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

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 press release.

        Attachment I
BlackRock, Inc.
Condensed Consolidated Statements of Income and Supplemental Information
(Dollar amounts in millions, except per share data)
(unaudited)

 

 
Three Months Ended

Three Months Ended

December 31, September 30,
2012 2011 $ Change 2012 $ Change
Revenue
Investment advisory, administration fees and securities lending revenue $2,081 $1,863 $218 $2,024 $57
Investment advisory performance fees 239 147 92 103 136
BlackRock Solutions and advisory 136 149 (13 ) 128 8
Distribution fees 13 22 (9 ) 19 (6 )
Other revenue 70   46   24   46   24  
Total revenue 2,539   2,227   312   2,320   219  
 
Expenses
Employee compensation and benefits 848 774 74 828 20
Distribution and servicing costs 82 87 (5 ) 94 (12 )
Amortization of deferred sales commissions 12 18 (6 ) 13 (1 )
Direct fund expenses 151 128 23 144 7
General and administration 401 341 60 327 74
Restructuring charges - 32 (32 ) - -
Amortization of intangible assets 40   39   1   39   1  
Total expenses 1,534   1,419   115   1,445   89  
 
Operating income 1,005 808 197 875 130
 
Non-operating income (expense)
Net gain (loss) on investments

20

28

(8

) 75

(55

)
Net gain (loss) on consolidated variable interest entities (39 ) 18 (57 ) 2 (41 )
Interest and dividend income 9 9 - 10 (1 )
Interest expense (57 ) (48 ) (9 ) (57 ) -  
Total non-operating income (expense)

(67

) 7  

(74

) 30  

(97

)
 
Income before income taxes

938

815

123

905

33

Income tax expense 288   232   56   250   38  
Net income

650

583

67

655

(5

)
Less:
Net income (loss) attributable to non-controlling interests

(40

) 28  

(68

) 13  

(53

)
Net income attributable to BlackRock, Inc. $690   $555   $135   $642   $48  
 
Weighted-average common shares outstanding (f)
Basic 171,518,278 178,562,187 (7,043,909 ) 172,359,141 (840,863 )
Diluted 175,176,037 181,987,669 (6,811,632 ) 175,450,532 (274,495 )

Earnings per share attributable to BlackRock, Inc. common stockholders (e) (f)

Basic $4.02 $3.10 $0.92 $3.72 $0.30
Diluted $3.93 $3.05 $0.88 $3.65 $0.28
Cash dividends declared and paid per share $1.50 $1.375 $0.125 $1.50 $-
Supplemental information:
AUM (end of period) $3,791,588 $3,512,681 $278,907 $3,673,274 $118,314
Shares outstanding (end of period) 171,215,729 178,309,109 (7,093,380 ) 172,037,373 (821,644 )
GAAP:
Operating margin 39.6 % 36.3 % 330 bps 37.7 % 190 bps
Effective tax rate 29.4 % 29.5 % (10) bps 28.1 % 130 bps
As adjusted:
Operating income (a) $1,041 $841 $200 $876 $165
Operating margin (a) 42.6 % 40.0 % 260 bps 40.7 % 190 bps
Non-operating income (expense), less net income (loss) attributable to non-controlling interests (b) ($27 ) ($21 ) ($6 ) $13 ($40 )
Net income attributable to BlackRock, Inc. (c) (d) $695 $558 $137 $610 $85
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (c) (d) (e) (f) $3.96 $3.06 $0.90 $3.47 $0.49
Effective tax rate 31.4 % 32.0 % (60) bps 31.4 % - bps
BlackRock, Inc.
Condensed Consolidated Statements of Income and Supplemental Information
(Dollar amounts in millions, except per share data)
(unaudited)
     
Year Ended
December 31,
2012 2011 $ Change
Revenue
Investment advisory, administration fees and securities lending revenue $8,072 $7,896 $176
Investment advisory performance fees 463 371 92
BlackRock Solutions and advisory 518 510 8
Distribution fees 71 100 (29 )
Other revenue 213   204   9  
Total revenue 9,337   9,081   256  
 
Expenses
Employee compensation and benefits 3,287 3,199 88
Distribution and servicing costs 364 386 (22 )
Amortization of deferred sales commissions 55 81 (26 )
Direct fund expenses 591 563 28
General and administration 1,359 1,415 (56 )
Restructuring charges - 32 (32 )
Amortization of intangible assets 157   156   1  
Total expenses 5,813  

 

5,832   (19 )
 
Operating income 3,524 3,249 275
 
Non-operating income (expense)
Net gain (loss) on investments

163

46

117

Net gain (loss) on consolidated variable interest entities (38 ) (18 ) (20 )
Interest and dividend income 36 34 2
Interest expense (215 ) (176 ) (39 )
Total non-operating income (expense)

(54

) (114 )

60

 
 
Income before income taxes

3,470

3,135

335

Income tax expense 1,030   796   234  
Net income

2,440

2,339

101

Less:
Net income (loss) attributable to non-controlling interests

(18

) 2  

(20

)
Net income attributable to BlackRock, Inc. $2,458   $2,337   $121  
 
Weighted-average common shares outstanding (f)
Basic 174,961,018 184,265,367 (9,304,349 )
Diluted 178,017,679 187,116,410 (9,098,731 )

Earnings per share attributable to BlackRock, Inc. common stockholders (e) (f)

Basic $14.03 $12.56 $1.47
Diluted $13.79 $12.37 $1.42
Cash dividends declared and paid per share $6.00 $5.50 $0.50
Supplemental information:
AUM (end of period) $3,791,588 $3,512,681 $278,907
Shares outstanding (end of period) 171,215,729 178,309,109 (7,093,380 )
GAAP:
Operating margin 37.7 % 35.8 % 190 bps
Effective tax rate 29.5 % 25.4 % 410 bps
As adjusted:
Operating income (a) $3,574 $3,392 $182
Operating margin (a) 40.4 % 39.7 % 70 bps
Non-operating income (expense), less net income (loss) attributable to non-controlling interests (b) ($42 ) ($113 ) $71
Net income attributable to BlackRock, Inc. (c) (d) $2,438 $2,239 $199
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (c) (d) (e) (f) $13.68 $11.85 $1.83
Effective tax rate 31.0 % 31.7 % (70) bps

BlackRock, Inc.

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 basis financial measures. Management reviews non-GAAP financial measures to assess ongoing operations and, for the reasons described below, considers them to be effective indicators, for both management and investors, of BlackRock's financial performance over time. 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.

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