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BlackRock Reports Record Quarterly Diluted EPS Of $3.93, Or $3.96 As Adjusted

“As we move into 2013, the investments we have made in people, technology, products and brand give us confidence in BlackRock’s ability to deliver exceptional value for clients and shareholders. As we continue to invest in key growth opportunities, I am pleased to welcome Hsueh-ming Wang, our new Chairman of BlackRock China. BlackRock’s employees have remained intensely focused on serving our clients, and I want to once again express my gratitude and admiration for their commitment to our clients and the Firm.”

Fourth Quarter Business Highlights

Assets under management (“AUM”) totaled $3.792 trillion at December 31, 2012, up 3% from September 30, 2012 and up 8% from a year ago. Net inflows in long-term products totaled $47.0 billion, reflecting equity, fixed income and multi-asset class product net inflows of $31.2 billion, $12.4 billion and $4.1 billion, respectively. Net inflows were partially offset by alternatives net outflows of $0.7 billion, including $2.0 billion of return of capital. Total net inflows of $60.8 billion also included cash management net inflows of $14.4 billion and planned advisory distributions of $0.6 billion.

Long-term AUM: The following table presents long-term AUM and base fees by client type:

(Dollar amounts in millions)  

December 31, 2012

AUM

  % of Total   Q4

2012

Base Fees

  % of Total  

Full Year

2012

Base Fees

  % of Total  

September 30,

2012 AUM

  % of Total   Q3

2012

Base Fees

  % of Total
Retail $403,484   12 %  

$677

  34 %  

$2,638

  34 %   $397,954   12 %   $654   34 %
iShares 752,707 22 %

660

33 %

2,475

32 % 705,765 21 % 625 32 %
Institutional:
Active 884,695 25 %

454

23 %

1,797

23 % 880,726 26 % 452 23 %
Index 1,441,480   41 %   196   10 %  

801

  11 %   1,393,928   41 %   203   11 %
Total institutional 2,326,175   66 %  

650

  33 %  

2,598

  34 %   2,274,654   67 %   655   34 %
Total long-term $3,482,366   100 %   $1,987   100 %   $7,711   100 %   $3,378,373   100 %   $1,934   100 %

Long-term net inflows were positive across all client regions, with net inflows of $21.4 billion, $24.4 billion and $1.2 billion from clients in the Americas, EMEA and Asia-Pacific, respectively. At December 31, 2012, BlackRock managed 61% of long-term AUM for investors in the Americas and 39% for other international clients.

  • Retail AUM of $403.5 billion reflected net inflows of $4.1 billion, and market and investment performance gains of $1.4 billion.International retail led flows, with long-term net new business of $2.1 billion, led by fixed income net inflows of over $2.0 billion. U.S. retail and high net worth net inflows of $2.0 billion showed continued strength in income-oriented products with equity dividend and high-yield bond funds among top flow generators.
  • iShares net inflows of $35.7 billion reflected positive net inflows across all asset classes, including net inflows of $30.1 billion into equity funds as demand tilted toward broad market and large cap equities and flows into emerging markets funds outpacing developed markets. Fixed income and alternatives products included net inflows of $4.5 billion and $1.1 billion, respectively.U.S. iShares net inflows into equity funds totaled $24.1 billion with notable flows into emerging markets and China equities. International iShares similarly was driven by equity net inflows of $6.0 billion led by developed and emerging broad and large cap funds.
  • Institutional active AUM ended the quarter at $884.7 billion, including market and investment performance gains of $12.0 billion and continued strength in multi-asset class products with net inflows of $3.2 billion largely into defined contribution plan, target date and asset allocation offerings.Core alternatives net inflows were $1.1 billion, excluding $2.0 billion of return of capital. Private equity funds of funds, real estate and single strategy hedge funds experienced net inflows of $0.4 billion, $0.4 billion and $0.2 billion, respectively. Equity net outflows of $4.5 billion were split between active fundamental and scientific active equity. Fixed income net outflows of $4.7 billion reflected outflows from U.S. core mandates in the latter part of the quarter.
  • Institutional index AUM totaled $1.441 trillion at December 31, 2012, reflecting net inflows of $15.2 billion and market and foreign exchange valuation gains of $32.3 billion. Flows were led by fixed income with net inflows of $8.3 billion led by flows into local currency and global bond mandates. Equity net inflows of $5.9 billion primarily reflected net inflows into regional and country-specific strategies.

Cash management AUM increased 6%, or $15.4 billion, to $263.7 billion reflecting net inflows of $14.4 billion and market and net foreign exchange gains of $1.0 billion.

Advisory AUM declined 2% to $45.5 billion, due to planned portfolio liquidations.

Investment performance as of December 31, 2012 is presented in the following table:

 
 

One-year

 

Three-year

 

Five-year

period

period

period

Fixed Income:
Actively managed products above benchmark or peer median
Taxable 84% 79% 63%
Tax-exempt 67% 65% 78%
Passively managed products within or above tolerance   96%   97%   89%
Equity:
Actively managed products above benchmark or peer median
Fundamental 30% 37% 46%
Scientific 84% 90% 88%
Passively managed products within or above tolerance   97%   97%   97%
Multi-Asset*:
Actively managed products above benchmark or peer median   22%   20%   92%

*Includes funds managed for unlevered, absolute return.

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