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Section 1: 8-K (8-K)

blk-8k_20190416.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 16, 2019

 

 

BLACKROCK, INC.

(Exact name of registrant as specified in its charter)

 

DELAWARE

(State or other jurisdiction

of incorporation)

001-33099

(Commission

File Number)

32-0174431

(IRS Employer

Identification No.)

 

 

55 East 52nd Street, New York, New York

 

10055

(Address of principal executive offices)

(Zip Code)

 

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

 

_________________________________________________________________________________________________

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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

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

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

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

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

Emerging growth company

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

 


Item 2.02. Results of Operations and Financial Condition

 

On April 16, 2019, BlackRock, Inc. (the “Company”) reported results of operations for the three months ended March 31, 2019. A copy of the earnings release issued by the Company is attached as Exhibit 99.1. In addition, a copy of the Company’s Earnings Release Supplement for the quarter ended March 31, 2019 is being furnished as Exhibit 99.2 to this Form 8-K.

Item 9.01. Financial Statements and Exhibits

 

(d)  Exhibits

 

99.1

Earnings release dated April 16, 2019 issued by the Company

99.2

First Quarter 2019 Earnings – Earnings Release Supplement

 

 

 

 



EXHIBIT INDEX

 

99.1

Earnings release dated April 16, 2019 issued by the Company

99.2

First Quarter 2019 Earnings – Earnings Release Supplement

 

 



SIGNATURES

 

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

 

 

 

 

BlackRock, Inc.

 

(Registrant)

 

 

 

 

 

By: /s/ Gary S. Shedlin          

Date: April 16, 2019

Gary S. Shedlin

 

Senior Managing Director and

 

Chief Financial Officer

 

 

 

(Back To Top)

Section 2: EX-99.1 (EARNINGS RELEASE DATED APRIL 16, 2019)

blk-ex991_6.htm

Exhibit 99.1

 

 

 

 

 

INVESTOR RELATIONS:

Samantha Tortora      212.810.5397

MEDIA RELATIONS:

Brian Beades      212.810.5596

 

BlackRock Reports First Quarter 2019 Diluted EPS of $6.61

New York, April 16, 2019 BlackRock, Inc. (NYSE: BLK) today reported financial results for the three months ended March 31, 2019.

 

 

 

$65 billion of quarterly total net inflows, or 4% organic asset growth, positive across index, active and cash management strategies

5% decrease in base fees year-over-year primarily reflects impact of negative markets in the fourth quarter and continued dollar appreciation

11% growth in technology services revenue year-over-year, driven by continued momentum in Aladdin®

1% decrease in diluted EPS year-over-year reflects lower operating income and a higher effective tax rate in the current quarter, partially offset by higher nonoperating income

$1.6 billion of share repurchases in the quarter reflects completion of a $1.3 billion private transaction on March 25, 2019

5% increase in quarterly cash dividend to $3.30 per share

 

Laurence D. Fink, Chairman and CEO:

"BlackRock's broad investment platform generated $65 billion of total net inflows in the first quarter, representing 4% organic growth. The breadth of our investment capabilities, spanning index, alpha-seeking, alternatives and cash, coupled with our industry-leading technology and portfolio construction capabilities, allowed us to generate strong flows and continue to meet the evolving needs of our global clients.

iShares once again captured the number one market share of global ETF industry flows, paced by a record $32 billion of net inflows into fixed income ETFs. Our active franchise generated $14 billion of net inflows, reflecting strength in active fixed income and a record quarter for illiquid alternatives, which included a first close of Long Term Private Capital, an innovative direct private equity vehicle that rounds out our comprehensive alternative investing capabilities.

“We continued to strategically invest in our world-class Aladdin technology business, which grew revenue 11% year-over-year, and entered an exclusive agreement to acquire eFront, the leading alternatives investment software provider. The combination of eFront with Aladdin will set a new standard in investment and risk management technology, vastly expanding Aladdin’s alternatives capabilities and providing a whole-portfolio technology solution to clients.

“BlackRock continues to build and evolve our organization, ahead of changing client needs, in order to drive strong investment performance, enhance the client experience and deliver long-term value for shareholders.”

 

 

FINANCIAL RESULTS

 

 

Q1

 

Q1

 

(in millions, except per share data)

2019

 

2018

 

AUM

$

6,515,345

 

$

6,316,984

 

% change

 

3

%

 

 

 

Total net flows

$

64,666

 

$

56,946

 

 

 

 

 

 

 

 

GAAP basis:

 

 

 

 

 

 

Revenue

$

3,346

 

$

3,583

 

% change

 

(7

)%

 

 

 

Operating income

$

1,233

 

$

1,375

 

% change

 

(10

)%

 

 

 

Operating margin

 

36.8

%

 

38.4

%

Net income(1)

$

1,053

 

$

1,089

 

% change

 

(3

)%

 

 

 

Diluted EPS

$

6.61

 

$

6.68

 

% change

 

(1

)%

 

 

 

Weighted average diluted shares

 

159.3

 

 

162.9

 

% change

 

(2

)%

 

 

 

 

 

 

 

 

 

 

As Adjusted:

 

 

 

 

 

 

Operating income(2)

$

1,233

 

$

1,378

 

% change

 

(11

)%

 

 

 

Operating margin(2)

 

41.9

%

 

44.1

%

Net income(1) (2)

$

1,053

 

$

1,092

 

% change

 

(4

)%

 

 

 

Diluted EPS(2)

$

6.61

 

$

6.70

 

% change

 

(1

)%

 

 

 

 

(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 and 10 for more information on as adjusted items and the reconciliation to GAAP.

NET FLOW HIGHLIGHTS

 

 

 

Q1

LTM(1)

(in billions)

2019

2019

Long-term net flows:

$

59.0

 

 

$

127.7

 

 

 

 

 

 

 

 

 

 

 

 

 

By region:

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

40.0

 

 

$

140.8

 

 

 

EMEA

 

21.9

 

 

 

3.3

 

 

 

APAC

 

(2.9

)

 

 

(16.4

)

 

 

 

 

 

 

 

 

 

 

 

 

By client type:

 

 

 

 

 

 

 

 

 

 

 

 

Retail:

$

(0.8

)

 

$

1.6

 

 

 

 

US

 

3.2

 

 

 

18.8

 

 

 

 

International

 

(4.0

)

 

 

(17.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

iShares®:

$

30.7

 

 

$

163.6

 

 

 

 

Core

 

19.5

 

 

 

93.4

 

 

 

 

Non-Core

 

11.2

 

 

 

70.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Institutional:

$

29.1

 

 

$

(37.5

)

 

 

 

Active

 

15.4

 

 

 

12.9

 

 

 

 

Index

 

13.7

 

 

 

(50.4

)

 

 

 

 

 

 

 

 

 

 

 

 

Cash management net flows:

$

5.7

 

 

$

3.0

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Amounts represent rolling last twelve months long-term net flows as of March 31, 2019.

 

 

 

 

 

1

 


 

BUSINESS RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2019

 

Q1 2019

 

 

 

Q1 2019

 

March 31, 2019

 

Q1 2019

 

AUM

 

Base fees(1)

 

 

(in millions), (unaudited)

Net flows

 

AUM

 

Base fees(1)

 

% of Total

 

% of Total

 

 

RESULTS BY CLIENT TYPE

Retail

$

(813

)

$

646,355

 

$

826

 

 

10

%

 

29

%

 

iShares ETFs

 

30,688

 

 

1,924,710

 

 

1,091

 

 

30

%

 

39

%

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

15,367

 

 

1,160,150

 

 

500

 

 

17

%

 

18

%

 

Index

 

13,757

 

 

2,327,080

 

 

247

 

 

36

%

 

9

%

 

Total institutional

 

29,124

 

 

3,487,230

 

 

747

 

 

53

%

 

27

%

 

Long-term

 

58,999

 

 

6,058,295

 

 

2,664

 

 

93

%

 

95

%

 

Cash management

 

5,666

 

 

455,271

 

 

141

 

 

7

%

 

5

%

 

Advisory

 

1

 

 

1,779

 

 

-

 

 

-

 

 

-

 

 

Total

$

64,666

 

$

6,515,345

 

$

2,805

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY INVESTMENT STYLE

Active

$

13,603

 

$

1,724,875

 

$

1,307

 

 

26

%

 

47

%

 

Index and iShares ETFs

 

45,396

 

 

4,333,420

 

 

1,357

 

 

67

%

 

48

%

 

Long-term

 

58,999

 

 

6,058,295

 

 

2,664

 

 

93

%

 

95

%

 

Cash management

 

5,666

 

 

455,271

 

 

141

 

 

7

%

 

5

%

 

Advisory

 

1

 

 

1,779

 

 

-

 

 

-

 

 

-

 

 

Total

$

64,666

 

$

6,515,345

 

$

2,805

 

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS BY PRODUCT TYPE

Equity

$

(26,077

)

$

3,375,885

 

$

1,386

 

 

52

%

 

49

%

 

Fixed income

 

79,923

 

 

2,029,966

 

 

774

 

 

31

%

 

28

%

 

Multi-asset

 

(1,655

)

 

499,520

 

 

276

 

 

8

%

 

10

%

 

Alternatives

 

6,808

 

 

152,924

 

 

228

 

 

2

%

 

8

%

 

Long-term

 

58,999

 

 

6,058,295

 

 

2,664

 

 

93

%

 

95

%

 

Cash management

 

5,666

 

 

455,271

 

 

141

 

 

7

%

 

5

%

 

Advisory

 

1

 

 

1,779

 

 

-

 

 

-

 

 

-

 

 

Total

$

64,666

 

$

6,515,345

 

$

2,805

 

 

100

%

 

100

%

 

 

(1)

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

INVESTMENT PERFORMANCE AT MARCH 31, 2019(1)

 

 

One-year period

 

Three-year period

 

Five-year period

 

Fixed income:

 

 

 

 

 

 

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

 

 

 

 

 

 

Taxable

61%

 

83%

 

85%

 

Tax-exempt

28%

 

78%

 

76%

 

Index AUM within or above applicable tolerance

98%

 

99%

 

98%

 

Equity:

 

 

 

 

 

 

 

 

 

Actively managed AUM above benchmark or peer median

 

 

 

 

 

 

 

 

 

Fundamental

63%

 

73%

 

83%

 

Systematic

27%

 

87%

 

87%

 

Index AUM within or above applicable tolerance

97%

 

99%

 

98%

 

 

(1)

Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 11 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 Tuesday, April 16, 2019 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, (800) 374-0176, or from outside the United States, (706) 679-8281, shortly before 8:30 a.m. and reference the BlackRock Conference Call (ID Number 5798975). 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 Tuesday, April 16, 2019 and ending at midnight on Tuesday, April 30, 2019. To access the replay of the teleconference, callers from the United States should dial (855) 859-2056 and callers from outside the United States should dial (404) 537-3406 and enter the Conference ID Number 5798975. To access the webcast, please visit the investor relations section of www.blackrock.com.

ABOUT BLACKROCK

BlackRock helps investors build better financial futures. As a fiduciary to investors and a leading provider of financial technology, our clients turn to us for the solutions they need when planning for their most important goals. As of March 31, 2019, the firm managed approximately $6.52 trillion in assets on behalf of investors worldwide. For additional information on BlackRock, please visit www.blackrock.com | Twitter: @blackrock | Blog: www.blackrockblog.com | 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

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2019

 

 

2018

 

 

Change

 

 

2018

 

 

Change

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory, administration fees and

  securities lending revenue

$

2,805

 

 

$

2,947

 

 

$

(142

)

 

$

2,779

 

 

$

26

 

Investment advisory performance fees

 

26

 

 

 

70

 

 

 

(44

)

 

 

100

 

 

 

(74

)

Technology services revenue

 

204

 

 

 

184

 

 

 

20

 

 

 

203

 

 

 

1

 

Distribution fees

 

262

 

 

 

311

 

 

 

(49

)

 

 

271

 

 

 

(9

)

Advisory and other revenue

 

49

 

 

 

71

 

 

 

(22

)

 

 

81

 

 

 

(32

)

Total revenue

 

3,346

 

 

 

3,583

 

 

 

(237

)

 

 

3,434

 

 

 

(88

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

1,064

 

 

 

1,121

 

 

 

(57

)

 

 

1,020

 

 

 

44

 

Distribution and servicing costs

 

404

 

 

 

432

 

 

 

(28

)

 

 

420

 

 

 

(16

)

Direct fund expense

 

242

 

 

 

261

 

 

 

(19

)

 

 

224

 

 

 

18

 

General and administration

 

388

 

 

 

383

 

 

 

5

 

 

 

449

 

 

 

(61

)

Restructuring charge

 

-

 

 

 

-

 

 

 

-

 

 

 

60

 

 

 

(60

)

Amortization of intangible assets

 

15

 

 

 

11

 

 

 

4

 

 

 

15

 

 

 

-

 

Total expense

 

2,113

 

 

 

2,208

 

 

 

(95

)

 

 

2,188

 

 

 

(75

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,233

 

 

 

1,375

 

 

 

(142

)

 

 

1,246

 

 

 

(13

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on investments

 

142

 

 

 

15

 

 

 

127

 

 

 

(67

)

 

 

209

 

Interest and dividend income

 

29

 

 

 

15

 

 

 

14

 

 

 

41

 

 

 

(12

)

Interest expense

 

(46

)

 

 

(46

)

 

 

-

 

 

 

(46

)

 

 

-

 

Total nonoperating income (expense)

 

125

 

 

 

(16

)

 

 

141

 

 

 

(72

)

 

 

197

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

1,358

 

 

 

1,359

 

 

 

(1

)

 

 

1,174

 

 

 

184

 

Income tax expense

 

298

 

 

 

265

 

 

 

33

 

 

 

247

 

 

 

51

 

Net income

 

1,060

 

 

 

1,094

 

 

 

(34

)

 

 

927

 

 

 

133

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling

  interests

 

7

 

 

 

5

 

 

 

2

 

 

 

-

 

 

 

7

 

Net income attributable to BlackRock, Inc.

$

1,053

 

 

$

1,089

 

 

$

(36

)

 

$

927

 

 

$

126

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

158,268,034

 

 

 

161,250,018

 

 

 

(2,981,984

)

 

 

158,859,998

 

 

 

(591,964

)

Diluted

 

159,348,431

 

 

 

162,918,961

 

 

 

(3,570,530

)

 

 

160,450,266

 

 

 

(1,101,835

)

Earnings per share attributable to BlackRock, Inc.

   common stockholders (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

6.65

 

 

$

6.75

 

 

$

(0.10

)

 

$

5.84

 

 

$

0.81

 

Diluted

$

6.61

 

 

$

6.68

 

 

$

(0.07

)

 

$

5.78

 

 

$

0.83

 

Cash dividends declared and paid per share

$

3.30

 

 

$

2.88

 

 

$

0.42

 

 

$

3.13

 

 

$

0.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM (end of period)

$

6,515,345

 

 

$

6,316,984

 

 

$

198,361

 

 

$

5,975,818

 

 

$

539,527

 

Shares outstanding (end of period)

 

155,323,503

 

 

 

161,275,008

 

 

 

(5,951,505

)

 

 

158,520,147

 

 

 

(3,196,644

)

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

36.8

%

 

 

38.4

%

 

 

(160

) bps

 

 

36.3

%

 

 

50

  bps

Effective tax rate

 

22.1

%

 

 

19.6

%

 

 

250

  bps

 

 

21.0

%

 

 

110

  bps

As adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (1)

$

1,233

 

 

$

1,378

 

 

$

(145

)

 

$

1,310

 

 

$

(77

)

Operating margin (1)

 

41.9

%

 

 

44.1

%

 

 

(220

) bps

 

 

43.5

%

 

 

(160

) bps

Nonoperating income (expense), less net income

     (loss) attributable to noncontrolling interests

$

118

 

 

$

(21

)

 

$

139

 

 

$

(72

)

 

$

190

 

Net income attributable to BlackRock, Inc. (2)

$

1,053

 

 

$

1,092

 

 

$

(39

)

 

$

975

 

 

$

78

 

Diluted earnings attributable to BlackRock, Inc.

     common stockholders per share (2) (3)

$

6.61

 

 

$

6.70

 

 

$

(0.09

)

 

$

6.08

 

 

$

0.53

 

Effective tax rate

 

22.1

%

 

 

19.6

%

 

 

250

  bps

 

 

21.2

%

 

 

90

  bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See pages 9-10 for the reconciliation to GAAP and notes (1) through (3) 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,

 

 

 

 

 

 

2018

 

 

(outflows)

 

 

change

 

 

FX impact (1)

 

 

2019

 

 

Average AUM (2)

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

$

205,714

 

 

$

(3,613

)

 

$

23,370

 

 

$

521

 

 

$

225,992

 

 

$

219,245

 

Fixed income

 

271,588

 

 

 

5,929

 

 

 

4,099

 

 

 

(50

)

 

 

281,566

 

 

 

277,587

 

Multi-asset

 

113,417

 

 

 

(3,692

)

 

 

8,086

 

 

 

87

 

 

 

117,898

 

 

 

116,924

 

Alternatives

 

20,131

 

 

 

563

 

 

 

226

 

 

 

(21

)

 

 

20,899

 

 

 

20,495

 

Retail subtotal

 

610,850

 

 

 

(813

)

 

 

35,781

 

 

 

537

 

 

 

646,355

 

 

 

634,251

 

iShares ETFs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

1,274,262

 

 

 

(1,622

)

 

 

151,100

 

 

 

(536

)

 

 

1,423,204

 

 

 

1,369,626

 

Fixed income

 

427,596

 

 

 

32,203

 

 

 

12,010

 

 

 

(648

)

 

 

471,161

 

 

 

451,119

 

Multi-asset

 

4,485

 

 

 

(636

)

 

 

320

 

 

 

2

 

 

 

4,171

 

 

 

4,204

 

Alternatives

 

25,082

 

 

 

743

 

 

 

354

 

 

 

(5

)

 

 

26,174

 

 

 

26,119

 

iShares ETFs subtotal

 

1,731,425

 

 

 

30,688

 

 

 

163,784

 

 

 

(1,187

)

 

 

1,924,710

 

 

 

1,851,068

 

Institutional:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active: