EX-99.1 2 blk-ex991_7.htm EX-99.1 blk-ex991_7.htm

Exhibit 99.1

 

 

 

 

 

INVESTOR RELATIONS:

Caroline Rodda      212.810.3442

MEDIA RELATIONS:

Brian Beades      212.810.5596

 

 

BlackRock Reports First Quarter 2023 Diluted EPS of $7.64, or $7.93 as adjusted

 

New York, April 14, 2023 – BlackRock, Inc. (NYSE: BLK) today reported financial results for the three months ended March 31, 2023.

 

 

$103 billion of quarterly long-term net inflows, representing 5% annualized organic asset growth, driven by continued momentum in bond ETFs and significant outsourcing mandates

$110 billion of quarterly total net inflows also reflect net inflows to diversified cash management platform

10% 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

18% decrease in operating income year-over-year (17% as adjusted)

18% decrease in diluted EPS year-over-year (17% as adjusted) also reflects a higher effective tax rate, partially offset by higher nonoperating income in the current quarter

$375 million of share repurchases in the current quarter and 2.5% increase in quarterly cash dividend to $5.00 per share

 

 

Laurence D. Fink, Chairman and CEO:

“BlackRock is helping clients execute on opportunities arising during this period of transition, driving $110 billion of total net inflows and positive annualized organic base fee growth in the first quarter. BlackRock is a source of both stability and optimism for clients. We are helping clients navigate volatility and embed resiliency in their portfolios, while also providing insights on the long-term opportunities to be had in today’s markets.

“BlackRock led the industry with $34 billion of bond ETF net inflows and accounted for over 60% of total fixed income ETF trading volume during the quarter. BlackRock ETFs once again proved their value as critically important tools for active management and in providing liquidity and transparency to clients.  Aladdin continued to provide best-in-class portfolio and risk analytics, enabling clients to act quickly and with clarity and confidence. And clients turned to our $683 billion cash management platform to manage risk, diversify, and enhance yields.

“BlackRock was founded on the belief that the capital markets would steadily grow as people, companies and countries turn to them to fund their retirements, businesses, and economies. I believe today’s crisis of confidence in the regional banking sector will further accelerate capital markets growth, and BlackRock will be a central player. Increased financing through the capital markets will require the scale, multi-asset capabilities and excellence in portfolio construction that BlackRock consistently delivers across market cycles.

“Throughout our history, moments of market dislocation and disruption have served as inflection points for BlackRock. We’ve always emerged stronger, more differentiated and more deeply connected with clients. We will continue to stay in front of client needs and execute on opportunities to deliver long-term growth for our clients, shareholders and employees.”

 

FINANCIAL RESULTS

 

Q1

 

 

Q1

 

(in millions, except per share data)

2023

 

 

2022

 

AUM

$

9,090,271

 

 

$

9,569,513

 

% change

 

(5

)%

 

 

 

 

Average AUM

$

8,902,588

 

 

$

9,669,202

 

% change

 

(8

)%

 

 

 

 

Total net flows

$

110,318

 

 

$

86,364

 

 

 

 

 

 

 

 

 

GAAP basis:

 

 

 

 

 

 

 

Revenue

$

4,243

 

 

$

4,699

 

% change

 

(10

)%

 

 

 

 

Operating income

$

1,438

 

 

$

1,764

 

% change

 

(18

)%

 

 

 

 

Operating margin

 

33.9

%

 

 

37.5

%

Net income(1)

$

1,157

 

 

$

1,436

 

% change

 

(19

)%

 

 

 

 

Diluted EPS

$

7.64

 

 

$

9.35

 

% change

 

(18

)%

 

 

 

 

Weighted-average diluted

  shares

 

151.3

 

 

 

153.5

 

% change

 

(1

)%

 

 

 

 

 

 

 

 

 

 

 

 

As Adjusted(2):

 

 

 

 

 

 

 

Operating income

$

1,511

 

 

$

1,822

 

% change

 

(17

)%

 

 

 

 

Operating margin

 

40.4

%

 

 

44.2

%

Net income(1)

$

1,200

 

 

$

1,462

 

% change

 

(18

)%

 

 

 

 

Diluted EPS

$

7.93

 

 

$

9.52

 

% change

 

(17

)%

 

 

 

 

 

 

 

(1)

Net income represents net income attributable to BlackRock, Inc.

(2)

See notes (1) through (3) to the condensed consolidated statements of income and supplemental information on pages 9 through 11 for more information on as adjusted items and the reconciliation to GAAP. Beginning in the first quarter of 2023, BlackRock updated the definitions of its non-GAAP financial measures to exclude the impact of market valuation changes on certain deferred cash compensation plans which the company began economically hedging in 2023.

NET FLOW HIGHLIGHTS

 

 

 

Q1

 

(in billions)

2023

LTM(1)

Long-term net flows:

$

103

 

 

$

382

 

 

 

 

 

 

 

 

 

 

 

 

 

By region:

 

Americas

$

62

 

 

$

267

 

 

 

EMEA

 

23

 

 

 

51

 

 

 

APAC

 

18

 

 

 

64

 

 

 

 

 

 

 

 

 

 

 

 

 

By client type:

 

 

 

 

 

 

 

 

 

 

 

 

Retail:

$

0.3

 

 

$

(29

)

 

 

 

US

 

0.2

 

 

 

(17

)

 

 

 

International

 

0.1

 

 

 

(12

)

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

$

22

 

 

$

186

 

 

 

 

Core equity

 

4

 

 

 

34

 

 

 

 

Strategic

 

29

 

 

 

160

 

 

 

 

Precision

 

(11

)

 

 

(8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Institutional:

$

81

 

 

$

226

 

 

 

 

Active

 

72

 

 

 

224

 

 

 

 

Index

 

9

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash management net flows

$

8

 

 

$

(43

)

 

 

 

 

 

 

 

 

 

 

 

 

Advisory net flows

$

-

 

 

$

(9

)

 

 

 

 

 

 

 

 

 

 

 

 

Total net flows

$

110

 

 

$

331

 

 

 

 

 

(1)

Amounts represent last twelve months net flows from April 1, 2022 to March 31, 2023.

 

 

 

1

 

 

 

BUSINESS RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1 2023

 

 

 

 

 

 

 

 

Q1 2023

 

 

 

 

Base fees (1)

 

 

 

 

 

 

 

 

Base fees (1)

 

March 31, 2023

 

and securities

 

 

Q1 2023

 

March 31, 2023

 

and securities

 

AUM

 

lending revenue

 

(in millions), (unaudited)

Net flows

 

AUM

 

lending revenue

 

% of Total

 

% of Total

 

RESULTS BY CLIENT TYPE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

$

283

 

$

876,979

 

$

1,032

 

 

10

%

 

29

%

ETFs

 

21,705

 

 

3,074,303

 

 

1,418

 

 

33

%

 

41

%

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

71,537

 

 

1,778,340

 

 

622

 

 

20

%

 

18

%

Index

 

9,175

 

 

2,677,711

 

 

221

 

 

29

%

 

6

%

Total institutional

 

80,712

 

 

4,456,051

 

 

843

 

 

49

%

 

24

%

Long-term

 

102,700

 

 

8,407,333

 

 

3,293

 

 

92

%

 

94

%

Cash management

 

7,618

 

 

682,938

 

 

209

 

 

8

%

 

6

%

Total

$

110,318

 

$

9,090,271

 

$

3,502

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY INVESTMENT STYLE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

$

68,293

 

$

2,474,034

 

$

1,606

 

 

27

%

 

46

%

Index and ETFs

 

34,407

 

 

5,933,299

 

 

1,687

 

 

65

%

 

48

%

Long-term

 

102,700

 

 

8,407,333

 

 

3,293

 

 

92

%

 

94

%

Cash management

 

7,618

 

 

682,938

 

 

209

 

 

8

%

 

6

%

Total

$

110,318

 

$

9,090,271

 

$

3,502

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY PRODUCT TYPE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

(6,790

)

$

4,707,344

 

$

1,755

 

 

52

%

 

51

%

Fixed income

 

53,876

 

 

2,653,744

 

 

850

 

 

29

%

 

24

%

Multi-asset

 

53,675

 

 

771,880

 

 

296

 

 

8

%

 

8

%

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

4,432

 

 

123,416

 

 

201

 

 

1

%

 

6

%

Liquid alternatives

 

(2,125

)

 

80,151

 

 

145

 

 

1

%

 

4

%

Currency and commodities

 

(368

)

 

70,798

 

 

46

 

 

1

%

 

1

%

Total Alternatives

 

1,939

 

 

274,365

 

 

392

 

 

3

%

 

11

%

Long-term

 

102,700

 

 

8,407,333

 

 

3,293

 

 

92

%

 

94

%

Cash management

 

7,618

 

 

682,938

 

 

209

 

 

8

%

 

6

%

Total

$

110,318

 

$

9,090,271

 

$

3,502

 

 

100

%

 

100

%

 

 

(1)

Base fees include investment advisory and administration fees.

INVESTMENT PERFORMANCE AT March 31, 2023(1)                                                      

 

One-year period

 

Three-year period

 

Five-year period

 

Fixed income:

 

 

 

 

 

 

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

 

 

 

 

 

 

Taxable

77%

 

90%

 

90%

 

Tax-exempt

35%

 

80%

 

42%

 

Index AUM within or above applicable tolerance

94%

 

96%

 

97%

 

Equity:

 

 

 

 

 

 

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

 

 

 

 

 

 

Fundamental

53%

 

47%

 

81%

 

Systematic

75%

 

78%

 

64%

 

Index AUM within or above applicable tolerance

99%

 

96%

 

96%

 

 

(1)

Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 12 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, Martin S. Small, will host a teleconference call for investors and analysts on Friday, April 14, 2023 at 7:30 a.m. (Eastern Time). Members of the public who are interested in participating in the teleconference should dial, from the United States, (877) 502-9276, or from outside the United States, (313) 209-4906, shortly before 7:30 a.m. and reference the BlackRock Conference Call (ID Number 2152058). A live, listen-only webcast will also be available via the investor relations section of www.blackrock.com.

The webcast will be available for replay by 10:30 a.m. (Eastern Time) on Friday, April 14, 2023. To access the replay of the webcast, please visit the investor relations section of www.blackrock.com.

ABOUT BLACKROCK

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

 

 

 

2

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

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

 

 

 

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

 

2022

 

 

Change

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

  securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administration fees

$

3,335

 

 

$

3,695

 

 

$

(360

)

 

 

$

3,260

 

 

$

75

 

 

Securities lending revenue

 

167

 

 

 

138

 

 

 

29

 

 

 

 

139

 

 

 

28

 

 

Total investment advisory, administration fees and

  securities lending revenue

 

3,502

 

 

 

3,833

 

 

 

(331

)

 

 

 

3,399

 

 

 

103

 

 

Investment advisory performance fees

 

55

 

 

 

98

 

 

 

(43

)

 

 

 

228

 

 

 

(173

)

 

Technology services revenue

 

340

 

 

 

341

 

 

 

(1

)

 

 

 

353

 

 

 

(13

)

 

Distribution fees

 

319

 

 

 

381

 

 

 

(62

)

 

 

 

314

 

 

 

5

 

 

Advisory and other revenue

 

27

 

 

 

46

 

 

 

(19

)

 

 

 

43

 

 

 

(16

)

 

Total revenue

 

4,243

 

 

 

4,699

 

 

 

(456

)

 

 

 

4,337

 

 

 

(94

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

1,427

 

 

 

1,498

 

 

 

(71

)

 

 

 

1,430

 

 

 

(3

)

 

Distribution and servicing costs

 

505

 

 

 

574

 

 

 

(69

)

 

 

 

497

 

 

 

8

 

 

Direct fund expense

 

315

 

 

 

329

 

 

 

(14

)

 

 

 

275

 

 

 

40

 

 

General and administration expense

 

521

 

 

 

496

 

 

 

25

 

 

 

 

580

 

 

 

(59

)

 

Restructuring charge

 

-

 

 

 

-

 

 

 

-

 

 

 

 

91

 

 

 

(91

)

 

Amortization of intangible assets

 

37

 

 

 

38

 

 

 

(1

)

 

 

 

37

 

 

 

-

 

 

Total expense

 

2,805

 

 

 

2,935

 

 

 

(130

)

 

 

 

2,910

 

 

 

(105

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,438

 

 

 

1,764

 

 

 

(326

)

 

 

 

1,427

 

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on investments

 

89

 

 

 

(102

)

 

 

191

 

 

 

 

207

 

 

 

(118

)

 

Interest and dividend income

 

86

 

 

 

18

 

 

 

68

 

 

 

 

72

 

 

 

14

 

 

Interest expense

 

(59

)

 

 

(54

)

 

 

(5

)

 

 

 

(54

)

 

 

(5

)

 

Total nonoperating income (expense)

 

116

 

 

 

(138

)

 

 

254

 

 

 

 

225

 

 

 

(109

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

1,554

 

 

 

1,626

 

 

 

(72

)

 

 

 

1,652

 

 

 

(98

)

 

Income tax expense

 

385

 

 

 

263

 

 

 

122

 

 

 

 

345

 

 

 

40

 

 

Net income

 

1,169

 

 

 

1,363

 

 

 

(194

)

 

 

 

1,307

 

 

 

(138

)

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling

  interests

 

12

 

 

 

(73

)

 

 

85

 

 

 

 

48

 

 

 

(36

)

 

Net income attributable to BlackRock, Inc.

$

1,157

 

 

$

1,436

 

 

$

(279

)

 

 

$

1,259

 

 

$

(102

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

149.9

 

 

 

151.7

 

 

 

(1.8

)

 

 

 

150.0

 

 

 

(0.1

)

 

Diluted

 

151.3

 

 

 

153.5

 

 

 

(2.2

)

 

 

 

151.8

 

 

 

(0.5

)

 

Earnings per share attributable to BlackRock, Inc.

   common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

7.72

 

 

$

9.46

 

 

$

(1.74

)

 

 

$

8.39

 

 

$

(0.67

)

 

Diluted

$

7.64

 

 

$

9.35

 

 

$

(1.71

)

 

 

$

8.29

 

 

$

(0.65

)

 

Cash dividends declared and paid per share

$

5.00

 

 

$

4.88

 

 

$

0.12

 

 

 

$

4.88

 

 

$

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM (end of period)

$

9,090,271

 

 

$

9,569,513

 

 

$

(479,242

)

 

 

$

8,594,485

 

 

$

495,786

 

 

Shares outstanding (end of period)

 

149.9

 

 

 

151.7

 

 

 

(1.8

)

 

 

 

149.8

 

 

 

0.1

 

 

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

33.9

%

 

 

37.5

%

 

 

(360

)

bps

 

 

32.9

%

 

 

100

 

bps

Effective tax rate

 

25.0

%

 

 

15.5

%

 

 

950

 

bps

 

 

21.5

%

 

 

350

 

bps

As adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (1)

$

1,511

 

 

$

1,822

 

 

$

(311

)

 

 

$

1,577

 

 

$

(66

)

 

Operating margin (1)

 

40.4

%

 

 

44.2

%

 

 

(380

)

bps

 

 

41.2

%

 

 

(80

)

bps

Nonoperating income (expense), less net income

     (loss) attributable to noncontrolling interests (2)

$

87

 

 

$

(65

)

 

$

152

 

 

 

$

177

 

 

$

(90

)

 

Net income attributable to BlackRock, Inc. (3)

$

1,200

 

 

$

1,462

 

 

$

(262

)

 

 

$

1,356

 

 

$

(156

)

 

Diluted earnings attributable to BlackRock, Inc.

     common stockholders per share (3)

$

7.93

 

 

$

9.52

 

 

$

(1.59

)

 

 

$

8.93

 

 

$

(1.00

)

 

Effective tax rate

 

25.0

%

 

 

16.8

%

 

 

820

 

bps

 

 

22.7

%

 

 

230

 

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See pages 9 through 11 for the reconciliation to GAAP and notes (1) through (3) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items.

3

 

 

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Current Quarter Component Changes by Client Type and Product Type

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2022

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2023

 

 

Average AUM (2)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

370,612

 

 

$

1,999

 

 

$

19,727

 

 

$

1,936

 

 

$

394,274

 

 

$

390,849

 

Fixed income

 

299,114

 

 

 

421

 

 

 

4,212

 

 

 

2,190

 

 

 

305,937

 

 

 

305,909

 

Multi-asset

 

125,168

 

 

 

(1,144

)

 

 

4,340

 

 

 

317

 

 

 

128,681

 

 

 

128,208

 

Alternatives

 

48,581

 

 

 

(993

)

 

 

332

 

 

 

167

 

 

 

48,087

 

 

 

48,514

 

Retail subtotal

 

843,475

 

 

 

283

 

 

 

28,611

 

 

 

4,610

 

 

 

876,979

 

 

 

873,480

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,081,742

 

 

 

(10,105

)

 

 

117,173

 

 

 

2,627

 

 

 

2,191,437

 

 

 

2,164,367

 

Fixed income

 

758,093

 

 

 

33,513

 

 

 

17,645

 

 

 

1,525

 

 

 

810,776

 

 

 

784,986

 

Multi-asset

 

8,875

 

 

 

(1,628

)

 

 

439

 

 

 

2

 

 

 

7,688

 

 

 

8,039

 

Alternatives

 

60,900

 

 

 

(75

)

 

 

3,560

 

 

 

17

 

 

 

64,402

 

 

 

61,527

 

ETFs subtotal

 

2,909,610

 

 

 

21,705

 

 

 

138,817

 

 

 

4,171

 

 

 

3,074,303

 

 

 

3,018,919

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

168,734

 

 

 

(3,682

)

 

 

9,984

 

 

 

1,017

 

 

 

176,053

 

 

 

171,321

 

Fixed income

 

774,955

 

 

 

15,703

 

 

 

22,010

 

 

 

1,969

 

 

 

814,637

 

 

 

795,268

 

Multi-asset

 

544,469

 

 

 

56,587

 

 

 

25,134

 

 

 

2,828

 

 

 

629,018

 

 

 

597,419

 

Alternatives

 

153,433

 

 

 

2,929

 

 

 

1,723

 

 

 

547

 

 

 

158,632

 

 

 

156,385

 

Active subtotal

 

1,641,591

 

 

 

71,537

 

 

 

58,851

 

 

 

6,361

 

 

 

1,778,340

 

 

 

1,720,393

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,814,266

 

 

 

4,998

 

 

 

121,405

 

 

 

4,911

 

 

 

1,945,580

 

 

 

1,906,349

 

Fixed income

 

704,661

 

 

 

4,239

 

 

 

8,454

 

 

 

5,040

 

 

 

722,394

 

 

 

714,315

 

Multi-asset

 

6,392

 

 

 

(140

)

 

 

251

 

 

 

(10

)

 

 

6,493

 

 

 

6,487

 

Alternatives

 

3,296

 

 

 

78

 

 

 

(133

)

 

 

3

 

 

 

3,244

 

 

 

3,258

 

Index subtotal

 

2,528,615

 

 

 

9,175

 

 

 

129,977

 

 

 

9,944

 

 

 

2,677,711

 

 

 

2,630,409

 

Institutional subtotal

 

4,170,206

 

 

 

80,712

 

 

 

188,828

 

 

 

16,305

 

 

 

4,456,051

 

 

 

4,350,802

 

Long-term

 

7,923,291

 

 

 

102,700

 

 

 

356,256

 

 

 

25,086

 

 

 

8,407,333

 

 

 

8,243,201

 

Cash management

 

671,194

 

 

 

7,618

 

 

 

1,819

 

 

 

2,307

 

 

 

682,938

 

 

 

659,387

 

Total

$

8,594,485

 

 

$

110,318

 

 

$

358,075

 

 

$

27,393

 

 

$

9,090,271

 

 

$

8,902,588

 

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

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2022

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2023

 

 

Average AUM (2)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

392,836

 

 

$

(5,093

)

 

$

21,200

 

 

$

1,946

 

 

$

410,889

 

 

$

407,524

 

Fixed income

 

1,053,083

 

 

 

16,007

 

 

 

25,879

 

 

 

3,768

 

 

 

1,098,737

 

 

 

1,079,569

 

Multi-asset

 

669,629

 

 

 

55,443

 

 

 

29,475

 

 

 

3,145

 

 

 

757,692

 

 

 

725,619

 

Alternatives

 

202,012

 

 

 

1,936

 

 

 

2,054

 

 

 

714

 

 

 

206,716

 

 

 

204,899

 

Active subtotal

 

2,317,560

 

 

 

68,293

 

 

 

78,608

 

 

 

9,573

 

 

 

2,474,034

 

 

 

2,417,611

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,081,742

 

 

 

(10,105

)

 

 

117,173

 

 

 

2,627

 

 

 

2,191,437

 

 

 

2,164,367

 

Fixed income

 

758,093

 

 

 

33,513

 

 

 

17,645

 

 

 

1,525

 

 

 

810,776

 

 

 

784,986

 

Multi-asset

 

8,875

 

 

 

(1,628

)

 

 

439

 

 

 

2

 

 

 

7,688

 

 

 

8,039

 

Alternatives

 

60,900

 

 

 

(75

)

 

 

3,560

 

 

 

17

 

 

 

64,402

 

 

 

61,527

 

ETFs subtotal

 

2,909,610

 

 

 

21,705

 

 

 

138,817

 

 

 

4,171

 

 

 

3,074,303

 

 

 

3,018,919

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,960,776

 

 

 

8,408

 

 

 

129,916

 

 

 

5,918

 

 

 

2,105,018

 

 

 

2,060,995

 

Fixed income

 

725,647

 

 

 

4,356

 

 

 

8,797

 

 

 

5,431

 

 

 

744,231

 

 

 

735,923

 

Multi-asset

 

6,400

 

 

 

(140

)

 

 

250

 

 

 

(10

)

 

 

6,500

 

 

 

6,495

 

Alternatives

 

3,298

 

 

 

78

 

 

 

(132

)

 

 

3

 

 

 

3,247

 

 

 

3,258

 

Non-ETF Index subtotal

 

2,696,121

 

 

 

12,702

 

 

 

138,831

 

 

 

11,342

 

 

 

2,858,996

 

 

 

2,806,671

 

Index and ETFs subtotal

 

5,605,731

 

 

 

34,407

 

 

 

277,648

 

 

 

15,513

 

 

 

5,933,299

 

 

 

5,825,590

 

Long-term

$

7,923,291

 

 

$

102,700

 

 

$

356,256

 

 

$

25,086

 

 

$

8,407,333

 

 

$

8,243,201

 

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

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2022

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2023

 

 

Average AUM (2)

 

Equity

$

4,435,354

 

 

$

(6,790

)

 

$

268,289

 

 

$

10,491

 

 

$

4,707,344

 

 

$

4,632,886

 

Fixed income

 

2,536,823

 

 

 

53,876

 

 

 

52,321

 

 

 

10,724

 

 

 

2,653,744

 

 

 

2,600,478

 

Multi-asset

 

684,904

 

 

 

53,675

 

 

 

30,164

 

 

 

3,137

 

 

 

771,880

 

 

 

740,153

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

117,751

 

 

 

4,432

 

 

 

626

 

 

 

607

 

 

 

123,416

 

 

 

120,872

 

Liquid alternatives

 

80,654

 

 

 

(2,125

)

 

 

1,503

 

 

 

119

 

 

 

80,151

 

 

 

80,631

 

Currency and commodities(3)

 

67,805

 

 

 

(368

)

 

 

3,353

 

 

 

8

 

 

 

70,798

 

 

 

68,181

 

Alternatives subtotal

 

266,210

 

 

 

1,939

 

 

 

5,482

 

 

 

734

 

 

 

274,365

 

 

 

269,684

 

Long-term

$

7,923,291

 

 

$

102,700

 

 

$

356,256

 

 

$

25,086

 

 

$

8,407,333

 

 

$

8,243,201

 

 

(1)

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

(2)

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

(3)

Amounts include commodity ETFs.

4

 

 

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

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

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2022

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2023

 

 

Average AUM (2)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

446,043

 

 

$

(4,305

)

 

$

(41,661

)

 

$

(5,803

)

 

$

394,274

 

 

$

389,562

 

Fixed income

 

343,712

 

 

 

(17,982

)

 

 

(18,742

)

 

 

(1,051

)

 

 

305,937

 

 

 

312,168

 

Multi-asset

 

149,480

 

 

 

(7,266

)

 

 

(13,039

)

 

 

(494

)

 

 

128,681

 

 

 

131,531

 

Alternatives

 

49,888

 

 

 

150

 

 

 

(1,743

)

 

 

(208

)

 

 

48,087

 

 

 

49,017

 

Retail subtotal

 

989,123

 

 

 

(29,403

)

 

 

(75,185

)

 

 

(7,556

)

 

 

876,979

 

 

 

882,278

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,350,421

 

 

 

49,481

 

 

 

(196,133

)

 

 

(12,332

)

 

 

2,191,437

 

 

 

2,124,649

 

Fixed income

 

712,767

 

 

 

148,255

 

 

 

(47,182

)

 

 

(3,064

)

 

 

810,776

 

 

 

735,279

 

Multi-asset

 

8,716

 

 

 

(364

)

 

 

(511

)

 

 

(153

)

 

 

7,688

 

 

 

8,000

 

Alternatives

 

78,592

 

 

 

(11,541

)

 

 

(2,541

)

 

 

(108

)

 

 

64,402

 

 

 

65,163

 

ETFs subtotal

 

3,150,496

 

 

 

185,831

 

 

 

(246,367

)

 

 

(15,657

)

 

 

3,074,303

 

 

 

2,933,091

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

188,822

 

 

 

4,369

 

 

 

(13,186

)

 

 

(3,952

)

 

 

176,053

 

 

 

171,020

 

Fixed income

 

718,225

 

 

 

133,339

 

 

 

(30,053

)

 

 

(6,874

)

 

 

814,637

 

 

 

727,212

 

Multi-asset

 

617,843

 

 

 

76,406

 

 

 

(51,197

)

 

 

(14,034

)

 

 

629,018

 

 

 

568,433

 

Alternatives

 

151,277

 

 

 

9,850

 

 

 

(610

)

 

 

(1,885

)

 

 

158,632

 

 

 

152,231

 

Active subtotal

 

1,676,167

 

 

 

223,964

 

 

 

(95,046

)

 

 

(26,745

)

 

 

1,778,340

 

 

 

1,618,896

 

Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,133,758

 

 

 

(27,256

)

 

 

(118,136

)

 

 

(42,786

)

 

 

1,945,580

 

 

 

1,894,107

 

Fixed income

 

871,167

 

 

 

32,522

 

 

 

(137,835

)

 

 

(43,460

)

 

 

722,394

 

 

 

745,023

 

Multi-asset

 

9,142

 

 

 

(1,551

)

 

 

(836

)

 

 

(262

)

 

 

6,493

 

 

 

7,073

 

Alternatives

 

5,696

 

 

 

(1,902

)

 

 

(321

)

 

 

(229

)

 

 

3,244

 

 

 

4,185

 

Index subtotal

 

3,019,763

 

 

 

1,813

 

 

 

(257,128

)

 

 

(86,737

)

 

 

2,677,711

 

 

 

2,650,388

 

Institutional subtotal

 

4,695,930

 

 

 

225,777

 

 

 

(352,174

)

 

 

(113,482

)

 

 

4,456,051

 

 

 

4,269,284

 

Long-term

 

8,835,549

 

 

 

382,205

 

 

 

(673,726

)

 

 

(136,695

)

 

 

8,407,333

 

 

 

8,084,653

 

Cash management

 

724,939

 

 

 

(42,661

)

 

 

3,517

 

 

 

(2,857

)

 

 

682,938

 

 

 

700,296

 

Advisory

 

9,025

 

 

 

(9,022

)

 

 

(3

)

 

 

-

 

 

 

-

 

 

 

2,741

 

Total

$

9,569,513

 

 

$

330,522

 

 

$

(670,212

)

 

$

(139,552

)

 

$

9,090,271

 

 

$

8,787,690

 

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

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2022

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2023

 

 

Average AUM (2)

 

Active:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

472,849

 

 

$

(9,764

)

 

$

(45,511

)

 

$

(6,685

)

 

$

410,889

 

 

$

410,109

 

Fixed income

 

1,037,813

 

 

 

114,006

 

 

 

(46,234

)

 

 

(6,848

)

 

 

1,098,737

 

 

 

1,017,777

 

Multi-asset

 

767,315

 

 

 

69,139

 

 

 

(64,235

)

 

 

(14,527

)

 

 

757,692

 

 

 

699,956

 

Alternatives

 

201,162

 

 

 

9,999

 

 

 

(2,352

)

 

 

(2,093

)

 

 

206,716

 

 

 

201,247

 

Active subtotal

 

2,479,139

 

 

 

183,380

 

 

 

(158,332

)

 

 

(30,153

)

 

 

2,474,034

 

 

 

2,329,089

 

Index and ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,350,421

 

 

 

49,481

 

 

 

(196,133

)

 

 

(12,332

)

 

 

2,191,437

 

 

 

2,124,649

 

Fixed income

 

712,767

 

 

 

148,255

 

 

 

(47,182

)

 

 

(3,064

)

 

 

810,776

 

 

 

735,279

 

Multi-asset

 

8,716

 

 

 

(364

)

 

 

(511

)

 

 

(153

)

 

 

7,688

 

 

 

8,000

 

Alternatives

 

78,592

 

 

 

(11,541

)

 

 

(2,541

)

 

 

(108

)

 

 

64,402

 

 

 

65,163

 

ETFs subtotal

 

3,150,496

 

 

 

185,831

 

 

 

(246,367

)

 

 

(15,657

)

 

 

3,074,303

 

 

 

2,933,091

 

Non-ETF Index:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

2,295,774

 

 

 

(17,428

)

 

 

(127,472

)

 

 

(45,856

)

 

 

2,105,018

 

 

 

2,044,580

 

Fixed income

 

895,291

 

 

 

33,873

 

 

 

(140,396

)

 

 

(44,537

)

 

 

744,231

 

 

 

766,626

 

Multi-asset

 

9,150

 

 

 

(1,550

)

 

 

(837

)

 

 

(263

)

 

 

6,500

 

 

 

7,081

 

Alternatives

 

5,699

 

 

 

(1,901

)

 

 

(322

)

 

 

(229

)

 

 

3,247

 

 

 

4,186

 

Non-ETF Index subtotal

 

3,205,914

 

 

 

12,994

 

 

 

(269,027

)

 

 

(90,885

)

 

 

2,858,996

 

 

 

2,822,473

 

Index and ETFs subtotal

 

6,356,410

 

 

 

198,825

 

 

 

(515,394

)

 

 

(106,542

)

 

 

5,933,299

 

 

 

5,755,564

 

Long-term

$

8,835,549

 

 

$

382,205

 

 

$

(673,726

)

 

$

(136,695

)

 

$

8,407,333

 

 

$

8,084,653

 

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

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

inflows

 

 

Market

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

2022

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2023

 

 

Average AUM (2)

 

Equity

$

5,119,044

 

 

$

22,289

 

 

$

(369,116

)

 

$

(64,873

)

 

$

4,707,344

 

 

$

4,579,338

 

Fixed income

 

2,645,871

 

 

 

296,134

 

 

 

(233,812

)

 

 

(54,449

)

 

 

2,653,744

 

 

 

2,519,682

 

Multi-asset

 

785,181

 

 

 

67,225

 

 

 

(65,583

)

 

 

(14,943

)

 

 

771,880

 

 

 

715,037

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

109,141

 

 

 

16,610

 

 

 

(1,468

)

 

 

(867

)

 

 

123,416

 

 

 

114,703

 

Liquid alternatives

 

87,326

 

 

 

(5,722

)

 

 

(349

)

 

 

(1,104

)

 

 

80,151

 

 

 

82,517

 

Currency and commodities(3)

 

88,986

 

 

 

(14,331

)

 

 

(3,398

)

 

 

(459

)

 

 

70,798

 

 

 

73,376

 

Alternatives subtotal

 

285,453

 

 

 

(3,443

)

 

 

(5,215

)

 

 

(2,430

)

 

 

274,365

 

 

 

270,596

 

Long-term

$

8,835,549

 

 

$

382,205

 

 

$

(673,726

)

 

$

(136,695

)

 

$

8,407,333

 

 

$

8,084,653

 

 

(1)

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

(2)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

(3)

Amounts include commodity ETFs.

5

 

 

SUMMARY OF REVENUE

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

(in millions), (unaudited)

2023

 

 

2022

 

 

Change

 

 

2022

 

 

Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

  securities lending revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

$

500

 

 

$

616

 

 

$

(116

)

 

$

478

 

 

$

22

 

ETFs

 

1,078

 

 

 

1,158

 

 

 

(80

)

 

 

1,021

 

 

 

57

 

Non-ETF Index

 

177

 

 

 

187

 

 

 

(10

)

 

 

159

 

 

 

18

 

Equity subtotal

 

1,755

 

 

 

1,961

 

 

 

(206

)

 

 

1,658

 

 

 

97

 

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

468

 

 

 

534

 

 

 

(66

)

 

 

462

 

 

 

6

 

ETFs

 

295

 

 

 

289

 

 

 

6

 

 

 

283

 

 

 

12

 

Non-ETF Index

 

87

 

 

 

118

 

 

 

(31

)

 

 

85

 

 

 

2

 

Fixed income subtotal

 

850

 

 

 

941

 

 

 

(91

)

 

 

830

 

 

 

20

 

Multi-asset

 

296

 

 

 

359

 

 

 

(63

)

 

 

293

 

 

 

3

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

201

 

 

 

179

 

 

 

22

 

 

 

194

 

 

 

7

 

Liquid alternatives

 

145

 

 

 

167

 

 

 

(22

)

 

 

150

 

 

 

(5

)

Currency and commodities

 

46

 

 

 

56

 

 

 

(10

)

 

 

47

 

 

 

(1

)

Alternatives subtotal

 

392

 

 

 

402

 

 

 

(10

)

 

 

391

 

 

 

1

 

Long-term

 

3,293

 

 

 

3,663

 

 

 

(370

)

 

 

3,172

 

 

 

121

 

Cash management

 

209

 

 

 

170

 

 

 

39

 

 

 

227

 

 

 

(18

)

Total investment advisory, administration

  fees and securities lending revenue

 

3,502

 

 

 

3,833

 

 

 

(331

)

 

 

3,399

 

 

 

103

 

Investment advisory performance fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

6

 

 

 

12

 

 

 

(6

)

 

 

36

 

 

 

(30

)

Fixed income

 

1

 

 

 

9

 

 

 

(8

)

 

 

6

 

 

 

(5

)

Multi-asset

 

15

 

 

 

5

 

 

 

10

 

 

 

11

 

 

 

4

 

Alternatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illiquid alternatives

 

21

 

 

 

37

 

 

 

(16

)

 

 

115

 

 

 

(94

)

Liquid alternatives

 

12

 

 

 

35

 

 

 

(23

)

 

 

60

 

 

 

(48

)

Alternatives subtotal

 

33

 

 

 

72

 

 

 

(39

)

 

 

175

 

 

 

(142

)

Total investment advisory performance fees

 

55

 

 

 

98

 

 

 

(43

)

 

 

228

 

 

 

(173

)

Technology services revenue

 

340

 

 

 

341

 

 

 

(1

)

 

 

353

 

 

 

(13

)

Distribution fees

 

319

 

 

 

381

 

 

 

(62

)

 

 

314

 

 

 

5

 

Advisory and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory

 

14

 

 

 

16

 

 

 

(2

)

 

 

17

 

 

 

(3

)

Other

 

13

 

 

 

30

 

 

 

(17

)

 

 

26

 

 

 

(13

)

Total advisory and other revenue

 

27

 

 

 

46

 

 

 

(19

)

 

 

43

 

 

 

(16

)

Total revenue

$

4,243

 

 

$

4,699

 

 

$

(456

)

 

$

4,337

 

 

$

(94

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highlights

•

Investment advisory, administration fees and securities lending revenue decreased $331 million from the first quarter of 2022, primarily driven by the negative impact of market beta and foreign exchange movements on average AUM, partially offset by the elimination of yield-related fee waivers on money market funds and higher securities lending revenue. Securities lending revenue of $167 million increased from $138 million in the first quarter of 2022 primarily reflecting higher spreads.

Investment advisory, administration fees and securities lending revenue increased $103 million from the fourth quarter of 2022, primarily driven by higher average AUM and securities lending revenue, partially offset by the effect of two fewer days in the quarter. Securities lending revenue of $167 million increased from $139 million in the fourth quarter of 2022.

•

Performance fees decreased $43 million from the first quarter of 2022, reflecting lower revenue from alternative products.

Performance fees decreased $173 million from the fourth quarter of 2022, primarily reflecting a seasonally higher number of products with a performance measurement period that ended in the fourth quarter of 2022.

•

Technology services revenue decreased $1 million from the first quarter of 2022 due to the negative impact of foreign exchange movements on Aladdin’s non-dollar revenue and market declines on Aladdin’s fixed income platform assets over the last twelve months, largely offset by continued strong client demand for Aladdin. Technology services revenue decreased $13 million from the fourth quarter of 2022, reflecting one-time fees in the fourth quarter of 2022 and the timing of client implementations. Technology services annual contract value (“ACV”)(1) increased 6% from the first quarter of 2022, and was similarly impacted by foreign exchange and market declines.

 

 

(1)

See note (4) to the condensed consolidated statements of income and supplemental information on page 11 for more information on ACV.

6

 

 

SUMMARY OF OPERATING EXPENSE

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

(in millions), (unaudited)

2023

 

 

2022

 

 

Change

 

 

2022

 

 

Change

 

Operating expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

$

1,427

 

 

$

1,498

 

 

$

(71

)

 

$

1,430

 

 

$

(3

)

Distribution and servicing costs

 

505

 

 

 

574

 

 

 

(69

)

 

 

497

 

 

 

8

 

Direct fund expense

 

315

 

 

 

329

 

 

 

(14

)

 

 

275

 

 

 

40

 

General and administration expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing and promotional

 

80

 

 

 

60

 

 

 

20

 

 

 

100

 

 

 

(20

)

Occupancy and office related

 

110

 

 

 

99

 

 

 

11

 

 

 

99

 

 

 

11

 

Portfolio services

 

68

 

 

 

69

 

 

 

(1

)

 

 

71

 

 

 

(3

)

Sub-advisory

 

20

 

 

 

22

 

 

 

(2

)

 

 

17

 

 

 

3

 

Technology

 

135

 

 

 

145

 

 

 

(10

)

 

 

151

 

 

 

(16

)

Professional services

 

42

 

 

 

40

 

 

 

2

 

 

 

51

 

 

 

(9

)

Communications

 

12

 

 

 

11

 

 

 

1

 

 

 

12

 

 

 

-

 

Foreign exchange remeasurement

 

(1

)

 

 

(3

)

 

 

2

 

 

 

8

 

 

 

(9

)

Contingent consideration fair value adjustments

 

-

 

 

 

1

 

 

 

(1

)

 

 

1

 

 

 

(1

)

Product launch costs

 

-

 

 

 

-

 

 

 

-

 

 

 

6

 

 

 

(6

)

Other general and administration

 

55

 

 

 

52

 

 

 

3

 

 

 

64

 

 

 

(9

)

Total general and administration expense

 

521

 

 

 

496

 

 

 

25

 

 

 

580

 

 

 

(59

)

Restructuring charge

 

-

 

 

 

-

 

 

 

-

 

 

 

91

 

 

 

(91

)

Amortization of intangible assets

 

37

 

 

 

38

 

 

 

(1

)

 

 

37

 

 

 

-

 

Total operating expense

$

2,805

 

 

$

2,935

 

 

$

(130

)

 

$

2,910

 

 

$

(105

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highlights

•

Employee compensation and benefits expense decreased $71 million from the first quarter of 2022, primarily resulting from lower incentive compensation, largely driven by lower operating income.

Employee compensation and benefits expense decreased $3 million from the fourth quarter of 2022, primarily reflecting lower incentive compensation driven by lower performance fees, partially offset by higher seasonal payroll taxes.

•

Direct fund expense decreased $14 million from the first quarter of 2022, primarily reflecting lower average index AUM.

Direct fund expense increased $40 million from the fourth quarter of 2022, primarily reflecting higher average index AUM and the impact of certain rebates that seasonally occur in the fourth quarter.

•

General and administration expense increased $25 million from the first quarter of 2022, primarily driven by higher marketing and promotional expense, resulting from higher travel and entertainment expense, and higher occupancy and office related expense, partially offset by lower technology expense.

General and administration expense decreased $59 million from the fourth quarter of 2022, primarily reflecting seasonally lower marketing and promotional expense, lower technology expense, lower professional services expense, and the impact of foreign exchange remeasurement, partially offset by higher occupancy and office related expense.

•

In the fourth quarter of 2022, a restructuring charge of $91 million, primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards, was recorded in connection with an initiative to modify the size and shape of the workforce to align more closely with strategic priorities.

7

 

 

SUMMARY OF NONOPERATING INCOME (expense), Less Net income (loss) attributable to noncontrolling interests

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

(in millions), (unaudited)

2023

 

 

2022

 

 

Change

 

 

2022

 

 

Change

 

Nonoperating income (expense), GAAP basis

$

116

 

 

$

(138

)

 

$

254

 

 

$

225

 

 

$

(109

)

Less: Net income (loss) attributable to

  noncontrolling interests ("NCI")

 

12

 

 

 

(73

)

 

 

85

 

 

 

48

 

 

 

(36

)

Nonoperating income (expense), net of NCI

 

104

 

 

 

(65

)

 

 

169

 

 

 

177

 

 

 

(73

)

Less: Hedge gain (loss) on deferred cash compensation plans(1)

 

17

 

 

 

-

 

 

 

17

 

 

 

-

 

 

 

17

 

Nonoperating income (expense), net of NCI, as adjusted(2)

$

87

 

 

$

(65

)

 

$

152

 

 

$

177

 

 

$

(90

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Three Months

 

 

 

 

 

 

Ended

 

 

 

 

 

 

Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

(in millions), (unaudited)

2023

 

 

2022

 

 

Change

 

 

2022

 

 

Change

 

Net gain (loss) on investments, net of NCI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private equity

$

39

 

 

$

10

 

 

$

29

 

 

$

66

 

 

$

(27

)

Real assets

 

6

 

 

 

13

 

 

 

(7

)

 

 

5

 

 

 

1

 

Other alternatives(3)

 

6

 

 

 

4

 

 

 

2

 

 

 

5

 

 

 

1

 

Other investments(4)

 

12

 

 

 

(75

)

 

 

87

 

 

 

44

 

 

 

(32

)

Hedge gain (loss) on deferred cash compensation plans(1)

 

17

 

 

 

-

 

 

 

17

 

 

 

-

 

 

 

17

 

Subtotal

 

80

 

 

 

(48

)

 

 

128

 

 

 

120

 

 

 

(40

)

Other gains (losses)

 

(3

)

 

 

19

 

 

 

(22

)

 

 

39

 

 

 

(42

)

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

 

77

 

 

 

(29

)

 

 

106

 

 

 

159

 

 

 

(82

)

Interest and dividend income

 

86

 

 

 

18

 

 

 

68

 

 

 

72

 

 

 

14

 

Interest expense

 

(59

)

 

 

(54

)

 

 

(5

)

 

 

(54

)

 

 

(5

)

Net interest income (expense)

 

27

 

 

 

(36

)

 

 

63

 

 

 

18

 

 

 

9

 

Nonoperating income (expense), net of NCI

 

104

 

 

 

(65

)

 

 

169

 

 

 

177

 

 

 

(73

)

Less: Hedge gain (loss) on deferred cash compensation plans(1)

 

17

 

 

 

-

 

 

 

17

 

 

 

-

 

 

 

17

 

Nonoperating income (expense), net of NCI, as adjusted(2)

$

87

 

 

$

(65

)

 

$

152

 

 

$

177

 

 

$

(90

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Amount relates to the gain (loss) from economically hedging BlackRock’s deferred cash compensation plans.

(2)

Management believes nonoperating income (expense), net of NCI, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating results, which ultimately impacts BlackRock’s book value. For more information on as adjusted items and the reconciliation to GAAP see notes to the condensed consolidated statements of income and supplemental information on pages 9 through 11.

(3)

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

(4)

Amounts primarily include net gains (losses) related to unhedged seed investments.

 

summary of INCOME TAX EXPENSE

 

Three Months

 

 

 

 

 

Three Months

 

 

 

 

 

 

Ended

 

 

 

 

 

Ended

 

 

 

 

 

 

March 31,

 

 

 

 

 

December 31,

 

 

 

 

 

(in millions), (unaudited)

2023

 

 

2022

 

 

Change

 

2022

 

 

Change

 

Income tax expense

$

385

 

 

$

263

 

 

$

122

 

 

$

345

 

 

$

40

 

Effective tax rate

 

25.0

%

 

 

15.5

%

 

 

950

bps

 

 

21.5

%

 

 

350

bps

 

Highlights

•

First quarter 2023 income tax expense included a $38 million discrete tax benefit related to stock-based compensation awards that vested in the first quarter, offset by a $38 million discrete tax expense related to the resolution of certain outstanding tax matters.  

•

First quarter 2022 income tax expense included $133 million of discrete tax benefits related to stock-based compensation awards and the resolution of certain outstanding tax matters. In addition, first quarter 2022 income tax expense included a $18 million net noncash tax benefit related to the revaluation of certain deferred income tax liabilities.

•

Fourth quarter 2022 income tax expense included a $28 million net discrete tax benefit, of which $17 million is associated with the net noncash tax benefit related to the revaluation of certain deferred income tax liabilities.


8

 

 

 

RECONCILIATION OF GAAP OPERATING INCOME AND OPERATING MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS ADJUSTED

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

(in millions), (unaudited)

 

2023

 

 

2022

 

 

2022

 

Operating income, GAAP basis

 

$

1,438

 

 

$

1,764

 

 

$

1,427

 

Non-GAAP expense adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense related to appreciation (depreciation)

  on deferred cash compensation plans (a)

 

 

20

 

 

 

-

 

 

 

-

 

Amortization of intangible assets (b)

 

 

37

 

 

 

38

 

 

 

37

 

Acquisition-related compensation costs (b)

 

 

5

 

 

 

7

 

 

 

6

 

Contingent consideration fair value adjustments (b)

 

 

-

 

 

 

1

 

 

 

1

 

Lease costs - New York (c)

 

 

11

 

 

 

12

 

 

 

15

 

Restructuring charge (d)

 

 

-

 

 

 

-

 

 

 

91

 

Operating income, as adjusted (1)

 

 

1,511

 

 

 

1,822

 

 

 

1,577

 

Product launch costs and commissions

 

 

-

 

 

 

-

 

 

 

6

 

Operating income used for operating margin measurement

 

$

1,511

 

 

$

1,822

 

 

$

1,583

 

Revenue, GAAP basis

 

$

4,243

 

 

$

4,699

 

 

$

4,337

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Distribution fees

 

 

(319

)

 

 

(381

)

 

 

(314

)

Investment advisory fees

 

 

(186

)

 

 

(193

)

 

 

(183

)

Revenue used for operating margin measurement

 

$

3,738

 

 

$

4,125

 

 

$

3,840

 

Operating margin, GAAP basis

 

 

33.9

%

 

 

37.5

%

 

 

32.9

%

Operating margin, as adjusted (1)

 

 

40.4

%

 

 

44.2

%

 

 

41.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

See note (1) to the condensed consolidated statements of income and supplemental information on page 10 for more information on as adjusted items.

 

RECONCILIATION OF GAAP NONOPERATING INCOME (EXPENSE) TO NONOPERATING INCOME (EXPENSE), LESS NET INCOME (LOSS) ATTRIBUTABLE TO NCI, AS ADJUSTED

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

(in millions), (unaudited)

 

2023

 

 

2022

 

 

2022

 

Nonoperating income (expense), GAAP basis

 

$

116

 

 

$

(138

)

 

$

225

 

Less: Net income (loss) attributable to NCI

 

 

12

 

 

 

(73

)

 

 

48

 

Nonoperating income (expense), net of NCI

 

 

104

 

 

 

(65

)

 

 

177

 

Less: Hedge gain (loss) on deferred cash compensation plans (a)

 

 

17

 

 

 

-

 

 

 

-

 

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

  attributable to NCI, as adjusted (2)

 

$

87

 

 

$

(65

)

 

$

177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes (1) and (2) to the condensed consolidated statements of income and supplemental information on pages 10 and 11 for more information on as adjusted items.

 

RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO BLACKROCK TO NET INCOME ATTRIBUTABLE TO BLACKROCK, AS ADJUSTED

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

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

 

2023

 

 

2022

 

 

2022

 

Net income attributable to BlackRock, Inc., GAAP basis

 

$

1,157

 

 

$

1,436

 

 

$

1,259

 

Non-GAAP adjustments(1):

 

 

 

 

 

 

 

 

 

 

 

 

Net impact of hedged deferred cash compensation plans (a)

 

 

2

 

 

 

-

 

 

 

-

 

Amortization of intangible assets (b)

 

 

28

 

 

 

29

 

 

 

27

 

Acquisition-related compensation costs (b)

 

 

4

 

 

 

5

 

 

 

5

 

Contingent consideration fair value adjustments (b)

 

 

-

 

 

 

1

 

 

 

1

 

Lease costs - New York (c)

 

 

9

 

 

 

9

 

 

 

12

 

Restructuring charge (d)

 

 

-

 

 

 

-

 

 

 

69

 

Income tax matters

 

 

-

 

 

 

(18

)

 

 

(17

)

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

 

$

1,200

 

 

$

1,462

 

 

$

1,356

 

Diluted weighted-average common shares outstanding

 

 

151.3

 

 

 

153.5

 

 

 

151.8

 

Diluted earnings per common share, GAAP basis

 

$

7.64

 

 

$

9.35

 

 

$

8.29

 

Diluted earnings per common share, as adjusted (3)

 

$

7.93

 

 

$

9.52

 

 

$

8.93

 

 

(1)

Non-GAAP adjustments are net of tax excluding income tax matters.

 

See note (3) to the condensed consolidated statements of income and supplemental information on page 11 for more information on as adjusted items.

 


9

 

 

 

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

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

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

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

•

Operating income, as adjusted, includes the following non-GAAP expense adjustments:

 

(a)

Compensation expense related to appreciation (depreciation) on deferred cash compensation plans. Beginning in the first quarter of 2023, the Company updated its definition of operating income, as adjusted, to exclude compensation expense related to the market valuation changes on certain deferred cash compensation plans, which the Company began hedging economically in 2023. For these deferred cash compensation plans, the final value of the deferred amount to be distributed to employees in cash upon vesting is determined based on the returns on specified investment funds. The Company recognizes compensation expense for the appreciation (depreciation) of the deferred cash compensation liability in proportion to the vested amount of the award during a respective period, while the gain (loss) to economically hedge these plans is immediately recognized in nonoperating income (expense), which creates a timing difference impacting net income. This timing difference will reverse and offset to zero over the life of the award at the end of the multi-year vesting period. Management believes excluding market valuation changes related to the deferred cash compensation plans in the calculation of operating income, as adjusted, provides useful disclosure to both management and investors of the Company’s financial performance over time as these amounts are economically hedged, while also increasing comparability with other companies.

 

(b)

Acquisition related costs. Includes adjustments related to amortization of intangible assets, other acquisition-related costs, including compensation costs for nonrecurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions. Management believes excluding the impact of these expenses when calculating operating income, as adjusted, provides a helpful indication of the Company’s financial performance over time, thereby providing helpful information for both management and investors while also increasing comparability with other companies.

 

(c)

Lease costs – New York. The Company began recording expenses in August 2021 related to the lease of office space for its new headquarters located at 50 Hudson Yards in New York (“Lease cost – Hudson Yards”), when it obtained access to the building to begin its tenant improvements. The Company will begin lease payments related to its new headquarters in May 2023. As a result, the Company continues to recognize lease expense within general and administration expense for both its new and prior headquarters until the Company's lease on its prior headquarters expires in April 2023. Prior to February 2023, the impact of Lease cost – Hudson Yards was excluded from operating income, as adjusted. Beginning in February 2023, when the Company completed the majority of its move to 50 Hudson Yards, it no longer excluded the impact of Lease cost – Hudson Yards and began to exclude the impact of lease costs related to the Company's prior headquarters for its remaining lease term. Management believes excluding the impact of these respective New York lease costs (“Lease costs – New York”) when calculating operating income, as adjusted, is useful to assess the Company’s financial performance, ongoing operations, and enhances comparability among periods presented.

 

(d)

Restructuring charge. In 2022, a restructuring charge, primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards, was excluded in the calculation of operating income, as adjusted. Management believes excluding the impact of the restructuring charge when calculating operating income, as adjusted, is useful to assess the Company’s financial performance, ongoing operations, and enhances comparability among periods presented.

10

 

 

•

Operating income used for measuring operating margin, as adjusted, is equal to operating income, as adjusted, excluding the impact of product launch costs (e.g. closed-end fund launch costs) and related commissions. Management believes the exclusion of such costs and related commissions is useful because these costs can fluctuate considerably and revenue associated with the expenditure of these costs will not fully impact BlackRock’s results until future periods.

•

Revenue used for calculating operating margin, as adjusted, is reduced to exclude all of the Company’s distribution fees, which are recorded as a separate line item on the condensed consolidated statements of income, as well as a portion of investment advisory fees received that is used to pay distribution and servicing costs. For certain products, based on distinct arrangements, distribution fees are collected by the Company and then passed-through to third-party client intermediaries. For other products, investment advisory fees are collected by the Company and a portion is passed-through to third-party client intermediaries. However, in both structures, the third-party client intermediary similarly owns the relationship with the retail client and is responsible for distributing the product and servicing the client. The amount of distribution and investment advisory fees fluctuates each period primarily based on a predetermined percentage of the value of AUM during the period. These fees also vary based on the type of investment product sold and the geographic location where it is sold. In addition, the Company may waive fees on certain products that could result in the reduction of payments to the third-party intermediaries.

(2) Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted: Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating contribution to its results and provides comparability of this information among reporting periods. Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, excludes the gain (loss) on the economic hedge of certain deferred cash compensation plans. As the gain (loss) on investments and derivatives used to hedge these compensation plans over time substantially offsets the compensation expense related to the market valuation changes on these deferred cash compensation plans, which is included in operating income, GAAP basis, management believes excluding the gain (loss) on the economic hedge of the deferred cash compensation plans when calculating nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, provides a useful measure for both management and investors of BlackRock’s nonoperating results that impact book value.

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

See notes (1) and (2) above regarding operating income, as adjusted, for information on the updated presentation of non-GAAP adjustments. For each period presented, the non-GAAP adjustments were tax effected at the respective blended rates applicable to the adjustments. Amounts for income tax matters represent net noncash (benefit) expense primarily associated with the revaluation of certain deferred tax liabilities related to intangible assets and goodwill as a result of tax rate changes. These amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to enhance comparability among periods presented.

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

(4) ACV: Management believes ACV is an effective metric for reviewing BlackRock’s technology services’ ongoing contribution to its operating results and provides comparability of this information among reporting periods while also providing a useful supplemental metric for both management and investors of BlackRock’s growth in technology services revenue over time, as it is linked to the net new business in technology services. ACV represents forward-looking, annualized estimated value of the recurring subscription fees under client contracts, assuming all client contracts that come up for renewal are renewed, unless we received a notice of termination, even though such notice may not be effective until a later date. ACV also includes the annualized estimated value of new sales, for existing and new clients, when we execute client contracts, even though the recurring fees may not be effective until a later date and excludes nonrecurring fees such as implementation and consulting fees.


 

11

 

 

 

FORWARD-LOOKING STATEMENTS

This earnings release, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions.

BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

BlackRock has previously disclosed risk factors in its Securities and Exchange Commission (“SEC”) reports. These risk factors and those identified elsewhere in this earnings release, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management (“AUM”); (3) the relative and absolute investment performance of BlackRock’s investment products; (4) BlackRock’s ability to develop new products and services that address client preferences; (5) the impact of increased competition; (6) the impact of future acquisitions or divestitures; (7) BlackRock’s ability to integrate acquired businesses successfully; (8) the unfavorable resolution of legal proceedings; (9) the extent and timing of any share repurchases; (10) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and cybersecurity protection; (11) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; (12) the impact of legislative and regulatory actions and reforms, regulatory, supervisory or enforcement actions of government agencies and governmental scrutiny relating to BlackRock; (13) changes in law and policy and uncertainty pending any such changes; (14) any failure to effectively manage conflicts of interest; (15) damage to BlackRock’s reputation; (16) geopolitical unrest, terrorist activities, civil or international hostilities, including the war between Russia and Ukraine, and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (17) a pandemic or health crisis, and related impact on BlackRock’s business, operations and financial condition; (18) climate-related risks to BlackRock's business, products, operations and clients; (19) the ability to attract, train and retain highly qualified and diverse professionals; (20) fluctuations in the carrying value of BlackRock’s economic investments; (21) the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products or transactions, which could affect the value proposition to clients and, generally, the tax position of the Company; (22) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (23) the failure by key third-party providers of BlackRock to fulfill their obligations to the Company; (24) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (25) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds (“ETF”) platform; (26) the impact of BlackRock electing to provide support to its products from time to time and any potential liabilities related to securities lending or other indemnification obligations; and (27) the impact of problems, instability or failure of other financial institutions or the failure or negative performance of products offered by other financial institutions.

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

PERFORMANCE NOTES

Past performance is not indicative of future results. Except as specified, the performance information shown is as of March 31, 2023 and is based on preliminary data available at that time. The performance data shown reflects information for all actively and passively managed equity and fixed income accounts, including US registered investment companies, European-domiciled retail funds and separate accounts for which performance data is available, including performance data for high net worth accounts available as of February 28, 2023. The performance data does not include accounts terminated prior to March 31, 2023 and accounts for which data has not yet been verified. If such accounts had been included, the performance data provided may have substantially differed from that shown.

Performance comparisons shown are gross-of-fees for institutional and high net worth separate accounts, and net-of-fees for retail funds. The performance tracking shown for index accounts is based on gross-of-fees performance and includes all institutional accounts and all iShares® funds globally using an index strategy. AUM information is based on AUM available as of March 31, 2023 for each account or fund in the asset class shown without adjustment for overlapping management of the same account or fund. Fund performance reflects the reinvestment of dividends and distributions.

Performance shown is derived from applicable benchmarks or peer median information, as selected by BlackRock, Inc. Peer medians are based in part on data either from Lipper, Inc. or Morningstar, Inc. for each included product.

12