BlackRock Reports Second Quarter Diluted EPS Of $3.08, Or $3.10 As Adjusted

BlackRock, Inc. (NYSE:BLK) today reported second quarter 2012 diluted EPS of $3.08 compared with $3.21 in second quarter 2011. Second quarter 2012 net income (1) totaled $554 million compared with $572 million in first quarter 2012 and $619 million from a year ago. Operating income for second quarter 2012 totaled $829 million with operating margin of 37.2%.

As adjusted (2) results . Second quarter 2012 operating income totaled $832 million compared with $883 million in second quarter 2011. Diluted EPS totaled $3.10 and included operating income of $3.27 per diluted share and net non-operating expense of $0.17 per diluted share. As compared with first quarter 2012, operating income rose 1% and reflected seasonal factors, partially offset by market-driven declines, lower performance fees and higher costs related to the new brand campaign. Operating margin in second quarter 2012 improved to 39.2% from 38.6% in first quarter 2012.

“Our second quarter 2012 financial performance again demonstrated the strength and resilience of BlackRock’s diversified platform and our commitment to delivering for shareholders,” said Laurence D. Fink, Chairman and CEO of BlackRock. “Despite market headwinds and the growing defensive posture of investors, we delivered consistent results quarter-over-quarter with $832 million in adjusted operating income and diluted EPS of $3.10. Our global platform and breadth of investment products and solutions positioned us effectively to serve clients in this environment, allowing us to attract positive long-term flows overall with particular strength in passive products in the face of broader industry contraction. Additionally, our pipeline, predominantly representing our institutional business, stood at $54.8 billion in mid-July.”

The table below presents AUM and a comparison of GAAP and as adjusted results for certain financial measures.

        Q2             Six Months Ended  
Q2 % Q1 % June 30, %
2012 2011 Change 2012 Change 2012   2011 Change
AUM $3,559,934 $3,659,148 (3%) $3,684,087 (3%) $3,559,934 $3,659,148 (3%)

GAAP basis:
Revenue $2,229 $2,347 (5%) $2,249 (1%) $4,478 $4,629 (3%)
Operating income $829 $866 (4%) $815 2% $1,644 $1,664 (1%)
Net income (1) $554 $619 (11%) $572 (3%) $1,126 $1,187 (5%)
Diluted EPS $3.08 $3.21 (4%) $3.14 (2%) $6.22 $6.10 2%

As Adjusted:
Operating income (2) $832 $883 (6%) $825 1% $1,657 $1,702 (3%)
Net income (1)(2) $558 $578 (3%) $575 (3%) $1,133 $1,160 (2%)
Diluted EPS (2)       $3.10   $3.00   3%     $3.16   (2%)     $6.26   $5.96   5%
    (1)   Net income represents net income attributable to BlackRock, Inc.
(2) See notes (a) through (f) to the Condensed Consolidated Statements of Income and Supplemental Information in Attachment I on pages 10 through 13 for more information on as adjusted items and the reconciliation to GAAP.

“As always, we remain intensely focused on further enhancing the experience of our clients by delivering superior investment performance in products and solutions that meet their most important needs. We are committed to continuously evolving our organization and fully leveraging the benefits of our global platform as we invest in talent, product innovation and greater brand awareness while still driving strong shareholder value. This quarter we demonstrated our commitment to returning value to our shareholders as we repurchased $1.0 billion of shares from Barclays Bank PLC and supported the successful secondary offer of their remaining ownership interest. We also announced the Swiss Re Private Equity Partners acquisition that further extends both our alternative capabilities as well as our European presence. While the investment environment remains challenging, the underlying momentum in our business is strong given the environment, and I am pleased with the investments we have been making to diversify the platform.

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