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I'll now turn it over to Ann Marie for our first comments. Thank you.Ann Petach Good morning, everyone. This morning, we are reporting record as adjusted fourth quarter earnings of $3.42 and record full year earnings of $10.94. I'd also like to welcome to the call our new shareholders. In December, Bank of America and PNC sold about 59 million shares or about 30% of our total shares outstanding into market. As a result of that transaction, now over 50% of our shares are owned by shareholders other than our three strategic investors. Looking at our results, we had strong results. They reflect strong product performance, as well as strong markets. We're beginning 2011 with the merger-related issues and outflows largely behind us. Just a comment on that noise a little bit more, we do have $14 billion of merger-related outflows still sitting in the pipeline. The majority of those were in the prior pipeline. So what is reflected is more the timing of the withdrawals rather than the pipeline containing a lot of new notification. We still have a handful of clients with known concentrations concerns. If those materialized, we'll call it out when they happen. But it's important to note of the concentration issues, those outflows have been at very low single-digit basis point, so have not had a material effect on revenue. With respect to our quantitative product, the performance on the scientific asset equity products have turned positive and competitive since Ken Kroner [ph] took over the leadership of that product. It'll take some time to fully repair the medium and longer-term track records. So it'll just be noise we have to watch there as we repair that track records. The total pipeline stands at $73 billion. That includes $61 billion in long-dated assets and that is net of the merger-related item. The rest of my remarks I'm going to walk through the supplemental slides. And I'll be talking that as adjusted earnings. If you move to Slide 1, operating earnings in the fourth quarter were $962 million. That's up 31% compared to the third quarter. Net income was $670 million, and EPS was $3.42. Both of those are up 25% compared to the third quarter.
Moving on to the full year, operating earnings of $3,167,000,000 and net income of $2.1 billion were both more than doubly 2009. EPS of $10.94 was up 53% compared to 2009. And if we look at the 2009 results and if the BGI transaction had taken place on January 1 and so on comparing them to pro forma results, our operating earnings were up 22%, and the net income was up 37%.Moving on to the third slide and taking a look at our operating margin. The full year operating margin came in at 39.3%. That's up 1.1 points compared to a year ago. It's up 2.5 points compared to the pro forma 2009 results. The fourth quarter margin came in at 40.7%. That does reflect both the strong performance fees in the quarter, as well as the benefits of market flowing through and to our margin. Not showing on the page are compensation to revenue ratio came in at 34.8%. This is the low end of the range of what we've been running for the last several years with the money in the 35% zone. It is down almost a half a point from our 2009 margin and really is consistent with our focus of really the benefit of Beta flowing through to our shareholder. As we begin 2011, we were very confident in the ability to grow the top line as well as our confidence in our margins. We plan to continue to speak efficiencies in our business and to realize the benefits of scale. At the same time, we plan to invest in growth opportunities. We've got a lot of strength the roadshow gave us the opportunity to get out and dialogue with our shareholders about the external environment and how our capabilities lined up with that environment to be able to really service our clients. With that, we are confident in our ability to grow iShares and retail platforms, Defined Contribution platforms, BlackRock Solutions, Asia, multi-asset class strategies and alternatives.
On the next slide I'll talk about markets, which are also contributing to growth in margins. So moving on to Slide 4, you can see that our 2010 markets were up about 20% compared to average 2009 markets, 2010 year-end market actually were close the year about 10% higher than the average 2010 market. That means we've got positive tailwind coming into 2011, and that's before considering the positive markets we've seen so far in January.Read the rest of this transcript for free on seekingalpha.com