRIBUTION THEREOF AND (III) IT IS EITHER (A) AN INSTITUTIONAL INVESTOR THAT IS (1) AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a) UNDER THE ACT (AN INSTITUTIONAL ACCREDITED INVESTOR) AND (2) PURCHASING NOTES FOR (i) ITS OWN ACCOUNT, (ii) A BANK (AS DEFINED IN SECTION 3(a)(2) OF THE ACT) OR A SAVINGS AND LOAN ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A) OF THE ACT) ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY OR (iii) A FIDUCIARY OR AGENT (OTHER THAN A U.S. BANK OR SAVINGS AND LOAN ASSOCIATION) PURCHASING NOTES FOR ONE OR MORE ACCOUNTS EACH OF WHICH ACCOUNTS IS SUCH AN INSTITUTIONAL ACCREDITED INVESTOR; OR (B) A QUALIFIED INSTITUTIONAL BUYER (QIB) WITHIN THE MEANING OF RULE 144A UNDER THE ACT THAT IS ACQUIRING NOTES FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH ACCOUNTS IS A QIB; AND THE PURCHASER ACKNOWLEDGES THAT IT IS AWARE THAT THE SELLER MAY RELY UPON THE EXEMPTION FROM THE REGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE 144A. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER THEREOF SHALL ALSO BE DEEMED TO AGREE THAT ANY RESALE OR OTHER TRANSFER THEREOF WILL BE MADE ONLY (A) IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (1) TO THE ISSUER OR TO A PLACEMENT AGENT DESIGNATED BY THE ISSUER AS A PLACEMENT AGENT FOR THE NOTES (COLLECTIVELY, THE PLACEMENT AGENTS), NONE OF WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2) THROUGH A PLACEMENT AGENT TO AN INSTITUTIONAL ACCREDITED INVESTOR OR A QIB, OR (3) TO A QIB IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF RULE 144A AND (B) IN MINIMUM AMOUNTS OF $250,000.
Ex. A-1
Exhibit B
Further Provisions Relating to Indemnification
(a) | The Issuer agrees to reimburse each Indemnitee for all expenses (including reasonable fees and disbursements of internal and external counsel) as they are incurred by it in connection with investigating or defending any loss, claim, damage, liability or action in respect of which indemnification may be sought under Section 5 of the Agreement (whether or not it is a party to any such proceedings). |
(b) | Promptly after receipt by an Indemnitee of notice of the existence of a Claim, such Indemnitee will, if a claim in respect thereof is to be made against the Issuer, notify the Issuer in writing of the existence thereof; provided that (i) the omission so to notify the Issuer will not relieve the Issuer from any liability which it may have hereunder unless and except to the extent it did not otherwise learn of such Claim and such failure results in the forfeiture by the Issuer of substantial rights and defenses, and (ii) the omission so to notify the Issuer will not relieve it from liability which it may have to an Indemnitee otherwise than on account of this indemnity agreement. In case any such Claim is made against any Indemnitee and it notifies the Issuer of the existence thereof, the Issuer will be entitled to participate therein, and to the extent that it may elect by written notice delivered to the Indemnitee, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnitee; provided that if the defendants in any such Claim include both the Indemnitee and the Issuer, and the Indemnitee shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Issuer, the Issuer shall not have the right to direct the defense of such Claim on behalf of such Indemnitee, and the Indemnitee shall have the right to select separate counsel to assert such legal defenses on behalf of such Indemnitee. Upon receipt of notice from the Issuer to such Indemnitee of the Issuers election so to assume the defense of such Claim and approval by the Indemnitee of counsel, the Issuer will not be liable to such Indemnitee for expenses incurred thereafter by the Indemnitee in connection with the defense thereof (other than reasonable costs of investigation) unless (i) the Indemnitee shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the Issuer shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel in the jurisdiction in which any Claim is brought), approved by the Dealer, representing the Indemnitee who is party to such Claim), (ii) the Issuer shall not have employed counsel reasonably satisfactory to the Indemnitee to represent the Indemnitee within a reasonable time after notice of existence of the Claim or (iii) the Issuer has authorized in writing the employment of counsel for the Indemnitee. The indemnity, reimbursement and contribution obligations of the Issuer hereunder shall be in addition to any other liability the Issuer may otherwise have to an Indemnitee and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Issuer and any Indemnitee. The Issuer agrees that without the Dealers prior written consent, it will not settle, compromise or consent to the entry of any judgment in any Claim in respect of which indemnification may be sought under the indemnification provision of the Agreement (whether or not the Dealer |
Ex. B-1
or any other Indemnitee is an actual or potential party to such Claim), unless such settlement, compromise or consent (i) includes an unconditional release of each Indemnitee from all liability arising out of such Claim and (ii) does not include a statement as to or an admission of fault, culpability or failure to act, by or on behalf of any Indemnitee. |
Ex. B-2
Exhibit C
Statement of Terms for Interest Bearing Commercial Paper Notes of [Name of Issuer]
THE PROVISIONS SET FORTH BELOW ARE QUALIFIED TO THE EXTENT APPLICABLE BY THE TRANSACTION SPECIFIC [PRICING] [PRIVATE PLACEMENT MEMORANDUM] SUPPLEMENT (THE SUPPLEMENT) (IF ANY) SENT TO EACH PURCHASER AT THE TIME OF THE TRANSACTION.
1. | General. (a) The obligations of the Issuer to which these terms apply (each a Note) are represented by one or more Master Notes (each, a Master Note) issued in the name of (or of a nominee for) The Depository Trust Company (DTC), which Master Note includes the terms and provisions for the Issuers Interest-Bearing Commercial Paper Notes that are set forth in this Statement of Terms, since this Statement of Terms constitutes an integral part of the Underlying Records as defined and referred to in the Master Note. |
(b) Business Day means any day other than a Saturday or Sunday that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, executive order or regulation to be closed in New York City and, with respect to LIBOR Notes (as defined below) is also a London Business Day. London Business Day means, a day, other than a Saturday or Sunday, on which dealings in deposits in U.S. dollars are transacted in the London interbank market.
2. | Interest. (a) Each Note will bear interest at a fixed rate (a Fixed Rate Note) or at a floating rate (a Floating Rate Note). |
(b) The Supplement sent to each holder of such Note will describe the following terms: (i) whether such Note is a Fixed Rate Note or a Floating Rate Note and whether such Note is an Original Issue Discount Note (as defined below); (ii) the date on which such Note will be issued (the Issue Date); (iii) the Stated Maturity Date (as defined below); (iv) if such Note is a Fixed Rate Note, the rate per annum at which such Note will bear interest, if any, and the Interest Payment Dates; (v) if such Note is a Floating Rate Note, the Base Rate, the Index Maturity, the Interest Reset Dates, the Interest Payment Dates and the Spread and/or Spread Multiplier, if any (all as defined below), and any other terms relating to the particular method of calculating the interest rate for such Note; and (vi) any other terms applicable specifically to such Note. Original Issue Discount Note means a Note which has a stated redemption price at the Stated Maturity Date that exceeds its Issue Price by more than a specified de minimis amount and which the Supplement indicates will be an Original Issue Discount Note.
(c) Each Fixed Rate Note will bear interest from its Issue Date at the rate per annum specified in the Supplement until the principal amount thereof is paid or made available for payment. Interest on each Fixed Rate Note will be payable on the dates specified in the Supplement (each an Interest Payment Date for a Fixed Rate Note) and on the Maturity Date (as defined below). Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-day months.
Ex. C-1
If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be payable on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
(d) The interest rate on each Floating Rate Note for each Interest Reset Period (as defined below) will be determined by reference to an interest rate basis (a Base Rate) plus or minus a number of basis points (one basis point equals one-hundredth of a percentage point) (the Spread), if any, and/or multiplied by a certain percentage (the Spread Multiplier), if any, until the principal thereof is paid or made available for payment. The Supplement will designate which of the following Base Rates is applicable to the related Floating Rate Note: (a) the CD Rate (a CD Rate Note), (b) the Commercial Paper Rate (a Commercial Paper Rate Note), (c) the Federal Funds Rate (a Federal Funds Rate Note), (d) LIBOR (a LIBOR Note), (e) the Prime Rate (a Prime Rate Note), (f) the Treasury Rate (a Treasury Rate Note) or (g) such other Base Rate as may be specified in such Supplement.
The rate of interest on each Floating Rate Note will be reset daily, weekly, monthly, quarterly or semi-annually (the Interest Reset Period). The date or dates on which interest will be reset (each an Interest Reset Date) will be, unless otherwise specified in the Supplement, in the case of Floating Rate Notes which reset daily, each Business Day, in the case of Floating Rate Notes (other than Treasury Rate Notes) that reset weekly, the Wednesday of each week; in the case of Treasury Rate Notes that reset weekly, the Tuesday of each week; in the case of Floating Rate Notes that reset monthly, the third Wednesday of each month; in the case of Floating Rate Notes that reset quarterly, the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes that reset semiannually, the third Wednesday of the two months specified in the Supplement. If any Interest Reset Date for any Floating Rate Note is not a Business Day, such Interest Reset Date will be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Interest on each Floating Rate Note will be payable monthly, quarterly or semiannually (the Interest Payment Period) and on the Maturity Date. Unless otherwise specified in the Supplement, and except as provided below, the date or dates on which interest will be payable (each an Interest Payment Date for a Floating Rate Note) will be, in the case of Floating Rate Notes with a monthly Interest Payment Period, on the third Wednesday of each month; in the case of Floating Rate Notes with a quarterly Interest Payment Period, on the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes with a semiannual Interest Payment Period, on the third Wednesday of the two months specified in the Supplement. In addition, the Maturity Date will also be an Interest Payment Date.
If any Interest Payment Date for any Floating Rate Note (other than an Interest Payment Date occurring on the Maturity Date) would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business
Ex. C-2
Day. If the Maturity Date of a Floating Rate Note falls on a day that is not a Business Day, the payment of principal and interest will be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after such maturity.
Interest payments on each Interest Payment Date for Floating Rate Notes will include accrued interest from and including the Issue Date or from and including the last date in respect of which interest has been paid, as the case may be, to, but excluding, such Interest Payment Date. On the Maturity Date, the interest payable on a Floating Rate Note will include interest accrued to, but excluding, the Maturity Date. Accrued interest will be calculated by multiplying the principal amount of a Floating Rate Note by an accrued interest factor. This accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal) for each such day will be computed by dividing the interest rate applicable to such day by 360, in the cases where the Base Rate is the CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR or Prime Rate, or by the actual number of days in the year, in the case where the Base Rate is the Treasury Rate. The interest rate in effect on each day will be (i) if such day is an Interest Reset Date, the interest rate with respect to the Interest Determination Date (as defined below) pertaining to such Interest Reset Date, or (ii) if such day is not an Interest Reset Date, the interest rate with respect to the Interest Determination Date pertaining to the next preceding Interest Reset Date, subject in either case to any adjustment by a Spread and/or a Spread Multiplier.
The Interest Determination Date where the Base Rate is the CD Rate or the Commercial Paper Rate will be the second Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Federal Funds Rate or the Prime Rate will be the Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is LIBOR will be the second London Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Treasury Rate will be the day of the week in which such Interest Reset Date falls when Treasury Bills are normally auctioned. Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is held on the following Tuesday or the preceding Friday. If an auction is so held on the preceding Friday, such Friday will be the Interest Determination Date pertaining to the Interest Reset Date occurring in the next succeeding week.
The Index Maturity is the period to maturity of the instrument or obligation from which the applicable Base Rate is calculated.
The Calculation Date, where applicable, shall be the earlier of (i) the tenth calendar day following the applicable Interest Determination Date or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity Date.
All times referred to herein reflect New York City time, unless otherwise specified.
Ex. C-3
The Issuer shall specify in writing to the Issuing and Paying Agent which party will be the calculation agent (the Calculation Agent) with respect to the Floating Rate Notes. The Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate which will become effective on the next Interest Reset Date with respect to such Floating Rate Note to the Issuing and Paying Agent as soon as the interest rate with respect to such Floating Rate Note has been determined and as soon as practicable after any change in such interest rate.
All percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five-one millionths of a percentage point rounded upwards. For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655). All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded, in the case of U.S. dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with one-half cent or unit being rounded upwards).
CD Rate Notes
CD Rate means the rate on any Interest Determination Date for negotiable certificates of deposit having the Index Maturity as published by the Board of Governors of the Federal Reserve System (the FRB) in Statistical Release H.15(519), Selected Interest Rates or any successor publication of the FRB (H.15(519)) under the heading CDs (Secondary Market).
If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, the CD Rate will be the rate on such Interest Determination Date set forth in the daily update of H.15(519), available through the world wide website of the FRB at http://www.federalreserve.gov/releases/h15/Update, or any successor site or publication or other recognized electronic source used for the purpose of displaying the applicable rate (H.15 Daily Update) under the caption CDs (Secondary Market).
If such rate is not published in either H.15(519) or H.15 Daily Update by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the CD Rate to be the arithmetic mean of the secondary market offered rates as of 10:00 a.m. on such Interest Determination Date of three leading nonbank dealers1 in negotiable U.S. dollar certificates of deposit in New York City selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing in the market for negotiable certificates of deposit with a remaining maturity closest to the Index Maturity in the denomination of $5,000,000.
If the dealers selected by the Calculation Agent are not quoting as set forth above, the CD Rate will remain the CD Rate then in effect on such Interest Determination Date.
1 | Such nonbank dealers referred to in this Statement of Terms may include affiliates of the Dealer. |
Ex. C-4
Commercial Paper Rate Notes
Commercial Paper Rate means the Money Market Yield (calculated as described below) of the rate on any Interest Determination Date for commercial paper having the Index Maturity, as published in H.15(519) under the heading Commercial Paper-Nonfinancial.
If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, then the Commercial Paper Rate will be the Money Market Yield of the rate on such Interest Determination Date for commercial paper of the Index Maturity as published in H.15 Daily Update under the heading Commercial Paper-Nonfinancial.
If by 3:00 p.m. on such Calculation Date such rate is not published in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Commercial Paper Rate to be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m. on such Interest Determination Date of three leading dealers of U.S. dollar commercial paper in New York City selected by the Calculation Agent for commercial paper of the Index Maturity placed for an industrial issuer whose bond rating is AA, or the equivalent, from a nationally recognized statistical rating organization.
If the dealers selected by the Calculation Agent are not quoting as mentioned above, the Commercial Paper Rate with respect to such Interest Determination Date will remain the Commercial Paper Rate then in effect on such Interest Determination Date.
Money Market Yield will be a yield calculated in accordance with the following formula:
where D refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and M refers to the actual number of days in the interest period for which interest is being calculated.
Federal Funds Rate Notes
Federal Funds Rate means the rate on any Interest Determination Date for Federal Funds as published in Reuters (or any successor service) on page FEDFUNDS1 under the heading EFFECT (or any other page as may replace the specified page on that service) (Reuters Page FEDFUNDS1).
If the above rate does not appear on Reuters Page FEDFUNDS1 or is not so published by 3:00 p.m. on the Calculation Date, the Federal Funds Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update under the heading Federal Funds/(Effective).
Ex. C-5
If such rate is not published as described above by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Federal Funds Rate to be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by each of three leading brokers of Federal Funds transactions in New York City selected by the Calculation Agent prior to 9:00 a.m. on such Interest Determination Date.
If the brokers selected by the Calculation Agent are not quoting as mentioned above, the Federal Funds Rate will remain the Federal Funds Rate then in effect on such Interest Determination Date.
LIBOR Notes
The London Interbank offered rate (LIBOR) means, with respect to any Interest Determination Date, the rate for deposits in U.S. dollars having the Index Maturity that appears on the Designated LIBOR Page as of 11:00 a.m., London time, on such Interest Determination Date.
If no rate appears, LIBOR will be determined on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are offered to prime banks in the London interbank market by four major banks in such market selected by the Calculation Agent for a term equal to the Index Maturity and in principal amount equal to an amount that in the Calculation Agents judgment is representative for a single transaction in U.S. dollars in such market at such time (a Representative Amount). The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such interest period will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in New York City, on such Interest Determination Date by three major banks in New York City, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks, for a term equal to the Index Maturity and in a Representative Amount; provided, however, that if fewer than three banks so selected by the Calculation Agent are providing such quotations, the then existing LIBOR rate will remain in effect for such Interest Payment Period.
Designated LIBOR Page means Reuters Screen LIBOR01 Page or any replacement page or pages on which London interbank rates of major banks for the Index Currency are displayed.
Prime Rate Notes
Prime Rate means the rate on any Interest Determination Date as published in H.15(519) under the heading Bank Prime Loan.
If the above rate is not published in H.15(519) prior to 3:00 p.m. on the Calculation Date, then the Prime Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update opposite the caption Bank Prime Loan.
Ex. C-6
If the rate is not published prior to 3:00 p.m. on the Calculation Date in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME1 Page (as defined below) as such banks prime rate or base lending rate as of 11:00 a.m., on that Interest Determination Date.
If fewer than four such rates referred to above are so published by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on such Interest Determination Date by three major banks in New York City selected by the Calculation Agent.
If the banks selected are not quoting as mentioned above, the Prime Rate will remain the Prime Rate in effect on such Interest Determination Date.
Reuters Screen US Prime1 Page means the display designated as page USPrime1 of the Reuters Service, or any successor service, or any replacement page or pages on that service, for the purpose of displaying prime rates or base lending rates of major U.S. banks.
Treasury Rate Notes
Treasury Rate means:
(1) the rate from the auction held on the Interest Determination Date (the Auction) of direct obligations of the United States (Treasury Bills) having the Index Maturity specified in the applicable pricing supplement above under the caption INVESTMENT RATE, as that rate appears on Reuters Screen USAUCTION10 or USAUCTION11 Page under the heading Investment Rate (or any other page as may replace the specified page on that service or a successor service), or
(2) if the rate referred to in clause (1) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, under the caption U.S. Government Securities/Treasury Bills/Auction High, or
(3) if the rate referred to in clause (2) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury, or
(4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption U.S. Government Securities/Treasury Bills/Secondary Market, or
Ex. C-7
(5) if the rate referred to in clause (4) not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, under the caption U.S. Government Securities/Treasury Bills/Secondary Market, or
(6) if the rate referred to in clause (5) is not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m. on that Interest Determination Date, of three primary United States government securities dealers selected by the Calculation Agent, for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified in the Supplement, or
(7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date.
Bond Equivalent Yield means a yield (expressed as a percentage) calculated in accordance with the following formula:
where D refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, N refers to 365 or 366, as the case may be, and M refers to the actual number of days in the applicable Interest Reset Period.
3. | Final Maturity. The Stated Maturity Date for any Note will be the date so specified in the Supplement, which shall be no later than 397 days from the date of issuance. On its Stated Maturity Date, or any date prior to the Stated Maturity Date on which the particular Note becomes due and payable by the declaration of acceleration, each such date being referred to as a Maturity Date, the principal amount of each Note, together with accrued and unpaid interest thereon, will be immediately due and payable. |
4. | Events of Default. The occurrence of any of the following shall constitute an Event of Default with respect to a Note: (i) default in any payment of principal of or interest on such Note (including on a redemption thereof); (ii) the Issuer makes any compromise arrangement with its creditors generally including the entering into any form of moratorium with its creditors generally; (iii) a court having jurisdiction shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or there shall be appointed a receiver, administrator, liquidator, custodian, trustee or sequestrator (or similar officer) with respect to the whole or substantially the whole of the assets of the Issuer and any such decree, order or appointment is not removed, discharged or withdrawn within 60 days thereafter; or (iv) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an |
Ex. C-8
involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, administrator, liquidator, assignee, custodian, trustee or sequestrator (or similar official), with respect to the whole or substantially the whole of the assets of the Issuer or make any general assignment for the benefit of creditors. Upon the occurrence of an Event of Default, the principal of each obligation evidenced by such Note (together with interest accrued and unpaid thereon) shall become, without any notice or demand, immediately due and payable.2 |
5. | Obligation Absolute. No provision of the Issuing and Paying Agency Agreement under which the Notes are issued shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on each Note at the times, place and rate, and in the coin or currency, herein prescribed. |
6. | Supplement. Any term contained in the Supplement shall supersede any conflicting term contained herein. |
2 | Unlike single payment notes, where a default arises only at the stated maturity, interest-bearing notes with multiple payment dates should contain a default provision permitting acceleration of the maturity if the Issuer defaults on an interest payment. |
Ex. C-9
Exhibit D
Note
[See attached]
Exhibit 10.30
Amended and Restated
Commercial Paper Dealer Agreement
4(a)(2) Program
Between:
BlackRock, Inc., as Issuer
and
Credit Suisse Securities (USA) LLC, as Dealer
Concerning Notes to be issued pursuant to an Issuing and Paying Agency Agreement dated as of
December 23, 2014 between the Issuer and Citibank, N.A., as Issuing and Paying Agent.
Dated as of January 6, 2015
This agreement (as amended, supplemented or otherwise modified and in effect from time to time, this Agreement), which amends and restates the Commercial Paper Dealer Agreement, dated as of October 14, 2009, sets forth the understandings between the Issuer and the Dealer, each named on the cover page hereof, in connection with the issuance and sale by the Issuer of its short-term promissory notes in substantially the form of Exhibit D hereto (the Notes) through the Dealer.
Certain terms used in this Agreement are defined in Section 6 hereof.
The Addendum to this Agreement, and any Annexes or Exhibits described in this Agreement or such Addendum, are hereby incorporated into this Agreement and made fully a part hereof.
1. | Offers, Sales and Resales of Notes. |
1.1 | While (i) the Issuer has and shall have no obligation to sell the Notes to the Dealer or to permit the Dealer to arrange any sale of the Notes for the account of the Issuer, and (ii) the Dealer has and shall have no obligation to purchase the Notes from the Issuer or to arrange any sale of the Notes for the account of the Issuer, the parties hereto agree that in any case where the Dealer purchases Notes from the Issuer, or arranges for the sale of Notes by the Issuer, such Notes will be purchased or sold by the Dealer in reliance on the representations, warranties, covenants and agreements of the Issuer contained herein or made pursuant hereto and on the terms and conditions and in the manner provided herein. |
1.2 | So long as this Agreement shall remain in effect, and in addition to the limitations contained in Section 1.7 hereof, the Issuer shall not, without the consent of the Dealer, offer, solicit or accept offers to purchase, or sell, any Notes except (a) in transactions with one or more dealers which may from time to time after the date hereof become dealers with respect to the Notes by executing with the Issuer one or more agreements which contain provisions substantially identical to those contained in Section 1 of this Agreement, of which the Issuer hereby undertakes to provide the Dealer prompt notice or (b) in transactions with the other dealers listed on the Addendum hereto, which are executing agreements with the Issuer which contain provisions substantially identical to Section 1 of this Agreement contemporaneously herewith. In no event shall the Issuer offer, solicit or accept offers to purchase, or sell, any Notes directly on its own behalf in transactions with persons other than broker-dealers as specifically permitted in this Section 1.2. |
1.3 | The Notes shall be in a minimum denomination of $250,000 or integral multiples of $1,000 in excess thereof, will bear such interest rates, if interest bearing, or will be sold at such discount from their face amounts, as shall be agreed upon by the Dealer and the Issuer, shall have a maturity not exceeding 397 days from the date of issuance and may have such terms as are specified in Exhibit C hereto or the Private Placement Memorandum, a pricing supplement or as otherwise agreed upon by the applicable purchaser and the Issuer. The Notes shall not contain any provision for extension, renewal or automatic rollover. |
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1.4 | The authentication and issuance of, and payment for, the Notes shall be effected in accordance with the Issuing and Paying Agency Agreement, and the Notes shall be either individual physical certificates or book-entry notes evidenced by one or more master notes (each, a Master Note) registered in the name of The Depository Trust Company (DTC) or its nominee, in the form or forms annexed hereto as Exhibit D. |
1.5 | If the Issuer and the Dealer shall agree on the terms of the purchase of any Note by the Dealer or the sale of any Note arranged by the Dealer (including, but not limited to, agreement with respect to the date of issue, purchase price, principal amount, maturity and interest rate or interest rate index and margin (in the case of interest-bearing Notes) or discount thereof (in the case of Notes issued on a discount basis), and appropriate compensation for the Dealers services hereunder) pursuant to this Agreement, the Issuer shall cause such Note to be issued and delivered in accordance with the terms of the Issuing and Paying Agency Agreement and payment for such Note shall be made by the purchaser thereof, either directly or through the Dealer, to the Issuing and Paying Agent, for the account of the Issuer. Except as otherwise agreed, in the event that the Dealer is acting as an agent and a purchaser shall either fail to accept delivery of or make payment for a Note on the date fixed for settlement, the Dealer shall promptly notify the Issuer, and if the Dealer has theretofore paid the Issuer for the Note, the Issuer will promptly return such funds to the Dealer against its return of the Note to the Issuer, in the case of a certificated Note, and upon notice of such failure in the case of a book-entry Note. If such failure occurred for any reason other than default by the Dealer, the Issuer shall reimburse the Dealer on an equitable basis for the Dealers loss of the use of such funds for the period such funds were credited to the Issuers account. |
1.6 | The Dealer and the Issuer hereby establish and agree to observe the following procedures in connection with offers, sales and subsequent resales or other transfers of the Notes: |
(a) | Offers and sales of the Notes by or through the Dealer shall be made only to: (i) investors reasonably believed by the Dealer to be Qualified Institutional Buyers or Institutional Accredited Investors and (ii) non-bank fiduciaries or agents that will be purchasing Notes for one or more accounts, each of which is reasonably believed by the Dealer to be an Institutional Accredited Investor. |
(b) | Resales and other transfers of the Notes by the holders thereof shall be made only in accordance with the restrictions in the legend described in clause (e) below. |
(c) | No general solicitation or general advertising shall be used in connection with the offering of the Notes. Without limiting the generality of the foregoing, without the prior written approval of the Dealer (which shall not be unreasonably withheld or delayed), the Issuer shall not issue any press release or place or publish any tombstone or other advertisement relating to the Notes. |
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(d) | No sale of Notes to any one purchaser shall be for less than $250,000 principal or face amount, and no Note shall be issued in a smaller principal or face amount. If the purchaser is a non-bank fiduciary acting on behalf of others, each person for whom such purchaser is acting must purchase at least $250,000 principal or face amount of Notes. |
(e) | Offers and sales of the Notes shall be subject to the restrictions described in the legend appearing on Exhibit A hereto. A legend substantially to the effect of such Exhibit A shall appear as part of the Private Placement Memorandum used in connection with offers and sales of Notes hereunder, as well as on each individual certificate representing a Note and each Master Note representing book-entry Notes offered and sold pursuant to this Agreement. |
(f) | To insure that potential purchasers of Notes have received the then-current Private Placement Memorandum prior to purchasing Notes, the Dealer shall furnish or shall have furnished to each purchaser of Notes for which it has acted as the Dealer a copy of the then-current Private Placement Memorandum unless such purchaser has previously received a copy of the Private Placement Memorandum as then in effect. The Private Placement Memorandum shall expressly state that any person to whom Notes are offered shall have an opportunity to ask questions of, and receive information from, the Issuer and the Dealer and shall provide the names, addresses and telephone numbers of the persons from whom information regarding the Issuer may be obtained. |
(g) | The Issuer agrees, for the benefit of the Dealer and each of the holders and prospective purchasers from time to time of the Notes that, if at any time the Issuer shall not be subject to Section 13 or 15(d) of the Exchange Act, the Issuer will furnish, upon request and at its expense, to the Dealer and to holders and prospective purchasers of Notes information required by Rule 144A(d)(4)(i) in compliance with Rule 144A(d). |
(h) | In the event that any Note offered or to be offered by the Dealer would be ineligible for resale under Rule 144A, the Issuer shall immediately notify the Dealer (by telephone, confirmed in writing) of such fact and shall promptly prepare and deliver to the Dealer an amendment or supplement to the Private Placement Memorandum describing the Notes that are ineligible, the reason for such ineligibility and any other relevant information relating thereto. |
(i) | The Issuer represents that it is not currently issuing commercial paper in the United States market in reliance upon the exemption provided by Section 3(a)(3) of the Securities Act. The Issuer agrees that, if it shall issue commercial paper after the date hereof in reliance upon such exemption (a) the proceeds from the sale of the Notes will be segregated from the proceeds of the sale of any such commercial paper by being placed in a separate account; (b) the Issuer will institute appropriate corporate procedures to ensure that the offers and sales of notes issued by the Issuer pursuant to the Section 3(a)(3) exemption are not integrated with offerings and sales of Notes hereunder; and (c) the Issuer will comply with each of the requirements of Section 3(a)(3) of the Securities Act in selling commercial paper or other short-term debt securities other than the Notes in the United States. |
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1.7 | The Issuer hereby represents and warrants to the Dealer, in connection with offers, sales and resales of Notes by the Issuer, as follows: |
(a) | The Issuer hereby confirms to the Dealer that (except as permitted by Section 1.6(i)) within the preceding six months neither the Issuer nor any person other than the Dealer or the other dealers referred to in Section 1.2 hereof acting on behalf of the Issuer has offered or sold any Notes, or any substantially similar security of the Issuer (including, without limitation, medium-term notes issued by the Issuer), to, or solicited offers to buy any such security from, any person other than the Dealer or the other dealers referred to in Section 1.2 hereof. The Issuer also agrees that (except as permitted by Section 1.6(i)), as long as the Notes are being offered for sale by the Dealer and the other dealers referred to in Section 1.2 hereof as contemplated hereby and until at least six months after the offer of Notes hereunder has been terminated, neither the Issuer nor any person other than the Dealer or the other dealers referred to in Section 1.2 hereof (except as contemplated by Section 1.2 hereof) will offer the Notes or any substantially similar security of the Issuer for sale to, or solicit offers to buy any such security from, any person other than the Dealer or the other dealers referred to in Section 1.2 hereof, it being understood that such agreement is made with a view to bringing the offer and sale of the Notes within the exemption provided by Section 4(a)(2) of the Securities Act and shall survive any termination of this Agreement. The Issuer hereby represents and warrants that it has not taken or omitted to take, and will not take or omit to take, any action that would cause the offering and sale of Notes hereunder to be integrated with any other offering of securities, whether such offering is made by the Issuer or some other party or parties. |
(b) | The Issuer represents and agrees that the proceeds of the sale of the Notes are not currently contemplated to be used for the purpose of buying, carrying or trading securities within the meaning of Regulation T and the interpretations thereunder by the Board of Governors of the Federal Reserve System. In the event that the Issuer determines to use such proceeds for the purpose of buying, carrying or trading securities, whether in connection with an acquisition of another company or otherwise, the Issuer shall give the Dealer at least five business days prior written notice to that effect. The Issuer shall also give the Dealer prompt notice of the actual date that it commences to purchase securities with the proceeds of the Notes. Thereafter, in the event that the Dealer purchases Notes as principal and does not resell such Notes on the day of such purchase, to the extent necessary to comply with Regulation T and the interpretations thereunder, the Dealer will sell such Notes either (i) only to offerees it reasonably believes to be Qualified Institutional Buyers or to Qualified Institutional Buyers it reasonably believes are acting for other Qualified Institutional Buyers, in each case in accordance with Rule 144A or (ii) in a manner which would not cause a violation of Regulation T and the interpretations thereunder. |
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2. | Representations and Warranties of Issuer. |
The Issuer represents and warrants that:
2.1 | The Issuer is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, has the power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted and is duly qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization, except where the failure to be so qualified or in good standing could not be reasonably expected to result in a Material Adverse Effect. The Issuer has all the requisite power and authority to execute, deliver and perform its obligations under the Notes, this Agreement and the Issuing and Paying Agency Agreement. |
2.2 | This Agreement and the Issuing and Paying Agency Agreement have been duly authorized, executed and delivered by the Issuer and constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law). |
2.3 | The Notes have been duly authorized, and when issued as provided in the Issuing and Paying Agency Agreement, will be duly and validly issued and will constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law). |
2.4 | The offer and sale of the Notes by the Issuer in the manner contemplated hereby do not require registration of the Notes under the Securities Act, pursuant to the exemption from registration contained in Section 4(a)(2) thereof, and no indenture in respect of the Notes is required to be qualified under the Trust Indenture Act of 1939, as amended. |
2.5 | The Notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness of the Issuer. |
2.6 | No consent or action of, or filing or registration with, any governmental or public regulatory body or authority, including the SEC, is required to authorize, or is otherwise required in connection with the execution, delivery or performance of, this Agreement, the Notes or the Issuing and Paying Agency Agreement, except as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes. |
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2.7 | The execution, delivery and performance by the Issuer of this Agreement and the Issuing and Paying Agency Agreement, and the issuance of the Notes in accordance with the Issuing and Paying Agency Agreement, each in accordance with its respective terms, and the transactions contemplated hereby and thereby do not and will not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental Approval relating to the Issuer where the failure to obtain such Governmental Approval could reasonably be expected to have a Material Adverse Effect, (ii) violate any Applicable Law relating to the Issuer except where such violation could not reasonably be expected to have a Material Adverse Effect, (iii) conflict with, result in a breach of or constitute a default under the articles of incorporation or bylaws of the Issuer, (iv) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which the Issuer is a party or by which any of its properties may be bound or any Governmental Approval relating to the Issuer, which could reasonably be expected to have a Material Adverse Effect, (v) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Issuer or (vi) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement, the Notes or the Issuing and Paying Agency Agreement other than consents, authorizations, filings or other acts or consents which have been obtained or made and are in full force and effect or for which the failure to obtain or make could not reasonably be expected to have a Material Adverse Effect. |
2.8 | Except for matters disclosed in any filings made by the Issuer with the SEC, there are no actions, suits or proceedings pending nor, to the knowledge of the Issuer, threatened against or in any other way relating adversely to or affecting the Issuer or any of its properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that has had or could reasonably be expected to have a Material Adverse Effect. |
2.9 | The Issuer is not an investment company within the meaning of the Investment Company Act of 1940, as amended. |
2.10 | Neither the Private Placement Memorandum nor the Company Information contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. |
2.11 | Each (a) issuance of Notes by the Issuer hereunder and (b) amendment or supplement of the Private Placement Memorandum shall be deemed a representation and warranty by the Issuer to the Dealer, as of the date thereof, that, both before and after giving effect to such issuance and after giving effect to such amendment or supplement, (i) the representations and warranties given by the Issuer set forth in this Section 2 remain true and correct on and as of such date as if made on and as of such date, (ii) in the case of an issuance of Notes, the Notes being issued on such date have been duly and validly issued and constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in |
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accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in a proceeding in equity or at law), (iii) in the case of an issuance of Notes, since the date of the most recent Private Placement Memorandum, there has been no material adverse change in the financial condition or operations of the Issuer which, if not publicly available, has not been disclosed to the Dealer in writing and (iv) the Issuer is not in default under any of its obligations hereunder, under the Issuing and Paying Agency Agreement or the Notes that is reasonably likely to result in a Material Adverse Effect. |
3. | Covenants and Agreements of Issuer. |
The Issuer covenants and agrees that:
3.1 | The Issuer will give the Dealer prompt notice (but in any event prior to any subsequent issuance of Notes hereunder) of any amendment to, modification of or waiver with respect to, the Notes or the Issuing and Paying Agency Agreement, including a complete copy of any such amendment, modification or waiver. |
3.2 | The Issuer shall, whenever there shall occur any change, development or occurrence in relation to the Issuer that would have a Material Adverse Effect (including any receipt by the Issuer, from any nationally recognized statistical rating organization that has provided a rating to the Notes, of any notice of a downgrading in such rating that is publicly available), promptly, and in any event prior to any subsequent issuance of Notes hereunder, notify the Dealer (by telephone, confirmed in writing) of such change, development or occurrence. |
3.3 | The Issuer shall from time to time furnish to the Dealer such non-public information as the Dealer may reasonably request, regarding (i) the Issuers operations and financial condition, (ii) the due authorization and execution of the Notes and (iii) the Issuers ability to pay the Notes as they mature; provided that the disclosure of such information shall not be reasonably likely to cause the Issuer to be in violation of any Applicable Law or otherwise violate the terms of any confidentiality agreement to which the Issuer is subject. |
3.4 | The Issuer will take all such action as the Dealer may reasonably request to ensure that each offer and each sale of the Notes will comply with any applicable state Blue Sky laws; provided, however, that the Issuer shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified or subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. |
3.5 | The Issuer will not be in default of any of its obligations hereunder, under the Notes or under the Issuing and Paying Agency Agreement, at any time that any of the Notes are outstanding. |
3.6 | The Issuer shall not issue Notes hereunder until the Dealer shall have received (a) one or more opinions of counsel to the Issuer, addressed to the Dealer, |
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satisfactory in form and substance to the Dealer, (b) a copy of the executed Issuing and Paying Agency Agreement as then in effect, (c) a copy of resolutions adopted by the Board of Directors of the Issuer, satisfactory in form and substance to the Dealer and certified by the Secretary or similar officer of the Issuer, authorizing execution and delivery by the Issuer of this Agreement, the Issuing and Paying Agency Agreement and the Notes and consummation by the Issuer of the transactions contemplated hereby and thereby, (d) prior to the issuance of any book-entry Notes represented by a master note registered in the name of DTC or its nominee, a copy of the executed Letter of Representations among the Issuer, the Issuing and Paying Agent and DTC and of the executed master note, (e) prior to the issuance of any Notes in physical form, a copy of such form (unless attached to this Agreement or the Issuing and Paying Agency Agreement), (f) confirmation of the then current ratings assigned to the Notes by each nationally recognized statistical rating organization then rating the Notes and (g) such other certificates, opinions, letters and documents as the Dealer shall have reasonably requested. |
3.7 | The Issuer shall reimburse the Dealer for all of the Dealers reasonable out-of-pocket expenses related to this Agreement, including reasonable expenses incurred in connection with its preparation and negotiation, and the transactions contemplated hereby (including, but not limited to, the printing and distribution of the Private Placement Memorandum), and, if applicable, for the reasonable fees and out-of-pocket expenses of the Dealers counsel. |
4. | Disclosure. |
4.1 | The Private Placement Memorandum and its contents (other than the Dealer Information) shall be the sole responsibility of the Issuer. The Private Placement Memorandum shall contain a statement expressly offering an opportunity for each prospective purchaser to ask questions of, and receive answers from, the Issuer concerning the offering of Notes and to obtain relevant additional information which the Issuer possesses or can acquire without unreasonable effort or expense. | |||
4.2 | The Issuer agrees to promptly furnish the Dealer the Company Information as it becomes available. | |||
4.3 | (a) | The Issuer further agrees to notify the Dealer promptly upon the occurrence of any event relating to or affecting the Issuer that would cause the Company Information then in existence to include an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they are made, not misleading. | ||
(b) | In the event that the Issuer gives the Dealer notice pursuant to Section 4.3(a) and the Dealer notifies the Issuer that it then has Notes it is holding in inventory, (i) the Issuer agrees promptly to supplement or amend the Private Placement Memorandum so that the Private Placement Memorandum, as amended or supplemented, shall not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not |
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misleading, and the Issuer shall make such supplement or amendment available to the Dealer prior to any further sale or resale of Notes or (ii) the Issuer shall repurchase any such Note held in inventory at a price equal to the face amount thereof discounted on a ratable basis based on the Issuers market rate reflecting the remaining period to maturity in relation to the original term. | ||||
(c) | In the event that (i) the Issuer gives the Dealer notice pursuant to Section 4.3(a), (ii) the Dealer does not notify the Issuer that it is then holding Notes in inventory and (iii) the Issuer chooses not to promptly amend or supplement the Private Placement Memorandum in the manner described in clause (b) above, then all solicitations and sales of Notes shall be suspended until such time as the Issuer has so amended or supplemented the Private Placement Memorandum, and made such amendment or supplement available to the Dealer. | |||
(d) | Without limiting the generality of Section 4.3(a), the Issuer shall review, amend and supplement the Private Placement Memorandum on a periodic basis, but no less than at least once annually, to incorporate current financial information of the Issuer to the extent necessary to ensure that the information provided in the Private Placement Memorandum is accurate and complete. |
5. | Indemnification and Contribution. |
5.1 | The Issuer will indemnify and hold harmless the Dealer, each individual, corporation, partnership, trust, association or other entity controlling the Dealer, any affiliate of the Dealer or any such controlling entity and their respective directors, officers, employees, partners, incorporators, shareholders, servants, trustees and agents (hereinafter the Indemnitees) against any and all liabilities, penalties, suits, causes of action, losses, damages, claims, costs and expenses (including, without limitation, fees and disbursements of counsel) or judgments of whatever kind or nature (each a Claim), imposed upon, incurred by or asserted against the Indemnitees arising out of or based upon (i) any allegation that the Private Placement Memorandum, the Company Information or any information provided by the Issuer to the Dealer included (as of any relevant time) or includes an untrue statement of a material fact or omitted (as of any relevant time) or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (ii) arising out of or based upon the breach by the Issuer of any agreement, covenant or representation made in or pursuant to this Agreement. This indemnification shall not apply to the extent that the Claim arises out of or is based upon Dealer Information or is determined to have resulted from an Indemnitees gross negligence or willful misconduct. |
5.2 | Provisions relating to claims made for indemnification under this Section 5 are set forth on Exhibit B to this Agreement. |
5.3 | In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in this Section 5 is held to be unavailable or insufficient to hold harmless the Indemnitees, although applicable in accordance with the terms of this Section 5, the Issuer shall contribute to the aggregate costs |
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incurred by the Dealer in connection with any Claim in the proportion of the respective economic interests of the Issuer and the Dealer; provided, however, that such contribution by the Issuer shall be in an amount such that the aggregate costs incurred by the Dealer do not exceed the aggregate of the commissions and fees earned by the Dealer hereunder with respect to the issue or issues of Notes to which such Claim relates. The respective economic interests shall be calculated by reference to the aggregate proceeds to the Issuer of the Notes issued hereunder and the aggregate commissions and fees earned by the Dealer hereunder. |
6. | Definitions. |
6.1 | Claim shall have the meaning set forth in Section 5.1. |
6.2 | Company Information at any given time shall mean the Private Placement Memorandum and information incorporated by reference therein together with, to the extent applicable, (i) the Issuers most recent report on Form 10-K filed with the SEC and each report on Form 10-Q or 8-K filed by the Issuer with the SEC since the most recent Form 10-K, (ii) the Issuers most recent annual audited financial statements and each interim financial statement or report prepared subsequent thereto, if not included in item (i) above, (iii) the Issuers and its affiliates other publicly available recent reports, including, but not limited to, any publicly available filings or reports provided to their respective shareholders, (iv) any other information or disclosure prepared pursuant to Section 4.3 hereof and (v) any information prepared or approved by the Issuer for dissemination to investors or potential investors in the Notes. |
6.3 | Dealer Information shall mean material concerning the Dealer provided by the Dealer in writing expressly for inclusion in the Private Placement Memorandum. |
6.4 | Exchange Act shall mean the U.S. Securities Exchange Act of 1934, as amended. |
6.5 | Governmental Approval shall mean all authorizations, consents, approvals, permits, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities. |
6.6 | Governmental Authority shall mean the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank). |
6.7 | Indemnitee shall have the meaning set forth in Section 5.1. |
6.8 | Institutional Accredited Investor shall mean an institutional investor that is an accredited investor within the meaning of Rule 501 under the Securities Act and that has such knowledge and experience in financial and business matters that it is capable of evaluating and bearing the economic risk of an investment in the Notes, including, but not limited to, a bank, as defined in Section 3(a)(2) of the Securities Act, or a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity. |
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6.9 | Issuing and Paying Agency Agreement shall mean the issuing and paying agency agreement described on the cover page of this Agreement, as such agreement may be amended or supplemented from time to time. |
6.10 | Issuing and Paying Agent shall mean the party designated as such on the cover page of this Agreement, as issuing and paying agent under the Issuing and Paying Agency Agreement, or any successor thereto in accordance with the Issuing and Paying Agency Agreement. |
6.11 | Material Adverse Effect shall mean a material adverse effect on (a) the business, operations or financial condition of the Issuer and its subsidiaries taken as a whole or (b) the ability of the Issuer to perform its obligations under this Agreement, the Notes and the Issuing and Paying Agency Agreement. |
6.12 | Non-bank fiduciary or agent shall mean a fiduciary or agent other than (a) a bank, as defined in Section 3(a)(2) of the Securities Act, or (b) a savings and loan association, as defined in Section 3(a)(5)(A) of the Securities Act. |
6.13 | Person shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity. |
6.14 | Private Placement Memorandum shall mean offering materials prepared in accordance with Section 4 (including materials referred to therein or incorporated by reference therein, if any) provided to purchasers and prospective purchasers of the Notes, and shall include amendments and supplements thereto which may be prepared from time to time in accordance with this Agreement (other than any amendment or supplement that has been completely superseded by a later amendment or supplement). |
6.15 | Qualified Institutional Buyer shall have the meaning assigned to that term in Rule 144A under the Securities Act. |
6.16 | Rule 144A shall mean Rule 144A under the Securities Act. |
6.17 | SEC shall mean the U.S. Securities and Exchange Commission. |
6.18 | Securities Act shall mean the U.S. Securities Act of 1933, as amended. |
7. | General |
7.1 | Unless otherwise expressly provided herein, all notices under this Agreement to parties hereto shall be in writing and shall be effective when received at the address of the respective party set forth in the Addendum to this Agreement. |
7.2 | This Agreement shall be governed by and construed in accordance with the laws of the State of New York. |
7.3 | The Issuer agrees that any suit, action or proceeding brought by the Issuer against the Dealer in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes shall be brought solely in the United States federal |
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courts located in the Borough of Manhattan or the courts of the State of New York located in the Borough of Manhattan. EACH OF THE DEALER AND THE ISSUER WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. |
7.4 | This Agreement may be terminated, at any time, by the Issuer, upon one business days prior notice to such effect to the Dealer, or by the Dealer upon one business days prior notice to such effect to the Issuer. Any such termination, however, shall not affect the obligations of the Issuer under Sections 3.7, 5 and 7.3 hereof or the respective representations, warranties, agreements, covenants, rights or responsibilities of the parties made or arising prior to the termination of this Agreement. |
7.5 | This Agreement is not assignable by either party hereto without the written consent of the other party; provided, however, with reasonably prompt notice to the Issuer, the Dealer may assign its rights and obligations under this Agreement to any affiliate of the Dealer. |
7.6 | This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. |
7.7 | This Agreement is for the exclusive benefit of the parties hereto, and their respective permitted successors and assigns hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. |
7.8 | The parties hereto agree that the Issuer may, in accordance with the terms of this Section 7.8, from time to time replace the party which is then acting as Issuing and Paying Agent (the Current Issuing and Paying Agent) with another party (such other party, the Replacement Issuing and Paying Agent), and enter into an agreement with the Replacement Issuing and Paying Agent covering the provision of issuing and paying agency functions in respect of the Notes by the Replacement Issuing and Paying Agent (the Replacement Issuing and Paying Agency Agreement) (any such replacement, a Replacement). |
Notwithstanding anything to the contrary herein, including without limitation Sections 6.9 and 6.10 hereof, from and after the effective date of any Replacement, except to the extent that the Issuing and Paying Agency Agreement provides that the Current Issuing and Paying Agent will continue to act in respect of Notes outstanding as of the effective date of such Replacement, the Issuing and Paying Agent for the Notes shall be deemed to be the Replacement Issuing and Paying Agent, all references to the Issuing and Paying Agent hereunder shall be deemed to refer to the Replacement Issuing and Paying Agent, and all references to the Issuing and Paying Agency Agreement hereunder shall be deemed to refer to the Replacement Issuing and Paying Agency Agreement.
From and after the effective date of any Replacement, the Issuer shall not issue any Notes hereunder unless and until the Dealer shall have received: (i) a copy of the executed Replacement Issuing and Paying Agency Agreement, (ii) a copy of
12
the executed Letter of Representations among the Issuer, the Replacement Issuing and Paying Agent and DTC, (iii) a copy of the executed Master Note authenticated by the Replacement Issuing and Paying Agent and registered in the name of DTC or its nominee, (iv) an amendment or supplement to the Private Placement Memorandum describing the Replacement Issuing and Paying Agent as the Issuing and Paying Agent for the Notes, and reflecting any other changes thereto necessary in light of the Replacement so that the Private Placement Memorandum, as amended or supplemented, satisfies the requirements of this Agreement, and (v) a legal opinion of counsel to the Issuer, addressed to the Dealer, satisfactory in form and substance reasonably satisfactory to the Dealer, as to (a) the due authorization, delivery, validity and enforceability of Notes issued pursuant to the Replacement Issuing and Paying Agency Agreement, and (b) such other matters as the Dealer may reasonably request.
[Signature Page Follows]
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.
BLACKROCK, INC., as Issuer | CREDIT SUISSE SECURITIES (USA) LLC, as Dealer | |||||||
By: | /s/ Philippe Matsumoto |
By: | /s/ Helena Willner | |||||
Name: | Philippe Matsumoto | Name: | Helena Willner | |||||
Title: | Treasurer and Managing Director | Title: | Director |
Amended and Restated
Commercial Paper Dealer Agreement
Addendum
The following additional clauses shall apply to the Agreement and be deemed a part thereof.
1. | The other dealers referred to in clause (b) of Section 1.2 of the Agreement are Barclays Capital Inc., Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. |
2. | The addresses of the respective parties for purposes of notices under Section 7.1 are as follows: |
For the Issuer:
Address: 40 East 52nd Street, New York, New York 10022
Attention: Philippe Matsumoto
Email address: Philippe.Matsumoto@blackrock.com
Telephone number: (212) 810-3767
Fax number: (212) 810-3144
with a copy to
Attention: Armando Gochuico
Email address: Armando.Gochuico@blackrock.com
Fax number: 212-810-3144
For the Dealer:
Address: 11 Madison Avenue, New York, New York 10010
Attention: Short Term Products Group
Telephone number: (212) 325-7198
Fax number: (212) 743-5825
2
Exhibit A
Form of Legend for Private Placement Memorandum and Notes
THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERS AND SALES THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER WILL BE DEEMED TO REPRESENT THAT (I) IT HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER AND THE NOTES, (II) IT IS NOT ACQUIRING SUCH NOTE WITH A VIEW TO ANY DISTRIBUTION THEREOF AND (III) IT IS EITHER (A) AN INSTITUTIONAL INVESTOR THAT IS (1) AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a) UNDER THE ACT (AN INSTITUTIONAL ACCREDITED INVESTOR) AND (2) PURCHASING NOTES FOR (i) ITS OWN ACCOUNT, (ii) A BANK (AS DEFINED IN SECTION 3(a)(2) OF THE ACT) OR A SAVINGS AND LOAN ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A) OF THE ACT) ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY OR (iii) A FIDUCIARY OR AGENT (OTHER THAN A U.S. BANK OR SAVINGS AND LOAN ASSOCIATION) PURCHASING NOTES FOR ONE OR MORE ACCOUNTS EACH OF WHICH ACCOUNTS IS SUCH AN INSTITUTIONAL ACCREDITED INVESTOR; OR (B) A QUALIFIED INSTITUTIONAL BUYER (QIB) WITHIN THE MEANING OF RULE 144A UNDER THE ACT THAT IS ACQUIRING NOTES FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH ACCOUNTS IS A QIB; AND THE PURCHASER ACKNOWLEDGES THAT IT IS AWARE THAT THE SELLER MAY RELY UPON THE EXEMPTION FROM THE REGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE 144A. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER THEREOF SHALL ALSO BE DEEMED TO AGREE THAT ANY RESALE OR OTHER TRANSFER THEREOF WILL BE MADE ONLY (A) IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (1) TO THE ISSUER OR TO A PLACEMENT AGENT DESIGNATED BY THE ISSUER AS A PLACEMENT AGENT FOR THE NOTES (COLLECTIVELY, THE PLACEMENT AGENTS), NONE OF WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2) THROUGH A PLACEMENT AGENT TO AN INSTITUTIONAL ACCREDITED INVESTOR OR A QIB, OR (3) TO A QIB IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF RULE 144A AND (B) IN MINIMUM AMOUNTS OF $250,000.
Ex. A-1
Exhibit B
Further Provisions Relating to Indemnification
(a) | The Issuer agrees to reimburse each Indemnitee for all expenses (including reasonable fees and disbursements of internal and external counsel) as they are incurred by it in connection with investigating or defending any loss, claim, damage, liability or action in respect of which indemnification may be sought under Section 5 of the Agreement (whether or not it is a party to any such proceedings). |
(b) | Promptly after receipt by an Indemnitee of notice of the existence of a Claim, such Indemnitee will, if a claim in respect thereof is to be made against the Issuer, notify the Issuer in writing of the existence thereof; provided that (i) the omission so to notify the Issuer will not relieve the Issuer from any liability which it may have hereunder unless and except to the extent it did not otherwise learn of such Claim and such failure results in the forfeiture by the Issuer of substantial rights and defenses, and (ii) the omission so to notify the Issuer will not relieve it from liability which it may have to an Indemnitee otherwise than on account of this indemnity agreement. In case any such Claim is made against any Indemnitee and it notifies the Issuer of the existence thereof, the Issuer will be entitled to participate therein, and to the extent that it may elect by written notice delivered to the Indemnitee, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnitee; provided that if the defendants in any such Claim include both the Indemnitee and the Issuer, and the Indemnitee shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Issuer, the Issuer shall not have the right to direct the defense of such Claim on behalf of such Indemnitee, and the Indemnitee shall have the right to select separate counsel to assert such legal defenses on behalf of such Indemnitee. Upon receipt of notice from the Issuer to such Indemnitee of the Issuers election so to assume the defense of such Claim and approval by the Indemnitee of counsel, the Issuer will not be liable to such Indemnitee for expenses incurred thereafter by the Indemnitee in connection with the defense thereof (other than reasonable costs of investigation) unless (i) the Indemnitee shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the Issuer shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel in the jurisdiction in which any Claim is brought), approved by the Dealer, representing the Indemnitee who is party to such Claim), (ii) the Issuer shall not have employed counsel reasonably satisfactory to the Indemnitee to represent the Indemnitee within a reasonable time after notice of existence of the Claim or (iii) the Issuer has authorized in writing the employment of counsel for the Indemnitee. The indemnity, reimbursement and contribution obligations of the Issuer hereunder shall be in addition to any other liability the Issuer may otherwise have to an Indemnitee and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Issuer and any Indemnitee. The Issuer agrees that without the Dealers prior written consent, it will not settle, compromise or consent to the entry of any judgment in any Claim in respect of which indemnification may be sought under the indemnification provision of the Agreement (whether or not the Dealer |
Ex. B-1
or any other Indemnitee is an actual or potential party to such Claim), unless such settlement, compromise or consent (i) includes an unconditional release of each Indemnitee from all liability arising out of such Claim and (ii) does not include a statement as to or an admission of fault, culpability or failure to act, by or on behalf of any Indemnitee. |
Ex. B-2
Exhibit C
Statement of Terms for Interest Bearing Commercial Paper Notes of [Name of Issuer]
THE PROVISIONS SET FORTH BELOW ARE QUALIFIED TO THE EXTENT APPLICABLE BY THE TRANSACTION SPECIFIC [PRICING] [PRIVATE PLACEMENT MEMORANDUM] SUPPLEMENT (THE SUPPLEMENT) (IF ANY) SENT TO EACH PURCHASER AT THE TIME OF THE TRANSACTION.
1. | General. (a) The obligations of the Issuer to which these terms apply (each a Note) are represented by one or more Master Notes (each, a Master Note) issued in the name of (or of a nominee for) The Depository Trust Company (DTC), which Master Note includes the terms and provisions for the Issuers Interest-Bearing Commercial Paper Notes that are set forth in this Statement of Terms, since this Statement of Terms constitutes an integral part of the Underlying Records as defined and referred to in the Master Note. |
(b) Business Day means any day other than a Saturday or Sunday that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, executive order or regulation to be closed in New York City and, with respect to LIBOR Notes (as defined below) is also a London Business Day. London Business Day means, a day, other than a Saturday or Sunday, on which dealings in deposits in U.S. dollars are transacted in the London interbank market.
2. | Interest. (a) Each Note will bear interest at a fixed rate (a Fixed Rate Note) or at a floating rate (a Floating Rate Note). |
(b) The Supplement sent to each holder of such Note will describe the following terms: (i) whether such Note is a Fixed Rate Note or a Floating Rate Note and whether such Note is an Original Issue Discount Note (as defined below); (ii) the date on which such Note will be issued (the Issue Date); (iii) the Stated Maturity Date (as defined below); (iv) if such Note is a Fixed Rate Note, the rate per annum at which such Note will bear interest, if any, and the Interest Payment Dates; (v) if such Note is a Floating Rate Note, the Base Rate, the Index Maturity, the Interest Reset Dates, the Interest Payment Dates and the Spread and/or Spread Multiplier, if any (all as defined below), and any other terms relating to the particular method of calculating the interest rate for such Note; and (vi) any other terms applicable specifically to such Note. Original Issue Discount Note means a Note which has a stated redemption price at the Stated Maturity Date that exceeds its Issue Price by more than a specified de minimis amount and which the Supplement indicates will be an Original Issue Discount Note.
(c) Each Fixed Rate Note will bear interest from its Issue Date at the rate per annum specified in the Supplement until the principal amount thereof is paid or made available for payment. Interest on each Fixed Rate Note will be payable on the dates specified in the Supplement (each an Interest Payment Date for a Fixed Rate Note) and on the Maturity Date (as defined below). Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-day months.
Ex. C-1
If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be payable on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
(d) The interest rate on each Floating Rate Note for each Interest Reset Period (as defined below) will be determined by reference to an interest rate basis (a Base Rate) plus or minus a number of basis points (one basis point equals one-hundredth of a percentage point) (the Spread), if any, and/or multiplied by a certain percentage (the Spread Multiplier), if any, until the principal thereof is paid or made available for payment. The Supplement will designate which of the following Base Rates is applicable to the related Floating Rate Note: (a) the CD Rate (a CD Rate Note), (b) the Commercial Paper Rate (a Commercial Paper Rate Note), (c) the Federal Funds Rate (a Federal Funds Rate Note), (d) LIBOR (a LIBOR Note), (e) the Prime Rate (a Prime Rate Note), (f) the Treasury Rate (a Treasury Rate Note) or (g) such other Base Rate as may be specified in such Supplement.
The rate of interest on each Floating Rate Note will be reset daily, weekly, monthly, quarterly or semi-annually (the Interest Reset Period). The date or dates on which interest will be reset (each an Interest Reset Date) will be, unless otherwise specified in the Supplement, in the case of Floating Rate Notes which reset daily, each Business Day, in the case of Floating Rate Notes (other than Treasury Rate Notes) that reset weekly, the Wednesday of each week; in the case of Treasury Rate Notes that reset weekly, the Tuesday of each week; in the case of Floating Rate Notes that reset monthly, the third Wednesday of each month; in the case of Floating Rate Notes that reset quarterly, the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes that reset semiannually, the third Wednesday of the two months specified in the Supplement. If any Interest Reset Date for any Floating Rate Note is not a Business Day, such Interest Reset Date will be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Interest on each Floating Rate Note will be payable monthly, quarterly or semiannually (the Interest Payment Period) and on the Maturity Date. Unless otherwise specified in the Supplement, and except as provided below, the date or dates on which interest will be payable (each an Interest Payment Date for a Floating Rate Note) will be, in the case of Floating Rate Notes with a monthly Interest Payment Period, on the third Wednesday of each month; in the case of Floating Rate Notes with a quarterly Interest Payment Period, on the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes with a semiannual Interest Payment Period, on the third Wednesday of the two months specified in the Supplement. In addition, the Maturity Date will also be an Interest Payment Date.
If any Interest Payment Date for any Floating Rate Note (other than an Interest Payment Date occurring on the Maturity Date) would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business
Ex. C-2
Day. If the Maturity Date of a Floating Rate Note falls on a day that is not a Business Day, the payment of principal and interest will be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after such maturity.
Interest payments on each Interest Payment Date for Floating Rate Notes will include accrued interest from and including the Issue Date or from and including the last date in respect of which interest has been paid, as the case may be, to, but excluding, such Interest Payment Date. On the Maturity Date, the interest payable on a Floating Rate Note will include interest accrued to, but excluding, the Maturity Date. Accrued interest will be calculated by multiplying the principal amount of a Floating Rate Note by an accrued interest factor. This accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal) for each such day will be computed by dividing the interest rate applicable to such day by 360, in the cases where the Base Rate is the CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR or Prime Rate, or by the actual number of days in the year, in the case where the Base Rate is the Treasury Rate. The interest rate in effect on each day will be (i) if such day is an Interest Reset Date, the interest rate with respect to the Interest Determination Date (as defined below) pertaining to such Interest Reset Date, or (ii) if such day is not an Interest Reset Date, the interest rate with respect to the Interest Determination Date pertaining to the next preceding Interest Reset Date, subject in either case to any adjustment by a Spread and/or a Spread Multiplier.
The Interest Determination Date where the Base Rate is the CD Rate or the Commercial Paper Rate will be the second Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Federal Funds Rate or the Prime Rate will be the Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is LIBOR will be the second London Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Treasury Rate will be the day of the week in which such Interest Reset Date falls when Treasury Bills are normally auctioned. Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is held on the following Tuesday or the preceding Friday. If an auction is so held on the preceding Friday, such Friday will be the Interest Determination Date pertaining to the Interest Reset Date occurring in the next succeeding week.
The Index Maturity is the period to maturity of the instrument or obligation from which the applicable Base Rate is calculated.
The Calculation Date, where applicable, shall be the earlier of (i) the tenth calendar day following the applicable Interest Determination Date or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity Date.
All times referred to herein reflect New York City time, unless otherwise specified.
Ex. C-3
The Issuer shall specify in writing to the Issuing and Paying Agent which party will be the calculation agent (the Calculation Agent) with respect to the Floating Rate Notes. The Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate which will become effective on the next Interest Reset Date with respect to such Floating Rate Note to the Issuing and Paying Agent as soon as the interest rate with respect to such Floating Rate Note has been determined and as soon as practicable after any change in such interest rate.
All percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five-one millionths of a percentage point rounded upwards. For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655). All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded, in the case of U.S. dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with one-half cent or unit being rounded upwards).
CD Rate Notes
CD Rate means the rate on any Interest Determination Date for negotiable certificates of deposit having the Index Maturity as published by the Board of Governors of the Federal Reserve System (the FRB) in Statistical Release H.15(519), Selected Interest Rates or any successor publication of the FRB (H.15(519)) under the heading CDs (Secondary Market).
If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, the CD Rate will be the rate on such Interest Determination Date set forth in the daily update of H.15(519), available through the world wide website of the FRB at http://www.federalreserve.gov/releases/h15/Update, or any successor site or publication or other recognized electronic source used for the purpose of displaying the applicable rate (H.15 Daily Update) under the caption CDs (Secondary Market).
If such rate is not published in either H.15(519) or H.15 Daily Update by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the CD Rate to be the arithmetic mean of the secondary market offered rates as of 10:00 a.m. on such Interest Determination Date of three leading nonbank dealers1 in negotiable U.S. dollar certificates of deposit in New York City selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing in the market for negotiable certificates of deposit with a remaining maturity closest to the Index Maturity in the denomination of $5,000,000.
If the dealers selected by the Calculation Agent are not quoting as set forth above, the CD Rate will remain the CD Rate then in effect on such Interest Determination Date.
1 | Such nonbank dealers referred to in this Statement of Terms may include affiliates of the Dealer. |
Ex. C-4
Commercial Paper Rate Notes
Commercial Paper Rate means the Money Market Yield (calculated as described below) of the rate on any Interest Determination Date for commercial paper having the Index Maturity, as published in H.15(519) under the heading Commercial Paper-Nonfinancial.
If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, then the Commercial Paper Rate will be the Money Market Yield of the rate on such Interest Determination Date for commercial paper of the Index Maturity as published in H.15 Daily Update under the heading Commercial Paper-Nonfinancial.
If by 3:00 p.m. on such Calculation Date such rate is not published in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Commercial Paper Rate to be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m. on such Interest Determination Date of three leading dealers of U.S. dollar commercial paper in New York City selected by the Calculation Agent for commercial paper of the Index Maturity placed for an industrial issuer whose bond rating is AA, or the equivalent, from a nationally recognized statistical rating organization.
If the dealers selected by the Calculation Agent are not quoting as mentioned above, the Commercial Paper Rate with respect to such Interest Determination Date will remain the Commercial Paper Rate then in effect on such Interest Determination Date.
Money Market Yield will be a yield calculated in accordance with the following formula:
where D refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and M refers to the actual number of days in the interest period for which interest is being calculated.
Federal Funds Rate Notes
Federal Funds Rate means the rate on any Interest Determination Date for Federal Funds as published in Reuters (or any successor service) on page FEDFUNDS1 under the heading EFFECT (or any other page as may replace the specified page on that service) (Reuters Page FEDFUNDS1).
If the above rate does not appear on Reuters Page FEDFUNDS1 or is not so published by 3:00 p.m. on the Calculation Date, the Federal Funds Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update under the heading Federal Funds/(Effective).
Ex. C-5
If such rate is not published as described above by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Federal Funds Rate to be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by each of three leading brokers of Federal Funds transactions in New York City selected by the Calculation Agent prior to 9:00 a.m. on such Interest Determination Date.
If the brokers selected by the Calculation Agent are not quoting as mentioned above, the Federal Funds Rate will remain the Federal Funds Rate then in effect on such Interest Determination Date.
LIBOR Notes
The London Interbank offered rate (LIBOR) means, with respect to any Interest Determination Date, the rate for deposits in U.S. dollars having the Index Maturity that appears on the Designated LIBOR Page as of 11:00 a.m., London time, on such Interest Determination Date.
If no rate appears, LIBOR will be determined on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are offered to prime banks in the London interbank market by four major banks in such market selected by the Calculation Agent for a term equal to the Index Maturity and in principal amount equal to an amount that in the Calculation Agents judgment is representative for a single transaction in U.S. dollars in such market at such time (a Representative Amount). The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such interest period will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in New York City, on such Interest Determination Date by three major banks in New York City, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks, for a term equal to the Index Maturity and in a Representative Amount; provided, however, that if fewer than three banks so selected by the Calculation Agent are providing such quotations, the then existing LIBOR rate will remain in effect for such Interest Payment Period.
Designated LIBOR Page means Reuters Screen LIBOR01 Page or any replacement page or pages on which London interbank rates of major banks for the Index Currency are displayed.
Prime Rate Notes
Prime Rate means the rate on any Interest Determination Date as published in H.15(519) under the heading Bank Prime Loan.
If the above rate is not published in H.15(519) prior to 3:00 p.m. on the Calculation Date, then the Prime Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update opposite the caption Bank Prime Loan.
Ex. C-6
If the rate is not published prior to 3:00 p.m. on the Calculation Date in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME1 Page (as defined below) as such banks prime rate or base lending rate as of 11:00 a.m., on that Interest Determination Date.
If fewer than four such rates referred to above are so published by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on such Interest Determination Date by three major banks in New York City selected by the Calculation Agent.
If the banks selected are not quoting as mentioned above, the Prime Rate will remain the Prime Rate in effect on such Interest Determination Date.
Reuters Screen US Prime1 Page means the display designated as page USPrime1 of the Reuters Service, or any successor service, or any replacement page or pages on that service, for the purpose of displaying prime rates or base lending rates of major U.S. banks.
Treasury Rate Notes
Treasury Rate means:
(1) the rate from the auction held on the Interest Determination Date (the Auction) of direct obligations of the United States (Treasury Bills) having the Index Maturity specified in the applicable pricing supplement above under the caption INVESTMENT RATE, as that rate appears on Reuters Screen USAUCTION10 or USAUCTION11 Page under the heading Investment Rate (or any other page as may replace the specified page on that service or a successor service), or
(2) if the rate referred to in clause (1) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, under the caption U.S. Government Securities/Treasury Bills/Auction High, or
(3) if the rate referred to in clause (2) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury, or
(4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption U.S. Government Securities/Treasury Bills/Secondary Market, or
Ex. C-7
(5) if the rate referred to in clause (4) not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, under the caption U.S. Government Securities/Treasury Bills/Secondary Market, or
(6) if the rate referred to in clause (5) is not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m. on that Interest Determination Date, of three primary United States government securities dealers selected by the Calculation Agent, for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified in the Supplement, or
(7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date.
Bond Equivalent Yield means a yield (expressed as a percentage) calculated in accordance with the following formula:
where D refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, N refers to 365 or 366, as the case may be, and M refers to the actual number of days in the applicable Interest Reset Period.
3. | Final Maturity. The Stated Maturity Date for any Note will be the date so specified in the Supplement, which shall be no later than 397 days from the date of issuance. On its Stated Maturity Date, or any date prior to the Stated Maturity Date on which the particular Note becomes due and payable by the declaration of acceleration, each such date being referred to as a Maturity Date, the principal amount of each Note, together with accrued and unpaid interest thereon, will be immediately due and payable. |
4. | Events of Default. The occurrence of any of the following shall constitute an Event of Default with respect to a Note: (i) default in any payment of principal of or interest on such Note (including on a redemption thereof); (ii) the Issuer makes any compromise arrangement with its creditors generally including the entering into any form of moratorium with its creditors generally; (iii) a court having jurisdiction shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or there shall be appointed a receiver, administrator, liquidator, custodian, trustee or sequestrator (or similar officer) with respect to the whole or substantially the whole of the assets of the Issuer and any such decree, order or appointment is not removed, discharged or withdrawn within 60 days thereafter; or (iv) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an |
Ex. C-8
involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, administrator, liquidator, assignee, custodian, trustee or sequestrator (or similar official), with respect to the whole or substantially the whole of the assets of the Issuer or make any general assignment for the benefit of creditors. Upon the occurrence of an Event of Default, the principal of each obligation evidenced by such Note (together with interest accrued and unpaid thereon) shall become, without any notice or demand, immediately due and payable.2 |
5. | Obligation Absolute. No provision of the Issuing and Paying Agency Agreement under which the Notes are issued shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on each Note at the times, place and rate, and in the coin or currency, herein prescribed. |
6. | Supplement. Any term contained in the Supplement shall supercede any conflicting term contained herein. |
2 | Unlike single payment notes, where a default arises only at the stated maturity, interest-bearing notes with multiple payment dates should contain a default provision permitting acceleration of the maturity if the Issuer defaults on an interest payment. |
Ex. C-9
Exhibit D
Note
[See attached]
Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
Year ended December 31, | ||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
Income before income taxes |
$ | 4,395 | $ | 3,973 | $ | 3,470 | $ | 3,135 | $ | 3,021 | ||||||||||
Less: Net income (loss) attributable to noncontrolling interests(1) |
(30 | ) | 19 | (18 | ) | 2 | (13 | ) | ||||||||||||
Pre-tax income attributable to BlackRock, Inc. |
4,425 | 3,954 | 3,488 | 3,133 | 3,034 | |||||||||||||||
Add: Fixed charges |
254 | 258 | 261 | 236 | 209 | |||||||||||||||
Distributions of earnings from equity method investees |
57 | 80 | 42 | 30 | 14 | |||||||||||||||
Less: (Losses) earnings from equity method investees |
158 | 158 | 175 | 23 | 141 | |||||||||||||||
Pre-tax income before fixed charges |
$ | 4,578 | $ | 4,134 | $ | 3,616 | $ | 3,376 | $ | 3,116 | ||||||||||
Fixed charges: |
||||||||||||||||||||
Interest expense |
$ | 232 | $ | 211 | $ | 215 | $ | 176 | $ | 150 | ||||||||||
Interest expense on uncertain tax positions(2) |
(22 | ) | 3 | 3 | 10 | 8 | ||||||||||||||
Portion of rent representative of interest(3) |
44 | 44 | 43 | 50 | 51 | |||||||||||||||
Total fixed charges |
$ | 254 | $ | 258 | $ | 261 | $ | 236 | $ | 209 | ||||||||||
Ratio of earnings to fixed charges |
18.0x | 16.0x | 13.9x | 14.3x | 14.9x |
(1) | Amount includes redeemable and nonredeemable noncontrolling interests. |
(2) | Interest expense on uncertain tax positions has been recorded within income tax expense on the consolidated statements of income. |
(3) | The portion of rent representative of interest is calculated as one third of the total rent expense. |
1
Exhibit 21.1
SUBSIDIARIES OF REGISTRANT
The following table lists the direct and indirect subsidiaries of BlackRock, Inc. as of December 31, 2014*.
Name of Subsidiary |
Jurisdiction/State of Incorporation | |
BAA Holdings, LLC |
Delaware | |
BlackRock Advisors, LLC |
Delaware | |
BlackRock Advisors Holdings, Inc. |
Pennsylvania | |
BlackRock Advisors Singapore Pte. Limited |
Singapore | |
BlackRock Advisors (UK) Limited |
United Kingdom | |
BlackRock Asia-Pac Holdco, LLC |
Delaware | |
BlackRock Asset Management Schweiz AG |
Switzerland | |
BlackRock Asset Management Australia Limited |
Australia | |
BlackRock Asset Management Canada Limited |
Canada | |
BlackRock Asset Management Deutschland AG |
Germany | |
BlackRock Asset Management International Inc. |
Delaware | |
BlackRock Asset Management Investors Services Limited |
United Kingdom | |
BlackRock Asset Management Ireland Limited |
Ireland | |
BlackRock Asset Management North Asia Limited |
Hong Kong | |
BlackRock Asset Management UK Limited |
United Kingdom | |
BlackRock Australia Holdco Pty. Ltd. |
Australia | |
BlackRock Brasil Gestora de Investimentos Ltda. |
Brazil | |
BlackRock Cal 1 Investor, LLC |
Delaware | |
BlackRock Canada Holdings LP |
Canada | |
BlackRock Canada Holdings, ULC |
Canada | |
BlackRock Capital Holdings, Inc. |
Delaware | |
BlackRock Capital Management, Inc. |
Delaware | |
BlackRock Cayco Limited |
Cayman Islands | |
BlackRock Cayman Finco Limited |
Cayman Islands | |
BlackRock Cayman Capital Holdings Limited |
Cayman Islands | |
BlackRock Channel Island Holdco Limited |
Jersey | |
BlackRock Jersey Finco 1 Limited |
Jersey | |
BlackRock Jersey Finco 2 Limited |
Jersey | |
BlackRock (Channel Islands) Limited |
Jersey | |
BlackRock Colombia Holdco, LLC |
Delaware | |
BlackRock Colombia SAS |
Colombia | |
BlackRock Corporation US Inc. |
California | |
BlackRock Delaware Holdings Inc. |
Delaware | |
BlackRock Europe Development Management Limited |
Cyprus | |
BlackRock Execution Services |
California | |
BlackRock Executor & Trustee Co. Limited |
United Kingdom | |
BlackRock Finance Europe Limited |
United Kingdom | |
BlackRock Financial Management, Inc. |
Delaware | |
BlackRock Finco UK Ltd. |
United Kingdom | |
BlackRock Finco, LLC |
Delaware | |
BlackRock First Partner Limited |
Jersey | |
BlackRock Fund Advisors |
California | |
BlackRock Fund Management Company (Ireland) Limited. |
Ireland | |
BlackRock Fund Management Company S.A. |
Luxembourg | |
BlackRock Fund Managers Limited |
United Kingdom | |
BlackRock Funding International, Ltd. |
Cayman Islands | |
BlackRock Funds Services Group, LLC. |
Delaware | |
BlackRock Group Limited |
United Kingdom | |
BlackRock Group Limited Luxembourg Branch |
Luxembourg | |
BlackRock HK Holdco Limited |
Hong Kong | |
BlackRock Holdco 2, Inc. |
Delaware | |
BlackRock Holdco 3, LLC |
Delaware | |
BlackRock Holdco 4, LLC |
Delaware |
1
Name of Subsidiary |
Jurisdiction/State of Incorporation | |
BlackRock Holdco 5, LLC |
Delaware | |
BlackRock Holdco 6, LLC |
Delaware | |
BlackRock (Hong Kong) Limited |
Hong Kong | |
BlackRock India Private Ltd. |
India | |
BlackRock Index Services, LLC. |
Delaware | |
BlackRock Institutional Services, Inc. |
Delaware | |
BlackRock Institutional Trust Company, National Association |
United States | |
BlackRock International Holdings, Inc. |
Delaware | |
BlackRock International Limited |
Scotland | |
BlackRock Investment Management (Australia) Limited |
Australia | |
BlackRock Investment Management (Dublin) Limited |
Ireland | |
BlackRock Investment Management (Korea) Limited |
Korea | |
BlackRock Investment Management (Taiwan) Limited |
Taiwan | |
BlackRock Investment Management (UK) Limited |
United Kingdom | |
BlackRock Investment Management Ireland Holdings Limited |
Ireland | |
BlackRock Investment Management, LLC |
Delaware | |
BlackRock Investments, LLC |
Delaware | |
BlackRock (Isle of Man) Holdings Limited |
Isle of Man | |
BlackRock (Isle of Man) Limited |
Isle of Man | |
BlackRock Japan Co., Ltd. |
Japan | |
BlackRock Japan Holdings GK |
Japan | |
BlackRock Kelso Capital Advisors LLC |
Delaware | |
BlackRock Life Limited |
United Kingdom | |
BlackRock Lux Finco S.à r.l. |
Luxembourg | |
BlackRock Luxembourg Holdco S.à r.l. |
Luxembourg | |
BlackRock (Luxembourg) S.A. |
Luxembourg | |
BlackRock Mexican Holdco, LLC |
Delaware | |
BlackRock Mortgage Ventures, LLC |
Delaware | |
BlackRock (Netherlands) B.V. |
Netherlands | |
BlackRock Niagara LLC |
Delaware | |
BlackRock Operations (Luxembourg) S.à r.l. |
Luxembourg | |
BlackRock Pensions Limited |
United Kingdom | |
BlackRock Pensions Nominees Limited |
United Kingdom | |
BlackRock Property Advisory Singapore Pte. Ltd. |
Singapore | |
BlackRock Property Asia Limited |
Hong Kong | |
BlackRock Property Australia Pty Limited |
Australia | |
BlackRock Property Consulting (Beijing) Co., Ltd. |
China | |
BlackRock Property Denmark ApS |
Denmark | |
BlackRock Property Europe Limited |
United Kingdom | |
BlackRock Property France S.a.r.l |
France | |
BlackRock Property Germany GmbH |
Germany | |
BlackRock Property Holdings Australia Pty Limited |
Australia | |
BlackRock Property Lux S.à.r.l. |
Luxembourg | |
BlackRock Property Malaysia Sdn. Bhd. |
Malaysia | |
BlackRock Property Poland sp. z.o.o. |
Poland | |
BlackRock Property Singapore Pte. Ltd. |
Singapore | |
BlackRock Realty Advisors, Inc. |
Delaware | |
BlackRock Services India Private Limited |
India | |
BlackRock (Singapore) Limited |
Singapore | |
BlackRock (Singapore) Holdco Pte. Limited |
Singapore | |
BlackRock Slovakia s.r.o. |
Slovakia | |
BlackRock Trident Holding Company Limited |
Ireland | |
BlackRock UK 1 LP |
United Kingdom | |
BlackRock UK 2 LLP |
United Kingdom | |
BlackRock UK 3 LLP |
United Kingdom | |
BlackRock UK 4 LLP |
United Kingdom | |
BlackRock UK Holdco Limited |
United Kingdom | |
BR Acquisition Mexico S.A. de C.V. |
Mexico | |
BR Jersey International Holdings L.P. |
Jersey | |
Grosvenor Alternate Partner Limited |
United Kingdom |
2
Name of Subsidiary |
Jurisdiction/State of Incorporation | |
Grosvenor Ventures Limited |
United Kingdom | |
HLX Financial Holdings, LLC |
Delaware | |
Impulsora y Promotora BlackRock Mexico, S.A. de C.V. |
Mexico | |
iShares (DE) I Investmentaktiengesellschaft mit Teilgesellschaftsvermögen |
Germany | |
BlackRock Chile Holdings Inversiones Limitada |
Chile | |
BlackRock Chile Asesorias Limitada |
Chile | |
iShares Delaware Trust Sponsor LLC |
Delaware | |
Mercury Carry Company Ltd. |
Isle of Man | |
Mercury Private Equity MUST 3 (Jersey) Limited |
Jersey | |
Portfolio Administration & Management Ltd. |
Cayman Islands | |
Prestadora de Servicios Integrales BlackRock Mexico, S.A. de C.V. |
Mexico | |
St. Albans House Nominees (Jersey) Ltd. |
Jersey | |
Trident Merger, LLC |
Delaware | |
Wimco Nominees Ltd. |
United Kingdom |
* | Certain subsidiaries that are not significant have been omitted. |
3
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-191157 on Form S-3 and Registration Statement Nos. 333-137708, 333-169329 and 333-197764 on Form S-8 of BlackRock, Inc. of our reports dated February 27, 2015, relating to the consolidated financial statements of BlackRock, Inc., and the effectiveness of BlackRock, Inc.s internal control over financial reporting, appearing in this Annual Report on Form 10-K of BlackRock, Inc. for the year ended December 31, 2014.
/s/ Deloitte & Touche LLP |
New York, New York |
February 27, 2015 |
1
Exhibit 31.1
CEO CERTIFICATION
I, Laurence D. Fink, certify that:
1. | I have reviewed this Annual Report on Form 10-K, for the fiscal year ended December 31, 2014 of BlackRock, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 27, 2015 | By: | /s/ Laurence D. Fink | ||||
Laurence D. Fink | ||||||
Chairman & Chief Executive Officer |
1
Exhibit 31.2
CFO CERTIFICATION
I, Gary S. Shedlin, certify that:
1. | I have reviewed this Annual Report on Form 10-K, for the fiscal year ended December 31, 2014 of BlackRock, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 27, 2015 | By: | /s/ Gary Shedlin | ||||
Gary S. Shedlin | ||||||
Senior Managing Director & Chief Financial Officer |
1
Exhibit 32.1
Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report on Form 10-K of BlackRock, Inc. (the Company) for the annual period ending December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the Report), Laurence D. Fink, as Chief Executive Officer of the Company, and Gary S. Shedlin, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Laurence D. Fink | ||
Name: | Laurence D. Fink | |
Title: | Chairman & Chief Executive Officer | |
Date: | February 27, 2015 | |
/s/ Gary Shedlin | ||
Name: | Gary S. Shedlin | |
Title: | Senior Managing Director & Chief Financial Officer | |
Date: | February 27, 2015 |
1
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Goodwill (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2014
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill Activity | Goodwill activity during 2014 and 2013 was as follows:
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Capital Stock (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2014
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common and Preferred Shares Authorized, Issued and Outstanding and Related Activity | The Company’s authorized common stock and nonvoting participating preferred stock, $0.01 par value, (“Preferred”) consisted of the following:
The Company’s common and preferred shares issued and outstanding and related activity consist of the following:
|
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