EX-99.1 2 blk-ex991_6.htm EARNINGS RELEASE DATED JULY 15, 2022 blk-ex991_6.htm

Exhibit 99.1

v

 

 

 

 

INVESTOR RELATIONS:

Caroline Rodda      212.810.3442

MEDIA RELATIONS:

Brian Beades      212.810.5596

 

 

BlackRock Reports Second Quarter 2022 Diluted EPS of $7.06, or $7.36 as adjusted

 

New York, July 15, 2022  –  BlackRock, Inc. (NYSE: BLK) today reported financial results for the three and six months ended June 30, 2022.

 

 

$90 billion of quarterly total net inflows reflects continued strength of broad-based platform with positive flows across all product types and regions

6% decrease in revenue year-over-year primarily driven by the impact of significantly lower markets and dollar appreciation on average AUM and lower performance fees

5% increase in technology services revenue year-over-year reflects continued strong client demand for Aladdin, despite the negative impact of foreign exchange movements

14% decrease in operating income year-over-year

21% decrease in diluted EPS (30% as adjusted) year-over-year also reflects lower nonoperating income in the current quarter

$500 million of share repurchases in the current quarter

 

Laurence D. Fink, Chairman and CEO:

“The first half of 2022 brought an investment environment that we have not seen in decades. Investors are simultaneously navigating high inflation, rising rates and the worst start to the year for both stocks and bonds in half a century, with global equity and fixed income indexes down 20% and 10%, respectively.

“BlackRock generated net inflows of $90 billion in the second quarter demonstrating our ability, once again, to deliver industry-leading organic growth even in the most challenging of environments. Our connectivity with clients has never been stronger. Over the last twelve months, we’ve delivered over $460 billion of net inflows reflecting 5% organic base fee growth.

“I cannot think of a time when BlackRock’s strategic focus has been more aligned with the needs of our clients than it is today. ETFs generated $52 billion of net inflows, led by fixed income net inflows of $31 billion. Active strategies continued to reflect demand for systematic equity, LifePath target-date solutions and alternatives, where we raised nearly $8 billion across commitments and net inflows. BlackRock’s cash platform reached record AUM levels in the quarter, generating $21 billion of net inflows. And, we had record Aladdin client mandates in the first half of 2022.

“Over the course of BlackRock’s 34-year history, we have experienced numerous periods of volatility and uncertainty, and BlackRock has always come through stronger. It is during periods like these that we differentiate ourselves even more with clients and further deepen those relationships. I see more opportunities for BlackRock today than ever before, and remain confident in our ability to deliver long-term growth for our clients, shareholders and employees.”

 

FINANCIAL RESULTS

 

Q2

 

 

Q2

 

(in millions, except per share data)

2022

 

 

2021

 

AUM

$

8,487,410

 

 

$

9,495,993

 

% change

 

(11

)%

 

 

 

 

Average AUM

$

9,022,278

 

 

$

9,317,092

 

% change

 

(3

)%

 

 

 

 

Total net flows

$

89,573

 

 

$

80,960

 

 

 

 

 

 

 

 

 

GAAP basis:

 

 

 

 

 

 

 

Revenue

$

4,526

 

 

$

4,820

 

% change

 

(6

)%

 

 

 

 

Operating income

$

1,668

 

 

$

1,931

 

% change

 

(14

)%

 

 

 

 

Operating margin

 

36.9

%

 

 

40.1

%

Net income(1)

$

1,077

 

 

$

1,378

 

% change

 

(22

)%

 

 

 

 

Diluted EPS

$

7.06

 

 

$

8.92

 

% change

 

(21

)%

 

 

 

 

Weighted-average diluted shares

 

152.5

 

 

 

154.4

 

% change

 

(1

)%

 

 

 

 

 

 

 

 

 

 

 

 

As Adjusted:

 

 

 

 

 

 

 

Operating income(2)

$

1,727

 

 

$

2,016

 

% change

 

(14

)%

 

 

 

 

Operating margin(2)

 

43.7

%

 

 

46.9

%

Net income(1) (2)

$

1,122

 

 

$

1,614

 

% change

 

(30

)%

 

 

 

 

Diluted EPS(2)

$

7.36

 

 

$

10.45

 

% change

 

(30

)%

 

 

 

 

(1)

Net income represents net income attributable to BlackRock, Inc.

(2)

See notes (1) and (2) to the condensed consolidated statements of income and supplemental information on pages 11 through 13 for more information on as adjusted items and the reconciliation to GAAP. Beginning in the first quarter of 2022, BlackRock updated the definitions of operating income, as adjusted, operating margin, as adjusted, and net income attributable to BlackRock, Inc., as adjusted, to include new adjustments. Such measures have been recast for 2021 to reflect the inclusion of such new adjustments.

NET FLOW HIGHLIGHTS

 

 

 

Q2

YTD

(in billions)

2022

2022

Long-term net flows:

$

69

 

 

$

182

 

 

 

 

 

 

 

 

 

 

 

 

 

By region:

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

18

 

 

$

46

 

 

 

EMEA

 

15

 

 

 

60

 

 

 

APAC

 

36

 

 

 

76

 

 

 

 

 

 

 

 

 

 

 

 

 

By client type:

 

 

 

 

 

 

 

 

 

 

 

 

Retail:

$

(10

)

 

$

-

 

 

 

 

US

 

(7

)

 

 

1

 

 

 

 

International

 

(3

)

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

$

52

 

 

$

108

 

 

 

 

Core equity

 

15

 

 

 

48

 

 

 

 

Strategic

 

36

 

 

 

50

 

 

 

 

Precision

 

1

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Institutional:

$

26

 

 

$

74

 

 

 

 

Active

 

5

 

 

 

22

 

 

 

 

Index

 

21

 

 

 

52

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash management net flows

$

21

 

 

$

(6

)

 

 

 

 

 

 

 

 

 

 

 

 

Advisory net flows

$

-

 

 

$

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

Total net flows

$

90

 

 

$

176

 

 

 

 

1

 


 

 

BUSINESS RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2 2022

 

 

 

 

 

 

 

 

Q2 2022

 

 

 

 

Base fees (1)

 

 

 

 

 

 

 

 

Base fees (1)

 

June 30, 2022

 

and securities

 

 

Q2 2022

 

June 30, 2022

 

and securities

 

AUM

 

lending revenue

 

(in millions), (unaudited)

Net flows

 

AUM

 

lending revenue

 

% of Total

 

% of Total

 

RESULTS BY CLIENT TYPE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

$

(9,973

)

$

863,425

 

$

1,139

 

 

10

%

 

31

%

ETFs

 

52,103

 

 

2,784,296

 

 

1,436

 

 

33

%

 

39

%

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

5,275

 

 

1,510,862

 

 

636

 

 

18

%

 

17

%

Index

 

21,208

 

 

2,580,603

 

 

245

 

 

30

%

 

7

%

Total institutional

 

26,483

 

 

4,091,465

 

 

881

 

 

48

%

 

24

%

Long-term

 

68,613

 

 

7,739,186

 

 

3,456

 

 

91

%

 

94

%

Cash management

 

21,218

 

 

739,457

 

 

232

 

 

9

%

 

6

%

Advisory

 

(258

)

 

8,767

 

 

-

 

 

-

 

 

-

 

Total

$

89,573

 

$

8,487,410

 

$

3,688

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY INVESTMENT STYLE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

$

(10,339

)

$

2,210,648

 

$

1,727

 

 

26

%

 

47

%

Index and ETFs

 

78,952

 

 

5,528,538

 

 

1,729

 

 

65

%

 

47

%

Long-term

 

68,613

 

 

7,739,186

 

 

3,456

 

 

91

%

 

94

%

Cash management

 

21,218

 

 

739,457

 

 

232

 

 

9

%

 

6

%

Advisory

 

(258

)

 

8,767

 

 

-

 

 

-

 

 

-

 

Total

$

89,573

 

$

8,487,410

 

$

3,688

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY PRODUCT TYPE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

28,642

 

$

4,345,120

 

$

1,839

 

 

51

%

 

50

%

Fixed income

 

36,126

 

 

2,439,844

 

 

879

 

 

29

%

 

24

%

Multi-asset

 

1,380

 

 

678,465

 

 

331

 

 

8

%

 

9

%

Alternatives

 

2,465

 

 

275,757

 

 

407

 

 

3

%

 

11

%

Long-term

 

68,613

 

 

7,739,186

 

 

3,456

 

 

91

%

 

94

%

Cash management

 

21,218

 

 

739,457

 

 

232

 

 

9

%

 

6

%

Advisory

 

(258

)

 

8,767

 

 

-

 

 

-

 

 

-

 

Total

$

89,573

 

$

8,487,410

 

$

3,688

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Base fees include investment advisory and administration fees.

INVESTMENT PERFORMANCE AT JUNE 30, 2022(1)

                            q

 

One-year period

 

Three-year period

 

Five-year period

 

Fixed income:

 

 

 

 

 

 

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

 

 

 

 

 

 

Taxable

49%

 

83%

 

89%

 

Tax-exempt

27%

 

33%

 

34%

 

Index AUM within or above applicable tolerance

89%

 

93%

 

94%

 

Equity:

 

 

 

 

 

 

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

 

 

 

 

 

 

Fundamental

35%

 

71%

 

83%

 

Systematic

59%

 

61%

 

81%

 

Index AUM within or above applicable tolerance

95%

 

95%

 

95%

 

 

(1)

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

TELECONFERENCE, WEBCAST AND PRESENTATION INFORMATION

Chairman and Chief Executive Officer, Laurence D. Fink, President, Robert S. Kapito, and Chief Financial Officer, Gary S. Shedlin, will host a teleconference call for investors and analysts on Friday, July 15, 2022 at 8:30 a.m. (Eastern Time). Members of the public who are interested in participating in the teleconference should dial, from the United States, (866) 409-1555, or from outside the United States, (313) 209-4906, shortly before 8:30 a.m. and reference the BlackRock Conference Call (ID Number 9540818). A live, listen-only webcast will also be available via the investor relations section of www.blackrock.com.

Both the teleconference and webcast will be available for replay by 11:30 a.m. (Eastern Time) on Friday, July 15, 2022 and ending at midnight on Friday, July 29, 2022. To access the replay of the teleconference, callers from the United States should dial (888) 203-1112 and callers from outside the United States should dial (719) 457-0820 and enter the Conference ID Number 9540818. To access the webcast, please visit the investor relations section of www.blackrock.com.

ABOUT BLACKROCK

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate | Twitter: @blackrock | LinkedIn: www.linkedin.com/company/blackrock.

2

 


 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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

 

 

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

June 30,

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2022

 

 

2021

 

 

Change

 

 

2022

 

 

Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

  securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administration fees

$

3,528

 

 

$

3,617

 

 

$

(89

)

 

$

3,695

 

 

$

(167

)

Securities lending revenue

 

160

 

 

 

140

 

 

 

20

 

 

 

138

 

 

 

22

 

Total investment advisory, administration fees and

  securities lending revenue

 

3,688

 

 

 

3,757

 

 

 

(69

)

 

 

3,833

 

 

 

(145

)

Investment advisory performance fees

 

106

 

 

 

340

 

 

 

(234

)

 

 

98

 

 

 

8

 

Technology services revenue

 

332

 

 

 

316

 

 

 

16

 

 

 

341

 

 

 

(9

)

Distribution fees

 

361

 

 

 

369

 

 

 

(8

)

 

 

381

 

 

 

(20

)

Advisory and other revenue

 

39

 

 

 

38

 

 

 

1

 

 

 

46

 

 

 

(7

)

Total revenue

 

4,526

 

 

 

4,820

 

 

 

(294

)

 

 

4,699

 

 

 

(173

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

1,414

 

 

 

1,548

 

 

 

(134

)

 

 

1,498

 

 

 

(84

)

Distribution and servicing costs

 

572

 

 

 

523

 

 

 

49

 

 

 

574

 

 

 

(2

)

Direct fund expense

 

304

 

 

 

320

 

 

 

(16

)

 

 

329

 

 

 

(25

)

General and administration expense

 

530

 

 

 

461

 

 

 

69

 

 

 

496

 

 

 

34

 

Amortization of intangible assets

 

38

 

 

 

37

 

 

 

1

 

 

 

38

 

 

 

-

 

Total expense

 

2,858

 

 

 

2,889

 

 

 

(31

)

 

 

2,935

 

 

 

(77

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,668

 

 

 

1,931

 

 

 

(263

)

 

 

1,764

 

 

 

(96

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on investments

 

(314

)

 

 

314

 

 

 

(628

)

 

 

(102

)

 

 

(212

)

Interest and dividend income

 

21

 

 

 

8

 

 

 

13

 

 

 

18

 

 

 

3

 

Interest expense

 

(54

)

 

 

(52

)

 

 

(2

)

 

 

(54

)

 

 

-

 

Total nonoperating income (expense)

 

(347

)

 

 

270

 

 

 

(617

)

 

 

(138

)

 

 

(209

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

1,321

 

 

 

2,201

 

 

 

(880

)

 

 

1,626

 

 

 

(305

)

Income tax expense

 

358

 

 

 

654

 

 

 

(296

)

 

 

263

 

 

 

95

 

Net income

 

963

 

 

 

1,547

 

 

 

(584

)

 

 

1,363

 

 

 

(400

)

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling

  interests

 

(114

)

 

 

169

 

 

 

(283

)

 

 

(73

)

 

 

(41

)

Net income attributable to BlackRock, Inc.

$

1,077

 

 

$

1,378

 

 

$

(301

)

 

$

1,436

 

 

$

(359

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

151,292,580

 

 

 

152,443,039

 

 

 

(1,150,459

)

 

 

151,732,845

 

 

 

(440,265

)

Diluted

 

152,452,320

 

 

 

154,417,581

 

 

 

(1,965,261

)

 

 

153,530,395

 

 

 

(1,078,075

)

Earnings per share attributable to BlackRock, Inc.

   common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

7.12

 

 

$

9.04

 

 

$

(1.92

)

 

$

9.46

 

 

$

(2.34

)

Diluted

$

7.06

 

 

$

8.92

 

 

$

(1.86

)

 

$

9.35

 

 

$

(2.29

)

Cash dividends declared and paid per share

$

4.88

 

 

$

4.13

 

 

$

0.75

 

 

$

4.88

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM (end of period)

$

8,487,410

 

 

$

9,495,993

 

 

$

(1,008,583

)

 

$

9,569,513

 

 

$

(1,082,103

)

Shares outstanding (end of period)

 

150,966,457

 

 

 

152,298,784

 

 

 

(1,332,327

)

 

 

151,725,643

 

 

 

(759,186

)

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

36.9

%

 

 

40.1

%

 

 

(320

) bps

 

 

37.5

%

 

 

(60

) bps

Effective tax rate

 

24.9

%

 

 

32.2

%

 

 

(730

) bps

 

 

15.5

%

 

 

940

  bps

As adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (1)

$

1,727

 

 

$

2,016

 

 

$

(289

)

 

$

1,822

 

 

$

(95

)

Operating margin (1)

 

43.7

%

 

 

46.9

%

 

 

(320

) bps

 

 

44.2

%

 

 

(50

) bps

Nonoperating income (expense), less net income

     (loss) attributable to noncontrolling interests

$

(233

)

 

$

101

 

 

$

(334

)

 

$

(65

)

 

$

(168

)

Net income attributable to BlackRock, Inc. (2)

$

1,122

 

 

$

1,614

 

 

$

(492

)

 

$

1,462

 

 

$

(340

)

Diluted earnings attributable to BlackRock, Inc.

     common stockholders per share (2)

$

7.36

 

 

$

10.45

 

 

$

(3.09

)

 

$

9.52

 

 

$

(2.16

)

Effective tax rate

 

24.9

%

 

 

23.8

%

 

 

110

bps

 

 

16.8

%

 

 

810

  bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See pages 11 through 13 for the reconciliation to GAAP and notes (1) and (2) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items. Beginning in the first quarter of 2022, BlackRock updated the definitions of operating income, as adjusted, operating margin, as adjusted, and net income attributable to BlackRock, Inc., as adjusted, to include new adjustments. Such measures have been recast for 2021 to reflect the inclusion of such new adjustments.

 

 

 

 

 

 

3

 


 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

 

June 30,

 

 

 

 

 

 

2022

 

 

2021

 

 

Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

  securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administration fees

$

7,223

 

 

$

7,082

 

 

$

141

 

Securities lending revenue

 

298

 

 

 

267

 

 

 

31

 

Total investment advisory, administration fees and

  securities lending revenue

 

7,521

 

 

 

7,349

 

 

 

172

 

Investment advisory performance fees

 

204

 

 

 

469

 

 

 

(265

)

Technology services revenue

 

673

 

 

 

622

 

 

 

51

 

Distribution fees

 

742

 

 

 

709

 

 

 

33

 

Advisory and other revenue

 

85

 

 

 

69

 

 

 

16

 

Total revenue

 

9,225

 

 

 

9,218

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

2,912

 

 

 

2,957

 

 

 

(45

)

Distribution and servicing costs

 

1,146

 

 

 

1,028

 

 

 

118

 

Direct fund expense

 

633

 

 

 

640

 

 

 

(7

)

General and administration expense

 

1,026

 

 

 

1,046

 

 

 

(20

)

Amortization of intangible assets

 

76

 

 

 

71

 

 

 

5

 

Total expense

 

5,793

 

 

 

5,742

 

 

 

51

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

3,432

 

 

 

3,476