Computations for all periods are derived from the Company's condensed consolidated statements of income as follows:
(a) Operating income, as adjusted, and operating margin, as adjusted:
Operating income, as adjusted, equals operating income, GAAP basis, excluding certain items management deems non-recurring, or transactions that ultimately will not impact BlackRock’s book value, as indicated in the table below. Operating income used for operating margin measurement equals operating income, as adjusted, excluding the impact of closed-end fund launch costs and commissions. Operating margin, as adjusted, equals operating income used for operating margin measurement, divided by revenue used for operating margin measurement, as indicated in the table below.
|Three Months Ended||Year Ended|
|December 31,||September 30,||December 31,|
|(Dollar amounts in millions)||2012||2011||2012||2012||2011|
|Operating income, GAAP basis||$1,005||$808||$875||$3,524||$3,249|
|Non-GAAP expense adjustments:|
|U.K. lease exit costs||-||-||(8)||(8)||63|
|Contribution to STIFs||30||-||-||30||-|
|PNC LTIP funding obligation||6||1||5||22||44|
|Merrill Lynch compensation contribution||-||-||-||-||7|
|Compensation expense related to appreciation (depreciation) on deferred compensation plans||-||-||4||6||(3)|
|Operating income, as adjusted||1,041||841||876||3,574||3,392|
|Closed-end fund launch costs||-||7||22||22||26|
|Closed-end fund launch commissions||-||1||3||3||3|
|Operating income used for operating margin measurement||$1,041||$849||$901||$3,599||$3,421|
|Revenue, GAAP basis||$2,539||$2,227||$2,320||$9,337||$9,081|
|Distribution and servicing costs||(82)||(87)||(94)||(364)||(386)|
|Amortization of deferred sales commissions||(12)||(18)||(13)||(55)||(81)|
|Revenue used for operating margin measurement||$2,445||$2,122||$2,213||$8,918||$8,614|
|Operating margin, GAAP basis||39.6%||36.3%||37.7%||37.7%||35.8%|
|Operating margin, as adjusted||42.6%||40.0%||40.7%||40.4%||39.7%|
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.
|Notes to Condensed Consolidated Statements of Income and Supplemental Information|
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