So with that, I'll turn it over to Ann Marie.Ann Marie Petach Thanks, Matt. Good morning, everyone. Uncertain markets continue in 2012. Markets began the year strong globally, buoyed by hopes for stability in Europe and positive economic data in the U.S. However, the mood remains fragile, and some of those initial gains have sold off as confidence and mood vary with each new data point. You can see that just in the last 2 days. The initial market improvements and investor activity supported BlackRock's strong first quarter results, with EPS up 7% compared to a year ago and 3% compared to the fourth quarter. Our financial performance highlights our strong focus on our clients' needs and our ability to work with them, supported by the breadth of our product set, our global presence and our unmatched risk tools. These strengths uniquely position us to meet the diverse needs of clients in this complex and ever-evolving market. As seen in our branding campaign, BlackRock is focusing on products and solutions that are especially important to investors in this environment, and this alignment with client needs is supporting our flows and our revenues. Our 5 client focus areas drove our net new revenue for the quarter. We expect them to be substantial contributors to organic revenue growth throughout 2012. At the same time, we saw the outflow of the previously identified $36 billion low-fee fixed income index mandate related to a single client who insourced the asset. The revenues associated with this mandate was about $4 million. Despite starting the year behind on high-water marks, strong performance in the first quarter allowed us to maintain stable performance fees compared to the first quarter of 2011. Our cost base is benefiting from actions we took in 2011 and supporting our margin. Supported by strong cash flow, the board approved the 9% increase in our first quarter dividend and increased our share repurchase authorization back up to 5 million shares. In the first quarter, we repurchased 648,000 shares for about $125 million. The key takeaway for me is that our breadth and diversity have positioned us well for organic growth and the ability to perform well in various market environments. With that, let me quickly walk you through the results.
As I make my comments, I'll be referring to the slides in the supplement, which you can get from our website. And as usual, I'm going to be talking primarily about as-adjusted results. I've already talked about the trends, so I'm going to move us right ahead to Slide 3.Our first quarter operating margin was 38.6%. The margin improved sequentially when you adjust for 2 items. First of all, we had seasonally high performance fees in the fourth quarter of 2011. And second of all, the first quarter had seasonally high employment taxes. Sequentially, the margin reflected the benefits of the lower base comp resulting from the restructuring we did last year, though this is partially offset by a sequential increase in marketing associated with our commitment to the brand. Our comp-to-revenue ratio of 36.2% was consistent with the long-term range of 35% when you normalize for the seasonal payroll taxes. Taking a look at markets, as shown on Slide 4. The strong recovery in all global markets benefited every -- all asset classes since the fourth quarter, and you can see that on the right-hand column of the page. I'm focusing on average markets since the majority of our equity piece is priced daily. Then if you look at the second column in, although markets are up compared to the fourth quarter, compared to a year ago, the story is quite different. U.S. markets are up, on average, 3%, but world markets, as seen on MSCI, European markets, emerging markets, Asia markets are still between 4% and 9% below the first quarter 2011. As a result of the diversity of our equity business, about 1/2 of our equity AUM is tied to non-U.S. markets. These mixed market results obviously impacted our revenues compared to a year ago, so it created headwinds for us coming into the year, though new business with clients and other revenue strengths helped to buffer the headwinds associated with these market effects. I'll start with a comparison of results to a year ago then discuss results compared to the prior quarter.
On Slide 6, you can see that earnings per share of $3.16 included $3.10 of operating earnings and $0.06 of nonoperating income. EPS benefited from growth in long-dated assets, expense discipline and share repurchases.The first quarter as-adjusted tax rate was 31.5%. This sequentially is a 0.5 point improvement and this reflected the positive effect of state and local tax legislation. And those benefits will continue for us, going forward. Operating earnings of $825 million, which you can see on Slide 7, reflected expense discipline and improvements in long-dated base fees. Our business model benefits from the first revenue sources. We've got a revenue slide laid out for you on Slide 8. Read the rest of this transcript for free on seekingalpha.com