Indicate by check mark if the registrant is a well-known, seasoned issuer, as defined in Rule 405 of the Securities Act. Yes xo No ¨x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to thisForm 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨o No x

The aggregate market value of the voting common stock and nonvoting common stock equivalents held by nonaffiliates of the registrant as of June 30, ~~2013~~2015 was approximately ~~$42.8~~$56.3 billion.

As of January 31, ~~2014,~~2016, there were ~~167,508,698~~163,941,835 shares of the registrant’s common stock outstanding.

Portions of the definitive Proxy Statement of BlackRock, Inc. to be filed pursuant to Regulation 14A of the general rules and regulations under the Securities Exchange Act of 1934, as amended, for the ~~2014~~2016 annual meeting of stockholders to be held on May ~~29, 2014~~25, 2016 (“Proxy Statement”) are incorporated by reference into Part III of this Form 10-K.

Item 1. Business

~~OVERVIEW~~Overview

BlackRock, Inc. ~~(NYSE: BLK; together,~~(together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) is ~~the world’s largest~~a leading publicly traded investment management firm with $4.645 trillion of assets under management (“AUM”) at December 31, 2015. With employees in more than 30 countries who serve clients in over 100 countries across the ~~globe. We provide~~globe, BlackRock provides a broad range of investment and risk management services to institutional and ~~had $4.324 trillion~~retail clients worldwide.

Our diverse platform of ~~assets under~~active (alpha) and index (beta) investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Our product offerings include single- and multi-asset class portfolios investing in equities, fixed income, alternatives and money market instruments. Products are offered directly and through intermediaries in a variety of vehicles, including open-end and closed-end mutual funds, iShares^® exchange-traded funds (“ETFs”), separate accounts, collective investment funds and other pooled investment vehicles. We also offer our BlackRock Solutions^® (“BRS”) investment and risk management ~~(“AUM”) at December 31, 2013. Our clients include retail, including high net worth,~~technology platform, Aladdin^®, risk analytics and advisory services and solutions to a broad base of institutional ~~investors, comprised of pension funds, official institutions, endowments, insurance companies, corporations, financial institutions, central banks and sovereign wealth funds.~~investors. The Company is highly regulated and serves its clients as a fiduciary. We do not engage in proprietary trading activities that could conflict with the interests of our clients.

~~Our unique platform enables us~~BlackRock serves a diverse mix of institutional and retail clients across the globe. Clients include tax-exempt institutions, such as defined benefit and defined contribution pension plans, charities, foundations and endowments; official institutions, such as central banks, sovereign wealth funds, supranationals and other government entities; taxable institutions, including insurance companies, financial institutions, corporations and third-party fund sponsors, and retail investors.

BlackRock maintains a significant global sales and marketing presence that is focused on establishing and maintaining retail and institutional investment management relationships by marketing its services to offer active and passive products and risk management capabilities to develop tailored solutions for clients. Our product range includes single- and multi-asset portfolios investing in equities, fixed income, alternatives and/or money market instruments. We offer our productsinvestors directly and through ~~intermediaries in a variety of vehicles, including open-end~~financial professionals and ~~closed-end mutual funds,~~~~iShares~~^® ~~exchange-traded funds (“ETFs”)~~pension consultants, and ~~other exchange-traded products (together with ETFs, “ETPs”), collective investment funds and separate accounts. We also offer our~~~~BlackRock Solutions~~^® ~~(“BRS”) risk management and advisory services primarily to institutional investors.~~establishing third-party distribution relationships.

BlackRock is an independent, publicly traded company, with no single majority shareholder and over two-thirds of its Board of Directors consisting of independent directors. At December 31, ~~2013,~~2015, The PNC Financial Services Group, Inc. (“PNC”) held ~~20.9%~~21.1% of BlackRock’s voting common stock and ~~21.9%~~22.2% of BlackRock’s capital stock, which includes outstanding common stock and nonvoting preferred stock.

Management seeks to achieve attractive returns for stockholders over time by, among other things, capitalizing on the following factors:

the Company’s focus on strong performance providing alpha for active products and limited or no tracking error for index products;

the Company’s global reach and commitment to best practices around the world, with approximately 48% of employees outside the United States supporting local investment capabilities and serving clients, and approximately 42% of total AUM managed for clients domiciled outside the United States;

the Company’s diversified active and ~~passive~~index product offerings, which enhance its ability to offer a variety of traditional and alternative investment products across the risk spectrum and to tailor single- and multi-asset investment solutions to address specific client needs;

the Company’s differentiated client relationships and fiduciary focus, which enable effective positioning toward changing client needs and macro trends including the secular shift to passive investing and ETFs, a focus on ~~strong performance providing alpha for~~income and retirement, and barbelling of risk using index and active products, including alternatives; and ~~limited or no tracking error for passive products;~~

the Company’s longstanding commitment to risk management and the continued development of, and increased interest in, BRS products and ~~services;~~services.

the Company’s positioning in the face of macro challenges driving trends in investor behavior, including the secular shift to passive investing and ETPs, a focus on income and retirement, and barbelling of risk using passive and active products, including alternatives;

the Company’s global presence and commitment to best practices around the world, with approximately 48% of employees outside the United States supporting local investment capabilities and serving clients, and approximately 44% of total AUM managed for clients domiciled outside the United States; and

~~the growing recognition of the global BlackRock brand, and the depth and breadth of the Company’s intellectual capital.~~

BlackRock operates in a global marketplace characterized by a high degree of market volatility and economic uncertainty, factors that can significantly affect earnings and stockholder returns in any given period.

The Company’s ability to increase revenue, earnings and stockholder value over time is predicated on its ability to generate new business, including business in BRS products and services. New business efforts ~~are dependent~~depend on BlackRock’s ability to achieve clients’ investment objectives in a manner consistent with their risk preferences and to deliver excellent client service. All of these efforts require the commitment and contributions of BlackRock employees. Accordingly, the ability to attract, develop and retain talented professionals is critical to the Company’s long-term success.

~~FINANCIAL HIGHLIGHTS~~

Financial Highlights


	Selected GAAP Financial Results
(in millions, except per share data)	2013			2012			2011			2010			2009			2008			5-Year CAGR⁽⁴⁾			2015			2014			2013			2012			2011			5-Year CAGR⁽⁴⁾
Total revenue	$	10,180		$	9,337		$	9,081		$	8,612		$	4,700		$	5,064			15	%	$	11,401		$	11,081		$	10,180		$	9,337		$	9,081			6	%
Operating income	$	3,857		$	3,524		$	3,249		$	2,998		$	1,278		$	1,593			19	%	$	4,664		$	4,474		$	3,857		$	3,524		$	3,249			9	%
Operating margin		37.9	%		37.7	%		35.8	%		34.8	%		27.2	%		31.5	%		4	%		40.9	%		40.4	%		37.9	%		37.7	%		35.8	%		3	%
Nonoperating income (expense)⁽¹⁾	$	97		$	(36	)	$	(116	)	$	36		$	(28	)	$	(422	)		(175	%)	$	(69	)	$	(49	)	$	97		$	(36	)	$	(116	)	N/A
Net income attributable to BlackRock, Inc.	$	2,932		$	2,458		$	2,337		$	2,063		$	875		$	784			30	%	$	3,345		$	3,294		$	2,932		$	2,458		$	2,337			10	%
Diluted earnings per common share	$	16.87		$	13.79		$	12.37		$	10.55		$	6.11		$	5.78			24	%	$	19.79		$	19.25		$	16.87		$	13.79		$	12.37			13	%


	Selected Non-GAAP Financial Results
(in millions, except per share data)	2013			2012			2011			2010			2009			2008			5-Year CAGR⁽⁴⁾			2015			2014			2013			2012			2011			5-Year CAGR⁽⁴⁾
As adjusted⁽²⁾:
Operating income	$	4,024		$	3,574		$	3,392		$	3,167		$	1,570		$	1,662			19	%	$	4,695		$	4,563		$	4,024		$	3,574		$	3,392			8	%
Operating margin⁽³⁾		41.4	%		40.4	%		39.7	%		39.3	%		38.2	%		38.7	%		1	%
Operating margin⁽²⁾																							42.9	%		42.9	%		41.4	%		40.4	%		39.7	%		2	%
Nonoperating income (expense)⁽¹⁾	$	7		$	(42	)	$	(113	)	$	25		$	(46	)	$	(384	)		(145	%)	$	(70	)	$	(56	)	$	7		$	(42	)	$	(113	)	N/A
Net income attributable to BlackRock, Inc.	$	2,882		$	2,438		$	2,239		$	2,139		$	1,021		$	856			27	%
Diluted earnings per common share	$	16.58		$	13.68		$	11.85		$	10.94		$	7.13		$	6.30			21	%
Net income attributable to BlackRock, Inc.⁽³⁾																						$	3,313		$	3,310		$	2,882		$	2,438		$	2,239			9	%
Diluted earnings per common share⁽³⁾																						$	19.60		$	19.34		$	16.58		$	13.68		$	11.85			12	%

~~(1)~~

N/A

— not applicable

(1)	Net of net income (loss) attributable to noncontrolling interests (“NCI”) (redeemable and nonredeemable).

(2)

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. GAAP reported results include certain significant items, the after-tax impact of which management deems nonrecurring, recurring infrequently or transactions that ultimately will not impact BlackRock’s book value and, therefore, are excluded in calculating as adjusted results.

See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures, for further information on non-GAAP financial measures and for as adjusted items for 2015, 2014, and 2013. In 2012, operating income, as adjusted, included an adjustment related to estimated lease exit costs initially recorded in 2011 and the contribution to certain of the Company’s bank-managed short-term investment funds (“STIFs”). In 2011, operating income, as adjusted, included U.K. lease exit costs which represent costs to exit two locations in London and restructuring charges. In 2012 and 2011, the portion of compensation expense associated with certain long-term incentive plans (“LTIP”) funded, or to be funded, through share distributions to participants of BlackRock stock held by PNC has been excluded because it ultimately did not impact BlackRock’s book value. Compensation expense associated with appreciation (depreciation) on investments related to certain BlackRock deferred compensation plans has been excluded as returns on investments set aside for these plans, which substantially offset this expense, are reported in nonoperating income (expense).

(3)

See reconciliation to GAAP measures in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures, for further information on as adjusted items for 2013, 2012 and 2011. Operating income, as adjusted, for 2009 excluded certain expenses incurred related to the integration of the acquisition of Barclays Global Investors (“BGI”), as well as advisory fees, legal fees and consulting transaction expenses related to the acquisition of BGI from Barclays on December 1, 2009 (the “BGI Transaction”), and restructuring charges. Operating income, as adjusted, for 2008 excluded restructuring charges. The portion of compensation expense associated with certain long-term incentive plans (“LTIP”) funded or to be funded through share distributions to participants of BlackRock stock held by PNC and a Merrill Lynch cash compensation contribution has also been excluded because these charges do not impact BlackRock’s book value. Compensation expense associated with appreciation (depreciation) on investments related to certain BlackRock deferred compensation plans has been excluded from operating and nonoperating income, as adjusted, as returns on investments set aside for these plans, which substantially offset this expense, are reported in nonoperating income (expense).

~~(3)~~

Operating income used for measuring operating margin, as adjusted, is equal to operating income, as adjusted, excluding the impact of closed-end fund launch costs and related commissions. Management believes the exclusion of such costs and related commissions is useful because these costs can fluctuate considerably and revenues associated with the expenditure of these costs will not fully impact the Company’s results until future periods. Revenue used for operating margin, as adjusted, excludes distribution and servicing costs paid to related parties and other third parties. Management believes the exclusion of such costs is useful because it creates consistency in the treatment for certain contracts for similar services, which due to the terms of the contacts, are accounted for under GAAP on a net basis within investment advisory, administration fees and securities lending revenue. Amortization of deferred sales commissions is excluded from revenue used for operating margin measurement, as adjusted, because such costs, over time, substantially offset distribution fee revenue the Company earns. In addition, in 2008, revenue used for operating margin, as adjusted, excluded reimbursable property management compensation, which represented compensation and benefits paid to personnel of Metric Property Management, Inc. (“Metric”), a subsidiary of BlackRock Realty Advisors, Inc. (“Realty”). Prior to the transfer in 2008 to a third party, these employees were retained on Metric’s payroll when certain properties were acquired by Realty’s clients. The related compensation and benefits were fully reimbursed by Realty’s clients and have been excluded from revenue used for operating margin, as adjusted, because they did not bear an economic cost to BlackRock.

Net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted exclude the after-tax impact of the items listed above and also include the effect on deferred income tax expense ~~attributable to changes in corporate~~resulting from certain income tax ~~rates as a result of income tax law changes and a state tax election.~~matters.

(4)	Percentage represents compounded annual growth rate (“CAGR”) over a five-year period (2010-2015).

~~ASSETS UNDER MANAGEMENT~~Assets Under Management

~~A summary of the~~The Company’s AUM by product type for the years ~~2008~~2011 through ~~2013~~2015 is presented ~~below:~~below.


	AUM by Product Type December 31,												December 31,
(in millions)	2013		2012		2011		2010		2009		2008		2015		2014		2013		2012		2011		5-Year CAGR⁽¹⁾
Equity	$	2,317,695	$	1,845,501	$	1,560,106	$	1,694,467	$	1,536,055	$	203,292	$	2,423,772	$	2,451,111	$	2,317,695	$	1,845,501	$	1,560,106		7	%
Fixed income		1,242,186		1,259,322		1,247,722		1,141,324		1,055,627		481,365		1,422,368		1,393,653		1,242,186		1,259,322		1,247,722		5	%
Multi-asset		341,214		267,748		225,170		185,587		142,029		77,516		376,336		377,837		341,214		267,748		225,170		15	%
Alternatives		111,114		109,795		104,948		109,738		102,101		61,544		112,839		111,240		111,114		109,795		104,948		1	%
Long-term		4,012,209		3,482,366		3,137,946		3,131,116		2,835,812		823,717		4,335,315		4,333,841		4,012,209		3,482,366		3,137,946		7	%
Cash management		275,554		263,743		254,665		279,175		349,277		338,439		299,884		296,353		275,554		263,743		254,665		1	%
Advisory		36,325		45,479		120,070		150,677		161,167		144,995		10,213		21,701		36,325		45,479		120,070		(42	%)
Total	$	4,324,088	$	3,791,588	$	3,512,681	$	3,560,968	$	3,346,256	$	1,307,151	$	4,645,412	$	4,651,895	$	4,324,088	$	3,791,588	$	3,512,681		5	%

Component Changes in AUM by Product Type
Five Years Ended December 31, 2013

(in millions) 12/31/2008 Net New
Business Acquired
AUM, net⁽¹⁾
Market /
FX
12/31/2013 5-Year
CAGR
Equity
$ 203,292    $ 260,503    $ 1,061,801    $ 792,099    $ 2,317,695    63 %
Fixed income
481,365    17,779    502,988    240,054    1,242,186    21 %
Multi-asset
77,516    139,077    45,907    78,714    341,214    35 %
Alternatives
61,544    (19,722 ) 68,351    941    111,114    13 %
Long-term
823,717    397,637    1,679,047    1,111,808    4,012,209    37 %
Cash management
338,439    (118,341 ) 53,616    1,840    275,554    (4 %)
Advisory
144,995    (112,263 ) (10 ) 3,603    36,325    (24 %)
Total
$ 1,307,151    $ 167,033    $ 1,732,653    $ 1,117,251    $ 4,324,088    27 %

(1)	Percentage represents CAGR over a five-year period (2010-2015).

Component changes in AUM by product type for the five years ended December 31, 2015 are presented below.

(in millions)	December 31, 2010		Net Inflows (Outflows)			Adjustment/ Acquisitions⁽¹⁾			Market Change			FX Impact			December 31, 2015		5-Year CAGR⁽²⁾
Equity	$	1,694,467	$	252,591		$	(16,112	)	$	605,577		$	(112,751	)	$	2,423,772		7	%
Fixed income		1,141,324		122,375			2,968			230,218			(74,517	)		1,422,368		5	%
Multi-asset		185,587		146,838			6,442			62,110			(24,641	)		376,336		15	%
Alternatives		109,738		(6,541	)		21,345			(6,310	)		(5,393	)		112,839		1	%
Long-term		3,131,116		515,263			14,643			891,595			(217,302	)		4,335,315		7	%
Cash management		279,175		25,411			—			3,487			(8,189	)		299,884		1	%
Advisory		150,677		(134,686	)		—			1,676			(7,454	)		10,213		(42	%)
Total	$	3,560,968	$	405,988		$	14,643		$	896,758		$	(232,945	)	$	4,645,412		5	%

(1)

Amounts include ~~acquisition adjustments and reclassification of certain~~ AUM acquired from ~~BGI~~Claymore Investments, Inc. (“Claymore”) in ~~December 2009,~~March 2012, Swiss Re Private Equity Partners (“SRPEP”) in September ~~2012, Claymore Investments, Inc. (“Claymore”) in March~~ 2012, Credit Suisse’s ETF franchise (“Credit Suisse ETF Transaction”) in July 2013 and MGPA in October ~~2013~~2013. Amounts also include AUM acquired in the acquisitions of certain assets of BlackRock Kelso Capital Advisors LLC (“BKCA”) in March 2015, Infraestructura Institucional and FutureAdvisor in October 2015, and other reclassifications to conform to current period combined AUM policy and presentation. Amounts also include ~~BGI~~Barclays Global Investors merger-related outflows due to manager concentration considerations prior to the third quarter of 2011 and outflows from scientific active equity performance prior to the second quarter of 2011. As a result of

client investment manager concentration limits and the scientific active equity performance, outflows were expected to occur for a period of time subsequent to the close of the transaction.

(2)	Percentage represents CAGR over a five-year period (2010-2015).

AUM represents the broad ~~ranges~~range of financial assets we manage for clients on a discretionary basis pursuant to investment management agreements that are expected to continue for at least 12 months. In general, reported AUM reflects the valuation methodology that corresponds to the basis used for billing (for example, net asset value). Reported AUM does not include assets for which we provide risk management or other forms of ~~non-discretionary~~nondiscretionary advice, or assets that we are retained to manage on a short-term, temporary basis.

Investment management fees are typically expressed as a percentage of AUM. We also earn performance fees on certain portfolios relative to an agreed-upon benchmark or return hurdle. On some products, we also may earn securities lending ~~fees.~~revenue. In addition, BlackRock offers its proprietaryAladdin^® investment system as well as risk

management, outsourcing and advisory services, to institutional investors under the BRS name. Revenue for these services may be based on several criteria including value of positions, number of users, accomplishment of specific deliverables or other objectives.

At December 31, ~~2013,~~2015, total AUM was ~~$4.324~~$4.645 trillion, representing a CAGR of ~~27%~~5% over the last five years. AUM growth during the period was achieved through the combination of net market valuation gains, net ~~new business~~inflows and acquisitions, including ~~BGI, which added approximately $1.844 trillion of AUM in December 2009,~~ Claymore and SRPEP, which collectively added $13.7 billion of AUM in 2012, ~~and~~ Credit Suisse and MGPA, which collectively added $26.9 billion of AUM in ~~2013. These acquisitions significantly changed our~~2013 and BKCA, Infraestructura Institucional and FutureAdvisor, which collectively added $2.2 billion of AUM in 2015. Our AUM mix ~~from predominantly active fixed income and equity in 2008 to~~encompasses a broadly diversified product range, as described below.

The Company considers the categorization of its AUM by client type, product type, investment style and client region useful to understanding its business. The following discussion of the Company’s AUM will be organized as follows:

Client Type	Product Type		Client Region
~~Client Type~~ ¨ Retail	¨ Equity	~~Product Type~~	~~Client Region~~ ¨ Americas
¨ ~~Retail~~iShares		¨ ~~Equity~~	¨ ~~Americas~~
¨~~iShares~~		¨ Fixed Income	¨ Europe, the Middle East and Africa (“EMEA”)
¨ Institutional		¨ Multi-asset	¨ ~~Asia-Pacific~~
		¨ ~~Alternatives~~ Asia-Pacific
		¨ Alternatives
	¨ Cash Management

~~CLIENT TYPE~~Client Type

We serve a diverse mix of institutional and retail investors worldwide. Clients include tax-exempt institutions, such as defined benefit and defined contribution pension plans, charities, foundations and endowments; official institutions, such as central banks, sovereign wealth funds, supranationals and other government entities; taxable institutions, including insurance companies, financial institutions, corporations and third-party fund sponsors; and retail investors.~~iShares~~ ~~is presented as a separate client type below, with investments in~~~~iShares~~ ~~by institutions and retail clients excluded from figures and discussions in their respective sections below.~~

Our organizational structure was designed to ensure that strong investment performance is our highest priority, and that we best align with our clients’ needs to capitalize on broader industry trends. Furthermore, our structure facilitates strong teamwork globally across both functions and regions in order to enhance our ability to leverage best practices to serve our clients and continue to develop our talent. Specifically, ~~the client side of our business is organized into two groups: one comprising Retail and~~~~iShares~~ ~~and another comprising Institutional and~~~~BlackRock Solutions~~. The separation of the client functions into these two teams allows us to focus on the unique needs of these client groups by bringing the full capabilities of the firm to bear in an organized, cohesive approach. Additionally, our investments functions are split into ~~five~~ distinct strategies: ~~Alpha,~~Active Equity and Fixed Income, Beta, Multi-Asset, Alternatives and Trading/Liquidity.

We serve a diverse mix of institutional and retail clients across the globe. Clients include tax-exempt institutions, such as defined benefit and defined contribution pension plans, charities, foundations and endowments; official institutions, such as central banks, sovereign wealth funds, supranationals and other government entities; taxable institutions, including insurance companies, financial institutions, corporations and third-party fund sponsors, and retail investors. iShares is presented as a separate client type below, with investments in iShares by institutions and retail clients excluded from figures and discussions in their respective sections below.

AUM by investment style and client type at December 31, 2015 is presented below.

(in millions)	Retail		iShares		Institutional		Total
Active	$	499,820	$	—	$	962,852	$	1,462,672
Non-ETF Index		41,305		—		1,738,777		1,780,082
iShares		—		1,092,561		—		1,092,561
Long-term		541,125		1,092,561		2,701,629		4,335,315
Cash management		27,406		—		272,478		299,884
Advisory		—		—		10,213		10,213
Total AUM	$	568,531	$	1,092,561	$	2,984,320	$	4,645,412

AUM by Investment Style & Client Type
December 31, 2013

(in millions) Retail iShares Institutional Total
Active
$ 458,833    $ —    $ 932,410    $ 1,391,243
Non-ETF Index
28,944    —    1,677,650    1,706,594
iShares
—    914,372    —    914,372
Long-term
487,777    914,372    2,610,060    4,012,209
Cash management
44,327    —    231,227    275,554
Advisory
11    —    36,314    36,325
Total AUM
$ 532,115    $ 914,372    $ 2,877,601    $ 4,324,088

Retail ~~Investors~~

Component Changes in AUM — Retail
(in millions) 12/31/2012 Net New
Business Adjustments⁽¹⁾ Acquisitions⁽²⁾ Market / FX 12/31/2013
Equity
$ 164,748    $ 3,641    $ 13,066    $ —    $ 21,580    $ 203,035
Fixed income
138,425    14,197    3,897    —    (5,044 ) 151,475
Multi-asset class
90,626    14,821    2,663    —    8,944    117,054
Alternatives
9,685    6,145    —    136    247    16,213
Long-term retail
$ 403,484    $ 38,804    $ 19,626    $ 136    $ 25,727    $ 487,777

~~(1)~~

~~Amounts include $19.6 billion of AUM related to fund ranges reclassed from institutional to retail.~~

~~(2)~~

~~Amounts represent AUM acquired in the MGPA acquisition in October 2013.~~

BlackRock serves retail investors globally through a wide array of vehicles across the active and passive spectrum, including separate accounts, open-end and closed-end funds, unit trusts and private investment funds. Retail investors are served principally through intermediaries, including broker-dealers, banks, trust companies, insurance companies and independent financial advisors. Clients invest primarily in mutual funds, which totaled ~~$402.2~~$446.4 billion, or ~~82%~~83%, of retail long-term AUM at year-end, with the remainder invested in private investment funds and separately managed accounts (“SMAs”). The majority ~~(94%~~(92%) of long-term retail AUM is invested in active products, although this is impacted by ~~the fact that~~iShares is being shown separately. Retail represented ~~12%~~13% oflong-term AUM at December 31, ~~2013~~2015 and ~~34%~~35% of long-term base fees for ~~2013.~~2015.

Component changes in retail long-term AUM for 2015 are presented below.

(in millions)	December 31, 2014		Net Inflows			Acquisitions⁽¹⁾		Market Change			FX Impact			December 31, 2015
Equity	$	200,445	$	8,543		$	—	$	(10,040	)	$	(5,193	)	$	193,755
Fixed income		189,820		31,114			—		(5,691	)		(2,590	)		212,653
Multi-asset class		125,341		(1,307	)		366		(8,108	)		(985	)		115,307
Alternatives		18,723		162			1,293		(177	)		(591	)		19,410
Total Retail	$	534,329	$	38,512		$	1,659	$	(24,016	)	$	(9,359	)	$	541,125

(1)	Amounts represent $1.3 billion of AUM acquired in the BKCA acquisition in March 2015 and $366 million of AUM acquired in the FutureAdvisor acquisition in October 2015. The FutureAdvisor acquisition amount does not include AUM that was held in iShares holdings.

The retail client base is ~~also~~ diversified geographically, with 70% of long-term AUM managed for investors based in the Americas, 24% in EMEA and 6% in Asia-Pacific at year-end ~~2013.~~2015.

U.S. retail long-term net inflows of $18.7 billion, or 5% organic growth, were led by fixed income net inflows of $20.9 billion. Fixed income net inflows were diversified across exposures and products, with strong flows into our unconstrained, high yield and core bond offerings. Equity net inflows of $1.3 billion were driven by flows into our index mutual funds, and we continued to make progress on the reinvigoration and globalization of our fundamental active equity business. Multi-asset class net outflows of $2.5 billion were primarily due to a large single-client transition out of mutual funds into a series of iShares across asset classes.

International retail long-term net inflows of $19.8 billion, representing 12% organic growth, were positive across major regions and diversified across asset classes. Fixed income products generated net inflows of $10.3 billion, led by short duration and unconstrained strategies as investors looked to manage duration and generate yield in their portfolios. Multi-asset class net inflows of $1.2 billion were driven by flows into managed volatility strategies and the cross-border version of our Multi-Asset Income fund. Equity net inflows of $7.2 billion reflected strong flows into international equities. Alternatives net inflows totaled $1.2 billion, and we remain committed to broadening the distribution of alternatives funds to bring institutional quality alternatives to retail investors.

iShares

•

~~U.S. retail~~ ~~long-term net inflows of $21.3 billion, or 7% organic growth, were driven by flows into income products, with investors’ continued attraction to yield in~~

a low rate environment, and a growing appreciation for duration risk. Multi-asset class products led flows with $10.0 billion of net inflows, driven by demand for our flagship Global Allocation and Multi-Asset Income funds. Fixed income net inflows of $9.4 billion reflected growing interest in unconstrained fixed income, with our Strategic Income Opportunities fund raising $6.9 billion. Our suite of six retail alternatives mutual funds continued to gain traction, raising $4.6 billion of net inflows, largely driven by our zero-duration liquid Global Long/Short Credit fund. This range of alternatives mutual funds now stands at $5.6 billion in AUM, and we are committed to broadening the distribution of alternatives funds to bring institutional-quality alternatives products to retail investors. Net inflows across multi-asset class, fixed income and alternatives were partially offset by equity net outflows of $2.8 billion, driven by historical performance-related redemptions from U.S. large cap equities, where we have implemented management changes to better meet our high performance standards. As of December 31, 2013, we are the leading U.S. manager by AUM of SMAs,

~~the second largest closed-end fund manager and a top-ten manager by AUM and 2013 net flows of long-term open-end mutual funds~~¹~~. In 2013, we were also the leading manager by net flows for~~iShares~~long-dated~~ ~~fixed income mutual funds~~¹.

•

~~We have fully integrated our legacy retail and~~~~iShares~~ retail distribution teams to create a unified client-facing presence. As retail clients increasingly use BlackRock’s capabilities in combination — active, alternative and passive — it is a strategic priority for BlackRock to coherently deliver these capabilities through one integrated team.

•

~~International retail~~ long-term net inflows of $17.5 billion, representing 15% organic growth, were positive across major regions and diversified across asset classes. Equity net inflows of $6.4 billion were driven by strong demand for our top-performing European Equities franchise as investor risk appetite for the sector improved. Multi-asset class and fixed income products each generated net inflows of $4.8 billion, as investors looked to manage duration and volatility in their portfolios. In 2013, we were ranked as the third largest cross border fund provider²~~. In the United Kingdom, we ranked among the five largest fund managers~~².

~~iShares~~

Component Changes in AUM — iShares
(in millions) 12/31/2012 Net New
Business Acquisition⁽¹⁾ Market / FX 12/31/2013
Equity
$ 534,648    $ 74,119    $ 13,021    $ 96,347    $ 718,135
Fixed income
192,852    (7,450 ) 1,294    (7,861 ) 178,835
Multi-asset class
869    355    —    86    1,310
Alternatives⁽²⁾
24,337    (3,053 ) 1,645    (6,837 ) 16,092
TotaliShares
$ 752,706    $ 63,971    $ 15,960    $ 81,735    $ 914,372

~~(1)~~

~~Amounts represent $16.0 billion of AUM acquired in the Credit Suisse ETF acquisition in July 2013.~~

~~(2)~~

~~Amounts include commodity~~~~iShares~~.

~~iShares~~ is the leading ETF provider in the world, with ~~$914.4 billion~~$1.1 trillion of AUM at December 31, ~~2013,~~2015 and was the top asset gatherer globally in ~~2013~~2015³¹ with ~~$64.0~~$129.9 billion of net inflows for an organic growth rate of 8%13%. Equity net inflows of ~~$74.1~~$78.4 billion were driven by flows into the Core Series and into funds with broad developed market equity exposures, partially offset by outflows from emerging ~~markets~~market products.~~iShares~~ Record fixed income ~~experienced~~ net ~~outflows~~inflows of ~~$7.5~~$50.3 billion ~~as the continued low interest rate environment~~were diversified across exposures and product lines, led ~~many liquidity-oriented investors to sell long-duration assets, which made up the majority of the~~~~iShares~~ ~~fixed income suite. In 2013, we launched several funds to meet demand from clients seeking protection in a rising interest rate environment~~ by ~~offering an expanded product set that includes four new U.S. funds, including short-duration versions of our flagship~~flows into core, corporate and high yield bond funds. iShares multi-asset class and ~~investment grade credit products, and short maturity and liquidity income funds.~~~~iShares~~alternatives ~~had $3.1~~funds contributed a combined $1.2 billion of net ~~outflows predominantly out of commodities.~~inflows, primarily into core allocation funds. iShares represented ~~23%~~25% of long-term AUM at December 31, ~~2013~~2015 and 35% of long-term base fees for ~~2013.~~2015.

~~iShares~~~~offers the most diverse product set~~Component changes in ~~the industry with 703 ETFs at year-end 2013, and serves the broadest client base, covering more than 25 countries on five continents. During 2013,~~iShares continued its dual commitment to innovation and responsible product structuring by introducing 42 new ETFs, acquiring Credit Suisse’s 58 ETFs in Europe and entering into a critical new strategic alliance with Fidelity Investments to deliver Fidelity’s more than 10 million clients increased access to

~~iShares~~ ~~products, tools and support. Our alliance with Fidelity Investments and a successful full first year~~ AUM for ~~the Core Series have deeply expanded our presence and offerings among buy-and-hold investors.~~ 2015 are presented below.

(in millions)	December 31, 2014		Net Inflows		Market Change			FX Impact			December 31, 2015
Equity	$	790,067	$	78,408	$	(32,349	)	$	(12,970	)	$	823,156
Fixed income		217,671		50,309		(7,508	)		(6,282	)		254,190
Multi-asset class		1,773		1,074		(90	)		(27	)		2,730
Alternatives⁽¹⁾		14,717		61		(2,160	)		(133	)		12,485
Total iShares	$	1,024,228	$	129,852	$	(42,107	)	$	(19,412	)	$	1,092,561

(1)	Amounts include commodity iShares.

Our broadiShares product range offers investors a precise, transparent and ~~low-cost~~efficient way to tap market returns and gain access to a full range of asset classes and global markets that have been difficult ~~or expensive~~ for many investors to access, ~~until now,~~ as well as the liquidity required to make adjustments to their exposures quickly and cost-efficiently.

•

U.S. iShares AUM ended 2015 at ~~$655.6~~$811.4 billion with ~~$41.4~~$97.2 billion of net inflows driven by strong demand for ~~developed markets equities and short-duration fixed income. During the fourth quarter of 2012, we debuted~~ the Core Series in the United States, designed to provide the essential building blocks for buy-and-hold investors to use in constructing the core of their portfolio. The Core Series demonstrated solid results in its first full year, raising $20.0 billion in net inflows, primarily in U.S. equities. In the United States,~~iShares~~ ~~maintained its position as the largest ETF provider, with 39% share of AUM~~³.

•

~~International iShares~~ ~~AUM ended at $258.8 billion with robust net new business of $22.6 billion led by demand for European~~ and ~~Japanese~~broad developed market equities as well as a diverse range of fixed income products. ~~At year-end 2013,~~~~iShares~~ ~~was the largest European ETF provider~~² In 2015, we saw increased investor focus on risk-aware, “smart beta” products, with ~~48% of AUM~~³our minimum volatility funds raising $8.3 billion.

1	~~Simfund~~

•

2	~~Lipper FERI~~

3	~~BlackRock; Bloomberg~~

~~Institutional Investors~~

Component Changes in AUM – Institutional
(in millions) 12/31/2012 Net New
Business Adjustments⁽¹⁾ Acquisition⁽²⁾ Market / FX 12/31/2013
Active:

Equity
$ 129,024    $ (16,504 ) $ —    $ —    $ 26,206    $ 138,726
Fixed income
518,102    (3,560 ) —    —    (9,433 ) 505,109
Multi-asset class
166,708    28,955    3,335    —    16,278    215,276
Alternatives
70,861    (9,819 ) —    10,836    1,421    73,299
Active subtotal
884,695    (928 ) 3,335    10,836    34,472    932,410
Non-ETF Index:

Equity
1,017,081    8,001    (18,238 ) —    250,955    1,257,799
Fixed income
409,943    8,321    (4,723 ) —    (6,774 ) 406,767
Multi-asset class
9,545    (1,833 ) —    —    (138 ) 7,574
Alternatives
4,912    777    —    —    (179 ) 5,510
Non-ETF Index subtotal
1,441,481    15,266    (22,961 ) —    243,864    1,677,650
Long-term institutional
$ 2,326,176    $ 14,338    $ (19,626 ) $ 10,836    $ 278,336    $ 2,610,060

~~(1)~~

~~Amounts include $19.6~~

International iShares AUM ended 2015 at $281.1 billion with net inflows of ~~AUM related to fund ranges reclassed from institutional to retail and $6.0~~$32.7 billion ~~of AUM reclassed from non-ETF index equity and~~led by fixed income net inflows of $19.2 billion, primarily into yield-focused categories including high yield and investment grade corporate debt.² Our international Core Series ranges in Canada and Europe demonstrated solid results in their second year, raising a combined $14.1 billion in net inflows as we continue to ~~multi-asset.~~expand our international presence among buy-and-hold investors.

Institutional

~~(2)~~

~~Amounts represent AUM acquired in the MGPA acquisition in October 2013.~~

BlackRock’s institutional AUM is well diversified by both product and region, and we serve institutional investors on six continents in sub-categories including: pensions, endowments and foundations, official institutions, and financial ~~institutions, as described~~institutions.

1	Source: BlackRock; Bloomberg

2	Regional iShares amounts based on jurisdiction of product, not underlying client

Component changes in Institutional long-term AUM for 2015 are presented below.

(in millions)

December 31,
2014

Net Inflows
(Outflows)

Acquisition⁽¹⁾

Market
Change

FX
Impact

December 31,
2015

Active:

Equity

$
125,143

$
(462
)

$
—

$
960

$
(4,199
)

$
121,442

Fixed income

518,590

5,690

—

(1,220
)

(8,632
)

514,428

Multi-asset class

242,913

18,409

—

1,074

(10,355
)

252,041

Alternatives

72,514

3,109

560

(175
)

(1,067
)

74,941

Active subtotal

959,160

26,746

560

639

(24,253
)

962,852

Index:

Equity

1,335,456

(33,711
)

—

6,157

(22,483
)

1,285,419

Fixed income

467,572

(10,169
)

—

2,317

(18,623
)

441,097

Multi-asset class

7,810

(1,009
)

—

(289
)

(254
)

6,258

Alternatives

5,286

1,793

—

(924
)

(152
)

6,003

Index subtotal

1,816,124

(43,096
)

—

7,261

(41,512
)

1,738,777

Total Institutional

$
2,775,284

$
(16,350
)

$
560

$
7,900

$
(65,765
)

$
2,701,629

(1)	Amounts represent $560 million of AUM acquired in the Infraestructura Institucional acquisition in October 2015.

Institutional active AUM ended ~~the quarter~~2015 at ~~$932.4~~$962.9 billion, ~~up $47.7~~reflecting $26.8 billion ~~or 5%, since year-end 2012.~~of net inflows. Institutional active represented ~~23%~~22% of long-term AUM and ~~21%~~20% of long-term base fees. Growth in AUM reflected continued strength in multi-asset class products with net inflows of ~~$29.0~~$18.4 billion ~~largely from defined contribution plans into target date offerings. Multi-asset class~~reflecting ongoing demand for solutions offerings and the LifePath^® target-date suite. Our top-performing fixed income platform generated net inflows of $5.7 billion,diversified across exposures. Alternatives net inflows of $3.1 billion were ~~offset~~led by ~~equity~~inflows into infrastructure and alternatives solutions offerings. In addition, 2015 was another strong fundraising year for illiquid alternatives, and we raised over $5 billion in new commitments, which will be a source of future net inflows. Equity net outflows of ~~$16.5~~$0.5 billion ~~with 70% of outflows coming from~~reflected fundamental ~~strategies, and fixed income~~ net outflows of ~~$3.6~~$2.2 billion, ~~largely from U.S. intermediate duration mandates. Alternatives~~which were partially offset by scientific net inflows of $1.7 billion.

Institutional index AUM totaled $1.739 trillion at December 31, 2015, reflecting net outflows of ~~$9.8~~$43.1 billion. Equity net outflows of $33.7 billion were primarily due to ~~active currency redemptions~~low-fee global and regional index equity outflows as clients looked to re-allocate, re-balance or meet their cash needs. Fixed income net outflows of ~~$6.5~~$10.2 billion ~~and return of capital on opportunistic funds of $2.5 billion.~~

~~Institutional non-ETF index~~ ~~AUM totaled $1.678 trillion at December 31, 2013, reflecting net inflows of $15.3 billion. Flows~~ were ~~led by fixed income with net inflows of $8.3 billion, primarily into~~concentrated in local currency ~~U.S. targeted duration and global bond~~ mandates, ~~as clients rebalanced portfolios and captured gains in equity markets. Equities saw net inflows of $8.0 billion, primarily into global mandates, as clients increasingly looked~~linked to ~~use passive vehicles for broad macro exposure.~~outflows from liability management strategies. Institutional ~~non-ETF~~ index represented ~~42%~~40% of long-term AUM at December 31, ~~2013~~2015 and accounted for 10% of long-term base fees for ~~2013.~~2015.

The Company’s institutional clients consist of the following:

Pensions, Foundations and Endowments. BlackRock is among the world’s largest managers of pension plan assets with $1.847 trillion, or 68%, of long-term institutional AUM managed for defined benefit, defined contribution and other pension plans for corporations, governments and unions at December 31, 2015. The market landscape is shifting from defined benefit to defined contribution, driving strong flows in our defined contribution channel, which had $36.2 billion of long-term net inflows for the year, or 6% organic growth, driven by continued demand for our LifePath target-date suite. Defined contribution represented $630.9 billion of total pension AUM, and we remain well positioned to capitalize on the on-going evolution of the defined contribution market and demand for outcome-oriented investments. An additional $52.8 billion, or 2% of long-term institutional AUM, was managed for other tax-exempt investors, including charities, foundations and endowments.

•

~~Pensions, Foundations and Endowments.~~ BlackRock is among the largest managers of pension plan assets in the world with $1.718 trillion, or 66%, of long-term institutional AUM managed for defined benefit, defined contribution and other pension plans for corporations, governments and unions at December 31, 2013.

Retirement is a key theme as longevity, aging populations and changing demographics worldwide are driving investment decisions. The market landscape is shifting from defined benefit to defined contribution, driving strong flows in our defined contribution channel, which had $30.0 billion of long-term net inflows for the year, or 7% organic growth. Defined contribution net inflows were led by $20.5 billion into multi-asset class products, with our~~LifePath~~^® ~~target-date suite serving as a key component of our retirement solutions. In 2013, our~~~~LifePath~~ franchise raised $23.9 billion in net inflows, a 38% organic growth rate. We ended 2013 with $526.4 billion in defined contribution AUM, and remain well positioned to capitalize on the on-going evolution of the defined contribution market and demand for outcome-oriented investments. An additional $59.9 billion, or 3% of long-term institutional AUM, was managed for other tax-exempt investors, including charities, foundations and endowments.

Official Institutions. We also managed $185.0 billion, or 7%, of long-term institutional AUM for official institutions, including central banks, sovereign wealth funds, supranationals, multilateral entities and government ministries and agencies at year-end 2015. These clients often require specialized investment advice, the use of customized benchmarks and training support.

•

~~Official Institutions.~~ We also managed $221.5 billion, or 8%, of long-term institutional AUM, for official institutions, including central banks, sovereign wealth funds, supranationals, multilateral entities and government ministries and agencies at year-end 2013. This specialty client group grew with long-term net new business of $22.7 billion for the year, primarily into passive equity mandates. These clients often require specialized investment policy advice, the use of customized benchmarks and training support.

•

~~Financial and Other Institutions.~~ BlackRock is a top independent manager of assets for insurance companies, which accounted for $237.3 billion, or 9%, of institutional long-term AUM at year-end 2013, and contributed $5.7 billion of long-term net inflows. Assets managed for other taxable institutions, including corporations, banks and third-party fund sponsors for which we provide sub-advisory services, totaled $373.3 billion, or 14%, of long-term institutional AUM at year-end.

Financial and Other Institutions. BlackRock is a top independent manager of assets for insurance companies, which accounted for $237.7 billion, or 9%, of institutional long-term AUM at year-end 2015. Assets managed for other taxable institutions, including corporations, banks and third-party fund sponsors for which we provide sub-advisory services, totaled $379.4 billion, or 14%, of long-term institutional AUM at year-end.

~~PRODUCT TYPE~~Product Type

Component changes in AUM by product type and investment style for ~~2013~~2015 are presented below.


(in millions)	12/31/2012		Net New Business			Adjustments⁽¹⁾			Acquisitions⁽²⁾		Market / FX			12/31/2013		December 31, 2014		Net Inflows (Outflows)			Acquisitions⁽¹⁾		Market Change			FX Impact			December 31, 2015
Equity:
Active	$	287,215	$	(15,377	)	$	—		$	—	$	45,424		$	317,262	$	292,802	$	4,210		$	—	$	(7,738	)	$	(7,955	)	$	281,319
iShares		534,648		74,119			—			13,021		96,347			718,135		790,067		78,408			—		(32,349	)		(12,970	)		823,156
Non-ETF index																	1,368,242		(29,840	)		—		4,815			(23,920	)		1,319,297
Equity subtotal																	2,451,111		52,778			—		(35,272	)		(44,845	)		2,423,772
Fixed income:
Active		656,331		10,443			—			—		(14,565	)		652,209		701,324		35,928			—		(6,907	)		(10,692	)		719,653
iShares		192,852		(7,450	)		—			1,294		(7,861	)		178,835		217,671		50,309			—		(7,508	)		(6,282	)		254,190
Non-ETF index																	474,658		(9,293	)		—		2,313			(19,153	)		448,525
Fixed income subtotal																	1,393,653		76,944			—		(12,102	)		(36,127	)		1,422,368
Multi-asset class		267,748		42,298			5,998			—		25,170			341,214		377,837		17,167			366		(7,413	)		(11,621	)		376,336
Alternatives:
Core		68,367		2,703			—			10,972		2,984			85,026		88,006		4,080			1,853		(213	)		(1,641	)		92,085
Currency and commodities		41,428		(8,653	)		—			1,645		(8,332	)		26,088		23,234		1,045			—		(3,223	)		(302	)		20,754
Subtotal		2,048,589		98,083			5,998			26,932		139,167			2,318,769
Non-ETF Index:
Equity		1,023,638		10,515			(5,172	)		—		253,317			1,282,298
Fixed income		410,139		8,515			(826	)		—		(6,686	)		411,142
Subtotal non-ETF index		1,433,777		19,030			(5,998	)		—		246,631			1,693,440
Alternatives subtotal																	111,240		5,125			1,853		(3,436	)		(1,943	)		112,839
Long-term		3,482,366		117,113			—			26,932		385,798			4,012,209		4,333,841		152,014			2,219		(58,223	)		(94,536	)		4,335,315
Cash management		263,743		10,056			—			—		1,755			275,554		296,353		7,510			—		267			(4,246	)		299,884
Advisory		45,479		(7,442	)		—			—		(1,712	)		36,325		21,701		(9,629	)		—		461			(2,320	)		10,213
Total AUM	$	3,791,588	$	119,727		$	—		$	26,932	$	385,841		$	4,324,088	$	4,651,895	$	149,895		$	2,219	$	(57,495	)	$	(101,102	)	$	4,645,412

(1)	~~Amounts include $6.0 billion of AUM reclassed from non-ETF index equity and fixed income to multi-asset.~~

~~(2)~~

Amounts represent ~~$16.0~~$1.3 billion of AUM acquired in the ~~Credit Suisse ETF~~BKCA acquisition in ~~July 2013 and $11.0 billion~~March 2015, $560 million of AUM acquired in the ~~MGPA~~Infraestructura Institucional acquisition in October ~~2013.~~2015 and $366 million of AUM acquired in the FutureAdvisor acquisition in October 2015. The FutureAdvisor acquisition amount does not include AUM that was held in iShares holdings.

Long-term product offerings include active and ~~passive~~index strategies. Our active strategies seek to earn attractive returns in excess of a market benchmark or performance hurdle while maintaining an appropriate risk profile. We offer two types of active strategies: those that rely primarily on fundamental research and those that utilize primarily quantitative models to drive portfolio construction. In contrast, ~~passive~~index strategies seek to closely track the returns of a corresponding index, generally by investing in substantially the same underlying securities within the index or in a subset of those securities selected to approximate a similar risk and return profile of the index. ~~Passive~~Index strategies include both our ~~institutional~~ non-ETF index products andiShares ETFs.

Although many clients use both active and ~~passive~~index strategies, the application of these strategies may differ. For example, clients may use index products to gain exposure to a market or asset class. In addition, institutional non-ETF index assignments tend to be very large (multi-billion dollars) and typically reflect low fee rates. This has the potential to exaggerate the significance of net flows in institutional index products on BlackRock’s revenues and earnings.

Equity

Year-end ~~2013~~2015 equity AUM ~~of $2.318~~totaled $2.424 trillion, ~~increased by $472.2 billion, or 26%, from the end of 2012, largely due to flows into U.S. and a range of international equity mandates~~ reflecting ~~investors’ increased risk appetite and the effect of higher market valuations. Equity AUM growth included $69.3 billion in net new business and $13.0 billion in new~~

~~assets related to the Credit Suisse ETF acquisition in July 2013. Net new business of $69.3 billion was driven by~~ net inflows of ~~$74.1~~$52.8 billion. Net inflows included $78.4 billion and ~~$10.5~~$4.2 billion intoiShares and ~~non-ETF index accounts,~~active products, respectively. ~~Passive~~iShares net inflows were driven by the Core Series and flows into broad developed market equity exposures, and active net inflows reflected demand for international equities. iShares and active net inflows were partially offset by ~~active~~non-ETF index net outflows of ~~$15.4 billion, with net outflows of $9.9 billion and $5.5 billion from fundamental and scientific active equity products, respectively.~~$29.8 billion.

BlackRock’s effective fee rates fluctuate due to changes in AUM mix. Approximately half of BlackRock’s equity AUM is tied to international markets, including emerging markets, which tend to have higher fee rates than ~~similar~~ U.S. equity strategies. Accordingly, fluctuations in international equity markets, which do not consistently move in tandem with U.S. markets, may have a greater impact on BlackRock’s effective equity fee rates and revenues.

Fixed Income

Fixed income AUM ended ~~2013~~2015 at ~~$1.242~~$1.422 trillion, ~~declining $17.1~~increasing $28.7 billion, or 1%2%, ~~relative to~~from December 31, ~~2012.~~2014. The ~~decline~~increase in AUM reflected ~~$29.1~~$76.9 billion in net inflows, partially offset by $48.2 billion in net market depreciation and foreign exchange ~~losses, partially offset by $11.5~~movements. In 2015, active net inflows of $35.9 billion ~~in net new business and $1.3 billion in new assets related to the Credit Suisse ETF acquisition. In 2013, net new business was led by~~were diversified across fixed income offerings, with strong flows into our unconstrained, ~~fixed income offerings, such as~~total return and high yield strategies. Flagship funds in these product areas include our unconstrained Strategic Income Opportunities ~~fund, which had~~and Fixed Income Strategies funds, with net inflows of ~~$6.9~~$7.0 billion ~~during the year, despite overall industry outflows from U.S. bond funds. Fixed income~~and $3.7 billion, respectively; our Total Return fund with net inflows of ~~$14.8~~$2.7 billion; and our High Yield Bond fund with net inflows of $3.5 billion. Fixed income iShares net inflows of $50.3 billion were led by flows into core, corporate and ~~$8.5 billion into fundamental~~high yield bond funds. Active and ~~non-ETF index products, respectively,~~iShares net inflows were partially offset by non-ETF index net outflows of ~~$7.5 billion and $4.3 billion from~~~~iShares~~ ~~and model based strategies, respectively.~~

$9.3 billion.

Multi-Asset Class

Component Changes in Multi-Asset Class AUM
(in millions) 12/31/2012 Net New
Business Adjustments⁽¹⁾ Market / FX 12/31/2013
Asset allocation and balanced
$ 140,160    $ 15,904    $ —    $ 13,540    $ 169,604
Target date/risk
69,884    26,073    5,998    9,453    111,408
Fiduciary
57,704    321    —    2,177    60,202
Multi-asset
$ 267,748    $ 42,298    $ 5,998    $ 25,170    $ 341,214

~~(1)~~

~~Amounts include $6.0 billion of AUM reclassed from non-ETF index equity and fixed income to multi-asset.~~

BlackRock’s multi-asset class team manages a variety of balanced funds and bespoke mandates for a diversified client base that leverages our broad investment expertise in global equities, bonds, currencies ~~bonds~~ and commodities, and our extensive risk management capabilities. Investment solutions might include a combination of long-only portfolios and alternative investments as well as tactical asset allocation overlays.

~~Flows~~6

Component changes in multi-asset class AUM for 2015 are presented below.

(in millions)	December 31, 2014		Net Inflows (Outflows)		Acquisition⁽¹⁾		Market Change			FX Impact			December 31, 2015
Asset allocation and balanced	$	183,032	$	12,926	$	—	$	(6,731	)	$	(3,391	)	$	185,836
Target date/risk		128,611		218		—		(1,308	)		(1,857	)		125,664
Fiduciary		66,194		3,985		—		627			(6,373	)		64,433
FutureAdvisor		—		38		366		(1	)		—			403
Multi-asset	$	377,837	$	17,167	$	366	$	(7,413	)	$	(11,621	)	$	376,336

(1)	Amounts represent $366 million of AUM acquired in the FutureAdvisor acquisition in October 2015. The FutureAdvisor acquisition amount does not include AUM that was held in iShares holdings.

Multi-asset class net inflows reflected ongoing institutional demand for our solutions-based advice with ~~$27.1~~$17.4 billion ~~or 64%,~~ of net inflows coming from institutional clients. Defined contribution plans of institutional clients remained a significant driver of flows, and contributed ~~$20.5~~$7.3 billion to institutional multi-asset class net new business in ~~2013,~~2015, primarily into target date and target risk product offerings. Retail net ~~inflows~~outflows of ~~$14.8~~$1.3 billion were ~~driven by particular~~primarily due to a large single-client transition out of mutual funds into a series of iShares across asset classes. Notwithstanding this transition, retail flows reflected demand for ~~our Global Allocation suite, which saw $6.3 billion of net inflows, and~~ our Multi-Asset Income fund family, which raised ~~$4.1~~$4.6 billion in ~~2013.~~2015.

The Company’s multi-asset class strategies include the following:

Asset allocation and balanced products represented 49% of multi-asset class AUM at year-end, with growth in AUM driven by net new business of $12.9 billion. These strategies combine equity, fixed income and alternative components for investors seeking a tailored solution relative to a specific benchmark and within a risk budget. In certain cases, these strategies seek to minimize downside risk through diversification, derivatives strategies and tactical asset allocation decisions. Flagship products in this category include our Global Allocation and Multi-Asset Income suites.

•

~~Asset allocation and balanced products~~ represented 50% of multi-asset class AUM at year-end, with growth in AUM driven by net new business of $15.9 billion. These strategies combine equity, fixed income and alternative components for investors seeking a tailored solution relative to a specific benchmark and within a risk budget. In certain cases, these strategies seek to

minimize downside risk through diversification, derivatives strategies and tactical asset allocation decisions. Flagship products in this category include our Global Allocation and Multi-Asset Income suites.•

•

Target date and target risk ~~products~~ ~~grew 37% organically in 2013.~~product flows were impacted by a large single-client transition out of mutual funds into a series of iShares across asset classes. Institutional investors represented ~~90%~~95% of target date and target risk AUM, with defined contribution plans accounting for over ~~80%~~88% of AUM. ~~The remaining 10% of target date and target risk AUM consisted of retail client investments.~~ Flows were driven by defined contribution investments in ourLifePath andLifePath Retirement Income^® ~~offerings, and included $10.4 billion of assets related to two large~~ offerings. LifePath ~~open-architecture assignments where we provide customized asset allocation glidepaths, direct asset management and model the use of third-party managers.~~~~LifePath~~ products utilize a proprietary asset allocation model that seeks to balance risk and return over an investment horizon based on the investor’s expected retirement timing.

•

~~Fiduciary management services~~ are complex mandates in which pension plan sponsors or endowments and foundations retain BlackRock to assume responsibility for some or all aspects of plan management. These customized services require strong partnership with the clients’ investment staff and trustees in order to tailor investment strategies to meet client-specific risk budgets and return objectives.

Fiduciary management services are complex mandates in which pension plan sponsors or endowments and foundations retain BlackRock to assume responsibility for some or all aspects of plan management. These customized services require strong partnership with the clients’ investment staff and trustees in order to tailor investment strategies to meet client-specific risk budgets and return objectives.

FutureAdvisor is a leading digital wealth management platform, acquired by BlackRock in October 2015. FutureAdvisor operates as a service within BRS, providing financial institutions with high quality, technology-enabled advice capabilities to improve their clients’ investment experience. As consumers increasingly engage with technology to invest, BlackRock and FutureAdvisor are positioned to empower distribution partners to better serve their clients by combining FutureAdvisor’s high-quality technology-enabled advice with BlackRock’s multi-asset investment capabilities, proprietary technology and risk analytics

Alternatives

~~Alternatives~~

Component Changes in Alternatives AUM
(in millions) 12/31/2012 Net New
Business Acquisitions⁽¹⁾ Market / FX 12/31/2013
Core:

Hedge Funds
$ 26,636    $ 4,440    $ —    $ 1,102    $ 32,178
Funds of Funds
29,083    (1,358 ) —    1,111    28,836
Real Estate and Hard Assets
12,648    (379 ) 10,972    771    24,012
Subtotal Core
68,367    2,703    10,972    2,984    85,026
Currency and commodities
41,428    (8,653 ) 1,645    (8,332 ) 26,088
Alternatives
$ 109,795    $ (5,950)    $ 12,617    $ (5,348)    $ 111,114

~~(1)~~

~~Amounts represent AUM acquired in the Credit Suisse ETF acquisition in July 2013 and AUM acquired in the MGPA acquisition in October 2013.~~

~~The~~ BlackRock Alternative Investors (“BAI”) ~~group coordinates our alternative investment efforts, including product management, business development~~focuses on sourcing and managing high-alpha investments with lower correlation to public markets and developing a holistic approach to address client ~~service.~~needs in alternatives investing. Our alternatives products fall into two main categories — 1) core, and 2) currency and commodities. Core includes alternative solutions, direct hedge funds, ~~funds of funds (hedge funds~~hedge fund and private ~~equity)~~equity solutions (funds of funds), opportunistic private equity and credit, real estate and ~~hard asset~~infrastructure offerings. The products offered under the BAI umbrella are described below.

~~We continued~~In 2015, BlackRock returned $3.3 billion of capital to ~~make significant investments~~investors, which is included in ~~our alternatives platform as demonstrated by our acquisition~~outflows. In addition, we raised $5.7 billion of ~~MGPA, which doubled the size~~new commitments in 2015 across a variety of ~~our~~strategies, including private equity solutions, opportunistic credit, alternative solutions, real estate ~~investment advisory platform~~and infrastructure. At year-end, we had $10.9 billion of non-fee paying, unfunded commitments, which are expected to be deployed in ~~addition to extending our real estate debt and equity investment capabilities to Asia-Pacific and Europe, and the build out of our alternatives retail platform, which now stands at $16.2 billion~~future years; these commitments are not included in ~~AUM.~~ AUM until they are invested.

We believe that as alternatives become more conventional and investors adapt

their asset allocation strategies, ~~to best meet their investment objectives, they~~investors will further increase their use of alternative investments to complement core ~~holdings, and as~~holdings. As a top 10ten alternative provider⁴³ our highly diversified ~~$111.1~~$112.8 billion alternatives franchise is well positioned to meet growing demand from both institutional and retail investors.

~~Core.~~

3	Source: Towers Watson, July 2015

Component changes in alternatives AUM for 2015 are presented in the table below.

(in millions)	December 31, 2014		Net Inflows (Outflows)			Acquisitions⁽¹⁾		Market Change			FX Impact			December 31, 2015		Memo: Return of Capital⁽²⁾
Core:
Alternative solutions	$	528	$	1,367		$	—	$	(9	)	$	—		$	1,886	$	(127	)
Hedge funds:
Direct hedge fund strategies		31,996		(452	)		—		508			(1,001	)		31,051		—
Hedge fund solutions		19,583		506			—		59			(31	)		20,117		(47	)
Hedge funds subtotal		51,579		54			—		567			(1,032	)		51,168		(47	)
Illiquid and opportunistic:
Private equity solutions		12,340		690			—		(475	)		(146	)		12,409		(1,109	)
Opportunistic private equity and credit strategies		802		295			1,293		(18	)		-			2,372		(436	)
Illiquid and opportunistic subtotal		13,142		985			1,293		(493	)		(146	)		14,781		(1,545	)
Real assets:
Real estate		22,001		(481	)		—		(313	)		(445	)		20,762		(1,463	)
Infrastructure		756		2,155			560		35			(18	)		3,488		(76	)
Real assets subtotal		22,757		1,674			560		(278	)		(463	)		24,250		(1,539	)
Core subtotal		88,006		4,080			1,853		(213	)		(1,641	)		92,085		(3,258	)
Currency and commodities		23,234		1,045			—		(3,223	)		(302	)		20,754		—
Alternatives	$	111,240	$	5,125		$	1,853	$	(3,436	)	$	(1,943	)	$	112,839	$	(3,258	)

(1)	• Amounts represent $1.3 billion of AUM acquired in the BKCA acquisition in March 2015 and $560 million of AUM acquired in the Infraestructura Institucional acquisition in October 2015.

(2)

~~Hedge Funds~~ net inflows of $4.4 billion were led by net inflows of $5.9 billion into single-strategy hedge funds. Single-strategy net inflows were driven by net inflows of $4.6 billion into retail alternative mutual funds, paced by our zero-duration liquid Global Long/Short Credit fund. Single-strategy net inflows were offset by return

Return of capital of $2.5 billion on opportunistic funds, largely due to a partial liquidation of an opportunistic 2007 vintage closed-end mortgage fund. Hedge fund AUM includes a variety of single-strategy, multi-strategy, and global macro, as well as portable alpha, distressed and opportunistic offerings. Products include both open-end hedge funds and similar products, and closed-end funds created to take advantage of specific opportunities over a defined, often longer-term investment horizon.is included in outflows.

Core.

•

~~Funds of Funds~~ ~~AUM included $16.9 billion in funds of hedge funds and hybrid vehicles and $11.9 billion in private equity funds of funds. Net outflows of $1.4 billion were predominantly from funds of hedge funds.~~

•

~~Real Estate and Hard Assets~~ AUM grew 90% compared to year-end 2012, primarily due to $11.0 billion in new assets from the acquisition of MGPA. Offerings include high yield debt and core, value-added and opportunistic equity portfolios and renewable power funds. We continued to grow our real estate platform and product offerings with the acquisition of MGPA.

~~During 2013, we secured $6~~Alternative Solutions represent holistic, highly customized portfolios of alternative investments. In 2015, alternative solutions portfolios had $1.4 billion of ~~alternatives commitments in offerings including infrastructure, strategic credit and~~net inflows.

Hedge Funds net inflows of $0.1 billion were led by net inflows of $0.5 billion into hedge fund solutions, our funds of hedge funds offering, partially offset by $0.4 billion of net outflows from direct hedge funds. ~~The majority~~Direct hedge fund AUM includes a variety of ~~these commitments are unfunded~~single- and ~~are expected~~multi-strategy offerings.

Illiquid and Opportunistic AUM included $12.4 billion in private equity solutions and $2.4 billion in opportunistic private equity and credit offerings. Net inflows of $1.0 billion were predominantly into private equity solutions. Our acquisition of certain assets of BKCA further enhanced our credit platform through the addition of a middle market, private credit capability.

Real Assets AUM totaled $24.3 billion, up $1.5 billion, or 7%. Real assets, which include infrastructure and real estate, saw net inflows of $1.7 billion. In 2015, we continued to ~~be deployed~~build our infrastructure capabilities through the acquisition of Infraestructura Institucional, a leading infrastructure investment business in ~~future quarters.~~Mexico. This acquisition advances our growth strategy in Mexico and Latin America and furthers our commitment to being a leader in infrastructure investing.

Currency and Commodities.

AUM in currency and commodities declined ~~37% compared to~~11% from year-end ~~2012,~~2014, reflecting ~~net outflows~~portfolio valuation declines of ~~$8.7 billion, primarily from low fee active currency mandates.~~$3.5 billion. Currency and commodities products include a range of active and passive products. OuriShares commodities products represented ~~$16.1~~$12.5 billion of AUM ~~including $1.6 billion acquired from Credit Suisse,~~ and are not eligible for performance fees.

Cash Management

Cash management AUM totaled ~~$275.6~~$299.9 billion at December 31, ~~2013, of which $114.7 billion was in prime strategies,~~2015, up ~~$11.8~~$3.5 billion, or 4%1%, from year-end ~~2012.~~2014. Cash management products include taxable and tax-exempt money market funds and customized separate accounts. Portfolios are denominated in U.S. ~~dollar,~~dollars, Canadian ~~dollar,~~dollars, Australian ~~dollar, Euro~~dollars, Euros or British ~~pound.~~pounds. We generated net inflows of ~~$10.1~~$7.5 billion during ~~2013, and continue to face headwinds around the uncertainty of future regulatory changes and~~2015, a period marked by a near zero interest rate environment. We provided new solutions and choices for our clients by launching ultra-short duration products in the United States, which address the immediate challenge of a continuing low interest rate environment as well as provide valuable investment alternatives in the wake ofBlackRock is working to bring all U.S. money market ~~fund~~funds into full compliance with new regulatory ~~change.~~requirements in advance of the 2016 deadlines, and is actively repurposing and streamlining our product lineup to meet the future requirements of clients. In Europe, we ~~launched~~continue to be a ~~non-rated Euro liquidity fund. Further, some existing~~market leader highlighted by our implementation of the reverse distribution mechanism in our euro funds when faced with negative rates. In November 2015, BlackRock and Bank of America’s asset management business, BofA Global Capital Management (“BACM”) entered into an agreement to transfer to BlackRock investment management responsibilities for approximately $87 billion of AUM in cash products ~~were re-structured with features~~currently managed by BACM. The transaction is expected to ~~address negative yields, should they occur.~~

close in the first half of 2016, subject to customary approvals and closing conditions.

~~CLIENT REGION~~Client Region

AUM by Product Type & Client Region
December 31, 2013

(in millions) Americas EMEA Asia-Pacific Total
Equity
$ 1,467,252    $ 660,602    $ 189,841    $ 2,317,695
Fixed income
702,608    436,124    103,454    1,242,186
Multi-asset class
214,895    110,524    15,795    341,214
Alternatives
56,490    35,923    18,701    111,114
Long-term
2,441,245    1,243,173    327,791    4,012,209
Cash management
189,359    83,207    2,988    275,554
Advisory
24,925    9,397    2,003    36,325
Total
$ 2,655,529    $ 1,335,777    $ 332,782    $ 4,324,088

Component Changes in AUM – Client Region
(in millions) 12/31/2012 Net New
Business Acquisitions⁽¹⁾ Market / FX 12/31/2013
Americas
$ 2,326,482    $ 76,017    $ 4,282    $ 248,748    $ 2,655,529
EMEA
1,158,261    38,743    20,536    118,237    1,335,777
Asia-Pacific
306,845    4,967    2,114    18,856    332,782
Total AUM
$ 3,791,588    $ 119,727    $ 26,932    $ 385,841    $ 4,324,088

~~(1)~~

~~Amounts represent $16.0 billion of AUM acquired in the Credit Suisse ETF acquisition in July 2013 and $11.0 billion of AUM acquired in the MGPA acquisition in October 2013.~~

4	~~Towers Watson, July 2013~~

Our ~~footprint~~footprints in ~~each of these~~the Americas, EMEA and Asia-Pacific regions ~~reflects~~reflect strong relationships with intermediaries and an established ability to deliver our global investment expertise in funds and other products tailored to local regulations and requirements.

~~Americas~~. ~~Net~~8

AUM by product type and client region at December 31, 2015 is presented below.

(in millions)	Americas		EMEA		Asia-Pacific		Total
Equity	$	1,610,776	$	622,744	$	190,252	$	2,423,772
Fixed income		807,722		485,388		129,258		1,422,368
Multi-asset class		233,441		120,362		22,533		376,336
Alternatives		59,644		35,855		17,340		112,839
Long-term		2,711,583		1,264,349		359,383		4,335,315
Cash management		216,079		80,962		2,843		299,884
Advisory		7,364		2,849		—		10,213
Total	$	2,935,026	$	1,348,160	$	362,226	$	4,645,412

Component changes in AUM by client region for 2015 are presented below.

(in millions)	December 31, 2014		Net Inflows			Acquisitions⁽¹⁾		Market Change			FX Impact			December 31, 2015
Americas	$	2,867,353	$	154,742		$	2,219	$	(66,714	)	$	(22,574	)	$	2,935,026
EMEA		1,413,441		(2,912	)		—		10,631			(73,000	)		1,348,160
Asia-Pacific		371,101		(1,936	)		—		(1,411	)		(5,528	)		362,226
Total	$	4,651,895	$	149,894		$	2,219	$	(57,494	)	$	(101,102	)	$	4,645,412

(1)

Amounts represent $1.3 billion of AUM acquired in the BKCA acquisition in March 2015, $560 million of AUM acquired in the Infraestructura Institucional acquisition in October 2015 and $366 million of AUM acquired in the FutureAdvisor acquisition in October 2015. The FutureAdvisor acquisition amount does not include AUM that was held in iShares holdings.

Americas.

Long-term net new business ~~in long-term products~~ of ~~$72.1~~$144.6 billion was ~~driven by equity and multi-asset class~~positive across all asset classes, with net inflows of ~~$53.3~~$84.6 billion, $49.7 billion, $6.3 billion and ~~$36.1~~$4.0 billion ~~respectively, which were partially offset by~~in equity, fixed income, multi-asset class and alternatives ~~net outflows of $13.0 billion and $4.3 billion,~~products, respectively. During the year, we served clients through offices in 3331 states in the United States as well as Canada, Mexico, Brazil, Chile, Colombia and Spain.

EMEA.

During the year, clients awarded us long-term net new business of ~~$41.3~~$8.7 billion, including inflows from investors in 2223 countries across the region. EMEA net new business was led by ~~equity~~fixed income net inflows of ~~$20.1~~$10.8 billion, ~~as clients began to re-risk in the face of improving confidence in European markets.~~reflecting strong flows into iShares and unconstrained fixed income. Our offerings include fund families in the United Kingdom, the Netherlands, Luxembourg and Dublin andiShares listed on stock exchanges throughout Europe as well as separate accounts and pooled investment products.

~~Asia-Pacific~~.Asia-Pacific.

Clients in the Asia-Pacific region are served through offices in Japan, Australia, Hong Kong, Malaysia, Singapore, Taiwan, ~~and~~ Korea, ~~and joint ventures in~~ China, and India. Long-term net ~~new business~~outflows of ~~$3.8~~$1.3 billion ~~was led by fixed~~were due to equity net outflows of $20.2 billion, primarily from institutional index mandates. Fixed income, ~~and~~ multi-asset class and alternatives saw net inflows of ~~$8.7~~$16.5 billion, $2.3 billion and ~~$1.2 billion, respectively, partially offset by equity and alternatives net outflows of $4.2 billion and $1.9~~$0.1 billion, respectively.

~~INVESTMENT PERFORMANCE~~

Investment Performance

Investment performance across active and passive products as of December 31, ~~2013~~2015 was as follows:


	One-year period			Three-year period			Five-year period			One-year period			Three-year period			Five-year period
Fixed Income:
Actively managed products above benchmark or peer median
Actively managed AUM above benchmark or peer median
Taxable		70	%		82	%		87	%		69	%		91	%		92	%
Tax-exempt		48	%		65	%		65	%		47	%		55	%		72	%
Passively managed products within or above tolerance		97	%		99	%		91	%
Index AUM within or above tolerance											94	%		99	%		99	%
Equity:
Actively managed products above benchmark or peer median
Actively managed AUM above benchmark or peer median
Fundamental		52	%		49	%		50	%		76	%		60	%		71	%
Scientific		93	%		91	%		85	%		65	%		90	%		95	%
Passively managed products within or above tolerance		94	%		98	%		94	%
Index AUM within or above tolerance											97	%		96	%		97	%

Product Performance Notes~~.Past~~. Past performance is not indicative of future results. Except as specified, the performance information shown is as of December 31, ~~2013~~2015 and is based on ~~preliminarily~~preliminary data available at that time. The performance data shown reflects information for all actively and passively managed equity and fixed income accounts, including U.S. registered investment companies, European-domiciled retail funds and separate accounts for which performance data is available, including performance data

for high net worth accounts available as of November 30, ~~2013.~~2015. The performance data does not include accounts terminated prior to December 31, ~~2013~~2015 and accounts for which data has not yet been verified. If such accounts had been included, the performance data provided may have substantially differed from that shown.

Performance comparisons shown are gross-of-fees for ~~U.S. retail,~~ institutional and high net worth separate accounts, ~~as well as EMEA institutional separate accounts,~~ and ~~net of fee~~net-of-fees for ~~European domiciled~~ retail funds. The performance tracking shown for ~~institutional~~ index accounts is based on ~~gross-of-fee~~gross-of-fees performance and includes all institutional accounts and alliSharesfunds globally using an index strategy. AUM information is based on AUM available as of December 31, ~~2013~~2015 for each account or fund in the

asset class shown without adjustment for overlapping management of the same account or fund. Fund performance reflects the reinvestment of dividends and distributions. The information reported may differ slightly from that reported previously due to the increased number of accounts that have been verified since the last performance disclosure. BlackRock considers these differences to be not material.

Source of performance information and peer medians is BlackRock, Inc. and is based in part on data from Lipper Inc. for U.S. funds and Morningstar, Inc. for non-U.S. funds.

~~BLACKROCK SOLUTIONS~~

BlackRock Solutions

BRS offers investment management technology systems, risk management services and advisory services on a fee basis.Aladdin is our proprietary technology platform, which serves as the risk management system for both BlackRock and a growing number of sophisticated institutional investors around the world. BRS also offers comprehensive risk reporting capabilities via the Green ~~Package~~^®Package® and risk management advisory services; interactive fixed income analytics through our web-based calculator, ~~AnSer~~^®AnSer®; middle and back office outsourcing services; and investment accounting. BRS’ Financial Markets Advisory (“FMA”) group ~~provides services such as valuation~~advises global financial institutions, regulators, and government entities on complex financial and risk ~~assessment of illiquid assets, portfolio restructuring, workouts~~issues though core competencies across capital markets, data analysis and ~~dispositions of distressed assets~~modeling; strategic advice regarding regulatory compliance, risk management, business transformations and transaction support; and integrated project management. FutureAdvisor, acquired by BlackRock in 2015, is a digital wealth management platform operating within BRS that provides financial ~~and balance sheet strategies, for a wide range of global clients.~~institutions with high quality, technology-enabled advice capabilities to improve their clients’ investment experience.

~~BlackRock Solutions~~BRS record revenues of ~~$577~~$646 million were up ~~11% year over year. Our~~2% year-over-year. Aladdin ~~business,~~, which represented ~~73%~~82% of BRS revenue for the year, ~~signed more than 15 new clients in 2013, and~~ continues to benefit from trends favoring global investment platform consolidation and multi-asset risk solutions.Aladdin ~~business~~ assignments are typically long-term contracts that provide significant recurring revenue.

Our FMA group ~~signed more than 50 new assignments during the year and~~ continued to post ~~strong~~solid revenues, even as the business transitions from a “crisis management” emphasis to a more institutionalized advisory business model, with a strong focus on helping clients navigate and implement requirements for the ~~new~~evolving regulatory environment. Advisory AUM decreased ~~20%~~ to ~~$36.3~~$10.2 billion, driven by ~~$7.4~~$9.6 billion of planned client distributions reflecting our continued success in disposing of assets for clients at, or above, targeted levels.

At year-end, BRS served clients, including banks, insurance companies, official institutions, pension funds, asset managers and other institutional investors across North America, Europe, Asia and Australia.

~~SECURITIES LENDING~~Securities Lending

Securities lending is managed by a dedicated team, supported by quantitative analysis, proprietary technology and disciplined risk management. BlackRock receives both cash (primarily for U.S. domiciled portfolios) and noncash collateral under securities lending arrangements. The cash management team invests the cash we receive as collateral for securities on loan in other portfolios. Fees for securities lending for U.S. domiciled portfolios can be structured as a share of earnings, ~~and/~~or as a management fee based on a percentage of the value of the cash ~~collateral.~~collateral or both. The value of the securities on loan and the revenue earned isare captured in the corresponding asset class being managed. The value of the collateral is not included in AUM.

Outstanding loan balances ended the year at approximately ~~$156~~$218 billion, up from ~~$134~~$187 billion at year-end ~~2012.~~2014. Liability spreads ~~declined from elevated 2012 levels, as the proportion of “special collateral,” securities commanding premium lending fees, declined due~~were generally flat compared to ~~low idiosyncratic risk, low single stock volatility and lack of M&A activity.~~2014 levels.

BlackRock employs a conservative investment style for cash and securities lending collateral that emphasizes quality, liquidity and interest rate risk management. Disciplined risk management, including a rigorous credit surveillance process, is an integral part of the investment process. BlackRock’s Cash Management Credit Committee has established risk limits, such as aggregate issuer exposure limits and maturity limits, across many of the products BlackRock manages, including over all of its cash management products. In the ordinary course of our business, there may be instances when a portfolio may exceed an internal risk limit or when an internal risk limit may be changed. No such instances, individually or in the aggregate, have been material to the Company. To the extent that daily ~~evaluation/~~evaluation and reporting of the profile of the portfolios ~~identifies~~identify that a limit has been exceeded, the relevant portfolio will be adjusted. To the extent a portfolio manager would like to obtain a temporary waiver of a risk limit, the portfolio manager must obtain approval from the credit research team, which is independent from the cash management portfolio managers. While a risk limit may be waived temporarily, such ~~temporary~~ waivers are infrequent.

~~RISK~~Risk & ~~QUANTITATIVE ANALYSIS~~Quantitative Analysis

Across all asset classes, in addition to the efforts of the portfolio management teams, the Risk & Quantitative Analysis (“RQA”) group at BlackRock draws on extensive analytical systems and proprietary and third-party data to identify, measure and manage a wide range of risks. RQA provides risk management advice and independent risk oversight of the investment management processes, identifies and helps manage counterparty and operational risks, coordinates standards for firm wide investment performance measurement and determines risk management-related analytical and information requirements. Where appropriate, RQA will work with portfolio managers and developers to facilitate the development or improvement of risk models and analytics.

COMPETITION

BlackRock competes with investment management firms, mutual fund complexes, insurance companies, banks, brokerage firms and other financial institutions that offer products that are similar to, or alternatives to, those offered by BlackRock. In order to grow its business, BlackRock must

be able to compete effectively for AUM. Key competitive factors include investment performance track records, the efficient delivery of beta for ~~passively managed~~index products, investment style and discipline, client service and brand name recognition. Historically, the Company has competed principally on the basis of its long-term investment performance track record, its investment process, its risk management and analytic capabilities and the quality of its client service. These factors may place BlackRock at a competitive disadvantage and there can be no assurance that the Company’s strategies and efforts to maintain its existing AUM and to attract new business will be successful.

~~GEOGRAPHIC INFORMATION~~10

Geographic Information

At December 31, ~~2013,~~2015, BlackRock served clients in more than 100 countries across the globe, including the United States, the United Kingdom and Japan. See Note 22, Segment Information, contained in Part II, Item 8 of this filing for more information.

The following table illustrates the Company’s total revenue for 2013, 2012 and 2011 by geographic region. These amounts are aggregated on a legal entity basis and do not necessarily reflect where the customer resides.

(in millions)
Revenue 2013 2012 2011
Americas
$ 6,829    $ 6,429    $ 6,064
Europe
2,832    2,460    2,517
Asia-Pacific
519    448    500
Total revenue
$ 10,180    $ 9,337    $ 9,081

The following table illustrates the Company’s long-lived assets, including goodwill and property and equipment at December 31, 2013, 2012 and 2011 by geographic region. These amounts are aggregated on a legal entity basis and do not necessarily reflect where the asset is physically located.

(in millions)
Long-lived Assets 2013 2012 2011
Americas
$ 13,204    $ 13,238    $ 13,133
Europe
214    166    123
Asia-Pacific
87    63    73
Total long-lived assets
$ 13,505    $ 13,467    $ 13,329

Americas primarily is comprised of the United States, Canada, Brazil, Chile and Mexico, while Europe is primarily comprised of the United Kingdom. Asia-Pacific is comprised of Japan, Australia, Singapore, Hong Kong, Taiwan, Korea, India, Malaysia and China.

~~EMPLOYEES~~Employees

At December 31, ~~2013,~~2015, BlackRock had a total of approximately ~~11,400~~13,000 employees, including approximately ~~5,400~~6,200 located in offices outside the United States. Consistent with our commitment to continually expand and enhance our talent base to support our clients, we added approximately ~~900~~800 employees during the year, including in strategic focus areas.

REGULATION

Virtually all aspects of BlackRock’s business are subject to various laws and regulations ~~both in and outside~~around the ~~United~~

~~States,~~world, some of which are summarized below. These laws and regulations are primarily intended to protect investment advisory clients, investors in registered and unregistered investment companies, trust customers of BlackRock Institutional Trust Company, N.A. (“BTC”), PNC and its bank subsidiaries and their customers and the financial system. Under these laws and regulations, agencies that regulate investment advisers, investment funds and bank holding companies and other individuals and entities have broad administrative powers, including the power to limit, restrict or prohibit the regulated entity or person from carrying on business if it fails to comply with such laws and regulations. Possible sanctions for significant compliance failures include the suspension of individual employees, limitations on engaging in certain lines of business for specified periods of time, revocation of investment adviser and other registrations, censures and fines both for individuals and ~~the Company.~~ BlackRock.

The rules governing the regulation of financial institutions and their holding companies and subsidiaries are very detailed and technical. Accordingly, the discussion below is general in nature, does not purport to be complete and is current only as of the date of this report.

GLOBAL REGULATORY REFORM

~~In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “DFA”) was signed into law in the United States. The DFA~~BlackRock is ~~expansive in scope and requires the adoption of extensive regulations and~~subject to numerous regulatory ~~decisions in order to be fully implemented. The continued adoption of these regulations and decisions will in large measure determine~~reform initiatives around the impact of the DFA on BlackRock and other financial services firms. The DFA may significantly change BlackRock’s operating environment and the financial markets in general in unpredictable ways. It is not possible to predict the ultimate effects that the DFA,world. Any such initiative, or subsequent implementing regulations and decisions, will have upon BlackRock’s business, financial condition, and results of operations. Among the potential impacts, provisions of the DFA referred to as the Volcker Rule will affect the extent to which BlackRock invests in and transacts with certain of its investment funds, including private equity funds, hedge funds and funds of funds. The impact of the Volcker Rule on liquidity and pricing in the broader financial markets is unknown at this time. For a further discussion of the Volcker Rule, see “Item 1A — Risk Factors — Legal and Regulatory Risks.” In addition, BlackRock could be designated a systemically important financial institution (“SIFI”) and become subject to direct supervision by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). If BlackRock were designated a SIFI, it could be subject to enhanced prudential, supervisory and other requirements, such as risk-based capital requirements; leverage limits; liquidity requirements; resolution plan and credit exposure report requirements; concentration limits; a contingent capital requirement; enhanced public disclosures; short-term debt limits; and overall risk management requirements. Further, new regulations under the DFA relating to regulation of swaps and derivatives will impact the manner by which BlackRock-advised funds and accounts use and trade swaps and other derivatives, and may significantly increase the costs of derivatives trading. Similarly, BlackRock’s management of funds and accounts that use and trade swaps and derivatives could be adversely impacted by recently adopted changes to the Commodity Futures Trading Commission’s (the “CFTC”) regulations. These rule changes

include those concerning, among other things, the registration and regulation of commodity pool operators and commodity trading advisors (and the accompanying registration and regulation of such entities by the National Futures Association (the “NFA”)), the registration status of dealer counterparties and other counterparties who are major participants in the swap markets, and requirements concerning mandatory clearing of certain swap transactions. Jurisdictions outside the United States in which BlackRock operates are also in the process of devising or considering more pervasive regulation of many elements of the financial services industry, which could have a similar impact on BlackRock and the broader markets.

~~The DFA and its regulations, and other~~any new laws or regulations or changes in enforcement of existing laws or regulations, could materially and adversely impact the scope or profitability of BlackRock’s business ~~activities;~~activities, lead to business disruptions, require BlackRock to ~~change certain~~alter its business ~~practices; divert management’s time and attention from BlackRock’s business~~or operating activities ~~to compliance activities;~~ and expose BlackRock to additional costs (including compliance and ~~tax~~legal costs) ~~and liabilities,~~ as well as reputational harm. For example, in addition to regulatory changes mandated by the DFA, the Securities and Exchange Commission (the “SEC”) continues to review the role of and risks related to, money market funds and has indicated that it may adopt additional regulations. Some of the proposed changes, if adopted, could significantly alter money market fund products and the entire money market fund industry. In 2012, the Office of the Comptroller of the Currency of the United States (the “OCC”) amended the regulations governing bank-maintained short-term investment funds (“STIFs”) to include new disclosure requirements regarding portfolio holdings and to more closely align portfolio limitations, such as maximum weighted average maturity and weighted average life, with those applicable to SEC registered money market funds. Similarly, the SEC continues to review the distribution fees paid to mutual fund distributors under Rule 12b-1 under the Investment Company Act of 1940 (the “Investment Company Act”), which are important to a number of the mutual funds BlackRock manages. Any changes to 12b-1 fees would alter the way BlackRock’s distribution partners distribute BlackRock products. Additionally, the SEC, the Internal Revenue Service (“IRS”) and the CFTC each continue to review the use of futures and derivatives by mutual funds, and such reviews could result in regulations that further limit the use of futures and derivatives by mutual funds. If adopted, these limitations could require BlackRock to change certain mutual fund business practices or to register additional entities with the CFTC, which could result in additional costs and/or restrictions. In addition, BlackRock has begun reporting certain information about a number of its private funds to the SEC and certain information about a number of its commodity pools to the CFTC, pursuant to systemic risk reporting requirements adopted by both agencies, which have required, and will continue to require, investments in people and systems to assure timely and accurate reporting. Still another example of changes in the regulatory landscape was the IRS’ implementation of Foreign Account Tax Compliance Act (“FATCA”). FATCA was enacted in 2010 and is intended to address tax compliance issues associated with U.S. taxpayers with foreign accounts. FATCA requires foreign financial institutions to report to the IRS information about financial accounts held by U.S. taxpayers and imposes withholding, documentation and reporting requirements on foreign financial institutions. Final

regulations were issued by the IRS on January 17, 2013, with the earliest effective dates beginning on July 1, 2014. In many instances, however, the precise nature of what needs to be implemented will be governed by bilateral Intergovernmental Agreements (“IGAs”) between the United States and the countries in which BlackRock does business. While many of these IGAs have been put into place, others have yet to be concluded. FATCA could cause the Company to incur significant administrative and compliance costs and subject clients to U.S. tax withholding.

An example of changes in the regulatory landscape in Europe is the European Union (“EU”) Alternative Investment Fund Managers Directive (“AIFMD”), which became effective on July 21, 2011 and was required to be implemented by EU member states by July 22, 2013. The AIFMD regulates managers of, and service providers to, a broad range of alternative investment funds (“AIFs”) domiciled within and (depending on the precise circumstances) outside the EU. The AIFMD also regulates the marketing of all AIFs inside the European Economic Area (the “EEA”). In general, the AIFMD will have a staged implementation between mid-2013 and 2018. Compliance with the AIFMD’s requirements will restrict AIF marketing and will place additional compliance and disclosure obligations regarding remuneration, capital requirements, leverage, valuation, stakes in EU companies, depositaries, the domicile of custodians and liquidity management.

Globally, regulators are examining the potential risks in ETFs and may impose additional regulations on ETFs, including requirements to promote increased transparency and to limit the ability of ETFs to utilize derivatives. The International Organization of Securities Commissions published principles for regulatory oversight of financial benchmarks in 2013, with standards applying to methodologies for benchmark calculation, and transparency and governance issues in the benchmarking process; some national and regional regulators are currently reviewing how to apply these principles, with a draft European Regulation published in September 2013. Any of these regulatory changes could also lead to business disruptions, could materially and adversely impact the value of assets in which BlackRock has invested directly and/or on behalf of clients, and, to the extent the regulations strictly control the activities of financial services firms, could make it more difficult for BlackRock to conduct certain businesses or distinguish itself from competitors.

Additional legislation, changes in rules promulgated by regulators and self-regulatory organizations, or changes in the interpretation or enforcement of existing laws and regulations may directly affect the method of operation and profitability of BlackRock. BlackRock’s profitability also could be materially and adversely affected by modification of the rules and regulations that impact the business and financial communities in general, including changes to the laws governing banking, taxation, antitrust regulation and electronic commerce. ~~See~~

Dodd-Frank Wall Street Reform and Consumer Protection Act

In July 2010, the ~~“— Non-U.S. Regulation” section below~~Dodd-Frank Wall Street Reform and Consumer Protection Act (the “DFA”) was signed into law in the U.S. The DFA is expansive in scope and requires the adoption of extensive regulations and numerous regulatory decisions, many of which have been adopted. BlackRock has commenced a conformance program to address certain regulations adopted under the DFA, as well as financial reforms that have been introduced as part of the SEC’s investment company modernization initiatives. The cost of these initial conformance activities have been absorbed by BlackRock; however, as the full extent of the DFA and other rules will only become evident over time, it is not yet possible to predict the ultimate effects that the DFA, or subsequent implementing regulations and decisions, will have upon BlackRock’s business, financial condition, and operating activities.

Systemically Important Financial Institution Review

Both the Financial Stability Board (“FSB”) working with the International Organization of Securities Commissions (“IOSCO”) and the Financial Stability Oversight Council (“FSOC”) are considering potential systemic risk related to asset management. In July 2014, the FSOC issued a statement indicating that their review would focus on products and activities, and FSOC subsequently released a request for information addressing: market liquidity and fund redemption risk, the use of leverage, operational risk, and the resolution of asset managers including the transition of client assets. In June 2015, IOSCO issued a statement indicating they also favored a products and activities approach in their review of asset managers, and in July 2015, the FSB made a similar announcement. In September 2015, the FSB released a statement indicating that their review would focus on: market liquidity and fund redemption risk, the use of leverage, securities lending practices, operational risk, and risks from pension funds and sovereign wealth funds.

Although FSOC, IOSCO and FSB have shifted from a focus on designating firms and/or funds as systemically important (i.e., G-SIFI or SIFI designations), the process is ongoing and may lead to designations in the future. In the event that BlackRock receives a SIFI designation, under the DFA, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) is charged with establishing enhanced regulatory requirements for nonbank financial institutions and BlackRock could become subject to direct supervision by the Federal Reserve. If BlackRock was designated a SIFI or G-SIFI, it could become subject to enhanced prudential, capital, supervisory and other requirements, such as risk-based capital requirements, leverage limits, liquidity requirements, resolution plan and credit exposure report requirements, concentration limits, a contingent capital requirement, enhanced public disclosures, short-term debt limits and overall risk management requirements. Requirements such as these, which were designed to regulate banking institutions, would be extremely burdensome for BlackRock, unless they were modified to be applicable to an asset manager. No proposals have been made indicating how such measures would be adapted for asset managers, if at all.

Securities and Exchange Commission Review of Asset Managers

BlackRock’s business may also be impacted by Securities and Exchange Commission (“SEC”) regulatory initiatives. The SEC and its staff continue to engage in various initiatives and reviews that seek to improve and modernize the regulatory structure governing the asset management industry, and registered investment companies in particular. During 2015, the SEC proposed, among other things: enhanced reporting by investment advisors, enhanced reporting on registered mutual funds, new rules for liquidity risk management in registered funds, and new rules governing the use of derivatives and leverage by registered investment companies and business development companies. Furthermore, in June 2015, the SEC issued a request for comments regarding practices related to exchange-traded funds (“ETFs”), which is

widely expected to result in a future rulemaking. The SEC has also indicated an intention to propose new rules for the stress testing of registered investment companies and transition planning by asset managers, including the transfer of client assets. The SEC’s focus has also been directed toward risk identification and controls in various areas, including the use of derivatives and other trading practices (as reflected in the SEC’s late December 2015 rule proposal described more particularly under” – Regulation of Swaps and Derivatives below), cyber-security and the evaluation of systemic risks. While these proposals have yet to be finalized into new rules, any new rules, guidance or regulatory initiatives resulting from these efforts could expose BlackRock to additional compliance and reporting costs and may require the Company to change how it operates its business or manages funds.

Money Market Fund Reform

In July 2014, the SEC adopted new rules designed to reform the regulatory structure governing money market funds (“MMFs”) and to address the perceived systemic risks that such funds present. The new rules, to which U.S. MMFs must conform by October 2016, require institutional prime and institutional municipal MMFs to employ a floating net asset value per share method of pricing, which allows the daily share prices of these funds to fluctuate along with changes in the market-based value of fund assets. Retail MMFs may continue operating with a constant net asset value per share. The rules also provide for new tools for institutional and retail MMFs’ boards designed to address market shocks, including liquidity fees and redemption gates. The new rules do not apply to government (non-municipal) MMFs, although such funds may “opt-in” to the new liquidity fee and redemption gate provisions if previously disclosed to investors. Implementation of these new rules requires the development of new or additional systems by BlackRock and the funds’ service providers. BlackRock has commenced efforts to move its MMFs into compliance in advance of the deadline. The impact of the rules that affect the structure of the funds on BlackRock’s business remains uncertain as clients must decide which products fit their investment needs. The new rules will, however, affect certain of BlackRock’s funds’ investment strategies, portfolio liquidity and return potential. The new rules will also result in changes to BlackRock’s existing U.S. MMFs and may reduce the attractiveness of certain U.S. MMFs to investors.

Regulation of Swaps and Derivatives

The SEC, the Internal Revenue Service (“IRS”) and the Commodity Futures Trading Commission (“CFTC”) each continue to review practices and regulations relating to the use of futures, swaps and other derivatives. Such reviews could result in regulations that restrict or limit the use of such products by funds or accounts. If adopted, these limitations could require BlackRock to change certain business practices or implement new reporting or compliance processes, which could result in additional costs and/or restrictions. In December 2015, the SEC proposed a new rule governing the use of derivatives and other financial commitment transactions by investment companies that, if enacted, would represent a fundamental change in the nature of the SEC's regulations governing the use of derivatives and other financial commitment transactions by investment companies. This proposal has the potential to require BlackRock to change or restrict certain investment strategies or practices for some investment companies and incur additional costs. In some circumstances the proposed rule could make certain products less competitive with other investment options in the marketplace, which could negatively impact assets under management.

Further, the full implementation of regulations under the DFA and similar regulations in the European Union (“EU”) and other global jurisdictions relating to regulation of swaps and derivatives could impact the manner in which BlackRock-advised funds and accounts use and trade swaps and other derivatives, increasing the costs of derivatives trading for BlackRock’s clients. For example, various global rules and regulations applicable to the use of financial products by funds, accounts and counterparties that have been adopted or proposed will require BlackRock to build and implement new compliance monitoring procedures to address the enhanced level of oversight to which it and its clients will be subject. These rules also introduce new requirements for centrally clearing certain swaps transactions and for executing certain swaps transactions on or through CFTC or SEC-registered trading venues (as opposed to over the phone or other execution methods).

Jurisdictions outside the U.S. in which BlackRock operates also have adopted and implemented, or are in the process of considering, adopting or implementing more pervasive regulation of many elements of the financial services industry, which could further impact BlackRock and the broader markets. This includes the implementation of mandated central clearing of swaps in the EU and the implementation of trade reporting, documentation, central clearing and other requirements in various jurisdictions globally.

In the United States, certain interest rate swaps and certain index credit default swaps are already subject to the DFA central clearing and electronic trading venue requirements, with additional products and asset classes potentially becoming subject to these requirements in 2016 and beyond. For swaps and security-based swaps that are not centrally cleared, U.S. bank regulators recently adopted rules that could require BlackRock-advised funds and accounts to post margin payments when trading with a swap dealer that is regulated by one of the U.S. bank regulators. The CFTC also recently adopted similar margin rules applicable when trading non-cleared swaps with swap dealers who are not regulated by one of the U.S. bank regulators. These rules have the potential to increase the complexity and cost of trading non-cleared derivatives for BlackRock's clients. In EMEA, central clearing requirements will be implemented in a phased manner and will apply to BlackRock funds and accounts beginning in the latter half of 2016. The new rules and regulations may produce regulatory inconsistencies in global derivatives trading rules and increase BlackRock’s operational and legal risks.

Regulation of Exchange Traded Funds

As a result of recent market volatility, regulators globally are examining the potential risks in ETFs, including those related to transparency, liquidity and structural resiliency. BlackRock and other large issuers of ETFs are working with market participants and regulators to address certain of these issues but there can be no assurance that structural or regulatory reforms will be implemented in a manner favorable to BlackRock, or at all. Depending on the outcome of this renewed regulatory analysis, or any associated structural reforms, ETF products may become subject to increased regulatory scrutiny or restrictions, which may require BlackRock to incur additional compliance and reporting expenses and adversely affect the Company’s business.

Taxation

BlackRock’s businesses may be affected by new tax legislation or regulations, or the modification of existing tax laws, regulations and rulings, by U.S. or non-U.S. authorities. In particular, BlackRock may be impacted by the Foreign Account Tax Compliance Act (“FATCA”) and the Common Reporting Standard (“CRS”) which have introduced new investor onboarding, withholding and reporting rules aimed at ensuring persons with financial assets outside of the their tax residence country pay appropriate taxes. FATCA and CRS rules will impact both U.S. and

non-U.S. funds and subject BlackRock to additional administrative burdens. In many instances, bilateral Intergovernmental Agreements (“IGAs”) between the U.S. and the countries in which BlackRock does business will govern implementation of the new rules. While many of these IGAs have been put into place, others have yet to be concluded.

The Organization for Economic Co-operation and Development (“OECD”) has also launched a base erosion and profit shifting (“BEPS”) proposal that aims to rationalize tax treatment across jurisdictions. In October 2015, the OECD released its final BEPS package in an effort to curb the use of certain tax regimes and elements of tax planning, primarily in a cross-border context. The final package was endorsed by the G20 and is subject to implementation. In addition, in January 2016, the European Commission announced an Anti-Tax Avoidance Package (“EU Package”) for consideration by the European Parliament and Council, containing measures to regulate certain elements of tax planning and to boost tax transparency. Once implemented, the BEPS package and the EU Package could curtail the amount of investments channeled by, and have unintended taxation consequences for funds as well as BlackRock’s overall tax position, which could adversely affect BlackRock’s financial condition and that of its clients.

In addition, certain EU Member States, such as France and Italy, have enacted financial transaction taxes (“FTTs”) which impose taxation on a broad range of financial instruments and derivatives transactions. Several other Member States continue to discuss introducing FTTs. In general, any tax on securities and derivatives transactions would impact investors and would likely have a negative impact on the liquidity of the securities and derivatives markets, could diminish the attractiveness of certain types of products that BlackRock manages in those countries and could cause clients to shift assets away from such products. An FTT could significantly increase the operational costs of BlackRock entering into, on behalf of its clients, securities and derivatives transactions that would be subjected to an FTT, which could adversely impact BlackRock’s financial results and clients’ performance results.

Lastly, the application of tax regulations involves numerous uncertainties and, in the normal course of business, U.S. and non-U.S. tax authorities may review and challenge BlackRock’s historical tax positions. These challenges may result in adjustments to BlackRock’s tax position, or impact the timing or amount of taxable income, deductions or other tax allocations, which may adversely affect BlackRock’s effective tax rate and overall financial condition.

Volcker Rule

Provisions of the DFA referred to as the “Volcker Rule” place limitations on the ability of banks and their subsidiaries to engage in proprietary trading and to invest in and transact with certain private investment funds, including hedge funds, private equity funds and funds of funds (collectively “covered funds”). Because the Federal Reserve currently treats BlackRock as a nonbank subsidiary of PNC, BlackRock may be required to conform its activities to the requirements of the Volcker Rule. On December 18, 2014, the Federal Reserve announced a second extension to the Volcker Rule conformance period, giving banking entities until July 21, 2016, to conform investments in and relationships with covered funds and foreign funds that were in place prior to December 31, 2013 (“legacy covered funds”). The Federal Reserve also announced its intention to grant banking entities an additional one-year extension of the conformance period until July 21, 2017, to conform ownership interests in and relationships with these legacy covered funds. The Volcker Rule’s restrictions may, among other things, limit BlackRock’s ability to invest in covered funds and require BlackRock to remove its name from the names of its covered funds, which could subject BlackRock to additional expense. The Volcker Rule may also require BlackRock to sell certain seed and co-investments that it holds in covered funds which may occur at a discount to existing carrying value, depending on market conditions. The Volcker Rule may also reduce the level of market making and liquidity activities of several of BlackRock’s trading counterparties, which may adversely impact the liquidity and, in some cases, the pricing of various financial instruments in which BlackRock client accounts invest. For a further discussion of the Volcker Rule, see “Item 1A — Risk Factors — Legal and Regulatory Risks.”

Revised Department of Labor (“DoL”) Fiduciary Rule

In April 2015, the DoL proposed a new regulation defining the term "fiduciary" for purposes of the fiduciary responsibility provisions of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”) and the prohibited transaction exercise tax provisions of the IRS. The rule has been highly criticized by industry participants, particularly retail intermediaries, and BlackRock is engaging with the DoL, trade associations and industry participants in an effort to affect revisions to the proposed rule. To the extent the rule is enacted as written, it will require BlackRock to re-paper a number of its distribution relationships, create compliance and operational challenges for BlackRock’s distribution partners and may limit BlackRock’s ability to provide certain useful services and education to its clients.

Markets in Financial Instruments Directives

BlackRock is also subject to numerous regulatory ~~reforms~~reform initiatives in Europe. For example, in the EU rules and regulations made under the current Markets in Financial Instruments Directive (“MiFID”) regime (described more particularly under “— European Regulation” below) are in the process of being ~~considered~~revised through implementation of the “MiFID II” package of measures made up of a recast Directive and a new Markets in Financial Instruments Regulation. MiFID II, which was originally scheduled to come into effect in January 2017, but is now scheduled to come into effect in January 2018, will be implemented through a number of Implementing and Regulatory Technical Standards to be made through Delegated Acts made by the European Commission following advice from the European Securities and Markets Authority (“ESMA”). MiFID II will build upon many of the measures introduced by MiFID, and will extend investor protection, trading transparency, clearing and trading venue access and reporting requirements. It is expected that MiFID II will have significant and wide-ranging impacts on EU securities and derivatives markets. In particular, there will be (i) enhanced governance and investor protection standards, (ii) prescriptive rules on portfolio management firms’ ability to receive and pay for investment research relating to all asset classes, (iii) enhanced regulation of algorithmic trading, (iv) the movement of trading in certain shares and derivatives on to regulated execution venues, (v) the extension of pre- and post-trade transparency requirements to wider categories of financial instruments, (vi) restrictions on the use of so-called dark pool trading, (vii) the creation of a new type of trading venue called the Organized Trading Facility for non-equity financial instruments, (viii) commodity derivative position limits and reporting requirements, (ix) a move away from vertical silos in execution, clearing and settlement, (x) an enhanced role for ESMA in supervising EU securities and derivatives markets and (xi) new requirements regarding non-EU investment firms’ access to EU financial markets. Implementation of these measures will have direct and indirect impacts on BlackRock and its subsidiaries and may require significant changes to client servicing models. A significant number of the impacts are yet to be determined because MiFID II contains a wide ranging and complex set of measures.

Undertakings for Collective Investment in Transferable Securities

The EU has also adopted directives on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (“UCITS”). The latest initiative in this area, UCITS V seeks to align the UCITS depositary regime, UCITS remuneration rules and regulators’ power to sanction for breaches of the UCITS Directive with the requirements of the Alternative Investment Fund Managers Directive (“AIFMD”). UCITS V is required to be adopted in the national law of each EU member state by March 18, 2016 though further implementing measures will only become effective in late 2016. Compliance with the updated UCITS directive will subject BlackRock to additional expenses associated with new depositary oversight and other organizational requirements.

Reform of European Retail Distribution

BlackRock must also comply with retail distribution rules aimed at enhancing consumer protections, overhauling mutual fund fee structures by banning the payment of commissions to distributors and increasing professionalism in the retail investment sector. The rules were originally introduced in the United Kingdom in 2012 and similar rules have since been introduced in other jurisdictions where BlackRock operates such as the Netherlands, and are under discussion elsewhere. Similarly, MiFID II will contain a ban on certain advisers recovering commissions and other nonmonetary benefits from fund managers. These rules will lead to greater fragmentation of distribution rules and may lead to changes to BlackRock’s client servicing and distribution models, in particular affecting the fees BlackRock is able to charge to its clients and the commissions it is able to pay to its distribution partners.

EU Benchmarks Regulation

Political agreement on the EU Benchmarks Regulation was reached at the end of 2015. The Regulation provides the legislative framework to implement the 2013 IOSCO Principles for Financial Benchmarks. The scope of the Regulation is broad as it includes submission based benchmarks through to transaction based market indices. Proportionality is applied to create a stricter framework for the systemically relevant benchmarks such as LIBOR and EURIBOR. Although the Regulation creates a number of obligations on administrators of, and submitters to, benchmarks, it is less extensive as regards the obligations of users of benchmarks, such as asset managers. The Regulation formalizes due diligence procedures for users and implies other additional administrative requirements of users of third-party benchmarks. Managers using third-party and/or ~~adopted outside~~bespoke benchmarks to assess fund performance are also caught by the Regulation. It is expected that detailed rule-making underpinning the Regulation's framework will be developed during 2016 and implemented beginning in 2018. While it is not yet possible to assess the full effect of the ~~United States.~~Regulation on BlackRock's business, it may impose additional administrative and due diligence requirements on the Company, the burden of which is likely to increase as BlackRock makes additional enhancements to its indexing business.

Financial Crimes Enforcement Network (“FinCEN”) Proposed Rulemaking for Registered Investment Advisers

FinCEN has issued a Notice of Proposed Rulemaking (“Proposed Rule”) that would extend to a number of BlackRock’s subsidiaries, which are registered or required to be registered with the SEC under the Investment Advisers Act of 1940 (the “Advisers Act”), the requirement to establish anti-money laundering programs and report suspicious activity to FinCEN under the Bank Secrecy Act of 1970 (the “Bank Secrecy Act”). The Proposed Rule would extend to those BlackRock subsidiaries captured within the Bank Secrecy Act’s definition of “financial institutions”, which would require them to comply with the Bank Secrecy Act reporting and recordkeeping requirements. If enacted in its current form, the Proposed Rule would expose BlackRock to additional compliance costs.

Financial Conduct Authority (“FCA”) Asset Management Market Survey

As part of its strategic priorities, the FCA is undertaking a market study into the asset management sector. The aim of this study is to understand whether competition is working effectively to enable both institutional and retail investors to get value for money when purchasing asset management services. The FCA is interested in understanding whether there are any barriers to innovation or technological advances which may be preventing new ways of doing business that could benefit investors (Fintech). If the FCA concludes that competition is not working well, the FCA may intervene through rule-making, introducing firm-specific remedies or enforcement action, publishing general guidance or proposing enhanced industry self-regulation. BlackRock is one of 40 firms included in the study and is currently responding to an information request that consists of qualitative and quantitative data. The FCA is aiming to engage with firms throughout 2016 with the proposal to issue a draft report to the industry in the summer of 2016. The FCA expect to publish their final report in early 2017.

EXISTING U.S. REGULATION - OVERVIEW

BlackRock and certain of its U.S. subsidiaries are currently subject to extensive regulation, primarily at the federal level, by the SEC, the ~~Department of Labor (the “DOL”),~~DoL, the Federal Reserve, the ~~OCC,~~Office of the Comptroller of the Currency (“OCC”), the Financial Industry Regulatory Authority (“FINRA”),

the ~~NFA,~~National Futures Association (“NFA”), the CFTC and other government agencies and regulatory bodies. Certain of BlackRock’s U.S. subsidiaries are also subject to various anti-terrorist financing, privacy, anti-money laundering regulations and economic sanctions laws and regulations established by various agencies.

The ~~Investment~~ Advisers Act ~~of 1940 (the “Advisers Act”)~~ imposes numerous obligations on registered investment advisers such as BlackRock, including record-keeping, operational and marketing requirements, disclosure obligations and prohibitions on fraudulent activities. The Investment Company Act of 1940 (the “Investment Company Act”) imposes stringent governance, compliance, operational, disclosure and related obligations on registered investment companies and their investment advisers and distributors, such as ~~BlackRock.~~BlackRock and its affiliated companies. The SEC is authorized to institute proceedings and impose sanctions for violations of the Advisers Act and the Investment Company Act, ranging from fines and censure to termination of an investment adviser’s registration. Investment advisers also are subject to certain state securities laws and regulations. Non-compliance with the Advisers Act, the Investment Company Act or other federal and state securities laws and regulations could result in investigations, sanctions, disgorgement, fines and reputational damage.

BlackRock’s trading and investment activities for client accounts are regulated under the Securities Exchange Act of 1934 (the “Exchange Act”), as well as the rules of various ~~U.S. and non-U.S.~~ securities exchanges and self-regulatory organizations, including laws governing trading on inside information, market manipulation and a broad number of technical requirements (e.g., short sale limits, volume limitations and reporting obligations) and market regulation ~~policies in the United States and globally. Depending on the scope~~policies. Violation of the rules to be adopted by the SEC, provisions added to the Exchange Act by the DFA may require certain BlackRock subsidiaries to register as municipal advisors in relation to their services for state and local governments, pension plans and other investment programs, such as college savings plans. In addition, BlackRock manages a variety of investment funds listed on U.S. and non-U.S. exchanges, which are subject to the rules of such exchanges. Violationany of these laws and regulations could result in restrictions on ~~the Company’s~~BlackRock’s activities and damage its

reputation. Furthermore, one of BlackRock’s subsidiaries, BTC, was required to register as a municipal advisor (as that term is defined in the statute) with the SEC and Municipal Securities Rulemaking Board (“MSRB”) as a result of SEC rules giving effect to a section of the DFA requiring such registration. The rules subject BTC to new and additional regulation by the SEC and MSRB.

BlackRock manages a variety of private pools of capital, including hedge funds, funds of hedge funds, private equity funds, ~~CDOs,~~collateralized debt obligations (“CDOs”), collateralized loan obligations (“CLOs”), real estate funds, collective investment trusts, managed futures funds and hybrid funds. Congress, regulators, tax authorities and others continue to explore, on their own and in response to demands from the investment community and the public, increased regulation related to private pools of capital, including changes with respect to investor eligibility, certain limitations on trading activities, record-keeping and reporting, the scope of anti-fraud protections, safekeeping of client assets and a variety of other matters. BlackRock may be materially and adversely affected by new legislation, rule-making or changes in the interpretation or enforcement of existing rules and regulations imposed by various ~~regulators.~~regulators in this area.

Certain BlackRock subsidiaries are subject to ~~the Employee Retirement Income Security Act of 1974 (“ERISA”),~~ERISA, and to regulations promulgated thereunder by the ~~DOL,~~DoL, insofar as they act as a “fiduciary” under Title I of ERISA with respect to benefit plan clients. ERISA and applicable provisions of the Internal Revenue Code impose certain duties on persons who are

fiduciaries under ERISA, prohibit certain transactions involving ERISA plan clients and impose excise taxes for violations of these prohibitions, mandate certain required periodic reporting and disclosures and require certain BlackRock entities to carry bonds ~~ensuring~~insuring against losses caused by fraud or dishonesty. ERISA also imposes additional compliance, reporting and operational requirements on BlackRock that otherwise are not applicable to non-benefit plan clients.

BlackRock has seven subsidiaries that are registered as commodity pool operators (“CPOs”) and/or commodity trading advisors (“CTAs”) with the CFTC and are members of the NFA. ~~Additional BlackRock entities may need to register as a CPO or commodity trading advisor as a result of recently enacted regulatory changes by the CFTC.~~ The CFTC and NFA each administer a comparable regulatory system covering futures contracts and various other financial instruments, including swaps as a result of the DFA, in which certain BlackRock clients may invest. Two of BlackRock’s other subsidiaries, BlackRock Investments, LLC (“BRIL”) and BlackRock Execution Services, are registered with the SEC as broker-dealers and are member-firms of FINRA. Each broker-dealer has a membership agreement with FINRA that limits the scope of such broker-dealer’s permitted activities. BRIL is also an approved person with the New York Stock Exchange (“NYSE”) and a member of the ~~Municipal Securities Rulemaking Board (“MSRB”)~~MSRB, subject to MSRB rules.

U.S. ~~BANKING REGULATION~~Banking Regulation

PNC is a bank holding company and regulated as a “financial holding company” by the Federal Reserve under the Bank Holding Company Act of 1956 (the “BHC Act”). As described in “Item 1-Business”, as of December 31, 2015 PNC ~~owns~~owned approximately 22% of BlackRock’s capital stock. Based on the Federal Reserve’s ~~current~~ interpretation of the BHC Act, the Federal Reserve currently takes the position that this ownership interest causes BlackRock to be treated as a ~~non-bank~~nonbank subsidiary of PNC for purposes of the BHC Act, ~~and therefore subject~~thereby subjecting BlackRock to banking regulation, including the supervision and regulation of the Federal Reserve and to most banking laws, regulations and orders that apply to PNC, including the Volcker Rule. The supervision and regulation of PNC and its subsidiaries under applicable banking laws isare intended primarily for the protection of its banking subsidiaries, its depositors, the Deposit Insurance Fund of the Federal Deposit Insurance Corporation, and the financial system as a whole, rather than for the protection of stockholders, creditors or clients of PNC or BlackRock. ~~PNC’s relationships and good standing with its regulators~~

BlackRock generally may conduct only activities that are ~~important to~~authorized for a financial holding company under the ~~conduct of BlackRock’s business.~~BHC Act. Investment management is an authorized activity, but must be conducted within applicable regulatory requirements, which in some cases are more restrictive than those BlackRock faces under applicable securities laws. BlackRock may also beinvest in investment companies and private investment funds to which it provides advisory, administrative or other services, only to the extent consistent with applicable law and regulatory interpretations. Based on the Federal Reserve’s position that BlackRock is a nonbank subsidiary of PNC, the Federal Reserve has broad powers to approve, deny or refuse to act upon applications or notices for BlackRock to conduct new activities, acquire or divest businesses or assets, or reconfigure existing operations, and there are limits on the ability of bank subsidiaries of PNC to extend credit to or conduct other transactions with BlackRock or its funds. PNC and its subsidiaries are also subject to ~~foreign~~examination by various banking regulators, which results in examination reports and ratings that may adversely impact the conduct and growth of BlackRock’s businesses. Furthermore, the Federal Reserve has broad enforcement authority over nonbank subsidiaries, including the power to prohibit them from conducting any activity that, in the Federal Reserve’s opinion, is unauthorized or constitutes an unsafe or unsound practice. The Federal Reserve may also impose substantial fines and other penalties for violations of applicable banking laws, regulations and ~~supervision that~~orders. The DFA strengthened the Federal Reserve’s supervisory and enforcement authority over a bank holding company’s nonbank subsidiaries.

Any failure of PNC to maintain its status as a financial holding company could ~~affect~~result in substantial limitations on certain BlackRock activities and its ~~business.~~growth. Such a change of status could be caused by any failure of PNC or one of PNC’s bank subsidiaries to remain “well capitalized” and “well managed,” by any examination downgrade of one of PNC’s bank subsidiaries, or by any failure of one of PNC’s bank subsidiaries to maintain a satisfactory rating under the Community Reinvestment Act.

One of BlackRock’s subsidiaries, BTC, is organized as a limited purpose national trust company that does not accept deposits or make commercial ~~loans and~~loans. BTC is a member of the Federal Reserve System. Accordingly, BTC is examined and supervised by the OCC and is subject to various banking laws and regulations enforced by the OCC, such as capital adequacy, regulations governing fiduciaries, conflicts of interest, self-dealing, and anti-money laundering laws and regulations. BTC is also subject to various Federal Reserve regulations applicable to member institutions, such as regulations restricting transactions with affiliates. Many of these laws and regulations are meant for the protection of BTC’s customers and not BTC, BlackRock and its affiliates, or BlackRock’s stockholders.

~~BlackRock generally may conduct only activities~~Regulation of Securities Lending Financing Transactions

In its 2014 Annual Report, the FSOC identified securities lending indemnification by asset managers who act as lending agents as a potential systemic risk that are authorized for a financial holding company under the BHC Act. Investment management is an authorized activity, but must be conducted within applicable regulatory requirements, which in some cases are more restrictive than those BlackRock faces under applicable securities laws. BlackRock may also invest in investment companiesrequired further review and ~~private investment funds to which it provides advisory, administrative or other services, only to the extent consistent with applicable law and regulatory interpretations.~~monitoring. The Federal Reserve ~~has broad powers~~is also considering whether to ~~approve, deny~~impose specific margin or ~~refuse~~minimum haircut requirements for securities financing transactions (“SFTs”). In addition, in October 2015, the European Parliament adopted the European Commission’s proposal for a European regulation on the reporting and transparency of SFTs. The SFT regulation aims to ~~act upon applications~~improve the transparency surrounding SFTs and limit the perceived risks of SFTs by, among other things, requiring central reporting of SFTs, requiring disclosure of SFTs to investors and imposing minimum requirements relating to the difference in prices at which a market maker can buy and sell a security in SFTs. If the recent scrutiny of SFTs results in additional regulatory requirements or ~~notices for~~reporting obligations, BlackRock may be

required to introduce additional compliance measures, which will subject BlackRock to ~~conduct new~~additional expenses and could lead to modifications in BlackRock’s SFT activities, ~~acquire or divest businesses or assets, or reconfigure existing operations. There are limits on the ability of bank subsidiaries of PNC~~including potential adjustments to ~~extend credit to or conduct other transactions with BlackRock or~~ its ~~funds. PNC and~~activities as agent lender for its subsidiaries are also subject to examination by various banking regulators, which results in examination reports and ratings that may adversely impact the conduct and growth of BlackRock’s businesses.clients.

The Federal Reserve has broad enforcement authority over BlackRock, including the power to prohibit BlackRock from conducting any activity that, in the Federal Reserve’s opinion, is unauthorized or constitutes an unsafe or unsound practice in conducting BlackRock’s business. The Federal Reserve may also impose substantial fines and other penalties for violations of applicable banking laws, regulations and orders. The DFA strengthened the Federal Reserve’s supervisory and enforcement authority over a bank holding company’s non-bank affiliates, such as BlackRock.

Any failure of PNC to maintain its status as a financial holding company could result in substantial limitations on certain BlackRock activities and its growth. Such a change of status could be caused by any failure of PNC or one of PNC’s bank subsidiaries to remain “well capitalized” and “well managed,” by any examination downgrade of one of PNC’s bank subsidiaries, or by any failure of one of PNC’s bank subsidiaries to maintain a satisfactory rating under the Community Reinvestment Act.

~~NON-U.S.~~EXISTING INTERNATIONAL REGULATION — OVERVIEW

BlackRock’s international operations are subject to the laws and regulations of ~~non-U.S.~~a number of international jurisdictions, ~~and non-U.S.~~as well as oversight by numerous regulatory agencies and bodies ~~and,~~ in ~~certain cases,~~those jurisdictions. In some instances, these operations are also affected by U.S. laws and regulations that have extra-territorial application. As

Below is a summary of certain international regulatory standards to which BlackRock ~~continues~~is subject. It is not meant to ~~expand its~~be comprehensive as there are parallel legal and regulatory arrangements in force in many jurisdictions where BlackRock’s subsidiaries conduct business.

Of note among the various other international ~~presence, a number~~regulations to which BlackRock is subject, are the extensive and complex regulatory reporting requirements that necessitate the monitoring and reporting of ~~its subsidiaries~~issuer exposure levels (thresholds) across the holdings of managed funds and ~~international operations have become subject to regulatory frameworks comparable to~~accounts and those ~~affecting its operations in~~of the ~~United States.~~Company.

European Regulation

The ~~Financial Conduct Authority (the “FCA”)~~FCA currently regulates certain BlackRock subsidiaries in the United Kingdom (“U.K.”). It also regulates those U.K. subsidiaries’ branches established in other European Union countries and the U.K. branches of ~~its U.K. regulated entities in the EU, and~~certain of BlackRock’s U.S. subsidiaries. In addition, the Prudential Regulation Authority ~~(the “PRA”~~(“PRA”) ~~also~~ regulates one BlackRock ~~subsidiary in the United Kingdom.~~U.K. insurance subsidiary. Authorization by the FCA ~~and/or~~and (where relevant) the PRA is required to conduct ~~any~~certain financial services related business in the ~~United Kingdom~~U.K. under the Financial Services and Markets Act ~~2000.~~2000 (the “FSMA”). The FCA’s rules ~~made~~adopted under ~~that Act~~the FSMA govern the majority of a firm’s capital resources requirements, senior management arrangements,

conduct of business, interaction with clients, and systems and controls, whereas the rules of the PRA focus solely on the prudential requirements ~~imposed on firms.~~that apply to BlackRock’s U.K.-regulated insurance subsidiary. The FCA supervises ~~the Company’s~~BlackRock’s U.K.-regulated subsidiaries through a combination of proactive engagement, event-driven and reactive supervision and thematic based reviews — in order to monitor ~~the Company’s~~BlackRock’s compliance with regulatory requirements. Breaches of the FCA’s rules may result in a wide range of disciplinary actions against ~~the Company’s~~BlackRock’s U.K.-regulated subsidiaries and/or its employees.

In addition, ~~to the above, the Company’s~~BlackRock’s U.K.-regulated subsidiaries and other European subsidiaries and branches, must comply with the pan-European regulatory regime established by ~~the Markets in Financial Instruments Directive (“MiFID”),~~MiFID, which ~~became effective on November 1, 2007 and~~ regulates the provision of investment services and activities throughout the ~~EEA, as well as~~wider EEA. MiFID, the ~~Capital Requirements Directive,~~scope of which delineates regulatory capital requirements. Revised obligations on capital resources for banks and certain investment firms apply as of January 1, 2014. These include requirements not only on capital, but address matters of governance and remuneration as well. These will have a direct effect on some of BlackRock’s European operations.is being enhanced through MiFID II (which is described more particularly under “— Global Regulatory Reform” above), sets out detailed requirements governing the organization and conduct of business of investment firms and regulated markets. It also includes pre- and post-trade transparency requirements for equity and non-equity markets and extensive transaction reporting requirements.

~~The United Kingdom has adopted~~ Certain BlackRock European subsidiaries must also comply with the MiFID rules into national legislation and FCA regulations, as have those other European jurisdictions in which BlackRock has a presence (excluding Switzerland which is not part of the EU or EEA). A review of MiFID by the European Commission has led to the publication of a draft amendedConsolidated Life Directive and Insurance Mediation Directive. In addition, relevant entities must comply with revised obligations on capital resources for banks and certain investment firms (the Capital Requirements Directive). These include requirements on capital, as well as matters of governance and remuneration. The obligations introduced through these directives will have a ~~draft new Markets in Financial Instruments Regulation. The proposals, which~~direct effect on some of BlackRock’s European operations.

BlackRock’s EU-regulated subsidiaries are ~~currently being finalized, are likely to result in changes to pre- and post-trade reporting obligations and an expansion of the types of instruments~~also subject to these requirements. They may affect the buying and selling of derivatives by moving most derivative trading onto regulated trading venues and may control the activities of algorithmic trading. The proposals may also result in changes to conduct of business requirements including selling practices, intermediary inducements and client categorization. The proposals also envisage giving the European Commission power to ban certain products and services. A furtheran EU regulation ~~Regulation (EU) No 648/2012 of the European Parliament and of the Council of July 4, 2012~~ on OTC derivatives, central counterparties and trade repositories, ~~was adopted in August 2012, and~~which requires (i) the central clearing of standardized OTC derivatives, (ii) the application of risk-mitigation techniques to non-centrally cleared OTC derivatives and (iii) the reporting of all derivative contracts ~~from~~since February 2014.

In addition, the FCA will introduce rules in April 2014 that ban payments by product providers to distribution platforms for both advised and non-advised business. These rules follow on from the retail distribution review that came into effect in December 2012 and changed how retail clients pay for investment advice. The FCA also has proposed a prohibition on the use of dealing commissions to pay for corporate access. Final rules are expected to be issued in mid-2014 along with a discussion paper on the broader use of dealing commissions.

In the aftermath of the financial crisis, the European Commission set out a detailed plan for EU financial reform, outlining a number of initiatives to be reflected in new or updated directives, regulations and recommendations of which the MiFID review (mentioned above) was a part. These, together with the changes contemplated by the AIFMD (mentioned above), will have direct and indirect effects on BlackRock’s operationsRegulation in the ~~EEA.~~

The European Commission has also published proposals to replace the Market Abuse Directive with a regulation on insider dealing and market manipulation and with an accompanying directive on criminal sanctions. The Regulation has now been largely agreed, but an implementation date remains outstanding as it will be linked to the commencement of the revised MiFID rules.

The next iteration of the Undertakings for Collective Investment in Transferable Securities Directive (“UCITS IV”), was required to be adopted in the national law of each EU member state by July 1, 2011. The United Kingdom has adopted UCITS IV requirements into national legislation and FCA regulation. Luxembourg and Ireland have also adopted UCITS IV into their national legislation. However, several other EU member states are still in various stages of the adoption process. UCITS IV introduced new requirements including a requirement on UCITS funds to provide a key investor information document. Recent European Commission consultations have addressed retail investor protection issues, including UCITS V, which considers, among other items, custodial liability, and UCITS VI, which includes proposals on depositaries and product management. A separate proposed regulation on money market funds has also been published and would, if adopted, have a significant impact on BlackRock’s European money market fund offerings.

Proposals on packaged retail investment products (“PRIPs”) are to be implemented through the strengthening of MiFID standards (for non-insurance PRIPs), revisions to the Insurance Mediation Directive’s selling standard (for all insurance-based PRIPs) and new investor disclosure requirements for all PRIPs though a separate EU legislative process.

The European Securities and Markets Authority (“ESMA”) has published guidelines on ETFs and other UCITS issues in February 2013, which introduce new collateral management requirements for UCITS concerning collateral received in the context of derivatives using Efficient Portfolio Management techniques and OTC derivative transactions. These rules will require significant changes and implementation is due by February 2014.

Certain individual EU Member States, such as France and Italy, have enacted national financial transaction taxes (“FTTs”), and a group of Member States also could adopt a FTT under an EU Enhanced Cooperation procedure that would apply in those Member States. In general, any tax on securities and derivatives transactions would likely have a negative impact on the liquidity of the securities and derivatives markets, could diminish the attractiveness of certain types of products that we manage in those countries and could cause clients to shift assets away from such products. A FTT could significantly increase the operational costs of our entering into, on behalf of our clients, securities and derivatives transactions that would be subjected to a FTT, which would adversely impact our revenues.

~~For the insurance sector, the Solvency II process will increase the amount of capital that insurers will have to set~~

aside and will have an indirect effect on fund managers with insurance clients. The Solvency II process has been delayed from an original compliance date of January 1, 2014 but agreement has now been confirmed for implementation on January 1, 2016.

In addition to the FCA, the activities of certain BlackRock subsidiaries, branches, and representative offices are overseen by financial services regulators in Germany, The Netherlands, Ireland, Luxembourg, Switzerland, Isle of Man, Jersey, France, Belgium, Italy, Poland, South Africa, Spain and Sweden. Regulators in these jurisdictions have authority with respect to financial services including, among other things, the authority to grant or cancel required licenses or registrations. In addition, these regulators may subject certain BlackRock subsidiaries to net capital requirements. Other BlackRock subsidiaries, branches, and representative offices are regulated in Japan, Australia, China, Hong Kong, Singapore, Taiwan, South Korea, India, Dubai, Cayman Islands, Brazil, Chile, Mexico and Canada.Asia-Pacific Region

In Japan, a BlackRock subsidiary is subject to the Financial Instruments and Exchange Law ~~(the “FIEL”~~(“FIEL”) and the Law Concerning Investment Trusts and Investment Corporations. These laws are administered and enforced by the Japanese Financial Services Agency ~~(the “JFSA”~~(“JFSA”), which establishes standards for compliance, including capital adequacy and financial soundness requirements, customer protection requirements and conduct of business rules. The JFSA is empowered to conduct administrative proceedings that can result in censure, ~~fine,~~fines, the issuance of cease and desist orders or the suspension or revocation of registrations and licenses granted under the FIEL. This Japanese subsidiary also holds a license for real estate brokerage activity which subjects it to the regulations set forth in the Real Estate Brokerage Business Act.

In Australia, BlackRock’s subsidiaries are subject to various Australian federal and state laws, and certain subsidiaries are regulated by the Australian Securities and Investments Commission (“ASIC”). ASIC regulates companies and financial services in Australia and is responsible for promoting investor, creditor and consumer protection. Failure to comply with applicable ~~law~~laws and regulations could result in the cancellation, suspension or variation of the regulated ~~subsidiaries~~subsidiaries’ licenses in Australia.

The activities of certain BlackRock subsidiaries in Hong Kong are subject to the Securities and Futures Ordinance ~~(the “SFO”~~(“SFO”) which governs the securities and futures markets and regulates, among others, offers of investments to the public and provides for the licensing of intermediaries. The SFO is administered by the Securities and Futures Commission ~~(the “SFC”~~(“SFC”). The SFC is also empowered ~~under the SFO~~ to establish standards for compliance as well as codes and guidelines. The relevant BlackRock subsidiaries and the employees conducting any of the regulated activities specified in the SFO are required to be licensed with the SFC, and are subject to the rules, codes and guidelines issued by the ~~SFC from time to time.~~SFC. Failure to comply with the applicable laws, regulations, codes and guidelines issued by the SFC could result in the suspension or revocations of the licenses granted by the SFC.

~~There~~BlackRock’s operations in Taiwan are ~~parallel legal~~regulated by the Taiwan Financial Supervisory Commission, which is responsible for regulating securities markets (including the Taiwan Stock Exchange and ~~regulatory arrangements in force in many other non-U.S. jurisdictions where BlackRock’s~~the Taiwan Futures Exchange), the banking industry and the insurance sector. Other financial regulators oversee BlackRock subsidiaries, ~~are authorized to conduct business. Among the various international regulations to which BlackRock is subject, are the extensive~~branches, and ~~increasingly stringent regulatory reporting requirements that necessitate the monitoring and reporting of issuer exposure levels (thresholds)~~representative offices across the ~~holdings of managed funds~~Asia-Pacific region, including in Singapore and ~~accounts and those of~~South Korea. Regulators in these jurisdictions have authority with respect to financial services including, among other things, the ~~Company.~~authority to grant or cancel required licenses or registrations. In addition, these regulators may subject certain BlackRock subsidiaries to net capital requirements.

AVAILABLE INFORMATION

BlackRock files annual, quarterly and current reports, proxy statements and all amendments to these reports and other information with the SEC. BlackRock makes available free-of-charge, on or through its website at http://www.blackrock.com, the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and all amendments to those filings, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The Company also makes available on its website the charters for the Audit Committee, Management Development and Compensation Committee, Nominating and Governance Committee and Risk Committee of the Board of Directors, its Code of Business Conduct and Ethics, its Code of Ethics for Chief Executive and Senior Financial Officers and its Corporate Governance Guidelines. Further, BlackRock will provide, without charge, upon written request, a copy of the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and all amendments to those filings as well as the committee charters, its Code of Business Conduct and Ethics, its Code of Ethics for Chief Executive and Senior Financial Officers and its Corporate Governance Guidelines. Requests for copies should be addressed to Investor Relations, BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. Investors may read and copy any document BlackRock files at the SEC’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Reports, proxy statements and other information regarding issuers that file electronically with the SEC, including BlackRock’s filings, are also available to the public from the SEC’s website at http://www.sec.gov.

Item 1A. ~~Risk~~Risk Factors

As a leading investment management firm, risk is an inherent part of BlackRock’s business. Global markets, by their nature, are prone to uncertainty and subject participants to a variety of risks. While BlackRock devotes significant resources across all of its operations to identify, measure, monitor, manage and analyze market, operating, legal, compliance, fiduciary and ~~compliance~~investment risks, BlackRock’s business, financial condition, operating results and nonoperating results could be materially adversely affected and the Company’s stock price could decline as a result of any of these risks and uncertainties, including the ones discussed below.

MARKET AND ~~EXTERNAL~~COMPETITION RISKS

Changes in the value levels of ~~the capital,~~equity, debt, real estate, commodities, or currency ~~markets~~ or other asset ~~classes could adversely impact revenues~~markets may cause assets under management (“AUM”), revenue and ~~earnings.~~earnings to decline.

BlackRock’s investment management ~~revenues are~~revenue is primarily comprised of fees based on a percentage of the value of ~~assets under management (“AUM”)~~AUM and, in some cases, performance fees which are normally expressed as a percentage of returns to the ~~returns in excess of a benchmark.~~client. Numerous factors, including price movements in the equity, debt ~~commodity,~~or currency markets, or in the price of real estate, ~~and~~commodities or alternative ~~investment asset prices, interest rates or foreign exchange rates~~investments in which BlackRock invests, could cause:

the value of AUM, ~~to decrease;~~

or the returns ~~realized~~BlackRock realizes on AUM, to decrease;

~~clients to withdraw~~the withdrawal of funds from BlackRock’s products in favor of products ~~that they perceive offer greater opportunity than BlackRock’s products;~~offered by competitors;

~~clients to rebalance~~the rebalancing or reallocating of assets ~~away from~~into BlackRock products that ~~BlackRock manages into products that it may not manage;~~

~~clients to rebalance assets away from products that earn higher fees into products with~~yield lower fees; ~~and~~

an impairment to the value of intangible assets and ~~goodwill.~~goodwill; or

a decrease in the value of seed or co-investment capital.

The occurrence of any of these events ~~could result in lower investment advisory, management, administration and performance fees and~~may cause the Company’s ~~revenues~~AUM, revenue and earnings to decline.

~~Competitive~~BlackRock’s investment advisory contracts may be terminated or may not be renewed by clients or fund boards on favorable terms and the liquidation of certain funds may be accelerated at the option of investors.

BlackRock derives a substantial portion of its revenue from its investment advisory business. The advisory or management contracts BlackRock has entered into with its clients, including the agreements that govern many of BlackRock’s investment funds, provide investors or, in some cases, the independent directors of private investment funds, with significant latitude to terminate such contracts, withdraw funds or liquidate funds by simple majority vote with limited notice or penalty, or to remove BlackRock as a fund’s investment advisor (or equivalent). BlackRock also manages its U.S. mutual funds, closed-end and exchange-traded funds under management contracts that must be renewed and approved annually by the funds’ respective boards of directors, a majority of whom are independent from the Company. BlackRock’s fee ~~pressures~~arrangements under any of its advisory or management contracts may be subject to reduction (including at the behest of a fund’s board of directors). In addition, if a number of BlackRock’s clients terminate their contracts, remove BlackRock from advisory roles, liquidate funds or fail to renew management contracts on favorable terms, the fees or carried interest BlackRock earns could ~~reduce revenues~~be reduced which may cause BlackRock’s AUM, revenue and ~~profit margins.~~earnings to decline.

Increased competition may cause BlackRock’s AUM, revenue and earnings to decline.

The investment management industry is highly competitive and has relatively low barriers to entry. ToBlackRock competes based on a number of factors including: investment performance, the ~~extent that BlackRock is forced~~level of fees charged, the quality and diversity of services and products provided, name recognition and reputation, and the ability to ~~compete~~develop new investment strategies and products to meet the changing needs of investors. Increased competition on the basis of ~~price,~~any of these factors, including competition leading to fee reductions on existing or ~~future~~ new business, ~~could~~may cause ~~revenues~~the Company’s AUM, revenue and ~~profit margins~~earnings to decline.

Failure to maintain Aladdin’s competitive position in a dynamic market for risk analytics could lead to a loss of clients and could impede BlackRock’s productivity and growth.

The sophisticated risk analytics that BlackRock provides via the Aladdin technology platform to support investment advisory and BlackRock Solutions clients are an important element of BlackRock’s competitive success. Aladdin’s competitive position is based in part on its ability to combine sophisticated risk analytics with comprehensive portfolio management, trading and operations tools on a single platform. Increased competition from risk analytics and investment management technology providers or a shift in client demand away to standalone or internally developed solutions, whether due to market-based or regulatory factors, may weaken Aladdin’s competitive position and may cause the Company’s revenue and earnings to decline. In addition, there can be no assurance that the Company will be able to effectively protect and enforce its intellectual property rights in Aladdin.

The impairment or failure of other financial institutions ~~could adversely affect~~may cause BlackRock’s ~~earnings.~~AUM, revenue and earnings to decline.

~~The~~BlackRock’s investment management activities expose the products and accounts ~~that BlackRock~~it manages ~~have exposure~~ to many different industries and counterparties, ~~and BlackRock routinely executes transactions with counterparties in the financial services industry,~~ including brokers and dealers, commercial ~~banks,~~and investment banks, clearing organizations, mutual and hedge funds, and other institutional clients. ~~Many of these transactions~~Transactions with counterparties expose ~~BlackRock’s~~the products and accounts BlackRock manages to credit risk in the event ~~of default of its counterparty. While~~the applicable counterparty defaults. Although BlackRock regularly assesses risks posed by ~~these~~its counterparties, such counterparties may be subject to sudden swings in the financial and credit markets that may impair their ability to ~~perform. Such a~~perform or they may otherwise fail to meet their obligations. Any such impairment or failure could negatively impact the performance of ~~BlackRock’s~~ products ~~and~~or accounts managed by BlackRock, which could lead to the loss of clients and ~~a decline in~~may cause BlackRock’s ~~revenues~~AUM, revenue and ~~earnings.~~earnings to decline.

The failure or negative performance of products ~~of other financial institutions could lead to reduced~~offered by competitors may cause AUM in similar BlackRock products ~~of BlackRock without regard~~ to ~~the performance~~decline irrespective of BlackRock’s ~~products.~~performance.

~~The~~Many competitors offer similar products to those offered by BlackRock and the failure or negative performance of competitors’ products ~~of other financial institutions~~ could lead to a loss of confidence in similar BlackRock products, irrespective of ~~BlackRock without regard to~~ the performance of ~~BlackRock’s~~such products. ~~Such~~Any loss of confidence in a ~~negative perception~~product type could lead to withdrawals, redemptions and liquidity issues in such products, ~~and have a material adverse impact on~~which may cause the Company’s AUM, ~~revenues~~revenue and earnings to decline.

Changes in the value of seed and co-investments that BlackRock owns could affect its nonoperating income and could increase the volatility of its earnings.

At December 31, 2015, BlackRock’s net economic investment ~~advisory contracts~~exposure of approximately $1.5 billion in its investments (see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations-Investments”) primarily resulted from co-investments and seed investments in its sponsored investment funds. Movements in the equity, debt or currency markets, or in the price of real estate, commodities or alternative investments, could lower the value of these investments, increase the volatility of BlackRock’s earnings and may ~~be terminated or may not be renewed by clients~~cause earnings to decline.

Acts of terror and the ~~liquidation~~continued threat of ~~certain funds may be accelerated at the option of investors.~~

Separate account and commingled trust clients may terminate their investment management contracts with BlackRock or withdraw funds on short notice. The Company experiences routine turnover in commingled trust funds and separate accounts and could, in the future, lose significant AUM in funds and accounts due to various circumstances such as adverse market conditions, fee competition or poor performance.

Additionally, BlackRock manages its U.S. mutual funds, closed-end and exchange-traded funds under management contracts with the funds that must be renewed and approved by the funds’ boards of directors annually and may be terminated by them without cause on short notice. Certain additional services, such as securities lending, also require approval by the funds’ boards of directors annually. A majority of the directors of each such fund are independent from BlackRock. Consequently, there can be no assurance that the board of directors of each fund managed by the Company will not terminate BlackRock or will approve the fund’s management contract each year or will not condition its approval on the terms of the management contract being revised in a way that is adverse to the Company.

Further, the governing agreements of many of the Company’s private investment funds generally provide that, subject to certain conditions, investors in those funds, and in some cases independent directors of those funds, may remove BlackRock as the investment adviser, general partner or the equivalent of the fund or liquidate the fund without cause by a simple majority vote, resulting in a reduction in the management or performance feesterrorism, as well as increased geopolitical unrest could adversely affect the ~~total carried interest BlackRock could earn.~~

~~Operating in~~global economy or specific international, regional and domestic markets, ~~increases~~which may cause BlackRock’s ~~operational, regulatory~~AUM, revenue and ~~other risks.~~

As a result of BlackRock’s extensive international business activities, the Company faces associated operational, regulatory, reputational and foreign exchange rate risks. The failure of the Company’s systems of internal control to properly mitigate such additional risks, or of its operating infrastructure to support such international activities, could result in operational failures and regulatory fines or sanctions, which could cause the Company’s earnings to decline.

~~RISKS RELATED TO BLACKROCK’S BUSINESS AND INTERNAL OPERATIONS~~Terrorist activity and the continued threat of terrorism and acts of civil or international hostility, both within the United States and abroad, as well as ongoing military and other actions and heightened security measures in response to these types of threats, may cause significant volatility and declines in the global markets, loss of life, property damage, disruptions to commerce and reduced economic activity. Acts of terror may also result in increased border security between countries which could adversely affect trade, impede growth and exacerbate refugee crises arising out of civil or international conflicts. Continued geopolitical unrest and terrorist activity that adversely affect the global economy or capital markets may cause BlackRock’s AUM, revenue and earnings to decline.

Risks Related to INVESTMENT PERFORMANCE

Poor investment performance could lead to the loss of clients and ~~a decline in revenues~~may cause AUM, revenue and ~~earnings.~~earnings to decline.

The Company’s management believes that investment performance, including the efficient delivery of beta for passively managed products, is one of the most important factors for the growth and retention of AUM. Poor investment performance relative to applicable portfolio benchmarks or to competitors ~~could reduce revenues~~may cause AUM, revenue and ~~cause~~ earnings to decline as a result of:

~~existing clients withdrawing funds~~client withdrawals in favor of better performing products;

client shifts from active to passive products which ~~could result in~~charge lower ~~investment advisory and administration~~ fees;

the diminishing ability to attract additional funds from existing and new clients;

the Company earning reduced, minimal or no performance fees; ~~and~~

an impairment to the value of intangible assets and ~~goodwill.~~goodwill; or

a decrease in investment returns on seed and co-investment capital.

Performance fees may increase volatility of both revenue and earnings.

A portion of BlackRock’s ~~revenues~~revenue is derived from performance fees on investment ~~and risk management~~ advisory assignments. Performance fees represented

~~$561~~ $621 million, or 6%5%, of total revenue for the year ended December 31, ~~2013. In most cases, performance fees are based on relative or absolute investment returns, although in some cases they are based on achieving specific service standards.~~2015. Generally, the Company is entitled to a performance ~~fees~~fee only if the agreement pursuant to which it is managing the assets provides for one and if returns on the related ~~portfolios~~portfolio exceed agreed-upon periodic or cumulative return targets. If these targets are not exceeded, a performance ~~fees~~fee for that period will not be earned and, if targets are based on cumulative returns, the Company may not earn performance fees in future ~~periods.~~periods, which may cause AUM, revenue and earnings to decline.

~~Changes~~Failure to identify errors in the ~~value of seed~~quantitative models BlackRock utilizes to manage its business could adversely impact product performance and ~~co-investments that~~ client relationships.

BlackRock ~~owns could affect BlackRock’s nonoperating income or earnings~~employs various quantitative models to support its investment decisions and ~~could increase the volatility of its earnings.~~

~~At December 31, 2013, BlackRock’s net economic investment exposure of approximately $1.6 billion in its investments (see “Item 7 — Management’s Discussion~~allocations, including those related to risk assessment, portfolio management, trading and ~~Analysis of Financial Condition~~hedging activities and ~~Results of Operations-Investments”) primarily resulted from co-investments and seed investments in its sponsored investment funds. A decline~~product valuations. Any errors in the ~~prices of equity~~underlying models or ~~debt securities,~~model assumptions could have unanticipated and adverse consequences on BlackRock’s business and reputation.

TECHNOLOGY AND OPERATIONAL RISKS

A failure in BlackRock’s operational systems or infrastructure, including business continuity plans, could disrupt operations, damage the ~~value of real estate or other alternative investments could lower the value of these investments, increase the volatility of~~Company’s reputation and may cause BlackRock’s AUM, revenue and earnings ~~and, if such prices decline or BlackRock realizes losses, could result in a decline in earnings.~~to decline.

Additionally, the Company may generate realized and unrealized capital losses on such seed investments and co-investments. U.S. Federal realized capital losses may be carried back three years and carried forward five years and offset against realized capital gains for federal income tax purposes. The Company has unrealized capital losses for which a deferred tax asset has been established. In the event such unrealized losses are realized, the Company may not be able to offset such losses within the carryback or carryforward period or from future realized capital gains, in which case the deferred tax asset will not be realized. The failure to utilize the deferred tax asset could materially increase BlackRock’s ~~income tax expense.~~

~~Failure to maintain adequate infrastructure and a technological advantage could lead to a loss of clients and could impede BlackRock’s productivity and growth.~~

~~The Company’s~~ infrastructure, including its technological capacity, data centers and office space, is vital to the competitiveness of its business. Moreover a significant portion of BlackRock’s critical business operations are concentrated in a limited number of geographic areas, including San Francisco, New York, London and Gurgaon. The failure to maintain an ~~adequate~~ infrastructure commensurate with the size and scope of ~~its~~BlackRock’s business, ~~including any expansion,~~ or the occurrence of a business outage or ~~failure of existing infrastructure,~~event outside BlackRock’s control, including a major earthquake, hurricane, fire, terrorist act, pandemic or other catastrophic event in any location at which BlackRock maintains a major presence, could materially impact operations, result in disruption to the business or impede its growth. Notwithstanding BlackRock’s efforts to ensure business continuity, if it fails to keep business continuity plans up-to-date or if such plans, including secure back-up facilities and ~~impede~~systems and the availability of back-up employees, are improperly implemented or deployed during a disruption, the Company’s ~~productivity~~ability to operate could be adversely impacted which may cause AUM, revenue and ~~growth, which could cause the Company’s~~ earnings to decline or ~~could~~ impact the Company’s ability to comply with regulatory obligations leading to reputational harm, regulatory fines ~~and~~and/or sanctions.

A ~~key element to BlackRock’s continued success is the ability to maintain~~cyber-attack or a ~~technological advantage in providing the sophisticated risk analytics incorporated into BlackRock’s~~~~Aladdin~~ technology platform that support investment advisory and BRS clients. Moreover, the Company’s technological and software advantage is dependent on a number of third parties who provide various types of data and software. The failure ~~of these third parties to provide such data or software could result in operational difficulties~~

and adversely impact BlackRock’s ability to provide services to its investment advisory and BRS clients. There can be no assurance that the Company will be able to maintain this technological advantage or be able to effectively protect and enforce its intellectual property rights in these systems and processes.

~~Failure~~ to implement effective information and cyber security policies, procedures and capabilities could disrupt operations and cause financial losses that ~~could result in a decrease in~~may cause BlackRock’s ~~earnings.~~AUM, revenue and earnings to decline.

BlackRock is dependent on the effectiveness of ~~its~~the information and cyber security policies, procedures and capabilities it maintains to protect its computer and telecommunications systems and the data that reside on or are transmitted through them. An externally caused information security incident, such as a hacker attack, virus, phishing scam or worm, or an internally caused issue, such as failure to control access to sensitive systems, could materially interrupt business operations or cause disclosure or modification of sensitive or confidential client or competitive information.

There have been a number of recent highly publicized cases involving financial services and consumer-based companies reporting the unauthorized disclosure of client or customer information, as well as cyber-attacks involving the dissemination, theft and destruction of corporate information or other assets, as a result of failure to follow procedures by employees or contractors or as a result of actions by third parties, including actions by terrorist organizations and hostile foreign governments. BlackRock has been the target of attempted cyber-attacks, as well as the co-opting of its brand to create fraudulent websites, and must continuously monitor and develop its systems to protect its technology infrastructure and data from misappropriation or corruption, as the failure to do so could disrupt BlackRock’s operations and cause financial losses. In addition, due to BlackRock’s interconnectivity with third-party vendors, central agents, exchanges, clearing houses and other financial institutions, BlackRock may be adversely affected if any of them are subject to a successful cyber-attack or other information security event. Any information security incident or cyber-attack against BlackRock or third parties with whom it is connected could result in material financial loss, loss of competitive position, regulatory ~~actions,~~fines and/or sanctions, breach of client contracts, reputational harm or legal liability, which, in turn, may cause BlackRock’s AUM, revenue and earnings to decline.

Failure or unavailability of third-party dependencies may adversely affect Aladdin operations and could ~~cause~~lead to a ~~decline~~loss of clients and could impede BlackRock’s productivity and growth

BlackRock relies on its ability to maintain a robust and secure technological framework to maximize the benefit of the Aladdin platform. The analytical capabilities of Aladdin depend on the ability of a number of third parties to provide data and other information as inputs into Aladdin analytical calculations. The failure of these third parties to provide such data or information, or disruption of such information flows, could result in operational difficulties and adversely impact BlackRock’s ability to provide services to its investment advisory and BlackRock Solutions clients.

Operating risks associated with BlackRock’s securities lending program may result in client losses.

BlackRock lends securities to banks and broker-dealers on behalf of certain of its clients. In these securities lending transactions, the borrower is required to provide and maintain collateral at or above regulatory minimums. Securities on loan are marked to market daily to determine if the borrower is required to pledge additional collateral. BlackRock must manage this process and is charged with mitigating the associated operational risks. The failure of BlackRock’s controls to mitigate such operational risks could result in financial losses for the Company’s clients that participate in its securities lending programs (separate from the risks of collateral investments), and BlackRock may be held liable for any failure to manage any such risks.

BlackRock indemnifies certain securities lending clients for specified losses as a result of a borrower default.

BlackRock provides borrower default indemnification to certain of its securities lending clients. In the event of a borrower default, BlackRock would use the collateral pledged by the borrower to repurchase securities out on loan in order to replace them in a client’s account. Borrower default indemnification is limited to the shortfall that occurs in the event the collateral available at the time of the borrower’s default is insufficient to repurchase those securities out on loan. BlackRock requires all borrowers to mark to market their pledged collateral daily to levels in excess of the value of the securities on loan to mitigate the likelihood of the indemnity being triggered. Where the collateral is in the form of cash, the indemnities BlackRock provides do not guarantee, assume or otherwise insure the investment performance or return of any cash collateral vehicle into which that cash collateral is invested. The amount of securities on loan as of December 31, 2015 and subject to indemnification was $169.3 billion. BlackRock held, as agent, cash and securities totaling $179.6 billion as collateral for indemnified securities on loan at December 31, 2015. Significant borrower defaults occurring simultaneously with rapid declines in the value of collateral pledged and/or increases in the value of the securities loaned may create collateral shortfalls, which could result in material liabilities under these indemnities and may cause the Company’s ~~earnings.~~AUM, revenue and earnings to decline.

BlackRock’s decision to provide support to particular products from time to time, or the inability to provide support, may cause AUM, revenue and earnings to decline.

BlackRock may, at its option, from time to time support investment products through capital or other credit support. Such support may utilize capital and liquidity that would otherwise be available for other corporate purposes. Losses on such support, as well as regulatory restrictions on the Company’s ability to provide such support or the failure to have available or devote sufficient capital or liquidity to support products, may cause AUM, revenue and earnings to decline.

Failure to maintain adequate ~~business continuity plans could have a material adverse impact on BlackRock~~corporate and ~~its products.~~

~~A significant portion of~~contingent liquidity may cause BlackRock’s ~~critical business operations is concentrated in a few geographic areas, including San Francisco, California, New York, New York~~AUM, liquidity and London, England. A major earthquake, hurricane, fire, terrorist act or other catastrophic event in any of these locations could result in disruption to the business. The failure of the Company to maintain updated adequate business continuity plans, including secure backup facilities, systems and personnel could impede the Company’s ability to operate during, or could effect, a disruption, which could cause the Company’s earnings to ~~decline.~~

~~Failure to maintain adequate liquidity~~decline, as well as harm its prospects for ~~general business operations could adversely impact BlackRock’s financial condition and growth prospects.~~growth.

BlackRock’s ability to meet anticipated cash needs depends upon a number of factors, including its ability to maintain and grow AUM, its creditworthiness and operating cash flows. Failure to maintain adequate liquidity could lead to unanticipated costs and force BlackRock to revise existing strategic and business initiatives. BlackRock’s access to ~~capital~~equity and debt markets and its ability to issue public or private debt, or secure lines of credit or commercial paper back-up lines, on reasonable terms may be limited by adverse market conditions, a reduction in its long- or short-term credit ratings, ~~as well as~~or changes in government regulations, including tax and interest rates. Failure to obtain funds and/or financing, ~~could adversely impact~~or any adverse change to the cost of obtaining such funds and/or financing, may cause BlackRock’s ~~financial condition~~AUM, revenue and earnings to decline, curtail its operations and limit or impede its prospects for growth.

~~Failure to comply with client contractual requirements and/or guidelines could result in damage awards against BlackRock and loss of revenues due to client terminations.~~20

When clients retain BlackRock to manage assets or provide products or services on their behalf, they typically specify guidelines or contractual requirements that the Company is required to observe in the provision of its services. A failure

to comply with these guidelines or contractual requirements could result in damage to BlackRock’s reputation or in its clients seeking to recover losses, withdrawing their assets or terminating their contracts, any of which could cause the Company’s AUM, revenues and earnings to decline.

~~Failure to identify errors in the quantitative models BlackRock utilizes to manage its business could adversely impact product performance and client relationships.~~

BlackRock employs various quantitative models to support its investment decisions and allocations, including those related to risk assessment, portfolio management, trading and hedging activities and product valuations. Any errors in the underlying models or model assumptions could have unanticipated and adverse consequences on BlackRock’s business and reputation.

~~The determination to provide support to particular products from time to time may reduce earnings or other investments in the business.~~

BlackRock may, at its option, from time to time support investment products through capital or credit support or indemnifications. Such support and indemnifications utilize capital that would otherwise be available for other corporate purposes. Losses or prohibitions on such support and indemnifications, or failure to have or devote sufficient capital to support products, could have an adverse impact on revenues and earnings.

~~Failure to manage risks in operating BlackRock’s securities lending program for clients could lead to a loss of clients and a decline in revenues and liquidity.~~

On behalf of certain clients, BlackRock lends securities to banks and broker-dealers. In these securities lending transactions, the borrower is required to provide and maintain collateral at or above regulatory minimums. Securities on loan are marked to market daily to determine if the borrower is required to pledge additional collateral. BlackRock must manage risks associated with (i) ensuring that the value of the collateral held against the securities on loan does not decline in value or become illiquid and that its nature and value complies with regulatory requirements and investment requirements; (ii) the potential that a borrower defaults or does not return a loaned security on a timely basis; and (iii) errors in the settlement of securities, daily mark-to-market valuations and collateral collection. The failure of the Company’s controls to mitigate these risks could result in financial losses for the Company’s clients that participate in its securities lending programs as well as for the Company.

~~The determination to provide securities lending indemnifications may reduce earnings or other investments in the business.~~

BlackRock has issued certain indemnifications to certain securities lending clients against potential loss resulting from a borrower’s failure to fulfill its obligations should the value of the collateral pledged by the borrower at the time of a potential default be insufficient to cover the borrower’s obligations under the securities lending agreement. These indemnifications cover only the collateral shortfall, and do not guarantee, assume or otherwise insure the investment performance or return of any cash collateral vehicle into which securities lending cash collateral is invested. The amount of securities on loan as of December 31, 2013 and subject to

indemnification was $118.3 billion. BlackRock held, as agent, cash and securities totaling $124.6 billion as collateral for indemnified securities on loan at December 31, 2013. BlackRock expects indemnified balances to continue to increase over time. The failure of the Company to mitigate these risks could result in financial losses for the Company’s clients that participate in its securities lending programs as well as for the Company.

~~Failure to establish adequate controls and risk management policies, or fraud,~~Fraud, or the circumvention of controls and risk management policies, could have an adverse effect on BlackRock’s reputation, which may cause the Company’s AUM, revenue and ~~financial position.~~earnings to decline.

Although BlackRock has adopted a comprehensive risk management process and continues to enhance various controls, procedures, policies and systems to monitor and manage risks, it cannot assure that such controls, procedures, policies and systems will successfully identify and manage internal and external risks to its businesses. BlackRock is subject to the risk that its employees, contractors or other third parties may deliberately seek to circumvent established controls to commit fraud or act in ways that are inconsistent with the Company’s controls, policies and procedures. Persistent attempts to circumvent policies and controls or repeated ~~attempts~~incidents involving fraud, conflicts of interests or ~~circumvention~~transgressions of policies and controls could have ~~a materially~~an adverse ~~impact~~effect on BlackRock’s reputation, ~~and~~which could ~~lead to~~cause costly regulatory ~~inquiries.~~

~~Additional acquisitions~~inquiries, fines and/or sanctions and may ~~decrease earnings and harm~~cause the Company’s ~~competitive position if not successful.~~AUM, revenue and earnings to decline.

BlackRock ~~employs a variety of strategies intended~~may be unable to ~~enhance earnings~~develop new products and ~~expand product offerings in order to improve profit margins. These strategies have included hiring smaller-sized investment teams, acquisitions of investment management businesses, such as MGPA~~services and Credit Suisse’s ETF franchise, and other small and medium-sized strategic acquisitions to expand geographical reach, access new clients or pursue other business and financial opportunities. These strategies may not be effective, and failure to successfully develop and implement these strategies may decrease earnings and harm certain aspects of the Company’s competitive position in the investment management industry. These strategic transactions also involve a number of financial accounting, tax, regulatory and operational challenges and uncertainties, including the assumption of pre-existing liabilities, and failure to identify and mitigate associated risks through due diligence and indemnification provisions could adversely impact BlackRock’s earnings and reputation. In the event BlackRock pursues additional acquisitions, it may not be able to find suitable businesses to acquire at acceptable prices, and it may not be able to successfully integrate or realize the intended benefits from such acquisitions.

~~The~~ development of new products and services may expose BlackRock to additional costs or operational risk.

BlackRock’s financial performance depends, in part, on its ability to develop, market and manage new investment products and services. The development and introduction of new products and services require continued innovative efforts on the part of BlackRock and may require significant time and resources as well as ongoing support and investment. Substantial risk and uncertainties are associated with the introduction of new products and services, including the implementation of new and appropriate operational controls and procedures, shifting client and market preferences, the

introduction of competing products or services and compliance with regulatory requirements. ~~Failure~~A failure to continue to innovate to introduce new products and services or to successfully manage ~~these~~the risks associated with such products and services may cause BlackRock’s ~~revenues and~~ costs to fluctuate, which may cause its AUM, revenue and ~~could have an adverse impact on its business~~earnings to decline.

The failure to recruit and ~~reputation.~~

~~Loss of~~retain employees and develop and implement effective executive succession could lead to the loss of clients and ~~a decline in revenues.~~may cause AUM, revenue and earnings to decline.

~~The~~BlackRock’s success is largely dependent on the talents and efforts of its highly skilled workforce and the Company’s ability to ~~attract~~plan for the future long-term growth of the business by identifying and ~~retain quality personnel has contributed significantly to BlackRock’s growth and success and is important to attracting and retaining clients.~~developing those employees who can ultimately transition into key roles within BlackRock. The market for qualified fund managers, investment analysts, ~~financial advisers~~technology and risk specialists and other professionals is ~~competitive.~~competitive, and factors that affect BlackRock’s ability to attract and retain such employees include the Company’s reputation, the compensation and benefits it provides, and its commitment to effectively managing executive succession, including the development and training of qualified individuals. BlackRock’s ability to attract and retain talent may also be affected if European regulations instituting bonus caps or limiting the amount of compensation that asset managers can pay to certain employees are enacted in the varying formats in which they have been proposed.

In addition, a percentage of the deferred compensation that BlackRock pays to its employees is tied to the Company’s share price. As such, if BlackRock’s share price were to decrease materially, the retention value of such deferred compensation would decrease. There can be no assurance that the Company will continue to be successful in its efforts to recruit and retain ~~required personnel. Loss~~employees and effectively manage executive succession. If BlackRock is unable to offer competitive compensation or otherwise attract and retain talented individuals, or if it fails to effectively manage executive succession, the Company’s ability to compete effectively and retain its existing clients may be materially impacted.

Future inorganic transactions may harm the Company’s competitive or financial position if they are not successful.

BlackRock employs a variety of ~~personnel~~organic and inorganic strategies intended to enhance earnings, increase product offerings, access new clients, leverage advances in technology and expand into new geographies. Inorganic strategies have included hiring smaller-sized investment teams, and acquiring investment management businesses and other small and medium-sized companies. Inorganic transactions involve a number of financial, accounting, tax, regulatory, geographical and operational challenges and uncertainties, including in some cases the assumption of pre-existing liabilities. Any failure to identify and mitigate these risks through due diligence and indemnification provisions could ~~have a~~adversely impact BlackRock’s reputation, may cause its AUM, revenue and earnings to decline, and may harm the Company’s competitive position in the investment management industry. Moreover, there can be no assurances that BlackRock will be able to successfully integrate or realize the intended benefits from future inorganic transactions.

Investments in real assets such as real estate, infrastructure and energy assets may expose BlackRock and its funds and accounts to new or increased risks and liabilities, as well as reputational harm.

Investments in real assets, including real estate, infrastructure and energy assets, may expose BlackRock and its funds and accounts to increased risks and liabilities that are inherent in the ownership and management of such assets. These may include:

construction risks, including labor disputes or work stoppages, shortages of material or interruptions to the availability of necessary equipment;

accidents, adverse ~~effect~~weather, force majeure or catastrophic events, such as explosions, fires or terrorist activity beyond BlackRock’s control;

personal injury or property damage;

failures on the ~~Company.~~part of third-party managers or sub-contractors appointed in connection with investments or projects to adequately perform their contractual duties or operate in accordance with applicable laws;

exposure to stringent and complex foreign, federal, state and local laws, ordinances and regulations, including those related to permits, government contracting, conservation, exploration and production, tenancy, occupational health and safety, foreign investment and environmental protection;

environmental hazards, such as natural gas leaks, product and waste spills, pipeline and tank ruptures, and unauthorized discharges of products, wastes and other pollutants;

changes to the supply and demand for properties and/or tenancies or fluctuations in the price of commodities;

•

the financial resources of tenants; and

contingent liabilities on disposition of assets.

The above risks may expose BlackRock’s funds and accounts to additional expenses and liabilities, including costs associated with delays or remediation costs, and increased legal or regulatory costs, all of which could impact the returns earned by BlackRock’s clients. These risks could also result in direct liability for BlackRock by exposing BlackRock to regulatory sanction or litigation, including claims for compensatory or punitive damages. Similarly, market conditions may change during the course of developments or projects in which BlackRock invests that make such development or project less attractive than at the time it was commenced and potentially harm the investment returns of BlackRock’s clients. The occurrence of any such events may expose BlackRock to reputational harm, divert management’s time and attention away from BlackRock’s business activities or cause AUM, revenue and earnings to decline.

~~RISKS RELATED TO~~Operating in international markets increases BlackRock’s operational, political, regulatory and other risks.

As a result of BlackRock’s extensive international operations, the Company faces associated operational, regulatory, reputational, political and foreign exchange rate risks, many of which are outside of the Company’s control. The failure of the Company’s systems of internal control to mitigate such risks, or of its operating infrastructure to support its global activities, could result in operational failures and regulatory fines and/or sanctions, which may cause the Company’s AUM, revenue and earnings to decline.

Risks Related to KEY ~~RELATIONSHIPS~~THIRD-PARTY Relationships

The failure of a key vendor to BlackRock to fulfill its obligations could have a material adverse effect on ~~BlackRock~~BlackRock’s reputation or business, which may cause the Company’s AUM, revenue and ~~its products.~~earnings to decline.

BlackRock depends on a number of key vendors for various fund administration, accounting, custody, risk analytics, market data, market indices and transfer agent roles and other distribution and operational needs. BlackRock performs focused diligence on its vendors in an effort to ensure they operate in accordance with expectations; however, to the extent any significant deficiencies are uncovered, there may be few, or no, feasible alternative vendors available to BlackRock in certain areas. The failure or inability of BlackRock to diversify its sources for key services or the failure of any key ~~vendors~~vendor to fulfill ~~their~~its obligations could lead to operational and regulatory issues for the Company, ~~and in~~including with respect to certain of its products, which could result in reputational harm and ~~financial losses for~~may cause BlackRock’s AUM, revenue and earnings to decline.

Any disruption to the ~~Company.~~Company’s distribution channels may cause BlackRock’s AUM, revenue and earnings to decline.

~~Bank~~BlackRock relies on a number of ~~America/Merrill Lynch is an important distributor of BlackRock’s products, and the Company is, therefore, subject~~third parties to ~~risks associated with the business of Bank of America/Merrill Lynch.~~

~~Under a global distribution agreement entered into with Merrill Lynch in 2006, Merrill Lynch, which merged with Bank of America on January 1, 2009, provides~~provide distribution, portfolio administration and servicing for certain BlackRock investment management products and services through ~~its~~their various distribution channels. ~~The Company may not be successful in distributing products through~~ In particular, BlackRock entered into a global distribution agreement with Bank of America/Merrill Lynch or in ~~distributing~~2006, which is subject to renegotiation at the end of 2016. BlackRock’s ability to maintain strong relationships with its ~~products and services through other third-party distributors.~~distributors is material to the Company’s future performance. If BlackRock is unable to distribute its products and services successfully, or if it experiences an increase in distribution-related costs, or if it is unable to replace or renew existing distribution arrangements, BlackRock’s AUM, revenue and earnings may decline.

Disruption to the operations of third parties whose functions are integral to BlackRock’s Exchange Traded Fund (“ETF”) platform may adversely affect the prices at which ETFs trade, particularly during periods of market volatility.

BlackRock is the largest provider of ETFs globally. Shares of ETFs trade on stock exchanges at prices at, above or below the ETF’s most recent net asset value (“NAV”). The NAV of an ETF is calculated at the end of each business day and fluctuates with changes in the market value of the ETF’s holdings. The trading price of the ETF’s shares fluctuates continuously throughout trading hours. While an ETF’s creation/redemption feature and the arbitrage mechanism are designed to make it more likely that the ETF’s shares normally will trade at prices close to the ETF’s NAV, exchange prices may deviate significantly from the ETF’s NAV. ETF market prices are subject to numerous potential risks, including trading halts invoked by a stock exchange, inability or unwillingness of market markers, authorized participants, settlement systems or other market participants to perform functions necessary for an ETF’s arbitrage mechanism to function effectively, or significant market volatility. Although BlackRock and other large issuers of ETFs are working with market participants to enhance U.S. equity market resiliency, there can be no assurance that structural reforms will be implemented in a timely or effective fashion, or at all. Moreover, if market events lead to incidences where ETFs trade at prices that deviate significantly from an ETF’s NAV, or trading halts are invoked by the relevant stock exchange or market, investors may lose confidence in ETF products and redeem their holdings, which may cause BlackRock’s AUM, revenue and earnings to decline.

Legal and Regulatory Risks

BlackRock is subject to extensive and pervasive regulation around the world.

BlackRock’s business is subject to extensive regulation around the world. These regulations subject BlackRock’s business activities to a pervasive array of increasingly detailed operational requirements, compliance with which is costly, time-consuming and complex. BlackRock may be adversely affected by its failure to comply with current laws and regulations or by changes in the interpretation or enforcement of existing laws and regulations. Challenges associated with interpreting regulations issued in numerous countries in a globally consistent manner may add to such risks, if regulators in different jurisdictions have inconsistent views or provide only limited regulatory guidance. In particular, violation of applicable laws or regulations could result in fines and/or sanctions, temporary or permanent prohibition of certain activities, reputational harm and related client terminations, suspensions of employees or revocation of their licenses, suspension or termination of investment adviser, broker-dealer or other registrations, or suspension or termination of bank charter or other sanctions, which could have a material adverse effect on BlackRock’s reputation or business and may cause the Company’s AUM, revenue and earnings to decline. For a more extensive discussion of the laws, regulations and regulators to which BlackRock is subject, see “Item 1 – Business – Regulation.”

Regulatory reforms in the United States and internationally expose BlackRock and its clients to increasing regulatory scrutiny.

In recent years a number of proposals for regulatory reform have been introduced, and the level of regulatory scrutiny to which BlackRock is subject is expected to increase. See “Item 1 – Business – Regulation.” A number of regulatory reforms that have been proposed may require BlackRock to alter its business or operating activities, which could be time-consuming and costly and which may impede the Company’s growth and may cause AUM, revenue and earnings to decline. Regulatory reform may also impact BlackRock’s banking, insurance company and pension fund clients, which could cause them to change their investment strategies or allocations in manners that may be adverse to BlackRock. Key regulatory reforms that may impact the Company include:

Designation as a systemically important financial institution: Both the FSB, working with IOSCO, and FSOC are considering potential systemic risk related to asset management. In July 2014, the FSOC issued a statement indicating that their review would focus on products and activities, and FSOC subsequently released a request for information addressing: market liquidity and fund redemption risk, the use of leverage, operational risk, and the resolution of asset managers including the transition of client assets. In June 2015, IOSCO issued a statement indicating they also favored a products and activities approach in their review of asset managers, and in July 2015, the FSB made a similar announcement. In September 2015, the FSB released a statement indicating that their review would focus on: market liquidity and fund redemption risk, the use of leverage, securities lending practices, operational risk, and risks from pension funds and sovereign wealth funds. Although FSOC, IOSCO and FSB have shifted from a focus on designating firms and/or funds as systemically important (i.e., G-SIFI or SIFI designations), the process is ongoing and may lead to designations in the future. In the event that BlackRock receives a SIFI designation, under the DFA, the Federal Reserve System is charged with establishing enhanced regulatory requirements for nonbank financial institutions and BlackRock could become subject to its direct supervision. If BlackRock were designated a SIFI or G-SIFI, it could become subject to enhanced prudential, capital, supervisory and other requirements, such as risk-based capital requirements, leverage limits, liquidity requirements, resolution plan and credit exposure report requirements, concentration limits, a contingent capital requirement, enhanced public disclosures, short-term debt limits and overall risk management requirements. Requirements such as these, which were designed to regulate banking institutions, would be extremely burdensome for BlackRock, unless they were modified to be applicable to an asset manager. No proposals have been made indicating how such measures would be adapted for asset managers, if at all.

The Volcker Rule: Provisions of the DFA referred to as the “Volcker Rule” created a new section of the BHC Act that places limitations on the ability of banks and their subsidiaries to engage in proprietary trading and to invest in and transact with certain private investment funds, including hedge funds, private equity funds and funds of funds (collectively “covered funds”). Conformance with the Volcker Rule’s requirements may reduce the level of market making and liquidity activities of several of BlackRock’s trading counterparties, which may adversely impact the liquidity and, in some cases, the pricing of various financial instruments in which BlackRock client accounts invest. Because the Federal Reserve currently treats BlackRock as a nonbank subsidiary of PNC, BlackRock may be required to conform its activities to the requirements of the Volcker Rule. On December 18, 2014, the Federal Reserve announced a second extension to the Volcker Rule conformance period, giving banking entities until July 21, 2016, to conform investments in and relationships with covered funds and foreign funds that were in place prior to December 31, 2013 (“legacy covered funds”). The Federal Reserve also announced its intention to grant banking entities an additional one-year extension of the conformance period until July 21, 2017, to conform ownership interests in and relationships with these legacy covered funds. BlackRock has chosen to commence a conformance program for covered funds, including legacy covered funds. The Volcker Rule’s restrictions may, among other things, limit BlackRock’s ability to invest in covered funds and require BlackRock to remove its name from the names of its covered funds. The Volcker Rule may also require BlackRock to sell certain seed and co-investments that it holds in covered funds, which may occur at a discount to existing carrying value, depending on market conditions.

Money market mutual fund reform: Approximately 3% of BlackRock’s AUM as of December 31, 2015, consisted of assets in U.S. MMFs, of which institutional prime or institutional municipal MMFs (including offshore funds that feed into such MMFs) comprised approximately 2%. In July 2014, the SEC adopted new rules designed to reform the regulatory structure governing MMFs and to address the perceived systemic risks that such funds present. The new rules, to which U.S. MMFs must conform by October 2016, require institutional prime and institutional municipal MMFs to employ a floating net asset value per share method of pricing, which allows the daily share prices of these funds to fluctuate along with changes in the market-based value of fund assets. Retail MMFs may continue operating with a constant net asset value per share. The rules also provide for new tools for institutional and retail MMFs’ boards designed to address market shocks, including liquidity fees and redemption gates. The new rules do not apply to government (non-municipal) MMFs, although such funds may “opt-in” to the new liquidity fee and redemption gate provisions if previously disclosed to investors. Implementation of these new rules requires the development of new or additional systems by BlackRock and the funds’ service providers. BlackRock has commenced efforts to move its MMFs into compliance in advance of the deadline. The impact of the rules that affect the structure of the funds on BlackRock’s business remains uncertain as clients must decide which products fit their investment needs. The new rules will, however, affect certain of BlackRock’s funds’ investment strategies, portfolio liquidity and return potential. The new rules will also result in changes to BlackRock’s existing U.S. MMFs and may reduce the attractiveness of certain U.S. MMFs to investors.

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Regulation of swaps and derivatives: The implementation of DFA regulations, similar regulations in the EU and other global jurisdictions relating to swaps and derivatives could impact the manner in which BlackRock-advised funds and accounts use and trade swaps and other derivatives, increasing the costs of derivatives trading for BlackRock’s clients. Various global rules and regulations applicable to the use of financial products by funds, accounts and counterparties that have been adopted or proposed will require BlackRock to build and implement new compliance monitoring procedures to address the enhanced level of oversight to which it and its clients will be subject. These rules will also introduce new central clearing requirements for certain swap transactions and will require that certain swaps be executed only on or through electronic trading venues (as opposed to over the phone or other execution methods), with which BlackRock will have to comply. In the United States, certain interest rate swaps and certain index credit default swaps are already subject to the DFA central clearing and electronic trading venue requirements, with additional products and asset classes potentially becoming subject to these requirements in 2016 and beyond. For swaps and security-based swaps that are not centrally cleared, U.S. bank regulators recently adopted rules that could require BlackRock-advised funds and accounts to post margin payments when trading with a swap dealer that is regulated by one of the U.S. bank regulators. The CFTC also recently adopted similar margin rules applicable when trading non-cleared swaps with swap dealers who are not regulated by one of the U.S. bank regulators. These rules have the potential to increase the complexity and cost of trading non-cleared derivatives for BlackRock's clients. In EMEA, central clearing requirements will be implemented

in a phased manner and will apply to BlackRock funds and accounts beginning in the latter half of 2016. The new rules and regulations may produce regulatory inconsistencies in global derivatives trading rules and increase BlackRock’s operational and legal risks.

SEC asset management industry initiatives: The SEC and its staff continue to engage in various initiatives and reviews that seek to improve and modernize the regulatory structure governing the asset management industry, and registered investment companies in particular. During 2015, the SEC proposed, among other things: enhanced reporting by investment advisors, enhanced reporting on registered mutual funds, new rules for liquidity risk management in registered funds, and new rules governing the use of derivatives and leverage by registered investment companies and business development companies. Furthermore, in June 2015, the SEC issued a request for comments regarding practices related to ETFs, which is widely expected to result in a future rulemaking. The SEC has also indicated an intention to propose new rules for the stress testing of registered investment companies and transition planning by asset managers, including the transfer of client assets. The SEC’s focus has also been directed toward risk identification and controls in various areas, including the use of derivatives and other trading practices (as reflected in the SEC’s late December 2015 rule proposal referenced in “Item 1 – Business – Regulation – Regulation of Swaps and Derivatives” above), cyber-security and the evaluation of systemic risks. While these proposals have yet to be finalized into new rules, any new rules, guidance or regulatory initiatives resulting from these efforts could require BlackRock to alter its business or operating activities or fund management practices, or increase its public reporting and disclosure requirements, which could be time-consuming and costly and which may impede BlackRock's growth and may cause AUM, revenue and earnings to decline.

Revised DoL Fiduciary Rule: In April 2015, the DoL proposed a new regulation defining the term "fiduciary" for purposes of the fiduciary responsibility provisions of Title I of ERISA and the prohibited transaction exercise tax provisions of the IRS. The rule has been highly criticized by industry participants, particularly retail intermediaries, and BlackRock is engaging with the DoL, trade associations and industry participants in an effort to affect revisions to the proposed rule. To the extent the rule is enacted as written, it will require BlackRock to re-paper a number of its distribution relationships, create compliance and operational challenges for BlackRock’s distribution partners and may limit BlackRock’s ability to provide certain useful services and education to its clients.

Increased international regulatory scrutiny: In addition to the extensive scrutiny BlackRock faces from U.S.-based regulators, the Company and its subsidiaries are also subject to the authority of numerous governmental and regulatory bodies globally, in particular in Europe and the Asia-Pacific region. These regulators have imposed numerous regulations, guidelines and standards on the activities of BlackRock and its subsidiaries covering a variety of areas, including capital resources requirements, marketing activities, client and investor protections, senior management arrangements, and system and control requirements. In the event that BlackRock or any of its subsidiaries fails to comply with these often complex guidelines, regulations and standards, the regulators have broad powers to suspend or revoke any licenses they may have granted and/or to impose fines and/or sanctions.

European Union Directives: In the aftermath of the financial crisis, the European Commission (“EC”) initiated a plan for EU financial reform, including a number of consultations and initiatives intended to improve retail investor protections, which the EC reflected in new or updated Directives and regulations. The resulting review of MiFID, introduction of AIFMD, the introduction of MiFID II and the revision of the UCITS Directive have increased the compliance, disclosure and other obligations BlackRock faces in the European Economic Area. Once fully implemented, these Directives will have significant and wide-ranging impacts on EU securities and derivative markets, products and distribution, and internal governance arrangements, which will directly and indirectly impact BlackRock's EU regulated subsidiaries and other group companies.

Reform of European Retail Distribution: BlackRock must also comply with retail distribution rules aimed at enhancing consumer protections, overhauling mutual fund fee structures by banning the payment of commissions to distributors and increasing professionalism in the retail investment sector. The rules were originally introduced in the United Kingdom in 2012 and similar rules have since been introduced in other jurisdictions where BlackRock operates such as the Netherlands, and are under discussion elsewhere. Similarly, MiFID II will contain a ban on certain advisers recovering commissions and other nonmonetary benefits from fund managers. These rules will lead to greater fragmentation of distribution rules and may lead to changes to BlackRock’s client servicing and distribution models, in particular affecting the fees BlackRock is able to charge to its clients and the commissions it is able to pay to its distribution partners.

Legal proceedings may cause the Company’s AUM, revenue and earnings to decline.

BlackRock is subject to a number of sources of potential legal liability and the Company, certain of the investment funds it manages and certain of its subsidiaries and employees have been named as defendants in various legal actions, including arbitrations, class actions and other litigation arising in connection with BlackRock’s activities. Certain of BlackRock’s subsidiaries and employees are also subject to periodic examination, special inquiries and potential proceedings by regulatory authorities, including the SEC, Federal Reserve, OCC, DoL, CFTC and FCA. Similarly, from time to time, BlackRock receives subpoenas or other requests for information from various U.S. and non-U.S. governmental and regulatory authorities in connection with certain industry-wide, company-specific or other investigations or proceedings. These examinations, inquiries and proceedings, have in the past and could in the future, if compliance failures or other violations are found, cause the relevant regulator to institute proceedings and impose sanctions for violations. Any such action may also result in litigation by investors in BlackRock’s funds, other BlackRock clients or by BlackRock’s shareholders, which could harm the Company’s reputation and may cause its AUM, revenue and earnings to decline, potentially harm the investment returns of the applicable fund, or result in the Company being liable for damages.

In addition, when clients retain BlackRock to manage their assets or provide them with products or services, they typically specify contractual requirements or guidelines that BlackRock must observe in the provision of its services. A failure to comply with these guidelines or requirements could expose BlackRock to lawsuits, harm its reputation or cause clients to withdraw assets or terminate contracts.

As BlackRock’s business continues to grow, the Company must routinely address conflicts of interest, as well as the perception of conflicts of interest, between itself and its clients, employees or vendors. In addition, the SEC and other regulators have increased their scrutiny of potential conflicts. BlackRock has procedures and controls in place that are designed to detect and address these issues. However, appropriately dealing with conflicts of interest is complex and if the Company fails, or appears to fail, to appropriately deal with any conflict of interest, it may face reputational damage, litigation, regulatory proceedings, or penalties, fines and/or sanctions, any of which may cause BlackRock’s AUM, revenue and earnings to decline.

BlackRock is subject to banking regulations that may limit its business activities.

As described in “Item 1-Business-Regulation”, PNC owns approximately 22% of BlackRock’s capital stock. Based on the Federal Reserve’s interpretation of the BHC Act, the Federal Reserve takes the position that this ownership interest causes BlackRock to be treated as a nonbank subsidiary of PNC for purposes of the BHC Act, thereby subjecting BlackRock to banking regulation, including the supervision and regulation of the Federal Reserve. Such banking regulation limits the activities and the types of businesses that a nonbank subsidiary may conduct. The Federal Reserve has broad enforcement authority over nonbank subsidiaries, including the power to prohibit them from conducting any activity that, in the Federal Reserve’s opinion, is unauthorized or constitutes an unsafe or unsound practice, and to impose substantial fines and other penalties for violations. PNC is regulated as a “financial holding company” under the BHC Act, which allows PNC and BlackRock to engage in a much broader set of activities than would otherwise be permitted under the BHC Act; any failure of PNC to maintain its status as a financial holding company could result in substantial limitations on certain BlackRock activities and its growth.

In addition, BlackRock’s trust bank subsidiary, which is organized as a national bank, is separately subject to banking regulation by the OCC. The OCC has broad supervisory and enforcement authority over BlackRock’s trust bank subsidiary and also subjects it to capital requirements. Being subject to banking regulation may put BlackRock at a competitive disadvantage because certain of its competitors are not subject to these limitations.

Failure to comply with ownership reporting requirements could result in harm to BlackRock’s reputation and may cause its AUM, revenue and earnings to decline.

Of note among the various international regulations to which BlackRock is subject are the extensive and increasingly stringent regulatory reporting requirements that necessitate the monitoring and reporting of issuer exposure levels (thresholds) across the holdings of managed funds and accounts and those of the Company. The specific triggers and the reporting methods that these threshold filings entail vary significantly by regulator and across jurisdictions. BlackRock continues to invest in technology, training and its employees to enhance its monitoring and reporting functions and improve the timeliness and accuracy of its disclosures. Despite these investments, the complexity of the various threshold reporting requirements combined with the breadth of the assets managed by the Company and high volume of securities trading have caused errors and omissions to occur in the past, and pose a risk that errors or omissions will occasionally occur in the future. Any such errors may expose BlackRock to monetary penalties, which could have an adverse effect on BlackRock’s reputation and may cause its AUM, revenue and earnings to decline.

New tax legislation or changes in U.S. and foreign tax laws, treaties and regulations or challenges to BlackRock’s historical taxation practices may adversely affect BlackRock’s effective tax rate, business and overall financial condition.

BlackRock’s businesses may be affected by new tax legislation or regulations, or the modification of existing tax laws, regulations and rulings, by U.S. or non-U.S. authorities. In particular, FATCA and the CRS have introduced new investor onboarding, withholding and reporting rules aimed at ensuring persons with financial assets outside of their tax residence country pay appropriate taxes. FATCA and CRS will impact both U.S. and non-U.S. funds and subject BlackRock to additional administrative burdens. Similarly, certain EU Member States have enacted FTTs, which impose taxation on a broad range of financial instrument and derivatives transactions. Several other EU Member States continue to discuss introducing FTTs. If introduced as proposed, FTTs could have an adverse effect on BlackRock’s financial results and on clients’ performance results. In addition, in October 2015 the OECD released its final BEPS package in an effort to curb the use of ~~operations or~~certain tax regimes and elements of tax planning, primarily in a cross-border context. The final package was endorsed by the G20 and is subject to implementation. BEPS contains a number of provisions that may negatively impact cross-border investing using commingled investment vehicles. In addition, in January 2016, the European Commission announced an Anti-Tax Avoidance Package (“EU Package”) for consideration by the European Parliament and Council containing measures to regulate certain elements of tax planning further and to boost tax transparency. Once implemented, the BEPS package and the EU Package could curtail the amount of investments channeled by, and have unintended taxation consequences for, funds as well as the BlackRock’s overall tax position, which could adversely affect BlackRock’s financial condition and that of its clients.

The Company also manages significant assets in products and accounts that have specific tax objectives, which could be adversely impacted by changes in tax law or policy, particularly with respect to U.S. municipal income, the U.S. individual income tax rate on qualified dividends and long-term capital gains and, globally, alternative products. The application of complex tax regulations involves numerous uncertainties and, in the normal course of business, U.S. and non-U.S. tax authorities may ~~be materially~~review and challenge BlackRock’s historical tax positions. These challenges may result in adjustments to BlackRock’s tax position, or impact the timing or amount of, taxable income, deductions or other tax allocations, which may adversely ~~affected.~~affect BlackRock’s effective tax rate and overall financial condition.

~~Loss of market share within Merrill Lynch’s Global Wealth & Investment Management business could harm operating results.~~Risks Related to BlackRock’s SIGNIFICANT SHAREHOLDER

~~A significant~~PNC owns a large portion of BlackRock’s ~~revenue has historically come from AUM generated~~capital stock. Future sales or distributions of BlackRock’s common stock in the public market by ~~Merrill Lynch’s Global Wealth & Investment Management (“GWIM”) business.~~the Company or PNC could adversely affect the trading price of BlackRock’s ~~ability to maintain a strong relationship within GWIM is material to the Company’s future performance. If one~~common stock.

As of December 31, 2015, PNC owned 22% of the Company’s ~~competitors gains significant additional~~capital stock. Sales or distributions of a substantial number of shares of BlackRock’s common stock in the public market, ~~share within~~or the ~~GWIM retail channel at~~perception that these sales or distributions might occur, may cause the ~~expense~~market price of ~~BlackRock, then~~ BlackRock’s ~~business, results of operations or financial condition may be negatively impacted.~~common stock to decline.

PNC has agreed to vote as a stockholder in accordance with the recommendation of BlackRock’s Board of Directors, and certain actions will require special board approval or the prior approval of PNC.

As discussed in ~~our~~BlackRock’s proxy statement, PNC has agreed to vote all of its voting shares in accordance with the recommendation of BlackRock’s Board of Directors in accordance with the provisions of its stockholder agreement with BlackRock. As a consequence, if the shares held by PNC constitute a substantial portion of the outstanding voting shares, matters submitted to a stockholder vote that require a majority or a plurality of votes for approval, including elections of directors, will have a substantial number of shares voted in accordance with the determination of the BlackRock Board of Directors. This arrangement has the effect of concentrating a significant block of voting control over BlackRock in its Board of Directors, whether or not stockholders agree with any particular determination of the Board. ~~At December 31, 2013, PNC owned approximately 20.9% of BlackRock’s voting common stock.~~

As discussed in ~~our~~BlackRock’s proxy statement, pursuant to ~~our~~BlackRock’s stockholder agreement with PNC, the following may not be done without prior approval of all of the independent directors, or at least two-thirds of the directors, then in office:

appointment of a new Chief Executive Officer of BlackRock;

any merger, issuance of shares or similar transaction in which beneficial ownership of a majority of the total voting power of BlackRock capital stock would be held by persons different than those currently holding such majority of the total voting power, or any sale of all or substantially all assets of BlackRock;

any acquisition of any person or business which has a consolidated net income after taxes for its preceding fiscal year that equals or exceeds 20% of BlackRock’s consolidated net income after taxes for its preceding fiscal year if such acquisition involves the current or potential issuance of BlackRock capital stock constituting more than 10% of the total voting power of BlackRock capital stock issued and outstanding immediately after completion of such acquisition;

any acquisition of any person or business constituting a line of business that is materially different from the lines of business BlackRock and its controlled affiliates are engaged in at that time if such acquisition involves consideration in excess of 10% of the total assets of BlackRock on a consolidated basis;

except for repurchases otherwise permitted under the stockholder agreement, any repurchase by BlackRock or any subsidiary of shares of BlackRock capital stock such that after giving effect to such repurchase BlackRock and its subsidiaries shall have repurchased more than 10% of the total voting power of BlackRock capital stock within the 12-month period ending on the date of such repurchase;

any amendment to BlackRock’s certificate of incorporation or bylaws; or

any matter requiring stockholder approval pursuant to the rules of the NYSE.

Additionally, BlackRock may not enter into any of the following transactions without the prior approval of PNC:

any sale of any subsidiary of BlackRock, the annualized ~~revenues~~revenue of which, together with the annualized ~~revenues~~revenue of any other subsidiaries disposed of within the same year, are more than 20% of the annualized ~~revenues~~revenue of BlackRock for the preceding fiscal year on a consolidated basis;

for so long as BlackRock is a subsidiary of PNC for purposes of the BHC Act, entering into any business or activity that is prohibited for any such subsidiary under the BHC Act;

any amendment of any provision of a stockholder agreement between BlackRock and any stockholder beneficially owning greater than 20% of BlackRock capital stock that would be viewed by a reasonable person as being adverse to PNC or materially more favorable to the rights of any stockholder beneficially owning greater than 20% of BlackRock capital stock than to PNC;

any amendment, modification, repeal or waiver of BlackRock’s certificate of incorporation or bylaws that would be viewed by a reasonable person as being adverse to the rights of PNC or more favorable to the rights of any stockholder beneficially owning greater than 20% of BlackRock capital stock, or any settlement or consent in a regulatory enforcement matter that would be reasonably likely to cause PNC or any of its affiliates to suffer regulatory disqualification, suspension of registration or license or other material adverse regulatory consequences; or

a voluntary bankruptcy or similar filing by BlackRock.

~~PNC owns a large portion of BlackRock’s capital stock. Future sales of our common stock in the public market by the Company or PNC could adversely affect the trading price of our common stock.~~

As of December 31, 2013, PNC owned 21.9% of the Company’s capital stock. The Company has entered into a registration rights agreement with PNC. The registration rights agreement provides PNC with the right to cause us to file one or more registration statements for the resale of its shares of capital stock and cooperate in certain underwritten offerings. Sales of a substantial number of shares of our common stock in the public market pursuant to registration rights or otherwise, or the perception that these sales might occur, could cause the market price of our common stock to decline.

~~LEGAL AND REGULATORY RISKS~~

~~BlackRock is subject to extensive regulation in the United States and internationally.~~

BlackRock’s business is subject to extensive regulation in the United States and around the world. See the discussion under “Item 1 – Business – Regulation.” New laws or regulations, or changes in enforcement of existing laws or regulations in the United States or internationally, could adversely impact the scope or profitability of BlackRock’s business activities. Violation of applicable laws or regulations could result in fines, temporary or permanent prohibition of the engagement in certain activities, reputational harm and related client terminations,

suspensions of personnel or revocation of their licenses or bank charter, suspension or termination of investment adviser, broker-dealer or other registrations, or other sanctions, which could have a material adverse effect on BlackRock’s reputation, business, results of operations or financial condition and cause the Company’s earnings to decline.

~~BlackRock may be adversely impacted by legal and regulatory changes required under the Dodd-Frank Wall Street Reform and Consumer Protection Act and other U.S. regulatory reform initiatives.~~

As previously mentioned, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “DFA”) was signed into law. The DFA is expansive in scope and requires the adoption of extensive regulations and numerous regulatory decisions in order to be implemented. The adoption of these regulations and decisions will in large measure determine the impact of the DFA on BlackRock. BlackRock is continuing to review what impact the legislation and related rule-making will have on its business, financial condition and results of operations.

The DFA charges the Board of Governors of the Federal Reserve System (the “Federal Reserve”) with establishing enhanced regulatory requirements for nonbank financial institutions designated as “systemically important” by the Financial Stability Oversight Council (“FSOC”). Should BlackRock be designated a systemically important financial institution (a “SIFI”), it could be subject to these enhanced prudential, capital, supervisory and other requirements, which, individually or in the aggregate, could adversely impact BlackRock’s business and operations.

The DFA and its regulations could adversely impact the scope or profitability of BlackRock’s business activities, could require BlackRock to change certain business practices and could expose BlackRock to additional costs (including compliance and tax costs).

Provisions of the DFA referred to as the “Volcker Rule” created a new section of the BHC Act that places limitations on the ability of banks and their subsidiaries to engage in proprietary trading and to invest in and transact with certain private investment funds, including hedge funds, private equity funds and funds of funds (collectively “covered funds”). Final regulations implementing the Volcker Rule were issued on December 10, 2013; entities subject to the Volcker Rule must conform their activities to the requirements of the final implementing regulations no later than July 21, 2015, subject to the granting of extensions that are available in limited circumstances. Because BlackRock is treated as a non-bank subsidiary of PNC under the Federal Reserve’s current interpretation of the BHC Act, BlackRock will be required to comply with the Volcker Rule. The Volcker Rule will limit BlackRock’s ability to invest in covered funds, require BlackRock to remove its name from the name of its covered funds, and limit investments in covered funds by BlackRock employees, among other restrictions. Depending on the availability of statutory extensions, BlackRock could be required to sell certain seed and co-investments that it holds, including at a discount, depending on market conditions. These limitations and restrictions could disadvantage BlackRock against competitors that are not subject to the Volcker Rule in our ability to attract clients into BlackRock covered funds and to retain employees. Finally, the restrictions on proprietary

trading in the Volcker Rule could impact the ability of our trading counterparties to make markets and provide liquidity in certain securities, which could have a negative impact on our ability to manage funds and client accounts that transact in those securities.

Further, the full implementation of regulations under the DFA relating to regulation of swaps and derivatives could impact the manner by which BlackRock-advised funds and accounts use and trade swaps and other derivatives, and could significantly increase the costs of derivatives trading conducted by BlackRock on behalf of its clients. BlackRock will also need to build new compliance mechanisms to monitor compliance with SEC and Commodity Futures Trading Commission (“CFTC”) rules concerning, among other things, the registration and regulation of commodity pool operators and commodity trading advisors (and the accompanying registration and regulation of such entities by the National Futures Association), the applicability of CFTC rules and regulations to offshore funds, accounts and counterparties, and requirements to centrally clear certain swap transactions and to execute certain swap transaction only on or through CFTC-registered trading venues. BlackRock, on behalf of its clients, is also preparing for the implementation of trade reporting, documentation, and mandated central clearing of swaps requirements in the EU and other jurisdictions globally. Inconsistencies and potential contradictions in the rules adopted by various global regulators will increase the operational and legal risks associated with trading in derivatives.

In addition, BlackRock has begun reporting certain information about a number of its private funds to the SEC and certain information about a number of its commodity pools to the CFTC, pursuant to systemic risk reporting requirements adopted by both agencies, which have required, and will continue to require, investments in people and systems to assure timely and accurate reporting.

The SEC, the Internal Revenue Service and the CFTC each continue to review the use of futures and derivatives by mutual funds, which could result in regulations that further limit the use of such instruments by mutual funds. If adopted, these limitations could require BlackRock to change certain mutual fund business practices or to register additional entities with the CFTC, which could result in additional costs and/or restrictions.

The SEC has recently promulgated new rules that give effect to a section of the DFA that requires municipal advisors (as that term is defined in the statute) to register with the SEC. The new rules require entities that provide certain types of advice to, or on behalf of, or solicit municipal entities or certain other persons, to register with the SEC and the Municipal Securities Rulemaking Board (“MSRB”) as municipal advisors, thereby subjecting those entities to new or additional regulation by the SEC and MSRB. BlackRock is reviewing what impact the new rules will have on its business, financial condition and results of operation.

The foregoing regulatory changes, and other reforms globally, could also lead to business disruptions, could adversely impact the value of assets in which BlackRock has invested on behalf of clients and/or via seed or co-investments, and, to the extent the regulations strictly control the activities of financial services firms, could make it more difficult for BlackRock to conduct certain business activities or distinguish itself from competitors. See “Item 1

~~– Business” above for additional information regarding certain laws and regulations that affect BlackRock’s business.~~

~~BlackRock may be adversely impacted by legal and regulatory changes related to money market mutual funds.~~

Regulatory authorities, including the SEC, the FSOC and the International Organization of Securities Commissions, continue to focus on the need for additional regulations for money market mutual funds. In June 2013, the SEC issued for public comment a proposal to reform the regulatory structure governing money market funds and address the perceived systemic risks that money market funds present. The SEC’s proposal also proposes many other changes to disclosure and portfolio construction requirements for money market funds. If adopted by the SEC, these reform proposals could significantly affect money market fund products and the entire money market fund industry. In light of the uncertainty regarding what changes may ultimately be adopted in a final SEC rule, the Company cannot predict what investor appetite will be for money market mutual fund products following the adoption of any such reforms or the impact of such reforms on BlackRock.

Failure to comply with the Investment Advisers Act of 1940 (the “Advisers Act”) or the Investment Company Act of 1940 (the “Investment Company Act”) and related regulations could result in substantial harm to BlackRock’s reputation and results of operations.

Certain BlackRock subsidiaries are registered with the SEC under the Advisers Act and BlackRock’s U.S. mutual funds, closed-end funds and exchange-traded funds are registered with the SEC under the Investment Company Act. The Advisers Act imposes numerous obligations and fiduciary duties on registered investment advisers, including record-keeping, operating and marketing requirements, disclosure obligations and prohibitions on self-dealing. The Investment Company Act imposes similar obligations, as well as additional detailed operational and compliance requirements on investment advisers to registered investment companies. The failure of any of BlackRock’s relevant subsidiaries to comply with the Advisers Act or the Investment Company Act could cause the SEC to institute proceedings and impose sanctions for violations of either of these acts, including censure, termination of an investment adviser’s registration or prohibition to serve as adviser to SEC-registered funds, and could lead to litigation by investors in those funds or harm to the Company’s reputation, any of which could cause its earnings to decline.

~~Failure to comply with ERISA regulations could result in penalties and cause the Company’s earnings to decline.~~

Certain BlackRock subsidiaries are subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) and to regulations promulgated thereunder, insofar as they act as a “fiduciary” under ERISA with respect to benefit plan clients. ERISA and applicable provisions of the Internal Revenue Code impose duties on persons who are fiduciaries under ERISA, prohibit specified transactions involving ERISA plan clients and provide monetary penalties for violations of these prohibitions. The failure of any of BlackRock’s relevant subsidiaries to comply with these requirements could result in significant penalties that could reduce the Company’s earnings to decline.

~~BlackRock is subject to banking regulations that may limit its business activities.~~

As described in “Item 1-Business”, PNC owns approximately 22% of BlackRock’s capital stock. Based on the Federal Reserve’s current interpretation of the Bank Holding Company Act of 1956 (the “BHC Act”), this ownership interest causes BlackRock to be treated as a non-bank subsidiary of PNC for purposes of the BHC Act. As a non-bank subsidiary of PNC, BlackRock is subject to banking regulation, including the supervision and regulation of the Federal Reserve. Such banking regulation limits the activities and the types of businesses that BlackRock may conduct. The Federal Reserve has broad enforcement authority over BlackRock, including the power to prohibit BlackRock from conducting any activity that, in the Federal Reserve’s opinion, is unauthorized or constitutes an unsafe or unsound practice, and to impose substantial fines and other penalties for violations. PNC is regulated as a “financial holding company” under the BHC Act, which allows PNC and BlackRock to engage in a much broader set of activities than would otherwise be permitted under the BHC Act; any failure of PNC to maintain its status as a financial holding company could result in substantial limitations on certain BlackRock activities and its growth. Furthermore, the Volcker Rule, which is a part of the BHC Act, will affect the method by which BlackRock invests in and operates its private investment funds, including private equity funds, hedge funds and funds of funds. BlackRock’s trust bank subsidiary is also subject to regulation by the OCC, and is subject to capital requirements established by the OCC. The OCC has broad enforcement authority over BlackRock’s trust bank subsidiary. Being subject to banking regulation, including the Volcker Rule, may put BlackRock at a competitive disadvantage because most of its competitors are not subject to these limitations.

~~Failure to comply with laws and regulations in the European Union in which BlackRock operates could result in substantial harm to BlackRock’s reputation and results of operations.~~

In the aftermath of the financial crisis, the European Commission set out a detailed plan for EU financial reform, outlining a number of initiatives to be reflected in new or updated directives, regulations and recommendations of which the review of the Markets in Financial Instruments Directive (“MiFID”) was a part. These, together with the changes introduced by the Alternative Investment Fund Managers Directive (“AIFMD”), will have direct and indirect effects on BlackRock’s operations in the European Economic Area, including increased compliance, disclosure and other obligations, which could adversely impact BlackRock’s ability to expand in these markets.

The Financial Conduct Authority (the “FCA”) regulates BlackRock’s subsidiaries in the United Kingdom and branches in the European Union and the Prudential Regulation Authority the (“PRA”) also regulates one BlackRock subsidiary in the United Kingdom. Authorization by the FCA and/or the PRA is required to conduct any financial services related business in the United Kingdom under the Financial Services and Markets Act 2000. BlackRock’s U.K. subsidiaries require authorization by the FCA under the Financial Services and Markets Act 2000 in order to conduct their financial services-related business in the United Kingdom. The FCA’s rules govern the Company’s U.K.-regulated subsidiaries’ capital resources requirements,

senior management arrangements, conduct of business, interaction with clients and systems and controls, while the rules of the PRA focus solely on the prudential requirements imposed on firms. Breaches of these rules may result in a wide range of disciplinary actions against the Company’s U.K.-regulated subsidiaries or employees.

In addition, these subsidiaries, and other European subsidiaries, branches or representative offices, must comply with the pan-European regime established by MiFID, which regulates the provision of investment services and activities throughout the EEA, as well as the Capital Requirements Directive, which delineates regulatory capital requirements. As discussed under “Item 1 - Business - Regulation,” in the aftermath of the financial crisis the European Commission adopted a detailed plan to complete the EU’s financial reform, outlining a number of initiatives to be reflected in new or updated directives, regulations and recommendations. The AIFMD has been implemented in some EU countries, including the United Kingdom, Ireland, France, Germany, the Netherlands and Luxembourg, but several other EU member states are still in various stages of the adoption process. Compliance with the AIFMD’s requirements is likely to restrict marketing by funds subject to the AIFMD and place additional compliance and disclosure obligations regarding remuneration, capital requirements, leverage, valuation, stakes in EU companies, depositaries, the domicile of custodians and liquidity management. In addition, UCITS IV was adopted into national law of each EU member state (except Portugal).

There are also European Commission consultations in process that are intended to improve retail investor protection including: (i) UCITS V, which addresses, among other items, custodial liability and remuneration of UCITS managers, which are intended to be consistent with the equivalent provisions of the AIFMD; (ii) UCITS VI, which will address, among other items, the eligible assets which a UCITS fund can invest in, efficient portfolio management techniques and extraordinary liquidity management tools; and (iii) Regulation on Money Market Funds (“MMFs”), which will introduce new regulatory measures that will apply to European MMFs. The European Commission’s proposals on packaged retail investment products (“PRIPs”) are to be implemented through the strengthening of MiFID standards (for non-insurance PRIPs), revisions to the Insurance Mediation Directive’s selling standard (for all insurance-based PRIPs) and new investor disclosure requirements for all PRIPs through a separate EU legislative process, which is expected to be adopted in 2014 and come into effect in 2016. In the United Kingdom, the Bribery Act 2010 came into force in July 2011 and has required the implementation of additional procedures on the Company’s U.K.-regulated subsidiaries.

In addition, rules introduced in the United Kingdom following a retail distribution review initiated by the FCA’s predecessor, the Financial Services Authority, changed how investment advice is paid for in the United Kingdom for all retail investment products. Regulation (EU) no 648/2012 of the European Parliament and of the Council of July 4, 2012 on OTC derivatives, central counterparties and trade repositories (“EMIR”), was adopted in August 2012, and requires (i) the central clearing of standardized OTC derivatives, (ii) the application of risk-mitigation techniques to non-centrally cleared OTC derivatives and (iii) the reporting of all derivative contracts from February 2014. Finally, the CRD IV package of reforms on prudential requirements for credit institutions and

~~investment firms, which became effective on January 1, 2014, will have direct and indirect impacts on the Company’s EU-regulated subsidiaries.~~

Failure to comply with laws and regulations in the Asia-Pacific region and other non-U.S. jurisdictions in which BlackRock operates could result in substantial harm to BlackRock’s reputation and results of operations.

In Japan, a BlackRock subsidiary is subject to the Financial Instruments and Exchange Law (the “FIEL”) and the Law Concerning Investment Trusts and Investment Corporations. These laws are administered and enforced by the Japanese Financial Services Agency (the “JFSA”), which establishes standards for compliance, including capital adequacy and financial soundness requirements, customer protection requirements and conduct of business rules. The JFSA is empowered to conduct administrative proceedings that can result in censure, fines, the issuance of cease and desist orders or the suspension or revocation of registrations and licenses granted under the FIEL. In addition, the BlackRock subsidiary has recently obtained a license for real estate broker business from the Tokyo governor and, therefore, must comply with various regulations set forth in the Real Estate Brokerage Business Act.

In Australia, BlackRock’s subsidiaries are subject to various Australian federal and state laws and certain subsidiaries are regulated by the Australian Securities and Investments Commission (“ASIC”). ASIC regulates companies and financial services in Australia and is responsible for promoting investor, creditor and consumer protection. Failure to comply with applicable law and regulations could result in the cancellation, suspension or variation of the relevant subsidiaries’ licenses in Australia.

The activities of certain BlackRock subsidiaries in Hong Kong are subject to the Securities and Futures Ordinance (the “SFO”), which governs the securities and futures markets and regulates, among others, offers of investments to the public and provides for the licensing of intermediaries. The SFO is administered by the Securities and Futures Commission (the “SFC”). The SFC is also empowered under the SFO to establish standards for compliance as well as codes and guidelines. The relevant BlackRock subsidiaries and the employees conducting any of the regulated activities specified in the SFO are required to be licensed with the SFC, and are subject to the rules, codes and guidelines issued by the SFC from time to time. Failure to comply with the SFO and other applicable laws, regulations, codes and guidelines issued by the SFC could result in penalties, sanctions and the suspension or revocations of the licenses granted by the SFC.

There are similar legal and regulatory arrangements in force in many other non-U.S. jurisdictions where BlackRock’s subsidiaries conduct business or where the funds and products it manages are organized. Failure to comply with laws and regulations in any of these jurisdictions could result in substantial harm to BlackRock’s reputation and results of operation and result in fines or sanctions for BlackRock or its employees.

~~Failure to comply with ownership reporting requirements could result in harm to BlackRock’s reputation and results of operations.~~

~~Of note among the various international regulations to which BlackRock is subject, are the extensive and increasingly~~

stringent regulatory reporting requirements that necessitate the monitoring and reporting of issuer exposure levels (thresholds) across the holdings of managed funds and accounts and those of the Company. The specific triggers and the reporting methods that these threshold filings entail vary significantly by regulator and across jurisdictions. BlackRock continues to invest in technology, training and personnel to enhance its monitoring and reporting functions and improve the timeliness and accuracy of its disclosures. Despite these investments, the complexity of the various threshold reporting requirements combined with the breadth of the assets managed by the Company and high volume of securities trading pose a risk that errors or omissions will occasionally occur, which could have an adverse effect on BlackRock’s reputation and results of operation.

Changes in U.S. and non-U.S. tax laws and regulations or challenges to BlackRock’s tax positions with respect to historical transactions may adversely affect BlackRock’s effective tax rate, business and overall financial condition.

BlackRock’s businesses may be directly or indirectly affected by new tax legislation and regulation, or the modification of existing tax laws and regulations by U.S. or non-U.S. authorities. The Company manages significant assets in products and accounts that have specific tax and after-tax related objectives, which could be adversely impacted by changes in tax policy, particularly with respect to U.S. municipal income, the U.S. individual income tax rate on qualified dividends and, globally, alternative products.

Additionally, any new legislation, modification or interpretation of tax laws could also impact BlackRock’s corporate tax position. The application of complex tax regulations involves numerous uncertainties and in the normal course of business U.S. and non-U.S. tax authorities may review and challenge tax positions adopted by BlackRock. These challenges may result in adjustments to, or impact the timing or amount of, taxable income, deductions or other tax allocations, which may adversely affect BlackRock’s effective tax rate and overall financial condition.

~~Legal proceedings could adversely affect operating results, financial condition and cash flows for a particular period.~~

Many aspects of BlackRock’s business involve substantial risks of legal liability. The Company, certain of its subsidiaries and employees have been named as defendants in various legal actions, including arbitrations, class actions and other litigation arising in connection with BlackRock’s activities. Certain BlackRock subsidiaries are subject to periodic examination, special inquiries and potential proceedings’ by regulatory authorities, including the SEC, OCC, DOL, CFTC and FCA. These examinations, inquiries and proceedings could if compliance failures or other violations are found, cause the SEC to institute proceedings and impose sanctions for violations, including censure, termination of an investment adviser’s registration or prohibition to serve as adviser to SEC-registered funds, and could lead to litigation by investors in those funds or harm to the Company’s reputation, any of which could cause its earnings to decline. From time to time, BlackRock receives subpoenas or other requests for information from various U.S. and non-U.S. governmental and regulatory authorities in connection with certain industry-wide, company-specific or other investigations or proceedings. Additionally, certain of the

investment funds that the Company manages are subject to lawsuits, any of which could potentially harm the investment returns of the applicable fund or result in the Company being liable to the funds for any resulting damages.

Item 1B. Unresolved Staff

Comments

The Company has no unresolved comments from the SEC staff relating to BlackRock’s periodic or current reports filed with the SEC pursuant to the Exchange ~~Act.~~Act.

Item ~~2.Properties~~2. Properties

BlackRock’s principal office, which is leased, is located at 55 East 52nd Street, New York, New York. BlackRock leases additional office space in New York City at 40 East 52nd Street and throughout the world, including Boston, Chicago, Edinburgh, Gurgaon (India), Hong Kong, London, Melbourne, Munich, Princeton (New Jersey), San Francisco, Seattle, Singapore, Sydney, Taipei and Tokyo. The Company also owns an 84,500 square foot office building in Wilmington (Delaware).

Item 3. Legal Proceedings

From time to time, BlackRock receives subpoenas or other requests for information from various U.S. federal, state governmental and domestic and international regulatory authorities in connection with certain industry-wide or other investigations or proceedings. It is BlackRock’s policy to cooperate fully with such inquiries. The Company and certain of its subsidiaries have been named as defendants in various legal actions, including arbitrations and other litigation arising in connection with BlackRock’s activities. Additionally, ~~certain BlackRock-sponsored~~BlackRock advised investment ~~funds that the Company manages are~~portfolios may be subject to lawsuits, any of which potentially could harm the investment returns of the applicable ~~fund~~portfolio or result in the Company being liable to the ~~funds~~portfolios for any resulting damages.

~~Italian Securities Regulator Proceeding~~

~~The Italian securities regulator, Commissione Nazionale per le Societa e la Borsa (“Consob”~~On May 27, 2014, certain purported investors in the BlackRock Global Allocation Fund, Inc. and the BlackRock Equity Dividend Fund (collectively, the “Funds”)~~, initiated~~ filed a ~~civil proceeding on January 3, 2014~~consolidated complaint (the “Consolidated Complaint”) in the U.S. District Court for the District of New Jersey against ~~Nigel Bolton, a portfolio manager and head of~~BlackRock Advisors, LLC, BlackRock Investment Management, ~~(UK) Limited’s European Equity Team (“EET”), in connection with~~

LLC and BlackRock International Limited (collectively, the ~~sale of shares in~~“Defendants”) under the ~~Italian oil and gas services company Saipem, SpA in January 2013.~~

~~Consob alleges that Mr. Bolton,~~caption In re BlackRock Mutual Funds Advisory Fee Litigation. The Consolidated Complaint, which purports to be brought derivatively on behalf of ~~certain BlackRock clients, sold, or influenced~~ the ~~sale~~Funds, alleges that the Defendants violated Section 36(b) of ~~approximately 10.7 million shares of Saipem using material, non-public information thereby avoiding client losses of over~~€~~114.5 million. The EET’s sale of Saipem shares occurred between January 25 and January 29, 2013, and Saipem announced negative news following~~ the ~~market close on January 29, 2013. While BlackRock is not charged~~Investment Company Act by receiving allegedly excessive investment advisory fees from the Funds. On February 24, 2015, the same plaintiffs filed another complaint in the ~~proceeding, it may be liable~~same

court against BlackRock Investment Management, LLC and BlackRock Advisors, LLC. The allegations and legal claims in both complaints are substantially similar, with the new complaint purporting to challenge fees received by Defendants after the plaintiffs filed their prior complaint. Both complaints seek, among other things, to recover on behalf of the Funds all allegedly excessive advisory fees received by Defendants in the twelve month period preceding the start of each lawsuit, along with purported lost investment returns on those amounts, plus interest. On March 25, 2015, Defendants’ motion to dismiss the Consolidated Complaint was denied. The Defendants believe the claims in both lawsuits are without merit and intend to vigorously defend the actions.

~~BlackRock conducted a thorough investigation and found no evidence to support the allegations. As a result~~Alameda arising out of the ~~investigation,~~June 16, 2015 collapse of a balcony at the Library Gardens apartment complex in Berkeley, California (the “Property”). The Property is indirectly owned by the Granite Fund, which is managed by BRA. The plaintiffs also named as defendants in the lawsuits Greystar, which is the property manager of the Property, and certain other entities, including the developer of the Property, building contractors and building materials suppliers. The plaintiffs allege, among other things, that the BlackRock Parties were negligent in their ownership, control and maintenance of the Property’s balcony, and seek monetary, including punitive, damages. BlackRock believes ~~that~~ the ~~sale of Saipem shares was made as a fiduciary based on publicly available information that was widely disseminated~~claims in the ~~marketplace, including negative publicity~~lawsuits are without merit and ~~a third-party analyst research report reducing earnings estimates, which was issued~~intends to vigorously defend the ~~market before trading on January 25, 2013.~~

Consob also alleges that BlackRock declined to provide Consob with information and was an obstacle to Consob’s investigation. BlackRock believes it has fully cooperated with Consob, and it will continue to do so.

While under Italian law the potential penalty could be greater than the loss actually avoided, BlackRock believes that Mr. Bolton will not be found liable and, as a result, neither Mr. Bolton nor BlackRock will incur any penalty.

~~All Legal Proceedings~~actions.

Management, after consultation with legal counsel, currently does not anticipate that the aggregate liability ~~if any,~~ arising out of regulatory matters or lawsuits will have a material effect on BlackRock’s results of operations, financial position, or cash flows. However, there is no assurance as to whether any such pending or threatened matters will have a material effect on BlackRock’s results of operations, financial position or cash flows in any future reporting period. Due to uncertainties surrounding the outcome of these matters, management cannot reasonably estimate the possible loss or range of loss that may arise from these matters.

Item 4. Mine Safety Disclosures

Not applicable.

~~PART~~Part II

Item 5. Market for Registrant’s

Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

BlackRock’s common stock is listed on the NYSE and is traded under the symbol “BLK”. At the close of business on January 31, ~~2014,~~2016, there were ~~320~~272 common stockholders of record. Common stockholders include institutional or omnibus accounts that hold common stock for ~~multiple~~many underlying investors.

The following table sets forth for the periods indicated the high and low reported sale prices, period-end closing prices for the common stock and dividends declared per share for the common stock as reported on the NYSE:

									Common Stock Price Ranges				Closing		Cash Dividend
	Common Stock Price Ranges				Closing Price		Cash Dividend Declared		High		Low		Price		Declared
	High		Low
2013					Closing Price		Cash Dividend Declared
2015
First Quarter	$	258.70	$	212.77	$	256.88	$	1.68	$	380.33	$	340.51	$	365.84	$	2.18
Second Quarter	$	291.69	$	245.30	$	256.85	$	1.68	$	377.85	$	344.54	$	345.98	$	2.18
Third Quarter	$	286.62	$	255.26	$	270.62	$	1.68	$	354.54	$	293.52	$	297.47	$	2.18
Fourth Quarter	$	316.47	$	262.75	$	316.47	$	1.68	$	363.72	$	295.92	$	340.52	$	2.18
2012
2014
First Quarter	$	205.60	$	179.13	$	204.90	$	1.50	$	323.89	$	286.39	$	314.48	$	1.93
Second Quarter	$	206.57	$	163.37	$	169.82	$	1.50	$	319.85	$	293.71	$	319.60	$	1.93
Third Quarter	$	183.00	$	164.06	$	178.30	$	1.50	$	336.47	$	301.10	$	328.32	$	1.93
Fourth Quarter	$	209.29	$	177.17	$	206.71	$	1.50	$	364.40	$	303.91	$	357.56	$	1.93

BlackRock’s closing common stock price as of February ~~27, 2014~~25, 2016 was ~~$305.81.~~$313.62.

~~DIVIDENDS~~Dividends

On January ~~15, 2014,~~14, 2016, the Board of Directors approved BlackRock’s quarterly dividend of ~~$1.93~~$2.29 to be paid on March ~~24, 2014~~23, 2016 to stockholders of record at the close of business on March 7, ~~2014.~~2016.

PNC ~~and their respective affiliates that hold~~receives dividends on shares of nonvoting participating preferred stock, ~~receive dividends on these shares,~~ which are equivalent to the dividends received by common stockholders.

~~ISSUER PURCHASES OF EQUITY SECURITIES~~Issuer Purchases of Equity Securities

During the three months ended December 31, ~~2013,~~2015, the Company made the following purchases of its common stock, which is registered pursuant to Section 12(b) of the Exchange Act.

Total
Number of
Shares
Purchased Average
Price Paid
per Share Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans or
Programs⁽¹⁾
October 1, 2013 through October 31, 2013
277,354 ⁽²⁾ $ 303.58    267,000    7,093,355
November 1, 2013 through November 30, 2013
514,075 ⁽²⁾ $ 302.38    513,000    6,580,355
December 1, 2013 through December 31, 2013
65,905 ⁽²⁾ $ 305.46    44,800    6,535,555
Total
857,334    $ 303.01    824,800

	Total Number of Shares Purchased			Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾
October 1, 2015 through October 31, 2015		244,379	⁽²⁾	$	331.76		243,705		6,825,131
November 1, 2015 through November 30, 2015		491,287	⁽²⁾	$	355.43		488,869		6,336,262
December 1, 2015 through December 31, 2015		62,180	⁽²⁾	$	358.99		56,484		6,279,778
Total		797,846		$	348.46		789,058

(1)

In January ~~2013,~~2015, the Board of Directors approved an increase in the availability of shares that may be repurchased under the Company’s existing share repurchase program to allow for the repurchase of up to ~~10.2~~a total of 9.4 million additional shares of BlackRock common stock with no stated expiration date.

(2)

Includes purchases made by the Company primarily to satisfy income tax withholding obligations of employees and members of the Company’s Board of Directors related to the vesting of certain restricted stock or restricted stock unit awards and purchases made by the Company as part of the publicly announced share repurchase program.

Item 6. Selected Financial Data

The selected financial data presented below has been derived in part from, and should be read in conjunction with, the consolidated financial statements of BlackRock and Item 7.7, Management’s Discussion andAnalysis of Financial Condition and Results of Operationsincluded in this Form 10-K.

Year ended December 31,
(in millions, except per share data) 2013 2012 2011 2010⁽¹⁾ 2009
Income statement data:

Revenue

Related parties⁽²⁾
$ 6,260    $ 5,501    $ 5,431    $ 5,025    $ 2,716
Other third parties
3,920    3,836    3,650    3,587    1,984
Total revenue
10,180    9,337    9,081    8,612    4,700
Expenses

Restructuring charges
— — 32    — 22
Other operating expenses
6,323    5,813    5,800    5,614    3,400
Total expenses
6,323    5,813    5,832    5,614    3,422
Operating income
3,857    3,524    3,249    2,998    1,278
Total nonoperating income (expense)
116    (54 ) (114 ) 23    (6 )
Income before income taxes
3,973    3,470    3,135    3,021    1,272
Income tax expense
1,022    1,030    796    971    375
Net income
2,951    2,440    2,339    2,050    897
Less: Net income (loss) attributable to noncontrolling interests
19    (18 ) 2    (13 ) 22
Net income attributable to BlackRock, Inc.
$ 2,932    $ 2,458    $ 2,337    $ 2,063    $ 875
Per share data:⁽³⁾

Basic earnings
$ 17.23    $ 14.03    $ 12.56    $ 10.67    $ 6.24
Diluted earnings
$ 16.87    $ 13.79    $ 12.37    $ 10.55    $ 6.11
Book value⁽⁴⁾
$ 156.69    $ 148.20    $ 140.07    $ 136.09    $ 128.86
Common and preferred cash dividends
$ 6.72    $ 6.00    $ 5.50    $ 4.00    $ 3.12

	Year ended December 31,
(in millions, except per share data)	2015			2014			2013		2012			2011
Income statement data:
Revenue
Related parties⁽¹⁾	$	7,084		$	6,994		$	6,260	$	5,501		$	5,431
Other third parties		4,317			4,087			3,920		3,836			3,650
Total revenue		11,401			11,081			10,180		9,337			9,081
Expense
Restructuring charges		—			—			—		—			32
Other operating expenses		6,737			6,607			6,323		5,813			5,800
Total expenses		6,737			6,607			6,323		5,813			5,832
Operating income		4,664			4,474			3,857		3,524			3,249
Total nonoperating income (expense)		(62	)		(79	)		116		(54	)		(114	)
Income before income taxes		4,602			4,395			3,973		3,470			3,135
Income tax expense		1,250			1,131			1,022		1,030			796
Net income		3,352			3,264			2,951		2,440			2,339
Less: Net income (loss) attributable to noncontrolling interests		7			(30	)		19		(18	)		2
Net income attributable to BlackRock, Inc.	$	3,345		$	3,294		$	2,932	$	2,458		$	2,337
Per share data:⁽²⁾
Basic earnings	$	20.10		$	19.58		$	17.23	$	14.03		$	12.56
Diluted earnings	$	19.79		$	19.25		$	16.87	$	13.79		$	12.37
Book value⁽³⁾	$	172.12		$	164.06		$	156.69	$	148.20		$	140.07
Cash dividends declared and paid per share	$	8.72		$	7.72		$	6.72	$	6.00		$	5.50

December 31,
(in millions) 2013 2012 2011 2010 2009
Balance sheet data:

Cash and cash equivalents
$ 4,390    $ 4,606    $ 3,506    $ 3,367    $ 4,708
Goodwill and intangible assets, net
30,481    30,312    30,148    30,317    30,346
Total assets⁽⁵⁾
219,873    200,451    179,896    178,459    178,124
Less:

Separate account assets⁽⁶⁾
155,113    134,768    118,871    121,137    119,629
Collateral held under securities lending agreements⁽⁶⁾
21,788    23,021    20,918    17,638    19,335
Consolidated investment vehicles⁽⁷⁾
2,714    2,813    2,006    1,610    282
Adjusted total assets
$ 40,258    $ 39,849    $ 38,101    $ 38,074    $ 38,878
Short-term borrowings
$ —    $ 100    $ 100    $ 100    $ 2,234
Convertible debentures
—    — — 67    243
Long-term borrowings
4,939    5,687    4,690    3,192    3,191
Total borrowings
$ 4,939    $ 5,787    $ 4,790    $ 3,359    $ 5,668
Total BlackRock, Inc. stockholders’ equity
$ 26,460    $ 25,403    $ 25,048    $ 26,094    $ 24,329
Assets under management:

Equity:

Active
$ 317,262    $ 287,215    $ 275,156    $ 334,532    $ 348,574
iShares
718,135    534,648    419,651    448,160    381,399
Fixed income:

Active
652,209    656,331    614,804    592,303    595,580
iShares
178,835    192,852    153,802    123,091    102,490
Multi-asset
341,214    267,748    225,170    185,587    142,029
Alternatives:

Core
85,026    68,367    63,647    63,603    66,058
Currency and commodities⁽⁸⁾
26,088    41,428    41,301    46,135    36,043
Subtotal
2,318,769    2,048,589    1,793,531    1,793,411    1,672,173
Non-ETF Index:

Equity
1,282,298    1,023,638    865,299    911,775    806,082
Fixed income
411,142    410,139    479,116    425,930    357,557
Subtotal Non-ETF Index
1,693,440    1,433,777    1,344,415    1,337,705    1,163,639
Long-term
4,012,209    3,482,366    3,137,946    3,131,116    2,835,812
Cash management
275,554    263,743    254,665    279,175    349,277
Advisory⁽⁹⁾
36,325    45,479    120,070    150,677    161,167
Total
$ 4,324,088    $ 3,791,588    $ 3,512,681    $ 3,560,968    $ 3,346,256

(1)	~~Significant increases in 2010 (for income statement data) were primarily the result of the BGI Transaction that closed on December 1, 2009.~~

~~(2)~~

BlackRock’s related party revenue includes fees for services provided to registered investment companies that it manages, which include mutual funds and exchange-traded funds, as a result of the Company’s advisory relationship. In addition, equity method investments are considered related parties due to the Company’s influence over the financial and operating policies of the investee. See Note 16, Related Party Transactions,to the consolidated financial statements for more ~~information on related parties.~~information.

~~(3)~~

(2)

Participating preferred stock is considered to be a common stock equivalent for purposes of earnings per share calculations.

~~(4)~~

(3)

Total BlackRock stockholders’ equity, excluding appropriated retained earnings, divided by total common and preferred shares outstanding at December 31 of the respective year-end.

	December 31,
(in millions)	2015		2014		2013		2012		2011
Balance sheet data:
Cash and cash equivalents	$	6,083	$	5,723	$	4,390	$	4,606	$	3,506
Goodwill and intangible assets, net		30,495		30,305		30,481		30,312		30,148
Total assets⁽¹⁾		225,261		239,792		219,859		200,433		179,880
Less:
Separate account assets⁽²⁾		150,851		161,287		155,113		134,768		118,871
Collateral held under securities lending agreements⁽²⁾		31,336		33,654		21,788		23,021		20,918
Consolidated investment vehicles⁽³⁾		678		3,787		2,714		2,813		2,006
Adjusted total assets	$	42,396	$	41,064	$	40,244	$	39,831	$	38,085
Short-term borrowings	$	—	$	—	$	—	$	100	$	100
Long-term borrowings		4,930		4,922		4,925		5,669		4,674
Total borrowings	$	4,930	$	4,922	$	4,925	$	5,769	$	4,774
Total BlackRock, Inc. stockholders’ equity	$	28,503	$	27,366	$	26,460	$	25,403	$	25,048
Assets under management:
Equity:
Active	$	281,319	$	292,802	$	317,262	$	287,215	$	275,156
iShares		823,156		790,067		718,135		534,648		419,651
Non-ETF index		1,319,297		1,368,242		1,282,298		1,023,638		865,299
Equity subtotal		2,423,772		2,451,111		2,317,695		1,845,501		1,560,106
Fixed income:
Active		719,653		701,324		652,209		656,331		614,804
iShares		254,190		217,671		178,835		192,852		153,802
Non-ETF index		448,525		474,658		411,142		410,139		479,116
Fixed income subtotal		1,422,368		1,393,653		1,242,186		1,259,322		1,247,722
Multi-asset		376,336		377,837		341,214		267,748		225,170
Alternatives:
Core		92,085		88,006		85,026		68,367		63,647
Currency and commodities⁽⁴⁾		20,754		23,234		26,088		41,428		41,301
Alternatives subtotal		112,839		111,240		111,114		109,795		104,948
Long-term		4,335,315		4,333,841		4,012,209		3,482,366		3,137,946
Cash management		299,884		296,353		275,554		263,743		254,665
Advisory⁽⁵⁾		10,213		21,701		36,325		45,479		120,070
Total	$	4,645,412	$	4,651,895	$	4,324,088	$	3,791,588	$	3,512,681

~~(5)~~

(1)

Includes separate account assets that are segregated funds held for purposes of funding individual and group pension contracts and collateral held under securities lending agreements related to these assets that have equal and offsetting amounts recorded in liabilities and ultimately do not impact BlackRock’s stockholders’ equity or cash flows.

~~(6)~~

(2)

Equal and offsetting amounts, related to separate account assets and collateral held under securities lending agreements, are recorded in liabilities.

~~(7)~~

(3)

~~Includes~~

Amounts include assets held by consolidated ~~variable interest entities and~~sponsored investment products. During 2015, the Company adopted new accounting guidance on consolidations effective January 1, 2015 using the modified retrospective method. As a result of the adoption, the Company’s balance sheet at December 31, 2015 reflects the deconsolidation of the Company’s previously consolidated ~~sponsored investments funds.~~collateralized loan obligations.

~~(8)~~

(4)

Amounts include commodityiShares.

~~(9)~~

(5)

Advisory AUM represents long-term portfolio liquidation assignments.

Item 7. Management’s Discussion

and Analysis of Financial Condition and Results of Operations

~~FORWARD-LOOKING STATEMENTS~~Forward-looking Statements

This report, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions.

BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to risk factors previously disclosed in BlackRock’s Securities and Exchange Commission (“SEC”) reports and those identified elsewhere in this report, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management (“AUM”); (3) the relative and absolute investment performance of BlackRock’s investment products; (4) the impact of increased competition; (5) the impact of future acquisitions or divestitures; (6) the unfavorable resolution of legal proceedings; (7) the extent and timing of any share repurchases; (8) the impact, extent and timing of technological changes and the adequacy of intellectual property, information and cyber security protection; (9) the impact of legislative and regulatory actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock or The PNC Financial Services Group, Inc. (“PNC”); (10) terrorist activities, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (11) the ability to attract and retain highly talented professionals; (12) fluctuations in the carrying value of BlackRock’s economic investments; (13) the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products or transactions, which could affect the value proposition to clients and, generally, the tax position of the Company; (14) BlackRock’s success in maintaining the distribution of its products; (15) the impact of BlackRock electing to provide support to its products from time to time and any potential liabilities

related to securities lending or other indemnification obligations; and (16) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions.

~~OVERVIEW~~Overview

BlackRock, Inc. ~~(“BlackRock”~~(together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) is ~~the world’s largest~~a leading publicly traded investment management firm. BlackRock has portfolio managers located around the world, including the United States, the United Kingdom, the Netherlands, Japan, Hong Kong, Singapore, Australia and Germany. At December 31, 2013, the Company managed $4.324firm with $4.645 trillion of AUM on behalf of institutional and individual investors worldwide. The Company provides a wide array of products, including passively and actively managed products in various equity, fixed income, multi-asset, alternative investment and cash management products. BlackRock offers clients diversified access to global markets through separate accounts, collective investment trusts, open-end and closed-end mutual funds, exchange-traded products, hedge funds and funds of funds. BlackRock also provides global advisory services for private investment funds and retail products. The Company’s non-U.S. investment funds are based in a number of domiciles and cover a range of asset classes, including equities, fixed income, cash management and alternatives. In addition,~~BlackRock Solutions~~^® provides market risk management, financial markets advisory and enterprise investment system services to a broad base of clients. Financial markets advisory services include valuation services relating to illiquid securities, dispositions and workout assignments (including long-term portfolio liquidation assignments), risk management and strategic planning and execution.

~~In the United States, retail offerings include various open-end and closed-end funds, including~~~~iShares~~^®~~, the global product leader in exchange-traded products for institutional, retail, including high net worth, investors.~~~~iShares~~ ~~global AUM totaled $914.4 billion~~ at December 31, ~~2013~~. ~~The~~2015. With approximately 13,000 employees in more than 30 countries, BlackRock Global Funds, the Company’s primary retail fund group offered outside the United States, are authorized for distribution in 35 jurisdictions worldwide. Additional fund offerings include structured products, real estate funds, hedge funds, hedge fundsprovides a broad range of ~~funds, private equity funds~~investment and ~~funds of funds, and managed futures funds. These products are sold~~risk management services to ~~both U.S. and non-U.S., retail and~~ institutional ~~investors in a wide variety of active and passive strategies covering equity, fixed income and alternative assets.~~

BlackRock’s client base consists of financial institutions and other corporate clients, pension plans, charities, official institutions, such as central banks, sovereign wealth funds, supranational authorities and other government entities and retail ~~investors around~~clients worldwide.

For further information see Note 1, Introduction and Basis of Presentation, in the ~~world. BlackRock maintains a significant sales and marketing presence both inside and outside~~notes to the ~~United States that is focused~~consolidated financial statements beginning on establishing and maintaining retail and institutional investment management relationships by marketing its services to investors directly and through financial professionals, pension consultants and establishing third-party distribution relationships, including the distributionpage F-1 of BlackRock products and services through Merrill Lynch under a global distribution agreement, which was automatically renewed for a three-year extension after the initial term ending on January 1, 2014.this Form 10-K.

Executive Summary

~~At December 31, 2013, PNC held 20.9% of the Company’s voting common stock and 21.9% of the Company’s capital stock, which includes outstanding common and nonvoting preferred stock.~~

Summarized financial information concerning the Company’s results of operations for the years ended December 31, 2013 (“2013”), December 31, 2012 (“2012”) and December 31, 2011 (“2011”) is included below.

(in millions, except per share data)	2015			2014			2013
GAAP basis:
Total revenue	$	11,401		$	11,081		$	10,180
Total expense		6,737			6,607			6,323
Operating income	$	4,664		$	4,474		$	3,857
Operating margin		40.9	%		40.4	%		37.9	%
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests⁽¹⁾		(69	)		(49	)		97
Income tax expense		(1,250	)		(1,131	)		(1,022	)
Net income attributable to BlackRock	$	3,345		$	3,294		$	2,932
Diluted earnings per common share	$	19.79		$	19.25		$	16.87
Effective tax rate		27.2	%		25.6	%		25.8	%
As adjusted⁽²⁾:
Total revenue	$	11,401		$	11,081		$	10,180
Total expense		6,706			6,518			6,156
Operating income	$	4,695		$	4,563		$	4,024
Operating margin		42.9	%		42.9	%		41.4	%
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests⁽¹⁾		(70	)		(56	)		7
Income tax expense		(1,312	)		(1,197	)		(1,149	)
Net income attributable to BlackRock	$	3,313		$	3,310		$	2,882
Diluted earnings per common share	$	19.60		$	19.34		$	16.58
Effective tax rate		28.4	%		26.6	%		28.5	%
Other:
Assets under management (end of period)	$	4,645,412		$	4,651,895		$	4,324,088
Diluted weighted-average common shares outstanding⁽³⁾		169,038,571			171,112,261			173,828,902
Common and preferred shares outstanding (end of period)		165,596,139			166,921,863			168,724,763
Book value per share⁽⁴⁾	$	172.12		$	164.06		$	156.69
Cash dividends declared and paid per share	$	8.72		$	7.72		$	6.72

~~EXECUTIVE SUMMARY~~

(in millions, except per share data) 2013 2012 2011
GAAP basis:

Total revenue
$ 10,180    $ 9,337    $ 9,081
Total expenses
6,323    5,813    5,832
Operating income
$ 3,857    $ 3,524    $ 3,249
Operating margin
37.9 % 37.7 % 35.8 %
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests⁽¹⁾
97    (36 ) (116 )
Income tax expense
(1,022 ) (1,030 ) (796 )
Net income attributable to BlackRock
$ 2,932    $ 2,458    $ 2,337
% attributable to common shares
100.0 % 99.9 % 99.1 %
Net income attributable to common shares
$ 2,932    $ 2,455    $ 2,315
Diluted earnings per common share
$ 16.87    $ 13.79    $ 12.37
Effective tax rate
25.8 % 29.5 % 25.4 %
As adjusted⁽²⁾:

Total revenue
$ 10,180    $ 9,337    $ 9,081
Total expenses
6,156    5,763    5,689
Operating income
$ 4,024    $ 3,574    $ 3,392
Operating margin
41.4 % 40.4 % 39.7 %
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests⁽¹⁾
7    (42 ) (113 )
Income tax expense
(1,149 ) (1,094 ) (1,040 )
Net income attributable to BlackRock
$ 2,882    $ 2,438    $ 2,239
% attributable to common shares
100.0 % 99.9 % 99.1 %
Net income attributable to common shares
$ 2,882    $ 2,435    $ 2,218
Diluted earnings per common share
$ 16.58    $ 13.68    $ 11.85
Effective tax rate
28.5 % 31.0 % 31.7 %
Other:

Assets under management (end of period)
$ 4,324,088    $ 3,791,588    $ 3,512,681
Diluted weighted-average common shares outstanding⁽³⁾
173,828,902    178,017,679    187,116,410
Shares outstanding (end of period)
168,724,763    171,215,729    178,309,109
Book value per share⁽⁴⁾
$ 156.69    $ 148.20    $ 140.07
Cash dividends declared and paid per share
$ 6.72    $ 6.00    $ 5.50

(1)	Net of net income (loss) attributable to noncontrolling interests (“NCI”) (redeemable and nonredeemable).

(2)	As adjusted items are described in more detail inNon-GAAP Financial Measures.

(3)

Nonvoting participating preferred ~~stock is~~shares are considered to be a common stock ~~equivalent~~equivalents for purposes of determining basic and diluted earnings per share calculations. In addition, unvested restricted stock units (“RSUs”) that contain nonforfeitable rights to dividends are not included for 2012 and 2011 as they were deemed to be participating securities in accordance with accounting principles generally accepted in the United States (“GAAP”). Upon vesting of the participating RSUs, the shares were added to the weighted-average shares outstanding that resulted in an increase to the percentage of net income attributable to common shares. ~~The Company’s remaining participating securities vested in January 2013.~~

(4)	Total BlackRock stockholders’ equity, excluding an appropriated retained deficit of $19 million for 2014 and appropriated retained earnings of $22 million for 2013, divided by total common and preferred shares outstanding at December 31 of the respective year-end.

~~2013 COMPARED WITH 2012~~2015 Compared with 2014

GAAP. Operating income of ~~$3,857~~$4,664 million increased ~~$333~~$190 million and operating margin of 40.9% increased 50 bps from 2014. Operating income reflected growth in base fees and performance fees, partially offset by higher expense. The Company’s 2015 expense reflected higher revenue-related expense, including compensation, and distribution and servicing costs, partially offset by lower general and administration expense and lower amortization of intangible assets. In connection with the Barclays Global Investors (“BGI”) acquisition, BlackRock recorded a $50 million indemnification asset for unrecognized tax benefits. Due to the resolution of outstanding tax matters in 2014, BlackRock recorded $50 million of general and administration expense in 2014 to reflect the reduction of the indemnification asset and an offsetting $50 million tax benefit. Results for 2014 also included $11 million of closed-end fund launch costs. Nonoperating income (expense), less net income (loss) attributable to NCI, decreased $20 million from ~~2012. In~~2014 due to lower net gains on investments in 2015.

Income tax expense for 2015 included a $54 million net noncash benefit associated with the ~~second quarter~~revaluation of certain deferred income tax liabilities, including the effect of tax legislation enacted in the United Kingdom and state and local income tax changes and benefited from $75 million of nonrecurring items. Income tax expense for 2014 included $94 million of tax benefits, including the $50 million tax benefit mentioned above, a $9 million net noncash benefit, primarily associated with the revaluation of certain deferred income tax liabilities as a result of domestic state and local tax changes, and a $73 million net tax benefit related to several favorable nonrecurring items.

Diluted earnings per common share rose $0.54, or 3%, compared with the prior year period, reflecting higher operating income and the benefit of share repurchases, partially offset by the impact of a higher 2015 effective tax rate and lower nonoperating income.

As Adjusted. Operating income of $4,695 million increased $132 million from 2014 and the operating margin for both 2015 and 2014 was 42.9%. Income tax expense on an as adjusted basis for 2015 included a $75 million net benefit and excluded the net noncash benefit of $54 million described above. General and administration expense for 2014 excluded the $50 million related to the reduction of the indemnification asset described above. Income tax expense for 2014 included a $73 million net benefit and excluded a $50 million tax benefit associated with the reduction of the same indemnification asset and $9 million of net noncash benefits described above. Diluted earnings per common share rose $0.26, or 1%, from 2014.

2014 Compared with 2013

GAAP. Operating income of $4,474 million increased $617 million from 2013, reflecting growth in base fees and BlackRock Solutions and advisory revenue, partially offset by higher expense. The Company’s 2014 expense reflected higher revenue-related expense, including compensation and direct fund expense. Expense for 2014 also included the previously mentioned $50 million general and administration expense related to the reduction of an indemnification asset and $11 million of closed-end fund launch costs. The 2013 expense included $124 million of expense related to the Charitable Contribution described below and $18 million of closed-end fund launch costs.

Nonoperating income (expense), less net income (loss) attributable to NCI, decreased $146 million from 2013. Expense for 2013 included a $39 million noncash, nonoperating pre-tax gain related to the carrying value of the Company’s equity method investment as a result of an initial public offering of PennyMac Financial Services, Inc. (the “PennyMac IPO”)~~, the Company recorded a noncash, nonoperating pre-tax gain of $39 million related to the carrying value of its equity method investment. Subsequent to the PennyMac IPO,~~. In addition, in 2013, the Company made a

charitable contribution of ~~6.1~~approximately six million units of ~~its equity method~~the Company’s investment ~~with a fair value of $124 million~~in PennyMac to a ~~new~~ donor advised fund (the “Charitable Contribution”). In connection with the Charitable Contribution, the Company also recorded a noncash, nonoperating pre-tax gain of $80 million related to the contributed investment. ~~For further information, see Note 11,~~~~Other Assets~~~~, to~~The decrease in nonoperating income (expense) also reflected net lower returns on the ~~consolidated financial statements.~~

~~Operating income reflects growth~~co-investment and seed portfolio and higher interest expense resulting from a long-term debt issuance in ~~base fees and strong performance fees and higher~~~~BlackRock Solutions~~ ~~and advisory revenue,~~March 2014, partially offset by ~~higher expenses, primarily due to~~ the ~~$124~~positive impact of the monetization of a nonstrategic, opportunistic private equity investment during 2014.

Income tax expense of $1,131 million included $94 million of tax benefits, including the $50 million tax benefit mentioned above. Income tax expense for 2014 and 2013 reflected the revaluation of deferred income tax liabilities related to ~~the Charitable Contribution~~intangible assets and ~~higher revenue-related expenses. The results~~goodwill. Income tax expense for 2013 also included $43 million of organizational alignment costs, reflecting compensation and severance costs associated with the alignment of staffing with the Company’s strategic priorities and growth opportunities. Operating income in 20122014 included a ~~$30~~$9 million ~~charge~~net noncash benefit arising primarily from state and local income tax changes and a $73 million net benefit related to a contribution to certain of the Company’s bank-managed short-term investment funds (“STIFs”). Nonoperating income (expense), less net income (loss) attributable to NCI increased $133 million due to the $39 million pre-tax gain related to the PennyMac IPO and the $80 million gain related to the Charitable Contribution and higher net positive marks on investments during 2013 compared with 2012.several favorable nonrecurring items. Income tax expense for 2013 included a $69 million ~~net~~ noncash benefit, ~~for 2013 and a $30 million net noncash benefit for 2012. The net noncash benefits for both periods~~ primarily related to ~~the revaluation of certain deferred income tax liabilities, including the effect of~~ legislation enacted in the United Kingdom and ~~domestic~~ state and local income tax changes. In addition, 2013 income tax expense included ana benefit of approximately $48 million ~~tax benefit~~ recognized in connection with the Charitable Contribution, a ~~tax~~ benefit of approximately $29 million, primarily due to the realization of tax loss carryforwards, and benefits from certain nonrecurring items. ~~Earnings~~

Diluted earnings per ~~diluted~~ common share rose ~~$3.08,~~$2.38, or ~~22%~~14%, ~~compared with 2012~~from 2013 due to higher net income and the benefit of share repurchases.

As ~~Adjusted.~~Adjusted. Operating income of ~~$4,024~~$4,563 million and operating margin of ~~41.4%~~42.9% increased ~~$450~~$539 million and ~~100~~150 basis points, respectively, from ~~2012.~~2013. Results for 2014 excluded a $50 million general and administrative expense related to the reduction of an indemnification asset. The ~~current year~~2014 income tax expense included a $73 million net benefit and excluded a $50 million tax benefit associated with the reduction of the same indemnification asset and $9 million of net noncash benefits described above. The 2013 results ~~included~~excluded the ~~previously mentioned organizational alignment costs~~financial impact of ~~$43 million and~~the Charitable Contribution, but included the $39 million pre-tax nonoperating gain related to the PennyMac IPO. ~~Income~~The 2013 income tax expense ~~on an as adjusted basis~~ included a ~~tax~~ benefit of approximately $29 million ~~primarily due to the realization of tax loss carryforwards,~~ and benefits from certain nonrecurring items and excluded the $69 million net noncash benefit, ~~in 2013 and the $30 million net noncash benefit in 2012~~ described above. ~~Earnings~~Diluted earnings per ~~diluted~~ common share rose ~~$2.90,~~$2.76, or ~~21%~~17%, from ~~2012. The financial impact related to the Charitable Contribution has been excluded from as adjusted results for~~ 2013.

~~2012 COMPARED WITH 2011~~

~~GAAP.~~ ~~Operating income of $3,524 million and operating margin of 37.7% increased $275 million and 190 basis points, respectively, from 2011 reflecting growth in base fees and higher performance fees~~. Operating income in 2012 included a $30 million charge related to the contribution to the Company’s STIFs. Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests, increased $80 million due to higher net positive marks on investments in 2012 compared with 2011, partially offset by higher interest expense resulting from long-term debt issuances in May 2012 and May 2011. In 2012, income tax expense included a $21 million benefit related to the resolution of certain outstanding tax positions and a $50 million net noncash benefit related to the revaluation of certain deferred income tax liabilities, including the effect of tax legislation enacted in the United Kingdom and the state

and local income tax effect resulting from changes in the Company’s organizational structure. In 2011, income tax expenses included a $24 million benefit related to the resolution of certain outstanding tax positions and $198 million of net noncash tax benefits due to a state tax election and enacted U.K., Japan, U.S. state and local tax legislation. Earnings per diluted common share rose $1.42 from 2011 due to higher net income and the benefit of share repurchases. During 2012, the Company repurchased 9.1 million shares.

~~As Adjusted~~. Operating income of $3,574 million and operating margin of 40.4% increased $182 million and 70 basis points, respectively, from 2011 reflecting higher revenues. Operating income on an as adjusted basis excluded non-GAAP expense adjustments totaling $50 million in 2012 and $143 million in 2011. Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests, increased $71 million. Income tax expense on an as adjusted basis excluded the $50 million and $198 million noncash benefits for 2012 and 2011, respectively, described above. Earnings per diluted common share rose $1.83 from 2011 reflecting the improvement in net income and the benefit of share repurchases.

SeeNon-GAAP Financial Measures for further information on as adjusted items.

For further discussion of BlackRock’s revenue, ~~expenses,~~expense, nonoperating results and income tax expense, seeDiscussion of Financial Results herein.

~~BUSINESS OUTLOOK~~

Business Outlook

BlackRock's framework for long-term value creation is predicated on generating differentiated organic growth, leveraging scale to increase operating margins over time, and returning capital to shareholders on a consistent basis. BlackRock's diversified platform, in terms of style, product, client and geography, enables it to generate more stable cash flows through market cycles, positioning BlackRock to invest for the long-term by striking an appropriate balance between investing for future growth and practical discretionary expense management.

BlackRock’s highly diversified multi-product platform was created to meet the needs of its clients in all market environments. BlackRock is positioned to provide active and ~~passive~~index investment solutions across asset classes and geographies and leverageBlackRock Solutions’ world-class risk management, analytics and advisory capabilities on behalf of clients.

~~BlackRock’s key~~ BlackRock serves a diverse mix of institutional and retail clients across the globe, including investors in iShares ETFs, maintaining differentiated client ~~themes — Income, Alternatives, Outcome Investing, Strategic Beta, Emerging Markets~~relationships and ~~Retirement Solutions — are expected to drive the Company’s organic growth across its businesses.~~a fiduciary focus.

BlackRock’s Retail strategy is focused on an outcome-oriented approach to creating client solutions, including active, ~~passive~~index and alternative products, and enhanced distribution. In the United States, BlackRock is leveraging its integrated wholesaler force to further penetrate ~~wire house~~wirehouse distribution platforms and gain share ~~amongst Registered Investment Advisors.~~among registered investment advisors. Internationally, BlackRock continues to diversify the range of investment solutions available to clients, penetrate new distribution ~~segments~~channels and capitalize on regulatory change impacting retrocession arrangements.

iShares ~~will be driven by the continued shift from active to passive investment strategies~~ growth strategy is centered on increasing global iShares market share and ~~adoption of ETFs.~~~~iShares~~ ~~is positioned to benefit from~~driving global market ~~expansion,~~expansion. BlackRock intends to achieve these goals by pursuing global growth themes in client and product segments including core investments, fixed income, ~~ETFs~~financial instruments and ~~continued product innovation, while focusing on increasing U.S. market share, especially in the “buy-and-hold” segment.~~precision exposures.

BlackRock believes Institutional results will be driven by strength in specialty areas, including Defined Contribution, Financial Institutions, ~~and~~ Official Institutions ~~more~~and Foundations, Family Offices and Endowments; deepening client relationships through effective cross-selling ~~efforts~~efforts; enhancing BlackRock’s solutions-oriented approach and leveragingBlackRock Solutions’ analytical and risk management expertise.

~~Assuming a stable market environment, BlackRock anticipates that organic growth, coupled with the benefits of scale, should result in increasing operating margins over time.~~

~~BlackRock believes that earnings growth and shareholder returns should also be positively impacted by the Company’s commitment to a consistent and predictable capital management strategy.~~

~~NON-GAAP FINANCIAL MEASURES~~Non-GAAP Financial Measures

BlackRock reports its financial results in accordance with 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. Management also uses non-GAAP financial measures as a benchmark to compare its performance with other companies and to enhance the comparability of this information for the reporting periods presented. Non-GAAP measures may pose limitations because they do not include all of BlackRock’s revenue and expense. 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.

Management uses both GAAP and non-GAAP financial measures in evaluating BlackRock’s financial performance. Adjustments to GAAP financial measures (“non-GAAP adjustments”) include certain items management deems nonrecurring or occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.

Computations for all periods are derived from the consolidated statements of income as follows:

~~(a)~~(1) Operating income, as adjusted, and operating margin, as adjusted:

Operating income, as adjusted, equals operating income, GAAP basis, excluding certain items management deems nonrecurring, recurring infrequently or transactions that ultimately will not impact BlackRock’s book value, as indicated in the table below. 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.


(in millions)	2013			2012			2011			2015			2014			2013
Operating income, GAAP basis	$	3,857		$	3,524		$	3,249		$	4,664		$	4,474		$	3,857
Non-GAAP expense adjustments:
PNC LTIP funding obligation		33			22			44			30			32			33
Compensation expense related to appreciation (depreciation) on deferred compensation plans											1			7			10
Reduction of indemnification asset											—			50			—
Charitable Contribution		124			—			—			—			—			124
U.K. lease exit costs		—			(8	)		63
Contribution to STIFs		—			30			—
Merrill Lynch compensation contribution		—			—			7
Restructuring charges		—			—			32
Compensation expense related to appreciation (depreciation) on deferred compensation plans		10			6			(3	)
Operating income, as adjusted		4,024			3,574			3,392			4,695			4,563			4,024
Closed-end fund launch costs		16			22			26
Closed-end fund launch commissions		2			3			3
Product launch costs and commissions											5			11			18
Operating income used for operating margin measurement	$	4,042		$	3,599		$	3,421		$	4,700		$	4,574		$	4,042
Revenue, GAAP basis	$	10,180		$	9,337		$	9,081		$	11,401		$	11,081		$	10,180
Non-GAAP adjustments:
Distribution and servicing costs		(353	)		(364	)		(386	)		(409	)		(364	)		(353	)
Amortization of deferred sales commissions		(52	)		(55	)		(81	)		(48	)		(56	)		(52	)
Revenue used for operating margin measurement	$	9,775		$	8,918		$	8,614		$	10,944		$	10,661		$	9,775
Operating margin, GAAP basis		37.9	%		37.7	%		35.8	%		40.9	%		40.4	%		37.9	%
Operating margin, as adjusted		41.4	%		40.4	%		39.7	%		42.9	%		42.9	%		41.4	%

Operating income, as adjusted,includes non-GAAP expense adjustments. The portion of compensation expense associated with certain long-term incentive plans (“LTIP”) funded, or to be funded, through share distributions to participants of BlackRock stock held by PNC ~~and a Merrill Lynch & Co., Inc. (“Merrill Lynch”) cash compensation contribution~~ has been excluded because it ultimately does not impact BlackRock’s book value. ~~The~~Compensation expense associated with appreciation (depreciation) on investments related to certain BlackRock deferred compensation plans has been excluded as returns on investments set aside for these plans, which substantially offset this expense, are reported in nonoperating income (expense). In 2014, general and administration expense relating to the ~~Merrill Lynch cash compensation contribution ceased at~~reduction of an indemnification asset has been excluded since it is directly offset by a tax benefit of the ~~end of third quarter 2011.~~same amount and, consequently, does not impact BlackRock’s book value. In 2013, the $124 million expense related to the Charitable Contribution ~~has been~~was excluded from operating income, as adjusted, due to its nonrecurring nature and because the noncash, nonoperating pre-tax gain of $80 million directly related to the contributed PennyMac investment is reported in nonoperating income (expense). ~~The U.K. lease exit costs represent costs to exit two locations in London in 2011. The amount in 2012 represents an adjustment related to the estimated lease exit costs initially recorded in 2011.~~

The contribution to STIFs represents a contribution to certain of the Company’s bank-managed STIFs. Restructuring charges consist of compensation costs and professional fees. Compensation expense associated with appreciation (depreciation) on investments related to certain BlackRock deferred compensation plans has been excluded as returns on investments set aside for these plans, which substantially offset this expense, are reported in nonoperating income (expense).

Management believes operating income exclusive of these items is a useful measure in evaluating BlackRock’s operating performance and helps enhance the comparability of this information for the reporting periods presented.

•

~~Operating margin, as adjusted~~, ~~allows BlackRock to compare performance from period to period by adjusting for items that may not recur, recur infrequently or may have an economic offset in~~

nonoperating income (expense). BlackRock also uses operating margin, as adjusted, to monitor corporate performance and efficiency and as a benchmark to compare its performance with other companies. Management uses both GAAP and non-GAAP financial measures in evaluating BlackRock’s financial performance. The non-GAAP measure by itself may pose limitations because it does not include all of BlackRock’s revenues and expenses.

Operating income used for measuring operating margin, as adjusted, is equal to operating income, as adjusted, excluding the impact of product launch costs (e.g. closed-end fund launch ~~costs~~costs) and related commissions. Management believes the exclusion of such costs and related commissions is useful because these costs can fluctuate considerably and ~~revenues~~revenue associated with the expenditure of these costs will not fully impact BlackRock’s results until future periods.

Revenue used for operating margin, as adjusted, excludes distribution and servicing costs paid to related parties and other third parties. Management believes the exclusion of such costs is useful because it creates consistency in the treatment for certain contracts for similar services, which due to the terms of the contracts, are accounted for under GAAP on a net basis within investment advisory, administration fees and securities lending revenue. Amortization of deferred sales commissions is excluded from revenue used for operating margin measurement, as adjusted, because such costs, over time, substantially offset distribution fee revenue the Company earns. For each of these items, BlackRock excludes from revenue used for operating margin, as adjusted, the costs related to each of these items as a proxy for such offsetting ~~revenues.~~revenue.

~~(b)~~(2) Nonoperating income (expense), less net income (loss) attributable to ~~noncontrolling interests,~~NCI, as adjusted:

Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, ~~is presented below.~~ equals nonoperating income (expense), GAAP basis, less net income (loss) attributable to NCI, adjusted for compensation expense associated with (appreciation) depreciation on investments related to certain BlackRock deferred compensation plans. The compensation expense offset is recorded in operating income. This compensation expense has been included in nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, to offset returns on investments set aside for these plans, which are reported in nonoperating income (expense), GAAP basis.

Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, provides comparability of information among reporting periods and is an effective measure for reviewing BlackRock’s nonoperating contribution to results. As compensation expense associated with (appreciation) depreciation on investments related to certain deferred compensation plans, which is included in operating income, substantially offsets the gain (loss) on the investments set aside for these plans, management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, provides a useful measure, for both management and investors, of BlackRock’s nonoperating results that impact book value. During 2013, the noncash, nonoperating pre-tax gain of $80 million related to the contributed PennyMac investment

~~has been~~ was excluded from nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted due to its nonrecurring nature and because the more than offsetting associated Charitable Contribution expense of $124 million is reported in operating income.


(in millions)	2013			2012			2011			2015			2014			2013
Nonoperating income (expense), GAAP basis	$	116		$	(54	)	$	(114	)	$	(62	)	$	(79	)	$	116
Less: Net income (loss) attributable to NCI		19			(18	)		2			7			(30	)		19
Nonoperating income (expense)		97			(36	)		(116	)
Nonoperating income (expense), net of NCI											(69	)		(49	)		97
Gain related to Charitable Contribution		(80	)		—			—			—			—			(80	)
Compensation expense related to (appreciation) depreciation on deferred compensation plans		(10	)		(6	)		3			(1	)		(7	)		(10	)
Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted	$	7		$	(42	)	$	(113	)	$	(70	)	$	(56	)	$	7

~~(c)~~

(3) Net income attributable to BlackRock, as adjusted: Management believes net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted, are useful measures of BlackRock’s profitability and financial performance. Net income attributable to BlackRock, Inc., as adjusted, equals net income attributable to BlackRock, Inc., GAAP basis, adjusted for significant nonrecurring items, charges that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.

(in millions, except per share data)	2015			2014			2013
Net income attributable to BlackRock, GAAP basis	$	3,345		$	3,294		$	2,932
Non-GAAP adjustments:
PNC LTIP funding obligation, net of tax		22			25			23
Income tax matters		(54	)		(9	)		(69	)
Amount related to the Charitable Contribution, net of tax		—			—			(4	)
Net income attributable to BlackRock, as adjusted	$	3,313		$	3,310		$	2,882
Diluted weighted-average common shares outstanding⁽⁴⁾	169.0				171.1			173.8
Diluted earnings per common share, GAAP basis⁽⁴⁾	$	19.79		$	19.25		$	16.87
Diluted earnings per common share, as adjusted⁽⁴⁾	$	19.60		$	19.34		$	16.58

See ~~note (a) Operating~~the aforementioned discussion regarding operating income, as adjusted, and operating margin, as adjusted, for information on the PNC LTIP funding obligation ~~Merrill Lynch compensation contribution,~~and the Charitable ~~Contribution, U.K. lease exit costs, contribution~~Contribution.

For each period presented, the non-GAAP adjustment related to ~~STIFs and restructuring charges.~~

~~The~~the PNC LTIP funding obligation was tax effected at the respective blended rates applicable to the adjustments. Amounts for 2013 ~~results~~ included a tax benefit of approximately $48 million recognized in connection with the Charitable Contribution. The tax benefit has been excluded from net income attributable to BlackRock, Inc., as adjusted due to the nonrecurring nature of the Charitable Contribution. ~~During 2013,~~

Non-GAAP income tax ~~changes~~matters adjustments for 2015, 2014 and 2013 reflected the revaluation of deferred income tax liabilities. The amount for 2015 included ~~adjustments~~a $54 million net noncash benefit, primarily related to the ~~revaluation of certain deferred income tax liabilities, including the effect~~impact of legislation enacted in the United Kingdom and ~~domestic~~ state and local income tax changes. ~~During 2012,~~The amount for 2014 included a $9 million net noncash tax benefit arising primarily from state and local income tax ~~changes~~changes. The amount for 2013 included ~~adjustments~~a $69 million noncash tax benefit, primarily related to the ~~revaluation of certain deferred income tax liabilities, including the effect~~impact of legislation enacted in the United Kingdom and ~~the~~ state and local income tax effect resulting from changes in the Company’s organizational structure. During 2011, income tax changes included adjustments related to the revaluation of certain deferred income tax liabilities due to a state tax electionchanges. Such amounts for 2015, 2014 and ~~enacted U.K., Japan, U.S. state and local tax legislation. The resulting decrease in income taxes has~~2013 have been excluded from ~~net income attributable to BlackRock, Inc.,~~ as adjusted results as ~~these items~~they will not have a cash flow impact and to ensure comparability among periods presented.

(in millions, except per share data) 2013 2012 2011
Net income attributable to BlackRock, GAAP basis
$ 2,932    $ 2,458    $ 2,337
Non-GAAP adjustments, net of tax:^(d)

PNC LTIP funding obligation
23    14    30
Amount related to the Charitable Contribution
(4 ) — —
U.K. lease exit costs
—    (5 ) 43
Contribution to STIFs
—    21    —
Merrill Lynch compensation contribution
—    — 5
Restructuring charges
—    — 22
Income tax changes
(69 ) (50 ) (198 )
Net income attributable to BlackRock, as adjusted
$ 2,882    $ 2,438    $ 2,239
Allocation of net income, as adjusted, to common shares^(e)
$ 2,882    $ 2,435    $ 2,218
Diluted weighted-average common shares outstanding^(f)
173.8    178.0    187.1
Diluted earnings per common share, GAAP basis^(f)
$ 16.87    $ 13.79    $ 12.37
Diluted earnings per common share, as adjusted^(f)
$ 16.58    $ 13.68    $ 11.85

~~(d)~~

For each period presented, the non-GAAP adjustments, including the PNC LTIP funding obligation, Merrill Lynch compensation contribution, U.K. lease exit costs, contribution to STIFs and restructuring charges were tax effected at the respective blended rates applicable to the adjustments. Amounts for 2013 also included the tax benefit of approximately $48 million related to the Charitable Contribution.

~~(e)~~

~~Amounts for 2012 and 2011 exclude net income attributable to participating securities (see below).~~

~~(f)~~

(4) Nonvoting participating preferred stock is considered to be a common stock equivalent for purposes of determining basic and diluted earnings per share calculations.

Prior to 2013, certain unvested restricted stock units were not included in diluted weighted-average common shares outstanding as they were deemed participating securities in accordance with required provisions of Accounting Standards Codification (“ASC”) 260-10,~~Earnings per Share~~~~. In 2012 and 2011, average outstanding participating securities were 0.2 million and 1.8 million, respectively. For further information, see Note 22,~~~~Earnings per Share~~~~, to the consolidated financial statements.~~

Assets Under Management

AUM for reporting purposes generally is based upon how investment advisory and administration fees are calculated for each portfolio. Net asset values, total assets, committed assets or other measures may be used to determine portfolio AUM.

AUM and Net ~~Subscriptions (Redemptions)~~Inflows (Outflows) by Client Type


	AUM						Net Subscriptions (Redemptions)									AUM						Net Inflows (Outflows)
(in millions)	2013		2012		2011		2013			2012⁽¹⁾			2011⁽²⁾			2015		2014		2013		2015			2014			2013
Retail	$	487,777	$	403,484	$	363,359	$	38,804		$	11,556		$	13,409		$	541,125	$	534,329	$	487,777	$	38,512		$	54,944		$	38,804
iShares		914,372		752,706		593,356		63,971			85,167			53,000			1,092,561		1,024,228		914,372		129,852			100,601			63,971
Institutional:
Active		932,410		884,695		831,275		(928	)		(24,046	)		(16,897	)		962,852		959,160		932,410		26,746			(10,420	)		(928	)
Index		1,677,650		1,441,481		1,349,956		15,266			(75,142	)		17,837			1,738,777		1,816,124		1,677,650		(43,096	)		36,128			15,266
Total institutional		2,610,060		2,326,176		2,181,231		14,338			(99,188	)		940
Total long-term		4,012,209		3,482,366		3,137,946		117,113			(2,465	)		67,349
Institutional subtotal																	2,701,629		2,775,284		2,610,060		(16,350	)		25,708			14,338
Long-term																	4,335,315		4,333,841		4,012,209		152,014			181,253			117,113
Cash management		275,554		263,743		254,665		10,056			5,048			(22,899	)		299,884		296,353		275,554		7,510			25,696			10,056
Advisory⁽³⁾		36,325		45,479		120,070		(7,442	)		(74,540)			(29,903)
Advisory⁽¹⁾																	10,213		21,701		36,325		(9,629	)		(13,173	)		(7,442	)
Total	$	4,324,088	$	3,791,588	$	3,512,681	$	119,727		$	(71,957	)	$	14,547		$	4,645,412	$	4,651,895	$	4,324,088	$	149,895		$	193,776		$	119,727

AUM and Net ~~Subscriptions (Redemptions)~~Inflows (Outflows) by Product Type


	AUM						Net Subscriptions (Redemptions)									AUM						Net Inflows (Outflows)
(in millions)	2013		2012		2011		2013			2012⁽¹⁾			2011⁽²⁾			2015		2014		2013		2015			2014			2013
Equity	$	2,317,695	$	1,845,501	$	1,560,106	$	69,257		$	54,016		$	24,139		$	2,423,772	$	2,451,111	$	2,317,695	$	52,778		$	52,420		$	69,257
Fixed income		1,242,186		1,259,322		1,247,722		11,508			(66,829	)		4,326			1,422,368		1,393,653		1,242,186		76,944			96,406			11,508
Multi-asset		341,214		267,748		225,170		42,298			15,817			42,654			376,336		377,837		341,214		17,167			28,905			42,298
Alternatives
Core		85,026		68,367		63,647		2,703			(3,922	)		48			92,085		88,006		85,026		4,080			3,061			2,703
Currency and commodities⁽⁴⁾		26,088		41,428		41,301		(8,653	)		(1,547	)		(3,818	)
Currency and commodities⁽²⁾																	20,754		23,234		26,088		1,045			461			(8,653	)
Subtotal		111,114		109,795		104,948		(5,950	)		(5,469	)		(3,770	)		112,839		111,240		111,114		5,125			3,522			(5,950	)
Total long-term		4,012,209		3,482,366		3,137,946		117,113			(2,465	)		67,349
Long-term																	4,335,315		4,333,841		4,012,209		152,014			181,253			117,113
Cash management		275,554		263,743		254,665		10,056			5,048			(22,899)			299,884		296,353		275,554		7,510			25,696			10,056
Advisory⁽³⁾		36,325		45,479		120,070		(7,442	)		(74,540	)		(29,903	)
Advisory⁽¹⁾																	10,213		21,701		36,325		(9,629	)		(13,173	)		(7,442	)
Total	$	4,324,088	$	3,791,588	$	3,512,681	$	119,727		$	(71,957)		$	14,547		$	4,645,412	$	4,651,895	$	4,324,088	$	149,895		$	193,776		$	119,727

AUM and Net Inflows (Outflows) by Investment Style

	AUM						Net Inflows (Outflows)
(in millions)	2015		2014		2013		2015			2014			2013
Active	$	1,462,672	$	1,453,613	$	1,391,243	$	60,510		$	34,408		$	41,177
Index & iShares		2,872,643		2,880,228		2,620,966		91,504			146,845			75,936
Long-term		4,335,315		4,333,841		4,012,209		152,014			181,253			117,113
Cash management		299,884		296,353		275,554		7,510			25,696			10,056
Advisory⁽¹⁾		10,213		21,701		36,325		(9,629	)		(13,173	)		(7,442	)
Total	$	4,645,412	$	4,651,895	$	4,324,088	$	149,895		$	193,776		$	119,727

(1)	~~Amounts include the effect of two single client low-fee institutional index fixed income outflows of $36.0 billion and $74.2 billion.~~

~~(2)~~

Amounts exclude BGI merger-related outflows due to manager concentration considerations prior to the third quarter of 2011 and outflows from scientific active equity performance prior to the second quarter of 2011 of $28.3 billion. As a result of client investment manager concentration limits and the scientific active equity performance, outflows were expected to occur for a period of time subsequent to the close of the BGI transaction.

~~(3)~~

Advisory AUM represents long-term portfolio liquidation assignments. ~~Redemptions include planned client distributions.~~

~~(4)~~

(2)

Amounts include commodityiShares.

The following table presents the component changes in BlackRock’s AUM for ~~2013, 2012~~2015, 2014 and ~~2011.~~2013.

December 31,
(in millions) 2013 2012 2011
Beginning assets under management
$ 3,791,588    $ 3,512,681    $ 3,560,968
Net subscriptions (redemptions)

Long-term⁽¹⁾
117,113    (2,465 ) 67,349
Cash management
10,056    5,048    (22,899 )
Advisory⁽²⁾
(7,442 ) (74,540 ) (29,903 )
Total net subscriptions (redemptions)
119,727    (71,957 ) 14,547
BGI merger-related outflows⁽³⁾
—    — (28,251 )
Acquisitions⁽⁴⁾
26,932    13,742    —
Market appreciation (depreciation)
398,707    321,377    (27,513 )
Foreign exchange⁽⁵⁾
(12,866 ) 15,745    (7,070 )
Total change
532,500    278,907    (48,287 )
Ending assets under management
$ 4,324,088    $ 3,791,588    $ 3,512,681

	December 31,
(in millions)	2015			2014			2013
Beginning assets under management	$	4,651,895		$	4,324,088		$	3,791,588
Net inflows (outflows)
Long-term		152,014			181,253			117,113
Cash management		7,510			25,696			10,056
Advisory⁽¹⁾		(9,629	)		(13,173	)		(7,442	)
Total net inflows (outflows)		149,895			193,776			119,727
Acquisitions⁽²⁾		2,219			—			26,932
Market change		(57,495	)		261,682			398,707
FX impact⁽³⁾		(101,102	)		(127,651	)		(12,866	)
Total change		(6,483	)		327,807			532,500
Ending assets under management	$	4,645,412		$	4,651,895		$	4,324,088

(1)	~~Amounts include the effect of two single client low-fee institutional index fixed income outflows of $36.0 billion and $74.2 billion in 2012.~~

~~(2)~~

Advisory AUM represents long-term portfolio liquidation assignments. ~~Redemptions include planned client distributions.~~

~~(3)~~

(2)

Amounts ~~include outflows due to manager concentration considerations prior to~~for 2015 represent $1.3 billion of AUM acquired in the ~~third quarter~~acquisition of ~~2011~~certain assets of BlackRock Kelso Capital Advisors LLC (“BKCA”) in March 2015, $560 million of AUM acquired in the Infraestructura Institucional acquisition in October 2015 and ~~outflows from scientific active equity performance prior to~~$366 million of AUM acquired in the second quarter of 2011. As a result of client investment manager concentration limits and the scientific active equity performance, outflows were expected to occur for a period of time subsequent to the close of the BGI transaction.FutureAdvisor acquisition in October

~~(4)~~

~~Amounts~~

2015. The FutureAdvisor acquisition amount does not include AUM that was held in iShares holdings. Amounts for 2013 represent $16.0 billion of AUM acquired ~~from the Company’s acquisition of MGPA~~ in ~~October 2013 of $11.0 billion,~~ the Credit ~~Suisse’s~~Suisse ETF franchise in July 2013 (the “Credit Suisse ETF Transaction”) and $11.0 billion of ~~$16.0 billion,~~AUM acquired in the ~~Swiss Re Private Equity Partners~~MGPA acquisition ~~(the “SRPEP Transaction”)~~ in ~~September 2012 of $6.2 billion and the Claymore Investments, Inc. acquisition (the “Claymore Transaction”) in March 2012 of $7.6 billion.~~October 2013.

~~(5)~~

(3)

Foreign exchange reflects the impact of ~~converting~~translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

BlackRock has historically grown ~~aggregate~~ AUM through organic growth and acquisitions. Management believes that the Company will be able to continue to grow AUM organically by focusing on strong investment performance, efficient delivery of beta for ~~passive~~index products, client service, developing new products and optimizing distribution capabilities.

Component Changes in AUM for ~~2013~~2015

The following table presents the component changes in AUM by client type and product type for ~~2013.~~2015.


(in millions)	December 31, 2012		Net subscriptions (redemptions)			Adjustments⁽¹⁾			Acquisitions⁽²⁾		Market change			FX impact⁽³⁾			December 31, 2013		Full Year Average AUM⁽⁴⁾		December 31, 2014		Net inflows (outflows)			Acquisitions⁽¹⁾		Market change			FX impact⁽²⁾			December 31, 2015		Full Year Average AUM⁽³⁾
Retail:
Equity	$	164,748	$	3,641		$	13,066		$	—	$	20,743		$	837		$	203,035	$	173,886	$	200,445	$	8,543		$	—	$	(10,040	)	$	(5,193	)	$	193,755	$	199,474
Fixed income		138,425		14,197			3,897			—		(5,338	)		294			151,475		143,929		189,820		31,114			—		(5,691	)		(2,590	)		212,653		205,919
Multi-asset		90,626		14,821			2,663			—		9,039			(95	)		117,054		102,276		125,341		(1,307	)		366		(8,108	)		(985	)		115,307		125,019
Alternatives		9,685		6,145			—			136		136			111			16,213		12,585		18,723		162			1,293		(177	)		(591	)		19,410		19,351
Retail subtotal		403,484		38,804			19,626			136		24,580			1,147			487,777		432,676		534,329		38,512			1,659		(24,016	)		(9,359	)		541,125		549,763
iShares:
Equity		534,648		74,119			—			13,021		95,335			1,012			718,135		620,113		790,067		78,408			—		(32,349	)		(12,970	)		823,156		810,836
Fixed income		192,852		(7,450	)		—			1,294		(8,477	)		616			178,835		186,264		217,671		50,309			—		(7,508	)		(6,282	)		254,190		239,164
Multi-asset		869		355			—			—		96			(10	)		1,310		1,115		1,773		1,074			—		(90	)		(27	)		2,730		1,924
Alternatives		24,337		(3,053	)		—			1,645		(6,863	)		26			16,092		20,084		14,717		61			—		(2,160	)		(133	)		12,485		14,268
iShares subtotal		752,706		63,971			—			15,960		80,091			1,644			914,372		827,576		1,024,228		129,852			—		(42,107	)		(19,412	)		1,092,561		1,066,192
Institutional:
Active:
Equity		129,024		(16,504	)		—			—		27,930			(1,724	)		138,726		131,254		125,143		(462	)		—		960			(4,199	)		121,442		125,410
Fixed income		518,102		(3,560	)		—			—		(6,247	)		(3,186	)		505,109		504,769		518,590		5,690			—		(1,220	)		(8,632	)		514,428		523,536
Multi-asset		166,708		28,955			3,335			—		14,193			2,085			215,276		184,958		242,913		18,409			—		1,074			(10,355	)		252,041		254,781
Alternatives		70,861		(9,819	)		—			10,836		2,593			(1,172	)		73,299		68,364		72,514		3,109			560		(175	)		(1,067	)		74,941		73,683
Active subtotal		884,695		(928	)		3,335			10,836		38,469			(3,997	)		932,410		889,345		959,160		26,746			560		639			(24,253	)		962,852		977,410
Index:
Equity		1,017,081		8,001			(18,238	)		—		260,333			(9,378	)		1,257,799		1,145,499		1,335,456		(33,711	)		—		6,157			(22,483	)		1,285,419		1,333,159
Fixed income		409,943		8,321			(4,723	)		—		(4,840	)		(1,934	)		406,767		405,502		467,572		(10,169	)		—		2,317			(18,623	)		441,097		466,494
Multi-asset		9,545		(1,833	)		—			—		476			(614	)		7,574		8,913		7,810		(1,009	)		—		(289	)		(254	)		6,258		7,305
Alternatives		4,912		777			—			—		(259	)		80			5,510		5,440		5,286		1,793			—		(924	)		(152	)		6,003		5,907
Index subtotal		1,441,481		15,266			(22,961	)		—		255,710			(11,846	)		1,677,650		1,565,354		1,816,124		(43,096	)		—		7,261			(41,512	)		1,738,777		1,812,865
Institutional subtotal		2,326,176		14,338			(19,626	)		10,836		294,179			(15,843	)		2,610,060		2,454,699		2,775,284		(16,350	)		560		7,900			(65,765	)		2,701,629		2,790,275
Long-term		3,482,366		117,113			—			26,932		398,850			(13,052	)		4,012,209	$	3,714,951		4,333,841		152,014			2,219		(58,223	)		(94,536	)		4,335,315	$	4,406,230
Cash management		263,743		10,056			—			—		395			1,360			275,554				296,353		7,510			—		267			(4,246	)		299,884
Advisory⁽⁵⁾		45,479		(7,442	)		—			—		(538	)		(1,174	)		36,325
Advisory⁽⁴⁾																						21,701		(9,629	)		—		461			(2,320	)		10,213
Total	$	3,791,588	$	119,727		$	—		$	26,932	$	398,707		$	(12,866	)	$	4,324,088			$	4,651,895	$	149,895		$	2,219	$	(57,495	)	$	(101,102	)	$	4,645,412

(1)	~~Amounts include $19.6 billion of AUM related to fund ranges reclassed from institutional to retail and $6.0 billion of AUM reclassed from non-ETF index equity and fixed income to multi-asset.~~

~~(2)~~

Amounts represent ~~$16.0~~$1.3 billion of AUM acquired in the ~~Credit Suisse ETF Transaction~~acquisition of certain assets of BKCA in ~~July 2013 and $11.0 billion~~March 2015, $560 million of AUM acquired in the ~~MGPA~~Infraestructura Institucional acquisition in October ~~2013.~~2015 and $366 million of AUM acquired in the FutureAdvisor acquisition in October 2015. The FutureAdvisor acquisition amount does not include AUM that was held in iShares holdings.

~~(3)~~

(2)

Foreign exchange reflects the impact of ~~converting~~translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

~~(4)~~

(3)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

~~(5)~~

(4)

Advisory AUM represents long-term portfolio liquidation assignments. ~~Redemptions include planned client distributions.~~

The following table presents component changes in AUM by product type for ~~2013.~~2015.


(in millions)	December 31, 2012		Net subscriptions (redemptions)			Adjustments⁽¹⁾			Acquisitions⁽²⁾		Market change			FX impact⁽³⁾			December 31, 2013		Full Year Average AUM⁽⁴⁾		December 31, 2014		Net inflows (outflows)			Acquisitions⁽¹⁾		Market change			FX impact⁽²⁾			December 31, 2015		Full Year Average AUM⁽³⁾
Equity:
Active	$	287,215		$ (15,377	)	$	—		$	—	$	46,530		$	(1,106	)	$	317,262	$	295,776	$	292,802	$	4,210		$	—	$	(7,738	)	$	(7,955	)	$	281,319	$	292,204
iShares		534,648		74,119			—			13,021		95,335			1,012			718,135		620,113		790,067		78,408			—		(32,349	)		(12,970	)		823,156		810,836
Non-ETF index																						1,368,242		(29,840	)		—		4,815			(23,920	)		1,319,297		1,365,839
Equity subtotal																						2,451,111		52,778			—		(35,272	)		(44,845	)		2,423,772		2,468,879
Fixed income:
Active		656,331		10,443			—			—		(11,584	)		(2,981	)		652,209		648,143		701,324		35,928			—		(6,907	)		(10,692	)		719,653		722,023
iShares		192,852		(7,450	)		—			1,294		(8,477	)		616			178,835		186,264		217,671		50,309			—		(7,508	)		(6,282	)		254,190		239,164
Non-ETF index																						474,658		(9,293	)		—		2,313			(19,153	)		448,525		473,926
Fixed income subtotal																						1,393,653		76,944			—		(12,102	)		(36,127	)		1,422,368		1,435,113
Multi-asset		267,748		42,298			5,998			—		23,804			1,366			341,214		297,262		377,837		17,167			366		(7,413	)		(11,621	)		376,336		389,029
Alternatives:
Core		68,367		2,703			—			10,972		3,012			(28	)		85,026		73,827		88,006		4,080			1,853		(213	)		(1,641	)		92,085		90,077
Currency and commodities⁽⁶⁾		41,428		(8,653	)		—			1,645		(7,405	)		(927	)		26,088		32,646
Subtotal		2,048,589		98,083			5,998			26,932		141,215			(2,048	)		2,318,769		2,154,031
Non-ETF Index:
Equity		1,023,638		10,515			(5,172	)		—		262,476			(9,159	)		1,282,298		1,154,863
Fixed income		410,139		8,515			(826	)		—		(4,841	)		(1,845	)		411,142		406,057
Subtotal Non-ETF Index		1,433,777		19,030			(5,998	)		—		257,635			(11,004	)		1,693,440		1,560,920
Currency and commodities⁽⁴⁾																						23,234		1,045			—		(3,223	)		(302	)		20,754		23,132
Alternatives subtotal																						111,240		5,125			1,853		(3,436	)		(1,943	)		112,839		113,209
Long-term		3,482,366		117,113			—			26,932		398,850			(13,052	)		4,012,209	$	3,714,951		4,333,841		152,014			2,219		(58,223	)		(94,536	)		4,335,315	$	4,406,230
Cash management		263,743		10,056			—			—		395			1,360			275,554				296,353		7,510			—		267			(4,246	)		299,884
Advisory⁽⁵⁾		45,479		(7,442	)		—			—		(538	)		(1,174	)		36,325				21,701		(9,629	)		—		461			(2,320	)		10,213
Total	$	3,791,588	$	119,727		$	—		$	26,932	$	398,707		$	(12,866)		$	4,324,088			$	4,651,895	$	149,895		$	2,219	$	(57,495	)	$	(101,102	)	$	4,645,412

(1)	~~Amounts include $6.0 billion of AUM reclassed from non-ETF index equity and fixed income tomulti-asset.~~

~~(2)~~

~~(3)~~

(2)

Foreign exchange reflects the impact of ~~converting~~translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

~~(4)~~

(3)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

~~(5)~~

(4)

Amounts include commodity iShares.

(5)	Advisory AUM represents long-term portfolio liquidation assignments. ~~Redemptions include planned client distributions.~~

~~(6)~~

~~Amounts include commodity~~~~iShares~~.

The following table presents component changes in AUM by investment style for 2015.

(in millions)	December 31, 2014		Net inflows (outflows)			Acquisitions⁽¹⁾		Market change			FX impact⁽²⁾			December 31, 2015		Full Year Average AUM⁽³⁾
Active	$	1,453,613	$	60,510		$	2,219	$	(22,026	)	$	(31,644	)	$	1,462,672	$	1,487,060
Index & iShares		2,880,228		91,504			—		(36,197	)		(62,892	)		2,872,643		2,919,170
Long-term		4,333,841		152,014			2,219		(58,223	)		(94,536	)		4,335,315	$	4,406,230
Cash management		296,353		7,510			—		267			(4,246	)		299,884
Advisory⁽⁴⁾		21,701		(9,629	)		—		461			(2,320	)		10,213
Total	$	4,651,895	$	149,895		$	2,219	$	(57,495	)	$	(101,102	)	$	4,645,412

(1)

Amounts represent $1.3 billion of AUM acquired in the acquisition of certain assets of BKCA in March 2015, $560 million of AUM acquired in the Infraestructura Institucional acquisition in October 2015 and $366 million of AUM acquired in the FutureAdvisor acquisition in October 2015. The FutureAdvisor acquisition amount does not include AUM that was held in iShares holdings.

(2)	Foreign exchange reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

(3)	Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

(4)	Advisory AUM represents long-term portfolio liquidation assignments.

AUM ~~increased $532.5~~decreased $6.5 billion ~~or 14%,~~ to ~~$4.324~~$4.645 trillion at December 31, ~~2013~~2015 from ~~$3.792~~$4.652 trillion at December 31, ~~2012. The increase in AUM~~2014 driven largely by foreign exchange movements and net market depreciation that more than offset organic growth.

Net market depreciation of $57.5 billion was driven by net market appreciation of $398.7 billion, net inflows of $119.7 billion and acquired AUM related to the MGPA acquisition and the Credit Suisse ETF Transaction, partially offset by foreign exchange net losses.

~~Net market appreciation of $398.7 billion included $404.3~~$35.3 billion from equity products ~~primarily~~ due to ~~positive movements in~~lower U.S. and global equity ~~markets.~~markets and $12.1 billion from fixed income products.

~~The $12.9~~AUM decreased $101.1 billion ~~decrease in AUM from~~due to the impact of foreign exchange movements, ~~was due to~~primarily resulting from the strengthening of the U.S. dollar ~~primarily~~ against the ~~Japanese yen~~euro, the British pound and the Canadian ~~dollar, partially offset by the weakening of the U.S. dollar against the pound sterling and the euro.~~

dollar.

For further discussion on AUM, see “Item 1. Business – Assets Under Management”.

Component Changes in AUM for 2014

The following table presents the component changes in AUM by client type and product type for ~~2012.~~2014.


(in millions)	December 31, 2011		Net subscriptions (redemptions)⁽¹⁾			Acquisitions⁽²⁾		Market change			FX impact⁽³⁾			December 31, 2012		December 31, 2013		Net inflows (outflows)			Market change			FX impact⁽¹⁾			December 31, 2014		Full Year Average AUM⁽²⁾
Retail:
Equity	$	156,412	$	(5,359	)	$	68	$	12,835		$	792		$	164,748	$	203,035	$	1,582		$	1,831		$	(6,003	)	$	200,445	$	207,280
Fixed income		115,055		15,965			—		7,350			55			138,425		151,475		36,995			3,698			(2,348	)		189,820		170,490
Multi-asset		82,785		630			—		7,146			65			90,626		117,054		13,366			(4,080	)		(999	)		125,341		123,619
Alternatives		9,107		320			164		16			78			9,685		16,213		3,001			152			(643	)		18,723		18,487
Retail subtotal		363,359		11,556			232		27,347			990			403,484		487,777		54,944			1,601			(9,993	)		534,329		519,876
iShares:
Equity		419,651		52,973			3,517		56,433			2,074			534,648		718,135		59,626			26,517			(14,211	)		790,067		751,830
Fixed income		153,802		28,785			3,026		6,325			914			192,852		178,835		40,007			4,905			(6,076	)		217,671		199,410
Multi-asset		562		178			78		50			1			869		1,310		439			37			(13	)		1,773		1,535
Alternatives		19,341		3,231			701		1,047			17			24,337		16,092		529			(1,722	)		(182	)		14,717		16,453
iShares subtotal		593,356		85,167			7,322		63,855			3,006			752,706		914,372		100,601			29,737			(20,482	)		1,024,228		969,228
Institutional:
Active:
Equity		125,515		(14,139	)		—		16,766			882			129,024		138,726		(18,648	)		9,935			(4,870	)		125,143		131,779
Fixed income		499,927		(15,060	)		—		33,179			56			518,102		505,109		(6,943	)		34,062			(13,638	)		518,590		515,411
Multi-asset		135,678		12,333			—		16,826			1,871			166,708		215,276		15,835			23,435			(11,633	)		242,913		233,729
Alternatives		70,155		(7,180	)		6,161		2,284			(559	)		70,861		73,299		(664	)		1,494			(1,615	)		72,514		73,075
Active subtotal		831,275		(24,046	)		6,161		69,055			2,250			884,695		932,410		(10,420	)		68,926			(31,756	)		959,160		953,994
Index:
Equity		858,528		20,541			27		137,679			306			1,017,081		1,257,799		9,860			102,549			(34,752	)		1,335,456		1,305,930
Fixed income		478,938		(96,519	)		—		20,986			6,538			409,943		406,767		26,347			56,086			(21,628	)		467,572		440,047
Multi-asset		6,145		2,676			—		1,050			(326	)		9,545		7,574		(735	)		1,652			(681	)		7,810		7,001
Alternatives		6,345		(1,840	)		—		226			181			4,912		5,510		656			(693	)		(187	)		5,286		6,061
Index subtotal		1,349,956		(75,142	)		27		159,941			6,699			1,441,481		1,677,650		36,128			159,594			(57,248	)		1,816,124		1,759,039
Institutional subtotal		2,181,231		(99,188	)		6,188		228,996			8,949			2,326,176		2,610,060		25,708			228,520			(89,004	)		2,775,284		2,713,033
Long-term		3,137,946		(2,465	)		13,742		320,198			12,945			3,482,366		4,012,209		181,253			259,858			(119,479	)		4,333,841	$	4,202,137
Cash management		254,665		5,048			—		1,983			2,047			263,743		275,554		25,696			715			(5,612	)		296,353
Advisory⁽⁴⁾		120,070		(74,540	)		—		(804	)		753			45,479
Advisory⁽³⁾																	36,325		(13,173	)		1,109			(2,560	)		21,701
Total	$	3,512,681		$ (71,957	)	$	13,742	$	321,377		$	15,745		$	3,791,588	$	4,324,088	$	193,776		$	261,682		$	(127,651	)	$	4,651,895

(1)	~~Amount includes the effect of two single client low-fee institutional index fixed income outflows of $36.0 billion and $74.2 billion.~~

~~(2)~~

~~Amounts represent AUM acquired in the SRPEP Transaction in September 2012 of $6.2 billion and the Claymore Transaction in March 2012 of $7.6 billion.~~

~~(3)~~

Foreign exchange reflects the impact of ~~converting~~translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

~~(4)~~

(2)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

(3)	Advisory AUM represents long-term portfolio liquidation assignments. ~~Redemptions include planned client distributions.~~

The following table presents component changes in AUM by product type for ~~2012.~~2014.


(in millions)	December 31, 2011		Net subscriptions (redemptions)⁽¹⁾			Acquisitions⁽²⁾		Market change			FX impact⁽³⁾			December 31, 2012		December 31, 2013		Net inflows (outflows)			Market change			FX impact⁽¹⁾			December 31, 2014		Full Year Average AUM⁽²⁾
Equity:
Active	$	275,156	$	(18,111	)	$	—	$	28,550		$	1,620		$	287,215	$	317,262	$	(24,882	)	$	9,867		$	(9,445	)	$	292,802	$	310,551
iShares		419,651		52,973			3,517		56,433			2,074			534,648		718,135		59,626			26,517			(14,211	)		790,067		751,830
Non-ETF index																	1,282,298		17,676			104,448			(36,180	)		1,368,242		1,334,438
Equity subtotal																	2,317,695		52,420			140,832			(59,836	)		2,451,111		2,396,819
Fixed income:
Active		614,804		892			—		40,524			111			656,331		652,209		27,694			36,942			(15,521	)		701,324		680,078
iShares		153,802		28,785			3,026		6,325			914			192,852		178,835		40,007			4,905			(6,076	)		217,671		199,410
Non-ETF index																	411,142		28,705			56,904			(22,093	)		474,658		445,870
Fixed income subtotal																	1,242,186		96,406			98,751			(43,690	)		1,393,653		1,325,358
Multi-asset		225,170		15,817			78		25,072			1,611			267,748		341,214		28,905			21,044			(13,326	)		377,837		365,884
Alternatives:
Core		63,647		(3,922	)		6,166		2,266			210			68,367		85,026		3,061			1,808			(1,889	)		88,006		87,689
Currency and commodities⁽⁴⁾		41,301		(1,547	)		860		1,307			(493	)		41,428
Subtotal		1,793,531		74,887			13,647		160,477			6,047			2,048,589
Non-ETF Index:
Equity		865,299		19,154			95		138,730			360			1,023,638
Fixed income		479,116		(96,506	)		—		20,991			6,538			410,139
Subtotal Non-ETF Index		1,344,415		(77,352	)		95		159,721			6,898			1,433,777
Currency and commodities⁽³⁾																	26,088		461			(2,577	)		(738	)		23,234		26,387
Alternatives subtotal																	111,114		3,522			(769	)		(2,627	)		111,240		114,076
Long-term		3,137,946		(2,465	)		13,742		320,198			12,945			3,482,366		4,012,209		181,253			259,858			(119,479	)		4,333,841	$	4,202,137
Cash management		254,665		5,048			—		1,983			2,047			263,743		275,554		25,696			715			(5,612	)		296,353
Advisory⁽⁵⁾		120,070		(74,540	)		—		(804	)		753			45,479
Advisory⁽⁴⁾																	36,325		(13,173	)		1,109			(2,560	)		21,701
Total	$	3,512,681	$	(71,957	)	$	13,742	$	321,377		$	15,745		$	3,791,588	$	4,324,088	$	193,776		$	261,682		$	(127,651	)	$	4,651,895

(1)	~~Amount includes the effect of two single client low-fee institutional index fixed income outflows of $36.0 billion and $74.2 billion.~~

~~(2)~~

~~Amounts represent AUM acquired in the SRPEP Transaction in September 2012 of $6.2 billion and Claymore Transaction in March 2012 of $7.6 billion.~~

~~(3)~~

Foreign exchange reflects the impact of ~~converting~~translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

~~(4)~~

(2)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

(3)	Amounts include commodityiShares.

~~(5)~~

(4)

Advisory AUM represents long-term portfolio liquidation assignments. ~~Redemptions include planned client distributions.~~

The following table presents component changes in AUM by investment style for 2014.

(in millions)	December 31, 2013		Net inflows (outflows)			Market change		FX impact⁽¹⁾			December 31, 2014		Full Year Average AUM⁽²⁾
Active	$	1,391,243	$	34,408		$	67,816	$	(39,851	)	$	1,453,616	$	1,439,474
Index & iShares		2,620,966		146,845			192,042		(79,628	)		2,880,225		2,762,663
Long-term		4,012,209		181,253			259,858		(119,479	)		4,333,841	$	4,202,137
Cash management		275,554		25,696			715		(5,612	)		296,353
Advisory⁽³⁾		36,325		(13,173	)		1,109		(2,560	)		21,701
Total	$	4,324,088	$	193,776		$	261,682	$	(127,651	)	$	4,651,895

(1)	Foreign exchange reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

(2)	Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

(3)	Advisory AUM represents long-term portfolio liquidation assignments.

AUM increased ~~$278.9~~$327.8 billion, or 8%, to ~~$3.792~~$4.652 trillion at December 31, ~~2012~~2014 from ~~$3.513~~$4.324 trillion at December 31, ~~2011.~~2013. The increase in AUM was driven ~~largely~~ by net market ~~gains and positive net new business, excluding the effect~~appreciation of ~~two single client low-fee, institutional index fixed income outflows of $36.0~~$261.7 billion and ~~$74.2~~net inflows of $193.8 billion, in the first quarter of 2012 and the third quarter of 2012, respectively. Total flows included $74.5 billion of planned advisory distributions and acquired AUM related to the SRPEP and the Claymore Transactions of $13.7 billion.partially offset by foreign exchange movements.

Net market appreciation of ~~$321.4~~$261.7 billion ~~reflected~~included $140.8 billion of growth in equity products primarily due to higher U.S. ~~and global~~ equity markets, and ~~$67.8~~appreciation of $98.8 billion ~~appreciation~~and $21.0 billion in fixed income and multi-asset products, respectively, across the majority of strategies.

~~The $15.7~~AUM decreased $127.7 billion ~~net increase in AUM~~ from ~~converting non-U.S. dollar denominated AUM into U.S. dollars was~~foreign exchange movements, primarily ~~due to the weakening of the U.S. dollar against the pound sterling and the euro, partially offset by~~resulting from the strengthening of the U.S. dollar against the euro, the British pound and the Japanese yen.

~~DISCUSSION OF FINANCIAL RESULTS~~

Discussion of Financial Results

Introduction

BlackRock derives a substantial portion of its revenue from investment advisory and administration fees, which are recognized as the services are performed. Such fees are primarily based on predetermined percentages of the market value of AUM or percentages of committed capital during investment periods of certain alternative products and are affected by changes in AUM, including market

appreciation or depreciation, foreign exchange translation and net ~~subscriptions~~inflows or ~~redemptions.~~outflows. Net ~~subscriptions~~inflows or ~~redemptions~~outflows represent the sum of new client assets, additional fundings from existing clients (including dividend reinvestment), withdrawals of assets from, and termination of, client accounts and distributions to investors representing return of capital and return on investments to investors. Market appreciation or depreciation includes current income earned on, and changes in the fair value of, securities held in client accounts. Foreign exchange translation reflects the impact of ~~converting~~translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

BlackRock also earns revenue by lending securities on behalf of clients to highly rated banks and broker-dealers. The securities loaned are secured by collateral in the form of cash or securities, with minimum collateral generally ranging from approximately 102% to 112% of the value of the loaned securities. Generally, the revenue earned is shared between BlackRock and the funds or accounts managed by the Company from which the securities are borrowed. Historically, securities lending revenue in the second quarter exceeds the other quarters during the year driven by higher seasonal demand.

Investment advisory agreements for certain separate accounts and investment funds provide for performance fees based upon relative and/or absolute investment performance, in addition to base fees based on AUM. Investment advisory performance fees generally are earned after a given period of time and when investment performance exceeds a contractual threshold. As such, the

timing of recognition of performance fees may increase the volatility of BlackRock’s revenue and earnings. ~~Historically, the~~The magnitude of performance fees incan fluctuate quarterly due to the timing of carried interest recognition on alternative products; however, the third and fourth quarters ~~generally exceeds that of the first two calendar quarters in~~have a ~~year due to the~~ greater number of nonalternative products with performance measurement periods that end on either September 30 or December 31.

BlackRock provides a variety of risk management, investment analytic and investment system and advisory services to financial institutions, pension funds, asset managers, foundations, consultants, mutual fund sponsors, real estate investment trusts and government agencies. These services are provided under the brand nameBlackRock Solutions and include a wide array of risk management services, valuation services related to illiquid securities, disposition and workout assignments (including long-term portfolio liquidation assignments), strategic planning and execution, and enterprise investment system outsourcing to clients. The Company’sAladdin^® operating platform serves as the investment/risk solutions system for BlackRock and other institutional investors. Fees earned forBlackRock Solutions and advisory services are determined using some, or all, of the following methods: (i) percentages of various attributes of advisory AUM or value of positions on theAladdin platform, (ii) fixed fees and (iii) performance fees if contractual thresholds are met.

BlackRock builds upon its leadership position to meet the growing need for investment and risk management solutions. Through its scale and diversity of products, it is able to provide its clients with customized solutions including fiduciary outsourcing for liability-driven investments and overlay strategies for pension plan sponsors, balance sheet management and related services for insurance companies and target date and target return funds, as well as asset allocation portfolios, for retail investors. BlackRock is also able to service these clients via itsAladdin platform to provide risk management and other outsourcing services for institutional investors and custom and tailored solutions to address complex risk exposures.

The Company earns fees for transition management services primarily comprised of commissions from acting as a broker-dealer in connection with buying and selling securities on behalf of its customers. Commissions related to transition management services are recorded on a trade-date basis as securities transactions occur.

The Company also earns revenue related to certain strategic investments accounted for as equity method investments.

Operating ~~expenses reflect~~expense reflects employee compensation and benefits, distribution and servicing costs, amortization of deferred sales commissions, direct fund ~~expenses,~~expense, general and administration ~~expenses~~expense and amortization of finite-lived intangible assets.

Employee compensation and benefits expense includes salaries, commissions, temporary help, deferred and incentive compensation, employer payroll taxes, severance and related benefit costs.

Distribution and servicing costs, which are primarily AUM driven, include payments made to Merrill Lynch-affiliated entities under a global distribution agreement, to PNC and Barclays, as well as other third parties, primarily associated with obtaining and retaining client investments in certain BlackRock products.

Direct fund ~~expenses~~expense primarily ~~consist~~consists of third-party nonadvisory ~~expenses~~expense incurred by BlackRock related to certain funds for the use of index trademarks, reference data for indices, custodial services, fund administration, fund accounting, transfer agent services, shareholder reporting services, legal ~~expenses,~~expense, audit and tax services as well as other fund-related ~~expenses~~expense directly attributable to the nonadvisory operations of the fund. These expenses may vary over time with fluctuations in AUM, number of shareholder accounts, or other attributes directly related to volume of business.

General and administration ~~expenses include~~expense includes marketing and promotional, occupancy and office-related costs, portfolio services (including clearing ~~expenses~~expense related to transition management services), technology, professional services, communications, closed-end fund launch costs and other general and administration ~~expenses,~~expense, including the impact of foreign currency remeasurement.

Foreign currency remeasurement (gains) losses were $(8) million, $(11) million and $1 million for 2015, 2014 and 2013, respectively.

Approximately 75% of the Company’s revenue is generated in U.S. dollars. The Company’s revenue and expense generated in foreign currencies (primarily the euro and British pound) are impacted by foreign exchange rates. Any effect of foreign exchange rate change on revenue is partially offset by a change in expense driven by the Company’s considerable non-dollar expense base related to its operations outside the United States.

Nonoperating income (expense) includes the effect of changes in the valuations on investments (excluding available-for-sale investments) and earnings on equity method investments as well as interest and dividend income and interest expense. Other comprehensive income includes changes in valuations related to available-for-sale investments. BlackRock primarily holds seed and co-investments in sponsored investment products that invest in a variety of asset classes, including private equity, ~~distressed credit/mortgage debt securities,~~ hedge funds and real estate. Investments generally are made for co-investment purposes, to establish a performance track record ~~to hedge exposure to certain deferred compensation plans~~ or for regulatory purposes, including Federal Reserve Bank stock. BlackRock does not engage in proprietary trading activities that could conflict with the interests of its clients.

In addition, nonoperating income (expense) includes the impact of changes in the valuations of consolidated sponsored investment ~~funds and consolidated collateralized loan obligations (“CLOs”).~~funds. The portion of nonoperating income (expense) not attributable to BlackRock is allocated to NCI on the consolidated statements of income.

Revenue

The following table presents the Company’s revenue for 2015, 2014 and 2013.

~~Revenue~~

(in millions)	2015		2014		2013
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	1,709	$	1,844	$	1,741
iShares		2,751		2,705		2,390
Non-ETF index		680		677		594
Equity subtotal		5,140		5,226		4,725
Fixed income:
Active		1,566		1,396		1,269
iShares		554		484		464
Non-ETF index		282		260		238
Fixed income subtotal		2,402		2,140		1,971
Multi-asset		1,253		1,204		1,039
Alternatives:
Core		653		638		576
Currency and commodities		73		89		107
Alternatives subtotal		726		727		683
Long-term		9,521		9,297		8,418
Cash management		319		292		321
Total base fees		9,840		9,589		8,739
Investment advisory performance fees:
Equity		205		111		91
Fixed income		26		31		25
Multi-asset		34		32		24
Alternatives		356		376		421
Total performance fees		621		550		561
BlackRock Solutions and advisory		646		635		577
Distribution fees		55		70		73
Other revenue		239		237		230
Total revenue	$	11,401	$	11,081	$	10,180

(in millions) 2013 2012 2011
Investment advisory, administration fees and securities lending revenue:

Equity:

Active
$ 1,741    $ 1,753    $ 1,967
iShares
2,390    1,941    1,847
Fixed income:

Active
1,269    1,182    1,104
iShares
464    441    317
Multi-asset
1,039    957    894
Alternatives:

Core
576    525    557
Currency and commodities
107    131    136
Subtotal
7,586    6,930    6,822
Non-ETF Index:

Equity
594    552    488
Fixed income
238    229    203
Subtotal Non-ETF Index
832    781    691
Long-term
8,418    7,711    7,513
Cash management
321    361    383
Total base fees
8,739    8,072    7,896
Investment advisory performance fees:

Equity
91    88    145
Fixed income
25    48    35
Multi-asset
24    15    20
Alternatives
421    312    171
Total
561    463    371
BlackRock Solutionsand advisory
577    518    510
Distribution fees
73    71    100
Other revenue
230    213    204
Total revenue
$ 10,180    $ 9,337    $ 9,081

The table below lists the asset type mix of investment advisory, administration fees and securities lending revenue (collectively “base fees”) and mix of average AUM by ~~asset class:~~product type:


	Mix of Base Fees									Mix of Average AUM by Asset Class⁽¹⁾									Mix of Base Fees									Mix of Average AUM by Asset Class⁽¹⁾
	2013			2012			2011			2013			2012			2011			2015			2014			2013			2015			2014			2013
Equity:
Active		20	%		22	%		25	%		7	%		8	%		9	%		17	%		18	%		20	%		6	%		7	%		7	%
iShares		26	%		23	%		23	%		16	%		13	%		13	%		28	%		28	%		26	%		17	%		17	%		16	%
Non-ETF index																				7	%		7	%		7	%		30	%		30	%		29	%
Equity subtotal																				52	%		53	%		53	%		53	%		54	%		52	%
Fixed income:
Active		15	%		15	%		14	%		16	%		18	%		19	%		15	%		15	%		15	%		16	%		15	%		16	%
iShares		5	%		5	%		4	%		5	%		5	%		4	%		6	%		5	%		5	%		5	%		4	%		5	%
Non-ETF index																				3	%		3	%		3	%		10	%		10	%		10	%
Fixed income subtotal																				24	%		23	%		23	%		31	%		29	%		31	%
Multi-asset		12	%		12	%		11	%		7	%		7	%		6	%		13	%		13	%		12	%		8	%		8	%		7	%
Alternatives:
Core		7	%		7	%		7	%		2	%		2	%		2	%		7	%		7	%		7	%		2	%		2	%		2	%
Currency and commodities		1	%		2	%		2	%		1	%		1	%		1	%		1	%		1	%		1	%		0	%		1	%		1	%
Subtotal		86	%		86	%		86	%		54	%		54	%		54	%
Non-ETF Index:
Equity		7	%		7	%		6	%		29	%		26	%		26	%
Fixed income		3	%		3	%		3	%		10	%		13	%		13	%
Subtotal Non-ETF Index:		10	%		10	%		9	%		39	%		39	%		39	%
Alternatives subtotal																				8	%		8	%		8	%		2	%		3	%		3	%
Long-term		96	%		96	%		95	%		93	%		93	%		93	%		97	%		97	%		96	%		94	%		94	%		93	%
Cash management		4	%		4	%		5	%		7	%		7	%		7	%		3	%		3	%		4	%		6	%		6	%		7	%
Total excluding Advisory AUM		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%

(1)	Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

~~2013~~2015 Compared with ~~2012~~2014

~~Revenues~~Revenue increased ~~$843~~$320 million, or 3%, from 2014, driven by higher base fees and growth in performance fees.

Investment advisory, administration fees and securities lending revenue of $9,840 million for 2015 increased $251 million from $9,589 million in 2014 primarily driven by organic growth, despite the impact of foreign exchange and market volatility. Securities lending revenue increased $36 million from 2014 to $513 million in 2015, reflecting an increase in average balances of securities on loan.

Investment advisory performance fees were $621 million in 2015 compared with $550 million in 2014. The current year reflected higher fees from equity products and strong 2015 performance from a single hedge fund with an annual performance measurement period that ended in the third quarter of 2015. The prior year reflected a large fee associated with the liquidation of a closed-end mortgage fund in 2014.

BlackRock Solutions and advisory revenue in 2015 totaled $646 million compared with $635 million in 2014. The current year reflected higher revenue from Aladdin mandates and lower revenue from disposition-related advisory assignments. BlackRock Solutions and advisory revenue included $528 million in Aladdin revenue compared with $474 million in 2014.

2014 Compared with 2013

Revenue increased $901 million, or 9%, from ~~2012,~~2013, reflecting growth in markets, long-term net inflows and strength in ~~performance fees and~~BlackRock Solutions and advisory revenue.

Investment advisory, administration fees and securities lending revenue of ~~$8,739~~$9,589 million for ~~2013~~2014 increased ~~$667~~$850 million from ~~$8,072 million in 2012 due to growth in long-term average AUM. Securities lending fees decreased $63 million from 2012 to $447~~$8,739 million in 2013 ~~driven by lower spreads consistent with industry trends, partially offset by an increase in~~due to higher long-term average ~~balances of securities on loan.~~

~~Investment advisory performance fees~~ ~~were $561~~AUM, reflecting organic growth and market appreciation. Securities lending revenue increased $30 million from 2013 to $477 million in ~~2013~~2014.

BlackRock Solutions and advisory revenue in 2014 totaled $635 million compared with ~~$463~~$577 million in ~~2012,~~2013. The year ended 2014 reflected higher revenue from Aladdin mandates and higher revenue from advisory assignments. BlackRock Solutions and advisory revenue included $474 million in Aladdin revenue compared with $433 million in 2013.

Expense

The following table presents the Company’s expense for 2015, 2014 and 2013.

(in millions)	2015		2014		2013
Expense, GAAP:
Employee compensation and benefits	$	4,005	$	3,829	$	3,560
Distribution and servicing costs		409		364		353
Amortization of deferred sales commissions		48		56		52
Direct fund expense		767		748		657
General and administration:
Marketing and promotional		365		413		409
Occupancy and office related		280		267		277
Portfolio services		221		215		203
Technology		170		164		160
Professional services		120		126		128
Communications		37		39		37
Regulatory, filing and license fees		24		36		31
Closed-end fund launch costs		4		10		16
Charitable Contribution		—		—		124
Reduction of indemnification asset		—		50		—
Other general and administration		159		133		155
Total general and administration expense		1,380		1,453		1,540
Amortization of intangible assets		128		157		161
Total expense, GAAP	$	6,737	$	6,607	$	6,323
Less non-GAAP expense adjustments:
Employee compensation and benefits:
PNC LTIP funding obligation	$	30	$	32	$	33
Compensation expense related to appreciation (depreciation) on deferred compensation plans		1		7		10
Subtotal		31		39		43
General and administration:
Reduction of indemnification asset		—		50		—
Charitable Contribution		—		—		124
Subtotal		—		50		124
Total non-GAAP expense adjustments	$	31	$	89	$	167
Expense, as adjusted:
Employee compensation and benefits	$	3,974	$	3,790	$	3,517
Distribution and servicing costs		409		364		353
Amortization of deferred sales commissions		48		56		52
Direct fund expense		767		748		657
General and administration		1,380		1,403		1,416
Amortization of intangible assets		128		157		161
Total expense, as adjusted	$	6,706	$	6,518	$	6,156

2015 Compared with 2014

GAAP. Expense increased $130 million, or 2%, from 2014, primarily reflecting higher ~~fees from alternative products,~~revenue-related expense, including ~~fund of funds~~compensation and ~~single-strategy hedge funds. Both years reflected significant fees from the liquidation of opportunistic funds.~~

~~BlackRock Solutions~~benefits expense, and ~~advisory revenue~~ ~~in 2013 totaled $577 million compared with $518 million in 2012. The current year reflected a $47 million increase in~~~~Aladdin~~ ~~business revenues to $421 million~~distribution and ~~higher advisory assignments revenue.~~

~~Other revenue~~ ~~increased $17 million, largely reflecting higher transition management service fees and higher earnings from certain strategic investments.~~

~~2012 Compared with 2011~~

~~Revenues increased $256 million, or 3%, from 2011 reflecting market growth, positive flows, improvements in securities lending revenue and strength in performance fees.~~

~~Investment advisory, administration fees and securities lending revenue~~ totaled $8,072 million in 2012 compared with $7,896 million in 2011, reflecting an improvement in securities lending revenue and higher advisory fees reflecting higher long-term average AUM. Securities lending fees were $510 million in 2012 compared with $397 million in 2011, reflecting higher lending rates and an increase in average balances of securities on loan.

~~Investment advisory performance fees~~ were $463 million in 2012 compared with $371 million in 2011, primarily reflecting higher performance fees from alternative products, including fees from a disposition-related opportunistic fund, which wereservicing costs, partially offset by lower ~~fees from equity products.~~general and administration expense and amortization of intangible assets. Expense for 2014 included an expense related to a $50 million reduction of an indemnification asset.

~~BlackRock Solutions~~Employee compensation and ~~advisory revenue~~ ~~in 2012~~benefits expense increased $8$176 million, or 2%5%, to $4,005 million in 2015 from ~~2011, primarily due to a $51~~$3,829 million ~~increase~~ in ~~Aladdin~~ ~~business revenue to $374 million,~~ 2014, reflecting higher headcount, and higher incentive and deferred compensation, partially offset by the ~~run off~~impact of ~~revenues associated with a lower level of advisory assets and lower one-time revenue from advisory assignments.~~

~~Distribution fees~~ ~~of $71 million in 2012 decreased $29 million, or 29%, from $100 million in 2011, primarily due to lower AUM in certain share classes of BlackRock funds.~~

~~Other revenue~~ ~~increased $9 million, largely reflecting higher earnings from certain strategic investments, partially offset by lower sales commissions and marketing fees earned for services to distribute~~~~iPath~~^® ~~products.~~

~~Expenses~~

(in millions) 2013 2012 2011
Expenses, GAAP:

Employee compensation and benefits
$ 3,560    $ 3,287    $ 3,199
Distribution and servicing costs
353    364    386
Amortization of deferred sales commissions
52    55    81
Direct fund expenses
657    591    563
General and administration:

Marketing and promotional
409    384    315
Occupancy and office related
277    248    373
Portfolio services
203    196    189
Technology
160    150    146
Professional services
128    114    139
Communications
37    39    40
Regulatory, filing and license fees
31    17    16
Charitable Contribution
124    — —
Closed-end fund launch costs
16    22    26
Other general and administration
155    189    171
Total general and administration expenses
1,540    1,359    1,415
Restructuring charges
— —    32
Amortization of intangible assets
161    157    156
Total expenses, GAAP
$ 6,323    $ 5,813    $ 5,832
Less non-GAAP expense adjustments:

Employee compensation and benefits:

PNC LTIP funding obligation
33    22    44
Merrill Lynch compensation contribution
— — 7
Compensation expense related to appreciation (depreciation) on deferred compensation plans
10    6    (3 )
Subtotal
43    28    48
General and administration:

Charitable Contribution
124    — —
U.K. lease exit costs
— (8 ) 63
Contribution to STIFs
— 30    —
Subtotal
124    22    63
Restructuring charges
— — 32
Total non-GAAP expense adjustments
167 50    143
Expenses, as adjusted:

Employee compensation and benefits
3,517    3,259    3,151
Distribution and servicing costs
353    364    386
Amortization of deferred sales commissions
52    55    81
Direct fund expenses
657    591    563
General and administration
1,416    1,337    1,352
Amortization of intangible assets
161    157    156
Total expenses, as adjusted
$ 6,156    $ 5,763    $ 5,689

~~2013 Compared with 2012~~

~~GAAP~~~~. Expenses increased $510 million, or 9%, from 2012, primarily reflecting higher revenue-related expenses and the $124 million expense related to the Charitable Contribution.~~

~~Employee compensation and benefits expense~~ increased $273 million, or 8%, to $3,560 million in 2013 from $3,287 million in 2012, reflecting increased headcount and higher incentive compensation driven by higher operating income, including higher performance fees.foreign exchange movements. Employees at December 31, ~~2013~~2015 totaled approximately ~~11,400~~13,000 compared with approximately ~~10,500~~12,200 at December 31, ~~2012.~~2014.

Distribution and servicing costs totaled ~~$353~~$409 million in ~~2013~~2015 compared with $364 million in ~~2012.~~2014. These costs included payments to Bank of America/Merrill Lynch under a global

distribution agreement and payments to PNC, as well as other third parties, primarily associated with the distribution and servicing of client investments in certain BlackRock products. Distribution and servicing costs for ~~2013~~2015 and ~~2012~~2014 included ~~$184~~$194 million and ~~$195~~$183 million, respectively, ~~of costs~~ attributable to Bank of America/Merrill Lynch.

General and administration expense decreased $73 million from 2014, primarily reflecting the previously mentioned $50 million reduction of an indemnification asset, lower marketing and promotional expense, and lower legal and regulatory expense, partially offset by the impact of transaction-related expense.

Amortization of intangible assets expense decreased $29 million, or 18%, to $128 million in 2015 from $157 million in 2014, reflecting certain finite-lived intangible assets becoming fully amortized.

As Adjusted. Expense, as adjusted, increased $188 million, or 3%, to $6,706 million in 2015 from $6,518 million in 2014. The increase in total expense, as adjusted, is primarily attributable to higher revenue-related expense, including compensation and benefits expense and distribution and servicing costs, partially offset by lower amortization of intangible assets and lower general and administration expense. Amounts related to the reduction of the indemnification asset in 2014 have been excluded from as adjusted results.

2014 Compared with 2013

GAAP. Expense increased $284 million, or 4%, from 2013, primarily reflecting higher revenue-related expenses, including compensation and direct fund expense and a $50 million reduction of an indemnification asset. Expense for 2013 included the $124 million expense related to the Charitable Contribution.

Employee compensation and benefits expense increased $269 million, or 8%, to $3,829 million in 2014 from $3,560 million in 2013, reflecting higher headcount and higher incentive compensation driven by higher operating income. Employees at December 31, 2014 totaled approximately 12,200 compared with approximately 11,400 at December 31, 2013.

Distribution and servicing costs totaled $364 million in 2014 compared with $353 million in 2013. Distribution and servicing costs for 2014 and 2013 included $183 million and $184 million, respectively, attributable to Bank of America/Merrill Lynch.

Direct fund ~~expenses~~expense increased ~~$66~~$91 million, reflecting higher average AUM, primarily related toiShares, where BlackRock pays certain nonadvisory ~~expenses~~expense of the funds.

General and administration ~~expenses~~ ~~increased $181~~expense decreased $87 million, ~~largely driven by~~primarily due to the $124 million ~~expense~~ related to the Charitable Contribution ~~higher marketing~~incurred in 2013 and ~~promotional costs and various lease exit costs. The full year 2012 included a one-time $30~~foreign currency remeasurement, partially offset by the $50 million ~~contribution to STIFs.~~

reduction of an indemnification asset.

As Adjusted. ~~Expenses,~~Expense, as adjusted, increased ~~$393~~$362 million, or 7%6%, to $6,518 million in 2014 from $6,156 million in ~~2013 from $5,763 million in 2012.~~2013. The increase in total ~~expenses,~~expense, as adjusted, is primarily attributable to ~~increases in employee compensation and benefits, direct fund expenses and general and administration expenses.~~

~~2012 Compared with 2011~~

~~GAAP~~. Expenses decreased $19 million to $5,813 million from 2011, primarily reflecting a reduction in general and administration expenses, amortization of deferred sales commissions and distribution and servicing costs, partially offset by higher employee compensation and benefits and direct fund ~~expenses. General and administration expenses in 2012 included a $30 million charge~~expense. Amounts related to ~~a contribution to STIFs.~~

~~Employee compensation and benefits expense~~ increased $88 million, or 3%, to $3,287 million in 2012 from $3,199 million in 2011, reflecting an increase in incentive compensation driven by higher operating income, including higher performance fees. Employees at December 31, 2012 totaled approximately 10,500 compared with approximately 10,100 at December 31, 2011.

~~Distribution and servicing costs~~ decreased $22 million, or 6%, to $364 million in 2012 from $386 million in 2011. The $22 million decrease related to lower service fees from variable annuities and lower cash management-related distribution costs. Distribution and servicing costs for 2012 and 2011 included $195 million and $207 million, respectively, of costs attributable to Bank of America/Merrill Lynch.

~~Amortization of deferred sales commissions~~ ~~decreased $26 million, or 32%, to $55 million in 2012 from $81 million in 2011, primarily related to lower sales in certain share classes of U.S. open-end mutual funds.~~

~~Direct fund expenses~~ ~~increased $28 million from 2011 million, primarily reflecting growth in average AUM for~~ the ~~funds (predominantly iShares) where BlackRock pays certain nonadvisory expenses~~reduction of the ~~funds.~~

~~General~~indemnification asset and ~~administration expenses~~ ~~decreased $56 million, or 4%, to $1,359 million in 2012~~the Charitable Contribution have been excluded from ~~$1,415 million in 2011. Lower occupancy and office-related expenses, primarily due to $63 million of U.K. lease exit costs incurred in 2011, and~~

lower professional services costs contributed to the overall net decrease in general and administration expenses. The decrease in general and administration expenses was partially offset by higher marketing and promotional expenses in connection with the brand campaign and a one-time contribution to STIFs.

~~Restructuring charges~~ of $32 million recorded in 2011, primarily related to severance, accelerated amortization of certain previously granted stock awards, and legal and outplacement costs associated with a reduction in work force and reengineering efforts.

~~As Adjusted~~~~. Expenses,~~ as adjusted increased $74 million, or 1%, to $5,763 million in 2012 from $5,689 million in 2011. The increase in total expenses, as adjusted, is primarily attributable to increases in employee compensation and benefits and direct fund expenses, partially offset by a reduction in amortization of deferred sales commissions, distribution and servicing costs and general and administration expenses.results.

~~NONOPERATING RESULTS~~Nonoperating Results

Nonoperating income (expense), less net income (loss) attributable to NCI for ~~2013, 2012~~2015, 2014 and ~~2011~~2013 was as follows:


(in millions)	2013			2012			2011			2015			2014			2013
Nonoperating income (expense), GAAP basis⁽¹⁾	$	116		$	(54	)	$	(114	)
Less: Net income (loss) attributable to NCI		19			(18	)		2
Nonoperating income (expense), GAAP basis										$	(62	)	$	(79	)	$	116
Less: Net income (loss) attributable to NCI⁽¹⁾											7			(30	)		19
Nonoperating income (expense)⁽²⁾		97			(36	)		(116	)		(69	)		(49	)		97
Gain related to the Charitable Contribution		(80	)		—			—			—			—			(80	)
Compensation expense related to (appreciation) depreciation on deferred compensation plans		(10	)		(6	)		3			(1	)		(7	)		(10	)
Nonoperating income (expense), as adjusted⁽²⁾	$	7		$	(42	)	$	(113	)	$	(70	)	$	(56	)	$	7

(1)

Amounts included a gain of $58 million and a loss of $41 million attributable to consolidated variable interest entities (“VIEs”) for 2015 and 2014, respectively. During 2013, the Company did not record any nonoperating income (loss) or net income (loss) attributable to ~~consolidated variable interest entities~~VIEs on the consolidated statements of income. ~~Amounts included losses of $38 million and $18 million attributable to consolidated variable interest entities for 2012 and 2011, respectively.~~

(2)	Net of net income (loss) attributable to NCI.

The components of nonoperating income (expense), less net income (loss) attributable to NCI for ~~2013, 2012~~2015, 2014 and ~~2011~~2013 were as follows:


(in millions)	2013			2012			2011			2015			2014			2013
Net gain (loss) on investments⁽¹⁾
Private equity	$	52		$	36		$	36		$	71		$	69		$	52
Real estate		24			14			10			12			16			24
Distressed credit/mortgage funds		40			69			(13	)
Hedge funds/funds of hedge funds		25			20			(5	)
Other investments⁽²⁾		16			(2	)		1
Other alternatives⁽²⁾											(2	)		55			65
Other investments⁽³⁾											(19	)		7			16
Subtotal		157			137			29			62			147			157
Other gains⁽⁴⁾											46			—			—
Gain related to the PennyMac IPO		39			—			—			—			—			39
Gain related to the Charitable Contribution		80			—			—			—			—			80
Investments related to deferred compensation plans		10			6			(3	)		1			7			10
Total net gain (loss) on investments		286			143			26
Total net gain (loss) on investments⁽¹⁾											109			154			286
Interest and dividend income		22			36			34			26			29			22
Interest expense		(211	)		(215	)		(176	)		(204	)		(232	)		(211	)
Net interest expense		(189	)		(179	)		(142	)		(178	)		(203	)		(189	)
Total nonoperating income (expense)⁽¹⁾		97			(36	)		(116	)		(69	)		(49	)		97
Gain related to the Charitable Contribution		(80	)		—			—			—			—			(80	)
Compensation expense related to (appreciation) depreciation on deferred compensation plans		(10	)		(6	)		3			(1	)		(7	)		(10	)
Nonoperating income (expense), as adjusted⁽¹⁾	$	7		$	(42	)	$	(113	)	$	(70	)	$	(56	)	$	7

(1)	Net of net income (loss) attributable to NCI. Amounts for 2015 also include net gain (loss) on consolidated VIEs.

(2)	~~Amount~~ Amounts primarily include net gains (losses) related to direct hedge fund strategies and hedge fund solutions. The prior year periods also included net gains related to opportunistic credit strategies.

(3)	Amounts include net gains (losses) related to equity and fixed income investments, and BlackRock’s seed capital hedging program.

(4)	The amount for 2015 primarily includes a gain related to the acquisition of certain assets of BKCA.

~~2013~~2015 Compared with ~~2012~~2014

BlackRock Kelso Capital Advisors LLC. On March 6, 2015, BlackRock acquired certain assets related to managing BlackRock Capital Investment Corporation (formerly known as BlackRock Kelso Capital Corporation) from BKCA. In connection with the acquisition, BlackRock recorded a noncash, nonoperating, pre-tax gain of $40 million related to the fair value of its pre-existing interest in BKCA. See Note 9, Goodwill, and Note 10, Intangible Assets, for further discussion on the BKCA acquisition.

Net gains on investments of ~~$286~~$109 million in ~~2013 increased $143~~2015 decreased $45 million from ~~2012~~2014 due to ~~the $39~~lower net positive marks in 2015. Net gains on investments in 2015 included a $40 million gain related to the ~~PennyMac IPO~~BKCA acquisition and a $35 million unrealized gain on a private equity investment. Net gains on investments in 2014 included the positive impact of the monetization of a nonstrategic, opportunistic private equity investment.

Interest expense decreased $28 million from 2014 primarily due to repayments of long-term borrowings in the fourth quarter of 2014.

2014 Compared with 2013

Net gains on investments of $154 million in 2014 decreased $132 million from 2013. Net gains on investments in 2013 included the noncash, nonoperating pre-tax gain of $80 million ~~gain~~ related to the Charitable Contribution and ~~higher net~~the $39 million pre-tax gain related to the PennyMac IPO. Net gains on investments in 2014 included the positive ~~marks.~~impact of the monetization of a nonstrategic, opportunistic private equity investment.

Net interest expense increased ~~$10~~$14 million from ~~2012~~2013 primarily due to ~~lower dividend income.~~higher interest expense resulting from a long-term debt issuance in March 2014.

For further information on the Company’s long-term debt, seeLiquidity and Capital Resources herein.

~~2012 Compared with 2011~~

~~Net gains on investments increased $117 million from 2011 due to higher net positive marks in 2012 compared with 2011.~~

~~Net interest expense increased from 2011, primarily due to long-term debt issuances in May 2011 and May 2012.~~

Income Tax Expense


	GAAP									As adjusted									GAAP									As adjusted
(in millions)	2013			2012			2011			2013			2012			2011			2015			2014			2013			2015			2014			2013
Income before income taxes⁽¹⁾	$	3,954		$	3,488		$	3,133		$	4,031		$	3,532		$	3,279		$	4,595		$	4,425		$	3,954		$	4,625		$	4,507		$	4,031
Income tax expense	$	1,022		$	1,030		$	796		$	1,149		$	1,094		$	1,040		$	1,250		$	1,131		$	1,022		$	1,312		$	1,197		$	1,149
Effective tax rate		25.8	%		29.5	%		25.4	%		28.5	%		31.0	%		31.7	%		27.2	%		25.6	%		25.8	%		28.4	%		26.6	%		28.5	%

(1)	Net of net income (loss) attributable to NCI.

The Company’s tax rate is affected by tax rates in foreign jurisdictions and the relative amount of income earned in those jurisdictions, which the Company expects to be fairly consistent in the near term. The significant foreign jurisdictions, which have lower statutory tax rates than the U.S. federal statutory rate of 35%, include the United Kingdom, ~~Luxembourg,~~Channel Islands, Canada and the Netherlands. U.S. income taxes were not provided for certain undistributed foreign earnings intended to be indefinitely reinvested outside the United States.

2015. Income tax expense (GAAP) reflected:

a net noncash benefit of $54 million, primarily associated with the revaluation of certain deferred income tax liabilities; and

a benefit from $75 million of nonrecurring items.

~~2013.~~The ~~GAAP~~as adjusted effective tax rate of ~~25.8%~~28.4% for ~~2013 included~~2015 excluded the net noncash benefit of $54 million mentioned above, as it will not have a ~~$69~~cash flow impact and to ensure comparability among periods presented.

2014. Income tax expense (GAAP) reflected:

a $94 million tax benefit, primarily due to the resolution of certain outstanding tax matters related to the acquisition of BGI, including the previously mentioned $50 million tax benefit (see Executive Summary for more information);

a $73 million net tax benefit related to several favorable nonrecurring items; and

a net noncash benefit of $9 million associated with the revaluation of deferred income tax liabilities.

The as adjusted effective tax rate of 26.6% for 2014 excluded the $9 million net noncash benefit ~~primarily related~~as it will not have a cash flow impact and to ~~the revaluation of certain deferred income tax liabilities, including the effect of legislation enacted in the United Kingdom~~ensure comparability among periods presented and ~~domestic state and local income tax changes. In addition, 2013 included the approximately $48~~$50 million tax benefit ~~recognized in connection with the Charitable Contribution, a~~mentioned above. The $50 million general and administrative expense and $50 million tax benefit ~~of approximately $29 million, primarily due to the realization of~~have been excluded from as adjusted results as there is no impact on BlackRock’s book value.

2013. Income tax ~~loss carryforwards, and benefits from certain nonrecurring items.~~

expense (GAAP) reflected:

a $69 million net noncash benefit primarily related to the revaluation of certain deferred income tax liabilities related to intangible assets and goodwill, including the effect of legislation enacted in the United Kingdom and domestic state and local income tax changes;

a tax benefit of approximately $48 million recognized in connection with the Charitable Contribution; and

a tax benefit of approximately $29 million, primarily due to the realization of tax loss carryforwards, and benefits from certain nonrecurring items.

The as adjusted effective tax rate of 28.5% for 2013 ~~included a tax benefit of approximately $29 million, primarily due to the realization of tax loss carryforwards, and benefits from certain nonrecurring items and~~ excluded the $69 million net noncash benefit and the $48 million tax benefit related to the Charitable Contribution mentioned above.

~~2012.~~ The GAAP effective tax rate of 29.5% for 2012 included a $21 million benefit related to the resolution of certain outstanding tax positions and a $50 million net noncash benefit related to the revaluation of certain deferred income tax liabilities, including the effect of tax legislation enacted in the United Kingdom and the state and local income tax effect resulting from changes in the Company’s organizational structure.

~~The as adjusted effective tax rate of 31.0% for 2012 excluded the $50 million net noncash tax benefit mentioned above.~~

~~2011.~~ The GAAP effective tax rate of 25.4% for 2011 included a $24 million benefit related to the resolution of certain outstanding tax positions and $198 million of net noncash tax benefits due to a state tax election and enacted U.K., Japan, U.S. state and local tax legislation.

The 2011 as adjusted effective tax rate of 31.7% included the $24 million benefit related to the revaluation of certain deferred income tax liabilities and excluded the $198 million net noncash benefit.

~~BALANCE SHEET OVERVIEW~~Balance Sheet Overview

As Adjusted Balance Sheet

The following table presents a reconciliation of the consolidated statement of financial condition presented on a GAAP basis to the consolidated statement of financial condition, excluding the impact of separate account assets and separate account collateral held under securities lending agreements (directly related to lending separate account securities) and separate account liabilities and separate account collateral liabilities under securities lending agreements ~~consolidated variable interest entities (“VIEs”)~~ and consolidated sponsored investment ~~funds.~~funds, including consolidated VIEs.

The Company presents the as adjusted balance sheet as additional information to enable investors to exclude certain assets that have equal and offsetting liabilities or noncontrolling interests that ultimately do not have an impact on stockholders’ equity ~~(excluding appropriated retained earnings related to consolidated collateralized loan obligations (“CLOs”))~~ or cash flows. Management views the as adjusted balance sheet, a non-GAAP financial measure,

as an economic presentation of ~~its~~the Company’s total assets and liabilities; however, it 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.

Separate Account Assets and Liabilities and Separate Account Collateral Held under Securities Lending Agreements

Separate account assets are maintained by BlackRock Life Limited, a wholly owned subsidiary of the Company, which is a registered life insurance company in the United Kingdom, and represent segregated assets held for purposes of funding individual and group pension contracts. The Company records equal and offsetting separate account liabilities. The separate account assets are not available to creditors of the Company and the holders of the pension contracts have no recourse to the Company’s assets. The net investment income attributable to separate account assets accrues directly to the contract owners and is not reported on the Company’s consolidated statements of income. While BlackRock has no economic interest in these assets or liabilities, BlackRock earns an investment advisory fee for the service of managing these assets on behalf of ~~the~~its clients.

In addition, the Company records on its consolidated statements of financial condition the separate account collateral received under BlackRock Life Limited securities lending arrangements as its own asset in addition to an equal and offsetting separate account collateral liability for the obligation to return the collateral.

~~Consolidated VIEs~~

~~At December 31, 2013, BlackRock’s consolidated VIEs included multiple CLOs and one private investment fund.~~ The ~~assets of these VIEs are~~collateral is not available to creditors of the Company, and the ~~Company has~~borrowers under the securities lending arrangements have no ~~obligation~~recourse to ~~settle~~ the liabilities of the VIEs. While BlackRock has no material economic interest in these assets or liabilities, BlackRock earns an investment advisory fee, as well as a potential performance fee, for the service of managing these assets on behalf of clients.Company’s assets.

Consolidated Sponsored Investment Funds

The Company consolidates certain sponsored investment funds ~~primarily because it is deemed~~accounted for as voting rights entities (“VREs”) and VIEs, (collectively, “Consolidated Sponsored Investment Funds”). See Note 2, Significant Accounting Policies, in the notes to ~~control such funds.~~ the consolidated financial statements beginning on page F-1 of this Form 10-K for further information of the Company’s consolidation policy.

The Company ~~may not be~~cannot readily ~~able to~~ access cash and cash equivalents or other assets held by ~~consolidated sponsored investment funds~~Consolidated Sponsored Investment Funds to use in its operating activities. In addition, the Company ~~may not be~~cannot readily ~~able to~~ sell investments held by ~~consolidated sponsored investment funds~~Consolidated Sponsored Investment Funds in order to obtain cash for use in the Company’s operations.


	December 31, 2013
			Segregated client assets generating advisory fees in which BlackRock has no economic interest or liability								December 31, 2015
(in millions)	GAAP Basis		Separate Account Assets/ Collateral		Consolidated VIEs		Consolidated Sponsored Investment Funds		As Adjusted		GAAP Basis		Separate Account Assets/ Collateral⁽¹⁾		Consolidated Sponsored Investment Funds⁽²⁾			As Adjusted
Assets
Cash and cash equivalents	$	4,390	$	—	$	—	$	114	$	4,276	$	6,083	$	—	$	88		$	5,995
Accounts receivable		2,247		—		—		—		2,247		2,237		—		—			2,237
Investments		2,151		—		—		94		2,057		1,578		—		84			1,494
Assets of consolidated VIEs		2,486		—		2,486		—		—
Assets of consolidated VIEs:
Cash and cash equivalents												148		—		148			—
Investments												1,030		—		297			733
Other assets												67		—		67			—
Separate account assets and collateral held under securities lending agreements		176,901		176,901		—		—		—		182,187		182,187		—			—
Other assets⁽¹⁾		1,217		—		—		20		1,197
Other assets⁽³⁾												1,436		—		(6	)		1,442
Subtotal		189,392		176,901		2,486		228		9,777		194,766		182,187		678			11,901
Goodwill and intangible assets, net		30,481		—		—		—		30,481		30,495		—		—			30,495
Total assets	$	219,873	$	176,901	$	2,486	$	228	$	40,258	$	225,261	$	182,187	$	678		$	42,396
Liabilities
Accrued compensation and benefits	$	1,747	$	—	$	—	$	—	$	1,747	$	1,971	$	—	$	—		$	1,971
Accounts payable and accrued liabilities		1,084		—		—		—		1,084		1,068		—		—			1,068
Liabilities of consolidated VIEs												177		—		177			-
Borrowings		4,939		—		—		—		4,939		4,930		—		—			4,930
Liabilities of consolidated VIEs		2,443		—		2,443		—		—
Separate account liabilities and collateral liabilities under securities lending agreements		176,901		176,901		—		—		—		182,187		182,187		—			—
Deferred income tax liabilities		5,085		—		—		—		5,085
Deferred income tax liabilities⁽⁴⁾												4,851		—		—			4,851
Other liabilities		1,004		—		—		39		965		1,033		—		(40	)		1,073
Total liabilities		193,203		176,901		2,443		39		13,820		196,217		182,187		137			13,893
Equity
Total stockholders’ equity⁽²⁾		26,460		—		22		—		26,438
Total stockholders’ equity												28,503		—		—			28,503
Noncontrolling interests		210		—		21		189		—		541		—		541			-
Total equity		26,670		—		43		189		26,438		29,044		—		541			28,503
Total liabilities and equity	$	219,873	$	176,901	$	2,486	$	228	$	40,258	$	225,261	$	182,187	$	678		$	42,396

(1)	Amounts represent segregated client assets generating advisory fees in which BlackRock has no economic interest or liability.

(2)	Amounts represent the portion of assets and liabilities of Consolidated Sponsored Investment Funds attributable to NCI.

(3)	Amounts include property and equipment and other assets.

~~(2)~~

(4)

~~GAAP amount~~

Amount includes ~~$22 million~~approximately $5.6 billion of ~~appropriated retained earnings~~deferred income tax liabilities related ~~solely~~ to goodwill and intangibles. See Note 20, Income Taxes, in the notes to the consolidated ~~CLOs in which the Company has no equity exposure.~~financial statements beginning on page F-1 of this Form 10-K for more information.

The following discussion summarizes the significant changes in assets and liabilities on a GAAP basis. Please see the consolidated statements of financial condition as of December 31, 2015 and 2014 contained in Part II, Item 8 of this filing. The discussion does not include changes related to assets and liabilities that are equal and offsetting and have no impact on BlackRock’s stockholders’ equity.

Assets.Cash and cash equivalents at December 31, ~~2013~~2015 and ~~2012~~2014 included ~~$114~~$100 million and ~~$133~~$120 million, respectively, of cash held by consolidated sponsored investment funds (seeLiquidity and Capital Resources for details on the change in cash and cash equivalents during ~~2013)~~2015).

~~Investments~~Accounts receivable at December 31, 2015 increased ~~$401~~$117 million from December 31, ~~2012~~2014 due to an increase in unit trust receivables (substantially offset by an increase in unit trust payables recorded within accounts payable and accrued liabilities) and higher performance fee receivables. Investments were $1,578 million at December 31, 2015 (for more information seeInvestments herein). Goodwill and intangible assets increased ~~$169~~$190 million from December 31, ~~2012,~~2014, primarily due to the ~~MGPA acquisition~~BKCA, Infraestructura Institucional and ~~Credit Suisse ETF Transaction,~~FutureAdvisor acquisitions, partially offset by ~~$161~~$128 million of amortization of intangible ~~assets amortization expense.~~assets. Other assets (including property, plant and equipment) increased ~~$34~~$284 million from December 31, ~~2012,~~2014, primarily related to an increase in property and equipment, higher earnings from certain strategic investments, and ~~other receivables, partially offset by a decrease in property and equipment due to depreciation and a decrease~~an increase in current taxes receivable.

Liabilities. Accrued compensation and benefits at December 31, ~~2013~~2015 increased ~~$200~~$106 million from December 31, ~~2012,~~2014, primarily due to ~~2013~~2015 incentive compensation accruals. Accounts payable and accrued liabilities at December 31, ~~2013~~2015 increased ~~$29~~$33 million from December 31, ~~2012~~2014 due to ~~an increase in current income taxes payable and increased accruals, including direct fund expenses, partially offset by lower~~higher unit trust payables (substantially offset by ~~a decrease~~an increase in unit trust receivables recorded within accounts receivable)~~. Borrowings decreased $848 million from December 31, 2012 resulting from the repayments of $750 million~~ and ~~$100 million of long-term and short-term borrowings, respectively.~~increased accruals, partially offset by a decrease in current income taxes payable.

Net deferred income tax liabilities at December 31, ~~2013~~2015 decreased ~~$208~~$138 million, primarily due to the effects of temporary differences associated with stock compensation, ~~and investment income. The change also reflects~~ the ~~revaluation of certain deferred income tax liabilities due to legislation enacted in the United Kingdom, domestic state and local income tax changes, and~~BKCA acquisition, realization of ~~tax~~ loss ~~carryforwards.~~carryforwards, and goodwill and intangibles. Other liabilities ~~at December 31, 2013~~ increased ~~$146~~$147 million from December 31, ~~2012,~~2014, primarily resulting from an increase in ~~liability~~uncertain tax positions and consolidated funds liabilities.

Investments and Investments of ~~unrecognized tax benefits, a contingent liability related to the Credit Suisse ETF Transaction~~Consolidated VIEs

The Company’s investments and ~~other operating liabilities.~~

~~Investments~~

~~Investments totaled $2,151~~investments of consolidated VIEs (collectively, “Total Investments”) were $1,578 million and $1,030 million, respectively, at December 31, ~~2013 and $1,750 million at December 31, 2012.~~2015. Total Investments include consolidated investments held by sponsored investment funds ~~deemed to be controlled by BlackRock.~~accounted for as VREs and VIEs. Management reviews BlackRock’s ~~investments~~Total Investments on an “economic” basis, which eliminates the portion of ~~investments~~Total Investments that does not impact BlackRock’s book value or net income attributable to BlackRock. 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.

The Company presents ~~total investments,~~Total Investments, as adjusted, to enable investors to understand the portion of its ~~investments~~Total Investments that is owned by the Company, net of NCI, as a gauge to measure the impact of changes in net nonoperating ~~gain (loss)~~income (expense) on investments to net income (loss) attributable to BlackRock.

The Company further presents net “economic” investment exposure, net of deferred compensation investments and hedged investments, to reflect another gauge for ~~investors as the~~investors. The economic impact of ~~investments~~Total Investments held pursuant to deferred compensation arrangements is substantially offset by a change in compensation ~~expense and the~~expense. The impact of ~~hedged~~certain investments is substantially mitigated by swap hedges. Carried interest capital allocations are excluded as there is no impact to BlackRock’s stockholders’ equity until such amounts are realized as performance fees. Finally, the Company’s regulatory investment in Federal Reserve Bank stock, which is not subject to market or interest rate risk, is excluded from the Company’s net economic investment exposure.

(in millions)	December 31, 2015			December 31, 2014
Investments, GAAP	$	1,578		$	1,921
Investments held by consolidated VIEs, GAAP⁽¹⁾		1,030			3,320
Total Investments		2,608			5,241
Investments held by consolidated VREs		(700	)		(713	)
Investments held by consolidated VIEs		(1,030	)		(3,320	)
Net interest in consolidated VREs		616			696
Net interest in consolidated VIEs⁽²⁾		733			—
Total Investments, as adjusted		2,227			1,904
Federal Reserve Bank stock		(93	)		(92	)
Deferred compensation investments		(79	)		(85	)
Hedged investments		(407	)		(323	)
Carried interest (VIEs/VREs)		(100	)		(85	)
Total “economic” investment exposure	$	1,548		$	1,319

(in millions) December 31,
2013 December 31,
2012
Total investments, GAAP
$ 2,151    $ 1,750
Investments held by consolidated sponsored investment funds⁽¹⁾
(826 ) (524 )
Net exposure to consolidated investment funds
732    430
Total investments, as adjusted
2,057    1,656
Federal Reserve Bank stock
(90 ) (89 )
Carried interest
(103 ) (85 )
Deferred compensation investments
(97 ) (62 )
Hedged investments
(184 ) (209 )
Total “economic” investment exposure
$ 1,583    $ 1,211

(1)

~~At December 31, 2013 and 2012, approximately $826 million and $524 million, respectively, of BlackRock’s total GAAP~~

Amounts represent investments ~~were~~ held in sponsored investment funds that ~~were deemed to be controlled by BlackRock~~are consolidated in accordance with GAAP as either a VIE or VRE. See Note 2, Significant Accounting Policies, for further information on the Company’s consolidation policy and ~~therefore, are consolidated even though BlackRock may not economically own a majority~~the 2015 adoption of ~~such funds.~~ASU 2015-02.

(2)	Amount includes $81 million of carried interest (VIEs), which has no impact on the Company’s “economic” investment exposure.

The following table represents the carrying value of the Company’s economic investment exposure, by asset type, at December 31, ~~2013~~2015 and ~~2012:~~2014:


(in millions)	December 31, 2013		December 31, 2012		December 31, 2015		December 31, 2014
Private equity	$	328	$	298	$	375	$	314
Real estate		125		122		91		117
Distressed credit/mortgage funds		148		214
Hedge funds/funds of hedge funds		348		159
Other investments⁽¹⁾		634		418
Other alternatives⁽¹⁾						240		289
Other investments⁽²⁾						842		599
Total “economic” investment exposure	$	1,583	$	1,211	$	1,548	$	1,319

(1)	Other alternatives include distressed credit/mortgage funds/opportunistic funds and hedge funds/funds of hedge funds.

(2)	Other investments primarily include seed investments in fixed income, equity and ~~equity~~multi-asset mutual funds/strategies as well as U.K. government securities, primarily held for regulatory purposes.

As adjusted investment activity for ~~2013~~2015 was as follows:

(in millions)
Investments, as adjusted, December 31, 2012
$ 1,656
Purchases/capital contributions
912
Sales/maturities
(469 )
Distributions
(216 )
Market valuations/earnings from equity method investments
156
Carried interest capital allocations
18
Investments, as adjusted, December 31, 2013
$ 2,057

(in millions)
Total Investments, as adjusted, December 31, 2014	$	1,904
Purchases/capital contributions		1,300
Sales/maturities		(847	)
Distributions ⁽¹⁾		(169	)
Market appreciation(depreciation)/earnings from equity method investments		24
Carried interest capital allocations/distributions received		15
Total Investments, as adjusted, December 31, 2015	$	2,227

(1)	Amounts include distributions representing return of capital and return on investments.

~~The following table represents investments, as adjusted at December 31, 2013:~~

(in millions) Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Other
Investments Not
Held at Fair
Value⁽¹⁾ Investments at
December 31,
2013
Total investments, as adjusted⁽²⁾
$ 607 $ 545 $ 489 $ 416 $ 2,057

~~(1)~~

Amount includes investments held at cost or amortized cost, carried interest and certain equity method investments, which include sponsored investment funds, which are not accounted for under a fair value measure. Certain equity method investees do not account for both their financial assets and financial liabilities under fair value measures, therefore, the Company’s investment in such equity method investees may not represent fair value.

~~(2)~~

~~Amounts include cash and cash equivalents, other assets and liabilities that are consolidated from non-VIE sponsored investment funds. See Note 5,~~~~Fair Value Disclosures~~~~, to the consolidated financial statements contained in Part II, Item 8 of this filing, for total GAAP investments.~~

LIQUIDITY AND CAPITAL RESOURCES

BlackRock Cash Flows Excluding the Impact of Consolidated Sponsored Investment Funds ~~and VIEs~~

~~BlackRock consolidates certain of its sponsored investment funds and CLOs, notwithstanding the fact BlackRock may only have a minority interest, if any, in these funds or CLOs. As a result, the~~The consolidated statements of cash flows include the cash flows of ~~consolidated sponsored investment funds and CLOs.~~the Consolidated Sponsored Investment Funds. The Company uses an adjusted cash flow statement, which excludes the impact of

~~consolidated sponsored investment funds and CLOs,~~ Consolidated Sponsored Investment Funds, as a supplemental non-GAAP measure to assess liquidity and capital requirements. The Company believes that its cash flows, excluding the impact of the ~~consolidated sponsored investment funds and CLOs,~~Consolidated

Sponsored Investment Funds, provide investors with useful information on the cash flows of BlackRock relating to its ability to fund additional operating, investing and financing activities. BlackRock’s management does not advocate that investors consider such non-GAAP measures in isolation from, or as a substitute for, its cash flows presented in accordance with GAAP.

The following table presents a reconciliation of the consolidated statements of cash flows presented on a GAAP basis to the consolidated statements of cash flows, excluding the impact of the cash flows of ~~consolidated sponsored investment funds and consolidated VIEs:~~Consolidated Sponsored Investment Funds:


(in millions)	GAAP Basis			Impact on Cash Flows of Consolidated Sponsored Investment Funds			Impact on Cash Flows of Consolidated VIEs			Cash Flows Excluding Impact of Consolidated Sponsored Investment Funds and VIEs			GAAP Basis			Impact on Cash Flows of Consolidated Sponsored Investment Funds			Cash Flows Excluding Impact of Consolidated Sponsored Investment Funds
Cash and cash equivalents, December 31, 2011	$	3,506		$	196		$	—		$	3,310
Cash and cash equivalents, December 31, 2013													$	4,390		$	114		$	4,276
Cash flows from operating activities		2,240			(256	)		(227	)		2,723			3,087			(534	)		3,621
Cash flows from investing activities		(266	)		(211	)		—			(55	)		239			(174	)		413
Cash flows from financing activities		(944	)		404			227			(1,575	)		(1,861	)		714			(2,575	)
Effect of exchange rate changes on cash and cash equivalents		70			—			—			70			(132	)		—			(132	)
Net change in cash and cash equivalents		1,100			(63	)		—			1,163			1,333			6			1,327
Cash and cash equivalents, December 31, 2012		4,606			133			—			4,473
Cash and cash equivalents, December 31, 2014													$	5,723		$	120		$	5,603
Cash flows from operating activities		3,642			(137	)		286			3,493			3,004			(348	)		3,352
Cash flows from investing activities		(483	)		39			—			(522	)		(465	)		(156	)		(309	)
Cash flows from financing activities		(3,392	)		79			(286	)		(3,185	)		(2,064	)		484			(2,548	)
Effect of exchange rate changes on cash and cash equivalents		17			—			—			17			(115	)		—			(115	)
Net change in cash and cash equivalents		(216	)		(19	)		—			(197	)		360			(20	)		380
Cash and cash equivalents, December 31, 2013	$	4,390		$	114		$	—		$	4,276
Cash and cash equivalents, December 31, 2015													$	6,083		$	100		$	5,983

Sources of BlackRock’s operating cash primarily include investment advisory, administration fees and securities lending revenue, performance fees, revenue fromBlackRock Solutions and advisory products and services, other revenue and distribution fees. BlackRock uses its cash to pay all operating ~~expenses,~~expense, interest and principal on ~~the Company’s~~ borrowings, income taxes, dividends on BlackRock’s capital stock, repurchases of the Company’s stock, capital expenditures and purchases of co-investments and seed investments.

Cash flows from operating activities, excluding the impact of ~~consolidated sponsored investment funds and VIEs,~~Consolidated Sponsored Investment Funds, primarily include the receipt of investment advisory and administration fees, securities lending revenue and other revenue offset by the payment of operating expenses incurred in the normal course of business, including year-end incentive compensation accrued for in the prior year.

Cash outflows from investing activities, excluding the impact of ~~consolidated sponsored investment funds and VIEs,~~Consolidated Sponsored Investment Funds, for ~~2013~~2015 were ~~$522~~$309 million and primarily reflected ~~$555~~$412 million

of investment purchases, $221 million of purchases of property and ~~$298~~equipment and $273 million related to ~~the Credit Suisse ETF Transaction and the MGPA acquisition,~~certain acquisitions, partially offset by ~~$342~~$531 million of net proceeds from sales and maturities of certain investments.

Cash outflows from financing activities, excluding the impact of ~~consolidated sponsored investment funds and VIEs,~~Consolidated Sponsored Investment Funds, for ~~2013~~2015 were ~~$3.2 billion,~~$2,548 million, primarily resulting from ~~$1.2~~$1.3 billion of share repurchases, including ~~$1.0~~$1.1 billion in ~~open market~~open-market transactions and ~~$243~~$231 million of employee tax withholdings related to employee stock transactions ~~$1.2~~and $1.5 billion of cash dividend payments, ~~a $750 million long-term debt repayment and a $100 million short-term debt repayment. Cash outflows from financing activities were~~ partially offset by ~~cash inflows related to $41~~$126 million of proceeds from stock options and $105 million of excess tax benefits from vested stock-based ~~compensation.~~compensation awards.

The Company manages its financial condition and funding to maintain appropriate liquidity for the business. Liquidity resources at December 31, ~~2013~~2015 and ~~2012~~2014 were as follows:


(in millions)	December 31, 2013			December 31, 2012			December 31, 2015			December 31, 2014
Cash and cash equivalents	$	4,390		$	4,606
Cash and cash equivalents held by consolidated sponsored investment funds⁽¹⁾		(114	)		(133	)
Cash and cash equivalents⁽¹⁾							$	6,083		$	5,723
Cash and cash equivalents held by consolidated sponsored investment funds, excluding VIEs⁽²⁾								(100	)		(120	)
Subtotal		4,276			4,473			5,983			5,603
Credit facility — undrawn		3,990			3,685			4,000			3,990
Total liquidity	$	8,266		$	8,158
Total liquidity resources⁽³⁾							$	9,983		$	9,593

(1)	The percentage of cash and cash equivalents held by the Company’s U.S. subsidiaries was approximately 50% at both December 31, 2015 and 2014. See Net Capital Requirements herein for more information on net capital requirements in certain regulated subsidiaries.

(2)	The Company ~~may not be able to~~cannot readily access such cash to use in its operating activities.

(3)	Amounts do not reflect year-end incentive compensation accruals of approximately $1.5 billion and $1.4 billion for 2015 and 2014, respectively, which were paid in February of the following year.

Total liquidity resources increased ~~$108~~$390 million during ~~2013,~~2015, primarily reflecting ~~positive operating~~ cash ~~flow and the increased aggregate commitment of the 2013 credit facility to $3.990 billion,~~from operations, partially offset by ~~the $750 million repayment of long-term borrowings,~~ cash payments of ~~2012~~2014 year-end incentive awards, share repurchases ~~including $1.0~~of $1.3 billion ~~in open market transactions,~~ and cash dividend payments.

A significant portion of the Company’s ~~$2,057~~$2,227 million of ~~total investments,~~Total Investments, as adjusted, is illiquid in nature and, as such, ~~may not~~cannot be readily convertible to cash.

Share ~~Repurchase Approvals.~~ In January 2013, the Board of Directors (the “Board”) approved an increase in the availability under the Company’s existing share repurchase program to allow for the repurchase of up to 10.2 million shares of BlackRock common stock.Repurchases. The Company repurchased ~~3.7~~3.1 million common shares in open market-transactions under the share repurchase program for ~~$1.0~~approximately $1.1 billion during ~~2013.~~2015. At December 31, ~~2013,~~2015, there were ~~6.5~~6.3 million shares still authorized to be repurchased.

Net Capital Requirements. The Company is required to maintain net capital in certain regulated subsidiaries within a number of jurisdictions, which is partially maintained by retaining cash and cash equivalent investments in those subsidiaries or jurisdictions. As a result, such subsidiaries of the Company may be restricted in their ability to transfer cash between different jurisdictions and to their parents. Additionally, transfers of cash between international jurisdictions, including repatriation to the United States, may have adverse tax consequences that could discourage such transfers.

BlackRock Institutional Trust Company, N.A. (“BTC”) is chartered as a national bank that does not accept client deposits and whose powers are limited to trust activities. BTC provides investment management services, including investment advisory and securities lending agency services, to institutional investors and other clients. BTC is subject to regulatory capital and liquid asset requirements administered by the Office of the Comptroller of the Currency.

At both December 31, ~~2013,~~2015 and 2014, the Company was required to maintain approximately $1.1 billion ~~compared with $1.2 billion at December 31, 2012~~ in net capital in certain regulated subsidiaries, including BTC, entities regulated by the Financial Conduct Authority and Prudential Regulation Authority in the United Kingdom, and the Company’s broker-dealers. The Company was in compliance with all applicable regulatory net capital requirements. ~~The decrease in required net capital was primarily due to a reduction in the BTC minimum Tier 1 capital requirement from $500 million to $385 million in August 2013.~~

Undistributed Earnings of Foreign Subsidiaries. As of December 31, ~~2013,~~2015, the Company has not provided for U.S. federal and state income taxes on approximately ~~$3.1~~$4.7 billion of undistributed earnings of its foreign subsidiaries. Such earnings are considered indefinitely reinvested outside the United States. The Company’s current plans do not demonstrate a need to repatriate these funds.

Short-Term Borrowings

~~2013~~2015 Revolving Credit Facility. In ~~March 2011,~~April 2015, the ~~Company entered into a five-year $3.5 billion unsecured revolving~~Company’s credit facility ~~(the “2011 credit facility”). In March 2012, the 2011 credit facility~~ was further amended to extend the maturity date ~~by one year~~ to March ~~2017~~2020 and ~~in April 2012~~to increase the amount of the aggregate commitment ~~was increased~~ to ~~$3.785~~$4.0 billion (the “2012 credit facility”). In March 2013, the Company’s credit facility was amended to extend the maturity date by one year to March 2018 and the amount of the aggregate commitment was increased to $3.990 billion (the “2013“2015 credit facility”). The ~~2013~~2015 credit facility permits the Company to request up to an additional $1.0 billion of borrowing capacity, subject to lender credit approval, increasing the overall size of the ~~2013~~2015 credit facility to an aggregate principal amount not to exceed ~~$4.990~~$5.0 billion. Interest on borrowings outstanding accrues at a rate based on the applicable London Interbank Offered Rate plus a spread. The ~~2013~~2015 credit facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at December 31, ~~2013.~~2015. The ~~2013~~2015 credit facility provides back-up liquidity ~~funds~~to fund ongoing working capital for general corporate purposes and ~~funds~~ various investment opportunities. At December 31, ~~2013,~~2015, the Company had no amount outstanding under the ~~2013~~2015 credit facility.

Commercial Paper Program. ~~On October 14, 2009, BlackRock established a commercial paper program (the “CP Program”) under~~ The maximum aggregate amount for which the Company could issue unsecured commercial paper notes (the “CP Notes”) on a private placement basis up to a maximum aggregate amount outstanding at any time of $3.0 billion. On May 13, 2011, BlackRock increased the maximum aggregate amount that may be borrowed under the CP Program to $3.5 billion. On

May 17, 2012, BlackRock increased the maximum aggregate amount to $3.785 billion. In April 2013, BlackRock increased the maximum aggregate amount for which the Company could issue unsecured CP Notes on a private-placement basis up to a maximum aggregate amount outstanding at any time of ~~$3.990 billion.~~$4.0 billion as amended in April 2015. The commercial paper program is currently supported by the ~~2013~~2015 credit facility. At December 31, ~~2013,~~2015, BlackRock had no CP Notes outstanding.

~~Long-term~~Long-Term Borrowings.

~~At December 31, 2013, the principal amount~~The carrying value of long-term borrowings ~~including~~at December 31, 2015 included the ~~current portion, was $4.95 billion.~~following:

(in millions)

Maturity Amount

Carrying Value

Maturity
6.25% Notes

$
700

$
699

September 2017
5.00% Notes

1,000

997

December 2019
4.25% Notes

750

745

May 2021
3.375% Notes

750

744

June 2022
3.50% Notes

1,000

992

March 2024
1.25% Notes

760

753

May 2025
Total Long-term Borrowings

$
4,960

$
4,930

During 2015, ~~and 2022 Notes.~~ ~~In May 2012,~~ the Company ~~issued $1.5 billion in aggregate principal amount of unsecured unsubordinated obligations. These notes were issued as two separate series of senior debt securities, including~~fully repaid $750 million of 1.375% notes maturing in June 2015 (the “2015 Notes”) and $750 million of 3.375% notes maturing in June 2022 (the “2022 Notes”). Net proceeds were used to fund the repurchase of BlackRock’s common stock and Series B Preferred from Barclays and affiliates and for general corporate purposes. Interest on the 2015 Notes and 2022 Notes of approximately $10 million and $25 million per year, respectively, is payable semi-annually on June 1 and December 1 of each year, which commenced December 1, 2012. The 2015 Notes and 2022 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a “make-whole” redemption price. The “make-whole” redemption price represents a price, subject to the specific terms of the 2015 and 2022 Notes and related indenture, that is the greater of (a) par value and (b) the present value of future payments that will not be paid because of an early redemption, which is discounted at a fixed spread over a comparable Treasury security.

~~2013 and 2021 Notes.~~maturity. In May ~~2011,~~2015, the Company issued ~~$1.5 billion in aggregate principal amount of unsecured unsubordinated obligations. These notes were issued as two separate series of senior debt securities, including $750~~€700 million of ~~4.25%~~1.25% senior unsecured notes maturing in May ~~2021 and $750 million of floating rate notes (“2013 Floating Rate Notes”), which were repaid in May 2013. Net proceeds of this~~

~~offering were used~~2025. Upon conversion to fund the repurchase of BlackRock’s Series B Preferred from affiliates of Merrill Lynch. Interest on the 4.25% notes due in 2021 (“2021 Notes”) is payable semi-annually on May 24 and November 24 of each year, which commenced November 24, 2011, and is approximately $32 million per year. The 2021 Notes may be redeemed prior to maturity at any time in whole or in part at the option ofU.S. dollars the Company atdesignated the €700 million debt offering as a ~~“make-whole” redemption price.~~

~~In May 2011,~~net investment hedge to offset its currency exposure relating to its net investment in ~~conjunction with~~certain euro functional currency operations. For more information on Company’s borrowings, see Note 12, Borrowings, in the ~~issuance of~~notes to the 2013 Floating Rate Notes, the Company entered into a $750 million notional interest rate swap maturing in 2013 to hedge the future cash flows of its obligation at a fixed rate of 1.03%. During the second quarter of 2013, the interest rate swap matured and the 2013 Floating Rate Notes were fully repaid.

~~2012, 2014 and 2019 Notes~~. In December 2009, the Company issued $2.5 billion in aggregate principal amount of unsecured and unsubordinated obligations. These notes were issued as three separate series of senior debt securities, including $0.5 billion of 2.25% notes, which were repaid in December 2012, $1.0 billion of 3.50% notes and $1.0 billion of 5.0% notes maturing in December 2014 and 2019, respectively. Net proceedsconsolidated financial statements beginning on page F-1 of this offering were used to repay borrowings under the CP program, which was used to finance a portion of the BGI Transaction, and for general corporate purposes. These notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a “make-whole” redemption price. Interest on the 2014 Notes and 2019 Notes of approximately $35 million and $50 million per year, respectively, is payable semi-annually in arrears on June 10 and December 10 of each year.

~~2017 Notes~~. In September 2007, the Company issued $700 million in aggregate principal amount of 6.25% senior unsecured and unsubordinated notes maturing on September 15, 2017 (the “2017 Notes”). A portion of the net proceeds of the 2017 Notes was used to fund the initial cash payment for the acquisition of the fund of funds business of Quellos Group, LLC in October 2007 (the “Quellos Transaction”) and the remainder was used for general corporate purposes. Interest is payable semi-annually in arrears on March 15 and September 15 of each year, or approximately $44 million per year. The 2017 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a “make-whole” redemption price.

Form 10-K.

Contractual Obligations, Commitments and Contingencies

The following table sets forth contractual obligations, commitments and contingencies by year of payment at December 31, ~~2013:~~

(in millions) 2014 2015 2016 2017 2018 Thereafter Total
Contractual obligations and commitments:

Long-term borrowings⁽¹⁾:

Principal
$ 1,000    $ 750    $ — $ 700    $ — $ 2,500    $ 4,950
Interest
196    156    151    151    107    218    979
Operating leases
135    127    110    109    106    699    1,286
Purchase obligations
83    77    31    8    — — 199
Investment commitments
216    — — — — — 216
Total contractual obligations and commitments
1,630    1,110    292    968    213    3,417    7,630
Contingent obligations:

Contingent distribution obligations
172    172 172 — — — 516
Contingent payments related to business acquisitions⁽²⁾
4    5    11    8    23    24    75
Total contractual obligations, commitments and contingent obligations⁽³⁾
$ 1,806    $ 1,287    $ 475    $ 976    $ 236    $ 3,441    $ 8,221

2015:

(in millions)	2016		2017		2018		2019		2020		Thereafter		Total
Contractual obligations and commitments:
Long-term borrowings:
Principal	$	—	$	700	$	—	$	1,000	$	—	$	3,260	$	4,960
Interest		196		196		152		152		102		224		1,022
Operating leases		134		133		131		125		120		560		1,203
Purchase obligations		79		50		2		—		—		—		131
Investment commitments		179		—		—		—		—		—		179
Total contractual obligations and commitments		588		1,079		285		1,277		222		4,044		7,495
Contingent obligations:
Contingent distribution obligations		185		—		—		—		—		—		185
Contingent payments related to business acquisitions⁽¹⁾		12		8		21		10		12		—		63
Total contractual obligations, commitments and contingent obligations⁽²⁾	$	785	$	1,087	$	306	$	1,287	$	234	$	4,044	$	7,743

(1)	~~Long-term borrowings exclude the borrowings of consolidated CLOs. The Company has no obligation to settle the liabilities of these CLOs.~~

~~(2)~~

The amount of contingent payments reflected for any year represents the expected payment amounts using foreign currency exchange rates as of December 31, ~~2013,~~2015 under the terms of the business acquisition’s agreement. The maximum potential payment amount related to Credit Suisse ETF Transaction is approximately $24 million for any year during a seven year period. There is no maximum amount for payments related to the MGPA Transaction. The fair value of the contingent obligations is not significant to the consolidated statement of financial condition and is recorded within other liabilities.

~~(3)~~

(2)

At December 31, ~~2013,~~2015, the Company had ~~$372~~approximately $350 million of net unrecognized tax benefits. Due to the uncertainty of timing and amounts that will ultimately be paid, this amount has been excluded from the table above.

Operating Leases. The Company leases its primary office locations under agreements that expire on varying dates through 2035. In connection with certain lease agreements, the Company is responsible for escalation payments. The contractual obligations table above includes only guaranteed minimum lease payments for such leases and does not project potential escalation or other lease-related payments. These leases are classified as operating leases and, as such, are not recorded as liabilities on the consolidated statements of financial condition.

Purchase Obligations. In the ordinary course of business, BlackRock enters into contracts or purchase obligations with third parties whereby the third parties provide services to or on behalf of BlackRock. Purchase obligations included in the contractual obligations table above represent executory contracts, which are either noncancelable or cancelable with a penalty. At December 31, ~~2013,~~2015, the Company’s obligations primarily reflected standard service contracts for portfolio services, market data, office-related services and third-party marketing and promotional ~~services.~~services, and obligations for equipment. Purchase obligations are recorded on the ~~Company’s~~consolidated financial statements when services are provided and, as such, obligations for services and equipment not received are not included in the consolidated statement of financial condition at December 31, ~~2013.~~2015.

Investment Commitments.At December 31, ~~2013,~~2015, the Company had ~~$216~~$179 million of various capital commitments to fund sponsored investment funds, including consolidated VIEs. These funds ofinclude private equity funds, real estate funds, infrastructure funds ~~opportunistic funds~~ and ~~distressed credit~~opportunistic funds. This amount excludes additional commitments made by consolidated funds of funds to underlying third-party funds as third-party noncontrolling interest holders have the legal obligation to fund the respective commitments of such funds of funds. In addition to the capital commitments of $179 million, the Company had approximately $38 million of contingent commitments for certain funds which have investment periods that have expired. Generally, the timing of the funding of these commitments is unknown and the commitments are callable on demand at any time prior to the expiration of the commitment. These unfunded commitments are not recorded on the consolidated statements of financial condition. These commitments do not include potential future commitments approved by the Company ~~but which~~that are not yet legally binding. The Company intends to make additional capital commitments from time to time to fund additional investment products for, and with, its clients.

Contingent Distribution Obligations. In November 2010, BlackRock entered into a second amended and restated global distribution agreement with Merrill Lynch, which requires the Company to make payments to Merrill Lynch contingent upon sales of products and level of AUM maintained in certain BlackRock products. The initial term of the agreement remained in effect until January 2014 and was renewed for one automatic three-year extension.

Contingent Payments Related to Business Acquisitions. In connection with certain acquisitions, BlackRock is required to make contingent payments, subject to the acquired businesses achieving specified performance targets over a certain period, subsequent to the applicable acquisition date.

The fair value of the remaining aggregate contingent payments at December 31, 2015 is included in other liabilities and is not significant to the consolidated statement of financial condition.

The following items have not been included in the contractual obligations, commitments and contingencies table:

Carried Interest Clawback.As a general partner in certain investment funds, including private equity partnerships and certain hedge funds, the Company may receive carried interest cash distributions from the partnerships in accordance with distribution provisions of the partnership agreements. The Company may, from time to time, be required to return all or a portion of such distributions to the

limited partners in the event the limited partners do not achieve a return as specified in the various partnership agreements. Therefore, BlackRock records carried interest subject to such clawback provisions in ~~investments,~~Total Investments, or cash/cash of consolidated VIEs to the extent that it is distributed, and as a deferred carried interest ~~liability~~liability/other liabilities of consolidated VIEs on its consolidated statements of financial condition. Carried interest is ~~realized and~~ recorded as performance fees on BlackRock’s consolidated statements of income upon the earlier of the termination of the investment fund or when the likelihood of clawback is considered mathematically improbable.

~~Contingent Payments Related to Business Acquisitions~~.Indemnifications. In the ordinary course of business or in connection with ~~the Credit Suisse ETF Transaction, BlackRock is required to make contingent payments annually to Credit Suisse, subject to achieving specified thresholds during a seven year period, subsequent to the~~certain acquisition date. In addition, BlackRock is required to make contingent payments related to the MGPA Transaction during a five year period, subject to achieving specified thresholds, subsequent to the acquisition date. The fair value of the contingent payments at December 31, 2013 is not significant to the consolidated statement of financial condition and is included in other liabilities.

~~Indemnifications.~~ ~~In many of the Company’s contracts, including the BGI, Merrill Lynch Investment Managers (“MLIM”) and Quellos Transaction~~ agreements, BlackRock ~~agrees~~enters into contracts pursuant to which it may agree to indemnify third parties ~~under~~in certain circumstances. The terms of ~~the~~these indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined or the likelihood of any liability is considered remote and, therefore, has not been included in the table above or recorded in the consolidated statement of financial condition at December 31, ~~2013.~~2015. See further discussion in Note 13,Commitments and Contingencies, to the consolidated financial statements beginning on page F-1 of thisForm 10-K.

On behalf of certain clients, the Company lends securities to highly rated banks and broker-dealers. In these securities lending transactions, the borrower is required to provide and maintain collateral at or above regulatory minimums. Securities on loan are marked to market daily to determine if the borrower is required to pledge additional collateral. BlackRock has issued certain indemnifications to certain securities lending clients against potential ~~losses~~loss resulting from a borrower’s failure to fulfill its obligations under the securities lending agreement should the value of the collateral pledged by the borrower at the time of default be insufficient to cover the borrower’s ~~obligations~~obligation under the securities lending agreement. At December 31, ~~2013,~~2015, the Company indemnified certain of its clients for their securities lending loan balances of approximately ~~$118.3~~$169.3 billion. The Company held, as agent, cash and securities totaling ~~$124.6~~$179.6 billion as collateral for indemnified securities on loan at December 31, ~~2013.~~2015. The fair value of these indemnifications was not material at December 31, ~~2013. The Company currently expects indemnified balances to continue to increase over time.~~2015.

While the collateral pledged by a borrower is intended to be sufficient to offset the borrower’s obligations to return securities borrowed and any other amounts owing to the lender under the relevant securities lending agreement, in the event of a borrower default, the Company can give no assurance that the collateral pledged by the borrower will be sufficient to fulfill such obligations. If the amount of such pledged collateral is not sufficient to fulfill such obligations

to a client for whom the Company has provided indemnification, BlackRock would be responsible for the amount of the shortfall. These indemnifications cover only the collateral shortfall described above, and do not in any way guarantee, assume or otherwise insure the investment performance or return of any cash collateral vehicle into which securities lending cash collateral is invested.

~~Contingent Distribution Obligations.~~ In November 2010, BlackRock entered into a second amended and restated global distribution agreement with Merrill Lynch, which requires the Company to make payments to Merrill Lynch contingent upon sales of products and level of AUM maintained in certain BlackRock products. The initial term of the agreement remained in effect until January 2014. After such term, the agreement renewed for one automatic three-year extension.50

~~The following items have not been included in the contractual obligations, commitments and contingencies table:~~

Compensation and Benefit Obligations. The Company has various compensation and benefit obligations, including bonuses, commissions and incentive payments payable, defined contribution plan matching contribution obligations, and deferred compensation arrangements, that are excluded from the contractual obligations and commitments table above. ~~These arrangements are discussed in more detail in Note 14,~~~~Stock-Based Compensation~~~~, and Note 15,~~~~Employee Benefit Plans~~~~, to the consolidated financial statements beginning on page F-1 of thisForm 10-K.~~Accrued compensation and benefits at December 31, ~~2013~~2015 totaled ~~$1,747~~$1,971 million and included incentive compensation of ~~$1,335~~$1,452 million, deferred compensation of ~~$164~~$266 million and other compensation and benefits related obligations of ~~$248~~$253 million. Substantially all of the incentive compensation liability was paid in the first quarter of ~~2014,~~2016, while the deferred compensation obligations are generally payable over periods of up to five years.

~~Separate Account Liabilities.~~At December 31, 2013, the Company had $155.1 billion of separate account assets and offsetting liabilities on the consolidated statement of financial condition. The timing of payments of these contractual obligations is inherently uncertain and varies by customer. As such, these liabilities have been excluded from the contractual obligations table above.

Critical Accounting Policies

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of ~~revenues~~revenue and ~~expenses~~expense during the reporting periods. Actual results could differ significantly from those estimates. Management considers the following critical accounting policies important to understanding the consolidated financial statements. For a summary of these and additional accounting policies see Note 2,Significant Accounting Policies, in the consolidated financial statements beginning on page F-1 of this Form 10-K.

Consolidation

In the normal course of business, the Company is the manager of various types of sponsored investment vehicles. The Company performs an analysis for investment products to determine if the product is a VIE or a VRE. Assessing whether an entity is a VIE or a VRE involves judgment and analysis. Factors considered in this assessment include the entity’s legal organization, the entity’s capital structure and equity ownership, and any related party or de facto agent implications of the Company’s involvement with the entity. Investments that are determined to be VREs are consolidated if the Company can exert control over the financial and operating policies of the investee, which generally exists if there is greater than 50% voting interest. See Note 4, Consolidated Voting Right Entities, in the notes to the consolidated financial statements beginning on page F-1 of this Form ~~10-K.~~

~~Consolidation of Sponsored Investment Funds and Securitization Products.~~ ~~Consolidation of sponsored investment funds and securitization products (collectively “investment products”) is~~10-K for more information. Investments that are determined ~~pursuant~~ to ~~ASC 810,~~~~Consolidation~~~~. The accounting method used by~~be VIEs are consolidated if the Company ~~depends upon~~is the ~~influence the Company has over its investee, the investment product. To the extent that BlackRock can exert control over the financial and operating policies~~primary beneficiary (“PB”) of the ~~investment product, which generally exists if there is a 50% or greater voting interest or if partners or members of~~entity.

At December 31, 2015, BlackRock was determined to be the PB for certain ~~products do not have substantive rights, BlackRock consolidates the investment product.~~

~~For~~ investment products inthat were determined to be VIEs, which ~~BlackRock’s voting interest is less than 50%, an analysis is performed to determine if the investment product is a VIE or a voting rights entity.~~

~~Consolidation of Variable Interest Entities~~~~. Certain investment products for which the risks and rewards of ownership are not directly linked to voting interests may be deemed VIEs.~~required BlackRock reviews factors, including the rights of the equity holders and obligations of equity holders to absorb losses or receive expected residual returns, to determine if the investment product is a VIE. BlackRock continuously evaluates such factors as facts and circumstances change. BlackRock is required to consolidate ~~a VIE when it is~~them. BlackRock was deemed to be the ~~primary beneficiary (“PB”).~~

~~Accounting Standards Update (“ASU”) 2010-10,~~~~Amendments to Statement 167 for Certain Investment Funds~~~~(“ASU 2010-10”) defers the application of Statement of Financial Accounting Standards (“SFAS”) No. 167,~~~~Amendments to FASB Interpretation No. 46(R),~~~~for certain investment funds, including money market funds. The~~ PB of a VIE that is an investment fund that meets the conditions of ASU 2010-10 is the enterprise that has a variable interest (or combination of variable interests, including those of related parties) that absorbs the majority of the entity’s expected losses, receives a majority of the entity’s expected residual

~~returns, or both. The PB of a VIE that does not meet the conditions for deferral in ASU 2010-10 is the enterprise that~~because it has the power to direct ~~activities of~~ the ~~entity~~activities that most significantly impact the ~~entity’s~~entities’ economic performance and has the obligation to absorb losses or the right to receive benefits that potentially could be significant to the VIE.

~~Significant judgment is required~~ See Note 5, Variable Interest Entities, in the ~~determination of whether the Company is the PB of a VIE. If the Company is determined~~notes to ~~be the PB of a VIE, BlackRock will consolidate the entity. In order to determine whether the Company is the PB of a VIE for entities that meet the conditions ofASU 2010-10,~~ management must make significant estimates and assumptions of projected future cash flows. Assumptions made in such analyses include, but are not limited to, market prices of securities, market interest rates, potential credit defaults on individual securities or default rates on a portfolio of securities, prepayments, realization of gains, liquidity or marketability of certain securities, discount rates and the probability of certain other outcomes.

In the normal course of business, the Company is the manager of various types of sponsored investment vehicles, including collateralized debt obligations (“CDOs”) or CLOs that do not meet the conditions of ASU 2010-10 and sponsored investment funds, which may be considered VIEs.

~~At December 31, 2013, the following balances related to VIEs were included on~~ the consolidated financial statements beginning on page F-1 of ~~financial condition:~~this Form 10-K for more information.

(in millions) CLOs Sponsored
Private
Equity Fund Total
Consolidated
VIEs
Assets of consolidated VIEs:

Cash and cash equivalents
$ 156 $ 5 $ 161
Bank loans, bonds, other investments and other assets
2,309 16 2,325
Liabilities of consolidated VIEs:

Borrowings
(2,369 ) — (2,369 )
Other liabilities
(74 ) — (74 )
Appropriated retained earnings
(22 ) — (22 )
Noncontrolling interests of consolidated VIEs
— (21 ) (21 )
Total BlackRock net interests in consolidated VIEs
$ — $ — $ —

~~CLOs.~~ ~~At December 31, 2013, BlackRock was~~See Note 2, Significant Accounting Policies — Accounting Pronouncements Adopted in 2015, in the manager of over 20 CLOs/CDOs and other securitization entities. BlackRock was determined to be the PB for certain of these CLOs, which required BlackRock to consolidate these VIEs. BlackRock was deemed to be the PB because it has the power to direct the activities of the CLOs that most significantly impact the entities’ economic performance and has the right to receive benefits that potentially could be significantnotes to the ~~VIE. The Company recorded appropriated retained earnings for the difference between the assets and liabilities of the CLOs recorded~~consolidated financial statements beginning on the consolidated statement of financial condition as the CLO noteholders ultimately will receive the benefits or absorb the losses associated with the CLOs’ assets and liabilities. Changes in the fair value of the assets and liabilities of these CLOs have no impact on net income attributable to BlackRock or its cash flows. Excluding outstanding management receivables, the Company has no risk of loss with its involvement with these VIEs.

~~Sponsored Private Equity Fund of Funds.~~ At December 31, 2013, BlackRock was determined to be the PB of one investment fund of funds and was deemed to absorb the majority of the variability due to its de-facto related-party relationships with other partners in the fund, which limited the ability of the partners to transfer or sell their interests without BlackRock’s consent as the general partner of the fund. Changes in the fair value of the assets and liabilitiespage F-1 of this ~~VIE recorded~~Form 10-K for more information on the consolidated statements of financial condition have no impact on net income attributable to BlackRock. Excluding outstanding management fee receivables, the Company has no risk of loss related to its involvement with this VIE.

~~Consolidation of Voting Rights Entities~~. To the extent that BlackRock can exert control over the financial and operating policies of the investee, which generally exists if there is a 50% or greater voting interest or if partners or members of certain products do not have substantive rights, BlackRock consolidates the investee.

substantive ability to dissolve (liquidate) the investment vehicle, or otherwise to remove BlackRock as the general partner or managing member without cause based on a simple unaffiliated majority vote, or have other substantive participating rights. If the investment vehicle is not a VIE and the presumption of control is not overcome, BlackRock will consolidate the investment vehicle.

At December 31, 2013 and 2012, as a result of consolidation of various investment products deemed to be voting rights entities, including products where BlackRock owns 50% or greater of the voting rights of the product, under the consolidation policies described above, the Company had the following balances on its consolidated statements of financial condition:

(in millions) December 31,
2013 December 31,
2012
Cash and cash equivalents
$ 114    $ 133
Investments:

Trading investments
  385      123
Other investments
441    401
Other assets
20    25
Other liabilities
(39 ) (65 )
Noncontrolling interests
(189 ) (187 )
BlackRock’s net interests in consolidated investment funds
$ 732    $ 430

The Company retained the specialized accounting of these investment funds pursuant to ASC 810. VIEs, including a consolidated sponsored investment fund and CLOs, were excluded from the balances above as the balances of these VIEs are reported separately on the consolidated statements of financial condition.ASU 2015-02.

Investments

Equity Method Investments. For equity investments where BlackRock does not control the investee, and where it is not the PB of a VIE, but can exert significant influence over the financial and operating policies of the investee, the Company follows the equity method of accounting. The evaluation of whether the Company exerts control or significant influence over the financial and operational policies of its investees requires significant judgment based on the facts and circumstances surrounding each individual investment. Factors considered in these evaluations may include the type of investment, the legal structure of the investee, the

terms and structure of the investment agreement, including investor voting or other rights, the terms of BlackRock’s advisory agreement or other agreements with the investee, any influence BlackRock may have on the governing board of the investee, the legal rights of other investors in the entity pursuant to the fund’s operating documents and the relationship between BlackRock and other investors in the entity.

BlackRock’s equity method investees that are investment companies record their underlying investments at fair value. Therefore, under the equity method of accounting, BlackRock’s share of the investee’s underlying net income predominantly represents fair value adjustments in the investments held by the equity method investees. BlackRock’s share of the investee’s underlying net income or loss is based upon the most currently available information and is recorded as nonoperating income (expense) for investments in investment companies, or as other revenue for certain strategic investments, which are recorded in other assets, since such investees are considered to be an extension of BlackRock’s core business.

At December 31, ~~2013,~~2015, the Company had ~~$736~~$527 million and ~~$163~~$265 million of equity method investments, including equity method investments held for deferred compensation, reflected within investments and other assets, respectively, and at December 31, ~~2012,~~2014, the Company had ~~$604~~$654 million and ~~$124~~$208 million of equity method investees reflected in investments and other assets, respectively.

~~Impairment~~Impairments of Investments. ~~The Company’s management~~ Management periodically assesses ~~its~~ equity method, available-for-sale, held-to-maturity and cost investments for ~~impairment.~~other-than-temporary Impairment (“OTTI”). If an OTTI exists, an impairment charge is recorded in nonoperating income (expense) on the consolidated statements of the income.

For equity method, held-to-maturity and cost method investments, if circumstances indicate that ~~impairment~~an OTTI may exist, the investments are evaluated using market values, where available, or the expected future cash flows of the investment. If the ~~undiscounted expected future cash flows are lower than the Company’s carrying value of the investment,~~Company determines an OTTI exists, an impairment charge is ~~recorded in~~recognized for the ~~consolidated statement~~excess of ~~income.~~the carrying amount of the investment over its estimated fair value.

~~When~~For available-for-sale securities, when the fair value ~~of available-for-sale securities~~ is lower than cost, ~~the Company evaluates the security to determine whether the impairment is considered “other-than-temporary”. In making this determination for equity securities,~~ the Company considers, among other factors, the length of time the security has been in a loss position, the extent to which the security’s ~~market~~fair value is less than cost, the financial condition and near-term prospects of the security’s issuer and the Company’s ability and intent to hold the security for a length of time sufficient to allow for recovery of such unrealized losses. IfFor equity securities, if the impairment is considered other-than-temporary, an impairment charge is ~~recorded in nonoperating income (expense) on~~recognized for the ~~consolidated statement~~excess of ~~income. In making this determination for~~the carrying amount of the investment over its fair value. For debt securities, the Company considers whether: (1) it has the intent to sell the ~~security,~~security; (2) it is more likely than not that it will be required to sell the security before ~~recovery~~recovery; or (3) it expects to recover the entire amortized cost basis of the security. If the Company intends to sell the security or it is more likely than not that it will be required to sell the

security, the entire difference between the amortized cost and fair value must be recognized in earnings. If the Company does not intend to sell a security and it is not more likely than not that it will be required to sell the security but the security has suffered aan impairment related to credit, ~~loss,~~ the credit loss will be bifurcated from the total ~~impairment~~decline in value and recorded in earnings with the remaining portion recorded in accumulated other comprehensive income.

For the Company’s investments in CLOs, the Company reviews cash flow estimates over the life of each CLO investment. On a quarterly basis, if the present value of the estimated future cash flows is lower than the carrying value of the investment and there is an adverse change in estimated cash flows, an impairment is considered to be other-than-temporary. An impairment charge is recognized for the excess of the carrying amount of the investment over its estimated fair value.

Evaluation of ~~securities~~ impairments involves significant assumptions and management judgments, which could differ from actual results, and these differences could have a material impact on the consolidated statements of income.

Fair Value ~~Measurements.~~Measurements

~~Hierarchy~~The Company’s assessment of ~~Fair Value Inputs.~~ ~~The provisions~~the significance of ~~ASC 820,~~~~Fair Value Measurement~~ ~~(“ASC 820”), establish~~ a ~~hierarchy that prioritizes inputs~~particular input to ~~valuation techniques used to measure fair value and require companies to disclose~~ the fair value ~~of their financial instruments~~measurement according to the fair value hierarchy (i.e., Level 1, 2 and 3 inputs, as defined)~~. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. See Note 2,~~~~Significant Accounting Policies~~~~, for further description of the Company’s assets and liabilities measured at fair value.~~

~~Significance of Inputs.~~ ~~The Company’s assessment of the significance of a particular input to the fair value measurement~~ in its entirety requires judgment and considers factors specific to the financial instrument.

~~Valuation Techniques.~~ ~~The fair values~~ See Note 2, Significant Accounting Policies, in the consolidated financial statements beginning on page F-1 of certain Level 3 assets and liabilities were determined using various methodologies as appropriate, including NAVs of underlying investments, third-party pricing vendors, broker quotes and market and income approaches. Such quotes and modeled prices are evaluatedthis Form 10-K for reasonableness through various procedures, including due diligence reviews of third-party pricing vendors, variance analyses, consideration of the current market environment and other analytical procedures. BlackRock’s $574 million of Level 3 investments, or 27% of total GAAP investments at December 31, 2013, primarily included co-investments in private equity fund of funds and private equity funds, funds of hedge funds as well as alternative hedge funds that invest in distressed credit and mortgage securities and real estate equity products.

As a practical expedient, the Company relies on NAV as the fair value for certain investments. The inputs to value these investments may include BlackRock capital accounts for its partnership interests in various alternative investments, including distressed credit hedge funds, real estate and private equity funds, which may be adjusted by using the returns of certain market indices. The various partnerships are investment companies, which record their underlying investments at fair value basedmore information on fair value policies established by management of the underlying fund. Fair value policies at the underlying fund generally require the fund to utilize pricing/valuation information from third-party sources, including independent appraisals. However, in some instances, current valuation information for illiquid securities or securities in markets that are not active may not be available from any third-party source or fund management may conclude that the valuations that are available from third-party sources are not reliable. In these instances, fund management may perform model-based analytical valuations that may be used as an input to value these investments.measurements.

A significant amount of inputs used to value equity, debt securities and bank loans is sourced from well-recognized third-party pricing vendors. Generally, prices obtained from pricing vendors are categorized as Level 1 inputs for identical securities traded in active markets and as Level 2

for other similar securities if the vendor uses observable inputs in determining the price. Annually, BlackRock’s internal valuation committee or other designated groups review both the valuation methodologies, including the general assumptions and methods used to value various asset classes, and operational processes with these vendors. In addition, on a quarterly basis, meetings are held with key vendors to identify any significant changes to the vendors’ processes.

In addition, quotes obtained from brokers generally are non-binding and categorized as Level 3 inputs. However, if the Company is able to determine that market participants have transacted for the asset in an orderly manner near the quoted price or if the Company can determine that the inputs used by the broker are observable, the quote is classified as a Level 2 input.

Changes in Valuation. Changes in value on ~~$1,622~~$2,261 million of ~~investments~~Total Investments will impact the Company’s nonoperating income (expense), ~~$183~~$44 million will impact accumulated other comprehensive income, ~~$243~~$203 million are held at cost or amortized cost and the remaining ~~$103~~$100 million relates to carried interest, which will not impact nonoperating income (expense). At December 31, ~~2013,~~2015, changes in fair value of approximately ~~$785~~$1,649 million of such ~~investments within~~ consolidated ~~sponsored investment funds~~VIEs/VREs will impact BlackRock’s net income (loss) attributable to noncontrolling interests ~~expense~~ on the consolidated statements of income. BlackRock’s net exposure to changes in fair value of such consolidated sponsored investment funds was ~~$691~~$1,268 million.

Goodwill and Intangible Assets

The value of advisory contracts acquired in business acquisitions to manage AUM in proprietary open-end investment funds as well as collective trust funds without a specified termination date are classified as indefinite-lived intangible assets. The assignment of indefinite lives to such investment fund contracts is based upon the assumption ~~that~~ there is no foreseeable limit on the contract period to manage these funds due to the likelihood of continued renewal at little or no cost. In addition, trade names/trademarks are considered indefinite-lived intangibles as they are expected to generate cash flows indefinitely. Goodwill represents the cost of a business acquisition in excess of the fair value of the net assets acquired. In accordance with the applicable provisions of ASC 350,Intangibles – Goodwill and Other (“ASC 350”), indefinite-lived intangible assets and goodwill are not amortized. Finite-lived management contracts, which relate to acquired separate accounts and funds with a specified termination date, are amortized over their remaining expected useful lives, which, at December 31, ~~2013,~~2015, ranged from 1 to 119 years with a weighted-average remaining estimated useful life of ~~4.3~~3.7 years.

Goodwill. The Company assesses its goodwill for impairment at least annually, considering such factors as the book value and the market capitalization of the Company. The impairment assessment performed as of July 31, ~~2013~~2015 indicated ~~that~~ no impairment charge was required. The Company ~~continuously monitors~~continues to monitor its book value per share as compared with closing prices of its common stock for potential indicators of impairment. At December 31, ~~2013,~~2015, the Company’s common stock closed at ~~$316.47~~$340.52, which exceeded its book value ~~per share~~ of approximately ~~$156.69 after excluding appropriated retained earnings.~~$172.12 per share.

Indefinite-lived and finite-lived intangibles. The Company performs assessments to determine if any intangible assets are ~~potentially~~ impaired and whether the indefinite-life and finite-life classifications are still appropriate.

In evaluating whether it is more likely than not that the fair value of indefinite-lived intangibles is less than ~~its~~ carrying value, BlackRock ~~assesses~~performed certain quantitative assessments and assessed various significant qualitative factors including AUM, revenue basis points, projected AUM growth rates, operating margins, tax rates and discount rates. In addition, the Company ~~considers~~considered other factors including: (i) macroeconomic conditions such as a deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets; (ii) industry and market considerations such as a deterioration in the environment in which an entity operates, an increased competitive environment, a decline in market-dependent multiples or metrics, a change in the market for an entity’s services, or regulatory, legal or political developments; and (iii) entity-specific events, such as a change in management or key personnel, overall financial performance and litigation that could affect significant ~~inputs.~~inputs used to determine the fair value of the indefinite-lived intangible asset. If an indefinite-lived intangible is determined to be more likely than not impaired, then the fair value of the asset is compared with its carrying value and any excess of the carrying value over the fair value would be recognized as an expense in the period in which the impairment occurs.

IfFor finite-lived intangible assets, if potential impairment circumstances are considered to exist, the Company will perform ~~an impairment~~a recoverability test, using an undiscounted cash flow analysis. Actual results could differ from these cash flow estimates, which could materially impact the impairment conclusion. If the carrying value of the asset is determined not to be ~~impaired,~~recoverable based on the undiscounted cash flow test, the difference between the book value of the asset and its current fair value would be recognized as an expense in the period in which the impairment occurs.

In addition, management judgment is required to estimate the period over which finite-lived intangible assets will contribute to the Company’s cash flows and the pattern in which these assets will be consumed. A change in the remaining useful life of any of these assets, or the reclassification of an indefinite-lived intangible asset to a finite-lived intangible asset, could have a significant impact on the Company’s amortization expense, which was ~~$161~~$128 million, $157 million and ~~$156~~$161 million for ~~2013, 2012~~2015, 2014 and ~~2011,~~2013, respectively.

In ~~2013, 2012~~2015, 2014 and ~~2011,~~2013, the Company performed impairment tests, including evaluating various qualitative factors and performing certain quantitative ~~assessments in 2013.~~assessments. The Company determined that no impairment charges were required, the classification of indefinite-lived versus

finite-lived intangibles was still appropriate and no changes to the expected lives of the finite-lived intangibles were required. The Company continuously monitors various factors, including AUM, for potential indicators of impairment.

~~Income Taxes.~~ ~~The Company accounts for income taxes under the asset and liability method prescribed by ASC 740,~~Income Taxes~~(“ASC 740”).~~

Deferred income tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using currently enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

Significant management judgment is required in estimating the ranges of possible outcomes and determining the probability of favorable or unfavorable tax outcomes and potential interest and penalties related to such unfavorable

outcomes. Actual future tax consequences relating to uncertain tax positions may be materially different than the Company’s current estimates. At December 31, ~~2013,~~2015, BlackRock had ~~$467~~$466 million of gross unrecognized tax benefits, of which ~~$304~~$320 million, if recognized, would affect the effective tax rate.

~~In accordance with ASC 740, management~~Management is required to estimate the timing of the recognition of deferred tax assets and liabilities, make assumptions about the future deductibility of deferred income tax assets and assess deferred income tax liabilities based on enacted tax rates for the appropriate tax jurisdictions to determine the amount of such deferred income tax assets and liabilities. At December 31, ~~2013,~~2015, the Company had deferred tax assets of $4$20 million and net deferred tax liabilities of approximately ~~$5,085~~$4,851 million on the consolidated statement of financial condition. Changes in ~~the calculated~~ deferred tax assets and liabilities may occur in certain circumstances, including statutory income tax rate changes, statutory tax law changes, changes in the anticipated timing of recognition of deferred tax assets and liabilities or changes in the structure or tax status of the Company.

~~ASC 740 requires the~~The Company ~~to assess~~assesses whether a valuation allowance should be established against its deferred income tax assets based on consideration of all available evidence, both positive and negative, using a more likely than not standard. ~~This~~The assessment considers, among other matters, the nature, frequency and severity of recent losses, forecast of future profitability, the duration of statutory carry back and carry forward periods, the Company’s experience with tax attributes expiring unused, and tax planning alternatives.

At December 31, 2013, the Company had recorded a deferred tax asset of $99 million for unrealized investment losses; however, no valuation allowance has been established because the Company expects to hold certain investments which invest in fixed income securities over a period sufficient for them to recover their unrealized losses, and generate future capital gains sufficient to offset the unrealized capital losses. Based on the weight of available evidence, it is more likely than not that the deferred tax asset will be realized. However, changes in circumstance could cause the Company to revalue its deferred tax balances with the resulting change impacting the consolidated statements of income in the period of the change. Such changes may be material to the Company’s consolidated financial statements. See Note 21,~~Income Taxes~~~~, to the consolidated financial statements beginning on page F-1 of this Form 10-K for further details.~~

The Company records income taxes based upon its estimated income tax liability or benefit. The Company’s actual tax liability or benefit may differ from the estimated income tax liability or benefit. The Company had current income taxes receivables of approximately ~~$89~~$166 million and current income taxes payables of ~~$168~~$79 million at December 31, ~~2013.~~2015.

Revenue ~~Recognition.~~Recognition

Investment advisory and administration fees are recognized as the services are performed. Such fees are primarily based on pre-determined percentages of the market value of AUM or, in the case of certain real estate clients, net operating income generated by the underlying properties. Investment advisory and administration fees are affected by changes in AUM, including market appreciation or depreciation, foreign

exchange translation and net ~~subscriptions~~inflows or ~~redemptions.~~outflows. Investment advisory and administration fees for investment funds are shown net of fees waived pursuant to contractual expense limitations of the funds or voluntary waivers.

The Company contracts with third parties and related parties for various fund distribution and shareholder servicing to be performed on behalf of certain funds the Company manages. Such arrangements generally are priced as a portion of the management fee paid by the fund. In certain cases, the fund takes on the primary responsibility for payment for services such that the Company bears no credit risk to the ~~third party.~~third-party. The Company accounts for such retrocession arrangements in accordance with ASC 605-45,Revenue Recognition — ~~Principle~~Principal Agent Considerations (“ASC 605-45”), and records its management fees net of retrocessions. Retrocessions for 2015, 2014 and 2013 ~~2012 and 2011~~ were ~~$785~~$870 million, ~~$793~~$891 million and ~~$928~~$785 million, respectively. The Company has additional contracts for similar services with third parties, which due to the terms of the contracts, are recorded as distribution and servicing costs and thus not netted on the consolidated statements of income.

The Company earns revenue by lending securities on behalf of clients to highly rated banks and broker-dealers. ~~Such revenues are~~Revenue is accounted for on an accrual basis. The securities loaned are secured by collateral, generally ranging from 102% to 112% of the value of the loaned securities. Generally, the revenue earned is shared between the Company and the funds or accounts managed by the Company from which the securities are borrowed. For ~~2013, 2012~~2015, 2014 and ~~2011,~~2013, securities lending revenue earned by the Company totaled ~~$447~~$513 million, ~~$510~~$477 million and ~~$397~~$447 million, respectively, and is recorded in investment advisory, administration fees and securities lending revenue on the consolidated statements of income. Investment advisory, administration fees and securities lending revenue are reported together as the fees for these services often are agreed upon with clients as a bundled fee.

The Company receives investment advisory performance fees or incentive allocations, ~~including carried interest allocations,~~ from certain actively managed investment funds and certain SMAs. These performance fees are ~~earned~~dependent upon exceeding specified relative or absolute investment return thresholds. Such fees are recorded upon completion of the measurement period, which varies by product or account, and could be monthly, quarterly, annually or longer. ~~For the years ended 2013, 2012 and 2011, performance fee revenue totaled $561 million, $463 million and $371 million, respectively.~~

In addition, the Company ~~receives~~is allocated carried interest from certain alternative ~~investments~~investment products upon exceeding performance thresholds. BlackRock may be required to reverse/return all, or part, of such carried interest allocations depending upon future performance of these funds. Therefore, BlackRock records carried interest subject to such clawback provisions in ~~investments~~Total Investments or cash/cash of consolidated VIEs to the extent that it is distributed, on its consolidated statements of financial condition. Carried interest is ~~realized and~~ recorded as performance fee revenue upon the earlier of the termination of the investment fund or when the likelihood of clawback is considered mathematically improbable.

The Company records a deferred carried interest liability to the extent it receives cash or capital allocations related to carried interest prior to meeting the revenue recognition criteria. At December 31, ~~2013~~2015 and ~~2012,~~2014, the Company had ~~$108~~$143 million and ~~$97~~$105 million, respectively, of deferred carried interest recorded in other liabilities/other liabilities of consolidated VIEs on the consolidated statements of financial condition. A portion of the deferred carried interest liability will be paid to certain employees. The ultimate timing of the recognition of performance fee revenue, if any, for these products is unknown.

The following table presents changes in the deferred carried interest liability (including the portion related to consolidated VIEs) for 2015 and 2014:

(in millions)	2015			2014
Beginning balance	$	105		$	108
Net increase (decrease)		69			69
Performance fee revenue recognized		(31	)		(72	)
Ending balance	$	143		$	105

For 2015, 2014 and 2013, performance fee revenue totaled $621 million, $550 million and $561 million, respectively.

Fees earned forBlackRock Solutions, which include advisory services, are recorded as services are performed or when completed and are determined using some, or all, of the following methods: (i) percentages of various attributes of advisory AUM or value of positions on theAladdin platform, (ii) fixed fees and (iii) performance fees if contractual thresholds are met. Revenue earned on advisory assignments was comprised of one-time advisory and portfolio structuring fees and ongoing fees based on AUM of the respective portfolio assignment. For 2015, 2014 and 2013, ~~2012 and 2011,~~BlackRock Solutions and advisory revenue totaled ~~$577~~$646 million, ~~$518~~$635 million and ~~$510~~$577 million, respectively.

Adjustments to revenue arising from initial estimates recorded historically have been immaterial since the majority of BlackRock’s investment advisory and administration revenue is calculated based on ~~the fair value of~~ AUM and since the Company does not record performance ~~revenues~~revenue until performance thresholds have been exceeded and the likelihood of clawback is mathematically improbable.

~~RECENT DEVELOPMENTS~~Recent Developments

In November 2015, the Company announced that it had entered an agreement to assume investment management responsibilities of approximately $87 billion of cash assets under management from BofA® Global Capital Management, Bank of America’s asset management business. The transaction is expected to close in the first half of 2016, subject to customary regulatory approvals and closing conditions. This transaction is not expected to be material to the Company’s consolidated financial condition or results of operations.

Accounting Developments

For accounting pronouncements that the Company adopted during ~~2013~~2015 and for recent accounting pronouncements not yet adopted, see Note 2, Significant Accounting Policies, in the consolidated financial ~~statements.~~statements beginning on page F-1 of this Form 10-K.

Item 7a. Quantitative and Qualitative Disclosures about Market Risk

AUM Market Price Risk.BlackRock’s investment advisory and administration fees are primarily comprised of fees based on a percentage of the value of AUM and, in some cases, performance fees expressed as a percentage of the returns realized on AUM. At December 31, ~~2013,~~2015, the majority of the Company’s investment advisory and administration fees were based on average or period end AUM of the applicable investment funds or separate accounts. Movements in equity market prices, interest rates/credit spreads, foreign exchange rates or all three could cause the value of AUM to decline, which would result in lower investment advisory and administration fees.

Corporate Investments Portfolio Risks. As a leading investment management firm, BlackRock devotes significant resources across all of its operations to identifying, measuring, monitoring, managing and analyzing market and operating risks, including the management and oversight of its own investment portfolio. The Board of Directors of the Company has adopted guidelines for the review of investments to be made by the Company, requiring, among other things, that investments be reviewed by certain senior officers of the Company, and that certain investments may be referred to the Audit Committee or the Board of Directors, depending on the circumstances, for approval.

In the normal course of its business, BlackRock is exposed to equity market price risk, interest rate/credit spread risk and foreign exchange rate risk associated with its corporate investments.

BlackRock has investments primarily in sponsored investment products that invest in a variety of asset classes, including

real estate, private equity and hedge funds. Investments generally are made for co-investment purposes, to establish a performance track record, to hedge exposure to certain deferred compensation plans or for regulatory purposes. Currently, the Company has a seed capital hedging program in which it enters into swaps to hedge market and interest rate exposure to certain investments. At December 31, ~~2013,~~2015, the Company had outstanding total return swaps and interest rate swaps with an aggregate notional value of approximately ~~$117~~$360 million and ~~$71~~$46 million, respectively.

At December 31, ~~2013,~~2015, approximately ~~$826 million~~$1.7 billion of BlackRock’s ~~total investments~~Total Investments were maintained in consolidated sponsored investment funds ~~deemed to be controlled by BlackRock in accordance with GAAP~~accounted for as VREs and ~~therefore, are consolidated even though BlackRock may not own a majority of such funds.~~VIEs. Excluding the impact of the Federal Reserve Bank stock, carried interest, investments made to hedge exposure to certain deferred compensation plans and certain investments that are hedged via the seed capital hedging program, the Company’s economic exposure to its investment portfolio is ~~$1,583~~$1,548 million. SeeBalance Sheet Overview-Investments and Investments of Consolidated VIEs in Management’s Discussion and ~~Analysis-Balance Sheet Overview~~-~~Investments~~Analysis of Financial Condition and Results of Operations for further information on the Company’s ~~investments.~~Total Investments.

~~The “economic” investment exposure of the portfolio is presented below:~~

Equity Market Price Risk.At December 31, ~~2013,~~2015, the Company’s net exposure to equity market price risk in its investment portfolio was approximately ~~$828~~$578 million of the Company’s total economic investment exposure. Investments subject to market price risk include private equity and real estate investments, hedge funds and funds of funds as well as mutual funds. The Company estimates that a hypothetical 10% adverse change in market prices would result in a decrease of approximately ~~$82.8~~$57.8 million in the carrying value of such investments.

~~Interest Rate/~~Interest-Rate/Credit Spread Risk.At December 31, ~~2013,~~2015, the Company was exposed to ~~interest-rate~~interest rate risk and credit spread risk as a result of approximately ~~$755~~$970 million of ~~investments~~Total Investments in debt securities and sponsored investment products that invest primarily in debt securities. Management considered a hypothetical 100 basis point fluctuation in interest rates or credit spreads and estimates that the impact of such a

fluctuation on these investments, in the aggregate, would result in a decrease, or increase, of approximately ~~$12.7~~$14.6 million in the carrying value of such investments.

Foreign Exchange Rate Risk.As discussed above, the Company invests in sponsored investment products that invest in a variety of asset classes. The carrying value of the total economic investment exposure denominated in foreign currencies, primarily the pound sterling and euro, was ~~$222~~$343 million at December 31, ~~2013.~~2015. A 10% adverse change in the applicable foreign exchange rates would result in approximately a ~~$22.2~~$34.3 million decline in the carrying value of such investments.

Other Market Risks.The Company executes forward foreign currency exchange contracts to mitigate the risk of certain foreign exchange risk movements. At December 31, ~~2013,~~2015, the Company had outstanding forward foreign currency exchange contracts with an aggregate notional value of approximately ~~$792~~$169 million.

Item 8. Financial Statements

and Supplemental Data

The report of the independent registered public accounting firm and financial statements listed in the accompanying index are included in Item 15 of this report. See Index to the consolidated financial statements on page F-1 of this Form 10-K.

Item 9. Changes in and

Disagreements with Accountants on Accounting and Financial Disclosure

There have been no disagreements on accounting and financial disclosure matters. BlackRock has not changed accountants in the two most recent fiscal years.

Item 9a. Controls and Procedures

Disclosure Controls and Procedures.Under the direction of BlackRock’s Chief Executive Officer and Chief Financial Officer, BlackRock evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this annual report on Form 10-K. Based on this evaluation, BlackRock’s Chief Executive Officer and Chief Financial Officer have concluded that BlackRock’s disclosure controls and procedures were effective.

Internal Control ~~Over~~over Financial Reporting.There ~~have been~~were no changes in our internal control over financial reporting that occurred during the ~~latest~~fourth quarter of the fiscal ~~quarter~~year ending December 31, 2015 that have materially affected or are reasonably likely to materially affect ~~such~~our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Management of BlackRock, Inc. (the “Company”) is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and affected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with the authorizations of management and directors of the Company; and

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of effectiveness of the internal control over financial reporting to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2013~~2015 based on the criteria established inInternal Control — Integrated Framework ~~(1992)~~(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, ~~2013,~~2015, the Company’s internal control over financial reporting is effective.

The Company’s independent registered public accounting firm has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting.

February ~~28, 2014~~26, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of BlackRock, Inc.:

We have audited the internal control over financial reporting of BlackRock, Inc. and subsidiaries (the “Company”) as of December 31, ~~2013,~~2015, based on criteria established inInternal Control – Integrated Framework ~~(1992)~~ (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2013,~~2015, based on the criteria established inInternal Control – Integrated Framework ~~(1992)~~ (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial condition as of December 31, ~~2013~~2015 and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended of the Company and our report dated February ~~28, 2014~~26, 2016 expressed an unqualified opinion on those consolidated financial statements.

/s/ Deloitte & Touche LLP

New York, New York

February ~~28, 2014~~

26, 2016

Item 9b. Other Information

The Company is furnishing no other information in this Form 10-K.

~~PART~~Part III

Item 10. Directors, Executive

Officers and Corporate Governance

The information regarding directors and executive officers set forth under the captions “Item 1: Election of Directors – Information Concerning the Nominees and Directors” and “Item 1: Election of Directors – Other Executive Officers” of the Proxy Statement is incorporated herein by reference.

The information regarding compliance with Section 16(a) of the Exchange Act set forth under the caption “Item 1: Section 16(a) Beneficial Ownership Reporting Compliance” of the Proxy Statement is incorporated herein by reference.

The information regarding BlackRock’s Code of Ethics for Chief Executive and Senior Financial Officers under the caption “Item 1: Corporate Governance Guidelines and Code of Business Conduct and Ethics” of the Proxy Statement is incorporated herein by reference.

Item 11. Executive Compensation

The information contained in the sections captioned “Item 1: Compensation of Executive Officers” and “Item 1: ~~2013~~2015 Director Compensation” of the Proxy Statement is incorporated herein by reference.

Item 12. Security Ownership of

Certain Beneficial Owners and Management and Related Stockholder Matters

The information contained in the sections captioned “Item 1: Ownership of BlackRock Common and Preferred Stock” and “Equity Compensation Plan Information” of the Proxy Statement is incorporated herein by reference.

Item 13. Certain Relationships and

Related Transactions, and Director Independence

The information contained in the sections captioned “Item 1: Certain Relationships and Related Transactions” and “Item 1: Director Independence” of the Proxy Statement is incorporated herein by reference.

Item 14. Principal Accountant Fees

and Services

The information regarding BlackRock’s independent auditor fees and services in the section captioned “Item 4: Ratification of Appointment of Independent Registered Public Accounting Firm” of the Proxy Statement is incorporated herein by reference.

~~PART~~

Part IV

Item 15. Exhibits and Financial

Statement Schedules

1. Financial Statements

The Company’s consolidated financial statements are included beginning on ~~pages~~page F-1.

2. Financial Statement Schedules

Ratio of Earnings to Fixed Charges has been included as Exhibit 12.1. All other schedules have been omitted because they are not applicable, not required or the information required is included in the Company’s consolidated financial statements or notes thereto.

3. Exhibit Index

As used in this exhibit list, “BlackRock” refers to BlackRock, Inc. (formerly named New BlackRock, Inc. and previously, New Boise, Inc.) (Commission File No. 001-33099) and “Old BlackRock” refers to BlackRock Holdco 2, Inc. (formerly named BlackRock, Inc.) (Commission File No. 001-15305), which is the predecessor of BlackRock. The following exhibits are filed as part of this Annual Report on Form 10-K:

Please note that the agreements included as exhibits to this Form 10-K are included to provide information regarding their terms and are not intended to provide any other factual or disclosure information about BlackRock or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement that have been made solely for the benefit of the other parties to the applicable agreement and may not describe the actual state of affairs as of the date they were made or at any other time.

Exhibit No.		Description
~~Exhibit No.~~ 3.1(1)		~~Description~~
~~3.1(1)~~		Amended and Restated Certificate of Incorporation of BlackRock.
3.2(2)		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of BlackRock, Inc.
~~3.3(29)~~ 3.3(3)		Amended and Restated Bylaws of BlackRock.
3.4(1)		Certificate of Designations of Series A Convertible Participating Preferred Stock of BlackRock.
~~3.5(3)~~ 3.5(4)		Certificate of Designations of Series B Convertible Participating Preferred Stock of BlackRock.
~~3.6(3)~~ 3.6(4)		Certificate of Designations of Series C Convertible Participating Preferred Stock of BlackRock.
~~3.7(4)~~ 3.7(5)		Certificate of Designations of Series D Convertible Participating Preferred Stock of BlackRock.
~~4.1(5)~~ 4.1(6)		Specimen of Common Stock Certificate.
~~4.2(6)~~ 4.2(7)		Indenture, dated September 17, 2007, between BlackRock and The Bank of New York, as trustee, relating to senior debt securities.
~~4.3(7)~~ 4.3(8)		Form of 6.25% Notes due 2017.
~~4.4(8)~~ 4.4(9)		~~Form of 3.50% Notes due 2014.~~
~~4.5(8)~~		Form of 5.00% Notes due 2019.
~~4.6(9)~~ 4.5(10)		Form of 4.25% Notes due 2021.
~~4.7(10)~~ 4.6(11)		~~Form of 1.375% Notes due 2015.~~
~~4.8(10)~~		Form of 3.375% Notes due 2022.
~~10.1(11)~~ 4.7(12)		Form of 3.500% Notes due 2024.
4.8(13)		Form of 1.250% Notes due 2025.
4.9(13)		Officers’ Certificate, dated May 6, 2015, for the 1.250% Notes due 2025 issued pursuant to the Indenture.
10.1		BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.2(12)~~ 10.2(14)		Amended and Restated BlackRock, Inc. 1999 Annual Incentive Performance Plan.+
~~10.3(13)~~ 10.3(15)		Amendment No. 1 to the BlackRock, Inc. Amended and Restated 1999 Annual Incentive Performance Plan.+
~~10.4(5)~~ 10.4(16)		Form of Restricted Stock Unit Agreement under the BlackRock, Inc. ~~Voluntary Deferred Compensation Plan, as amended~~Second Amended and ~~restated as of January 1, 2005.~~Restated 1999 Stock Award and Incentive Plan.+
~~10.5(1)~~ 10.5(16)		Form of Performance-Based Restricted Stock Unit Agreement (BPIP) under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
10.6(1)		Form of Stock Option Agreement expected to be used in connection with future grants of Stock Options under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.6(1)~~ 10.7(1)		Form of Restricted Stock Agreement expected to be used in connection with future grants of Restricted Stock under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.7(14)~~ 10.8(1)		~~Form of Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+~~
~~10.8(14)~~		Form of Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units for long-term incentive awards under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+
~~10.9(1)~~		Form of Directors’ Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.10(5)~~ 10.9		~~Registration Rights Agreement, dated~~ BlackRock, Inc. Amended and Restated Voluntary Deferred Compensation Plan, as amended and restated as of ~~September 29, 2006, among BlackRock, Merrill Lynch & Co., Inc. and the PNC Financial Service Group, Inc.~~November 16, 2015.+
~~10.11(15)~~ 10.10(17)		Share Surrender Agreement, dated October 10, 2002 (the “Share Surrender Agreement”), among Old BlackRock, PNC Asset Management, Inc. and The PNC Financial Services Group, Inc.+
~~10.12(16)~~ 10.11(18)		First Amendment, dated as of February 15, 2006, to the Share Surrender Agreement.+
~~10.13(17)~~ 10.12(19)		Second Amendment, dated as of June 11, 2007, to the Share Surrender Agreement.+
~~10.14(3)~~ 10.13(4)		Third Amendment, dated as of February 27, 2009, to the Share Surrender Agreement.+
~~10.15(18)~~ 10.14(20)		Fourth Amendment, dated as of August 7, 2012, to the Share Surrender Agreement.+
~~10.16(19)~~ 10.15(21)		Five-Year Revolving Credit Agreement, dated as of March 10, 2011, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender and L/C agent, Sumitomo Mitsui Banking Corporation, as Japanese Yen lender, a group of lenders, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Citibank, N.A., as syndication agent and Bank of America, N.A., Barclays Bank PLC, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc., as documentation agents.
~~10.17(20)~~ 10.16(22)		Amendment No. 1, dated as of March 30, 2012, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
~~10.18(27)~~ 10.17(23)		Amendment No. 2, dated as of March 28, 2013, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
~~10.19(21)†~~ 10.18(24)		Amendment No. 3, dated as of March 28, 2014, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
10.19(25)		Amendment No. 4, dated as of April 2, 2015, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
10.20(26)†		Second Amended and Restated Global Distribution Agreement, dated as of November 15, 2010, among BlackRock and Merrill Lynch & Co., Inc.


~~Exhibit No.~~ 10.21(3)		~~Description~~
~~10.20(3)~~		Amended and Restated Implementation and Stockholder Agreement, dated as of February 27, 2009, between The PNC Financial Services Group, Inc. and BlackRock.
~~10.21(22)~~ 10.22(27)		Amendment No. 1, dated as of June 11, 2009, to the Amended and Restated Implementation and Stockholder Agreement between The PNC Financial Services Group, Inc. and BlackRock.
~~10.22(23)~~ 10.23(28)		~~Commercial Paper Dealer Agreement between BlackRock and Barclays Capital Inc., dated as of October 14, 2009.~~
~~10.23(24)~~		Lease Agreement, dated as of February 17, 2010, among BlackRock Investment Management (UK) Limited and Mourant & Co Trustees Limited and Mourant Property Trustees Limited as Trustees of the Drapers Gardens Unit Trust for the lease of Drapers Gardens, 12 Throgmorton Avenue, London, EC2, United Kingdom.

~~10.24(25)~~ 10.24(29)		~~Stock Repurchase Agreement, dated as of May 21, 2012, between Barclays Bank PLC and BlackRock.~~
~~10.25(25)~~		~~Exchange Agreement, dated as of May 21, 2012, between Barclays Bank PLC and BlackRock.~~
~~10.26(25)~~		~~Exchange Agreement, dated as of May 21, 2012, among PNC Bancorp, Inc., The PNC Financial Services Group, Inc. and BlackRock.~~
~~10.27(26)~~		~~Letter Agreement, dated November 20, 2012, between Susan L. Wagner and BlackRock. +~~
~~10.28(28)~~		Letter Agreement, dated February 12, 2013, between Gary S. Shedlin and BlackRock.+
~~12.1~~ 10.25(30)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Barclays Capital Inc., dated as of December 23, 2014.
10.26(30)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Citigroup Global Markets Inc., dated as of December 23, 2014.
10.27(30)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Merrill Lynch, Pierce, Fenner & Smith Incorporated, dated as of January 6, 2015.
10.28(30)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Credit Suisse Securities (USA) LLC dated as of January 6, 2015.
12.1		Computation of Ratio of Earnings to Fixed Charges.
21.1		Subsidiaries of Registrant.
23.1		Deloitte & Touche LLP Consent.
31.1		Section 302 Certification of Chief Executive Officer.
31.2		Section 302 Certification of Chief Financial Officer.
32.1		Section 906 Certification of Chief Executive Officer and Chief Financial Officer.
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

(1)	Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on October 5, 2006.

(2)	Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 25, 2012.

(3)	Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2012.

(4)	Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on February 27, 2009.

~~(4)~~

(5)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on December 3, 2009.

~~(5)~~

(6)

Incorporated by reference to BlackRock’s Registration Statement on Form S-8 (Registration No. 333-137708) filed on September 29, 2006.

~~(6)~~

(7)

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2007.

~~(7)~~

(8)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on September 17, 2007.

~~(8)~~

(9)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on December 10, 2009.

~~(9)~~

(10)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 25, 2011.

~~(10)~~

(11)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 31, 2012.

~~(11)~~

(12)

Incorporated by reference to BlackRock’s ~~Quarterly~~Current Report on Form ~~10-Q for the quarter ended June 30, 2010.~~8-K filed on March 18, 2014.

~~(12)~~

(13)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 6, 2015.

(14)	Incorporated by reference to Old BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2002.

~~(13)~~

(15)

Incorporated by reference to Old BlackRock’s Current Report on Form 8-K filed on May 24, 2006.

~~(14)~~

(16)

Incorporated by reference to BlackRock’s ~~Annual~~Quarterly Report on Form ~~10-K~~10-Q for the ~~year~~quarter ended ~~December 31, 2008.~~June 30, 2015

~~(15)~~

(17)

Incorporated by reference to Old BlackRock’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002.

~~(16)~~

(18)

Incorporated by reference to Old BlackRock’s Current Report on Form 8-K filed on February 22, 2006.

~~(17)~~

(19)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on June 15, 2007.

~~(18)~~

(20)

Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.

~~(19)~~

(21)

Incorporated by reference to BlackRock’s Current Report on Form 8-K/A filed on August 24, 2012.

~~(20)~~

(22)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 4, 2012.

~~(21)~~

(23)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 3, 2013.

(24)	Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on March 28, 2014.

(25)	Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 3, 2015.

(26)	Incorporated by reference to BlackRock’s Current Report on Form 8-K/A filed on August 24, 2012.

~~(22)~~

(27)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on June 17, 2009.

~~(23)~~

(28)

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on October 20, 2009.~~

~~(24)~~

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2009.

~~(25)~~

(29)

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 23, 2012.~~

~~(26)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on November 27, 2012.~~

~~(27)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 3, 2013.~~

~~(28)~~

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on February 19, 2013.

~~(29)~~

(30)

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2014.

+	Denotes compensatory plans or ~~arrangements~~arrangements.

†	Confidential treatment has been granted for certain portions of this exhibit, which portions have been omitted and filed separately with the Securities and Exchange Commission.

~~SIGNATURES~~SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BLACKROCK, INC.

By:
~~By:~~		/s/ LAURENCE D. FINK
		Laurence D. Fink
		Chairman, Chief Executive Officer and Director

February ~~28, 2014~~26, 2016

Each of the officers and directors of BlackRock, Inc. whose signature appears below, in so signing, also makes, constitutes and appoints Laurence D. Fink, Gary S. Shedlin, Matthew J. Mallow, Christopher J. Meade, Daniel R. Waltcher and ~~J. Russell McGranahan,~~R. Andrew Dickson III, his or her true and lawful attorneys-in-fact, with full power and substitution, for him or her in any and all capacities, to execute and cause to be filed with the Securities and Exchange Commission any and all amendments to the Annual Report on Form 10-K, with exhibits thereto and other documents connected therewith and to perform any acts necessary to be done in order to file such documents, and hereby ratifies and confirms all that said attorney-in-fact or his or her substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	~~Title~~	Date
/S/ LAURENCE D. FINK Laurence D. Fink		Chairman, Chief Executive Officer and Director (Principal Executive Officer)	February ~~28, 2014~~26, 2016
/S/ GARY SHEDLIN Gary S. Shedlin		Senior Managing Director and Chief Financial Officer (Principal Financial Officer)	February ~~28, 2014~~26, 2016
/S/ JOSEPH FELICIANI, JR. Joseph Feliciani, Jr.		Managing Director and Chief Accounting Officer (Principal Accounting Officer)	February ~~28, 2014~~26, 2016
/S/ ABDLATIF Y. AL-HAMAD	Director	~~Director~~	February ~~28, 2014~~26, 2016
Abdlatif Y. Al-Hamad
/S/ MATHIS CABIALLAVETTA	Director	~~Director~~	February ~~28, 2014~~26, 2016
Mathis Cabiallavetta
/S/ PAMELA DALEY	Director	February 26, 2016
Pamela Daley
/S/ WILLIAM S. DEMCHAK	Director	~~Director~~	February ~~28, 2014~~26, 2016
William S. Demchak
/S/ JESSICA EINHORN	Director	~~Director~~	February ~~28, 2014~~26, 2016
Jessica Einhorn
/S/ FABRIZIO FREDA	Director	~~Director~~	February ~~28, 2014~~26, 2016
Fabrizio Freda
/S/ MURRY S. GERBER	Director	~~Director~~	February ~~28, 2014~~26, 2016
Murry S. Gerber
/S/ JAMES GROSFELD	Director	~~Director~~	February ~~28, 2014~~26, 2016
James Grosfeld
/S/ ROBERT S. KAPITO	Director	~~Director~~	February ~~28, 2014~~26, 2016
Robert S. Kapito
/S/ DAVID H. KOMANSKY	Director	~~Director~~	February ~~28, 2014~~26, 2016
David H. Komansky
/S/ SIR DERYCK MAUGHAN	Director	~~Director~~	February ~~28, 2014~~26, 2016
Sir Deryck Maughan
/S/ ~~THOMAS K. MONTAG~~CHERYL D. MILLS	Director	~~Director~~	February ~~28, 2014~~26, 2016
~~Thomas K. Montag~~ Cheryl D. Mills
/S/ GORDON M. NIXON	Director	February 26, 2016
Gordon M. Nixon
/S/ THOMAS H. O’BRIEN	Director	~~Director~~	February ~~28, 2014~~26, 2016
Thomas H. O’Brien


~~Signature~~		~~Title~~	~~Date~~
~~/S/ JAMES E. ROHR~~		~~Director~~	~~February 28, 2014~~
~~James E. Rohr~~
/S/ IVAN G. SEIDENBERG	Director	~~Director~~	February ~~28, 2014~~26, 2016
Ivan G. Seidenberg
/S/ MARCO ANTONIO SLIM DOMIT	Director	~~Director~~	February ~~28, 2014~~26, 2016
Marco Antonio Slim Domit
/S/ JOHN S. VARLEY	Director	~~Director~~	February ~~28, 2014~~26, 2016
John S. Varley
/S/ SUSAN L. WAGNER	Director	~~Director~~	February ~~28, 2014~~26, 2016
Susan L. Wagner

INDEX TO FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm	F-2
Consolidated Statements of Financial Condition	F-3
Consolidated Statements of Income	F-4
Consolidated Statements of Comprehensive Income	F-5
Consolidated Statements of Changes in Equity	F-6
Consolidated Statements of Cash Flows	~~F-9~~	F-8
Notes to the Consolidated Financial Statements	~~F-10~~	F-9

F-1

REPORT OF INDEPENDENT ~~REGISTERED~~REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of BlackRock, Inc.:

We have audited the accompanying consolidated statements of financial condition of BlackRock, Inc. and subsidiaries (the “Company”) as of December 31, ~~2013~~2015 and ~~2012,~~2014, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, ~~2013.~~2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of BlackRock, Inc. and subsidiaries at December 31, ~~2013~~2015 and ~~2012,~~2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, ~~2013,~~2015, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, ~~2013,~~2015, based on criteria established inInternal Control – Integrated Framework ~~(1992)~~ (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February ~~28, 2014~~26, 2016 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ Deloitte & Touche LLP

New York, New York

February ~~28, 2014~~

26, 2016

F-2

BlackRock, Inc.

Consolidated Statements of Financial Condition


(in millions, except per share data)	December 31, 2013			December 31, 2012
(in millions, except shares and per share data)							December 31, 2015			December 31, 2014
Assets
Cash and cash equivalents	$	4,390		$	4,606		$	6,083		$	5,723
Accounts receivable		2,247			2,250			2,237			2,120
Investments		2,151			1,750			1,578			1,921
Assets of consolidated variable interest entities:
Cash and cash equivalents		161			297			148			278
Bank loans, other investments and other assets		2,325			2,264
Investments								1,030			3,320
Other assets								67			32
Separate account assets		155,113			134,768			150,851			161,287
Separate account collateral held under securities lending agreements		21,788			23,021			31,336			33,654
Property and equipment (net of accumulated depreciation of $611 and $572 at December 31, 2013 and 2012, respectively)		525			557
Intangible assets (net of accumulated amortization of $1,057 and $899 at December 31, 2013 and 2012, respectively)		17,501			17,402
Property and equipment (net of accumulated depreciation of $570 and $587 at December 31, 2015 and 2014, respectively)								581			467
Intangible assets (net of accumulated amortization of $745 and $1,040 at December 31, 2015 and 2014, respectively)								17,372			17,344
Goodwill		12,980			12,910			13,123			12,961
Other assets		692			626			855			685
Total assets	$	219,873		$	200,451		$	225,261		$	239,792
Liabilities
Accrued compensation and benefits	$	1,747		$	1,547		$	1,971		$	1,865
Accounts payable and accrued liabilities		1,084			1,055			1,068			1,035
Short-term borrowings		—			100
Liabilities of consolidated variable interest entities:
Borrowings		2,369			2,402			—			3,389
Other liabilities		74			103			177			245
Long-term borrowings		4,939			5,687
Borrowings								4,930			4,922
Separate account liabilities		155,113			134,768			150,851			161,287
Separate account collateral liabilities under securities lending agreements		21,788			23,021			31,336			33,654
Deferred income tax liabilities		5,085			5,293			4,851			4,989
Other liabilities		1,004			858			1,033			886
Total liabilities		193,203			174,834			196,217			212,272
Commitments and contingencies (Note 13)
Temporary equity
Redeemable noncontrolling interests		54			32			464			35
Permanent Equity
BlackRock, Inc. stockholders’ equity
Common stock, $ 0.01 par value;		2			2			2			2
Shares authorized: 500,000,000 at December 31, 2013 and 2012; Shares issued: 171,252,185 at December 31, 2013 and 2012; Shares outstanding: 166,589,688 and 168,875,304 at December 31, 2013 and 2012, respectively;
Shares authorized: 500,000,000 at December 31, 2015 and 2014; Shares issued: 171,252,185 at December 31, 2015 and 2014; Shares outstanding: 163,461,064 and 164,786,788 at December 31, 2015 and 2014, respectively;
Series B nonvoting participating preferred stock, $0.01 par value;		—			—			—			—
Shares authorized: 150,000,000 at December 31, 2013 and 2012; Shares issued and outstanding: 823,188 at December 31, 2013 and 2012;
Shares authorized: 150,000,000 at December 31, 2015 and 2014; Shares issued and outstanding: 823,188 at December 31, 2015 and 2014;
Series C nonvoting participating preferred stock, $0.01 par value;		—			—			—			—
Shares authorized: 6,000,000 at December 31, 2013 and 2012; Shares issued and outstanding: 1,311,887 and 1,517,237 at December 31, 2013 and 2012, respectively
Shares authorized: 6,000,000 at December 31, 2015 and 2014; Shares issued and outstanding: 1,311,887 at December 31, 2015 and 2014
Additional paid-in capital		19,473			19,419			19,405			19,386
Retained earnings		8,208			6,444			12,033			10,164
Appropriated retained earnings		22			29			—			(19	)
Accumulated other comprehensive loss		(35	)		(59	)		(448	)		(273	)
Treasury stock, common, at cost (4,662,497 and 2,376,881 shares held at December 31, 2013 and 2012, respectively)		(1,210	)		(432	)
Treasury stock, common, at cost (7,791,121 and 6,465,397 shares held at December 31, 2015 and 2014, respectively)								(2,489	)		(1,894	)
Total BlackRock, Inc. stockholders’ equity		26,460			25,403			28,503			27,366
Nonredeemable noncontrolling interests		135			155			77			119
Nonredeemable noncontrolling interests of consolidated variable interest entities		21			27
Total permanent equity		26,616			25,585			28,580			27,485
Total liabilities, temporary equity and permanent equity	$	219,873		$	200,451		$	225,261		$	239,792

See accompanying notes to consolidated financial statements.

F-3

BlackRock, Inc.

Consolidated Statements of Income

										Year ended December 31,
	Year ended December 31,
(in millions, except per share data)	2013			2012			2011
(in millions, except shares and per share data)										2015			2014			2013
Revenue
Investment advisory, administration fees and securities lending revenue
Investment advisory, administration fees and securities lending revenue:
Related parties	$	5,991		$	5,292		$	5,303		$	6,875		$	6,738		$	5,991
Other third parties		2,748			2,780			2,593			2,965			2,851			2,748
Total investment advisory, administration fees and securities lending revenue		8,739			8,072			7,896			9,840			9,589			8,739
Investment advisory performance fees		561			463			371			621			550			561
BlackRock Solutions and advisory		577			518			510			646			635			577
Distribution fees		73			71			100			55			70			73
Other revenue		230			213			204			239			237			230
Total revenue		10,180			9,337			9,081			11,401			11,081			10,180
Expenses
Expense
Employee compensation and benefits		3,560			3,287			3,199			4,005			3,829			3,560
Distribution and servicing costs		353			364			386			409			364			353
Amortization of deferred sales commissions		52			55			81			48			56			52
Direct fund expenses		657			591			563			767			748			657
General and administration		1,540			1,359			1,415			1,380			1,453			1,540
Restructuring charges		—			—			32
Amortization of intangible assets		161			157			156			128			157			161
Total expenses		6,323			5,813			5,832
Total expense											6,737			6,607			6,323
Operating income		3,857			3,524			3,249			4,664			4,474			3,857
Nonoperating income (expense)
Net gain (loss) on investments		305			163			46			58			165			305
Net gain (loss) on consolidated variable interest entities		—			(38	)		(18	)		58			(41	)		—
Interest and dividend income		22			36			34			26			29			22
Interest expense		(211	)		(215	)		(176	)		(204	)		(232	)		(211	)
Total nonoperating income (expense)		116			(54	)		(114	)		(62	)		(79	)		116
Income before income taxes		3,973			3,470			3,135			4,602			4,395			3,973
Income tax expense		1,022			1,030			796			1,250			1,131			1,022
Net income		2,951			2,440			2,339			3,352			3,264			2,951
Less:
Net income (loss) attributable to redeemable noncontrolling interests		(1	)		9			—			1			2			(1	)
Net income (loss) attributable to nonredeemable noncontrolling interests		20			(27	)		2			6			(32	)		20
Net income attributable to BlackRock, Inc.	$	2,932		$	2,458		$	2,337		$	3,345		$	3,294		$	2,932
Earnings per share attributable to BlackRock, Inc. common stockholders:
Basic	$	17.23		$	14.03		$	12.56		$	20.10		$	19.58		$	17.23
Diluted	$	16.87		$	13.79		$	12.37		$	19.79		$	19.25		$	16.87
Cash dividends declared and paid per share	$	6.72		$	6.00		$	5.50		$	8.72		$	7.72		$	6.72
Weighted-average common shares outstanding:
Basic		170,185,870			174,961,018			184,265,367			166,390,009			168,225,154			170,185,870
Diluted		173,828,902			178,017,679			187,116,410			169,038,571			171,112,261			173,828,902

See accompanying notes to consolidated financial statements.

F-4

BlackRock, Inc.

Consolidated Statements of Comprehensive Income


	Year ended December 31,									Year ended December 31,
(in millions)	2013			2012			2011			2015			2014			2013
Net income	$	2,951		$	2,440		$	2,339		$	3,352		$	3,264		$	2,951
Other comprehensive income:
Change in net unrealized gains (losses) from available-for-sale investments, net of tax:
Unrealized holding gains (losses), net of tax⁽¹⁾		4			26			(3	)
Unrealized holding gains (losses)⁽¹⁾											(1	)		3			4
Less: reclassification adjustment included in net income⁽¹⁾		13			6			1			2			8			13
Net change from available-for-sale investments, net of tax		(9	)		20			(4	)
Benefit plans, net⁽¹⁾		10			(5	)		—
Foreign currency translation adjustments		23			53			(27	)
Net change from available-for-sale investments											(3	)		(5	)		(9	)
Benefit plans, net											1			(2	)		10
Foreign currency translation adjustments⁽²⁾											(173	)		(231	)		23
Other comprehensive income (loss)		24			68			(31	)		(175	)		(238	)		24
Comprehensive income		2,975			2,508			2,308			3,177			3,026			2,975
Less: Comprehensive income (loss) attributable to noncontrolling interests		19			(18	)		2			7			(30	)		19
Comprehensive income attributable to BlackRock, Inc.	$	2,956		$	2,526		$	2,306		$	3,170		$	3,056		$	2,956

(1)	The tax benefit (expense) was not material in ~~2013, 2012~~2015, 2014 and ~~2011.~~2013.

(2)	Amount for the year ended December 31, 2015 includes gains from a net investment hedge of $19 million, net of tax of $11 million.

See accompanying notes to consolidated financial statements.

BlackRock, Inc.

Consolidated Statements of Changes in Equity

(in millions)	Additional Paid-in Capital⁽¹⁾			Retained Earnings			Appropriated Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock Common			Total BlackRock Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Permanent Equity			Redeemable Noncontrolling Interests / Temporary Equity
December 31, 2012	$	19,421		$	6,444		$	29		$	(59	)	$	(432	)	$	25,403		$	182		$	25,585		$	32
Net income		—			2,932			—			—			—			2,932			20			2,952			(1	)
Consolidation of a collateralized loan obligation		—			—			(4	)		—			—			(4	)		—			(4	)		—
Allocation of gains (losses) of consolidated collateralized loan obligations		—			—			(3	)		—			—			(3	)		3			—			—
Dividends paid		—			(1,168	)		—			—			—			(1,168	)		—			(1,168	)		—
Stock-based compensation		447			—			—			—			1			448			—			448			—
Issuance of common shares related to employee stock transactions		(429	)		—			—			—			464			35			—			35			—
Employee tax withholdings related to employee stock transactions		—			—			—			—			(243	)		(243	)		—			(243	)		—
Shares repurchased		—			—			—			—			(1,000	)		(1,000	)		—			(1,000	)		—
Net tax benefit (shortfall) from stock-based compensation		36			—			—			—			—			36			—			36			—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			—			66			66			137
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			—			(115	)		(115	)		(114	)
Other comprehensive income (loss)		—			—			—			24			—			24			—			24			—
December 31, 2013	$	19,475		$	8,208		$	22		$	(35	)	$	(1,210	)	$	26,460		$	156		$	26,616		$	54
Net income		—			3,294			—			—			—			3,294			(32	)		3,262			2
Allocation of gains (losses) of consolidated collateralized loan obligations		—			—			(41	)		—			—			(41	)		41			—			—
Dividends paid		—			(1,338	)		—			—			—			(1,338	)		—			(1,338	)		—
Stock-based compensation		453			—			—			—			—			453			—			453			—
Issuance of common shares related to employee stock transactions		(646	)		—			—			—			660			14			—			14			—
Employee tax withholdings related to employee stock transactions		—			—			—			—			(344	)		(344	)		—			(344	)		—
Shares repurchased		—			—			—			—			(1,000	)		(1,000	)		—			(1,000	)		—
Net tax benefit (shortfall) from stock-based compensation		106			—			—			—			—			106			—			106			—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			—			(46	)		(46	)		248
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			—			—			—			(269	)
Other comprehensive income (loss)		—			—			—			(238	)		—			(238	)		—			(238	)		—
December 31, 2014	$	19,388		$	10,164		$	(19	)	$	(273	)	$	(1,894	)	$	27,366		$	119		$	27,485		$	35

(1)	Amounts include $2 million of common stock at December 31, 2014, 2013 and 2012.

See accompanying notes to consolidated financial statements.

BlackRock, Inc.

Consolidated Statements of Changes in Equity

(in millions) Additional
Paid-in
Capital⁽¹⁾ Retained
Earnings Appropriated
Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Common
Shares
Held in
Escrow Treasury
Stock
Common Total
Stockholders’
Equity Nonredeemable
Noncontrolling
Interests Nonredeemable
Noncontrolling
Interests of
Consolidated
VIEs Total
Permanent
Equity Redeemable
Noncontrolling
Interests /
Temporary
Equity
December 31, 2010
$ 22,504    $ 3,723    $ 75    $ (96 ) $ (1 ) $ (111 ) $ 26,094    $ 189    $ 45    $ 26,328    $ 6
Net income
— 2,337    —    —    —    —    2,337    20    (18 ) 2,339    —
Consolidation of a collateralized loan obligation
—    —    19    —    —    —    19    —    —    19    —
Allocation of gains (losses) of consolidated collateralized loan obligations
—    —    (22 ) —    —    —    (22 ) —    22    —    —
Dividends paid, net of dividend expense for unvested RSUs
—    (1,014 ) —    —    —    —    (1,014 ) —    —    (1,014 ) —
Stock-based compensation
494    —    —    —    —    3    497    —    —    497    —
PNC preferred stock capital contribution
200    —    —    —    —    —    200    —    —    200    —
Retirement of preferred stock
(200 ) —    —    —    —    —    (200 ) —    —    (200 ) —
Merrill Lynch cash capital contribution
8    —    —    —    —    —    8    —    —    8    —
Issuance of common shares related to employee stock transactions
(208 ) —    —    —    —      228    20    —    —    20    —
Employee tax benefit withholdings related to employee stock transactions
—    —    —    —    —    (239 ) (239 ) —    —    (239 ) —
Shares repurchased
(2,545 ) —    —    —    —    (100 ) (2,645 ) —    —    (2,645 ) —
Convertible debt conversions
4    —    —    —    —    1    5    —    —    5    —
Net tax benefit (shortfall) from stock-based compensation
12    —    —    —    —    —    12    —    —    12    —
Subscriptions
(redemptions/distributions) — noncontrolling interest holders
—    —    —    —    —    —    —    (25 ) (11 ) (36 ) 90
Net consolidations (deconsolidations) of sponsored investment funds
—    —    —    —    —    —    —    —    —    —    (4 )
Foreign currency translation adjustments
7    —    —        —      —    —    7    —    —    7    —
Other comprehensive income (loss)
—    —    —    (31 ) —    —    (31 ) —    —    (31 ) —
December 31, 2011
$ 20,276    $ 5,046    $ 72    $ (127 ) $ (1 ) $ (218 ) $ 25,048    $ 184    $ 38    $ 25,270    $ 92

(in millions)	Additional Paid-in Capital⁽¹⁾			Retained Earnings			Appropriated Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock Common			Total BlackRock Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Permanent Equity			Redeemable Noncontrolling Interests / Temporary Equity
December 31, 2014	$	19,388		$	10,164		$	(19	)	$	(273	)	$	(1,894	)	$	27,366		$	119		$	27,485		$	35
Net income		—			3,345			—			—			—			3,345			6			3,351			1
Net consolidation (deconsolidation) of VIEs due to adoption of new accounting pronouncement		—			—			19			—			—			19			(8	)		11			194
Dividends paid		—			(1,476	)		—			—			—			(1,476	)		—			(1,476	)		—
Stock-based compensation		514			—			—			—			—			514			—			514			—
Issuance of common shares related to employee stock transactions		(600	)		—			—			—			736			136			—			136			—
Employee tax withholdings related to employee stock transactions		—			—			—			—			(231	)		(231	)		—			(231	)		—
Shares repurchased		—			—			—			—			(1,100	)		(1,100	)		—			(1,100	)		—
Net tax benefit (shortfall) from stock-based compensation		105			—			—			—			—			105			—			105			—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			—			(34	)		(34	)		518
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			—			(6	)		(6	)		(284	)
Other comprehensive income (loss)		—			—			—			(175	)		—			(175	)		—			(175	)		—
December 31, 2015	$	19,407		$	12,033		$	—		$	(448	)	$	(2,489	)	$	28,503		$	77		$	28,580		$	464

(1)	~~Amount includes $1 million of common stock at par value at both December 31, 2011 and 2010 and $1 million of preferred stock at par value at December 31, 2010.~~

~~See accompanying notes to consolidated financial statements.~~

~~BlackRock, Inc.~~

~~Consolidated Statements of Changes in Equity~~

(in millions) Additional
Paid-in
Capital⁽¹⁾ Retained
Earnings Appropriated
Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Common
Shares
Held in
Escrow Treasury
Stock
Common Total
Stockholders’
Equity Nonredeemable
Noncontrolling
Interests Nonredeemable
Noncontrolling
Interests of
Consolidated
VIEs Total
Permanent
Equity Redeemable
Noncontrolling
Interests /
Temporary
Equity⁽²⁾
December 31, 2011
$ 20,276    $ 5,046    $ 72    $ (127) $ (1 ) $ (218 ) $ 25,048    $ 184    $ 38    $ 25,270    $ 92
Net income
— 2,458    — — — — 2,458    11    (38 ) 2,431    9
Allocation of losses of consolidated collateralized loan obligations
— — (43 ) — — — (43 ) — 43    — —
Release of common stock from escrow
(1 ) — — — 1    — — — — — —
Dividends paid
— (1,060 ) — — — — (1,060 ) — — (1,060 ) —
Stock-based compensation
451    — — — — — 451    — — 451    —
Merrill Lynch cash capital contribution
7    — — — — — 7    — — 7    —
Issuance of common shares related to employee stock transactions
(376 ) — — — —   432    56    — — 56    —
Employee tax benefit withholdings related to employee stock transactions
— — — — — (146 ) (146 ) — — (146 ) —
Shares repurchased
(1,000 ) — — — — (500 ) (1,500 ) — — (1,500 ) —
Net tax benefit (shortfall) from stock-based compensation
64    — — — — — 64    — — 64    —
Subscriptions
(redemptions/
distributions) — noncontrolling interest holders
— — — — — — — (33 ) (10 ) (43 ) 343
Net consolidations (deconsolidations) of sponsored investment funds
— — — — — — — (7 ) (6 ) (13 ) (412 )
Other comprehensive income (loss)
— — —   68      —    — 68    — — 68    —
December 31, 2012
$ 19,421    $ 6,444    $ 29    $ (59 ) $ — $ (432 ) $ 25,403    $ 155    $ 27    $ 25,585    $ 32

~~(1)~~

~~Amount includes $2 million and $1 million of common stock at par value at December 31, 2012 and 2011, respectively.~~

~~(2)~~

~~Amounts include $89 million of redemptions and $89 million of net consolidations related to consolidated variable interest entities (“VIEs”).~~

~~See accompanying notes to consolidated financial statements.~~

~~BlackRock, Inc.~~

~~Consolidated Statements of Changes in Equity~~

(in millions) Additional
Paid-in
Capital⁽¹⁾ Retained
Earnings Appropriated
Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Treasury
Stock
Common Total
BlackRock
Stockholders’
Equity Nonredeemable
Noncontrolling
Interests Nonredeemable
Noncontrolling
Interests of
Consolidated
VIEs Total
Permanent
Equity Redeemable
Noncontrolling
Interests /
Temporary
Equity
December 31, 2012
$ 19,421 $ 6,444    $ 29 $ (59 ) $ (432 ) $ 25,403 $ 155 $ 27 $ 25,585 $ 32
Net income
—    2,932    —    —    —    2,932    20 —    2,952 (1 )
Consolidation of a collateralized loan obligation
—    —    (4 ) —    —    (4 ) —    —    (4 ) —
Allocation of gains (losses) of consolidated collateralized loan obligations
—    —    (3 ) —    —    (3 ) —    3 —    —
Dividends paid
—    (1,168 ) —    —    —    (1,168 ) —    —    (1,168 ) —
Stock-based compensation
447 —    —    —    1 448 —    —    448 —
Issuance of common shares related to employee stock transactions
(429 ) —    —    —      464 35 —    —    35 —
Employee tax benefit withholdings related to employee stock transactions
—    —    —    —    (243 ) (243 ) —    —    (243 ) —
Shares repurchased
—    —    —    —    (1,000 ) (1,000 ) —    —    (1,000 ) —
Net tax benefit (shortfall) from stock-based compensation
36 —    —    —    —    36 —    —    36 —
Subscriptions
(redemptions/distributions) — noncontrolling interest holders
—    —    —    —    —    —    (59 )   125 66   137
Net consolidations (deconsolidations) of sponsored investment funds
—    —    —    —    —    —    19 (134 ) (115 ) (114 )
Other comprehensive income (loss)
—    —    —      24 —    24 —    —    24 —
December 31, 2013
$ 19,475 $ 8,208 $ 22 $ (35 ) $ (1,210 ) $ 26,460 $ 135 $ 21 $ 26,616 $ 54

~~(1)~~

Amounts include $2 million of common stock at both December 31, ~~2013~~2015 and ~~2012.~~2014.

See accompanying notes to consolidated financial statements.

BlackRock, Inc.

Consolidated Statements of Cash Flows


(in millions)	Year ended December 31,									Year ended December 31,
	2013			2012			2011			2015			2014			2013
Cash flows from operating activities
Net income	$	2,951		$	2,440		$	2,339		$	3,352		$	3,264		$	2,951
Adjustments to reconcile net income to cash from operating activities:
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization		291			295			299			247			278			291
Amortization of deferred sales commissions		52			55			81			48			56			52
Stock-based compensation		448			451			497			514			453			448
Deferred income tax expense (benefit)		(193	)		(61	)		(137	)		(156	)		(104	)		(193	)
Other gains											(40	)		—			—
Net (gains) losses on nontrading investments											12			(37	)		(73	)
Purchases of investments within consolidated sponsored investment funds											(1	)		(160	)		(195	)
Proceeds from sales and maturities of investments within consolidated sponsored investment funds											2			137			145
Gain related to PennyMac initial public offering		(39	)		—			—			—			—			(39	)
Gain related to the charitable contribution		(80	)		—			—			—			—			(80	)
Charitable contribution		124			—			—			—			—			124
Net (gains) losses on nontrading investments		(73	)		(43	)		(40	)
Purchases of investments within consolidated sponsored investment funds		(195	)		(108	)		(41	)
Proceeds from sales and maturities of investments within consolidated sponsored investment funds		145			96			50
Assets and liabilities of consolidated VIEs:
Change in cash and cash equivalents		143			(24	)		54			(98	)		168			143
Net (gains) losses within consolidated VIEs		—			38			18			(58	)		41			—
Net (purchases) proceeds within consolidated VIEs		142			(203	)		82			(227	)		(599	)		142
(Earnings) losses from equity method investees		(158	)		(175	)		(23	)		(91	)		(158	)		(158	)
Distributions of earnings from equity method investees		80	��		42			30			41			57			80
Other adjustments		10			(4	)		—			1			5			10
Changes in operating assets and liabilities:
Accounts receivable		14			(292	)		124			(154	)		78			14
Investments, trading		(218	)		(664	)		(116	)		(584	)		(416	)		(218	)
Other assets		(92	)		(10	)		(181	)		(123	)		5			(92	)
Accrued compensation and benefits		203			138			(140	)		98			101			203
Accounts payable and accrued liabilities		7			114			(152	)		14			(69	)		7
Other liabilities		80			155			82			207			(13	)		80
Cash flows from operating activities		3,642			2,240			2,826			3,004			3,087			3,642
Cash flows from investing activities
Purchases of investments		(412	)		(402	)		(204	)		(330	)		(369	)		(412	)
Proceeds from sales and maturities of investments		286			695			213			456			654			286
Distributions of capital from equity method investees		83			73			34			66			143			83
Net consolidations (deconsolidations) of sponsored investment funds		(48	)		(215	)		—			(163	)		(123	)		(48	)
Acquisitions, net of cash acquired		(298	)		(267	)		—			(273	)		—			(298	)
Purchases of property and equipment		(94	)		(150	)		(247	)		(221	)		(66	)		(94	)
Cash flows from investing activities		(483	)		(266	)		(204	)		(465	)		239			(483	)
Cash flows from financing activities
Repayments of short-term borrowings		(100	)		—			(600	)		—			—			(100	)
Proceeds from short-term borrowings		—			—			600
Repayments of convertible debt		—			—			(67	)
Repayments of long-term borrowings		(750	)		(500	)		—			(750	)		(1,000	)		(750	)
Proceeds from long-term borrowings		—			1,495			1,496			787			997			—
Cash dividends paid		(1,168	)		(1,060	)		(1,014	)		(1,476	)		(1,338	)		(1,168	)
Proceeds from stock options exercised		28			47			16			126			4			28
Proceeds from issuance of common stock		7			7			5
Repurchases of common stock		(1,243	)		(1,645	)		(2,885	)		(1,331	)		(1,344	)		(1,243	)
Merrill Lynch cash capital contribution		—			7			8
Net proceeds from (repayments of) borrowings by consolidated VIEs		(410	)		331			(125	)		—			512			(410	)
Net (redemptions/distributions paid)/subscriptions received from noncontrolling interest holders		203			300			54			484			202			203
Excess tax benefit from stock-based compensation		41			74			27			105			106			41
Other financing activities											(9	)		—			7
Cash flows from financing activities		(3,392	)		(944	)		(2,485	)		(2,064	)		(1,861	)		(3,392	)
Effect of exchange rate changes on cash and cash equivalents		17			70			2			(115	)		(132	)		17
Net increase (decrease) in cash and cash equivalents		(216	)		1,100			139			360			1,333			(216	)
Cash and cash equivalents, beginning of year		4,606			3,506			3,367			5,723			4,390			4,606
Cash and cash equivalents, end of year	$	4,390		$	4,606		$	3,506		$	6,083		$	5,723		$	4,390
Supplemental disclosure of cash flow information:
Cash paid for:
Interest	$	202		$	201		$	167		$	194		$	216		$	202
Interest on borrowings of consolidated VIEs	$	102		$	75		$	60		$	—		$	142		$	102
Income taxes (net of refunds)	$	1,064		$	976		$	962		$	1,276		$	1,227		$	1,064
Supplemental schedule of noncash investing and financing transactions:
Issuance of common stock	$	429		$	378		$	213		$	600		$	646		$	429
PNC preferred stock capital contribution	$	—		$	—		$	200
Increase (decrease) in noncontrolling interests due to net consolidation (deconsolidation) of sponsored investment funds	$	(229	)	$	(425	)	$	(4	)	$	(104	)	$	(269	)	$	(229	)
Increase (decrease) in borrowings due to consolidation of VIEs	$	363		$	406		$	412
Increase (decrease) in borrowings due to consolidation/deconsolidation of VIEs										$	(3,389	)	$	585		$	363

See accompanying notes to consolidated financial statements.

BlackRock, Inc.

Notes to the Consolidated Financial Statements

1. Introduction and Basis of Presentation

Business. BlackRock, Inc. (together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) ~~provides diversified~~is a leading publicly traded investment management firm providing a broad range of investment and risk management services to institutional and retail clients ~~intermediary~~worldwide.

BlackRock’s diverse platform of active (alpha) and ~~individual investors through various~~index (beta) investment ~~vehicles. Investment management services primarily consist of~~strategies across asset classes enables the ~~management of equity,~~Company to tailor investment outcomes and asset allocation solutions for clients. Product offerings include single- and multi-asset class portfolios investing in equities, fixed income, ~~multi-asset, alternative investment~~alternatives and ~~cash management products. BlackRock offers its investment products~~money market instruments. Products are offered directly and through intermediaries in a variety of vehicles, including open-end and closed-end mutual funds,iShares^® exchange-traded funds (“ETFs”), separate accounts, collective investment ~~trusts~~funds and ~~separate accounts. In addition,~~other pooled investment vehicles. BlackRock ~~provides market~~also offers the BlackRock Solutions^® investment and risk management ~~financial markets~~technology platform, Aladdin^®, risk analytics and advisory services and ~~enterprise investment system services~~solutions to a broad base of clients. Financial markets advisory services include valuation services relating to illiquid securities, dispositions and workout assignments (including long-term portfolio liquidation assignments), risk management and strategic planning and execution.institutional investors.

At December 31, ~~2013,~~2015, The PNC Financial Services Group, Inc. (“PNC”) held ~~20.9%~~21.1% of the Company’s voting common stock and ~~21.9%~~22.2% of the Company’s capital stock, which includes outstanding common and nonvoting preferred stock.

~~See Note 19,~~~~Capital Stock~~~~, for more information on the equity ownership of BlackRock.~~

Basis of Presentation.These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its controlled subsidiaries. Noncontrolling interests on the consolidated statements of financial condition ~~include~~represents the portion of consolidated sponsored investment funds in which the Company does not have direct equity ownership. ~~Significant accounts~~Accounts and transactions between consolidated entities have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of ~~revenues~~revenue and ~~expenses~~expense during the reporting periods. Actual results could differ from those estimates.

Certain items previously reported have been reclassified to conform to the current year presentation.

2. Significant Accounting Policies

Accounting Pronouncements Adopted in 2015

Amendments to the Consolidation Analysis. In February 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis, (“ASU 2015-02”) that requires companies to reevaluate all legal entities under revised consolidation guidance. The revised consolidation rules provide guidance for evaluating: i) limited partnerships and similar entities for consolidation ii) how decision maker or service provider fees affect the consolidation analysis, iii) how interests held by related parties affect the consolidation analysis, and iv) the consolidation analysis required for certain investment funds. The consolidation guidance also provides a scope exception for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.

The Company early adopted ASU 2015-02 using the modified retrospective method with an effective adoption date of January 1, 2015. The modified retrospective method did not require the restatement of prior year periods. In connection with the adoption of ASU 2015-02, the Company reevaluated all of its investment products for consolidation. As of January 1, 2015, the Company deconsolidated all of its previously consolidated collateralized loan obligations (“CLOs”) as its fee arrangements were no longer deemed to be variable interests and it held no other interests in these entities.

The adoption of the ASU also resulted in the consolidation of certain investment products that were not previously consolidated. Upon adoption, these products became consolidated variable interest entities (“VIEs”) as the Company is considered the party with both (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE.

The impact to the consolidated statement of financial condition upon adoption was primarily the deconsolidation of approximately $3.6 billion of assets and $3.6 billion of liabilities related to certain CLOs that the Company manages with an adjustment to appropriated retained earnings of $19 million. In addition, certain investment products previously accounted for as voting rights entities (“VREs”) became VIEs under the new accounting guidance and were consolidated.

Debt Issuance Costs. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The Company early adopted ASU 2015-03 during 2015 on a retrospective basis, which required the restatement of prior periods. The adoption of ASU 2015-03 was not material to the consolidated financial statements.

Disclosures for Investments in Certain Entities that Calculate NAV per Share. In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (“ASU 2015-07”). ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value (“NAV”) per share practical expedient. The Company early adopted ASU 2015-07 during 2015 on a retrospective basis, which required the restatement of prior periods. As a result of the adoption, $647 million and $692 million as of December 31, 2015 and 2014, respectively, of NAV investments are no longer included in Level 2 and 3 within the fair value hierarchy.

Cash and Cash Equivalents. Cash and cash equivalents primarily consists of cash, money market funds and short-term, highly liquid investments with original maturities of three months or less in which the Company is exposed to market and credit risk. Cash and cash

equivalent balances that are legally restricted from use by the Company are recorded in other assets on the consolidated statements of financial condition. Cash balances maintained by consolidated ~~sponsored investment funds~~VREs are not considered legally restricted and are

included in cash and cash equivalents on the consolidated statements of financial condition. Cash balances maintained by consolidated VIEs are included in assets of consolidated variable interest entities on the consolidated statements of financial condition.

Investments.Investments in Debt and Marketable Equity Securities. BlackRock ~~holds~~classifies debt and marketable equity investments ~~which pursuant to Accounting Standards Codification (“ASC”) 320-10,~~~~Investments – Debt and Equity Securities,~~ ~~are classified~~ as trading, available-for-sale, or held-to-maturity based on the Company’s intent to sell the security or, for a debt security, the Company’s intent and ability to hold the debt security to maturity.

Trading securities are those investments that are purchased principally for the purpose of selling them in the near term. Trading securities are carried at fair value on the consolidated statements of financial condition with changes in fair value recorded in nonoperating income (expense) on the consolidated statements of income in the period of the change.

Held-to-maturity debt securities are purchased with the positive intent and ability to be held to maturity and are recorded at amortized cost on the consolidated statements of financial condition.

Available-for-sale securities are those securities that are not classified as trading or held-to-maturity. Available-for-sale securities are carried at fair value on the consolidated statements of financial condition with changes in fair value recorded in the accumulated other comprehensive income (loss) component of stockholders’ equity in the period of the change. Upon the disposition of an available-for-sale security, the Company reclassifies the gain or loss on the security from accumulated other comprehensive income (loss) to nonoperating income (expense) on the consolidated statements of income.

Equity Method. For equity investments where BlackRock does not control the investee, and where it is not the primary beneficiary (“PB”) of a VIE, but can exert significant influence over the financial and operating policies of the investee, the Company follows the equity method of ~~accounting in accordance with ASC 323,~~~~Investments-Equity~~ ~~Method and Joint Ventures~~~~. Under the equity method of accounting,~~accounting. BlackRock’s share of the investee’s underlying net income or loss is recorded as net gain (loss) on investments within nonoperating income (expense) and as other revenue for certain strategic investments since such companies are considered to be an extension of BlackRock’s core business. BlackRock’s share of net income of the investee is recorded based upon the most current information available at the time, which may precede the date of the consolidated statement of financial condition. Distributions received from the investment reduce the Company’s carrying value of the investee and the cost basis if deemed to be a return of capital.

Cost Method. For nonmarketable equity investments where BlackRock neither controls nor has significant influence over the investee, the investments are accounted for using the cost method of accounting. ~~Under the cost method, dividends~~Dividends received from the investment are recorded as dividend income within nonoperating income (expense).

Impairments of Investments. ~~The Company’s management~~Management periodically assesses ~~its~~ equity method, available-for-sale, held-to-maturity and cost investments for ~~impairment.~~other-than-temporary impairment (“OTTI”). If

an OTTI exists, an impairment charge is recorded in nonoperating income (expense) on the consolidated statements of the income.

~~When~~For available-for-sale securities, when the fair value ~~of available-for-sale securities~~ is lower than cost, ~~the Company evaluates the securities to determine whether the impairment is considered “other-than-temporary.”~~

~~In making this determination for equity securities,~~ the Company considers, among other factors, the length of time the security has been in a loss position, the extent to which the security’s ~~market~~fair value is less than cost, the financial condition and near-term prospects of the security’s issuer and the Company’s ability and intent to hold the security for a length of time sufficient to allow for recovery of such unrealized losses. IfFor equity securities, if the impairment is considered other-than-temporary, an impairment charge is ~~recorded in nonoperating income (expense) on~~recognized for the ~~consolidated statements~~excess of ~~income.~~

~~In making this determination for~~the carrying amount of the investment over its fair value. For debt securities, the Company considers whether: (1) it has the intent to sell the ~~security,~~security; (2) it is more likely than not that it will be required to sell the security before ~~recovery~~recovery; or (3) it expects to recover the entire amortized cost basis of the security. If the Company intends to sell the security or it is more likely than not that it will be required to sell the security, the entire difference between the amortized cost and fair value must be recognized in earnings. If the Company does not intend to sell a security and it is not more likely than not that it will be required to sell the security but the security has suffered aan impairment related to credit, ~~loss,~~ the credit loss will be bifurcated from the total ~~impairment~~decline in value and recorded in earnings with the remaining portion recorded in accumulated other comprehensive income.

Consolidation.~~For~~The Company performs an analysis for investment products ~~in which BlackRock’s voting interest is less than 50%, an analysis is performed~~ to determine if the ~~investment~~ product is a VIE or a VRE. Assessing whether an entity is a VIE or a VRE involves judgment and analysis. Factors considered in this assessment include the entity’s legal organization, the entity’s capital structure and equity ownership, and any related party or de facto agent implications of the Company’s involvement with the entity. Investments that are determined to be VIEs are consolidated if the Company is the PB of the entity. VREs are typically consolidated if the Company holds the majority voting ~~rights~~interest. Upon the occurrence of certain events (such as contributions and redemptions, either by the Company, or third parties, or amendments to the governing documents of the Company’s investment products), management reviews and reconsiders its previous conclusion regarding the status of an entity as a VIE or a VRE. Additionally, management continually reconsiders whether the Company is deemed to be a VIE’s PB that consolidates such entity.

Consolidation of Variable Interest Entities. ~~Pursuant to ASC 810,~~~~Consolidation~~~~(“ASC 810”), certain~~Certain investment products for which ~~the risks and rewards of ownership~~a controlling financial interest is achieved through arrangements that do not involve or are not directly linked to voting interests ~~may be~~are deemed VIEs. BlackRock reviews factors, including whether or not i) the ~~rights of~~entity has equity that is sufficient to permit the entity to finance its activities without additional subordinated support from other parties and ii) the equity holders ~~and obligations of equity holders~~at risk have the obligation to absorb losses, orthe right to receive ~~expected~~ residual returns, and the right to direct the activities of

the entity that most significantly impact the entity’s economic performance, to determine if the investment product is a VIE. BlackRock ~~continuously evaluates~~re-evaluates such factors as facts and circumstances change. ~~BlackRock is required~~

Prior to ~~consolidate~~the adoption of ASU 2015-02, the Company used two methods for determining whether it was the PB of a VIE ~~when it is~~depending on the nature and characteristics of the entity. For CLOs, the Company was deemed to be the ~~PB.~~

~~Accounting Standards Update (“ASU”) 2010-10,~~~~Amendments to Statement 167 for Certain Investment Funds~~~~(“ASU 2010-10”), defers the application of Statement of Financial Accounting Standards (“SFAS”) No. 167,~~~~Amendments to FASB Interpretation No. 46(R),~~~~for certain investment funds, including money market funds.~~

~~The~~ PB ~~of a VIE that does not meet the conditions of ASU 2010-10 is the enterprise that has~~if it had the power to direct activities of the entity that most significantly ~~impact~~impacted the entity’s economic performance and ~~has~~had the obligation to absorb losses or the right to receive benefits that potentially could be significant to the VIE.

~~The~~ For certain sponsored investment funds, the Company was deemed to be the PB ~~of a VIE that meets the conditions of ASU 2010-10 is the enterprise that has a variable interest (or combination of variable interests, including those of related parties) that~~

~~absorbs~~if it absorbed the majority of the entity’s expected losses, ~~receives~~received a majority of the entity’s expected residual returns, or both.

Following the adoption of ASU 2015-02, all VIEs are evaluated for consolidation under a single method. The PB of a VIE is defined as the variable interest holder that has a controlling financial interest in the VIE. A controlling financial interest is defined as (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that potentially could be significant to the VIE. The consolidation analysis can generally be performed qualitatively, however, if it is not readily apparent that the Company is not the PB, a quantitative analysis may also be performed.

Consolidation of Voting Rights Entities. ToBlackRock is required to consolidate an investee to the extent that BlackRock can exert control over the financial and operating policies of the investee, which generally exists if there is a greater than 50% ~~or greater~~ voting ~~interest or if partners or members of certain products do not have substantive rights, BlackRock consolidates the investee.~~equity interest.

The Company, as general partner or managing member of certain sponsored investment funds, generally is presumed to control funds that are limited partnerships or limited liability companies. Pursuant to ASC 810-20, ~~Control of Partnerships and Similar Entities~~ (“ASC 810-20”), the Company reviews such investment vehicles to determine if such a presumption can be overcome by determining whether other nonaffiliated partners or members of the limited partnership or limited liability company have the substantive ability to dissolve (liquidate) the investment vehicle, or to otherwise remove BlackRock as the general partner or managing member without cause based on an unaffiliated simple majority vote, or have other substantive participating rights. If the investment vehicle is not a VIE and the presumption of control is not overcome, BlackRock will consolidate the investment vehicle.

Retention of Specialized Investment Company Accounting Principles. Upon consolidation of ~~certain~~ sponsored investment funds, the Company retains the specialized investment company accounting principles of the underlying ~~funds pursuant to ASC 810.~~funds. All of the underlying investments held by such consolidated sponsored investment funds are carried at fair value with corresponding changes in the investments’ fair values reflected in nonoperating income (expense) on the consolidated statements of income. When the Company no longer controls these funds due to reduced ownership percentage or other reasons, the funds are deconsolidated and accounted for ~~under another accounting~~as an equity method investment, available-for-sale security or trading investment if the Company still maintains an investment.

Money Market Fee Waivers. The Company is currently voluntarily waiving a portion of its management fees on certain money market funds to ensure that they maintain a minimum level of daily net investment income (the “Yield Support waivers”). During 2015, these waivers resulted in a reduction of management fees of approximately $137 million. Approximately 50% of Yield Support waivers were offset by a reduction of BlackRock’s distribution and servicing costs paid to a financial intermediary. BlackRock has provided Yield Support waivers in prior periods and may increase or decrease the level of fee waivers in future periods.

Separate Account Assets and Liabilities. Separate account assets are maintained by BlackRock Life Limited, a wholly owned subsidiary of the Company, which is a registered life insurance company in the United Kingdom, and represent segregated assets held for purposes of funding individual and group pension contracts. The life insurance company does not underwrite any insurance contracts that involve any insurance risk transfer from the insured to the life insurance company. The separate account assets primarily include equity securities, debt securities, money market funds and derivatives. The separate account assets are not subject to general claims of the creditors of BlackRock. These separate account assets and the related equal and offsetting liabilities are recorded as separate account assets and separate account liabilities on the consolidated statements of financial ~~condition in accordance with ASC 944-80,~~~~Financial Services – Separate Accounts.~~condition.

The net investment income attributable to separate account assets supporting individual and group pension contracts accrues directly to the contract owner and is not reported on the consolidated statements of income. While BlackRock has no economic interest in these separate account assets and liabilities, BlackRock earns policy administration and management fees associated with these products, which are included in investment advisory, administration fees and securities lending revenue on the consolidated statements of income.

Separate Account Collateral Assets Held and Liabilities Under Securities Lending Agreements. The Company facilitates securities lending arrangements whereby securities held by separate ~~account assets~~accounts maintained by BlackRock Life Limited are lent to third parties under global master securities lending agreements. In exchange, the Company receives legal title to the collateral with minimum values generally ranging from approximately 102% to 112% of the value of the securities lent in order to reduce counterparty risk. The required collateral value is calculated on a daily basis. The global master securities lending agreements provide the Company the right to request additional collateral or, in the event of borrower default, the right to liquidate collateral. ~~Under the Company’s securities lending arrangements, the Company can resell or repledge the collateral and the borrower can resell or repledge the loaned securities.~~ The securities lending transactions entered into by the Company are accompanied by an agreement that entitles the Company to request the borrower to return the securities at any time; therefore, these transactions are not reported as sales ~~under ASC 860,~~~~Transfers and Servicing.~~

~~As a result of the Company’s ability to resell or repledge the collateral, the~~The Company records on the consolidated statements of financial condition the cash and noncash collateral received under these BlackRock Life Limited securities lending arrangements as its own asset in addition to an equal and offsetting collateral liability for the obligation to return the collateral. During ~~2013~~2015 and ~~2012,~~2014, the Company had not resold or repledged any of the collateral received under these arrangements. At December 31, ~~2013~~2015 and ~~2012,~~2014, the fair value of loaned securities held by separate ~~account assets~~accounts was approximately ~~$19.7~~$28.8 billion and ~~$21.0~~$30.6 billion, respectively, and the fair value of the collateral held under these securities lending agreements was approximately ~~$21.8~~$31.3 billion and ~~$23.0~~$33.7 billion, respectively.

~~Deferred Sales Commissions~~. The Company holds the rights to receive certain cash flows from sponsored mutual funds sold without a front-end sales charge (“back-end load shares”). The carrying value of these deferred mutual fund commissions is recorded within other assets on the consolidated statements of financial condition and is being amortized over periods between one and six years. The Company receives distribution fees from these funds and contingent deferred sales commissions (“CDSCs”) upon shareholder redemption of certain back-end load shares that are recorded within distribution fees on the consolidated statements of income. Upon receipt of CDSCs, the Company records revenue and the remaining unamortized deferred sales commission is expensed.

The Company periodically reviews the carrying value of deferred commission assets to determine whether a significant decline in the AUM of these funds or other events or circumstances indicate that an impairment may have occurred. If indicators of a potential impairment exist, the Company compares the carrying value of the asset to the estimated future net undiscounted cash flows related to the asset. If such assessments indicate that the estimated future net undiscounted cash flows will not be sufficient to recover the remaining carrying value, the assets are adjusted to their estimated fair value. No such impairments were recorded for 2013, 2012 and 2011.

Property and Equipment. Property and equipment are recorded at cost less accumulated depreciation. Depreciation is generally determined by cost less any

estimated residual value using the straight-line method over the estimated useful lives of the various classes of property and equipment. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life or the remaining lease term.

BlackRock develops a variety of risk management, investment analytic and investment system services for internal use, utilizing proprietary software that is hosted and maintained by BlackRock. ~~In accordance with ASC 350-40,~~~~Internal-Use Software~~ ~~(“ASC 350-40”), the~~The Company capitalizes certain costs incurred in connection with developing or obtaining software for internal use. Capitalized software costs are included within property and equipment on the consolidated statements of financial condition and are amortized, beginning when the software project is ~~put into production,~~ready for its intended use, over the estimated useful life of the software of approximately three years.

Goodwill and Intangible Assets. Goodwill represents the ~~excess~~ cost of a business acquisition ~~over~~in excess of the fair value of the net ~~identifiable~~ assets acquired. The Company has determined that it has one reporting unit for goodwill impairment testing purposes, the consolidated BlackRock single

operating segment, which is consistent with internal management reporting and management's oversight of operations. In its assessment of goodwill for impairment, the Company considers such factors as the book value and market capitalization of the Company.

On a quarterly basis, the Company considers if triggering events have occurred that may indicate a potential goodwill impairment. If a triggering event has occurred, the Company performs assessments, which may include reviews of significant valuation assumptions, to determine if goodwill may be impaired. The Company performs an impairment assessment of its goodwill at least annually as of July ~~31st.~~31^st.

Intangible assets are comprised of indefinite-lived intangible assets and finite-lived intangible assets acquired in a business acquisition. The value of contracts to manage assets in proprietary open-end funds and collective trust funds and certain other commingled products without a specified termination date is generally classified as indefinite-lived intangible assets. The assignment of indefinite lives to such contracts primarily is based upon the following: (i) the assumption that there is no foreseeable limit on the contract period to manage these products; (ii) the Company expects to, and has the ability to, continue to operate these products indefinitely; (iii) the products have multiple investors and are not reliant on a single investor or small group of investors for their continued operation; (iv) current competitive factors and economic conditions do not indicate a finite life; and (v) there is a high likelihood of continued renewal based on historical experience. In addition, trade names/trademarks are considered indefinite-lived intangible assets when they are expected to generate cash flows indefinitely.

~~In accordance with ASC 350,~~~~Intangibles – Goodwill and Other~~~~(“ASC 350”), indefinite-lived~~Indefinite-lived intangible assets and goodwill are not amortized. ~~The value of~~Finite-lived management contracts, ~~for separately managed~~which relate to acquired separate accounts ~~(“SMAs”)~~ and ~~certain~~ funds ~~that have finite lives~~with a specified termination date, are amortized over ~~the expected lives of the management contracts.~~their remaining useful lives.

The Company performs assessments to determine if any intangible assets are potentially impaired and whether the ~~indefinite-life~~indefinite-lived and ~~finite-life~~finite-lived classifications are still appropriate. The carrying value of finite-lived management contracts and their remaining useful lives are reviewed at least annually to determine if circumstances exist which may indicate a potential ~~impairment.~~impairment or revisions to the amortization period. The Company performs ~~such~~ impairment assessments of all of its intangible assets

~~including indefinite-lived management contracts and trade names/trademarks,~~ at least annually, as of July 31^st.

In evaluating whether it is more likely than not that the fair value of indefinite-lived intangibles is less than its carrying value, BlackRock assesses various significant qualitative factors, including assets under management (“AUM”), revenue basis points, projected AUM growth rates, operating margins, tax rates and discount rates. In addition, the Company considers other factors, including (i) macroeconomic conditions such as a deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets; (ii) industry and market considerations such as a deterioration in the environment in which anthe entity operates, an increased competitive environment, a decline in market-dependent multiples or metrics, a change in the market for an entity’s services, or regulatory, legal or political developments; and (iii) entity-specific events, such as a change in management or key personnel, overall financial performance and litigation that could affect significant ~~inputs.~~inputs used to determine the fair value of the indefinite-lived intangible asset. If an indefinite-lived intangible is determined to be more likely than not impaired, then the fair value of the asset is compared with its carrying value and any excess of the carrying value over the fair value would be recognized as an expense in the period in which the impairment occurs.

IfFor finite-lived intangible assets, if potential impairment circumstances are considered to exist, the Company will perform ~~an impairment~~a recoverability test using an undiscounted cash flow analysis. Actual results could differ from these cash flow estimates, which could materially impact the impairment conclusion. If the carrying value of the asset is determined not to be ~~impaired,~~recoverable based on the undiscounted cash flow test, the difference between the carrying value of the asset and its current fair value would be recognized as an expense in the period in which the impairment occurs.

Noncontrolling Interests. The Company reports noncontrolling interests as equity, separate from the parent’s equity, on the consolidated statements of financial condition. In addition, the Company’s consolidated net income on the consolidated statements of income includes the income (loss) attributable to noncontrolling interest holders of the Company’s consolidated ~~sponsored~~ investment ~~funds and collateralized loan obligations (“CLOs”).~~products. Income (loss) attributable to noncontrolling interests is not adjusted for income taxes for consolidated ~~sponsored~~ investment ~~funds and CLOs~~products that are treated as pass-through entities for tax purposes.

Classification and Measurement of Redeemable Securities. The Company includes redeemable noncontrolling interests related to certain consolidated ~~sponsored~~ investment ~~funds~~products in temporary equity on the consolidated statements of financial condition.

~~Appropriated Retained Earnings~~. Upon the initial consolidation of CLOs, BlackRock records an adjustment to appropriated retained earnings on the consolidated statements of financial condition equal to the difference between the fair value of the CLOs’ assets and the fair value of their liabilities. Such amounts are recorded as appropriated retained earnings as the CLO noteholders ultimately will receive the benefits or absorb the losses associated with the CLOs’ assets and liabilities. The net change in the fair value of the CLOs’ assets and liabilities is recorded as net income (loss) attributable to nonredeemable noncontrolling interests and as a change to appropriated retained earnings.

Treasury Stock. The Company records common stock purchased for treasury at cost. At the date of subsequent reissuance, the treasury stock account is reduced by the cost of such stock using the average cost method.

Revenue Recognition

Investment Advisory, Administration Fees and Securities Lending Revenue. Investment advisory and administration fees are recognized as the services are performed. Such fees are primarily based on pre-determined percentages of the market value of AUM or committed capital. Investment advisory and administration fees are affected by changes in AUM, including market appreciation or depreciation, foreign exchange translation and net ~~subscriptions~~inflows or ~~redemptions.~~outflows. Investment advisory and administration fees for investment funds are shown net of fees waived pursuant to contractual expense limitations of the funds or voluntary waivers.

The Company contracts with third parties and related parties for various mutual fund distribution and shareholder servicing to be performed on behalf of certain funds the Company manages. Such arrangements generally are priced as a portion of the management fee paid by the fund. In certain cases, the fund (primarily international funds) takes on the primary responsibility for payment for services such that the Company bears no credit risk to the ~~third party.~~third-party. The Company accounts for such retrocession arrangements in accordance with ~~ASC~~Accounting Standards Codification (“ASC”) 605-45,Revenue Recognition – Principal Agent Considerations,and records its management fees net of retrocessions. Retrocessions for 2015, 2014 and 2013 ~~2012 and 2011~~ were ~~$785~~$870 million, ~~$793~~$891 million and ~~$928~~$785 million, respectively, and were reflected net in investment advisory, administration fees and securities lending revenue on the consolidated statements of income.

The Company also earns revenue by lending securities as an agent on behalf of clients, primarily to brokerage institutions. ~~Such revenues are~~Revenue is accounted for on an accrual basis. The revenue earned is shared between the Company and the funds or other third-party accounts managed by the Company from which the securities are borrowed.

Investment Advisory Performance Fees / Carried Interest. The Company receives investment advisory performance fees or an incentive ~~allocation~~allocations from certain actively managed investment funds and certain ~~SMAs.~~separately managed accounts (“SMAs”). These performance fees are ~~earned~~dependent upon exceeding specified relative or absolute investment return thresholds. Such fees are recorded upon completion of the measurement period, which varies by product or ~~account.~~account, and could be monthly, quarterly, annually or longer.

~~The~~In addition, the Company ~~may receive~~is allocated carried interest from certain alternative ~~investments~~investment products upon exceeding performance thresholds. BlackRock may be required to reverse/return all, or part, of such carried interest allocations depending upon future performance of these ~~investments.~~funds. Therefore, BlackRock records carried interest subject to such clawback provisions in total investments or cash/cash ~~on the~~of consolidated ~~statements of financial condition~~VIEs to the extent that it is ~~distributed.~~distributed, on its consolidated statements of financial condition. Carried interest is ~~realized and~~ recorded as performance fee revenue upon the earlier of the termination of the investment fund or when the likelihood of clawback is considered mathematically improbable.

A portion of the deferred carried interest liability will be paid to certain employees. The ultimate timing of the recognition of performance fee revenue, if any, for these products is unknown.

BlackRock Solutions and Advisory. BlackRock provides a variety of risk management, investment analytic, enterprise investment system and financial markets advisory services to financial institutions, pension funds, asset managers, foundations, consultants, mutual fund sponsors, real estate investment trusts and government agencies. These services are provided under the brand nameBlackRock Solutions^® and include a wide array of risk management services, valuation of illiquid securities, disposition and workout assignments (including long-term portfolio liquidation assignments), strategic planning and execution, and enterprise investment system outsourcing to clients. Fees earned forBlackRock Solutionsand advisory services are recorded as services are performed and are determined using some, or all, of the following methods: (i) percentages of various attributes of advisory AUM or value of positions on theAladdin^® platform, (ii) fixed fees and (iii) performance fees if contractual thresholds are met. The fees earned forBlackRock Solutionsand advisory services are recorded inBlackRock Solutionsand advisory on the consolidated statements of income.

Other Revenue. The Company earns fees for transition management services comprised of commissions from acting as an introducing broker-dealer in buying and selling securities on behalf of the Company’s customers. Commissions related to transition management services are recorded on a trade-date basis as securities transactions occur and are reflected in other revenue on the consolidated statements of income.

The Company earns commissions revenue upon the sale of unit trusts and Class A mutual funds. Revenue is recorded at the time of the sale of the product.

Other revenue also includes equity method investment earnings related to certain strategic ~~investments and marketing fees earned for services to distribute~~~~iPath~~^® ~~products, which are exchange-traded notes issued by Barclays.~~investments.

Stock-based Compensation. ~~The Company applies ASC 718-10,~~~~Compensation – Stock Compensation~~~~(“ASC 718-10”), which establishes standards for the accounting of transactions in which an entity obtains employee services in share-based payment transactions.~~ Entities are required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The compensation cost is recognized over the period during which an employee is required to provide service (usually the vesting period) in exchange for the stock-based award.

The Company measures the grant-date fair value of restricted stock units (“RSUs”) using the Company’s share price on the date of grant. For employee share options and instruments with market conditions, the Company uses pricing models. If an equity award is modified after the ~~grant date,~~grant-date, incremental compensation cost is recognized for an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. Awards under the Company’s stock-based compensation plans vest over various periods. Compensation cost is recorded by the Company on a straight-line basis over the requisite service period for each separate vesting portion of the award as if the award is, in-substance, multiple awards. Compensation cost is reduced by the number of awards expected to be forfeited prior to

vesting. Forfeiture estimates generally are derived using historical forfeiture information, where available, and are reviewed for reasonableness at least quarterly.

The Company amortizes the grant-date fair value of stock-based compensation awards made to retirement-eligible employees over the requisite service period. Upon notification of retirement, the Company accelerates the unamortized portion of the award over the contractually required retirement notification ~~period, if applicable.~~period.

Distribution and Servicing Costs. Distribution and servicing costs include payments to third parties, primarily associated with distribution and servicing of client investments in certain BlackRock products. Distribution and servicing costs are expensed when incurred.

Amortization of Deferred Sales Commissions. The Company holds the rights to receive certain cash flows from sponsored mutual funds sold without a front-end sales charge (“back-end load shares”). The carrying value of these deferred mutual fund commissions is recorded within other assets on the consolidated statements of financial condition and is being amortized over periods between one and six years. The Company receives distribution fees from these funds and contingent deferred sales commissions (“CDSCs”) upon shareholder redemption of certain back-end load shares that are recorded within distribution fees on the consolidated statements of income. Upon receipt of CDSCs, the Company records revenue and the remaining unamortized deferred sales commission is expensed.

Direct Fund Expenses. Direct fund expenses, which are expensed as incurred, primarily consist of third-party nonadvisory expenses incurred by BlackRock related to certain funds for the use of certain index trademarks, reference data for certain indices, custodial services, fund administration, fund accounting, transfer agent services, shareholder reporting services, audit and tax services as well as other fund-related expenses directly attributable to the nonadvisory operations of the fund.

Leases. The Company accounts for its office facilities leases as operating leases, which may include escalation ~~clauses, in accordance with ASC 840-10,~~~~Leases~~.clauses. The Company expenses the lease payments associated with operating leases evenly during the lease term (including rent-free periods) commencing when the Company obtains the right to control ~~over~~the use of the leased property.

Foreign Exchange. Foreign currency transactions are recorded at the exchange rates prevailing on the dates of the transactions. Monetary assets and liabilities ofthat are denominated in foreign ~~subsidiaries having non-U.S. dollar~~currencies are subsequently remeasured into the functional currencies ~~are translated at exchange rates~~of the Company's

subsidiaries at the ~~date of~~rates prevailing at each balance sheet date. Gains and losses arising on remeasurement are included in general and administration expense on the consolidated statements of ~~financial condition. Nonmonetary assets and liabilities of foreign subsidiaries having non-U.S. dollar functional currencies are translated at historical exchange rates.~~income. Revenue and expenses are translated at average exchange rates during the period. Gains or losses resulting from translating foreign currency financial statements into U.S. dollars are included in accumulated other comprehensive income, a separate component of stockholders’ equity, on the consolidated statements of financial condition. Gains or losses resulting from foreign currency transactions are included in general and administration expense on the consolidated statements of income. For 2013, 2012 and 2011, the gains (losses) from foreign currency transactions were immaterial.

Income Taxes~~. The Company accounts for income taxes under the asset and liability method prescribed by ASC 740-10,~~~~Income Taxes~~~~(“ASC 740-10”)~~. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using currently enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized inon the consolidated statements of income in the period that includes the enactment date.

Management periodically assesses the recoverability of its deferred income tax assets based upon expected future earnings, taxable income in prior carryback years, future

deductibility of the asset, changes in applicable tax laws and other factors. If management determines that it is not more likely than not that the deferred tax asset will be fully recoverable in the future, a valuation allowance will be established for the difference between the asset balance and the amount expected to be recoverable in the future. This allowance will result in additional income tax expense. Further, the Company records its income taxes receivable and payable based upon its estimated income tax position.

Excess tax benefits related to stock-based compensation are recognized as additional paid-in capital and are reflected as financing cash flows on the consolidated statements of cash flows. If the Company does not have additional paid-in capital credits (cumulative tax benefits recorded to additional paid-in capital), the Company will record an expense for any deficit, or shortfall, between the recorded tax benefit and tax return benefit. At December 31, ~~2013~~2015 and ~~2012,~~2014, BlackRock had excess additional paid-in capital credits to absorb potential future deficits between recorded tax benefits and tax return benefits.

Earnings per Share (“EPS”). Basic EPS is calculated by dividing net income applicable to common shareholders by the weighted-average number of shares outstanding during the period. Diluted EPS includes the determinants of basic EPS and common stock equivalents outstanding during the period. Diluted EPS is computed using the treasury stock method.

Due to the similarities in terms between BlackRock’s nonvoting participating preferred stock and the Company’s common stock, the Company considers its nonvoting participating preferred stock to be a common stock equivalent for purposes of EPS calculations. As such, the Company has included the outstanding nonvoting participating preferred stock in the calculation of average basic and diluted shares outstanding.

~~Prior to 2013, the Company calculated EPS pursuant to the two-class method as defined in ASC 260-10,~~~~Earnings per Share~~ (“ASC 260-10”), which specifies that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends or dividend equivalents are considered participating securities and should be included in the computation of EPS. The Company’s participating securities consisted of its unvested share-based payment awards that contained rights to nonforfeitable dividends or dividend equivalents. The dilutive effect of participating securities was calculated under the more dilutive of either the treasury stock method or the two-class method. The Company’s remaining participating securities vested in January 2013.

Business Segments. The Company’s management directs BlackRock’s operations as one business, the asset management business. The Company utilizes a consolidated approach to assess performance and allocate resources. As such, the Company operates in one business segment as defined in ASC 280-10,Segment Reporting (“ASC 280-10”).

~~Business Combinations~~~~. The Company accounts for business combinations in accordance with the requirements of ASC 805,~~~~Business Combinations~~ (“ASC 805”). The fundamental requirement of ASC 805 is that the acquisition method of accounting (the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. The provisions of ASC 805 define the acquirer, establish the acquisition date and define transactions that qualify as business combinations.

Additionally, the requirements of ASC 805 provide guidance for measuring the fair value of assets acquired, liabilities assumed and any noncontrolling interest in the acquiree, provide guidance for the measurement of fair value in a step acquisition, provide guidance for recognizing assets acquired and liabilities assumed subject to contingencies, provide guidance on recognition and measurement of contingent consideration and require that acquisition-related costs of the acquirer generally be expensed as incurred. Reversal of valuation allowances related to acquired deferred tax assets and changes to liabilities for unrecognized tax benefits related to tax positions assumed in business combinations subsequent to the adoption of the requirements of ASC 805, will affect the income tax provision in the period of reversal or change.

Fair Value Measurements.

Hierarchy of Fair Value Inputs. The ~~provisions of ASC 820,~~~~Fair Value Measurement~~ ~~(“ASC 820”), establish~~Company uses a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair ~~value and require companies to disclose the fair value of their financial instruments according to the fair value hierarchy (i.e., Level 1, 2 and 3 inputs, as defined).~~value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories:

Level 1 Inputs:

Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date.

Level 1 assets may include listed mutual funds, (including those accounted for under the equity method of accounting as these mutual funds are investment companies that have publicly available net asset values (“NAVs”), which in accordance with GAAP, are calculated under fair value measures and the changes in fair values are equal to the earnings of such funds), ETFs, listed equities and certain exchange-traded derivatives.

Level 2 Inputs:

Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; quotes from pricing services or brokers for which the Company can determine that orderly transactions took place at the quoted price or that the inputs used to arrive at the price are observable; and inputs other than quoted prices that are observable, such as models or other valuation methodologies. ~~As a practical expedient, the Company relies on the NAV (or its equivalent) of certain investments as their fair value.~~

Level 2 assets may include debt securities, bank loans, short-term floating-rate notes, ~~and~~ asset-backed securities, securities held within consolidated hedge funds, certain equity method limited partnership interests in hedge funds valued based on NAV (or its equivalent) where the Company has the ability to redeem at the measurement date or within the near term without redemption restrictions, restricted public securities valued at a discount, as well as over-the-counter derivatives, including interest and inflation rate swaps and foreign currency exchange contracts that have inputs to the valuations that generally can be corroborated by observable market data.

Level 3 Inputs:

Unobservable inputs for the valuation of the asset or liability, which may include nonbinding broker quotes. Level 3 assets include investments for which there is little, if any, market activity. These inputs require significant management judgment or estimation. ~~Certain investments that are valued using a NAV (or its equivalent) and are subject to current redemption restrictions that will not be lifted in the near term are included in Level 3.~~

Level 3 assets may include ~~general and limited partnership interests in private equity funds, funds of private equity funds, real estate funds, hedge funds and funds of hedge funds,~~ direct private equity investments held within consolidated funds, investments in CLOs, bank loans and bonds.

Level 3 liabilities include contingent liabilities related to acquisitions valued based upon discounted cash flow analysis using unobservable market data. Level 3 liabilities at December 31, 2014 also included borrowings of consolidated ~~collateralized loan obligations~~CLOs valued based upon nonbinding single-broker quotes.

Level 3 inputs include BlackRock capital accounts for its partnership interests in various alternative investments, including distressed credit hedge funds, real estate and private equity funds, which may be adjusted by using the returns of certain market indices.

Significance of ~~Inputs~~.Inputs. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Valuation Techniques. The fair values of certain Level 3 assets and liabilities were determined using various methodologies as appropriate, including ~~NAVs of underlying investments,~~ third-party pricing vendors, broker quotes and market and income approaches. Such quotes and modeled prices are evaluated for

reasonableness through various procedures, including due diligence reviews of third-party pricing vendors, variance analyses, consideration of the current market environment and other analytical procedures.

As a practical expedient, the Company relies on NAV as the fair value for certain investments. The inputs to value these investments may include BlackRock capital accounts for its partnership interests in various alternative investments, including distressed credit hedge funds, real estate and private equity funds, which may be adjusted by using the returns of certain market indices. The various partnerships generally are investment companies, which record their underlying investments at fair value based on fair value policies established by management of the underlying fund. Fair value policies at the underlying fund generally require the fund to utilize pricing/valuation information from third-party sources, including independent appraisals. However, in some instances, current valuation information for illiquid securities or securities in markets that are not active may not be available from any third-party source or fund management may conclude that the valuations that are available from third-party sources are not reliable. In these instances, fund management may perform model-based analytical valuations that may be used as an input to value these investments.

A significant ~~amount~~number of inputs used to value equity, debt securities and bank loans is sourced from ~~well-recognized~~ third-party pricing vendors. Generally, prices obtained from pricing vendors are categorized as Level 1 inputs for identical

securities traded in active markets and as Level 2 for other similar securities if the vendor uses observable inputs in determining the price. Annually, BlackRock’s internal valuation committee or other designated groups review both the valuation methodologies, including the general assumptions and methods used to value various asset classes, and operational processes with these vendors. On a quarterly basis, meetings are held with key vendors to identify any significant changes to the vendors’ processes.

In addition, quotes obtained from brokers generally are nonbinding and categorized as Level 3 inputs. However, if the Company is able to determine that market participants have transacted for the asset in an orderly manner near the quoted price or if the Company can determine that the inputs used by the broker are observable, the quote is classified as a Level 2 input.

~~Fair Value Option~~~~. ASC 825-10,~~~~Financial Instruments~~ ~~(“ASC 825-10”), provides~~Investments Measured at Net Asset Values. As a practical expedient, the Company uses NAV as the fair value ~~option election that allows companies an irrevocable election to use fair value as the initial and subsequent accounting measurement attribute~~ for certain ~~financial assets~~investments. The inputs to value these investments may include BlackRock capital accounts for its partnership interests in various alternative investments, including distressed credit hedge funds, opportunistic funds, real estate and ~~liabilities. ASC 825-10 permits entities to elect to measure eligible financial assets and liabilities~~private equity funds, which may be adjusted by using the returns of certain market indices. The various partnerships generally are investment companies, which record their underlying investments at fair value based on ~~an ongoing basis. Unrealized gains and losses on items for which the~~ fair value ~~option has been elected~~policies established by management of the underlying fund. Fair value policies at the underlying fund generally require the fund to utilize pricing/valuation information from third-party sources, including independent appraisals. However, in some instances, current valuation information for illiquid securities or securities in markets that are ~~reported in earnings. The decision~~not active may not be available from any third-party source or fund management may conclude that the valuations that are available from third-party sources are not reliable. In these instances, fund management may perform model-based analytical valuations that may be used as an input to ~~elect the fair~~ value option is determined on an instrument-by-instrument basis, which must be applied to an entire instrument, and not only specified risks, specific cash flows, or portions of that instrument, and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to ASC 825-10 are required to be reported separately from those instruments measured using another accounting method.these investments.

Derivative Instruments and Hedging Activities. ~~ASC 815-10,~~~~Derivatives and Hedging~~ (“ASC 815-10”), establishes accounting and reporting standards for derivative instruments, including certain derivatives embedded in other contracts and for hedging activities. ASC 815-10 generally requires an entity to recognize all derivatives as either assets or liabilities on the consolidated statements of financial condition and to measure those investments at fair value.

The Company does not use derivative financial instruments for trading or speculative purposes. The Company ~~may use~~uses derivative financial instruments primarily for purposes of ~~hedging: (i)~~hedging exposures to fluctuations in foreign currency exchange rates of certain assets and liabilities, ~~(ii)~~and market exposures for certain seed ~~investments and (iii) future cash flows on floating-rate notes.~~investments. The Company may also use derivatives within its separate account assets, which are segregated ~~funds held~~ for purposes of funding individual and group pension contracts. In addition, certain consolidated sponsored investment funds may also invest in derivatives as a part of their investment strategy.

Changes in the fair value of the Company’s derivative financial instruments are ~~generally~~ recognized in earnings and, where applicable, are offset by the corresponding gain or loss on the related foreign-denominated assets or liabilities or hedged investments, on the consolidated statements of income.

~~Accounting Pronouncements Adopted~~The Company may also use financial instruments designated as net investment hedges for accounting purposes to hedge net investments in ~~2013~~

~~Amendments to Accumulated Other Comprehensive Income Disclosures.~~ ~~On February 5, 2013,~~international subsidiaries whose functional currency is different from the ~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-02,~~~~Reporting~~reporting currency of ~~Amounts Reclassified Out~~the parent company. The gain or loss from revaluing accounting hedges of ~~Accumulated Other Comprehensive Income~~ ~~(“ASU 2013-02”), which added new disclosure requirements for items reclassified out of~~net investments in foreign operations at the spot rate is deferred and reported within accumulated other comprehensive income ~~(“AOCI”). See Note 18,~~~~Accumulated Other Comprehensive Income (Loss)~~.

~~Disclosures About Offsetting Assets and Liabilities.~~ ~~On December 16, 2011, the FASB issued ASU 2011-11,~~~~Disclosures About Offsetting Assets and Liabilities~~ (“ASU 2011-11”), which created new disclosure requirements about the nature of an entity’s rights of setoff and related arrangements associated with its financial instruments and derivative instruments. On January 31, 2013, the FASB issued ASU 2013-01,~~Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities~~~~(“ASU 2013-01”), that provides clarification about which instruments and transactions are subject to ASU 2011-11. The adoption of ASU 2011-11 and ASU 2013-01~~ on ~~January 1, 2013 was not material to~~ the consolidated statements of financial ~~statements.~~condition. The Company reassesses the effectiveness of its net investment hedge on a quarterly basis.

Recent Accounting Pronouncements Not Yet Adopted

~~Cumulative Translation Adjustment.~~Revenue from Contracts with Customers. In ~~March 2013,~~May 2014, the FASB issued ASU ~~2013-05,~~~~Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity~~ (“2014-09, Revenue from Contracts with Customers (“ASU ~~2013-05”~~2014-09”). ASU ~~2013-05 addresses the~~2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The Company is currently evaluating the ~~cumulative translation adjustment when a parent either sells a part or all~~impact of ~~its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that~~adopting ASU 2014-09, which is ~~a nonprofit activity or a business within a foreign entity. ASU 2013-05 became~~ effective for the Company on January 1, ~~2014. The Company does not believe the adoption of ASU 2013-05 will have a material impact on the consolidated financial statements.~~2018.

~~Investment Company Guidance.~~Accounting for Measurement-Period Adjustments.In ~~June 2013,~~September 2015, the FASB issued ASU ~~2013-08,~~~~Financial Services — Investment Companies: Amendments~~2015-16, Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”). Under ASU 2015-16, an acquirer must recognize, upon determination, adjustments to the ~~Scope,~~original amounts recorded for a business acquisition that are identified during the one-year period following the acquisition date. Previously prior period information was required to be revised. The Company adopted ASU 2015-16 prospectively on January 1, 2016 and will apply the ASU to any adjustments related to business acquisitions.

Recognition and Measurement of Financial Instruments.In January 2016, the FASB issued ASU 2016-01, Recognition and ~~Disclosure Requirements~~Measurement of Financial Assets and Financial Liabilities (“ASU ~~2013-08”~~2016-01”). ASU ~~2013-08~~2016-01 amends guidance on the ~~current criteria~~classification and measurement of financial instruments, including significant revisions in accounting related to the classification and measurement of investments in equity securities and presentation of certain fair value changes for ~~an entity to qualify as an investment company, creates new~~financial liabilities when the fair value option is elected. ASU 2016-01 also amends certain disclosure requirements ~~and amends~~associated with the ~~measurement criteria for certain interests in other investment companies.~~fair value of financial instruments. The Company is currently evaluating the impact of adopting ASU ~~2013-08 became~~2016-01, which is effective for the Company on January 1, ~~2014. The Company does not believe the adoption of ASU 2013-08 will have a material impact on the consolidated financial statements.~~2018.

~~Presentation of an Unrecognized Tax Benefit.~~ Leases. In ~~July 2013,~~February 2016, the FASB issued ASU ~~2013-11,~~~~Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists~~(“2016-02, Leases (“ASU ~~2013-11”~~2016-02”). ASU ~~2013-11 became~~2016-02 requires lessees to recognize assets and liabilities arising from most operating leases on the statement of financial position. The Company is currently evaluating the impact of adopting ASU 2016-02, which is effective for the Company on January 1, ~~2014. The Company does not believe the adoption of ASU 2013-11 will have a material impact on the consolidated financial statements.~~2019.

3. Investments

A summary of the carrying value of total investments is as follows:


(in millions)	December 31, 2013		December 31, 2012		December 31, 2015		December 31, 2014
Available-for-sale investments	$	183	$	158	$	44	$	201
Held-to-maturity investments		83		112		108		79
Trading investments:
Consolidated sponsored investment funds		385		123		700		443
Other equity and debt securities		43		94		20		29
Deferred compensation plan mutual funds		58		53		65		64
Total trading investments		486		270		785		536
Other investments:
Consolidated sponsored investment funds		441		401		-		270
Equity method investments		697		595		513		633
Deferred compensation plan hedge fund equity method investments		39		9
Deferred compensation plan equity method investments						14		21
Cost method investments⁽¹⁾		119		120		95		96
Carried interest		103		85		19		85
Total other investments		1,399		1,210		641		1,105
Total investments	$	2,151	$	1,750	$	1,578	$	1,921

(1)	Amounts primarily include Federal Reserve Bank ~~Stock~~(“FRB”) Stock.

At December 31, 2013, the Company consolidated $826 million of investments held by consolidated sponsored investment funds (excluding VIEs) of which $385 million and $441 million were classified as trading investments and other investments, respectively. At December 31, 2012, the Company consolidated $524 million of investments held by consolidated sponsored investment funds (excluding VIEs) of which $123 million and $401 million were classified as trading investments and other investments, respectively.

Available-for-Sale Investments

A summary of the cost and carrying value of investments classified as available-for-sale investments is as follows:

(in millions) Gross Unrealized
Carrying
Value

At December 31, 2013 Cost Gains Losses
Equity securities of sponsored investment funds
$ 180    $ 4    $ (4 ) $ 180
Other securities
1    2    — 3
Total available-for-sale investments
$ 181    $ 6    $ (4 ) $ 183
At December 31, 2012
Equity securities of sponsored investment funds
$ 142    $ 14    $ (1 ) $ 155
Other securities
2    1    — 3
Total available-for-sale investments
$ 144    $ 15    $ (1 ) $ 158

(in millions)			Gross Unrealized					Carrying
	Cost		Gains		Losses			Value
December 31, 2015	$	45	$	2	$	(3	)	$	44

December 31, 2014	$	205	$	5	$	(9	)	$	201

~~Available-for-sale~~

At December 31, 2015 available-for-sale investments primarily included investments in CLOs. At December 31, 2014, available-for-sale investments primarily included seed ~~investments~~investment in BlackRock sponsored ~~investment~~ mutual funds.

A summary of sale activity inof available-for-sale securities during ~~2013, 2012~~2015, 2014 and ~~2011~~2013 is shown below.


	Year ended December 31,									Year ended December 31,
(in millions)	2013			2012			2011			2015			2014			2013
Sales proceeds	$	139		$	134		$	44		$	36		$	155		$	139
Net realized gain (loss):
Gross realized gains	$	20		$	8		$	3		$	3		$	14		$	20
Gross realized losses		(1	)		(1	)		(2	)		(1	)		(3	)		(1	)
Net realized gain (loss)	$	19		$	7		$	1		$	2		$	11		$	19

Held-to-Maturity Investments

The carrying value of held-to-maturity investments was ~~$83~~$108 million and ~~$112~~$79 million at December 31, ~~2013~~2015 and ~~2012,~~2014, respectively. Held-to-maturity investments included foreign government debt held primarily for regulatory ~~purposes and the~~purposes. The amortized cost (carrying value) of these investments approximated fair value. At December 31, ~~2013, $69~~2015, $96 million of these investments mature in one year or less and ~~$14~~$12 million mature after 10five years through ten years.

Trading Investments

A summary of the cost and carrying value of trading investments is as follows:


	December 31, 2013				December 31, 2012				December 31, 2015				December 31, 2014
(in millions)	Cost		Carrying Value		Cost		Carrying Value		Cost		Carrying Value		Cost		Carrying Value
Trading investments:
Deferred compensation plan mutual funds	$	49	$	58	$	46	$	53	$	48	$	65	$	48	$	64
Equity/Multi-asset mutual funds		174		184		154		162
Equity securities/multi-asset mutual funds									294		279			210		239
Debt securities/fixed income mutual funds:
Corporate debt		128		128		44		44	194		190			109		110
Government debt		121		116		11		11	202		202			100		103
Asset/mortgage backed debt									49		49			20		20
Total trading investments	$	472	$	486	$	255	$	270	$	787	$	785	$	487	$	536

At December 31, ~~2013,~~2015, trading investments included ~~$172~~$437 million of ~~equity~~debt securities and ~~$213~~$263 million of ~~debt~~equity securities held by consolidated sponsored investment funds ~~$58~~accounted for as VREs, $65 million of certain deferred compensation plan mutual fund investments and ~~$43~~$20 million of other equity and debt securities.

At December 31, ~~2012,~~2014, trading investments included ~~$73~~$223 million of ~~equity~~debt securities and ~~$50~~$220 million of ~~debt~~equity securities held by consolidated sponsored investment funds ~~$53~~accounted for as VREs, $64 million of certain deferred compensation plan mutual fund investments and ~~$94~~$29 million of other equity and debt securities.

Other Investments

A summary of the cost and carrying value of other investments is as follows:


	December 31, 2013				December 31, 2012				December 31, 2015				December 31, 2014
(in millions)	Cost		Carrying Value		Cost		Carrying Value		Cost		Carrying Value		Cost		Carrying Value
Other investments:
Consolidated sponsored investment funds	$	420	$	441	$	378	$	401
Equity method		613		697		541		595
Consolidated sponsored investment funds accounted for as VREs									$	-	$	-	$	268	$	270
Equity method Investments									429		513			518		633
Deferred compensation plan equity method investments		37		39		15		9	14		14			21		21
Cost method investments:
Cost method investments:
Federal Reserve Bank stock		90		90		89		89	93		93			92		92
Other		17		29		31		31	2		2			4		4
Total cost method investments		107		119		120		120	95		95			96		96
Carried interest		—		103		—		85
Carried interest⁽¹⁾										—	19			—		85
Total other investments	$	1,177	$	1,399	$	1,054	$	1,210	$	538	$	641	$	903	$	1,105

~~Consolidated~~

(1)	Carried interest related to VREs.

At December 31, 2014, consolidated sponsored investment funds accounted for as VREs include third-party private equity funds, direct investments in private companies and third-party hedge funds held by BlackRock sponsored investment funds.

Equity method investments primarily include BlackRock’s direct ~~investment~~investments in certain BlackRock sponsored investment funds. See Note 11,Other Assets, for more information on the Company’s investment in PennyMac Financial Services, Inc. (“PennyMac”), which is included in other assets on the consolidated statements of financial condition.

Cost method investments include nonmarketable securities, ~~including Federal Reserve Bank (“FRB”)~~primarily FRB stock, which is held for regulatory purposes and is restricted from sale. At December 31, ~~2013~~2015 and ~~2012,~~2014, there were no indicators of impairment on these investments.

Carried interest represents allocations to BlackRock’s general partner capital accounts from certain funds. These balances are subject to change upon cash distributions, additional allocations or reallocations back to limited partners within the respective funds.

4. Consolidated ~~Sponsored Investment Funds~~Voting Rights Entities

The Company consolidates certain sponsored investment funds ~~primarily~~accounted for as VREs because it is deemed to control such funds. The investments owned by these consolidated ~~sponsored investment funds~~VREs are classified as trading or other investments. The following table presents the balances related to these consolidated ~~funds~~VREs that were ~~included~~recorded on the consolidated statements of financial condition, ~~as well as~~including BlackRock’s net interest in these funds:


(in millions)	December 31, 2013			December 31, 2012			December 31, 2015			December 31, 2014
Cash and cash equivalents	$	114		$	133		$	100		$	120
Investments:
Trading investments		385			123		700				443
Other investments		441			401			-			270
Other assets		20			25		18				20
Other liabilities		(39	)		(65	)		(77	)		(18	)
Noncontrolling interests		(189	)		(187	)		(125	)		(139	)
BlackRock’s net interests in consolidated investment funds	$	732		$	430
BlackRock’s net interests in consolidated VREs							$	616		$	696

BlackRock’s total exposure to consolidated ~~sponsored investment funds~~VREs represents the value of its economic ownership interest in these sponsored investment funds. Valuation changes associated with investments held at fair value by these consolidated ~~investment funds~~VREs are reflected in nonoperating income (expense) and partially offset in net income (loss) attributable to noncontrolling interests for the portion not attributable to BlackRock.

In addition, at December 31, ~~2013~~2015 and ~~2012, several~~2014, certain consolidated ~~CLOs and one~~ sponsored investment ~~fund,~~funds, which were ~~deemed to be~~accounted for as VIEs, were excluded from the balances in the table above as the balances for these investment products are reported separately on the consolidated statements of financial condition. See Note 6,5, Variable Interest Entities, for further discussion on these consolidated investment products. See Note 2, Significant Accounting Policies, for the Company’s consolidation policy and for further information on the adoption of ASU 2015-02.

The Company ~~may not be~~cannot readily ~~able to~~ access cash and cash equivalents held by consolidated ~~sponsored investment funds~~VREs to use in its operating activities.

5. Variable Interest Entities

In ~~addition,~~the normal course of business, the Company is the manager of various types of sponsored investment vehicles, which may be considered VIEs. The Company may from time to time own equity or debt securities or enter into derivatives with the vehicles, each of which are considered variable interests. The Company’s involvement in financing the operations of the VIEs is generally limited to its investments in the entity. The Company consolidates entities when it is determined to be the PB. See Note 2, Significant Accounting Policies, for further information on the Company’s accounting policy on consolidation.

As a result of the adoption of ASU 2015-02, the Company deconsolidated all previously consolidated CLOs effective January 1, 2015 as its fees are no longer deemed variable interests. The Company also consolidated certain investment products that were not ~~be readily able to sell investments held by~~previously consolidated. See Note 2, Significant Accounting Policies – Accounting Pronouncements Adopted in 2015, for further information on ASU 2015-02.

Consolidated VIEs. The Company’s consolidated VIEs as of December 31, 2015 include certain sponsored investment funds in ~~order~~which BlackRock has an investment and as the investment manager, is deemed to ~~obtain cash for use~~have both the power to direct the most significant activities of the funds and the right to receive benefits (or the obligation to absorb losses) that could potentially be significant to these sponsored investment funds. The assets of these VIEs are not available to creditors of the Company. In addition, the investors in these VIEs have no recourse to the credit of the Company.

The Company’s consolidated VIEs under previous accounting guidance as of December 31, 2014 primarily included CLOs in which BlackRock did not have an investment; however, as the collateral manager, BlackRock was deemed to have both the power to direct the most significant activities of the CLOs and the right to receive benefits that could potentially be significant to the CLOs.

Consolidated VIE assets and liabilities are presented after intercompany eliminations at December 31, 2015 and 2014 in the following table:

(in millions)	December 31, 2015			December 31, 2014
Assets of consolidated VIEs:
Cash and cash equivalents	$	148		$	278
Investments		1,030			3,320
Other assets		67			32
Total investments and other assets		1,097			3,352
Liabilities of consolidated VIEs:
Borrowings		—			(3,389	)
Other liabilities		(177	)		(245	)
Appropriated retained earnings		—			19
Noncontrolling interests of consolidated VIEs		(416	)		(15	)
BlackRock's net interests in consolidated VIEs	$	652		$	—

The Company recorded a $58 million nonoperating net gain for 2015 related to consolidated VIEs. Net income attributable to noncontrolling interests related to consolidated VIEs for 2015 was $6 million.

The Company recorded $41 million of nonoperating expense and an equal and offsetting loss attributable to noncontrolling interests related to consolidated VIEs for 2014. No gain or loss was recorded for 2013.

Non-Consolidated VIEs. At December 31, 2015 and 2014, the Company’s ~~operations.~~carrying value of assets and liabilities included on the consolidated statements of financial condition pertaining to nonconsolidated VIEs and its maximum risk of loss related to VIEs for which it held a variable interest, but for which it was not the PB, was as follows:

(in millions) At December 31, 2015	Investments		Advisory Fee Receivables		Other Net Assets (Liabilities)			Maximum Risk of Loss⁽¹⁾
Sponsored investment products	$	64	$	3	$	(7	)	$	84
At December 31, 2014
CDOs/CLOs	$	—	$	2	$	(5	)	$	19
Other sponsored investment funds:
Collective trusts		—		191		—			191
Other		57		177		(3	)		234
Total	$	57	$	370	$	(8	)	$	444

(1)	At December 31, 2015 and 2014, BlackRock’s maximum risk of loss associated with these VIEs primarily related to collecting advisory fee receivables and BlackRock’s investments.

The net assets of sponsored investment products that are nonconsolidated VIEs approximated $3 billion at December 31, 2015. Net assets of other sponsored investment funds approximated $1.7 trillion to $1.8 trillion at December 31, 2014 and included approximately $1.4 trillion of collective trusts at December 31, 2014. Upon the adoption of ASU 2015-02, BlackRock no longer has a variable interest in collective trusts as BlackRock does not have any economic interest and earns at-market fees from these products.

6. Fair Value Disclosures

Fair Value Hierarchy

Assets and liabilities measured at fair value on a recurring basis and other assets not held at fair value

December 31, 2013
(in millions)

Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Other Assets
Not Held at Fair
Value⁽¹⁾
December 31,
2013

Assets:

Investments

Available-for-sale:

Equity securities of sponsored investment funds
$ 180    $ —    $ —    $ —    $ 180
Other securities
—    3    —    —    3
Total available-for-sale
180    3    —    —    183
Held-to-maturity debt securities
—    —    —    83    83
Trading:

Deferred compensation plan mutual funds
58    —    —    —    58
Equity/Multi-asset mutual funds
184    —    —    —    184
Debt securities / fixed income mutual funds
31    213    —    —    244
Total trading
273    213    —    —    486
Other investments:

Consolidated sponsored investment funds:

Hedge funds / Funds of funds
—    135    24    —    159
Private / public equity⁽²⁾
5    13    223    41    282
Total consolidated sponsored investment funds
5    148    247    41    441
Equity method:

Hedge funds / Funds of hedge funds
—    177    99    63    339
Private equity investments
—    —    101    —    101
Real estate funds
—    20    98    7    125
Fixed income mutual funds
113    —    —    —    113
Equity/Multi-asset, alternative mutual funds
19    —    —    —    19
Total equity method
132    197    298    70    697
Deferred compensation plan equity method investments
—    10    29    —    39
Cost method investments
—    —    —    119    119
Carried interest
—    —    —    103    103
Total investments
590    571    574    416    2,151
Separate account assets
113,382    40,841    —    890    155,113
Separate account collateral held under securities lending agreements:

Equity securities
20,856    —    —    —    20,856
Debt securities
—    932    ��    —    932
Total separate account collateral held under securities lending agreements
20,856    932    —    —    21,788
Other assets⁽³⁾
—    39    —    —    39
Assets of consolidated VIEs:

Bank loans and other assets
—    2,047    129    19    2,195
Bonds
—    71    35    —    106
Private / public equity⁽⁴⁾
—    10    14    —    24
Total assets of consolidated VIEs
—    2,128    178    19    2,325
Total
$ 134,828    $ 44,511    $ 752    $ 1,325    $ 181,416
Liabilities:

Borrowings of consolidated VIEs
$ —    $ —    $ 2,369    $ —    $ 2,369
Separate account collateral liabilities under securities lending agreements
20,856    932    —    —    21,788
Other liabilities⁽⁵⁾
18    4    42    —    64
Total
$ 20,874    $ 936    $ 2,411    $ —    $ 24,221

December 31, 2015 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Investments Measured at NAV⁽¹⁾		Other Assets Not Held at Fair Value⁽²⁾		December 31, 2015
Assets:
Investments
Available-for-sale	$	19	$	2	$	23	$	—	$	—	$	44
Held-to-maturity debt securities		—		—		—		—		108		108
Trading:
Deferred compensation plan mutual funds		65		—		—		—		—		65
Equity/Multi-asset mutual funds		278		—		—		—		—		278
Debt securities / fixed income mutual funds		2		438		2		—		—		442
Total trading		345		438		2		—		—		785
Other investments:
Equity method:
Equity and fixed income mutual funds		73		—		—		30		—		103
Other		—		—		—		400		10		410
Total equity method		73		—		—		430		10		513
Deferred compensation plan equity method investments		—		—		—		14		—		14
Cost method investments		—		—		—		—		95		95
Carried interest		—		—		—		—		19		19
Total investments		437		440		25		444		232		1,578
Separate account assets		109,761		40,152		—		—		938		150,851
Separate account collateral held under securities lending agreements:
Equity securities		26,062		—		—		—		—		26,062
Debt securities		—		5,274		—		—		—		5,274
Total separate account collateral held under securities lending agreements		26,062		5,274		—		—		—		31,336
Investments of consolidated VIEs:
Private / public equity⁽³⁾		6		4		196		145		—		351
Equity securities		298		—		—		—		—		298
Debt securities		—		242		—		—		—		242
Other		—		—		—		58		—		58
Carried interest		—		—		—		—		81		81
Total investments of consolidated VIEs		304		246		196		203		81		1,030
Total	$	136,564	$	46,112	$	221	$	647	$	1,251	$	184,795
Liabilities:
Separate account collateral liabilities under securities lending agreements	$	26,062	$	5,274	$	—	$	—	$	—	$	31,336
Other liabilities⁽⁴⁾		—		6		48		—		—		54
Total	$	26,062	$	5,280	$	48	$	—	$	—	$	31,390

(1)	Amounts are comprised of certain investments measured at fair value using NAV (or its equivalent) as a practical expedient. These investments have not been classified in the fair value hierarchy (see Note 2, Significant Accounting Policies, for more information on the adoption of ASU 2015-07).

(2)

Amounts are comprised of investments held at cost or amortized cost, carried interest and certain equity method investments, which include sponsored investment funds and other assets, which ~~in accordance with GAAP~~ are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and liabilities under fair value measures; therefore, the Company’s investment in such equity method investees may not represent fair value.

~~(2)~~

(3)

Level 3 amounts include ~~$195 million and $28 million of underlying third-party private equity funds and~~ direct investments in private equity companies held by private equity ~~funds, respectively.~~funds.

~~(3)~~

(4)

~~Amount includes company-owned and split-dollar life insurance policies and unrealized gains on forward foreign currency exchange contracts.~~

~~(4)~~

~~Level 3 amounts include $14 million of underlying third-party private equity funds held by a private equity fund.~~

~~(5)~~

Amounts include a ~~credit default swap~~derivative (see Note 7,Derivatives and Hedging, for more information)~~, securities sold short within consolidated sponsored investment funds~~ and recorded contingent liabilities related to ~~the~~certain acquisitions ~~of Credit Suisse’s ETF franchise~~(see Note 13, Commitments and ~~MGPA.~~Contingencies, for more information).

Assets and liabilities measured at fair value on a recurring basis and other assets not held at fair value

December 31, 2012
(in millions)
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Other Assets
Not
Held at Fair
Value⁽¹⁾ December 31,
2012
Assets:

Investments

Available-for-sale:

Equity securities of sponsored investment funds
$ 155    $ —    $ 1    $ —    $ 156
Other securities
—    2    —    —    2
Total available-for-sale
155    2    1    —    158
Held-to-maturity debt securities
—    —    —    112    112
Trading:

Deferred compensation plan mutual funds
53    —    —    —    53
Equity/Multi-asset mutual funds
159    3    —    —    162
Debt securities / fixed income mutual funds
5    50    —    —    55
Total trading
217    53    —    —    270
Other investments:

Consolidated sponsored investment funds:

Hedge funds / Funds of funds
3    39    73    —    115
Private / public equity⁽²⁾
10    10    266    —    286
Total consolidated sponsored investment funds
13    49    339    —    401
Equity method:

Hedge funds / Funds of hedge funds
—    61    161    39    261
Private equity investments
—    —    90    —    90
Real estate funds
—    19    88    15    122
Fixed income mutual funds
46    —    —    —    46
Equity/Multi-asset, alternative mutual funds
76    —    —    —    76
Total equity method
122    80    339    54    595
Deferred compensation plan hedge fund equity method investments
—    9    —    —    9
Cost method investments
—    —    —    120    120
Carried interest
—    —    —    85    85
Total investments
507    193    679    371    1,750
Separate account assets
95,514    38,392    2    860    134,768
Separate account collateral held under securities lending agreements:

Equity securities
21,273    —    —    —    21,273
Debt securities
—    1,748    —    —    1,748
Total separate account collateral held under securities lending agreements
21,273    1,748    —    —    23,021
Other assets⁽³⁾
—    12    —    —    12
Assets of consolidated VIEs:

Bank loans
—    2,004    106    —    2,110
Bonds
—    78    46    —    124
Private / public equity⁽⁴⁾
2    6    22    —    30
Total assets of consolidated VIEs
2    2,088    174    —    2,264
Total
$ 117,296    $ 42,433    $ 855    $ 1,231    $ 161,815
Liabilities:

Borrowings of consolidated VIEs
$ —    $ —    $ 2,402    $ —    $ 2,402
Separate account collateral liabilities under securities lending agreements
21,273    1,748    —    —    23,021
Other liabilities⁽⁵⁾
15    5    —    —    20
Total
$ 21,288    $ 1,753    $ 2,402    $ —    $ 25,443

December 31, 2014 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Investments Measured at NAV⁽¹⁾		Other Assets Not Held at Fair Value⁽²⁾		December 31, 2014
Assets:
Investments
Available-for-sale	$	198		$	3	$	—	$	—	$	—	$	201
Held-to-maturity debt securities		—			—		—		—		79		79
Trading:
Deferred compensation plan mutual funds		64			—		—		—		—		64
Equity/Multi-asset mutual funds		239			—		—		—		—		239
Debt securities / fixed income mutual funds		11			222		—		—		—		233
Total trading		314			222		—		—		—		536
Other investments:
Consolidated sponsored investment funds private / public equity⁽³⁾		11			11		80		168		—		270
Equity method:
Fixed income mutual funds		29	��		—		—		—		—		29
Other		98			—		—		493		13		604
Total equity method		127			—		—		493		13		633
Deferred compensation plan equity method investments		—			—		—		21		—		21
Cost method investments		—			—		—		—		96		96
Carried interest		—			—		—		—		85		85
Total investments		650			236		80		682		273		1,921
Separate account assets		113,566			46,866		—		—		855		161,287
Separate account collateral held under securities lending agreements:
Equity securities		30,387			—		—		—		—		30,387
Debt securities		—			3,267		—		—		—		3,267
Total separate account collateral held under securities lending agreements		30,387			3,267		—		—		—		33,654
Assets of consolidated VIEs:
Bank loans and other assets		—			2,958		302		—		32		3,292
Bonds		—			29		18		—		—		47
Private / public equity		—			3		—		10		—		13
Total assets of consolidated VIEs		—			2,990		320		10		32		3,352
Total	$	144,603		$	53,359	$	400	$	692	$	1,160	$	200,214
Liabilities:
Borrowings of consolidated VIEs	$	—		$	—	$	3,389	$	—	$	—	$	3,389
Separate account collateral liabilities under securities lending agreements		30,387			3,267		—		—		—		33,654
Other liabilities⁽⁴⁾		—			5		39		—		—		44
Total	$	30,387		$	3,272	$	3,428	$	—	$	—	$	37,087

(1)	Amounts are comprised of certain investments measured at fair value using NAV (or its equivalent) as a practical expedient. These investments have not been classified in the fair value hierarchy (see Note 2, Significant Accounting Policies, for more information on the adoption of ASU 2015-07).

(2)

~~(2)~~

(3)

Level 3 amounts include ~~$212 million and $54 million of underlying third-party private equity funds and~~ direct investments in private equity companies held by private equity ~~funds, respectively.~~funds.

~~(3)~~

(4)

~~Amount includes company-owned and split-dollar life insurance policies.~~

~~(4)~~

~~Level 3 amounts include $20 million and $2 million of underlying third-party private equity funds and direct investments in private equity companies held by a private equity fund.~~

~~(5)~~

Amounts include a ~~credit default swap~~derivative (see Note 7,Derivatives and Hedging, for more information) and ~~securities sold short within consolidated sponsored investment funds.~~contingent liabilities related to certain acquisitions (see Note 13, Commitments and Contingencies, for more information).

Level 3 Assets.Level 3 investments of ~~$574 million and $679~~consolidated VIEs of $196 million at December 31, ~~2013~~2015 and ~~2012, respectively, primarily related to equity method investments and consolidated sponsored investment funds.~~ Level 3 ~~assets within~~ investments ~~except for~~of $80 million at December 31, 2014 related to direct investments in private equity companies held by private equity ~~funds described below, were primarily valued based upon NAVs received from internal and third-party fund managers.~~

~~Direct investments in private equity companies held by private equity funds totaled $28 million and $56 million at December 31, 2013 and 2012, respectively.~~funds. Direct investments in private equity companies may be valued using the market approach or the income approach, or a combination thereof, and were valued based on an assessment of each underlying investment, incorporating evaluation of additional significant third-party financing, changes in valuations of comparable peer companies, the business environment of the companies, market indices, assumptions relating to appropriate risk adjustments for nonperformance and legal restrictions on disposition, among other factors. The fair value derived from the methods used ~~are~~is evaluated and weighted, as appropriate, considering the reasonableness of the range of values indicated. Under the market approach, fair value may be determined by reference to multiples of market-comparable companies or transactions, including earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples. Under the income approach, fair value may be determined by discounting the expected cash flows to a single present value amount using current ~~market~~ expectations about those future amounts. Unobservable inputs used in a

discounted cash flow model may include projections of

operating performance generally covering a five-year period and a terminal value of the private equity direct investment. For ~~securities~~investments utilizing the discounted cash flow valuation technique, a significant increase (decrease) in the discount rate, risk premium or discount for lack of marketability in isolation could result in a significantly lower (higher) fair value measurement. For ~~securities~~investments utilizing the market comparable companies valuation technique, a significant increase (decrease) in the EBITDA multiple in isolation could result in a significantly higher (lower) fair value measurement.

Level 3 assets ~~recorded within separate account assets include single-broker nonbinding quotes for fixed income securities and equity securities that have unobservable inputs due to certain corporate actions.~~

~~Level 3 assets of consolidated VIEs~~may include bank loans, investments in CLOs, and bonds valued based on single-broker nonbinding quotes and direct private equity investments ~~and private equity funds~~ valued ~~based upon internal as well as third-party fund manager valuations, which may be adjusted by~~ using the ~~returns of certain~~ market ~~indices.~~approach or the income approach as described above.

Level 3 Liabilities.Level 3 borrowings of consolidated VIEs at December 31, 2014 include CLO borrowings valued based upon single-broker nonbinding quotes.

Level 3 other liabilities primarily include recorded contingent liabilities related to ~~the~~certain acquisitions, ~~of Credit Suisse’s ETF franchise and MGPA,~~ which were valued based upon discounted cash flow analyses using unobservable market data inputs.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for ~~2013~~2015⁽¹⁾

(in millions) December 31,
2012 Realized
and
unrealized
gains
(losses) in
earnings
and OCI Purchases Sales and
maturities Issuances
and other
settlements⁽¹⁾ Transfers
into
Level 3 Transfers
out of
Level 3 December 31,
2013 Total net
unrealized
gains
(losses)
included
in
earnings⁽²⁾
Assets:

Investments:

Available-for-sale:

Equity securities of sponsored investment funds
$ 1    $ —    $ —    $ —    $ (1 ) $ —    $ —    $ —    $ —
Consolidated sponsored investment funds:

Hedge funds / Funds of funds
73    8 12    (19 ) (34 ) —    (16 ) 24    4
Private equity
266    37    16    (82 ) —    —    (14 ) 223    25
Equity method:

Hedge funds / Funds of hedge funds
161    16    7    (11 ) (74 ) —    —    99    9
Private equity investments
90    21    14    (10 ) (14 ) —    —    101    21
Real estate funds
88    20    7    —    (17 ) —    —    98    20
Deferred compensation plan equity method investments
—    —    —    —    29    —    —    29    —
Total Level 3 investments
679    102    56    (122 ) (111 ) —    (30 ) 574    79
Separate account assets:
2    —    —    (2 ) —    —    —    —    n/a ⁽³⁾
Assets of consolidated VIEs:

Bank loans
106    —    109    (60 )     16    117    (159 ) 129
Bonds
46    1    4    (16 ) —    —    —    35
Private equity
22    2    —    (7 ) —    —    (3 ) 14
Funds of hedge funds
—    —    134 —    (134 ) —    —    —
Total Level 3 assets of consolidated VIEs
174    3    247    (83 ) (118 ) 117    (162 ) 178    n/a ⁽⁴⁾
Total Level 3 assets
$ 855    $ 105    $ 303    $ (207 ) $ (229 ) $ 117    $ (192 ) $ 752    $ 79
Liabilities:

Borrowings of consolidated VIEs
$ 2,402    $ (14 ) $ —    $ —    $ (47 ) $ —    $ —    $ 2,369    n/a ⁽⁴⁾
Other liabilities
—    —    —    —    42 —    —    42    —
Total Level 3 liabilities
$ 2,402    $ (14 ) $ —    $     —    $ (5 ) $ —    $   —    $ 2,411

(in millions)	December 31, 2014		Realized and Unrealized Gains (Losses) in Earnings and OCI		Purchases		Sales and Maturities		Issuances and Other Settlements⁽²⁾⁽³⁾			Transfers into Level 3		Transfers out of Level 3		December 31, 2015		Total Net Unrealized Gains (Losses) Included in Earnings⁽⁴⁾
Assets:
Investments:
Available-for-sale securities⁽⁵⁾	$	—	$	—	$	23	$	—	$	—		$	—	$	—	$	23	$	—
Trading		—		—		2		—		—			—		—		2		—
Consolidated sponsored investment funds- Private equity		80		—		—		—		(80	)		—		—		—		—
Total investments		80		—		25		—		(80	)		—		—		25		—
Assets of consolidated VIEs:
Private equity		—		37		79		—		80			—		—		196		37
Bank loans		302		—		—		—		(302	)		—		—		—		—
Bonds		18		—		—		—		(18	)		—		—		—		—
Total assets of consolidated VIEs		320		37		79		—		(240	)		—		—		196		37
Total Level 3 assets	$	400	$	37	$	104	$	—	$	(320	)	$	—	$	—	$	221	$	37
Liabilities:
Borrowings of consolidated VIEs	$	3,389	$	—	$	—	$	—	$	(3,389	)	$	—	$	—	$	—	$	—
Other liabilities		39		3		—		—		12			—		—		48		—
Total liabilities	$	3,428	$	3	$	—	$	—	$	(3,377	)	$	—	$	—	$	48	$	—

~~n/a~~

(1)

~~— not applicable~~

Upon adoption of ASU 2015-07, investments measured at NAV are no longer required to be categorized within the fair value hierarchy. See Note 2, Significant Accounting Policies, for further information.

~~(1)~~

(2)

Amounts include ~~distributions from equity method investees, repayments~~the consolidation (deconsolidation) of ~~borrowings of consolidated~~ VIEs ~~loans and borrowings related~~due to the ~~consolidation~~adoption of ~~one additional CLO, elimination~~ASU 2015-02 effective January 1, 2015.

(3)

Other liabilities amount includes contingent liabilities and payments of investment related to a deconsolidation of a consolidated VIE and a reclassification of an investment from a consolidated sponsored investment fund to an equity method investment due to a change in ownership percentage. Amounts also include the acquisition of deferred compensation plan equity method investments and contingent liabilities related to ~~the acquisitions of Credit Suisse’s ETF franchise and MGPA.~~certain acquisitions.

~~(2)~~

(4)

Earnings attributable to the change in unrealized gains (losses) relating to assets still held at the reporting date.

(5)	Amounts include investments in CLOs.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for 2014⁽¹⁾

(in millions)	December 31, 2013		Realized and Unrealized Gains (Losses) in Earnings and OCI			Purchases		Sales and Maturities			Issuances and Other Settlements⁽²⁾			Transfers into Level 3⁽³⁾		Transfers out of Level 3			December 31, 2014		Total Net Unrealized Gains (Losses) Included in Earnings⁽⁴⁾
Assets:
Investments
Consolidated sponsored investment funds:
Hedge funds	$	2	$	—		$	—	$	(1	)	$	(1	)		—	$	—		$	—	$	—
Private equity		28		(8	)		23		—			—			37		—			80		(8	)
Assets of consolidated VIEs:												—
Bank loans		129		(9	)		210		(96	)		46			302		(280	)		302
Bonds		35		—			—		(17	)		—			—		—			18
Total assets of consolidated VIEs		164		(9	)		210		(113	)		46			302		(280	)		320	N/A			⁽⁵⁾
Total assets	$	194	$	(17	)	$	233	$	(114	)	$	45		$	339	$	(280	)	$	400	$	(8	)
Liabilities:
Borrowings of consolidated VIEs	$	2,369	$	77		$	—	$	—		$	1,097			—	$	—		$	3,389	N/A			⁽⁵⁾
Other liabilities		42		(1	)		—		—			(4	)		—		—			39
Total liabilities	$	2,411	$	76		$	—	$	—		$	1,093		$	—	$	—		$	3,428

N/A – not applicable

~~(3)~~

(1)

~~The~~

(2)	Amount primarily includes net ~~investment income~~proceeds from borrowings of consolidated VIEs.

(3)	Includes investments previously held at cost.

(4)	Earnings attributable to ~~separate account~~the change in unrealized gains (losses) relating to assets ~~accrues directly to~~still held at the ~~contract owners and is not reported on the consolidated statements of income.~~reporting date.

~~(4)~~

(5)

The net gain (loss) on consolidated VIEs is solely attributable to noncontrolling interests on the consolidated statements of income.

~~Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for 2012~~

(in millions)
December 31,
2011
Realized
and
unrealized
gains
(losses) in
earnings
and OCI Purchases Sales and
maturities Issuances
and other
settlements⁽¹⁾ Transfers
into
Level 3 Transfers
out of
Level 3 December 31,
2012 Total net
unrealized
gains
(losses)
included
in
earnings⁽²⁾
Assets:

Investments:

Available-for-sale:

Equity securities of sponsored investment funds
$ 1    $ —    $ —    $ —    $ —    $ —    $ —    $ 1    $     —
Consolidated sponsored investment funds:

Hedge funds / Funds of funds
22    —    37    (6 ) —    25    (5 ) 73    (1 )
Private equity
313    27    32    (85 ) (15 ) —    (6 ) 266    24
Equity method:

Hedge funds / Funds of hedge funds
193    38    —    —    (70 ) —    —    161    32
Private equity investments
85    6    11    —    (12 ) —    —    90    6
Real estate funds
88    12    21    (7 ) (7 ) —    (19 ) 88    12
Total Level 3 investments
702    83    101    (98 ) (104 ) 25    (30 ) 679    73
Separate account assets
10    5    11    (62 ) —    48    (10 ) 2    n/a ⁽³⁾
Assets of consolidated VIEs:

Bank loans
83    4    68    (44 ) 7    101    (113 ) 106
Bonds
40    4    2         —    —    —    —    46
Private equity
27    4    —    (9 ) —    —    —    22
Total Level 3 assets of consolidated VIEs
150    12    70    (53 ) 7    101    (113 ) 174    n/a ⁽⁴⁾
Total Level 3 assets
$ 862    $ 100    $ 182    $ (213 ) $ (97 ) $ 174    $ (153 ) $ 855    $ 73
Liabilities:

Borrowings of consolidated VIEs
$ 1,574    $ (93 ) $ —    $ —    $ 735    $ —    $      —    $ 2,402    n/a ⁽⁴⁾

~~n/a~~

~~— not applicable~~

~~(1)~~

~~Amount primarily includes distributions from equity method investees, and proceeds from and repayments of borrowings of consolidated VIEs.~~

~~(2)~~

~~Earnings attributable to the change in unrealized gains (losses) relating to assets still held at the reporting date.~~

~~(3)~~

~~The net investment income attributable to separate account assets accrues directly to the contract owners and is not reported on the consolidated statements of income.~~

~~(4)~~

~~The net gain (loss) on consolidated VIEs is solely attributable to noncontrolling interests on the consolidated statements of income.~~

Realized and Unrealized Gains (Losses) for Level 3 Assets and Liabilities.Realized and unrealized gains (losses) recorded for Level 3 assets and liabilities are reported in nonoperating income (expense) on the consolidated statements of income. A portion of net income (loss) for consolidated ~~investments and all of the net income (loss) for consolidated VIEs~~sponsored investment funds are allocated to noncontrolling interests to reflect net income (loss) not attributable to the Company.

Transfers in and/or out of Levels.Transfers in and/or out of levels are reflected when significant inputs, including market inputs or performance attributes, used for the fair value measurement become observable/unobservable, or when the ~~Company determines it has the ability, or no longer has the ability, to redeem, in the near term, certain~~

~~investments that the Company values using a NAV (or a capital account), or when the~~ carrying value of certain equity method investments no longer represents fair value as determined under valuation methodologies.

~~Separate Account Assets~~.~~In 2012, there were $48 million of transfers of equity securities into Level 3 from Level 1, primarily due to market inputs no longer being considered observable.~~

In 2012, there were $10 million of transfers out of Level 3 to Level 1 primarily related to equity securities held within separate accounts. The transfers were primarily due to availability of observable market inputs.

Assets of Consolidated VIEs.~~In 2013,~~ During 2014, there were ~~$159~~$280 million of transfers out of Level 3 to Level 2 related to bank loans. In addition, in ~~2013,~~2014, there were ~~$117~~$302 million of transfers into Level 3 from Level 2 related to bank loans. These transfers in and out of levels were primarily due to availability/unavailability of observable market inputs, including inputs from pricing vendors and brokers.

Significant Issuances and Other Settlements. During 2015, other settlements primarily included the impact of deconsolidating previously consolidated CLOs effective January 1, 2015 as a result of adopting ASU 2015-02. See Note 2, Significant Accounting Policies, for further information on ASU 2015-02.

In 2012, there were $113 million of transfers out of Level 3 to Level 2 related to bank loans. In addition, in 2012, there were $101 million of transfers into Level 3 from Level 2 related to bank loans. The transfers in and out of levels were primarily due to availability/ unavailability of observable market inputs, including inputs from pricing vendors and brokers.

~~Consolidated Sponsored Investment Funds~~. In 2013, there were $12 million of transfers out of Level 1 to Level 2 related to consolidated private equity funds. These transfers were due to a direct investment in a public company valued at a discount due to restrictions on sale.

~~Significant Other Settlements.~~~~In 2013 and 2012, there were $105 million and $89 million, respectively, of distributions from equity method investees categorized in Level 3.~~

In 2013, other settlements included $134 million related to a deconsolidation of a consolidated fund of hedge funds, which was previously classified as a VIE. This fund was deconsolidated during the second quarter of 2013 due to the granting of additional substantive rights to unaffiliated investors of the fund.

~~In 2013, other settlements included $363 million of borrowings of consolidated VIEs related to a consolidation of one additional CLO.~~

In 2013, there was a $28 million reclassification of a Level 3 investment from a consolidated sponsored investment fund to an equity method investment due to a change in BlackRock’s ownership percentage.

~~In 2013,~~2014, issuances and other settlements included ~~$29~~$1,582 million of ~~acquired Level 3 deferred compensation plan equity method investments.~~

~~During 2012, other settlements included $1,011~~borrowings due to the consolidation of CLOs and $485 million of ~~proceeds from~~repayments of borrowings of consolidated CLOs.

Disclosures of Fair Value for Financial Instruments Not Held at Fair Value. At December 31, ~~2013~~2015 and ~~2012,~~2014, the fair value of the Company’s financial instruments not held at fair value are categorized in the table ~~below:~~below.


	December 31, 2013				December 31, 2012							December 31, 2015				December 31, 2014
(in millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Fair Value Hierarchy			Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Fair Value Hierarchy
Financial Assets:
Cash and cash equivalents	$	4,390	$	4,390	$	4,606	$	4,606		Level 1	⁽¹⁾	$	6,083	$	6,083	$	5,723	$	5,723	Level 1	^(1),(2)
Accounts receivable		2,247		2,247		2,250		2,250		Level 1	⁽²⁾		2,237		2,237		2,120		2,120	Level 1	⁽³⁾
Cash and cash equivalents of consolidated VIEs		161		161		297		297		Level 1	⁽¹⁾		148		148		278		278	Level 1	^(1),(2)

Financial Liabilities:
Accounts payable and accrued liabilities		1,084		1,084		1,055		1,055		Level 1	⁽²⁾		1,068		1,068		1,035		1,035	Level 1	⁽³⁾
Short-term borrowings		—		—		100		100		Level 1	⁽²⁾
Long-term borrowings		4,939		5,284		5,687		6,275		Level 2	⁽³⁾		4,930		5,223		4,922		5,309	Level 2	⁽⁴⁾

(1)	Cash and cash equivalents are carried at either cost or amortized cost, which approximates fair value due to their short-term maturities.

(2)

At December 31, ~~2013~~2015 and ~~2012,~~2014, approximately ~~$64~~$132 million and ~~$98~~$100 million, respectively, of money market funds were recorded within cash and cash equivalents on the consolidated statements of financial condition. In addition, at December 31, 2015, approximately $68 million of money market funds was recorded within cash and cash equivalents of consolidated VIEs. Money market funds are valued based on quoted market prices, or $1.00 per share, which generally is the NAV of the fund. ~~At December 31, 2013 and 2012, approximately $114 million and $133 million, respectively, related to cash and cash equivalents held by consolidated sponsored investment funds.~~

~~(2)~~

(3)

The carrying amounts of accounts receivable, accounts payable and accrued liabilities ~~and short-term borrowings~~ approximate fair value due to their short-term nature.

~~(3)~~

(4)

Long-term borrowings are recorded at amortized ~~cost.~~cost, net of debt issuance costs. The fair value of the long-term borrowings, including the current portion of long-term borrowings, is estimated using market prices at the end of December ~~2013~~2015 and ~~2012,~~2014, respectively. See Note 12,Borrowings, for the fair value of each of the Company’s long-term borrowings.

Investments in Certain Entities that Calculate Net Asset Value Per Share

As a practical expedient to value certain investments that do not have a readily determinable fair value and have attributes of an investment company, the Company ~~relies on~~uses NAV as the fair value. The following ~~table lists~~tables list information regarding all investments that use a fair value measurement to account for both their financial assets and financial liabilities in their calculation of a NAV per share (or equivalent).

December 31, ~~2013~~2015


(in millions)	Ref			Fair Value		Total Unfunded Commitments		Redemption Frequency			Redemption Notice Period		Ref			Fair Value		Total Unfunded Commitments		Redemption Frequency	Redemption Notice Period
Consolidated sponsored investment funds:
Private equity funds of funds		(a	)	$	195	$	23		n/r			n/r
Other funds of hedge funds		(b	)		155		—		Monthly Quarterly n/r	(13%), (78%), (9%)		30 –90 days
Equity method:⁽¹⁾
Equity method:⁽¹⁾
Hedge funds/funds of hedge funds		(c	)		276		84		Monthly Quarterly n/r	(55%), (11%) (34%)		15 – 90 days		(b	)	$	230	$	33	Daily/Monthly (21%) Quarterly (49%) N/R (30%)	30 – 90 days
Private equity funds		(d	)		101		62		n/r			n/r		(c	)		89		67	N/R	N/R
Real estate funds		(e	)		118		12		Quarterly n/r	(17%) (83%)		60 days		(d	)		81		28	Quarterly (28%) N/R (72%)	60 days
Deferred compensation plan investments		(f	)		39		7		Monthly Quarterly n/r	(8%), (18%) (74%)		60 –90 days
Consolidated VIEs:
Private equity fund		(g	)		14		1		n/r			n/r
Other														(e	)		44		5	Daily/Monthly (68%) N/R (32%)	3-5 days
Consolidated VIEs:
Private equity funds of funds														(a	)		145		19	N/R	N/R
Hedge fund														(b	)		58		—	Quarterly	90 days
Total				$	898	$	189									$	647	$	152

December 31, ~~2012~~2014


(in millions)	Ref			Fair Value		Total Unfunded Commitments		Redemption Frequency	Redemption Notice Period		Ref	Fair Value		Total Unfunded Commitments		Redemption Frequency	Redemption Notice Period
Consolidated sponsored investment funds:
Consolidated VREs:
Private equity funds of funds		(a	)	$	212	$	32	n/r		n/r	(a)	$	168	$	22	N/R	N/R
Other funds of hedge funds		(b	)		98		—	Monthly (22%) Quarterly (11%) n/r (67%)		1 –90 days
Equity method:⁽¹⁾
Equity method:⁽¹⁾
Hedge funds/funds of hedge funds		(c	)		222		42	Monthly (2%) Quarterly (28%) n/r (70%)		15 –90 days	(b)		277		39	Daily/Monthly (29%) Quarterly (48%) N/R (23%)	1 – 90 days
Private equity funds		(d	)		90		135	n/r		n/r	(c)		107		61	N/R	N/R
Real estate funds		(e	)		107		15	Quarterly (18%) n/r (82%)		60 days	(d)		109		1	Quarterly (19%) N/R (81%)	60 days
Deferred compensation plan hedge fund investments		(f	)		9		—	Monthly (33%) Quarterly (67%)		60 –90 days
Consolidated VIE:
Private equity fund		(g	)		20		1	n/r		n/r
Trading:
Equity		(h	)		3		—	Daily (100%)		None
Deferred compensation plan investments											(e)		21		5	N/R	N/R
Consolidated VIEs:
Private equity fund of funds											(f)		10		1	N/R	N/R
Total				$	761	$	225					$	692	$	129

N/R – not redeemable

~~n/r~~

(1)

~~– not redeemable~~

~~(1)~~

Comprised of equity method investments, which include investment companies, which account for their financial assets and most financial liabilities under fair value measures; therefore, the Company’s investment in such equity method investees approximates fair value.

(a)

This category includes the underlying third-party private equity funds within consolidated BlackRock sponsored private equity funds of funds. The fair values of the investments in the third-party funds have been estimated using capital accounts representing the Company’s ownership interest in each fund in the portfolio as well as other performance inputs. These investments are not subject to redemption; however, for certain funds, the Company may sell or transfer its interest, which may need approval by the general partner of the underlying funds. Due to the nature of the investments in this category, the Company reduces its investment by distributions that are received through the realization of the underlying assets of the funds. It is estimated that the underlying assets of these funds will be liquidated over a weighted-average period of approximately five years and seven years at ~~both~~ December 31, ~~2013~~2015 and ~~2012.~~2014, respectively. The total remaining unfunded commitments to other third-party funds were ~~$23~~$19 million and ~~$32~~$22 million at December 31, ~~2013~~2015 and ~~2012,~~2014, respectively. The Company ~~was contractually obligated~~had contractual obligations to ~~fund $30~~the consolidated funds of $31 million at both December 31, ~~2013~~2015 and ~~2012 to the consolidated funds.~~2014.

(b)

This category includes consolidated funds of hedge funds that invest in multiple strategies to diversify risks. The fair values of the investments have been estimated using the NAV of the fund’s ownership interest in partners’ capital of each fund in the portfolio. Certain of the underlying funds can be redeemed as long as there are no restrictions in place. At December 31, 2013 and 2012, the underlying funds that are currently restricted from redemptions within one year will become redeemable in approximately 12 to 24 months. This category also includes a consolidated offshore feeder fund that invests in a master fund with multiple alternative investment strategies. The fair value of this investment has been estimated using the NAV of the master offshore fund held by the feeder fund. The investment is currently subject to restrictions in place by the underlying master fund.

~~(c)~~

This category includes hedge funds and funds of hedge funds that invest primarily in equities, fixed income securities, distressed credit, opportunistic and mortgage instruments and other third-party hedge funds. The fair values of the investments have been estimated using the NAV of the Company’s ownership interest in partners’ capital. It was estimated that the investments in the funds that are not subject to redemption will be liquidated over a weighted-average period of approximately ~~three~~one year and ~~five~~two years at December 31, ~~2013~~2015 and ~~2012,~~2014, respectively.

~~(d)~~

(c)

This category includes several private equity funds that initially invest in nonmarketable securities of private companies, which ultimately may become public in the future. The fair values of these investments have been estimated using capital accounts representing the Company’s ownership interest in the funds as well as other performance inputs. The Company’s investment in each fund is not subject to redemption and is normally returned through distributions as a result of the liquidation of the underlying assets of the private equity funds. It was estimated that the investments in these funds will be liquidated over a weighted-average period of approximately ~~five~~four years at both December 31, ~~2013~~2015 and ~~2012.~~2014.

~~(e)~~

(d)

This category includes several real estate funds that invest directly in real estate and real estate related assets. The fair values of the investments have been estimated using capital accounts representing the Company’s ownership interest in the funds. A majority of the Company’s investments are not subject to redemption or are not currently redeemable and isare normally returned through distributions as a result of the liquidation of the underlying assets of the real estate funds. It is estimated that the investments in these funds not subject to redemptions will be liquidated over a weighted-average period of approximately six years and seven years at December 31, ~~2013~~2015 and ~~eight years at December 31, 2012.~~2014, respectively.

~~(f)~~

(e)

This category for 2015 primarily includes ~~investments in several real estate funds and certain hedge funds~~a multi-asset fund that ~~invest in energy and health science related equity securities.~~is redeemable. The fair values of the investments ~~in this category~~ have been estimated using capital accounts representing the Company’s ownership interest in partners’ ~~capital as well as performance inputs. The~~capital. In addition, for both 2014 and 2015, this category includes investments in ~~hedge funds will be redeemed upon settlement~~several real estate funds. The fair values of ~~certain deferred compensation liabilities.~~the investments have been estimated using capital accounts representing the Company’s ownership interest in partners’ capital. The ~~real estate~~ investments are not subject to redemption; however, distributions as a result of the liquidation of the underlying assets will be used to settle certain deferred compensation liabilities over time.

~~(g)~~

(f)

This category includes the underlying third-party private equity funds within one consolidated BlackRock sponsored private equity fund of funds. The fair values of the investments in the third-party funds have been estimated using capital accounts representing the Company’s ownership interest in each fund in the portfolio as well as other performance inputs. These investments are not subject to redemption; however, for certain funds the Company may sell or transfer its interest, which may need approval by the general partner of the underlying third-party funds. Due to the nature of the investments in this category, the Company reduces its investment by distributions that are received through the realization of the underlying assets of the funds. It is estimated that the underlying assets of these funds will be liquidated over a weighted-average period of approximately ~~two years~~one year at December 31, 2013 and three years at December 31, 2012. Total remaining unfunded commitments to other third-party funds were not material at both December 31, 2013 and 2012, which commitments are required to be funded by capital contributions from noncontrolling interest holders.2014.

~~(h)~~

This category includes consolidated offshore feeder funds that invest in master funds with multiple equity strategies to diversify risks. The fair values of the investments in this category have been estimated using the NAV of master offshore funds held by the feeder funds. Investments in this category generally can be redeemed at any time, as long as there are no restrictions in place by the underlying master funds.

Fair Value ~~Option.~~~~Upon the initial consolidation~~Option.

As of ~~certain CLOs, the Company elected to adopt~~December 31, 2015, assets for which the fair value option ~~provisions for eligible assets and liabilities, including bank loans and borrowings of the CLOs~~was elected were not material to mitigate accounting mismatches between the carrying value of the assets and liabilities and to achieve operational simplification. To the extent there is a difference between the change in fair value of the assets and liabilities, the difference will be reflected as net income (loss) attributable to nonredeemable noncontrolling interests on the consolidated ~~statements of income and offset by a change in appropriated retained earnings on the consolidated statements of~~ financial ~~condition.~~statements.

The following table summarizes information at December 31, 2014 related to those assets and liabilities ~~selected~~ for which the fair value ~~accounting at December 31, 2013 and 2012:~~option was elected:

(in millions)	December 31, 2014
CLO Bank Loans:
Aggregate principal amounts outstanding	$	3,338
Fair value		3,260
Aggregate unpaid principal balance in excess of (less than) fair value	$	78
Unpaid principal balance of loans more than 90 days past due	$	6
Aggregate fair value of loans more than 90 days past due		2
Aggregate unpaid principal balance in excess of fair value for loans more than 90 days past due	$	4

CLO Borrowings:
Aggregate principal amounts outstanding	$	3,508
Fair value	$	3,389

(in millions) December 31,
2013 December 31,
2012
CLO Bank Loans:

Aggregate principal amounts outstanding
$ 2,181    $ 2,124
Fair value
2,176    2,110
Aggregate unpaid principal balance in excess of (less than) fair value
$ 5    $ 14
Unpaid principal balance of loans more than 90 days past due
$ 14    $ 4
Aggregate fair value of loans more than 90 days past due
9    —
Aggregate unpaid principal balance in excess of fair value for loans more than 90 days past due
$ 5    $ 4
CLO Borrowings:

Aggregate principal amounts outstanding
$ 2,455    $ 2,535
Fair value
$ 2,369    $ 2,402

At December 31, ~~2013,~~2014, the principal amounts outstanding of the borrowings issued by the CLOs mature between 2016 and ~~2025.~~2027.

During ~~2013, 2012~~2014 and ~~2011,~~2013, the change in fair value of the bank loans and bonds held by the CLOs resulted in a ~~$153 million, a $154~~$69 million and ~~a $57~~$153 million gain, respectively, which were offset by a ~~$117 million, a $166~~$65 million and ~~a $68~~$117 million loss, respectively, from the change in fair value of the CLO borrowings.

The net gains (losses) were recorded in net gain (loss) on consolidated VIEs on the consolidated statements of income.

The change in fair value of the assets and liabilities included interest income and expense, respectively.

~~6. Variable Interest Entities~~

~~In the normal course of business,~~Effective January 1, 2015, the Company isno longer consolidates CLOs due to the ~~manager~~adoption of various types of sponsored investment vehicles, including collateralized debt obligations (“CDOs”)/CLOs and sponsored investment funds, which may be considered VIEs. The Company receives advisory fees and/or other incentive-related fees for its services and may from time to time own equity or debt securities or enter into derivatives with the vehicles, each of which are considered variable interests. The Company enters into these variable interests principally to address client needs through the launch of such investment vehicles. The VIEs are primarily financed via capital contributed by equity and debt holders. The Company’s involvement in financing the operations of the VIEs is generally limited to its equity interests.

In order to determine whether the Company is the PB of a VIE, management must make significant estimates and assumptions of probable future cash flows of the VIEs. Assumptions made in such analyses may include, but are not limited to, market prices of securities, market interest rates, potential credit defaults on individual securities or default rates on a portfolio of securities, prepayments, realization of gains, liquidity or marketability of certain securities, discount rates and the probability of certain other outcomes.ASU 2015-02. See Note 2,Significant Accounting Policies, for ~~more~~further information.

~~Consolidated VIEs~~. Consolidated VIEs included CLOs in which BlackRock did not have an investment; however, BlackRock, as the collateral manager, was deemed to have both the power to control the activities of the CLOs and the right to receive benefits that could potentially be significant to the CLOs. In addition, BlackRock was the PB of one investment fund because it absorbed the majority of the variability due to its de-facto related-party relationships with other

partners in the fund. The assets of these VIEs are not available to creditors of the Company. In addition, the investors in these VIEs have no recourse to the credit of the Company. At December 31, 2013 and 2012, the following balances related to VIEs were consolidated on the consolidated statements of financial condition:

(in millions) December 31,
2013 December 31,
2012
Assets of consolidated VIEs:

Cash and cash equivalents
$ 161    $ 297
Bank loans
2,176    2,110
Bonds
106    124
Other investments and other assets
43    30
Total bank loans, bonds, other investments and other assets
2,325    2,264
Liabilities of consolidated VIEs:

Borrowings
(2,369 ) (2,402 )
Other liabilities
(74 ) (103 )
Appropriated retained earnings
(22 ) (29 )
Noncontrolling interests of consolidated VIEs
(21 ) (27 )
Total BlackRock net interests in consolidated VIEs
$ — $ —

During 2013, the Company did not record any nonoperating net income (loss) on consolidated VIEs on the consolidated statements of income. During 2012, the Company recorded a $38 million nonoperating net loss on consolidated VIEs offset by a $38 million net loss attributable to nonredeemable noncontrolling interests on the consolidated statements of income. During 2011, the Company recorded an $18 million nonoperating net loss on consolidated VIEs offset by an $18 million net loss attributable to nonredeemable noncontrolling interests on the consolidated statements of income.

~~At December 31, 2013 and 2012, the weighted-average maturity of the bank loans and bonds was approximately 4.7 years and 4.5 years, respectively.~~

~~Non-Consolidated VIEs.~~At December 31, 2013 and 2012, the Company’s carrying value of assets and liabilities and its maximum risk of loss related to VIEs for which it was the sponsor or in which it held a variable interest, but for which it was not the PB, was as follows:

(in millions) Variable Interests on the Consolidated
Statement of Financial Condition
At December 31, 2013 Investments Advisory
Fee
Receivables Other Net
Assets
(Liabilities) Maximum
Risk of Loss⁽¹⁾
CDOs/CLOs
$ — $ 1    $ (4 ) $ 18
Other sponsored investment funds:

Collective trusts
— 184      — 184
Other
37    137    (6 ) 174
Total
$ 37    $ 322    $ (10 ) $ 376

(in millions) Variable Interests on the Consolidated
Statement of Financial Condition
At December 31, 2012 Investments Advisory
Fee
Receivables Other Net
Assets
(Liabilities) Maximum
Risk of Loss⁽¹⁾
CDOs/CLOs
$ 1    $ 1    $ (5 ) $ 19
Other sponsored investment funds:

Collective trusts
— 248    — 248
Other
17    61    (3 ) 77
Total
$ 18    $ 310    $ (8 ) $ 344

~~(1)~~

At both December 31, 2013 and 2012, BlackRock’s maximum risk of loss associated with these VIEs primarily related to: (i) advisory fee receivables; (ii) BlackRock’s investments; and (iii) $17 million of credit protection sold by BlackRock to a third party in a synthetic CDO transaction.

~~The net assets related to the above CDOs/CLOs and other sponsored investment funds, including collective trusts, that the Company does not consolidate were as follows:~~

~~CDOs/CLOs~~

(in billions) December 31,
2013 December 31,
2012
Assets at fair value
$ 1 $ 4
Liabilities⁽¹⁾
2 5
Net assets
$ (1 ) $ (1 )

~~(1)~~

~~Amounts primarily comprised of unpaid principal debt obligations to CDO/CLO debt holders.~~

The net assets of other sponsored investment funds that are nonconsolidated VIEs approximated $1.6 trillion to $1.7 trillion at December 31, 2013 and $1.5 trillion to $1.6 trillion at December 31, 2012. Net assets included $1.4 trillion of collective trusts at December 31, 2013 and $1.3 trillion of collective trusts at December 31, 2012. Each collective trust has been aggregated separately and may include collective trusts that invest in other collective trusts. The net assets of these VIEs primarily are comprised of cash and cash equivalents and investments offset by liabilities primarily comprised of various accruals for the sponsored investment vehicles.

7. Derivatives and Hedging

The Company maintains a program to enter into swaps to hedge against market price and interest rate exposures with respect to certain seed investments in sponsored investment products. At December 31, ~~2013,~~2015, the Company had outstanding total return swaps and interest rate swaps with an aggregate notional ~~value~~values of approximately ~~$117~~$360 million and ~~$71~~$46 million, respectively. At December 31, ~~2012,~~2014, the Company had outstanding total return swaps and interest rate swaps with an aggregate notional ~~value~~values of approximately ~~$206 million.~~$238 million and $84 million, respectively.

The Company has entered into a ~~credit default swap,~~derivative, providing credit protection to a counterparty of approximately $17 million, representing the Company’s maximum risk of loss with respect to the provision of credit protection. The Company carries the ~~credit default swap~~derivative at fair value based on the expected discounted future cash flows under the arrangement.

The fair values of the outstanding ~~total return swaps, interest rate swaps and the credit default swap~~derivatives mentioned above were not material to the consolidated statements of financial condition at December 31, ~~2013~~2015 and ~~2012.~~2014.

The Company executes forward foreign currency exchange contracts to mitigate the risk of certain foreign exchange ~~risk~~ movements. At December 31, ~~2013,~~2015 and 2014, the Company had outstanding forward foreign currency exchange contracts with an aggregate notional ~~value~~values of

approximately ~~$792~~$169 million and a$201 million, respectively. The fair value of ~~approximately $26 million. At December 31, 2012,~~ the ~~aggregate notional value of outstanding~~ forward foreign currency exchange contracts at December 31, 2015 and 2014 was ~~approximately $79 million and~~not material to the ~~fair value was immaterial.~~consolidated statement of financial condition.

Gains (losses) on total return swaps are recorded in nonoperating income (expense) and were $11 million, $(26) million and $(15) million for 2015, 2014 and 2013, respectively.

Gains (losses) on the ~~consolidated statements of~~interest rate swaps are recorded in nonoperating income (expense) and were ~~$(15) million, $(23) million and $4~~$(21) million for ~~2013, 2012~~2014. Gains (losses) were not material for 2015 and ~~2011, respectively.~~2013.

Gains (losses) on forward foreign currency exchange contracts are recorded in other general and administration expense ~~on the consolidated statement of income~~ and were $(26) million for 2013. Gains (losses) ~~on forward foreign currency exchange contracts~~ were not material to the consolidated statements of income for ~~2012~~2015 and ~~2011.~~

~~Gains (losses) on the interest rate swaps and the credit default swap were not material to the consolidated statements of income for 2013, 2012 and 2011.~~2014.

The Company consolidates certain sponsored investment funds, which may utilize derivative instruments as a part of the funds’ investment strategies. The fair value of such derivatives at December 31, ~~2013~~2015 and ~~2012~~2014 was not material. The change in fair value of such derivatives, which is recorded in nonoperating income (expense), was not material for ~~2013, 2012~~2015, 2014 and ~~2011.~~2013.

~~In May 2011, the Company entered into a designated cash flow hedge consisting of a $750 million interest rate swap to hedge future cash flows~~See Note 12, Borrowings, for more information on the Company’s floating rate notes due in 2013. Interest on this swap was at a fixed rate of 1.03%, payable semi-annually on May 24 and November 24 of each year. During 2013, the interest rate swap matured and the floating rate notes were fully repaid. Gains (losses) on the interest rate swap were not material to the consolidated statements of income for 2013, 2012 and 2011.net investment hedge.

8. Property and Equipment

Property and equipment consists of the following:

							Estimated useful		December 31,
(in millions)	Estimated useful life-in years		December 31,
(in millions)	Estimated useful life-in years		2013		2012		life-in years		2015		2014
Property and equipment:
Land		N/A	$	4	$	4	N/A		$	6	$	4
Building		39		17		17		39		17		17
Building improvements		15		14		13		15		15		14
Leasehold improvements		1-15		501		482	1-15			491		478
Equipment and computer software		3		451		465		3		374		387
Other transportation equipment		10		56		56		10		135		56
Furniture and fixtures		7		93		92		7		62		93
Construction in progress							N/A			51		5
Total				1,136		1,129				1,151		1,054
Less: accumulated depreciation and amortization				611		572				570		587
Property and equipment, net			$	525	$	557			$	581	$	467

N/A	– Not Applicable

Qualifying software costs of approximately ~~$35~~$48 million, ~~$36~~$45 million and ~~$37~~$35 million have been capitalized within equipment and computer software during ~~2013, 2012~~2015, 2014 and ~~2011,~~2013, respectively, and are being amortized over an estimated useful life of three years.

Depreciation and amortization expense was $115 million, $117 million and $128 million ~~$129 million~~for 2015, 2014 and ~~$138 million for~~ 2013, ~~2012 and 2011,~~ respectively.

9. Goodwill

Goodwill activity during ~~2013~~2015 and ~~2012~~2014 was as follows:


(in millions)	2013			2012			2015			2014
Beginning of year balance	$	12,910		$	12,792		$	12,961		$	12,980
Acquisitions⁽¹⁾		73			131			181			—
Goodwill adjustments related to Quellos and other⁽²⁾		(3	)		(13	)		(19	)		(19	)
End of year balance	$	12,980		$	12,910		$	13,123		$	12,961

(1)

~~The 2013~~

In 2015, amount ~~primarily~~ represents ~~$29~~$113 million of goodwill from the Company’s acquisition of MGPA, an independently managed private equity real estate investment advisory company primarily in Asia and Europe, on October 4, 2013 for approximately $66 million (the “MGPA Transaction”) and $44FutureAdvisor, which expanded the Company’s digital wealth management capabilities, $49 million of goodwill from the Company’s acquisition of ~~Credit Suisse’s ETF franchise on July 1, 2013 for approximately $273 million (the “Credit Suisse ETF Transaction”). The amount for 2012 represents $106~~Infraestructura Institucional, which expanded the Company’s infrastructure capabilities in Mexico, and $19 million of goodwill from the Company’s acquisition of ~~the Canadian exchange-traded products (“ETP”) provider, Claymore Investments, Inc. (the “Claymore Transaction”) on March 7, 2012~~certain assets related to BKCA. The total consideration paid for these acquisitions was approximately ~~$212~~$300 million, ~~and $25~~including $27 million of ~~goodwill from the Company’s acquisition~~contingent consideration at fair value at time of ~~the European private equity and infrastructure funds of funds franchise of Swiss Re Private Equity Partners (the “SRPEP Transaction”) on September 4, 2012.~~close.

(2)

The decrease in goodwill during both ~~2013~~2015 and ~~2012~~2014 primarily resulted from a decline ~~of approximately $20 million~~ related to tax benefits realized from tax-deductible goodwill in excess of book goodwill from the acquisition of the fund-of-funds business of Quellos Group, LLC in October 2007 (the “Quellos Transaction”). Goodwill related to the Quellos Transaction will continue to be reduced in future periods by the amount of tax benefits realized from tax-deductible goodwill in excess of book goodwill from the Quellos Transaction. The balance of the Quellos tax-deductible goodwill in excess of book goodwill was approximately ~~$293~~$231 million and ~~$324~~$263 million at December 31, ~~2013~~2015 and ~~2012,~~2014, respectively. In 2012, the decrease in Quellos goodwill was partially offset by a $10 million increase related to the release of the remaining common shares held in escrow in connection with the Quellos Transaction.

~~The impairment tests performed~~BlackRock assessed its goodwill for ~~goodwill~~impairment as of July 31, 2015, 2014 and 2013 ~~2012~~ and ~~2011~~considered such factors as the book value and the market capitalization of the Company. The impairment assessment indicated ~~that~~ no impairment charges were required. The Company ~~continuously monitors~~continues to monitor its book value per share as compared with closing prices of its common stock for potential indicators of impairment. At December 31, ~~2013,~~2015, the Company’s common stock closed ~~trading~~ at a market price of ~~$316.47 per share,~~$340.52, which exceeded its book value ~~per share~~ of approximately ~~$156.69 excluding appropriated retained earnings.~~$172.12 per share.

10. Intangible Assets

Intangible assets at December 31, ~~2013~~2015 and ~~2012~~2014 consisted of the following:


(in millions)	Remaining Weighted- Average Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Remaining Weighted- Average Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
*At December 31, 2013*
At December 31, 2015
*Indefinite-lived intangible assets:*
Management contracts		N/A	$	15,582	$	—	$	15,582	N/A		$	15,699	$	—	$	15,699
Trade names / trademarks		N/A		1,403		—		1,403	N/A			1,403		—		1,403
License		N/A		6		—		6	N/A			6		—		6
Total indefinite-lived intangible assets				16,991		—		16,991				17,108		—		17,108
Finite-lived intangible assets:
Management contracts		4.3		1,561		1,054		507		3.7		1,003		741		262
Intellectual property		4.6		6		3		3		2.6		6		4		2
Total finite-lived intangible assets		4.3		1,567		1,057		510		3.7		1,009		745		264
Total intangible assets			$	18,558	$	1,057	$	17,501			$	18,117	$	745	$	17,372
*At December 31, 2012*
At December 31, 2014
Indefinite-lived intangible assets:
Management contracts		N/A	$	15,351	$	—	$	15,351	N/A		$	15,579	$	—	$	15,579
Trade names / trademarks		N/A		1,403		—		1,403	N/A			1,403		—		1,403
License		N/A		6		—		6	N/A			6		—		6
Total indefinite-lived intangible assets				16,760		—		16,760				16,988		—		16,988
Finite-lived intangible assets:
Management contracts		4.9		1,535		896		639		3.8		1,390		1,036		354
Intellectual property		5.6		6		3		3		3.6		6		4		2
Total finite-lived intangible assets		4.9		1,541		899		642		3.8		1,396		1,040		356
Total intangible assets			$	18,301	$	899	$	17,402			$	18,384	$	1,040	$	17,344

N/A	— Not Applicable

The impairment tests performed for intangible assets as of July 31, ~~2013, 2012~~2015, 2014 and ~~2011~~2013 indicated no impairment charges were required.

Estimated amortization expense for finite-lived intangible assets for each of the five succeeding years is as follows:


(in millions)
Year	Amount		Amount
2014		$ 156
2015		126
2016		91	$	97
2017		74		80
2018		24		30
2019				28
2020				14

Indefinite-Lived Acquired Management Contracts

In ~~July 2013,~~March 2015, in connection with the ~~Credit Suisse ETF Transaction,~~BKCA acquisition, the Company acquired ~~$231~~$120 million of indefinite-lived management contracts.

Finite-Lived Acquired Management Contracts

In ~~March 2012,~~October 2015, in connection with the ~~Claymore Transaction,~~Infraestructura Institucional acquisition, the Company acquired ~~$163 million of indefinite-lived ETP management contracts.~~

~~Finite-Lived Acquired Management Contracts~~

~~In October 2013, in connection with the MGPA Transaction, the Company acquired $29~~$36 million of finite-lived management contracts with a weighted-average estimated useful life of approximately ~~eight~~six years.

In September 2012, in connection with the SRPEP Transaction, the Company acquired $40 million of finite-lived management contracts with a weighted-average estimated useful life of approximately 10 years.

11. Other Assets

At March 31, 2013, BlackRock held an approximately one-third economic equity interest in Private National Mortgage Acceptance Company, LLC (“PNMAC”), which is accounted for as an equity method investment and is included in other assets on the consolidated statements of financial condition. On May 8, 2013, PennyMac became the sole managing member of PNMAC in connection with an initial public offering of PennyMac (the “PennyMac IPO”). As a result of the 2013 PennyMac IPO, BlackRock recorded a noncash, nonoperating pre-tax gain of $39 million related to the carrying value of its equity method investment.

Subsequent to the PennyMac IPO, in 2013 the Company contributed 6.1 million units of its PennyMac investment to a new donor advised fund (the “Charitable Contribution”). The fair value of the Charitable Contribution was $124 million and is included in general and administration ~~expenses~~expense on the consolidated statements of ~~income.~~income for 2013. In connection with the Charitable Contribution, the Company also recorded a noncash, nonoperating pre-tax gain of $80 million related to the contributed investment and a tax benefit of approximately $48 million.

The carrying value and fair value of the Company’s ~~remaining~~ interest (approximately 20% or 16 million shares and units) was approximately ~~$127~~$222 million and ~~$273~~$239 million, respectively, at December 31, ~~2013.~~2015 and approximately $167 million and $269 million, respectively, at December 31, 2014. The fair value of the Company’s interest reflected the PennyMac stock price at December 31, ~~2013 (Level~~2015 and 2014, respectively (a Level 1 input).

12. Borrowings

Short-Term Borrowings

~~The carrying value of short-term borrowings at December 31, 2012 included $100 million under the 2012 revolving credit facility.~~

~~2013~~2015 Revolving Credit Facility. In March 2011, the Company entered into a five-year $3.5 billion unsecured revolving credit facility, ~~(the “2011 credit facility”).~~which was amended in 2014, 2013 and 2012. In ~~March 2012,~~April 2015, the ~~2011~~Company’s credit facility was further amended to extend the maturity date ~~by one year~~ to March ~~2017~~2020 and ~~in April 2012~~to increase the amount of the aggregate commitment ~~was increased~~ to ~~$3.785~~$4.0 billion (the “2012 credit facility”). In March 2013, the Company’s credit facility was amended to extend the maturity date by one year to March 2018 and the amount of the aggregate commitment was increased to $3.990 billion (the “2013“2015 credit facility”). The ~~2013~~2015 credit facility permits the Company to request up to an additional $1.0 billion of borrowing capacity, subject to lender credit approval, increasing the overall size of the ~~2013~~2015 credit facility to an aggregate principal amount not to exceed ~~$4.990~~$5.0 billion. Interest on borrowings outstanding accrues at a rate based on the applicable London Interbank Offered Rate plus a spread. The ~~2013~~2015 credit facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at December 31, ~~2013.~~2015. The ~~2013~~2015 credit facility provides back-up liquidity ~~funds~~to fund ongoing working capital for general corporate purposes and ~~funds~~ various investment opportunities. At December 31, ~~2013,~~2015, the Company had no amount outstanding under the ~~2013~~2015 credit facility.

Commercial Paper Program. On October 14, 2009, BlackRock established a commercial paper program (the “CP Program”) under which the Company could issue unsecured commercial paper notes (the “CP Notes”) on a private placement basis up to a maximum aggregate amount outstanding at any time of ~~$3.0 billion. On May 13, 2011, BlackRock increased the maximum aggregate amount that may be borrowed under the~~$4.0 billion as amended in April 2015. The CP Program to $3.5 billion. On May 17, 2012, BlackRock increased the maximum aggregate amount to $3.785 billion. In April 2013, BlackRock increased the maximum aggregate amount for which the Company could issue unsecured CP Notes on a private-placement basis up to a maximum aggregate amount outstanding at any time of $3.990 billion. The commercial paper program is currently supported by the ~~2013~~2015 credit facility. At December 31, ~~2013 and 2012,~~2015, BlackRock had no CP Notes outstanding.

Long-Term Borrowings

The carrying value and fair value of long-term borrowings estimated using market prices and foreign exchange rates at December 31, ~~2013~~2015 included the following:


(in millions)	Maturity Amount		Unamortized Discount			Carrying Value		Fair Value		Maturity Amount		Unamortized Discount and Debt Issuance Costs			Carrying Value		Fair Value
3.50% Notes due 2014	$	1,000	$	—		$	1,000	$	1,029
1.375% Notes due 2015		750		—			750		759
6.25% Notes due 2017		700		(2	)		698		812	$	700	$	(1	)	$	699	$	757
5.00% Notes due 2019		1,000		(2	)		998		1,140		1,000		(3	)		997		1,106
4.25% Notes due 2021		750		(3	)		747		799		750		(5	)		745		828
3.375% Notes due 2022		750		(4	)		746		745		750		(6	)		744		773
3.50% Notes due 2024											1,000		(8	)		992		1,030
1.25% Notes due 2025											760		(7	)		753		729
Total Long-term Borrowings	$	4,950	$	(11	)	$	4,939	$	5,284	$	4,960	$	(30	)	$	4,930	$	5,223

Long-term borrowings at December 31, ~~2012~~2014 had a carrying value of ~~$5.687~~$4.922 billion and a fair value of ~~$6.275~~$5.309 billion determined using market prices at the end of December ~~2012.~~2014.

2025 Notes. In May 2015, the Company issued €700 million of 1.25% senior unsecured notes maturing on May 6, 2025 (the “2025 Notes”). The notes are listed on the New York Stock Exchange. The net proceeds of the 2025 Notes were used for general corporate purposes, including refinancing of outstanding indebtedness. Interest of approximately $10 million per year based on current exchange rates is payable annually on May 6 of each year. The 2025 Notes may be redeemed in whole or in part prior to maturity at any time at the option of the Company at a “make-whole” redemption price. The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2025 Notes.

Upon conversion to U.S. dollars the Company designated the €700 million debt offering as a net investment hedge to offset its currency exposure relating to its net investment in certain euro functional currency operations. A gain of $19 million, net of tax, was recognized in other comprehensive income for 2015. No hedge ineffectiveness was recognized during 2015.

2024 Notes. In March 2014, the Company issued $1.0 billion in aggregate principal amount of 3.50% senior unsecured and unsubordinated notes maturing on March 18, 2024 (the “2024 Notes”). The net proceeds of the 2024 Notes were used to refinance certain indebtedness which matured in the fourth quarter of 2014. Interest is payable semi-annually in arrears on March 18 and September 18 of each year, or approximately $35 million per year. The 2024 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a “make-whole” redemption price. The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2024 Notes.

2022 Notes. In May 2012, the Company issued $1.5 billion in aggregate principal amount of unsecured unsubordinated obligations. These notes were issued as two separate series of senior debt securities, including $750 million of 1.375% notes, ~~maturing~~which were repaid in June 2015 ~~(the “2015 Notes”)~~at maturity, and $750 million of 3.375% notes maturing in June 2022 (the “2022 Notes”). Net proceeds were used to fund the repurchase of BlackRock’s common stock and Series B Preferred from Barclays and affiliates and for general corporate purposes. Interest on the ~~2015 Notes and the~~ 2022 Notes of approximately ~~$10 million and~~ $25 million per year, respectively, is payable semi-annually on June 1 and December 1 of each year, which commenced December 1, 2012. The ~~2015 Notes and~~ 2022 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a “make-whole” redemption price. The “make-whole” redemption price represents a price, subject to the specific terms of the ~~2015 and~~ 2022 Notes and related indenture, that is the greater of (a) par value and (b) the present value of future payments that will not be paid because of an early redemption, which is discounted at a fixed spread over a comparable Treasury security. The ~~2015 Notes~~unamortized discount and ~~2022 Notes were issued at a discount of $5 million that is being amortized over the term of the notes. The Company incurred approximately $7 million of~~ debt issuance costs ~~which~~ are being amortized over the ~~respective terms~~remaining term of the ~~2015 Notes and~~ 2022 Notes. ~~At December 31, 2013, $5 million of unamortized debt issuance costs was included in other assets on the consolidated statement of financial condition.~~

~~2013 and~~ 2021 Notes.In May 2011, the Company issued $1.5 billion in aggregate principal amount of unsecured unsubordinated obligations. These notes were issued as two separate series of senior debt securities, including $750 million of 4.25% notes maturing in May 2021 and $750 million of floating rate notes (“2013 Floating Rate Notes”), which were repaid in May 2013 at maturity. Net proceeds of this offering were used to fund the repurchase of BlackRock’s Series B Preferred from affiliates of Merrill Lynch & Co., Inc. (“Merrill Lynch”). Interest on the 4.25% notes due in 2021 (“2021 Notes”) is payable semi-annually on May 24 and November 24 of each year, which commenced November 24, 2011, and is approximately $32 million per year. The 2021 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the

Company at a “make-whole” redemption price. The ~~2021 Notes were~~

~~issued at a~~unamortized discount ~~of $4 million that is being amortized over the term of the notes. The Company incurred approximately $7 million of~~and debt issuance costs ~~for the $1.5 billion note issuances, which~~ are being amortized over the ~~respective terms~~remaining term of the ~~notes. At December 31, 2013, $3 million of unamortized debt issuance costs was included in other assets on the consolidated statement of financial condition.~~2021 Notes.

In May 2011, in conjunction with the issuance of the 2013 Floating Rate Notes, the Company entered into a $750 million notional interest rate swap maturing in 2013 to hedge the future cash flows of its obligation at a fixed rate of 1.03%. During the second quarter of 2013, the interest rate swap matured and the 2013 Floating Rate Notes were fully repaid.

~~2012, 2014 and~~ 2019 Notes.In December 2009, the Company issued $2.5 billion in aggregate principal amount of unsecured and unsubordinated obligations. These notes were issued as three separate series of senior debt securities including $0.5 billion of 2.25% notes, which were repaid in December 2012, $1.0 billion of 3.50% notes, which were repaid in December 2014 at maturity, and $1.0 billion of 5.0% notes maturing in December ~~2014 and~~ 2019 ~~respectively.~~(the “2019 Notes”). Net proceeds of this offering were used to repay borrowings under the CP Program, which was used to finance a portion of the acquisition of Barclays Global Investors (“BGI”) from Barclays on December 1, 2009 (the “BGI Transaction”), and for general corporate purposes. Interest on the ~~2014 Notes and~~ 2019 Notes of approximately ~~$35 million and~~ $50 million per year ~~respectively,~~ is payable semi-annually in arrears on June 10 and December 10 of each year. These notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a “make-whole” redemption price. ~~These notes were issued collectively at a~~The unamortized discount ~~of $5 million, which is being amortized over the respective terms of the notes. The Company incurred approximately $13 million of~~and debt issuance costs ~~which~~ are being amortized over the ~~respective terms~~remaining term of ~~these notes. At December 31, 2013, $4 million of unamortized debt issuance costs was included in other assets on~~ the ~~consolidated statement of financial condition.~~2019 Notes.

2017 Notes.In September 2007, the Company issued $700 million in aggregate principal amount of 6.25% senior unsecured and unsubordinated notes maturing on September 15, 2017 (the “2017 Notes”). A portion of the net proceeds of the 2017 Notes was used to fund the initial cash payment for the acquisition of the ~~fund of funds~~fund-of-funds business of Quellos and the remainder was used for general corporate purposes. Interest is payable semi-annually in arrears on March 15 and September 15 of each year, or approximately $44 million per year. The 2017 Notes may be redeemed prior

to maturity at any time in whole or in part at the option of the Company at a “make-whole” redemption price. The ~~2017 Notes were issued at a~~unamortized discount ~~of $6 million, which is being amortized over their ten-year term. The Company incurred approximately $4 million of~~and debt issuance costs ~~which~~ are being amortized over ~~ten years. At December 31, 2013, $2 million~~the remaining term of ~~unamortized debt issuance costs was included in other assets on~~ the ~~consolidated statement of financial condition.~~2017 Notes.

13. Commitments and Contingencies

Operating Lease Commitments

The Company leases its primary office spaces under agreements that expire through 2035. Future minimum commitments under these operating leases are as follows:


(in millions)
Year	Amount		Amount
2014	$	135
2015		127
2016		110	$	134
2017		109		133
2018		106		131
2019				125
2020				120
Thereafter		699		560
Total	$	1,286	$	1,203

Rent expense and certain office equipment expense under lease agreements amounted to $136 million, $132 million and $137 million ~~$133 million~~in 2015, 2014 and ~~$154 million in~~ 2013, ~~2012 and 2011,~~ respectively.

Investment Commitments.At December 31, ~~2013,~~2015, the Company had ~~$216~~$179 million of various capital commitments to fund sponsored investment funds, including consolidated VIEs. These funds ofinclude private equity funds, real estate funds, infrastructure funds ~~opportunistic funds~~ and ~~distressed credit~~opportunistic funds. This amount excludes additional commitments made by consolidated funds of funds to underlying third-party funds as third-party noncontrolling interest holders have the legal obligation to fund the respective commitments of such funds of funds. In addition to the capital commitments of $179 million, the Company had approximately $38 million of contingent commitments for certain funds which have investment periods that have expired. Generally, the timing of the funding of these commitments is unknown and the commitments are callable on demand at any time prior to the expiration of the commitment. These unfunded commitments are not recorded on the consolidated statements of financial condition. These commitments do not include potential future commitments approved by the Company ~~but which~~that are not yet legally binding. The Company intends to make additional capital commitments from time to time to fund additional investment products for, and with, its clients.

Contingencies

Contingent Payments.The Company acts as the portfolio manager in a series of ~~credit default swap~~derivative transactions and has a maximum potential exposure of $17 million ~~under a credit default swap~~ between the Company and counterparty. See Note 7,Derivatives and Hedging, for further discussion.

Contingent Payments Related to Business ~~Acquisitions~~.Acquisitions. In connection with ~~the Credit Suisse ETF Transaction,~~certain acquisitions, BlackRock is required to make contingent payments,

~~annually to Credit Suisse,~~ subject to the acquired businesses achieving specified ~~thresholds during~~performance targets over a ~~seven-year~~certain period subsequent to the ~~acquisition date. In addition, BlackRock is required to make contingent payments related to the MGPA Transaction during a five-year period, subject to achieving specified thresholds, subsequent to the~~applicable acquisition date. The fair value of the remaining aggregate contingent payments at December 31, ~~2013~~2015 is not significant to the condensed consolidated statement of financial condition and is included in other liabilities.

Legal Proceedings.From time to time, BlackRock receives subpoenas or other requests for information from various U.S. federal, state governmental and domestic and international regulatory authorities in connection with certain industry-wide or other investigations or proceedings. It is BlackRock’s policy to cooperate fully with such inquiries. The Company and certain of its subsidiaries have been named as defendants in various legal actions, including arbitrations and other litigation arising in connection with BlackRock’s activities. Additionally, ~~certain BlackRock-sponsored~~BlackRock advised investment ~~funds that the Company manages are~~portfolios may be subject to lawsuits, any of which potentially could harm the investment returns of the applicable ~~fund~~portfolio or result in the Company being liable to the ~~funds~~portfolios for any resulting damages.

On May 27, 2014, certain purported investors in the BlackRock Global Allocation Fund, Inc. and the BlackRock Equity Dividend Fund (collectively, the “Funds”) filed a consolidated complaint (the “Consolidated Complaint”) in the U.S. District Court for the District of New Jersey against BlackRock Advisors, LLC, BlackRock Investment Management, LLC and BlackRock International Limited (collectively, the “Defendants”) under the caption In re BlackRock Mutual Funds Advisory Fee Litigation. The Consolidated Complaint, which purports to be brought derivatively on behalf of the Funds, alleges that the Defendants violated Section 36(b) of the Investment Company Act by receiving

allegedly excessive investment advisory fees from the Funds. On February 24, 2015, the same plaintiffs filed another complaint in the same court against BlackRock Investment Management, LLC and BlackRock Advisors, LLC. The allegations and legal claims in both complaints are substantially similar, with the new complaint purporting to challenge fees received by Defendants after the plaintiffs filed their prior complaint. Both complaints seek, among other things, to recover on behalf of the Funds all allegedly excessive advisory fees received by Defendants in the twelve month period preceding the start of each lawsuit, along with purported lost investment returns on those amounts, plus interest. On March 25, 2015, Defendants’ motion to dismiss the Consolidated Complaint was denied. The Defendants believe the claims in both lawsuits are without merit and intend to vigorously defend the actions.

Between November 12, 2015 and November 16, 2015, BlackRock, Inc., BlackRock Realty Advisors, Inc. (“BRA”) and the BlackRock Granite Property Fund, Inc. (“Granite Fund”), along with certain other Granite Fund-related entities (collectively, the “BlackRock Parties”) were named as defendants in thirteen separate lawsuits filed in the Superior Court of the State of California for the County of Alameda arising out of the June 16, 2015 collapse of a balcony at the Library Gardens apartment complex in Berkeley, California (the “Property”). The Property is indirectly owned by the Granite Fund, which is managed by BRA. The plaintiffs also named as defendants in the lawsuits Greystar, which is the property manager of the Property, and certain other entities, including the developer of the Property, building contractors and building materials suppliers. The plaintiffs allege, among other things, that the BlackRock Parties were negligent in their ownership, control and maintenance of the Property’s balcony, and seek monetary, including punitive, damages. The Company believes the claims in the lawsuits are without merit and intends to vigorously defend the actions.

Indemnifications.In the ordinary course of business or in connection with certain acquisition agreements, BlackRock enters into contracts pursuant to which it may agree to indemnify third parties in certain circumstances. The terms of these indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined or the likelihood of any liability is considered remote. Consequently, no liability has been recorded on the consolidated ~~statement~~statements of financial condition.

In connection with securities lending transactions, BlackRock has issued certain indemnifications to certain securities lending clients against potential loss resulting from a borrower’s failure to fulfill its obligations under the securities lending agreement should the value of the collateral pledged by the borrower at the time of default be insufficient to cover the borrower’s obligation under the securities lending agreement. At December 31, ~~2013,~~2015, the Company indemnified certain of its clients for their securities lending loan balances of approximately ~~$118.3~~$169.3 billion. The Company held as agent, cash and securities totaling ~~$124.6~~$179.6 billion as collateral for indemnified securities on loan at December 31, ~~2013.~~2015. The fair value of these indemnifications was not material at December 31, ~~2013.~~

2015.

14. Stock-Based Compensation

The components of stock-based compensation expense are as follows:


	Year ended December 31,						Year ended December 31,
(in millions)	2013		2012		2011		2015		2014		2013
Stock-based compensation:
Restricted stock and RSUs	$	415	$	429	$	444	$	484	$	421	$	415
Market performance-based RSUs to be funded by PNC		33		15		—
Long-term incentive plans to be funded by PNC		—		7		44		30		32		33
Stock options		—		—		9
Total stock-based compensation	$	448	$	451	$	497	$	514	$	453	$	448

Stock Award and Incentive Plan. Pursuant to the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan (the “Award Plan”), options to purchase shares of the Company’s common stock at an exercise price not less than the market value of BlackRock’s common stock on the date of grant in the form of stock options, restricted stock or RSUs may be granted to employees and ~~non-employee~~nonemployee directors. A maximum of ~~27,000,000~~34,500,000 shares of common stock were authorized for issuance under the Award Plan. Of this amount, ~~3,304,834~~7,621,046 shares remain available for future awards at December 31, ~~2013.~~2015. Upon exercise of employee stock options, the issuance of restricted stock or the vesting of RSUs, the Company issues shares out of treasury to the extent available.

Restricted Stock and RSUs.Pursuant to the Award Plan, restricted stock grants and RSUs may be granted to certain employees. Substantially all restricted stock and RSUs vest over periods ranging from one to ~~four~~three years and are expensed using the straight-line method over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. Prior to 2009, the Company awarded restricted stock and RSUs with nonforfeitable dividend equivalent rights. Restricted stock and RSUs awarded beginning in 2009 are not considered participating securities for purposes of calculating EPS as the dividend equivalents are subject to forfeiture prior to vesting of the award.

Restricted stock and RSU activity for ~~2013~~2015 is summarized ~~below:~~below.


Outstanding at	Restricted Stock and Units			Weighted Average Grant Date Fair Value		Restricted Stock and Units			Weighted Average Grant-Date Fair Value
December 31, 2012		5,620,835		$	197.90
December 31, 2014							3,401,909		$	257.01
Granted		1,660,532		$	234.75		1,377,263		$	343.49
Converted		(2,588,637	)	$	204.09		(1,639,078	)	$	231.26
Forfeited		(79,917	)	$	204.12		(72,357	)	$	306.41
December 31, 2013⁽¹⁾		4,612,813		$	207.94
December 31, 2015⁽¹⁾							3,067,737		$	308.42

(1)	At December 31, ~~2013,~~2015, approximately ~~4.4~~2.8 million awards are expected to vest and 0.2 million awards have vested but have not been converted.

The Company values restricted stock and RSUs at their grant-date fair value as measured by BlackRock’s common stock price. The total fair market value of ~~RSUs~~RSUs/restricted stock granted to employees during 2015, 2014 and 2013 ~~2012 and 2011~~ was ~~$390~~$473 million, ~~$348~~$472 million and ~~$477~~$390 million, respectively. The total fair market value of ~~RSUs~~RSUs/restricted stock converted to common stock during 2015, 2014 and 2013 ~~2012~~was $379 million, $534 million and ~~2011 was~~ $528 million, ~~$297 million and $553 million,~~ respectively.

At December 31, ~~2013,~~2015, the intrinsic value of outstanding RSUs was ~~$1.5~~$1.0 billion, reflecting a closing stock price of ~~$316.47~~$340.52 at December 31, ~~2013.~~2015.

~~The awards~~RSUs/restricted stock granted under the Award Plan primarily related to the following:

~~2011~~

~~1,594,259 RSUs to employees as part of annual incentive compensation that vest ratably over three years from the date of grant; and~~

	Year ended December 31,
	2015		2014		2013
Awards granted as part of annual incentive compensation that vest ratably over three years from the date of grant		952,329		1,022,295		1,172,381
Awards granted that cliff vest 100% on:
January 31, 2016		—		—		370,812
January 31, 2017		—		287,963		—
January 31, 2018		303,999		—		—
		1,256,328		1,310,258		1,543,193

~~609,733~~

In addition the Company also granted RSUs ~~to employees that cliff vest 100% on January 31, 2014.~~

~~2012~~

~~1,365,691 RSUs to employees as part~~ of ~~annual incentive compensation that vest ratably over three years from the date of grant;~~120,935, 166,018 and

117,339 during 2015, 2014 and 2013, respectively.

~~418,038 RSUs to employees that cliff vest 100% on January 31, 2015.~~

~~2013~~

~~1,172,381 RSUs to employees as part of annual incentive compensation that vest ratably over three years from the date of grant; and~~

~~370,812 RSUs to employees that cliff vest 100% on January 31, 2016.~~

At December 31, ~~2013,~~2015, there was ~~$250~~$305 million in total unrecognized stock-based compensation expense related to unvested RSUs. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of ~~0.7~~0.9 years.

~~2014~~

In January ~~2014,~~2016, the Company granted ~~the following awards~~ under the Award ~~Plan:~~

Plan

~~1,022,295~~

1,030,964 RSUs or shares of restricted stock to employees as part of annual incentive compensation that vest ratably over three years from the date of grant; and

~~287,963~~303,587 RSUs or shares of restricted stock to employees that cliff vest 100% on January 31, ~~2017.~~2019.

Market Performance-based RSUs.Pursuant to the Award Plan, market performance-based RSUs may be granted to certain employees. The market performance-based RSUs require that separate 15%, 25% and 35% share price appreciation targets be achieved during the six-year term of the awards. The awards are split into three tranches and each tranche may vest if the specified target increase in share price is met. Eligible ~~delivery~~vesting dates for each tranche are January 31 (or, if such date is not a business day, the next following business day) of the year in which the fourth, fifth or sixth anniversaries of the ~~grant date.~~grant-date occurs. Certain awards are forfeited if the employee leaves BlackRock before the vesting date. These awards are amortized over a service period of four years, which is the longer of the explicit service period or the period in which the market target is expected to be met. Market performance-based RSUs are not considered participating securities as the dividend equivalents are subject to forfeiture prior to vesting of the award. During 2015 there were no market performance-based awards granted. In 2014 and 2013, the Company granted 315,961 and 556,581 market performance-based RSUs, ~~which~~respectively. The 2013 grant will be funded primarily by shares currently held by PNC (seeLong-Term Incentive PlansFunded by PNC below).

Market performance-based RSU activity for ~~2013~~2015 is summarized ~~below:~~below.

Outstanding at Market
Performance-
Based RSUs Weighted
Average
Grant Date
Fair Value
December 31, 2012
575,532    $ 115.03
Granted
556,581    $ 126.76
December 31, 2013⁽¹⁾
1,132,113    $ 120.80

Outstanding at	Market Performance- Based RSUs			Weighted Average Grant-Date Fair Value
December 31, 2014		1,425,319		$	137.31
Forfeited		(47,142	)	$	144.27
December 31, 2015⁽¹⁾		1,378,177		$	137.07

(1)	At December 31, ~~2013,~~2015, approximately ~~1.1~~1.3 million awards are expected to vest and noan immaterial amount of awards have vested and have not been converted.

At December 31, ~~2013,~~2015, total unrecognized stock-based compensation expense related to unvested market performance-based awards was ~~$88~~$47 million. The unrecognized compensation cost is expected to be recognized over athe remaining weighted-average period of ~~2.6~~0.9 years.

At December 31, 2015, the intrinsic value of outstanding market performance-based awards was $469 million reflecting a closing stock price of $340.52.

The grant-date fair value of the awards was $62 million in 2014 and $71 million in ~~both 2013 and 2012.~~2013. The fair value was calculated using a Monte Carlo simulation with the following assumptions:


Grant Year	Risk-Free Interest Rate			Performance Period		Expected Stock Volatility			Expected Dividend Yield			Risk-Free Interest Rate			Performance Period		Expected Stock Volatility			Expected Dividend Yield
2012		1.21	%		6		33.63	%		2.99	%
2013		1.05	%		6		25.85	%		2.89	%		1.05	%		6		25.85	%		2.89	%
2014													2.05	%		6		27.40	%		2.42	%

The Company’s expected stock volatility assumption was based upon an average of the historical stock price fluctuations of BlackRock’s common stock and an implied volatility at the ~~grant date.~~grant-date. The dividend yield assumption was derived using estimated dividends over the expected term and the stock price at the date of grant. The risk-free interest rate is based on the U.S. Treasury yield at date of grant.

Performance-Based RSUs. Pursuant to the Award Plan, performance-based RSUs may be granted to certain employees. Each performance-based award consists of a “base” number of RSUs granted to the employee. The number of shares that an employee ultimately receives at vesting will be equal to the base number of performance-based RSUs granted, multiplied by a predetermined percentage determined in accordance with the level of attainment of Company performance measures during the performance period and could be higher or lower than the original RSU grant. The awards are generally forfeited if the employee leaves the Company before the vesting date. Performance-based RSUs are not considered participating securities as the dividend equivalents are subject to forfeiture prior to vesting of the award.

In January ~~2014,~~2015, the Company granted ~~315,961 market~~262,847 performance-based RSUs ~~under~~to certain employees that cliff vest 100% on January 31, 2018. These awards are amortized over a service period of three years. The number of shares distributed at vesting could be higher or lower than the ~~Award Plan.~~original grant based on the level of attainment of predetermined Company performance measures.

Performance-based RSU activity for 2015 is summarized below.

Outstanding at

Performance-
Based RSUs

Weighted
Average
Grant-Date
Fair Value

December 31, 2014

—

$
—

Granted

262,847

$
343.86

Forfeited

(6,979
)

$
343.86

December 31, 2015

255,868

$
343.86

At December 31, 2015, total unrecognized stock-based compensation expense related to unvested performance-based awards was $59 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of 2.1 years.

The Company values performance-based RSUs at their grant-date fair value as measured by BlackRock’s common stock price. The total grant-date fair market value of performance-based RSUs expected to vest was $90 million.

At December 31, 2015, the intrinsic value of outstanding performance-based RSUs was $87 million reflecting a closing stock price of $340.52.

In January 2016, the Company granted 375,242 performance-based RSUs to certain employees that cliff vest 100% on January 31, 2019. These awards are amortized over a service period of three years. The number of shares distributed at vesting could be higher or lower than the original grant based on the level of attainment of predetermined Company performance measures.

Long-Term Incentive Plans Funded by PNC.Under a share surrender agreement, PNC committed to provide up to 4 million shares of BlackRock stock, held by PNC, to fund certain BlackRock long-term incentive plans (“LTIP”). The current share surrender agreement commits PNC to provide BlackRock series C nonvoting participating preferred stock to fund the remaining committed shares. As of December 31, ~~2012, 2.5~~2015, 2.7 million shares had been surrendered by PNC. ~~In January 2013, 0.2 million additional shares were surrendered.~~

At December 31, ~~2013,~~2015, the remaining shares committed by PNC of 1.3 million were available to fund certain future long-term incentive awards.

In January 2016, 548,277 shares were surrendered by PNC.

Stock Options.Stock option grants were made to certain employees pursuant to the Award Plan in 1999 through 2007. Options granted have a ten-year life, vested ratably over periods ranging from two to five years and became exercisable upon vesting. The Company has not granted any stock options subsequent to the January 2007 grant, which vested on September 29, 2011. Stock option activity for ~~2013~~2015 is summarized ~~below:~~below.

Outstanding at Shares
under
option Weighted
average
exercise
price
December 31, 2012
1,099,909    $ 167.76
Exercised
(168,151 ) $ 167.76
December 31, 2013⁽¹⁾
931,758    $ 167.76

Outstanding and Exercisable at	Shares under option			Weighted average exercise price
December 31, 2014		906,719		$	167.76
Exercised		(752,625	)	$	167.76
December 31, 2015		154,094		$	167.76

~~(1)~~

~~At December 31, 2013, all options were vested. The aggregate intrinsic value of options exercised during the years ended December 31, 2013, 2012~~

The aggregate intrinsic value of options exercised during 2015, 2014 and 2013 was $128 million, $4 million and ~~2011 was~~ $19 million, respectively.

The aggregate intrinsic value of exercisable shares was $27 million ~~$157 million and $13 million, respectively.~~

~~Stock options outstanding and exercisable~~ at December 31, ~~2013 were as follows:~~2015, reflecting a closing stock price of $340.52. The weighted average remaining life of the options outstanding at December 31, 2015 was approximately one year.

Options Outstanding and Exercisable
Exercise
Prices
Options
Outstanding
Weighted
Average
Remaining
Life
(years) Weighted
Average
Exercise
Price Aggregate
Intrinsic
Value of
Exercisable
Shares(in
millions)
$ 167.76
931,758 3.09 $ 167.76 $ 139

As of December 31, ~~2013,~~2015, the Company had no remaining unrecognized stock-based compensation expense related to ~~unvested~~ stock options.

Employee Stock Purchase Plan (“ESPP”).The ESPP allows eligible employees to purchase the Company’s common stock at 95% of the fair market value on the last day of each three-month offering period. ~~In accordance with ASC 718-10,~~~~Compensation–Stock Compensation,~~ ~~the~~The Company does not record compensation expense related to employees purchasing shares under the ESPP.

15. Employee Benefit Plans

Deferred Compensation Plans

Voluntary Deferred Compensation Plan.The Company adopted a Voluntary Deferred Compensation Plan (“VDCP”) that allows ~~participants~~eligible employees in the United States to elect to defer between 1% and 100% of their annual cash incentive compensation. The participants must specify a deferral period of up to 10 years from the year of ~~deferral.~~deferral and additionally, elect to receive distributions in the form of a lump sum or in up to 10 annual installments. The Company ~~funds~~may fund the obligation through the ~~establishment of a~~ rabbi trust on behalf of the plan’s participants.

The rabbi trust established for the VDCP, with assets totaling $65 million ~~and $59 million~~at both December 31, ~~2013~~2015 and ~~2012, respectively,~~2014, is reflected in investments on the consolidated statements of financial condition. Such investments are classified as trading ~~and other~~ investments. The corresponding liability balance of ~~$64~~$88 million and ~~$60~~$78 million at December 31, ~~2013~~2015 and ~~2012,~~2014, respectively, is reflected on the consolidated statements of financial condition as accrued compensation and benefits. Earnings in the rabbi trust, including unrealized appreciation or depreciation, are reflected as nonoperating income (expense) and changes in the corresponding liability are reflected as employee compensation and benefits expense on the consolidated statements of income.

Other Deferred Compensation Plans.The Company has additional compensation plans for the purpose of providing deferred compensation and retention incentives to certain employees. For these plans, the final value of the deferred amount to be distributed in cash upon vesting is associated with investment returns of certain investment funds. The liabilities for these plans were ~~$100~~$178 million and ~~$77~~$126 million at December 31, ~~2013~~2015 and ~~2012,~~2014, respectively, and are reflected in the consolidated statements of financial condition as accrued compensation and benefits. In January ~~2014,~~2016, the Company granted approximately ~~$100~~$151 million of additional deferred compensation that will fluctuate with investment returns and will vest ratably over three years from the date of grant.

Defined Contribution Plans

~~BlackRock Retirement Savings Plan.~~The Company has several defined contribution plans primarily in the United States and United Kingdom.

Certain of the Company’s U.S. employees participate in ~~the BlackRock Retirement Savings Plan~~a defined contribution plan (“~~BRSP”~~U.S. Plan”). Employee contributions of up to 8% of eligible compensation, as defined by the plan and subject to Internal Revenue Code (“IRC”) limitations, are matched by the Company at 50%. up to a maximum of $5,000 annually. In addition, the Company ~~will continue to make~~makes an annual retirement contribution to eligible participants equal to 3-5% of eligible compensation. In ~~2013, 2012~~2015, 2014 and ~~2011,~~2013, the Company’s contribution expense related to the ~~BRSP~~U.S. Plan was $72 million, $67 million and $63 million, ~~$59 million and $43 million,~~ respectively.

~~BlackRock Group Personal Pension Plan.~~~~BlackRock Investment Management (UK) Limited (“BIM”), a~~Certain U.K. wholly owned ~~subsidiary~~subsidiaries of the Company ~~contributes~~contribute to ~~the BlackRock Group Personal Pension Plan,~~ a defined contribution plan for ~~all~~their employees ~~of BIM. BIM contributes~~(“U.K. Plan”). The contributions range between 6% and 15% of each employee’s eligible compensation. ~~In 2013, 2012 and 2011, the~~The Company’s contribution expense related to this plan was $33 million in both 2015 and 2014, and $29 million ~~$27~~in 2013.

In addition, the contribution expense related to defined contribution plans in other regions was $18 million in 2015 and ~~$26 million, respectively.~~2014, and 2013.

Defined Benefit Plans.The Company has several defined benefit pension plans primarily in Japan and Germany. All accrued benefits under the Germany defined benefit plan are currently frozen and the plan is closed to new participants. The participant benefits under the Germany plan will not change with salary increases or additional years of service. At December 31, ~~2013~~2015 and ~~2012,~~2014, the plan assets for both these plans were approximately $22 million and $21 million, respectively. The ~~overfunded~~underfunded obligations at December 31, ~~2013~~2015 and ~~the underfunded obligation at December 31, 2012~~2014 were not material. Benefit payments for the next five years and in aggregate for the five years thereafter are not expected to be material.

~~The plan assets for the defined benefit plan in Japan (the “Japan Plan”) are invested using a total return investment approach whereby a mix of equity securities, debt securities~~

and other investments are used to preserve asset values, diversify risk and achieve the target investment return benchmark. Investment strategies and asset allocations are based on consideration of plan liabilities and the funded status of the plan. Investment performance and asset allocation are measured and monitored on an ongoing basis. The current target allocations for the plan assets are 22% for U.S. and international equity securities, 76% for U.S. and international fixed income securities and 2% for other. The table below provides the fair value of the plan assets of the Japan Plan at December 31, 2013 and 2012 by asset category and identifies the level of inputs used to determine the fair value of assets in each category.

(in millions)
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Total
At December 31, 2013

Equity securities
$ 6    —    $ 6
Fixed income securities
—    13    13
Fair value of plan assets
$ 6    $ 13    $ 19
At December 31, 2012

Equity securities
$ 9    —    $ 9
Fixed income securities
—    9    9
Fair value of plan assets
$ 9    $ 9    $ 18

~~Post-retirement Benefit Plans~~

The Company provides post-retirement medical benefits to a closed population of employees in the United Kingdom and the United States. The accumulated benefit obligation for each of these unfunded plans was immaterial at December 31, 2013 and 2012, and was included in accrued compensation and benefits on the consolidated statements of financial condition. For 2013, 2012 and 2011, expenses for these benefits were not material.

16. Related Party Transactions

Determination of Related Parties

PNC.The Company considers PNC, along with its affiliates, to be related parties based on the level of its ownership of BlackRock capital stock. At December 31, ~~2013,~~2015, PNC owned approximately ~~20.9%~~21.1% of the Company’s voting common stock and held approximately ~~21.9%~~22.2% of the total capital stock.

Registered Investment Companies and Equity Method Investments. The Company considers the registered investment companies that it manages, which include mutual funds and ~~exchanged-traded~~exchange-traded funds, to be related parties as a result of the Company’s advisory relationship. In addition, equity method investments are considered related parties, ~~in accordance with ASC 850-10,~~ ~~Related Party Disclosures~~~~(“ASC 850-10”),~~ due to the Company’s influence over the financial and operating policies of the investee.

~~Barclays.~~ The Company considered Barclays, along with its affiliates, to be related parties in accordance with ASC 850-10, based on its level of capital stock ownership prior to the secondary offering in May 2012 by Barclays of shares of the Company’s stock. At December 31, 2012, Barclays did not own any of the Company’s capital stock and was no longer considered a related party.

Revenue from Related Parties

Revenues for services provided by the Company to these and other related parties are as follows:


	Year ended December 31,						Year ended December 31,
(in millions)	2013		2012		2011		2015		2014		2013
Investment advisory, administration fees and securities lending revenue:
PNC and affiliates	$	5	$	4	$	4	$	4	$	5	$	5
Barclays and affiliates		—		5		14
Registered investment companies/equity method investees		5,986		5,283		5,282		6,871		6,733		5,986
Other		—		—		3
Total investment advisory, administration fees, and securities lending revenue		5,991		5,292		5,303		6,875		6,738		5,991
Investment advisory performance fees		185		120		54		129		173		185
BlackRock Solutions and advisory:
PNC and affiliates		7		7		6		7		7		7
Equity method investees		11		13		15		—		6		11
Other		5		3		—		—		—		5
TotalBlackRock Solutions and advisory		23		23		21		7		13		23
Other revenue:
PNC and affiliates		3		3		3		3		3		3
Barclays and affiliates		—		11		35
Equity method investees		58		52		15		70		67		58
Total other revenue		61		66		53		73		70		61
Total revenue from related parties	$	6,260	$	5,501	$	5,431	$	7,084	$	6,994	$	6,260

The Company provides investment advisory and administration services to its open- and closed-end funds and other commingled or pooled funds and separate accounts in which related parties invest. In addition, the Company provides investment advisory and administration services

to ~~Barclays and~~ PNC and its affiliates for fees based on AUM. Further, the Company provides risk management services to PNC. The Company records its investment advisory and administration fees net of retrocessions.

Aggregate Expenses for Transactions with Related Parties

Aggregate expenses included in the consolidated statements of income for transactions with related parties are as follows:


	Year ended December 31,						Year ended December 31,
(in millions)	2013		2012		2011		2015		2014		2013
Expenses with related parties:
Distribution and servicing costs
PNC and affiliates	$	2	$	3	$	3	$	2	$	2	$	2
Barclays and affiliates		—		1		2
Total distribution and servicing costs		2		4		5		2		2		2
Direct fund expenses
Barclays and affiliates		—		4		8
Total direct fund expenses		—		4		8
General and administration expenses
Barclays and affiliates		—		5		15
Other registered investment companies		50		49		42		60		55		50
Other⁽¹⁾		—		33		3
Other								18		5		—
Total general and administration expenses		50		87		60		78		60		50
Total expenses with related parties	$	52	$	95	$	73	$	80	$	62	$	52

~~(1)~~

~~Amount in 2012 included a one-time pre-tax charge of $30 million related to a contribution to certain of the Company’s bank managed short-term investment funds (“STIFs”).~~

Certain Agreements and Arrangements with ~~Barclays and~~ PNC

PNC.On February 27, 2009, BlackRock entered into an amended and restated implementation and stockholder agreement with PNC, and a third amendment to the share surrender agreement with PNC. ~~See Note 19,~~~~Capital Stock~~~~, for further discussion.~~

The changes contained in the amended and restated stockholder agreement with PNC, in relation to the prior agreement, among other things, (i) revised the definitions of “Fair Market Value,” “Ownership Cap,” “Ownership Percentage,” “Ownership Threshold” and “Significant Stockholder”; and (ii) amended or supplemented certain other provisions therein to incorporate series B preferred stock and series C preferred stock, respectively.

~~The amendment to the share surrender agreement with PNC provided for the substitution of series C preferred stock for the shares of common stock subject to the share surrender agreement.~~

~~In June 2009, in connection with the BGI Transaction, certain additional amendments were made to the amended and restated stockholder agreement with PNC.~~

The amended and restated stockholder agreement with PNC was changed to, among other things, (i) revise the definitions of “Ownership Cap” and “Ownership Threshold,” (ii) amend or supplement certain other definitions and provisions therein to incorporate series D participating preferred stock, (iii) provide that none of the transfer restriction provisions set forth in the amended and restated stockholder agreement with PNC apply to the shares purchased by PNC as part of the financing for the BGI Transaction, (iv) amend the provision relating to the composition of BlackRock’s Board of Directors and (v) provide that the amended and restated stockholder agreement with PNC shall terminate upon the later of (A) the five year anniversary of the amended and restated stockholder agreement with PNC and (B) the first date on which PNC and its affiliates beneficially own less than 5% of the outstanding BlackRock capital stock, subject to certain other conditions specified therein.

~~Barclays~~. In connection with the completion of its acquisition of BGI, BlackRock entered into a Stockholder Agreement, dated as of December 1, 2009 (the “Barclays Stockholder Agreement”), with Barclays and Barclays BR Holdings S.à.r.l. (“BR Holdings”, and together with Barclays, the “Barclays Parties”). Pursuant to the terms of the Barclays Stockholder Agreement, the Barclays Parties agreed, among other things, to certain transfer and voting restrictions with respect to shares of BlackRock common stock and preferred stock owned by them and their affiliates, to limits on the ability of the Barclays Parties and their affiliates to acquire additional shares of BlackRock common stock and preferred stock and to certain other restrictions. The Barclays Stockholder Agreement was terminated on May 29, 2012.

In addition, Barclays and certain of its affiliates have been engaged by the Company to provide the use of certain indices for certain BlackRock investment funds and for a fee to provide indemnification to clients related to potential losses in connection with lending of client securities. For the five months ended May 31, 2012, and the full year ended December 31, 2011, fees incurred for these agreements were $9 million and $18 million, respectively, and were recorded within direct fund expenses and general and administration expenses.

Receivables and Payables with Related Parties. Due from related parties, which is included within other assets on the consolidated statements of financial condition was ~~$74~~$73 million and ~~$77~~$89 million at December 31, ~~2013~~2015 and ~~2012,~~

2014, respectively, and primarily represented ~~receivables for investment advisory and administration services provided by BlackRock, and other~~ receivables from certain investment products managed by BlackRock. ~~Due from related parties at December 31, 2013 and 2012 included $60 million and $68 million, respectively, due from certain funds.~~

Accounts receivable at December 31, ~~2013~~2015 and ~~2012~~2014 included ~~$745~~$705 million and ~~$629~~$747 million, respectively, related to receivables from BlackRock mutual funds, includingiShares, for investment advisory and administration services.

Due to related parties, which is included within other liabilities on the consolidated statements of financial condition, was ~~$13~~$18 million and ~~$14~~$12 million at December 31, ~~2013~~2015 and ~~2012,~~2014, respectively, and primarily represented payables to certain investment products managed by BlackRock.

17. Net Capital Requirements

The Company is required to maintain net capital in certain regulated subsidiaries within a number of jurisdictions, which is partially maintained by retaining cash and cash equivalent investments in those subsidiaries or jurisdictions. As a result, such subsidiaries of the Company may be restricted in their ability to transfer cash between different jurisdictions and to their parents. Additionally, transfers of cash between international jurisdictions, including repatriation to the United States, may have adverse tax consequences that could discourage such transfers.

Banking Regulatory Requirements.BlackRock Institutional Trust Company, N.A. (“BTC”), a wholly owned subsidiary of the Company, is chartered as a national bank whose powers are limited to trust activities. BTC is subject to regulatory capital requirements administered by the Office of the Comptroller of the Currency. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements. Under the capital adequacy guidelines and the regulatory framework for prompt corrective action, BTC must meet specific capital guidelines that invoke quantitative measures of BTC’s assets, liabilities, and certain off-balance sheet items as calculated under the regulatory accounting practices. BTC’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulators to ensure capital adequacy require BTC to maintain a minimum Tier 1 capital and Tier 1 leverage ratio, as well as Tier 1 and total risk-based capital ratios. Based on BTC’s calculations as of December 31, ~~2013~~2015 and ~~2012,~~2014, it exceeded the applicable capital adequacy requirements.

Actual For Capital
Adequacy
Purposes To Be Well
Capitalized
Under Prompt
Corrective Action
Provisions
(in millions) Amount Ratio Amount Ratio Amount Ratio
December 31, 2013

Total capital (to risk weighted assets)
$ 660    112.7 % $ 47    8.0 % $ 59    10.0 %
Tier 1 capital (to risk weighted assets)
$ 660    112.7 % $ 23    4.0 % $ 35    6.0 %
Tier 1 capital (to average assets)
$ 660    63.4 % $ 42    4.0 % $ 52    5.0 %
December 31, 2012

Total capital (to risk weighted assets)
$ 633    99.1 % $ 51    8.0 % $ 64    10.0 %
Tier 1 capital (to risk weighted assets)
$ 633    99.1 % $ 26    4.0 % $ 38    6.0 %
Tier 1 capital (to average assets)
$ 633    49.7 % $ 51    4.0 % $ 64    5.0 %

	Actual						For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
(in millions)	Amount			Ratio			Amount		Ratio			Amount		Ratio
December 31, 2015⁽¹⁾
Total capital (to risk weighted assets)	$	1,593			88.6	%	$	144		8.0	%	$	180		10.0	%
Common Equity Tier 1 capital (no risk weighted assets)⁽¹⁾	$	1,593			88.6	%	$	81		4.5	%	$	117		6.5	%
Tier 1 capital (to risk weighted assets)	$	1,593			88.6	%	$	108		6.0	%	$	144		8.0	%
Tier 1 capital (to average assets)	$	1,593			66.7	%	$	96		4.0	%	$	119		5.0	%
December 31, 2014
Total capital (to risk weighted assets)	$	775	��		142.0	%	$	44		8.0	%	$	56		10.0	%
Tier 1 capital (to risk weighted assets)	$	775			142.0	%	$	22		4.0	%	$	33		6.0	%
Tier 1 capital (to average assets)	$	775			72.1	%	$	43		4.0	%	$	54		5.0	%

(1)	Ratios and amounts as of December 31, 2015 reflect the adoption of revised capital rules effective January 1, 2015.

Broker-dealers.BlackRock Investments, LLC and BlackRock Execution Services are registered broker-dealers and wholly owned subsidiaries of BlackRock that are subject to the Uniform Net Capital requirements under the Securities Exchange Act of 1934, which requires maintenance of certain minimum net capital levels.

Capital Requirements.At both December 31, ~~2013~~2015 and ~~2012,~~2014, the Company was required to maintain approximately $1.1 billion ~~and $1.2 billion, respectively,~~ in net capital in certain regulated subsidiaries, including BTC, entities regulated by the Financial Conduct Authority and Prudential Regulation Authority in the United Kingdom, and the Company’s broker-dealers. The Company was in compliance with all applicable regulatory net capital requirements.

18. Accumulated Other Comprehensive Income (Loss)

The following table presents changes in ~~AOCI~~accumulated other comprehensive income (loss) (“AOCI”) by component for 2015, 2014 and 2013:


(in millions)	Unrealized gains (losses) on available-for-sale investments			Benefit plans			Foreign currency translation adjustments			Total⁽¹⁾			Unrealized Gains (Losses) on Available-for-sale Investments^(1),(2)			Benefit Plans			Foreign Currency Translation Adjustments⁽³⁾			Total
December 31, 2012	$	16		$	(4	)	$	(71	)	$	(59	)	$	16		$	(4	)	$	(71	)	$	(59	)
Other comprehensive income (loss) before reclassifications⁽²⁾		4			10			23			37
Amount reclassified from AOCI⁽³⁾		(13	)		—			—			(13	)
Other comprehensive income (loss) before reclassifications														4			10			23			37
Amount reclassified from AOCI⁽⁴⁾														(13	)		—			—			(13	)
Net other comprehensive income (loss) for 2013		(9	)		10			23			24			(9	)		10			23			24
December 31, 2013	$	7		$	6		$	(48	)	$	(35	)	$	7		$	6		$	(48	)	$	(35	)
Other comprehensive income (loss) before reclassifications														3			(2	)		(231	)		(230	)
Amount reclassified from AOCI⁽⁴⁾														(8	)		—			—			(8	)
Net other comprehensive income (loss) for 2014														(5	)		(2	)		(231	)		(238	)
December 31, 2014													$	2		$	4		$	(279	)	$	(273	)
Other comprehensive income (loss) before reclassifications														(1	)		1			(173	)		(173	)
Amount reclassified from AOCI⁽⁴⁾														(2	)		—			—			(2	)
Net other comprehensive income (loss) for 2015														(3	)		1			(173	)		(175	)
December 31, 2015													$	(1	)	$	5		$	(452	)	$	(448	)

(1)	All amounts are net of tax.

(2)	The tax benefit (expense) was not material for 2015, 2014 and 2013.

(3)	~~The~~ Amount for 2015 includes gains from a net investment hedge of $19 million, net of tax ~~benefit (expense) was not material for 2013.~~ of $11 million.

(4)	The pre-tax amount reclassified from AOCI was included in net gain (loss) on investments on the consolidated statements of income.

19. Capital Stock

~~Capital Stock Authorized.~~~~BlackRock’s~~The Company’s authorized common stock and nonvoting participating preferred stock, $0.01 par value, ~~was 500,000,000 shares at December 31, 2013 and 2012. At December 31, 2013 and 2012, BlackRock had 20,000,000 series A nonvoting participating preferred shares~~ (“~~Series A~~ Preferred”), $0.01 par value, authorized. At December 31, 2013 and 2012, BlackRock had 150,000,000 series B nonvoting participating preferred shares (“Series B Preferred”), $0.01 par value, authorized. At December 31, 2013 and 2012, BlackRock had 6,000,000 series C nonvoting participating preferred shares (“Series C Preferred”), $0.01 par value, authorized. At December 31, 2013 and 2012, BlackRock had 20,000,000 series D nonvoting participating preferred shares (“Series D Preferred”), $0.01 par value, authorized.

~~May 2011 Barclays Sale and Conversion.~~~~In May 2011, 2,356,750 shares~~ consisted of ~~Series B Preferred owned by Barclays were automatically converted to shares of common stock upon their disposition.~~

~~June 2011 Bank of America Stock Repurchase Agreement.~~~~On June 1, 2011, BlackRock completed its repurchase of Bank of America’s remaining ownership interest of 13,562,878 Series B Preferred for $2.545 billion, or $187.65 per share.~~

~~September 2011 Institutional Investor Capital Exchange.~~ ~~In September 2011, an institutional investor exchanged 2,860,188 shares of Series B Preferred for common shares.~~

~~September 2011 PNC Capital Contribution.~~~~In September 2011, PNC surrendered to BlackRock approximately 1.3 million shares of BlackRock Series C Preferred to fund certain LTIP awards in accordance with~~ the ~~share surrender agreement between PNC and BlackRock.~~

~~May 2012 Barclays Sale and Capital Exchange.~~BlackRock completed the secondary offering of 26,211,335 shares of common stock held by Barclays at a price of $160.00 per share, which included 23,211,335 shares of common stock issued upon the conversion of Series B Preferred by a subsidiary of Barclays.

following:

	December 31, 2015		December 31, 2014
Common Stock		500,000,000		500,000,000
Nonvoting Participating Preferred Stock
Series A Preferred		20,000,000		20,000,000
Series B Preferred		150,000,000		150,000,000
Series C Preferred		6,000,000		6,000,000
Series D Preferred		20,000,000		20,000,000

Upon completion of this offering, BlackRock repurchased 6,377,552 shares directly from Barclays outside the publicly announced share repurchase program at a price of $156.80 per share (consisting of 6,346,036 of Series B Preferred and 31,516 shares of common stock). The total transactions, including the full exercise of the underwriters’ option to purchase 2,621,134 additional shares in the secondary offering, amounted to 35,210,021 shares, resulting in Barclays exiting its entire ownership position in BlackRock.

~~May 2012 PNC Capital Exchange.~~~~In May 2012, PNC exchanged 2,000,000 shares of Series B Preferred for an equal number of shares of common stock.~~

~~Other Changes.~~~~In September and October 2012, 593,786 and 2,594,070 shares of Series B Preferred, respectively, converted into an equal number of shares of common stock.~~

January 2013 PNC Capital Contribution.In January 2013, PNC surrendered to BlackRock 205,350 shares of BlackRock Series C Preferred to fund certain LTIP awards in accordance with the share surrender agreement between PNC and BlackRock.

Cash Dividends for Common and Preferred Shares / RSUs.During ~~2013, 2012~~2015, 2014 and ~~2011,~~2013, the Company paid cash dividends of $8.72 per share (or $1,476 million), $7.72 per share (or $1,338 million)and $6.72 per share (or $1,168 million), ~~$6.00 per share (or $1,060 million) and $5.50 per share (or $1,014 million),~~ respectively.

Share ~~Repurchase Approvals.~~In January 2013, the Board of Directors (the “Board”) approved an increase in the availability under the Company’s existing share repurchase program to allow for the repurchase of up to 10.2 million shares of BlackRock common stock. Repurchases. The Company repurchased ~~3.7~~3.1 million common shares in open market-transactions under ~~the~~its share repurchase program for ~~approximately $1.0~~$1.1 billion during ~~2013.~~2015. At December 31, ~~2013,~~2015, there were ~~6.5~~6.3 million shares still authorized to be repurchased.

The Company’s common and preferred shares issued and outstanding and related activity consist of the following:

   Shares Issued Shares Outstanding
   Common
Shares Escrow
Common
Shares Treasury
Common
Shares Series B
Preferred Series C
Preferred Common
Shares Series B
Preferred Series C
Preferred
December 31, 2010
   131,923,624    (3,603 ) (703,460 ) 57,108,553    2,866,439    131,216,561    57,108,553    2,866,439
Exchange of Series B Preferred for common shares
   5,216,938    —    —    (5,216,938 ) —    5,216,938    (5,216,938 ) —
Shares repurchased
   —    —    (618,000 ) (13,562,878 ) —    (618,000 ) (13,562,878 ) —
Net issuance of common shares related to employee stock transactions and convertible debt conversions
   2,739,818    —    (92,182 ) —    —    2,647,636    —    —
PNC LTIP capital contribution
   —    —    —    —    (1,349,202 ) —    —    (1,349,202 )
December 31, 2011
   139,880,380    (3,603 ) (1,413,642 ) 38,328,737    1,517,237    138,463,135    38,328,737    1,517,237
Exchange of Series B Preferred for common shares
   31,159,513    —    —    (31,159,513 ) —    31,159,513    (31,159,513 ) —
Shares repurchased
   (31,516 ) —    (2,726,600 ) (6,346,036 ) —    (2,758,116 ) (6,346,036 ) —
Net issuance of common shares related to employee stock transactions
   247,411    —    1,763,361    —    —    2,010,772    —    —
Release of common shares from escrow
   (3,603 ) 3,603    —    —    —    —    —    —
December 31, 2012
   171,252,185    —    (2,376,881 ) 823,188    1,517,237    168,875,304    823,188    1,517,237
Shares repurchased
   —    —    (3,689,845 ) —    —    (3,689,845 ) —    —
Net issuance of common shares related to employee stock transactions
   —    —    1,404,229    —    —    1,404,229    —    —
PNC LTIP capital contribution
   —    —    —    —    (205,350 ) —    —    (205,350 )
December 31, 2013
   171,252,185    —    (4,662,497 ) 823,188    1,311,887    166,589,688    823,188    1,311,887

	Shares Issued										Shares Outstanding
	Common Shares		Treasury Common Shares			Series B Preferred		Series C Preferred			Common Shares			Series B Preferred		Series C Preferred
December 31, 2012		171,252,185		(2,376,881	)		823,188		1,517,237			168,875,304			823,188		1,517,237
Shares repurchased		—		(3,689,845	)		—		—			(3,689,845	)		—		—
Net issuance of common shares related to employee stock transactions		—		1,404,229			—		—			1,404,229			—		—
PNC LTIP capital contribution		—		—			—		(205,350	)		—			—		(205,350	)
December 31, 2013		171,252,185		(4,662,497	)		823,188		1,311,887			166,589,688			823,188		1,311,887
Shares repurchased		—		(3,175,088	)		—		—			(3,175,088	)		—		—
Net issuance of common shares related to employee stock transactions		—		1,372,188			—		—			1,372,188		��	—		—
December 31, 2014		171,252,185		(6,465,397	)		823,188		1,311,887			164,786,788			823,188		1,311,887
Shares repurchased		—		(3,080,689	)		—		—			(3,080,689	)		—		—
Net issuance of common shares related to employee stock transactions		—		1,754,965			—		—			1,754,965			—		—
December 31, 2015		171,252,185		(7,791,121	)		823,188		1,311,887			163,461,064			823,188		1,311,887

~~20. Restructuring Charges~~

During 2011, the Company reduced its workforce globally by approximately 3.4%. This action was the result of a cost-cutting initiative designed to streamline operations, enhance competitiveness and better position the Company in the asset management marketplace. The Company recorded a pre-tax restructuring charge of approximately $32 million ($22 million after-tax) during 2011. This charge was comprised of $24 million of severance and associated outplacement costs and $8 million of expenses related to the accelerated amortization of previously granted equity-based compensation awards.

~~The following table presents a rollforward of the Company’s restructuring liability, which is included within other liabilities on the consolidated statements of financial condition:~~

(in millions)
Liability as of December 31, 2010⁽¹⁾
$ 2
Additions
32
Cash payments
(8 )
Accelerated amortization of equity-based awards
(8 )
Liability as of December 31, 2011
$ 18
Cash payments
(17 )
Liability as of December 31, 2012
$ 1
Other adjustments
(1 )
Liability as of December 31, 2013
$   —

~~(1)~~

~~Liability amount as of December 31, 2010 related to a pre-tax restructuring charge of $22 million recorded during 2009.~~

~~21.~~20. Income Taxes

The components of income tax expense for ~~2013, 2012~~2015, 2014 and ~~2011,~~2013, are as follows:


(in millions)	2013			2012			2011			2015			2014			2013
Current income tax expense:
Federal	$	869		$	856		$	693		$	937		$	923		$	869
State and local		39			49			54			74			54			39
Foreign		307			186			186			395			258			307
Total net current income tax expense		1,215			1,091			933			1,406			1,235			1,215
Deferred income tax expense (benefit):
Federal		(68	)		4			52			(13	)		(73	)		(68	)
State and local		13			13			(112	)		(19	)		(9	)		13
Foreign		(138	)		(78	)		(77	)		(124	)		(22	)		(138	)
Total net deferred income tax expense (benefit)		(193	)		(61	)		(137	)		(156	)		(104	)		(193	)
Total income tax expense	$	1,022		$	1,030		$	796		$	1,250		$	1,131		$	1,022

Income tax expense has been based on the following components of income before taxes, less net income (loss) attributable to noncontrolling interests:


(in millions)	2013		2012		2011		2015		2014		2013
Domestic	$	2,814	$	2,690	$	2,397	$	2,840	$	2,946	$	2,814
Foreign		1,140		798		736		1,755		1,479		1,140
Total	$	3,954	$	3,488	$	3,133	$	4,595	$	4,425	$	3,954

The foreign income before taxes includes countries that have statutory tax rates that are lower than the U.S. federal statutory tax rate of 35%, such as the United Kingdom, ~~Luxembourg,~~Channel Islands, Canada and the Netherlands.

A reconciliation of income tax expense with expected federal income tax expense computed at the applicable federal income tax rate of 35% is as follows:


(in millions)	2013			%			2012			%			2011			%			2015			%			2014			%			2013			%
Statutory income tax expense	$	1,383			35	%	$	1,221			35	%	$	1,097			35	%	$	1,608			35	%	$	1,549			35	%	$	1,383			35	%
Increase (decrease) in income taxes resulting from:
State and local taxes (net of federal benefit)		39			1			49			2			59			2			42			1			51			1			39			1
Impact of foreign, state, and local tax rate changes on deferred taxes		(69	)		(2	)		(50	)		(2	)		(188	)		(6	)		(45	)		(1	)		(4	)		—			(69	)		(2	)
Effect of foreign tax rates		(329	)		(8	)		(221	)		(5	)		(197	)		(6	)		(385	)		(8	)		(434	)		(10	)		(329	)		(8	)
Other		(2	)		—			31			—			25			—			30			—			(31	)		—			(2	)		—
Income tax expense	$	1,022			26	%	$	1,030			30	%	$	796			25	%	$	1,250			27	%	$	1,131			26	%	$	1,022			26	%

Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements. These temporary differences result in taxable or deductible amounts in future years.

The components of deferred income tax assets and liabilities are shown ~~below:~~below


	December 31,						December 31,
(in millions)	2013			2012			2015			2014
Deferred income tax assets:
Compensation and benefits	$	345		$	355		$	372		$	323
Unrealized investment losses		99			71			114			157
Loss carryforwards		42			81			98			47
Foreign tax credit carryforwards		28			—			83			40
Other		290			222			235			253
Gross deferred tax assets		804			729			902			820
Less: deferred tax valuation allowances		(48	)		(95	)		(20	)		(29	)
Deferred tax assets net of valuation allowances		756			634			882			791
Deferred income tax liabilities:
Goodwill and acquired indefinite-lived intangibles		5,594			5,656			5,588			5,616
Acquired finite-lived intangibles		110			158	��		45			65
Other		133			109			80			89
Gross deferred tax liabilities		5,837			5,923			5,713			5,770
Net deferred tax (liabilities)	$	(5,081	)	$	(5,289	)	$	(4,831	)	$	(4,979	)

Deferred income tax assets and liabilities are recorded net when related to the same tax jurisdiction. At December 31, ~~2013,~~2015, the Company recorded on the consolidated statement of financial condition deferred income tax assets, within other assets, and deferred income tax liabilities of $4$20 million and ~~$5,085~~$4,851 million, respectively. At December 31, ~~2012,~~2014, the Company recorded on the consolidated statement of financial condition deferred income tax assets, within other assets, and deferred income tax liabilities of $4$10 million and ~~$5,293~~$4,989 million, respectively.

During ~~2013,~~2015, tax legislation enacted in the United Kingdom and domestic state and local tax ~~law~~ changes resulted in a ~~$69~~$54 million net noncash benefit related to the revaluation of certain deferred income tax liabilities. During ~~2012, tax legislation enacted in the United Kingdom and the~~2014, state and local ~~income~~ tax ~~effect resulting from~~ changes ~~in the Company’s organizational structure primarily~~ resulted in a ~~$50~~$4 million net noncash benefit related to the revaluation of certain deferred income tax liabilities.

The Company had a deferred income tax asset related to unrealized investment losses of approximately $99 million and $71 million at December 31, 2013 and 2012, respectively, reflecting the Company’s conclusion that based on the weight of available evidence, it is more likely than not that the deferred tax asset will be realized. U.S. Federal realized capital losses may be carried back three years and carried forward five years and offset against realized capital gains for federal income tax purposes. The Company expects to hold certain fixed income securities over a period sufficient for them to recover their unrealized losses, and to generate future capital gains sufficient to offset the unrealized capital losses.

At December 31, ~~2013~~2015 and ~~2012,~~2014, the Company had available state net operating loss carryforwards of ~~$935 million~~$1.5 billion and ~~$842 million,~~$1.2 billion, respectively, which will begin to expire in 2017. At December 31, ~~2013~~2015 and ~~December 31, 2012,~~2014, the Company had foreign net operating loss carryforwards of ~~$109~~$135 million and ~~$152~~$137 million, respectively, of which ~~$11~~$6 million will begin to expire in 2017 and the balance will carry forward

indefinitely. At December 31, ~~2013,~~2015, the Company had foreign tax credit carryforwards for income tax purposes of ~~$28~~$83 million which will begin to expire in 2023.

At December 31, ~~2013~~2015 and ~~2012,~~2014, the Company had ~~$48~~$20 million and ~~$95~~$29 million of valuation allowances for deferred income tax assets, respectively, recorded on the consolidated statements of financial condition. The year-over-year decrease in the valuation allowance primarily related to the realization of tax loss carryforwards and certain foreign deferred income tax assets.

Goodwill recorded in connection with the Quellos Transaction has been reduced during the period by the amount of tax benefit realized from tax-deductible goodwill. See Note 9,Goodwill, for further discussion.

Current income taxes are recorded net on the consolidated statements of financial condition when related to the same tax jurisdiction. At December 31, ~~2013,~~2015, the Company had current income taxes receivable and payable of ~~$89~~$166 million and ~~$168~~$79 million, respectively, recorded in other assets and accounts payable and accrued liabilities, respectively. At December 31, ~~2012,~~2014, the Company had current income taxes receivable and payable of ~~$102~~$117 million and ~~$121~~$125 million, respectively, recorded in other assets and accounts payable and accrued liabilities, respectively.

The Company does not provide deferred taxes on the excess of the financial reporting over tax basis on its investments in foreign subsidiaries that are essentially permanent in duration. The excess totaled ~~$3,074~~$4,734 million and ~~$2,125~~$3,871 million at December 31, ~~2013~~2015 and ~~2012,~~2014, respectively. The determination of the additional deferred income taxes on the excess has not been provided because it is not practicable due to the complexities associated with its hypothetical calculation.

The following tabular reconciliation presents the total amounts of gross unrecognized tax benefits:


	Year ended December 31,									Year ended December 31,
(in millions)	2013			2012			2011			2015			2014			2013
Balance at January 1	$	404		$	349		$	307		$	379		$	467		$	404
Additions for tax positions of prior years		11			4			22			39			21			11
Reductions for tax positions of prior years		(5	)		(1	)		(1	)		(25	)		(24	)		(5	)
Additions based on tax positions related to current year		67			69			46			75			85			67
Lapse of statute of limitations		—			—			—			(2	)		(2	)		—
Settlements		(12	)		(29	)		(25	)		—			(168	)		(12	)
Positions assumed in acquisitions		2			12			—			—			—			2
Balance at December 31	$	467		$	404		$	349		$	466		$	379		$	467

Included in the balance of unrecognized tax benefits at December 31, ~~2013, 2012~~2015, 2014 and ~~2011,~~2013, respectively, are ~~$304~~$320 million, ~~$250~~$283 million and ~~$226~~$304 million of tax benefits that, if recognized, would affect the effective tax rate.

The Company recognizes interest and penalties related to income tax matters as a component of income tax expense. Related to the unrecognized tax benefits noted above, the Company accrued interest and penalties of $12 million during 2015 and in total, as of December 31, 2015, had recognized a liability for interest and penalties of $56 million. The Company accrued interest and penalties of $(25) million during 2014 and in total, as of December 31, 2014, had recognized a liability for interest and penalties of $44 million. The Company accrued interest

and penalties of $(1) million during 2013 and in total, as of December 31, 2013, had recognized a liability for interest and penalties of $68 million. ~~The Company accrued interest and penalties of~~

$3 million during 2012 and in total, as of December 31, 2012, had recognized a liability for interest and penalties of $69 million. The Company accrued interest and penalties of $10 million during 2011 and in total, as of December 31, 2011, had recognized a liability for interest and penalties of $66 million. Pursuant to the Amended and Restated Stock Purchase Agreement, the Company has been indemnified by Barclays for $50 million and Guggenheim for $6 million of unrecognized tax benefits.

BlackRock is subject to U.S. federal income tax, state and local income tax, and foreign income tax in multiple jurisdictions. Tax years after ~~2007~~2009 remain open to U.S. federal income tax examination. ~~The~~

In June 2014, the IRS ~~is in the process~~commenced its examination of ~~concluding its audit of the 2008 and 2009~~BlackRock’s 2010 through 2012 tax years, and ~~its case must~~while the impact on the consolidated financial statements is undetermined, it is not expected to be approved by The Joint Committee on Taxation. The BGI group’s tax years 2007 through December 1, 2009 are under IRS examination. The IRS is in the process of concluding its audit and its case must be approved by The Joint Committee on Taxation.material.

The Company is currently under audit in several state and local jurisdictions. The significant state and local income tax examinations are in ~~California for tax years 2009 through 2010,~~ New York State and New York City for tax years 2009 through 2011, and New Jersey for tax years 2007 through 2009. No state and local income tax audits cover years earlier than 2007. No state and local income tax audits are expected to result in an assessment material to BlackRock’s consolidated financial statements.

Her Majesty’s Revenue and ~~Customs~~Customs’ (“HMRC”) ~~commenced its~~ United Kingdom income tax audit offor various U.K. BlackRock subsidiaries is in ~~respect of~~progress for tax years 2009 ~~through 2011 tax years.~~and forward. While the impact on the consolidated financial statements is undetermined, it is not expected to be material.

At December 31, ~~2013,~~2015, it is reasonably possible the total amounts of unrecognized tax benefits will change within the next twelve months due to completion of tax authorities’ exams or the expiration of statues of limitations. Management estimates that the existing liability for uncertain tax positions could decrease by approximately ~~$110~~$13 million to ~~$135~~$33 million within the next twelve months.

~~22.~~

21. Earnings Per Share

The following table sets forth the computation of basic and diluted EPS for 2015, 2014 and 2013 under the treasury stock method:


( in millions, except share data)	2013
(in millions, except shares and per share data)			2015		2014		2013
Net income attributable to BlackRock	$	2,932	$	3,345	$	3,294	$	2,932
Basic weighted-average shares outstanding		170,185,870		166,390,009		168,225,154		170,185,870
Dilutive effect of nonparticipating RSUs and stock options		3,643,032		2,648,562		2,887,107		3,643,032
Total diluted weighted-average shares outstanding		173,828,902		169,038,571		171,112,261		173,828,902
Basic earnings per share	$	17.23	$	20.10	$	19.58	$	17.23
Diluted earnings per share	$	16.87	$	19.79	$	19.25	$	16.87

~~The following table sets forth the computation of basic and diluted EPS for 2012 and 2011 under the two-class method:~~

(in millions, except per share data) 2012 2011
Net income attributable to BlackRock
$ 2,458    $ 2,337
Less:

Dividends distributed to common shares
1,059    1,004
Dividends distributed to participating RSUs
1    10
Undistributed net income attributable to BlackRock
1,398    1,323
Percentage of undistributed net income allocated to common shares⁽¹⁾
99.9 % 99.1 %
Undistributed net income allocated to common shares
1,396    1,311
Plus:

Common share dividends
1,059    1,004
Net income attributable to common shares
$ 2,455    $ 2,315
Basic weighted-average shares outstanding
174,961,018    184,265,367
Dilutive effect of nonparticipating RSUs and stock options
3,056,661    2,826,292
Dilutive effect of convertible debt
—    24,751
Total diluted weighted-average shares outstanding
178,017,679    187,116,410
Basic earnings per share
$ 14.03    $ 12.56
Diluted earnings per share
$ 13.79    $ 12.37

~~(1)~~

Allocation to common stockholders was based on the total of common shares and participating securities (which represent unvested RSUs that contain nonforfeitable rights to dividends). For 2012 and 2011, average outstanding participating securities were 0.2 million and 1.8 million, respectively.

~~For 2012 and 2011, 449 and 5,125 RSUs, respectively, were excluded from the calculation of diluted EPS because to include them would have an anti-dilutive effect.~~ There were no anti-dilutive RSUs for 2015 and 2013. Amounts of anti-dilutive RSUs for 2014 were immaterial. In addition, there were no anti-dilutive stock options for ~~2013, 2012~~2015, 2014 and ~~2011.~~2013.

~~23.~~

22. Segment Information

The Company’s management directs BlackRock’s operations as one business, the asset management business. The Company utilizes a consolidated approach to assess performance and allocate resources. As such, the Company operates in one business segment as defined in ASC 280-10.

The following table illustrates investment advisory, administration fees, securities lending revenue and performance fees by product type, BlackRock Solutions and advisory revenue, distribution fees and other revenue for ~~2013, 2012~~2015, 2014 and ~~2011.~~

(in millions) 2013 2012 2011
Equity
$ 4,816    $ 4,334    $ 4,447
Fixed income
1,996    1,900    1,659
Multi-asset
1,063    972    914
Alternatives
1,104    968    864
Cash management
321    361    383
Total investment advisory, administration fees, securities lending revenue and performance fees
9,300    8,535    8,267
BlackRock Solutions and advisory
577    518    510
Distribution fees
73    71    100
Other revenue
230    213    204
Total revenue
$ 10,180    $ 9,337    $ 9,081

2013.

(in millions)	2015		2014		2013
Equity	$	5,345	$	5,337	$	4,816
Fixed income		2,428		2,171		1,996
Multi-asset		1,287		1,236		1,063
Alternatives		1,082		1,103		1,104
Cash management		319		292		321
Total investment advisory, administration fees, securities lending revenue and performance fees		10,461		10,139		9,300
BlackRock Solutions and advisory		646		635		577
Distribution fees		55		70		73
Other revenue		239		237		230
Total revenue	$	11,401	$	11,081	$	10,180

The following table illustrates total revenue for ~~2013, 2012~~2015, 2014 and ~~2011~~2013 by geographic region. These amounts are aggregated on a legal entity basis and do not necessarily reflect where the customer resides.


(in millions)
Revenue	2013		2012		2011		2015		2014		2013
Americas	$	6,829	$	6,429	$	6,064	$	7,502	$	7,286	$	6,829
Europe		2,832		2,460		2,517		3,356		3,246		2,832
Asia-Pacific		519		448		500		543		549		519
Total revenue	$	10,180	$	9,337	$	9,081	$	11,401	$	11,081	$	10,180

The following table illustrates long-lived assets that consist of goodwill and property and equipment at December 31, ~~2013, 2012~~2015, 2014 and ~~2011~~2013 by geographic region. These amounts are aggregated on a legal entity basis and do not necessarily reflect where the asset is physically located.

(in millions)
Long-lived Assets	2015		2014		2013
Americas	$	13,422	$	13,151	$	13,204
Europe		186		194		214
Asia-Pacific		96		83		87
Total long-lived assets	$	13,704	$	13,428	$	13,505

(in millions)
Long-lived Assets 2013 2012 2011
Americas
$ 13,204    $ 13,238    $ 13,133
Europe
214    166    123
Asia-Pacific
87    63    73
Total long-lived assets
$ 13,505    $ 13,467    $ 13,329

Americas primarily is comprised of the United States ~~Canada, Brazil, Chile~~ and ~~Mexico,~~Canada, while Europe primarily is comprised of the United ~~Kingdom.~~Kingdom and Luxembourg. Asia-Pacific primarily is comprised of ~~Japan, Australia, Singapore,~~ Hong Kong, ~~Taiwan, Korea, India, Malaysia~~Australia, Japan and ~~China.~~Singapore.

~~24.~~

23. Selected Quarterly Financial Data (unaudited)


(in millions, except per share data)
2013	1^st Quarter		2^nd Quarter⁽¹⁾		3^rd Quarter⁽²⁾		4^th Quarter
(in millions, except shares and per share data)
2015									1^st Quarter⁽¹⁾		2^nd Quarter⁽³⁾		3^rd Quarter⁽⁴⁾		4^th Quarter^{(2) (5)}
Revenue	$	2,449	$	2,482	$	2,472	$	2,777	$	2,723	$	2,905	$	2,910	$	2,863
Operating income	$	909	$	849	$	966	$	1,133	$	1,067	$	1,238	$	1,222	$	1,137
Net income	$	666	$	706	$	729	$	850
Net income⁽⁶⁾									$	825	$	826	$	832	$	869
Net income attributable to BlackRock	$	632	$	729	$	730	$	841	$	822	$	819	$	843	$	861
Earnings per share attributable to BlackRock, Inc. common stockholders:
Basic	$	3.69	$	4.27	$	4.30	$	4.98	$	4.92	$	4.92	$	5.08	$	5.19
Diluted	$	3.62	$	4.19	$	4.21	$	4.86	$	4.84	$	4.84	$	5.00	$	5.11
Weighted-average common shares outstanding:
Basic		171,301,800		170,648,731		169,811,633		169,010,606		167,089,037		166,616,558		166,045,291		165,826,808
Diluted		174,561,132		173,873,583		173,371,508		172,999,529		169,723,167		169,114,759		168,665,303		168,632,558
Dividend declared per share	$	1.68	$	1.68	$	1.68	$	1.68	$	2.18	$	2.18	$	2.18	$	2.18
Common stock price per share:
High	$	258.70	$	291.69	$	286.62	$	316.47	$	380.33	$	377.85	$	354.54	$	363.72
Low	$	212.77	$	245.30	$	255.26	$	262.75	$	340.51	$	344.54	$	293.52	$	295.92
Close	$	256.88	$	256.85	$	270.62	$	316.47	$	365.84	$	345.98	$	297.47	$	340.52

(in millions, except per share data)
2012 1^st Quarter 2^nd Quarter 3^rd Quarter⁽³⁾ 4^th Quarter⁽⁴⁾
Revenue
$ 2,249    $ 2,229    $ 2,320    $ 2,539
Operating income
$ 815    $ 829    $ 875    $ 1,005
Net income
$ 575    $ 560    $ 655    $ 650
Net income attributable to BlackRock
$ 572    $ 554    $ 642    $ 690
Earnings per share attributable to BlackRock, Inc. common stockholders:

Basic
$ 3.19    $ 3.13    $ 3.72    $ 4.02
Diluted
$ 3.14    $ 3.08    $ 3.65    $ 3.93
Weighted-average common shares outstanding:

Basic
179,022,840    177,010,239    172,359,141    171,518,278
Diluted
181,917,864    179,590,702    175,450,532    175,176,037
Dividend declared per share
$ 1.50    $ 1.50    $ 1.50    $ 1.50
Common stock price per share:

High
$ 205.60    $ 206.57    $ 183.00    $ 209.29
Low
$ 179.13    $ 163.37    $ 164.06    $ 177.17
Close
$ 204.90    $ 169.82    $ 178.30    $ 206.71

2014
Revenue	$	2,670	$	2,778	$	2,849	$	2,784
Operating income	$	1,051	$	1,122	$	1,157	$	1,144
Net income	$	744	$	841	$	873	$	806
Net income attributable to BlackRock	$	756	$	808	$	917	$	813
Earnings per share attributable to BlackRock, Inc. common stockholders:
Basic	$	4.47	$	4.79	$	5.46	$	4.86
Diluted	$	4.40	$	4.72	$	5.37	$	4.77
Weighted-average common shares outstanding:
Basic		169,081,421		168,712,221		167,933,040		167,197,844
Diluted		171,933,803		171,150,153		170,778,766		170,367,445
Dividend declared per share	$	1.93	$	1.93	$	1.93	$	1.93
Common stock price per share:
High	$	323.89	$	319.85	$	336.47	$	364.40
Low	$	286.39	$	293.71	$	301.10	$	303.91
Close	$	314.48	$	319.60	$	328.32	$	357.56

(1)

~~In the second~~

The first quarter of ~~2013 in connection with the PennyMac IPO the Company recorded a noncash, nonoperating pre-tax gain~~2015 included nonrecurring tax benefits of $39 million related to the carrying value of its equity method investment. In connection with the Charitable Contribution the Company recorded an expense of $124 million and a noncash, nonoperating pre-tax gain of $80 million related to the contributed investment. For further information, see Note 11,~~Other Assets~~.

~~In addition, the second quarter of 2013 included approximately a $57 million tax benefit recognized in connection with the Charitable Contribution and a tax benefit of approximately $29~~$69 million, primarily due to the realization of losses from changes in the Company’s organizational tax ~~loss carryforwards.~~structure and the resolution of certain outstanding tax matters.

(2)

The ~~third~~fourth quarter of ~~2013~~2015 included a $64 million ~~net~~ noncash tax benefit, primarily related to the revaluation of certain deferred income tax liabilities, including the effect of tax legislation enacted in the United ~~Kingdom and domestic state and local income tax changes.~~Kingdom.

(3)

The ~~third~~second quarter of ~~2012~~2014 included a ~~$30~~$23 million net noncash tax ~~benefit related to~~expense, primarily associated with the revaluation of certain deferred income tax liabilities ~~including the effect of legislation enacted in the United Kingdom, and~~arising from the state and local ~~income~~ tax effect ~~resulting from~~of changes in the Company’s organizational structure. In addition, the second quarter of 2014 benefited from an improvement in the geographic mix of earnings and included a $34 million net tax benefit related to several favorable nonrecurring items.

(4)	The third quarter of 2014 included a $32 million noncash tax benefit, primarily associated with the revaluation of certain deferred income tax liabilities related to intangible assets and goodwill as a result of domestic state and local tax changes.

In addition, the third quarter of 2014 included a $94 million tax benefit, primarily due to the resolution of certain outstanding tax matters related to the acquisition of BGI. In connection with the acquisition, BlackRock recorded a $50 million indemnification asset for unrecognized tax benefits. Due to the resolution of such tax matters, BlackRock recorded $50 million of general and administration expense to reflect the reduction of the indemnification asset and an offsetting $50 million tax benefit.

~~(4)~~

(5)

The fourth quarter of ~~2012 included a one-time pre-tax $30 million charge related to a contribution to certain of the Company’s STIFs and $20~~2014 benefited from $39 million of ~~noncash~~nonrecurring tax ~~benefits primarily associated~~items.

(6)

During the second quarter of 2015, the Company adopted new accounting guidance on consolidations effective January 1, 2015 using the modified retrospective method. Upon adoption, the Company recorded a change to total nonoperating income (expense) with ~~revaluation of certain deferred tax liabilities.~~an equal and offsetting change to noncontrolling interests for the three months ended March 31, 2015. There was no impact to net income attributable to BlackRock, Inc. or to BlackRock’s earnings per share.

~~25.~~24. Subsequent Events

~~Dividend Approval.~~In November 2015, the Company announced that it had entered an agreement to assume investment management responsibilities of approximately $87 billion of cash assets under management from BofA® Global Capital Management, Bank of America’s asset management business. The transaction is expected to close in the first half of 2016, subject to customary regulatory approvals and closing conditions. This transaction is not expected to be material to the Company’s consolidated financial condition or results of operations.

~~Other.~~The Company conducted a review for additional subsequent events and determined that no additional subsequent events had occurred that would require accrual or additional disclosures.

F-39

~~EXHIBIT INDEX~~

Exhibit Index


Exhibit No.		Description
3.1(1)		Amended and Restated Certificate of Incorporation of BlackRock.
3.2(2)		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of BlackRock, Inc.
~~3.3(29)~~ 3.3(3)		Amended and Restated Bylaws of BlackRock.
3.4(1)		Certificate of Designations of Series A Convertible Participating Preferred Stock of BlackRock.
~~3.5(3)~~ 3.5(4)		Certificate of Designations of Series B Convertible Participating Preferred Stock of BlackRock.
~~3.6(3)~~ 3.6(4)		Certificate of Designations of Series C Convertible Participating Preferred Stock of BlackRock.
~~3.7(4)~~ 3.7(5)		Certificate of Designations of Series D Convertible Participating Preferred Stock of BlackRock.
~~4.1(5)~~ 4.1(6)		Specimen of Common Stock Certificate.
~~4.2(6)~~ 4.2(7)		Indenture, dated September 17, 2007, between BlackRock and The Bank of New York, as trustee, relating to senior debt securities.
~~4.3(7)~~ 4.3(8)		Form of 6.25% Notes due 2017.
~~4.4(8)~~ 4.4(9)		~~Form of 3.50% Notes due 2014.~~
~~4.5(8)~~		Form of 5.00% Notes due 2019.
~~4.6(9)~~ 4.5(10)		Form of 4.25% Notes due 2021.
~~4.7(10)~~ 4.6(11)		~~Form of 1.375% Notes due 2015.~~
~~4.8(10)~~		Form of 3.375% Notes due 2022.
~~10.1(11)~~ 4.7(12)		Form of 3.500% Notes due 2024.
4.8(13)		Form of 1.250% Notes due 2025.
4.9(13)		Officers’ Certificate, dated May 6, 2015, for the 1.250% Notes due 2025 issued pursuant to the Indenture.
10.1		BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.2(12)~~ 10.2(14)		Amended and Restated BlackRock, Inc. 1999 Annual Incentive Performance Plan.+
~~10.3(13)~~ 10.3(15)		Amendment No. 1 to the BlackRock, Inc. Amended and Restated 1999 Annual Incentive Performance Plan.+
~~10.4(5)~~ 10.4(16)		Form of Restricted Stock Unit Agreement under the BlackRock, Inc. ~~Voluntary Deferred Compensation Plan, as amended~~Second Amended and ~~restated as of January 1, 2005.~~Restated 1999 Stock Award and Incentive Plan.+
~~10.5(1)~~ 10.5(16)		Form of Performance-Based Restricted Stock Unit Agreement (BPIP) under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
10.6(1)		Form of Stock Option Agreement expected to be used in connection with future grants of Stock Options under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.6(1)~~ 10.7(1)		Form of Restricted Stock Agreement expected to be used in connection with future grants of Restricted Stock under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.7(14)~~ 10.8(1)		~~Form of Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+~~
~~10.8(14)~~		Form of Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units for long-term incentive awards under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.+
~~10.9(1)~~		Form of Directors’ Restricted Stock Unit Agreement expected to be used in connection with future grants of Restricted Stock Units under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.10(5)~~		~~Registration Rights Agreement, dated as of September 29, 2006, among BlackRock, Merrill Lynch & Co., Inc. and the PNC Financial Service Group, Inc.~~


~~Exhibit No.~~		~~Description~~
~~10.11(15)~~ 10.9		BlackRock, Inc. Amended and Restated Voluntary Deferred Compensation Plan, as amended and restated as of November 16, 2015.+
10.10(17)		Share Surrender Agreement, dated October 10, 2002 (the “Share Surrender Agreement”), among Old BlackRock, PNC Asset Management, Inc. and The PNC Financial Services Group, Inc.+
~~10.12(16)~~ 10.11(18)		First Amendment, dated as of February 15, 2006, to the Share Surrender Agreement.+
~~10.13(17)~~ 10.12(19)		Second Amendment, dated as of June 11, 2007, to the Share Surrender Agreement.+
~~10.14(3)~~ 10.13(4)		Third Amendment, dated as of February 27, 2009, to the Share Surrender Agreement.+
~~10.15(18)~~ 10.14(20)		Fourth Amendment, dated as of August 7, 2012, to the Share Surrender Agreement.+
~~10.16(19)~~ 10.15(21)		Five-Year Revolving Credit Agreement, dated as of March 10, 2011, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender and L/C agent, Sumitomo Mitsui Banking Corporation, as Japanese Yen lender, a group of lenders, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Citibank, N.A., as syndication agent and Bank of America, N.A., Barclays Bank PLC, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc., as documentation agents.
~~10.17(20)~~ 10.16(22)		Amendment No. 1, dated as of March 30, 2012, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
~~10.18(27)~~ 10.17(23)		Amendment No. 2, dated as of March 28, 2013, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
~~10.19(21)†~~ 10.18(24)		Amendment No. 3, dated as of March 28, 2014, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
10.19(25)		Amendment No. 4, dated as of April 2, 2015, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
10.20(26)†		Second Amended and Restated Global Distribution Agreement, dated as of November 15, 2010, among BlackRock and Merrill Lynch & Co., Inc.
~~10.20(3)~~ 10.21(3)		Amended and Restated Implementation and Stockholder Agreement, dated as of February 27, 2009, between The PNC Financial Services Group, Inc. and BlackRock.

~~10.21(22)~~ 10.22(27)		Amendment No. 1, dated as of June 11, 2009, to the Amended and Restated Implementation and Stockholder Agreement between The PNC Financial Services Group, Inc. and BlackRock.
~~10.22(23)~~ 10.23(28)		~~Commercial Paper Dealer Agreement between BlackRock and Barclays Capital Inc., dated as of October 14, 2009.~~
~~10.23(24)~~		Lease Agreement, dated as of February 17, 2010, among BlackRock Investment Management (UK) Limited and Mourant & Co Trustees Limited and Mourant Property Trustees Limited as Trustees of the Drapers Gardens Unit Trust for the lease of Drapers Gardens, 12 Throgmorton Avenue, London, EC2, United Kingdom.
~~10.24(25)~~ 10.24(29)		~~Stock Repurchase Agreement, dated as of May 21, 2012, between Barclays Bank PLC and BlackRock.~~
~~10.25(25)~~		~~Exchange Agreement, dated as of May 21, 2012, between Barclays Bank PLC and BlackRock.~~
~~10.26(25)~~		~~Exchange Agreement, dated as of May 21, 2012, among PNC Bancorp, Inc., The PNC Financial Services Group, Inc. and BlackRock.~~
~~10.27(26)~~		~~Letter Agreement, dated November 20, 2012, between Susan L. Wagner and BlackRock. +~~
~~10.28(28)~~		Letter Agreement, dated February 12, 2013, between Gary S. Shedlin and BlackRock.+
~~12.1~~ 10.25(30)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Barclays Capital Inc., dated as of December 23, 2014.
10.26(30)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Citigroup Global Markets Inc., dated as of December 23, 2014.
10.27(30)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Merrill Lynch, Pierce, Fenner & Smith Incorporated, dated as of January 6, 2015.
10.28(30)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Credit Suisse Securities (USA) LLC dated as of January 6, 2015.
12.1		Computation of Ratio of Earnings to Fixed Charges.
21.1		Subsidiaries of Registrant.
23.1		Deloitte & Touche LLP Consent.
31.1		Section 302 Certification of Chief Executive Officer.
31.2		Section 302 Certification of Chief Financial Officer.
32.1		Section 906 Certification of Chief Executive Officer and Chief Financial Officer.
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.


~~Exhibit No.~~		~~Description~~
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

(1)	Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on October 5, 2006.

(2)	Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 25, 2012.

(3)	Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2012.

(4)	Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on February 27, 2009.

~~(4)~~

(5)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on December 3, 2009.

~~(5)~~

(6)

Incorporated by reference to BlackRock’s Registration Statement on Form S-8 (RegistrationNo. 333-137708) filed on September 29, 2006.

~~(6)~~

(7)

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2007.

~~(7)~~

(8)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on September 17, 2007.

~~(8)~~

(9)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on December 10, 2009.

~~(9)~~

(10)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 25, 2011.

~~(10)~~

(11)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 31, 2012.

~~(11)~~

(12)

Incorporated by reference to BlackRock’s ~~Quarterly~~Current Report on Form ~~10-Q for the quarter ended June 30, 2010.~~8-K filed on March 18, 2014.

~~(12)~~

(13)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 6, 2015.

(14)	Incorporated by reference to Old BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2002.

~~(13)~~

(15)

Incorporated by reference to Old BlackRock’s Current Report on Form 8-K filed on May 24, 2006.

~~(14)~~

(16)

Incorporated by reference to BlackRock’s ~~Annual~~Quarterly Report on Form ~~10-K~~10-Q for the ~~year~~quarter ended ~~December 31, 2008.~~June 30, 2015

~~(15)~~

(17)

Incorporated by reference to Old BlackRock’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002.

~~(16)~~

(18)

Incorporated by reference to Old BlackRock’s Current Report on Form 8-K filed on February 22, 2006.

~~(17)~~

(19)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on June 15, 2007.

~~(18)~~

(20)

Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.

~~(19)~~

(21)

Incorporated by reference to BlackRock’s Current Report on Form 8-K/A filed on August 24, 2012.

~~(20)~~

(22)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 4, 2012.

~~(21)~~

(23)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 3, 2013.

(24)	Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on March 28, 2014.

(25)	Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 3, 2015.

(26)	Incorporated by reference to BlackRock’s Current Report on Form 8-K/A filed on August 24, 2012.

~~(22)~~

(27)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on June 17, 2009.

~~(23)~~

(28)

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on October 20, 2009.~~

~~(24)~~

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2009.

~~(25)~~

(29)

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 23, 2012.~~

~~(26)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on November 27, 2012.~~

~~(27)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 3, 2013.~~

~~(28)~~

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on February 19, 2013.

~~(29)~~

(30)

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2014.

+	Denotes compensatory plans or ~~arrangements~~arrangements.

†	Confidential treatment has been granted for certain portions of this exhibit, which portions have been omitted and filed separately with the Securities and Exchange Commission.


Large accelerated filer	x	x	Accelerated filer	¨ o
Non-accelerated filer		¨o (Do not check if a smaller reporting company)	Smaller reporting company	¨ o

PART I
~~PART I~~
Item 1	Business	1
~~Item 1~~		~~Business~~	1
Item 1A		Risk Factors	16	18
Item 1B		Unresolved Staff Comments	25	26
Item 2		Properties	25	26
Item 3		Legal Proceedings	25	26
Item 4		Mine Safety Disclosures	25	27

PART II

Item 5		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26	27
Item 6		Selected Financial Data	27	28
Item 7		Management’s Discussion and Analysis of Financial Condition and Results of Operations	29	30
Item 7A		Quantitative and Qualitative Disclosures About Market Risk	58	54
Item 8		Financial Statements and Supplemental Data	59	55
Item 9		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	59	55
Item 9A		Controls and Procedures	59	55
Item 9B		Other Information	62	58

PART III

Item 10		Directors, Executive Officers and Corporate Governance	62	58
Item 11		Executive Compensation	62	58
Item 12		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	62	58
Item 13		Certain Relationships and Related Transactions, and Director Independence	62	58
Item 14		Principal Accountant Fees and Services	62	58

PART IV

Item 15		Exhibits and Financial Statement Schedules	62	58
		Signatures	66	61


	Component Changes in AUM by Product Type Five Years Ended December 31, 2013
(in millions)	12/31/2008		Net New Business			Acquired AUM, net⁽¹⁾			Market / FX		12/31/2013		5-Year CAGR
Equity	$	203,292	$	260,503		$	1,061,801		$	792,099	$	2,317,695		63	%
Fixed income		481,365		17,779			502,988			240,054		1,242,186		21	%
Multi-asset		77,516		139,077			45,907			78,714		341,214		35	%
Alternatives		61,544		(19,722	)		68,351			941		111,114		13	%
Long-term		823,717		397,637			1,679,047			1,111,808		4,012,209		37	%
Cash management		338,439		(118,341	)		53,616			1,840		275,554		(4	%)
Advisory		144,995		(112,263	)		(10	)		3,603		36,325		(24	%)
Total	$	1,307,151	$	167,033		$	1,732,653		$	1,117,251	$	4,324,088		27	%


	Component Changes in AUM — Retail
(in millions)	12/31/2012		Net New Business		Adjustments⁽¹⁾		Acquisitions⁽²⁾		Market / FX			12/31/2013
Equity	$	164,748	$	3,641	$	13,066	$	—	$	21,580		$	203,035
Fixed income		138,425		14,197		3,897		—		(5,044	)		151,475
Multi-asset class		90,626		14,821		2,663		—		8,944			117,054
Alternatives		9,685		6,145		—		136		247			16,213
Long-term retail	$	403,484	$	38,804	$	19,626	$	136	$	25,727		$	487,777


	Component Changes in AUM — iShares
(in millions)	12/31/2012		Net New Business			Acquisition⁽¹⁾		Market / FX			12/31/2013
Equity	$	534,648	$	74,119		$	13,021	$	96,347		$	718,135
Fixed income		192,852		(7,450	)		1,294		(7,861	)		178,835
Multi-asset class		869		355			—		86			1,310
Alternatives⁽²⁾		24,337		(3,053	)		1,645		(6,837	)		16,092
*TotaliShares***	$	752,706	$	63,971		$	15,960	$	81,735		$	914,372