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

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  No ☒☐ No ☒

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☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes☒ No ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the voting common stock ~~and nonvoting common stock equivalents~~ held by nonaffiliates of the registrant as of June 30, ~~2019~~2022 was approximately ~~$71.9~~$91 billion.

As of January 31, ~~2020,~~2023, there were ~~154,827,534~~150,236,373 shares of the registrant’s common stock outstanding.

BlackRock, Inc. (together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) is a leading publicly traded investment management firm with ~~$7.43~~$8.6 trillion of assets under management (“AUM”) at December 31, ~~2019.~~2022. With approximately ~~16,200~~19,800 employees in more than 30 countries who serve clients in over 100 countries across the globe, BlackRock provides a broad range of investment management and technology services to institutional and retail clients worldwide.

~~Our~~BlackRock’s diverse platform of alpha-seeking active, index and cash management investment strategies across asset classes enables the Company to offer choice and tailor investment outcomes and asset allocation solutions for clients. Product offerings include single- and multi-asset 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~~^®iShares® and BlackRock exchange-traded funds (“ETFs”), separate accounts, collective ~~investment trusts~~trust funds and other pooled investment vehicles. BlackRock also offers technology services, including theinvestment and risk management technology platform, Aladdin^®, Aladdin Wealth, eFront, ~~Cachematrix~~ and ~~FutureAdvisor,~~Cachematrix, as well as advisory services and solutions to a broad base of institutional and wealth management clients. The Company is highly regulated and manages its clients’ assets as a fiduciary. ~~We do~~The Company does not engage in proprietary trading activities that could conflict with the interests of ~~our~~its clients.

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.~~intermediaries.

BlackRock maintains a significant global sales and marketing presence that is focused on establishing and maintaining retail and institutional investment management and technology service relationships by marketing its services to investors directly and through third-party distribution relationships, including financial professionals and pension consultants.

BlackRock is an independent, publicly traded company, with no single majority shareholder and over ~~two-thirds~~85% of its Board of Directors consisting of independent directors. At December 31, 2019, The PNC Financial Services Group, Inc. (“PNC”) held 22.0% of BlackRock’s voting common stock and 22.4% of BlackRock’s capital stock, which includes outstanding common and nonvoting preferred stock.

Management seeks to deliver value for stockholders over time by, among other things, capitalizing on BlackRock’s differentiated competitive position, including:

BlackRock operates in a global marketplace impacted by changing market dynamics 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 Aladdin and other technology products and services. New business efforts depend on BlackRock’s ability to achieve clients’ investment objectives, in a manner consistent with their risk preferences, to deliver excellent client service and to innovate in technology to serve clients’ evolving needs. All of these efforts require the commitment and contributions of BlackRock employees. Accordingly, the ability to attract, develop and retain ~~talented~~qualified professionals is critical to the Company’s long-term success.

~~See “Item 7 -~~Beginning in the first quarter of 2022, BlackRock updated the definitions of operating income, as adjusted, operating margin, as adjusted, and net income attributable to BlackRock, Inc., as adjusted, to include new adjustments. Such measures have been recast for all prior periods to reflect the inclusion of such new adjustments. For further information on non-GAAP financial measures and as adjusted items, 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 2019 and 2018.~~Measures.

In 2016, a restructuring charge, primarily comprised of severance and accelerated amortization expense of previously granted compensation awards, has been excluded to provide more meaningful analysis of BlackRock’s ongoing operations and to ensure comparability among periods presented. In 2015, 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 2017, 2016 and 2015, 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.

The Company’s AUM by product type for the years ~~2015~~2018 through ~~2019~~2022 is presented below.

December 31,

(in millions)
2019

2018

2017

2016

2015

5-Year
CAGR⁽¹⁾

Equity
$
3,820,329

$
3,035,825

$
3,371,641

$
2,657,176

$
2,423,772

9
%
Fixed income

2,315,392

1,884,417

1,855,465

1,572,365

1,422,368

11
%
Multi-asset

568,121

461,884

480,278

395,007

376,336

8
%
Alternatives

178,072

143,358

129,347

116,938

112,839

10
%
Long-term

6,881,914

5,525,484

5,836,731

4,741,486

4,335,315

10
%
Cash management

545,949

448,565

449,949

403,584

299,884

13
%
Advisory

1,770

1,769

1,515

2,782

10,213

(39
)%
Total
$
7,429,633

$
5,975,818

$
6,288,195

$
5,147,852

$
4,645,412

10
%
(1)

Percentage represents CAGR over a five-year period (December 31, 2017 – December 31, 2022).

~~(1)~~

~~Percentage represents CAGR over a five-year period (2014-2019).~~

Component changes in AUM by product type for the five years ended December 31, ~~2019~~2022 are presented below.


(in millions)	December 31, 2017		Net inflows (outflows)			Acquisitions(1)		Market change			FX impact			December 31, 2022		5-Year CAGR(2)
Equity	$	3,371,641	$	299,298		$	43,914	$	843,558		$	(123,057	)	$	4,435,354		6	%
Fixed income		1,855,465		980,768			18,538		(211,347	)		(106,601	)		2,536,823		6	%
Multi-asset		480,278		178,069			683		55,358			(29,484	)		684,904		7	%
Alternatives		129,347		110,318			5,003		25,596			(4,054	)		266,210		16	%
Long-term		5,836,731		1,568,453			68,138		713,165			(263,196	)		7,923,291		6	%
Cash management		449,949		223,072			686		4,515			(7,028	)		671,194		8	%
Advisory		1,515		(2,099	)		—		624			(40	)		—		—
Total	$	6,288,195	$	1,789,426		$	68,824	$	718,304		$	(270,264	)	$	8,594,485		6	%

(1)

Amounts include the following: (a) net AUM from the acquisitions of Tennenbaum Capital Partners in August 2018 (“TCP Transaction”) and the asset management business of Citibanamex in September 2018 (“Citibanamex Transaction”), (b) AUM reclassifications and net dispositions related to the transfer of BlackRock’s UK Defined Contribution Administration and Platform business to Aegon N.V. in July 2018 (“Aegon Transaction”), (c) net AUM dispositions related to the sale of BlackRock’s minority interest in DSP BlackRock Investment Managers Pvt. Ltd. to the DSP Group in August 2018 (“DSP Transaction”), and (d) net AUM from the acquisition of Aperio Group, LLC (“Aperio Transaction”) in February 2021.

(2)

Percentage represents CAGR over a five-year period (December 31, 2017 – December 31, 2022).

(in millions)
December 31,
2014

Net inflows
(outflows)

Adjustment/
acquisitions and dispositions⁽¹⁾

Market
change

FX
impact

December 31,
2019

5-Year
CAGR⁽²⁾

Equity
$
2,451,111

$
277,866

$
2,590

$
1,134,325

$
(45,563
)

$
3,820,329

9
%
Fixed income

1,393,653

718,376

18,539

232,306

(47,482
)

2,315,392

11
%
Multi-asset

377,837

77,525

1,048

123,068

(11,357
)

568,121

8
%
Alternatives

111,240

48,035

10,121

11,255

(2,579
)

178,072

10
%
Long-term

4,333,841

1,121,802

32,298

1,500,954

(106,981
)

6,881,914

10
%
Cash management

296,353

168,051

81,321

6,583

(6,359
)

545,949

13
%
Advisory

21,701

(18,149
)

—

174

(1,956
)

1,770

(39
)%
Total
$
4,651,895

$
1,271,704

$
113,619

$
1,507,711

$
(115,296
)

$
7,429,633

10
%

~~(1)~~

Amounts include AUM acquired in the acquisition of certain assets of BlackRock Kelso Capital Advisors LLC (“BKCA”) in March 2015, AUM acquired from Infraestructura Institucional and FutureAdvisor in October 2015, AUM acquired in the BofA^® Global Capital Management transaction in April 2016, AUM acquired in the acquisition of the equity infrastructure franchise of First Reserve (“First Reserve Transaction”) in June 2017, net AUM from the acquisitions of Tennenbaum Capital Partners in August 2018 (“TCP Transaction”) and the asset management business of Citibanamex in September 2018 (“Citibanamex Transaction”), AUM reclassifications and net dispositions related to the transfer of BlackRock’s UK Defined Contribution Administration and Platform business to Aegon N.V. in July 2018 (“Aegon Transaction”), and net AUM dispositions related to the sale of BlackRock’s minority interest in DSP BlackRock Investment Managers Pvt. Ltd. to the DSP Group in August 2018 (“DSP Transaction”). In addition, amounts include other reclassifications to conform to current period combined AUM policy and presentation.

~~(2)~~

~~Percentage represents CAGR over a five-year period (2014-2019).~~

AUM represents the broad range of financial assets ~~we manage~~managed for clients on a discretionary basis pursuant to investment management and trust 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 determining revenue (for example, net asset value). Reported AUM does not include assets for which ~~we provide~~BlackRock provides risk management or other forms of nondiscretionary advice, or assets that ~~we are~~the Company is retained to manage on a short-term, temporary basis.

Investment management fees are typically earned as a percentage of AUM. WeBlackRock also ~~earn~~earns performance fees on certain portfolios relative to an agreed-upon benchmark or return hurdle. On some products, wethe Company also may earn securities lending revenue. In addition, BlackRock offers its proprietary Aladdin investment system as well as risk management, outsourcing, advisory and other technology services, to institutional investors and wealth management intermediaries. Revenue for these services may be based on several criteria including value of positions, number of users, ~~or accomplishment of specific deliverables.~~implementation go-lives and software solution delivery and support.

At December 31, ~~2019,~~2022, total AUM was ~~$7.43~~$8.6 trillion, representing a CAGR of ~~10%~~6% over the last five years. AUM growth during the period was achieved through the combination of net market valuation gains, net inflows and acquisitions, including BKCA, Infraestructura Institucional and FutureAdvisor, which collectively added $2.2 billion of AUM in 2015, BofA Global Capital Management, which added $80.6 billion of AUM in 2016, the First Reserve Transaction, which added $3.3 billion of AUM in 2017 and the net AUM impact from the TCP Transaction, the Citibanamex Transaction, the Aegon Transaction and the DSP Transaction, which added $27.5 billion of AUM in ~~2018.~~2018, and the Aperio Transaction, which added $41.3 billion of AUM in February 2021. Our AUM mix 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	Investment Style	Client Region
• Retail ~~Retail~~	• Equity ~~Equity~~	• Active ~~Active~~	• Americas ~~Americas~~
• ETFs~~iShares~~ ~~ETFs~~	• Fixed Income	• Index and ~~iShares~~ETFs ~~ETFs~~	• Europe, the Middle East and Africa (“EMEA”)
• Institutional ~~Institutional~~	• Multi-asset ~~Multi-asset~~		•	 Asia-Pacific
	• Alternatives ~~Alternatives~~
	• Cash Management

Client Type

BlackRock serves a diverse mix of institutional and retail clients across the globe, with a regionally focused business model. BlackRock leverages the benefits of scale across global investment, risk and technology platforms while at the same time using local distribution presence to deliver solutions for clients. 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.

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.~~intermediaries.

~~iShares~~ ETFs are a growing component of both institutional and retail client portfolios. However, as ~~iShares~~ETFs are traded on exchanges, complete transparency on the ultimate end-client is unavailable. Therefore, ~~iShares~~ETFs are presented as a separate client type below, with investments in~~iShares~~ ETFs by institutions and retail clients excluded from figures and discussions in their respective sections.

AUM by investment style and client type at December 31, ~~2019~~2022 is presented below.


(in millions)	Retail		ETFs		Institutional		Total
Active	$	675,969	$	—	$	1,641,591	$	2,317,560
Non-ETF Index		167,506		—		2,528,615		2,696,121
ETFs		—		2,909,610		—		2,909,610
Long-term		843,475		2,909,610		4,170,206		7,923,291
Cash management		6,953		—		664,241		671,194
Total	$	850,428	$	2,909,610	$	4,834,447	$	8,594,485

Retail

(in millions)
Retail

iShares ETFs

Institutional

Total

Active
$
608,552

$
—

$
1,338,670

$
1,947,222

Non-ETF Index

94,745

—

2,599,882

2,694,627

iShares ETFs

—

2,240,065

—

2,240,065

Long-term

703,297

2,240,065

3,938,552

6,881,914

Cash management

10,842

—

535,107

545,949

Advisory

—

—

1,770

1,770

Total
$
714,139

$
2,240,065

$
4,475,429

$
7,429,633

~~Retail~~

BlackRock serves retail investors globally through a wide array of vehicles across the investment 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. Technology solutions, digital distribution tools and a shift toward portfolio construction are increasing the number of financial advisors and end-retail ~~clients~~investors using BlackRock products.

Retail represented 10% of long-term AUM at December 31, ~~2019~~2022 and ~~31%~~32% of long-term ~~base~~investment advisory and administration fees (collectively “base fees”) and securities lending revenue for ~~2019.~~2022.

~~iShares~~ ETFs have a significant retail component but isare shown separately below. With the exclusion of ~~iShares~~ETFs, the majority of retail AUM is ~~predominantly~~ comprised of active mutual funds. ~~Mutual~~In the aggregate, active and index mutual funds totaled ~~$565.1~~$660 billion, or approximately 80%, of retail long-term AUM at year-end, with the remainder invested in private investment funds and separately managed accounts. ~~87%~~Approximately 80% of retail long-term AUM is invested in active products.

Component changes in retail long-term AUM for ~~2019~~2022 are presented below.


(in millions)	December 31, 2018		Net inflows (outflows)			Market change		FX impact		December 31, 2019		December 31, 2021		Net inflows (outflows)			Market change			FX impact			December 31, 2022
Equity	$	205,714	$	(652	)	$	45,820	$	1,531	$	252,413	$	471,937	$	(103	)	$	(90,767	)	$	(10,455	)	$	370,612
Fixed income		271,588		21,222			11,882		573		305,265		365,306		(20,299	)		(41,706	)		(4,187	)		299,114
Multi-asset		113,417		(9,291	)		16,138		175		120,439		155,461		(3,143	)		(26,064	)		(1,086	)		125,168
Alternatives		20,131		4,531			506		12		25,180		47,349		4,022			(2,271	)		(519	)		48,581
Total	$	610,850	$	15,810		$	74,346	$	2,291	$	703,297	$	1,040,053	$	(19,523	)	$	(160,808	)	$	(16,247	)	$	843,475

The retail client base is diversified geographically, with ~~70%~~69% of long-term AUM managed for investors based in the Americas, ~~25%~~26% in EMEA and 5% in Asia-Pacific at year-end ~~2019.~~2022.

•

~~US retail~~ long-term net inflows of $23.4 billion were led by fixed income net inflows of $22.7 billion. Fixed income net inflows were diversified across exposures and products, with strong flows into municipal, total return, high yield and short duration bond offerings. Equity net inflows of $3.9 billion included the successful close of the $1.4 billion BlackRock Science & Technology Trust II, BlackRock’s largest closed-end fund launch in the last seven years. Alternatives net inflows of $2.7 billion were driven by flows into the BlackRock Global Event Driven fund. Multi-asset net outflows of $5.9 billion were primarily due to outflows from world allocation strategies.

•

US retail long-term net outflows of $9 billion were driven by outflows from fixed income and multi-asset of $16 billion and $4 billion, respectively, partially offset by equity and alternatives net inflows of $8 billion, and $3 billion, respectively. Fixed income net outflows were primarily due to net outflows from unconstrained and high yield bond funds. Multi-asset net outflows were driven by world allocation and multi-asset income strategies. Alternatives net inflows were led by multi-strategy credit and tactical opportunities funds, and equity net inflows reflect continued growth in Aperio, BlackRock’s customized index equity solution.

•

International retail long-term net outflows of $10 billion were driven by equity net outflows of $8 billion, reflecting outflows from European equities and index equity. Fixed income net outflows of $4 billion were primarily due to net outflows from short duration, Asian and high yield bond strategies. Alternatives and multi-asset net inflows were $1 billion, and $716 million, respectively.

~~International retail~~ long-term net outflows of $7.6 billion resulted from net outflows from equity, multi-asset and fixed income, partially offset by alternatives net inflows. Alternatives net inflows of $1.8 billion were driven by flows into the BlackRock Global Event Driven fund. Equity net outflows of $4.5 billion were primarily due to outflows from European equities, as political and market uncertainty contributed to a risk-off environment in the region. Multi-asset net outflows of $3.4 billion were primarily due to outflows from world allocation strategies.

~~iShares~~ ETFs

~~iShares~~BlackRock is the leading ETF provider in the world with ~~$2.2~~$2.9 trillion of AUM at December 31, ~~2019~~2022, and ~~was the top asset gatherer globally in 2019~~¹ ~~with~~generated net inflows of ~~$183.5~~$220 billion ~~driving an organic growth rate~~in 2022. The majority of ~~11%.~~ ETF AUM and net inflows represent the Company’s index-tracking iShares-branded ETFs. The Company also offers a select number of active BlackRock-branded ETFs that seek outperformance and/or differentiated outcomes.~~iShares~~

Record fixed income ETF net inflows of ~~$112.4~~$123 billion were diversified across exposures, ~~and product lines,~~ led by flows into ~~Core, treasuries~~treasury, investment grade, and ~~mortgage-backed securities funds.~~ ~~iShares~~ ~~equity~~municipal ETFs. Equity ETF net inflows of ~~$64.7~~$101 billion were driven by flows into ~~Core funds~~core, sustainable and ~~factor-based ETFs.~~ ~~iShares~~ ~~ETF multi-asset~~thematic ETFs, as well as continued client use of BlackRock’s broad-based precision exposure ETFs to express risk preferences and ~~alternative funds contributed a combined $6.4 billion of~~make tactical allocation changes during the year. Multi-asset ETFs saw net inflows of $1 billion, while alternative ETFs had net outflows of $5 billion, primarily ~~into~~driven by commodities funds.~~iShares~~

ETFs represented ~~33%~~37% of long-term AUM at December 31, ~~2019~~2022 and ~~41%~~42% of long-term base fees and securities lending revenue for ~~2019.~~2022.

Component changes in ~~iShares~~ETFs AUM for ~~2019~~2022 are presented below.


(in millions)	December 31, 2021		Net inflows (outflows)			Market change			FX impact			December 31, 2022
Equity	$	2,447,248	$	100,756		$	(449,140	)	$	(17,122	)	$	2,081,742
Fixed income		745,373		122,893			(103,957	)		(6,216	)		758,093
Multi-asset		9,119		1,333			(1,441	)		(136	)		8,875
Alternatives(1)		65,614		(4,647	)		70			(137	)		60,900
Total	$	3,267,354	$	220,335		$	(554,468	)	$	(23,611	)	$	2,909,610

(in millions)
December 31,
2018

Net
inflows

Market
change

FX
impact

December 31,
2019

Equity
$
1,274,262

$
64,705

$
292,840

$
1,165

$
1,632,972

Fixed income

427,596

112,345

25,878

(29
)

565,790

Multi-asset

4,485

113

601

11

5,210

Alternatives⁽¹⁾

25,082

6,329

4,664

18

36,093

Total
$
1,731,425

$
183,492

$
323,983

$
1,165

$
2,240,065

(1)

Amounts include commodity ETFs.

~~(1)~~

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

~~Our broad~~ ~~iShares~~BlackRock’s ETF product range offers investors a precise, transparent and efficient way to gain exposure to a full range of asset classes and global markets that have been difficult for many investors to access, as well as the liquidity required to make adjustments to their exposures quickly and cost-efficiently.

•

~~US iShares ETF~~² ~~AUM ended 2019 at $1.7 trillion with $117.9 billion of net inflows driven by strong demand for a diverse range of fixed income products, Core funds and factor-based ETFs.~~

•

US ETF* AUM ended 2022 at $2.2 trillion with $165 billion of net inflows diversified across all product categories, and led by net inflows into core equity and fixed income ETFs.

•

~~International iShares ETF~~²~~AUM ended 2019 at $549.0 billion with net inflows of $65.6 billion led by fixed income and equity net inflows of $45.8 billion and $17.1 billion, respectively.~~

•

International ETF* AUM ended 2022 at $745 billion with net inflows of $55 billion, similarly diversified across all product categories, and led by net inflows into core equity, fixed income and sustainable ETFs.

1~~Source: BlackRock; Bloomberg~~

2* Regional~~iShares~~ ETF amounts based on jurisdiction of product, not underlying client.

Institutional

BlackRock serves institutional investors on six continents in sub-categories including: pensions, endowments and foundations, official institutions, and financial institutions; institutional AUM is diversified across product and region.

Component changes in institutional long-term AUM for ~~2019~~2022 are presented below.


(in millions)	December 31, 2021		Net inflows (outflows)			Market change			FX impact			December 31, 2022
Active:
Equity	$	199,980	$	9,882		$	(34,912	)	$	(6,216	)	$	168,734
Fixed income		767,402		114,742			(95,291	)		(11,898	)		774,955
Multi-asset		642,951		33,950			(112,028	)		(20,404	)		544,469
Alternatives		146,384		10,252			(243	)		(2,960	)		153,433
Active subtotal		1,756,717		168,826			(242,474	)		(41,478	)		1,641,591
Index:
Equity		2,223,195		(5,432	)		(341,087	)		(62,410	)		1,814,266
Fixed income		943,960		32,444			(203,501	)		(68,242	)		704,661
Multi-asset		8,963		(918	)		(1,285	)		(368	)		6,392
Alternatives		5,534		(2,482	)		569			(325	)		3,296
Index subtotal		3,181,652		23,612			(545,304	)		(131,345	)		2,528,615
Total	$	4,938,369	$	192,438		$	(787,778	)	$	(172,823	)	$	4,170,206

(in millions)
December 31,
2018

Net inflows
(outflows)

Market
change

FX
impact

December 31,
2019

Active:

Equity
$
110,976

$
1,852

$
27,547

$
743

$
141,118

Fixed income

538,961

55,006

55,358

2,043

651,368

Multi-asset

336,237

28,785

68,410

801

434,233

Alternatives

93,805

13,813

3,852

481

111,951

Active subtotal

1,079,979

99,456

155,167

4,068

1,338,670

Index:

Equity

1,444,873

(37,552
)

380,101

6,404

1,793,826

Fixed income

646,272

75,006

55,969

15,722

792,969

Multi-asset

7,745

(718
)

1,203

9

8,239

Alternatives

4,340

166

272

70

4,848

Index subtotal

2,103,230

36,902

437,545

22,205

2,599,882

Total
$
3,183,209

$
136,358

$
592,712

$
26,273

$
3,938,552

Institutional active AUM ended ~~2019~~2022 at ~~$1.3~~$1.6 trillion, reflecting ~~$99.5~~$169 billion of net inflows, ~~positive across all asset classes.~~ driven by the funding of several significant outsourcing mandates and continued growth in our LifePath® target-date, quantitative equity and private markets platforms.

Fixed income net inflows of ~~$55.0~~$115 billion ~~included two sizable~~reflected the funding of a significant insurance client ~~wins in the second quarter of 2019.~~outsourcing mandate. Multi-asset ~~strategies saw continued growth, with~~and equity net inflows of ~~$28.8~~$34 billion ~~reflecting ongoing demand for solutions~~and $10 billion, respectively, reflected continued growth in LifePath target-date offerings and ~~the~~ ~~LifePath~~^®our quantitative equity strategies, respectively. ~~target-date suite.~~

Alternatives net inflows of ~~$13.8~~$10 billion were led by ~~inflows into~~private credit, infrastructure and private ~~equity and real estate.~~equity. Excluding return of capital and investment of ~~$5.1~~$12 billion, alternatives net inflows were ~~$18.9~~$22 billion. In addition, ~~2019~~2022 was another strong fundraising year for illiquid alternatives, ~~and at~~with BlackRock raising $35 billion of client capital. At year-end, ~~2019 we~~BlackRock had approximately ~~$24~~$34 billion of ~~committed capital~~non-fee paying, unfunded, uninvested commitments to deploy for institutional ~~clients.~~clients, which is not included in AUM.

~~In total,~~ Institutional active represented ~~19%~~21% of long-term AUM and 19% of long-term base ~~fees.~~

fees and securities lending revenue for 2022.

Institutional index AUM totaled ~~$2.6~~$2.5 trillion at December 31, ~~2019,~~2022, reflecting ~~$36.9~~$24 billion of ~~net inflows. Fixed income net~~ inflows, ~~of $75.0 billion were~~ driven by demand for liability-driven investment solutions. Equity net outflows of $37.6 billion resulted from client de-risking, re-allocating, re-balancing and seeking liquidity in a more uncertain market environment. fixed income.

Institutional index represented ~~38%~~32% of long-term AUM ~~at December 31, 2019~~ and ~~accounted for 9%~~7% of long-term base fees and securities lending revenue for ~~2019.~~2022.

BlackRock’s institutional franchise generated 5% long-term organic base fee growth in 2019 reflecting strength in higher-fee illiquid alternatives, multi-asset solutions and liability-driven investment strategies.

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 $2.6 trillion, or 62%, of long-term institutional AUM managed for defined benefit, defined contribution and other pension plans for corporations, governments and unions at December 31, 2022. The market landscape continues to shift from defined benefit to defined contribution, and our defined contribution channel represented $1.2 trillion of total pension AUM. BlackRock remains well positioned to capitalize on the on-going evolution of the defined contribution market and demand for outcome-oriented investments. An additional $80 billion, or 2%, of long-term institutional AUM was managed for other tax-exempt investors, including charities, foundations and endowments.

•

Official Institutions BlackRock managed $259 billion, or 6%, 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 2022. These clients often require specialized investment 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 $570 billion, or 14%, of long-term institutional AUM at year-end 2022. Assets managed for other taxable institutions, including corporations, banks and third-party fund sponsors for which the Company provides sub-advisory services, totaled $695 billion, or 16%, of long-term institutional AUM at year-end.

•

~~Pensions, Foundations and Endowments.~~ BlackRock is among the world’s largest managers of pension plan assets with $2.6 trillion, or 67%, of long-term institutional AUM managed for defined benefit, defined contribution and other pension plans for corporations, governments and unions at December 31, 2019. The market landscape continues to shift from defined benefit to defined contribution, driving strong flows in our defined contribution channel, which had $16.7 billion of long-term net inflows for the year, driven by continued demand for our ~~LifePath~~ target-date suite. Defined contribution represented $1.1 trillion 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 $78.7 billion, or 2%, of long-term institutional AUM was managed for other tax-exempt investors, including charities, foundations and endowments.

•

~~Official Institutions.~~ BlackRock managed $234.4 billion, or 6%, 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 2019. These clients often require specialized investment 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 $380.0 billion, or 10%, of institutional long-term AUM at year-end 2019. Assets managed for other taxable institutions, including corporations, banks and third-party fund sponsors for which we provide sub-advisory services, totaled $605.0 billion, or 15%, of long-term institutional AUM at year-end.

Client Type and Product Type

Component changes in AUM by client type and product type ~~and investment style~~ for ~~2019~~2022 are presented below.


(in millions)	December 31, 2021		Net inflows (outflows)			Market change			FX impact			December 31, 2022
Retail:
Equity	$	471,937	$	(103	)	$	(90,767	)	$	(10,455	)	$	370,612
Fixed income		365,306		(20,299	)		(41,706	)		(4,187	)		299,114
Multi-asset		155,461		(3,143	)		(26,064	)		(1,086	)		125,168
Alternatives		47,349		4,022			(2,271	)		(519	)		48,581
Retail subtotal		1,040,053		(19,523	)		(160,808	)		(16,247	)		843,475
ETFs:
Equity		2,447,248		100,756			(449,140	)		(17,122	)		2,081,742
Fixed income		745,373		122,893			(103,957	)		(6,216	)		758,093
Multi-asset		9,119		1,333			(1,441	)		(136	)		8,875
Alternatives		65,614		(4,647	)		70			(137	)		60,900
ETFs subtotal		3,267,354		220,335			(554,468	)		(23,611	)		2,909,610
Institutional:
Active:
Equity		199,980		9,882			(34,912	)		(6,216	)		168,734
Fixed income		767,402		114,742			(95,291	)		(11,898	)		774,955
Multi-asset		642,951		33,950			(112,028	)		(20,404	)		544,469
Alternatives		146,384		10,252			(243	)		(2,960	)		153,433
Active subtotal		1,756,717		168,826			(242,474	)		(41,478	)		1,641,591
Index:
Equity		2,223,195		(5,432	)		(341,087	)		(62,410	)		1,814,266
Fixed income		943,960		32,444			(203,501	)		(68,242	)		704,661
Multi-asset		8,963		(918	)		(1,285	)		(368	)		6,392
Alternatives		5,534		(2,482	)		569			(325	)		3,296
Index subtotal		3,181,652		23,612			(545,304	)		(131,345	)		2,528,615
Institutional subtotal		4,938,369		192,438			(787,778	)		(172,823	)		4,170,206
Long-term		9,245,776		393,250			(1,503,054	)		(212,681	)		7,923,291
Cash management		755,057		(77,374	)		1,071			(7,560	)		671,194
Advisory		9,310		(9,306	)		(4	)		—			—
Total	$	10,010,143	$	306,570		$	(1,501,987	)	$	(220,241	)	$	8,594,485

(in millions)
December 31,
2018

Net inflows
(outflows)

Market
change

FX
impact

December 31,
2019

Retail:

Equity
$
205,714

$
(652
)

$
45,820

$
1,531

$
252,413

Fixed income

271,588

21,222

11,882

573

305,265

Multi-asset

113,417

(9,291
)

16,138

175

120,439

Alternatives

20,131

4,531

506

12

25,180

Retail subtotal

610,850

15,810

74,346

2,291

703,297

iShares ETFs:

Equity

1,274,262

64,705

292,840

1,165

1,632,972

Fixed income

427,596

112,345

25,878

(29
)

565,790

Multi-asset

4,485

113

601

11

5,210

Alternatives

25,082

6,329

4,664

18

36,093

iShares ETFs subtotal

1,731,425

183,492

323,983

1,165

2,240,065

Institutional:

Active:

Equity

110,976

1,852

27,547

743

141,118

Fixed income

538,961

55,006

55,358

2,043

651,368

Multi-asset

336,237

28,785

68,410

801

434,233

Alternatives

93,805

13,813

3,852

481

111,951

Active subtotal

1,079,979

99,456

155,167

4,068

1,338,670

Index:

Equity

1,444,873

(37,552
)

380,101

6,404

1,793,826

Fixed income

646,272

75,006

55,969

15,722

792,969

Multi-asset

7,745

(718
)

1,203

9

8,239

Alternatives

4,340

166

272

70

4,848

Index subtotal

2,103,230

36,902

437,545

22,205

2,599,882

Institutional subtotal

3,183,209

136,358

592,712

26,273

3,938,552

Long-term

5,525,484

335,660

991,041

29,729

6,881,914

Cash management

448,565

93,074

3,054

1,256

545,949

Advisory

1,769

2

(19
)

18

1,770

Total
$
5,975,818

$
428,736

$
994,076

$
31,003

$
7,429,633

Long-term product offerings include ~~alpha-seeking~~ active and index strategies. Our ~~alpha-seeking~~ active strategies seek to earn attractive returns in excess of a market benchmark or performance hurdle while maintaining an appropriate risk profile and leverage fundamental research and quantitative models to drive portfolio construction. In contrast, 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. Index ~~strategies~~products include both our non-ETF index products and ETFs.~~iShares~~ ~~ETFs.~~

Although many clients use both ~~alpha-seeking~~ active and 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 or may use a combination of index strategies to target active returns. In addition, institutional non-ETF index assignments tend to be very large (multi-billion dollars) and typically reflect low fee rates. Net flows in institutional index products generally have a small impact on BlackRock’s revenues and earnings.

Equity

Year-end ~~2019~~2022 equity AUM totaled ~~$3.8~~$4.4 trillion, reflecting net inflows of ~~$28.4~~$105 billion. Net inflows included ~~$64.7~~$101 billion and $7 billion into ~~iShares~~ETFs ~~driven by net inflows into Core funds~~ and ~~factor-based ETFs,~~non-ETF index, respectively, partially offset by ~~non-ETF index and~~ active net outflows of ~~$33.4 billion and $2.9 billion, respectively.~~$3 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 US equity strategies. Accordingly, fluctuations in international

equity markets, which may not consistently move in tandem with US markets, have a greater impact on BlackRock’s equity revenues and effective fee rate.

Equity represented 56% of long-term AUM and 52% of long-term base fees and securities lending revenue for 2022.

Fixed Income

Fixed income AUM ended ~~2019~~2022 at ~~$2.3~~$2.6 trillion, reflecting net inflows of ~~$263.6~~$250 billion. ~~iShares~~Net inflows included $123 billion, $93 billion and $34 billion into ETFs, active and non-ETF index, respectively. Record fixed income ETF net inflows of ~~$112.3~~$123 billion ~~were led by~~reflected the benefit of our diverse product offering and included strong flows into ~~Core, treasuries~~treasury, investment grade and ~~mortgage-backed securities funds. Non-ETF index~~municipal ETFs. Active fixed income net inflows included the funding of ~~$76.3 billion were driven by demand~~a significant insurance client outsourcing mandate.

Fixed income represented 32% of long-term AUM and 26% of long-term base fees and securities lending revenue for liability-driven investment solutions. Active net inflows of $75.0 billion included two sizable institutional client wins in the second quarter of 2019, in addition to strong flows in municipal, total return, high yield and short duration bond offerings.2022.

Multi-Asset

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

Multi-asset represented 9% of long-term AUM and 10% of long-term base fees and securities lending revenue for 2022.

Component changes in multi-asset AUM for ~~2019~~2022 are presented below.

(in millions)
December 31,
2018

Net inflows
(outflows)

Market
change

FX
impact

December 31,
2019

Asset allocation and balanced
$
174,636

$
(13,792
)

$
23,641

$
599

$
185,084

Target date/risk

206,334

23,454

46,180

1,110

277,078

Fiduciary

80,402

9,404

16,496

(713
)

105,589

FutureAdvisor⁽¹⁾

512

(177
)

35

—

370

Total
$
461,884

$
18,889

$
86,352

$
996

$
568,121


(in millions)	December 31, 2021		Net inflows (outflows)		Market change			FX impact			December 31, 2022
Target date/risk	$	418,638	$	23,866	$	(67,847	)	$	(3,817	)	$	370,840
Asset allocation and balanced		237,686		5,673		(35,208	)		(6,979	)		201,172
Fiduciary		160,170		1,683		(37,763	)		(11,198	)		112,892
Total	$	816,494	$	31,222	$	(140,818	)	$	(21,994	)	$	684,904

~~(1)~~

~~FutureAdvisor amounts do not include AUM held in~~ ~~iShares~~ ~~ETFs.~~

Multi-asset net inflows reflected ongoing institutional demand for our solutions-based advice with ~~$28.1~~$33 billion of net inflows coming from institutional clients. Defined contribution plans of ~~institutional~~ clients remained a significant driver of flows and contributed ~~$18.9~~$19 billion to institutional multi-asset net inflows in ~~2019,~~2022, primarily into target date and target risk product offerings. ~~Retail net outflows of $9.3 billion were primarily due to outflows from world allocation strategies.~~

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

•

Target date and target risk products generated net inflows of $24 billion. Institutional investors represented 89% of target date and target risk AUM, with defined contribution plans representing 84% of AUM. Flows were driven by defined contribution investments in our LifePath offerings. LifePath products utilize a proprietary active asset allocation overlay model that seeks to balance risk and return over an investment horizon based on the investor’s expected retirement timing. Underlying investments are primarily index products.

•

Asset allocation and balanced products generated $6 billion of net inflows. 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 include our Global Allocation and Multi-Asset Income fund families.

•

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 investment management, often with BlackRock acting as outsourced chief investment officer. 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.

Alternatives

•

~~Asset allocation and balanced products~~ represented 33% of multi-asset AUM at year-end. 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 fund families.

•

~~Target date and target risk products~~ grew 11% organically in 2019, with net inflows of $23.5 billion. Institutional investors represented 90% of target date and target risk AUM, with defined contribution plans representing 84% of AUM. Flows were driven by defined contribution investments in our ~~LifePath~~ ~~offerings.~~ ~~LifePath~~ products utilize a proprietary active asset allocation overlay model that seeks to balance risk and return over an investment horizon based on the investor’s expected retirement timing. Underlying investments are primarily index products.

•

~~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 investment management, often with BlackRock acting as outsourced chief investment officer (“OCIO”). 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. In 2019, BlackRock saw $9.4 billion of net inflows, or 12% organic growth, in fiduciary mandates.

•

~~FutureAdvisor~~ is a digital wealth management platform that provides financial institutions with technology-enabled investment advisory capabilities to manage their clients’ investments. 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 technology-enabled advice with BlackRock’s multi-asset investment capabilities, proprietary technology and risk analytics. FutureAdvisor AUM does not include underlying ~~iShares~~ ~~ETF investments.~~

~~Alternatives~~

BlackRock alternatives focus on sourcing and managing high-alpha investments with lower correlation to public markets and developing a holistic approach to address client needs in alternatives investing. Our alternatives products fall into three main categories — 1)(1) illiquid alternatives, 2)(2) liquid alternatives, and 3)(3) currency and commodities. Illiquid alternatives include offerings in alternative solutions, private equity, opportunistic and credit, real estate and infrastructure. Liquid alternatives include offerings in direct hedge funds and hedge fund solutions (funds of funds).

In ~~2019,~~2022, liquid and illiquid alternatives generated ~~$24.8~~a combined $14 billion of net inflows, or ~~$30.8~~$28 billion excluding return of capital/investment of ~~$6.0~~$14 billion. The largest contributors to return of capital/investment were ~~private equity solutions,~~ opportunistic and credit strategies, ~~real estate~~private equity solutions and infrastructure. Net inflows were driven by opportunistic and credit strategies, infrastructure ~~direct hedge funds, real estate,~~ and private ~~equity and opportunistic strategies.~~equity. At year-end, weBlackRock had approximately ~~$24~~$34 billion of non-fee paying, unfunded, uninvested commitments, which are expected to be deployed in future years; these commitments are not included in AUM or flows until they are fee-paying. Currency and commodities saw $7 billion of net outflows, primarily from commodities ETFs and institutional separate accounts.

~~We believe~~BlackRock believes that as alternatives become more conventional and investors adapt their asset allocation strategies, investors will further increase their use of alternative investments to complement core holdings. ~~Our~~BlackRock’s highly diversified alternatives franchise is well positioned to continue to meet growing demand from both institutional and retail investors.

Alternatives represented 3% of long-term AUM and 12% of long-term base fees and securities lending revenue for 2022.

Component changes in alternatives AUM for ~~2019~~2022 are presented in the table below.


(in millions)	December 31, 2021		Net inflows (outflows)			Market change			FX impact			December 31, 2022		Memo: return of capital/ investment(1)			Memo: committed capital(2)
Illiquid alternatives:
Alternative solutions	$	5,980	$	895		$	(88	)	$	(142	)	$	6,645	$	(846	)	$	5,336
Private equity and opportunistic:
Private equity solutions		19,421		2,148			13			(82	)		21,500		(1,745	)		7,590
Opportunistic and credit strategies		19,313		5,925			(114	)		(282	)		24,842		(7,329	)		3,670
Long Term Private Capital		3,459		844			2,317			—			6,620		—			—
Private equity and opportunistic subtotal		42,193		8,917			2,216			(364	)		52,962		(9,074	)		11,260
Real assets:
Real estate		28,737		766			28			(935	)		28,596		(1,042	)		1,050
Infrastructure		25,669		5,474			(1,044	)		(551	)		29,548		(2,344	)		15,680
Real assets subtotal		54,406		6,240			(1,016	)		(1,486	)		58,144		(3,386	)		16,730
Total illiquid alternatives		102,579		16,052			1,112			(1,992	)		117,751		(13,306	)		33,326
Liquid alternatives:
Direct hedge fund strategies		58,655		(1,747	)		(3,940	)		(996	)		51,972		—			—
Hedge fund solutions		28,693		57			230			(298	)		28,682		(343	)		765
Total Liquid alternatives		87,348		(1,690	)		(3,710	)		(1,294	)		80,654		(343	)		765
Currency and commodities		74,954		(7,217	)		723			(655	)		67,805		—			—
Total	$	264,881	$	7,145		$	(1,875	)	$	(3,941	)	$	266,210	$	(13,649	)	$	34,091

(in millions)
December 31,
2018

Net inflows
(outflows)

Market
change

FX
impact

December 31,
2019

Memo:
return of
capital/
investment⁽¹⁾

Memo:
committed capital⁽²⁾

Illiquid alternatives:

Alternative solutions
$
3,498

$
273

$
180

$
29

$
3,980

$
(536
)
$
3,287

Private equity and opportunistic:

Private equity solutions

13,308

1,095

(16
)

(13
)

14,374

(2,009
)

5,268

Opportunistic and credit
strategies

8,671

2,408

51

(21
)

11,109

(1,095
)

5,228

Long Term Private Capital

—

2,430

—

—

2,430

—

—

Private equity and opportunistic subtotal

21,979

5,933

35

(34
)

27,913

(3,104
)

10,496

Real assets:

Real estate

20,262

2,472

1,457

239

24,430

(982
)

1,384

Infrastructure

14,088

5,425

(571
)

84

19,026

(936
)

7,373

Real assets subtotal

34,350

7,897

886

323

43,456

(1,918
)

8,757

Total illiquid alternatives

59,827

14,103

1,101

318

75,349

(5,558
)

22,540

Liquid alternatives:

Direct hedge fund strategies

29,330

4,337

2,426

141

36,234

—

—

Hedge fund solutions

22,388

(380
)

798

8

22,814

(434
)

955

Total Liquid alternatives

51,718

3,957

3,224

149

59,048

(434
)

955

Currency and commodities

31,813

6,779

4,969

114

43,675

—

—

Total
$
143,358

$
24,839

$
9,294

$
581

$
178,072

$
(5,992
)
$
23,495

(1)

Return of capital/investment is included in outflows.

(2)

Amount represents client assets that are uninvested commitments, which are currently non-fee paying and are not included in AUM. These commitments are expected to generate fees and will be counted in AUM and flows as the capital is deployed over time.

~~(1)~~

~~Return of capital/investment is included in outflows.~~

~~(2)~~

Illiquid Alternatives

The Company’s illiquid alternatives strategies include the following:

•

Alternative Solutions represents highly customized portfolios of alternative investments. In ~~2019,~~2022, alternative solutions portfolios had ~~$0.3~~$7 billion in AUM, and $895 million of net inflows.

•

Private Equity and Opportunistic included AUM of $25 billion in opportunistic and credit offerings, $22 billion in private equity solutions, and $7 billion in Long Term Private Capital (“LTPC”). Net inflows of $9 billion into private equity and opportunistic strategies included $6 billion of net ~~inflows.~~

inflows into opportunistic and credit offerings, $2 billion of net inflows into private equity solutions and $844 million of net inflows into LTPC.

•

Real Assets which includes infrastructure and real estate, totaled $58 billion in AUM, reflecting net inflows of $6 billion, led by infrastructure.

•

~~Private Equity and Opportunistic~~ ~~included $14.4 billion in private equity solutions, $11.1 billion in opportunistic and credit offerings, and $2.4 billion in Long Term Private Capital (“LTPC”). LTPC was launched in 2019,~~ and is a perpetual, direct private equity fund designed to create value for the long-term, limit re-investment risk and operate with lower volatility than comparable vehicles. Net inflows of $5.9 billion into private equity and opportunistic strategies included $2.4 billion of net inflows into both LTPC and opportunistic and credit offerings, and $1.1 billion of net inflows into private equity solutions.

•

~~Real Assets, which includes infrastructure and real estate, totaled $43.5 billion, reflecting net inflows of $7.9 billion, led by infrastructure deployments.~~

Liquid Alternatives

The Company’s liquid alternatives products’ net ~~inflows~~outflows of ~~$4.0~~$2 billion ~~were due to~~reflected net ~~inflows of $4.3 billion~~outflows from direct hedge ~~funds, partially offset by $0.3 billion of net outflows from hedge~~ fund ~~solutions.~~strategies. Direct hedge fund ~~AUM~~strategies includes a variety of single- and multi-strategy offerings.

In addition, the Company manages $86 billion in liquid credit strategies which is included in active fixed income.

Currency and Commodities

The Company’s currency and commodities products include a range of active and index products.

Currency and commodities products had ~~$6.8~~$7 billion of net ~~inflows,~~outflows, primarily driven by ~~iShares~~ ~~ETFs.~~ ~~iShares~~ETFs and institutional separate accounts. ETF commodities products represented ~~$36.1~~$61 billion of AUM and are not eligible for performance fees.

Cash Management

Cash management AUM totaled ~~$545.9~~$671 billion at December 31, ~~2019,~~2022, reflecting ~~$93.1~~$77 billion of net ~~inflows.~~outflows, primarily due to institutional client redemptions from US government money market funds. Cash management products include taxable and tax-exempt money market funds, ~~short term~~short-term investment funds and customized separate accounts. Portfolios are denominated in US dollars, Canadian dollars, Australian dollars, Euros, Swiss Francs, New ~~Taiwan Dollars~~Zealand dollars or British pounds. ~~Strong growth~~

During 2022 BlackRock voluntarily waived a portion of its management fees on certain money market funds to ensure that they maintain a minimum level of daily net investment income. These waivers resulted in ~~cash~~a reduction of management ~~reflects~~fees of approximately $72 million, which was partially offset by a reduction of BlackRock’s ~~success in leveraging scale for clients and delivering innovative digital~~ distribution and ~~risk management solutions.~~servicing costs paid to financial intermediaries. These waivers ceased following rate hikes by the Bank of England and the US Federal Reserve in March 2022. BlackRock has provided voluntary yield support waivers in prior periods and may increase or decrease the level of yield support waivers in future periods. For more information see Note 2, Significant Accounting Policies, in the notes to the consolidated financial statements included in Part II, Item 8 of this filing.

Client Region

Our footprints in the Americas, EMEA and Asia-Pacific regions 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.

AUM by product type and client region at December 31, ~~2019~~2022 is presented below.


(in millions)	Americas		EMEA		Asia-Pacific		Total
Equity	$	3,058,433	$	1,047,542	$	329,379	$	4,435,354
Fixed income		1,577,702		695,127		263,994		2,536,823
Multi-asset		488,164		153,245		43,495		684,904
Alternatives		151,603		84,900		29,707		266,210
Long-term		5,275,902		1,980,814		666,575		7,923,291
Cash management		506,321		156,628		8,245		671,194
Total	$	5,782,223	$	2,137,442	$	674,820	$	8,594,485

(in millions)
Americas

EMEA

Asia-Pacific

Total

Equity
$
2,708,870

$
876,590

$
234,869

$
3,820,329

Fixed income

1,315,748

777,121

222,523

2,315,392

Multi-asset

388,931

153,067

26,123

568,121

Alternatives

92,145

61,041

24,886

178,072

Long-term

4,505,694

1,867,819

508,401

6,881,914

Cash management

403,742

133,846

8,361

545,949

Advisory

1,518

252

—

1,770

Total
$
4,910,954

$
2,001,917

$
516,762

$
7,429,633

Component changes in AUM by client region for ~~2019~~2022 are presented below.


(in millions)	December 31, 2021		Net inflows (outflows)		Market change			FX impact			December 31, 2022
Americas	$	6,645,592	$	146,546	$	(998,038	)	$	(11,877	)	$	5,782,223
EMEA		2,647,528		73,795		(432,922	)		(150,959	)		2,137,442
Asia-Pacific		717,023		86,229		(71,027	)		(57,405	)		674,820
Total	$	10,010,143	$	306,570	$	(1,501,987	)	$	(220,241	)	$	8,594,485

(in millions)
December 31,
2018⁽¹⁾

Net inflows
(outflows)

Market
change

FX
impact

December 31,
2019

Americas
$
3,931,771

$
280,069

$
691,361

$
7,753

$
4,910,954

EMEA

1,615,140

122,787

243,226

20,764

2,001,917

Asia-Pacific

428,907

25,880

59,489

2,486

516,762

Total
$
5,975,818

$
428,736

$
994,076

$
31,003

$
7,429,633

Americas~~(1)~~

~~2018 AUM reflects the reclassification of $16.0 billion of aggregate AUM in the Iberia region (primarily Spain) from the Americas to EMEA.~~

~~Americas~~

~~Net~~Americas net inflows of ~~$280.1~~$147 billion were ~~positive across all asset classes, with~~driven by the funding of several significant outsourcing mandates, and reflected net inflows into fixed income, ~~cash,~~multi-asset, equity, ~~multi-asset~~ and alternatives of ~~$168.0~~$174 billion, ~~$62.4~~$31 billion, ~~$21.1~~$23 billion, ~~$15.2~~ and ~~$13.4~~$5 billion, respectively. These were partially offset by cash and advisory net outflows of $77 billion and $9 billion, respectively. Advisory net outflows of $9 billion were primarily linked to the successful planned wind-downs of portfolios managed by our Financial Markets Advisory group on behalf of the Federal Reserve Bank of NY. Revenue linked to these assignments is primarily reflected in the “Advisory and other revenue” line item on the Income Statement. During the year, weBlackRock served clients through offices in 3236 states in the ~~United States~~US as well as Canada, Mexico, Brazil, Colombia, Chile and ~~Colombia.~~the Dominican Republic.

~~EMEA~~The Americas represented 67% of total AUM and 65% of total base fees and securities lending revenue for 2022.

EMEA

EMEA net inflows of ~~$122.8~~$74 billion ~~reflected~~were driven by fixed income and alternatives net inflows ~~into fixed income, cash, equity, alternatives~~of $73 billion and ~~multi-asset of $64.7 billion, $29.4 billion, $15.9 billion, $9.3 and $3.5~~$2 billion, respectively. ~~Our offerings~~Offerings include fund families in the United Kingdom ("UK"), the Netherlands, Luxembourg and Dublin and~~iShares~~ ETFs listed on stock exchanges throughout Europe, as well as separate accounts and pooled investment products.

~~Asia-Pacific~~EMEA represented 25% of total AUM and 29% of total base fees and securities lending revenue for 2022.

Asia-Pacific

Asia-Pacific net inflows of ~~$25.9~~$86 billion were primarily due to equity and fixed income net inflows of ~~$30.9~~$85 billion ~~partially offset by equity net outflows of $8.6 billion.~~and $3 billion, respectively. Clients in the Asia-Pacific region are served through offices in Japan, Australia, Hong Kong, Singapore, Taiwan, Korea, China, and India.

Asia-Pacific represented 8% of total AUM and 6% of total base fees and securities lending revenue for 2022.

Investment Performance

Investment performance across active and index products as of December 31, ~~2019~~2022 was as follows:


	One-year period	Three-year period	Five-year period
Fixed income:
Actively managed AUM above benchmark or peer median
Taxable	57%	83%	89%
Tax-exempt	31%	41%	44%
Index AUM within or above applicable tolerance	94%	90%	95%
Equity:
Actively managed AUM above benchmark or peer median
Fundamental	49%	62%	80%
Systematic	54%	76%	72%
Index AUM within or above applicable tolerance	97%	98%	98%

One-year
period

Three-year
period

Five-year
period

Fixed income:

Actively managed AUM above benchmark or peer median

Taxable

87%

86%

89%

Tax-exempt

61%

79%

77%

Index AUM within or above applicable tolerance

95%

98%

91%

Equity:

Actively managed AUM above benchmark or peer median

Fundamental

71%

76%

82%

Systematic

54%

84%

82%

Index AUM within or above applicable tolerance

97%

98%

99%

Performance ~~Notes~~.Notes. Past performance is not indicative of future results. Except as specified, the performance information shown is as of December 31, ~~2019~~2022 and is based on preliminary data available at that time. The performance data shown reflects information for all actively and passively managed equity and fixed income accounts, including US 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, ~~2019.~~2022. The performance data does not include accounts terminated prior to December 31, ~~2019~~2022 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 institutional and high net worth separate accounts, and net-of-fees for retail funds. The performance tracking shown for index accounts is based on gross-of-fees performance and includes all institutional accounts and all iShares funds globally using an index strategy. AUM information is based on AUM available as of December 31, ~~2019~~2022 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.

Performance shown is derived from applicable benchmarks or peer median information, as selected by BlackRock, Inc. Peer medians are based in part on data either from Lipper, Inc. or Morningstar, Inc. for each included product.

TECHNOLOGY SERVICES

BlackRock offers investment management technology systems, risk management services, wealth management and digital distribution tools on a fee basis. Aladdin is our proprietary technology platform, ~~which serves as the~~providing an end-to-end, SaaS solution for investment and risk management ~~system~~ for both BlackRock and a growing number of institutional and retail investors around the world. BlackRock offers risk reporting capabilities via ~~the~~ Aladdin Risk, ~~offering,~~ as well as investment accounting capabilities. Aladdin Provider is a tool used by ~~BlackRock’s custodial partners,~~asset servicers, connecting them to the platform used by asset managers and owners to add operational efficiency. In 2019, BlackRock acquired eFront, a leading end-to-end alternative investment management software and solutions provider to enable clients to manage portfolios and risk across public and private asset classes on a single platform. eFront is offered to clients both as a standalone offering and as part of an integrated “Whole Portfolio View” solution that provides transparency across clients’ public and private assets. Building on eFront’s industry-leading tools for private asset classes, Aladdin was an early mover to provide data transparency and analytics across public and private assets with over forty clients using the Whole Portfolio View capabilities. Through our Cachematrix platform, BlackRock is also a leading provider of financial technology which simplifies the cash management process for banks and their corporate clients in a streamlined, open-architecture platform.

BlackRock offers a number of wealth management technology tools offering personalized digital advice, portfolio construction capabilities and risk analytics for retail distributors. These tools include Aladdin Wealth, which provides wealth management firms and their financial professionals with institutional-quality business management, portfolio construction, modeling and risk analytics capabilities, FutureAdvisor, a digital wealth management platform that provides financial institutions with technology-enabled investment advisory capabilities to manage their clients’ investments, and Cachematrix, a leading provider of financial technology which simplifies the cash management process for banks and their corporate clients in a streamlined, open-architecture platform. In 2019, BlackRock completed the acquisition of eFront, a leading end-to-end alternative investment management software and solutions provider. eFront will continue to be offered on a standalone basis, and, in combination with ~~Aladdin~~capabilities.~~, will provide clients with an ability to manage portfolios and risk across public and private asset classes on a single platform.~~

~~Technology services revenue of $974 million was up 24% year-over-year, reflecting the impact of the eFront acquisition and continued growth in~~ ~~Aladdin~~. ~~Aladdin, which represented the majority of technology services revenue for the year, continues to benefit from trends favoring global investment platform consolidation and multi-asset risk solutions.~~ ~~Aladdin~~ ~~assignments are typically long-term contracts that provide recurring revenue.~~

At year-end, BlackRock technology services clients included banks, insurance companies, official institutions, pension funds, asset managers, asset servicers, retail distributors and other investors across North America, South America, Europe, the Middle East, Asia, Africa and Australia.

Technology services revenue of $1.4 billion was up 6% year-over-year, and annual contract value (“ACV”) increased 8% year-over-year. ACV growth was driven by record net sales of Aladdin in 2022, with about half of new client mandates spanning multiple Aladdin products. Aladdin assignments are typically long-term contracts that provide recurring revenue. At the end of any period, BlackRock generally has recurring revenue contracts in place for a large portion of total annual revenue. BlackRock measures the fees related to these agreements and refers to this as ACV. For further information on ACV, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures.

Aladdin, which represented the majority of technology services revenue for the year, continues to benefit from trends favoring global platform consolidation and multi-asset risk solutions across public and private markets. Approximately 25% of Aladdin’s revenue was denominated in non-US currencies. In addition, while Aladdin is a multi-asset system, the majority of positions managed on the platform are fixed income. 2022 technology services revenue growth reflected headwinds associated with the foreign exchange impact on Aladdin’s non-dollar revenue and bond market declines on Aladdin’s fixed income platform assets.

BlackRock is focused on enhancing Aladdin, with continued investment into areas such as whole portfolio, private markets, wealth and sustainable investing solutions. BlackRock continues to evolve and enable clients to further simplify their operating infrastructure with Aladdin. Clients increasingly want to tailor how they use Aladdin to meet their specific needs, and BlackRock is providing them with choice and flexibility. BlackRock is creating connectivity with ecosystem providers and third-party technology solutions, which include asset servicers, cloud providers, digital asset platforms, trading systems and others, who can work with clients in their Aladdin environments to provide a more customized and seamless end-to-end experience.

BlackRock is also investing to scale Aladdin for its next leg of growth through the substantially complete migration of Aladdin from BlackRock-hosted data centers to the cloud. This is expected to bring enhanced capabilities to BlackRock and its Aladdin clients, accelerating innovation and supporting greater computing scale and flexibility for clients. Through this migration as well as BlackRock’s partnership with Snowflake, an industry leader in cloud enabled data technology, BlackRock is building Aladdin Data Cloud, a next generation solution that brings Aladdin and non-Aladdin data together, so clients can nimbly access and use data across their organization, unlocking their full potential for collaboration, creativity, and innovation.

In addition, BlackRock has made minority investments in the financial technology and digital distribution companies Human Interest, Circle, Envestnet, Scalable Capital, ~~and~~ iCapital, Acorns ~~a micro-investing tool,~~ and ~~Envestnet, a leading independent provider of technology-enabled, web-based investment solutions and services to financial advisors.~~Clarity AI. BlackRock records its share of income related to minority investments accounted for under the equity method in other ~~revenue. BlackRock~~revenue and records gains and losses related to changes in value of other minority investments in nonoperating income (expense).

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 US domiciled portfolios) and noncash collateral under securities lending arrangements. The cash management team invests the cash ~~we receive~~received as collateral for securities on loan in other portfolios. Fees for securities lending for US domiciled portfolios can be structured as a share of earnings, or as a management fee based on a percentage of the value of the cash collateral or both. The value of the securities on loan and the revenue earned are 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 ~~$290~~$355 billion, updown from ~~$267~~$389 billion at year-end ~~2018. On average, relative~~2021. Lower demand for general collateral securities resulted in lower balances compared to ~~2018, intrinsic~~2021. Intrinsic lending spreads were ~~slightly lower,~~higher, while ~~average~~ cash reinvestment ~~rates~~spreads remained ~~roughly flat. However,~~lower as cash yields continued ~~asset gathering in lending products resulted in increased balances compared~~ to ~~2018.~~compress slightly.

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 and reporting of the profile of the portfolios 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 waivers are infrequent.

Risk &and Quantitative Analysis

Across all asset classes, in addition to the efforts of the portfolio management teams, the Risk &and 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 enterprise 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

~~COMPETITION~~

BlackRock competes with investment management firms, mutual fund complexes, insurance companies, banks, brokerage firms, financial technology providers 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 index products, investment style and discipline, price, 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.

~~Employees~~

AtHUMAN CAPITAL

With approximately 19,800 employees in more than 30 countries, as of December 31, ~~2019,~~2022, BlackRock ~~had~~provides a ~~total~~broad range of investment and technology services to institutional and retail clients in more than 100 countries across the globe. As an asset manager, BlackRock’s long-term success depends on its people and how it manages its workforce.

Culture and Principles

BlackRock believes that maintaining a strong corporate culture is an important component of its human capital management practices and critical to the firm’s long-term success. BlackRock’s culture is underpinned by five core principles that unify its workforce and guide how it interacts with its employees, its clients, the communities in which it operates and its other stakeholders: (1) We are a fiduciary to our clients; (2) We are One BlackRock; (3) We are passionate about performance; (4) We take emotional ownership; and (5) We are committed to a better future.

Diversity, Equity and Inclusion (“DEI”)

BlackRock believes a diverse workforce and an equitable and inclusive work environment are key factors in achieving better outcomes across all levels of its business. BlackRock has made a long-term commitment to cultivating diversity, equity and inclusion in its workforce and leadership team through its hiring, retention, promotion and development practices. As part of this long-term commitment, BlackRock has instituted a multi-year DEI strategy that it believes is actionable, measurable and designed to apply across the many countries in which the firm operates. The Company has aligned its DEI strategy with the firm’s business priorities and long-term objectives. BlackRock’s DEI strategy centers on talent and culture, responding to the needs of our clients, and policy and social impact in the communities in which we operate.

To advance its DEI strategy, BlackRock strives to:

•

Expand partnerships with external organizations and develop strategies to increase the diversity of applicant pools;

•

Strengthen talent acquisition and management processes in an effort to eliminate bias; and

•

Implement leadership development, networking, sponsorship and coaching initiatives to engage and develop underrepresented talent.

Another focus of BlackRock’s DEI strategy is to foster an inclusive, equitable work environment in which employees feel connected to BlackRock’s culture and supported in pursuit of their professional goals. To this end, BlackRock has committed to raising employee awareness of racial equity issues and setting high behavioral expectations for employees, as well as to holding firm leaders and managers accountable for continued progress toward the firm’s goals.

BlackRock views transparency and accountability as a critical part of its DEI strategy, including as a means to inform, measure and improve its human capital management practices. To that end, since 2020, the firm has published annual SASB-aligned disclosure and EEO-1 reports, and in 2022, the firm published its inaugural Global DEI Annual Report, each of which include information regarding workforce diversity. During 2020, BlackRock also set goals for increasing the overall workplace representation of US Black and Latinx employees and growing the number of senior women globally and US Black and Latinx leaders at the Director level and above. As of January 1, 2023, of the Company’s employees who self-identified their gender status, approximately ~~16,200~~44% of the Company's global workforce, 32% of global senior leaders (Directors or above) and 47% of global new hires, were women. Additionally, as of January 1, 2023, of the Company’s US employees who self-identified their race/ethnicity status, approximately 8% of employees, 4% of senior leaders and 12% of new hires identified as Black or African American, 8% of employees, 4% of senior leaders and 10% of new hires identified as Latinx, and 27% of employees, 20% of senior leaders and 33% of new hires identified as Asian. Further, of the Company's approximately 19,800 employees as of December 31, 2022, 47% were based in the Americas, 31% were based in EMEA and 22% were based in Asia-Pacific regions.

Board Oversight of Human Capital Management

BlackRock’s Board of Directors (the “Board”) plays an important role in the oversight of human capital management and devotes one Board meeting annually to an in-depth review of BlackRock’s culture, talent development, retention and recruiting initiatives, DEI strategy, leadership and succession planning and employee feedback. Moreover, the Board’s Management Development and Compensation Committee (“MDCC”) periodically reviews the progress made toward the firm’s DEI goals and other human capital management objectives. This progress is considered in compensation outcomes, including individual compensation outcomes for executive officers, that are approved by the MDCC.

Succession planning for BlackRock’s Chief Executive Officer and other senior executives is a key part of the Board’s annual review of human capital management issues. As part of this review, the Board focuses on whether BlackRock has the right people in place to execute the Company’s long-term strategic plans, and on BlackRock’s ability to identify, attract, develop, promote and retain future senior executives. An important element of the succession planning across the organization is a commitment to building leadership from within and increasing diversity in leadership roles.

Employee Engagement

BlackRock values continuous dialogue with its employees to better understand their experiences at the firm and assess the efficacy of its human capital management practices. The Company uses several employee engagement mechanisms, including: (1) employee opinion pulse surveys; (2) interactive events and communications; and (3) the sponsorship of employee networks. The employee opinion pulse surveys, which BlackRock conducts multiple times per year, provide the Company with actionable feedback for its teams and for the Company as a whole. Additionally, BlackRock uses ongoing lifecycle surveys to collect feedback on various areas of employee focus. BlackRock works to keep employees informed and engaged through a regular cadence of communications and events, including weekly newsletters, global and local townhalls and messages from leaders with timely business and organizational updates and culture-building opportunities. BlackRock’s employee networks also provide additional forums and opportunities for employees with a diverse range of backgrounds, experiences and perspectives to connect with one another and enhance the firm’s culture. Open to all, the networks are designed by employees, for employees, are sponsored by senior leaders and strengthen the One BlackRock community.

Compensation, Wellness and Benefits

BlackRock is committed to responsible business practices and believes that investing in the physical, emotional, mental and financial well-being of its employees is a critical component of the firm’s human capital management strategy. To that end, the Company designs its compensation and benefits practices to: (1) attract, retain and motivate talented employees; (2) align employee incentives and risk-taking with that of the firm and the interests of its clients; and (3) support employees across many aspects of their lives. The Company has a strong pay-for-performance culture and an annual compensation process that takes into consideration firmwide results, individual business results and employee performance, as well as market benchmarks. BlackRock also offers a wide range of benefits that it regularly reviews in accordance with leading best practices and the local requirements of its offices, including, where applicable, retirement savings plans, a Flexible Time Off (“FTO”) policy and flexible working arrangements, and parental leave and family support benefits, including fertility benefits, adoption and surrogacy assistance, and backup elder and childcare benefits. The Company provides comprehensive healthcare and mental-health benefits to eligible employees, including ~~approximately 8,600 located~~medical, dental and vision coverage, health savings and spending accounts, counseling services, an employee assistance program and access to telemedicine services, where available.

BlackRock prioritizes protecting the rights of its workforce and the equitable treatment of its employees. The Company has implemented policies related to harassment prevention and compliance with equal employment opportunity and overtime regulations. BlackRock is also committed to providing a safe and healthy work environment for its workforce. To do this, it designs global programs, including environmental and occupational health and safety programs, to meet or exceed local requirements. Moreover, BlackRock encourages all of its employees to raise issues of concern and assures employees that they may do so without fear of retaliation.

As the COVID-19 pandemic highlighted the importance of keeping employees safe and healthy, BlackRock continues to communicate about the telemedicine and digital health resources it has available, including mental, emotional and physical health offerings. For example, the Company offers several benefits to support mental health, including a Mental Health Ambassador program that is comprised of global volunteers across office locations who act as allies for firmwide mental health awareness and direct interested colleagues to mental health resources.

Training, Innovation and Development

BlackRock is committed to innovation, learning and reinvention in ~~offices outside~~all areas of its business and believes that developing the ~~United States.~~capabilities of its employees is integral to delivering long-term value. To that end, the Company’s human capital management practices are designed to provide opportunities for employees to learn, innovate and enhance their skillsets at every stage of their career. One example is the BlackRock Academies, the firm’s online suite of interactive resources and courses, which enable employees to build skills in specific facets of BlackRock’s business and purpose. The Company believes these opportunities play an important role in engaging BlackRock’s employees.

In addition, BlackRock believes that a critical driver of its future success is its ability to grow strong leaders and people managers. The Company invests in leadership development programs designed to foster career growth. For leadership development, select employees are invited to participate in programs that include executive coaching, in-person and virtual learning and senior management sponsorship. Further, BlackRock provides training and makes coaching available to people managers to assist in building foundational skills.

REGULATION

Virtually all aspects of BlackRock’s business are subject to various laws and regulations around the 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, and trust and other fiduciary clients of BlackRock Institutional Trust Company, N.A. (“BTC”). Under these laws and regulations, agencies that regulate investment advisers, investment funds and trust banks 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 or bank charters, censures and fines both for individuals and 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~~

BlackRock’s business may be impacted by numerous regulatory reform initiatives occurring around the world. Any such initiative, or any new laws or regulations or changes to, or in the enforcement of, existing laws or regulations, could materially and adversely impact the scope or profitability of BlackRock’s business activities, lead to business disruptions, require BlackRock to alter its business or operating activities and expose BlackRock to additional costs (including compliance and legal costs) as well as reputational harm. 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, securities, taxation, antitrust regulation and electronic commerce.

~~Dodd-Frank Wall Street Reform~~GLOBAL REGULATORY REFORM

~~In July 2010, the Dodd-Frank Wall Street Reform~~12

of non-bank financial institutions, money market funds (“MMFs”), open-ended funds (“OEFs”), central counterparty margin practices and ~~Consumer Protection Act (“Dodd-Frank”) was signed into law~~enhanced ESG disclosures.

Macroprudential Policies for Asset Managers

Concerns about liquidity and leverage risks in the ~~United States. Dodd-Frank is expansive in scope~~asset management industry and ~~requires the adoption of extensive regulations and numerous regulatory decisions, many of which~~wider market-based finance sector have been ~~adopted. BlackRock has implemented~~heightened since the COVID-19 pandemic and reinforced by the recent Liquidity Driven Investment events in the UK. Such events have prompted a ~~conformance program to address~~broad review of existing regulations globally, including an assessment of the adequacy of certain ~~regulations adopted under Dodd-Frank, as well as financial reforms that have been introduced as part of~~structural market components in mitigating risks by the FSB, IOSCO, the US Securities and Exchange ~~Commission’s (“SEC”~~Commission (the “SEC”) ~~investment company modernization initiatives. The cost of these conformance activities has been substantially absorbed by BlackRock; however, as certain limited aspects of Dodd-Frank~~ and ~~other rules are still being adopted, it is not yet possible to predict~~ the ~~ultimate effects that any implementation of these rules and regulations will have upon BlackRock’s business, financial condition, and operating activities.~~

~~Systemically Important Financial Institution (“SIFI”) Review~~

~~The~~ Financial Stability Oversight Council (“FSOC”). In November 2022, the SEC proposed, among other things, amendments to the rules governing OEF liquidity risk management and swing pricing. The European Union (“EU”) has also proposed reforms to increase the ~~authority~~availability of liquidity management tools to ~~designate nonbank financial institutions~~OEFs, enhance reporting on the use of liquidity management tools by OEFs to national regulators and allow such regulators to require OEF managers to activate liquidity management tools in extreme market conditions. If any of these regulatory or policy actions result in broad application of macroprudential tools to OEFs or require BlackRock to make changes to structural features of certain OEFs, it could limit BlackRock’s ability to offer products to certain clients and/or result in clients altering their investment strategies or allocations in a manner that is adverse to BlackRock.

Global MMF Reforms

Following the market events of March 2020, US, EU and UK authorities initiated a review of existing regulatory frameworks with the aim of improving the resilience of MMFs in market downturns. The ongoing review of the EU Money Market Fund Regulation could result in significant changes to the rules around liquidity and how some MMFs price shares. The UK may materially depart from the EU approach as ~~SIFIs~~the UK develops its own legal and regulatory framework for MMFs domiciled or marketed in the ~~United States.~~UK. In ~~July 2014,~~ the ~~FSOC pivoted~~US, the SEC proposed changes to Rule 2a-7, the primary rule under the Investment Company Act of 1940 governing MMFs, including changes to required liquidity levels and certain operational aspects of such funds, and changes in pricing under certain circumstances. Such regulatory reforms, if adopted, could significantly and adversely impact certain of BlackRock’s MMF products.

ESG and Sustainability

ESG and sustainability have been the subject of increased regulatory focus across jurisdictions. Globally, the International Sustainability Standards Board and the development of its disclosure standards may inform national regulators’ approaches on these topics. In the US, the SEC has proposed a series of rules that would require, among other things: (1) corporate issuers to make substantial climate-related disclosures in their periodic reports, including with respect to governance, risk management, business strategy, financial statement metrics and greenhouse gas ("GHG") emissions and (2) enhanced ESG disclosures by investment companies and investment advisers in fund and adviser filings, including disclosures regarding ESG strategies and how ESG factors are considered, and GHG emissions disclosure by certain environmentally focused funds. The SEC also announced plans to propose rules to require enhanced disclosure regarding human capital management and board diversity for public issuers. It has also increased its scrutiny of disclosure and compliance issues relating to investment advisers’ and funds’ ESG strategies, policies and procedures. In addition, the US Department of Labor (the “DOL”) recently issued final rules clarifying that Employee Retirement Income Security Act of 1974, as amended (“ERISA”) plan fiduciaries can, but are not required to, consider the economic effects of ESG factors for purposes of investing ERISA plan assets and exercising voting rights with respect to plan investments. Some US states and/or state officials have adopted or proposed legislation or otherwise have taken official positions restricting or prohibiting state government entities from ~~its previous entity-specific approach~~doing certain business with entities identified by the state as “boycotting” or “discriminating” against particular industries or considering ESG factors in their investment processes and proxy voting. Other states and localities may adopt similar legislation or other ESG-related laws and positions.

The EU has enacted numerous regulations on ESG and sustainability, including to ~~designation~~require sustainability-related disclosure by financial market participants; require the integration of sustainability considerations into the investment and ~~indicated~~risk management processes of asset managers and other institutional investors; and make the advice and financial product distribution process more receptive to end-investor sustainability preferences. Further rules are expected to come into force in 2023 and beyond. In addition, requirements for asset managers to report against an EU-wide taxonomy of environmentally sustainable activities took effect in 2022, with a further phase expected in 2023, and new proposed regulation to enhance sustainability reporting for EU-based corporate issuers is expected to take effect in 2024. BlackRock’s EU asset management companies and investment firms will be required to publish granular disclosures relating to the ESG characteristics of their funds and portfolios starting in 2023. The EU also proposed a draft directive in 2022 that it would ~~focus~~apply new supply chain due diligence obligations pertaining to sustainability to a wide group of global companies. Furthermore, the EU released a consultation on ESG and sustainability factors in credit ratings. The EU and the UK Financial Conduct Authority (“FCA”) are developing guidelines for the use of ESG or sustainability related terms in fund names, focused on specifying a minimum threshold of assets meeting ESG or sustainable criteria for such funds.

Within the UK, the government has mandated climate-related risk reporting based on the Task Force on Climate-Related Financial Disclosures (“TCFD”) framework at UK firm and product level with first disclosures due in 2023. In addition, the FCA has proposed UK-specific sustainability regulations, including a sustainable product classification system for funds, which are expected to come into force on a ~~products~~staggered basis from 2023 through 2025.

In Asia, policymakers in Singapore, Hong Kong and ~~activities-based approach~~Japan issued or proposed sustainability-related regulations. For instance, requirements for asset managers to ~~designation~~integrate climate risk considerations in ~~connection~~investment and risk management processes, together with ~~addressing potential risks~~relevant disclosure obligations, became effective in Hong Kong and Singapore in 2022. ESG fund naming and related disclosure rules became effective in Hong Kong in 2022 and in Singapore in January 2023. Further, Singapore and Japan announced enhanced sustainability reporting requirements for corporate issuers. In 2022, Japan finalized its voluntary code of conduct for ESG data and ratings providers. Meanwhile, Australia’s securities regulator issued information on “greenwashing", and the Australian government is seeking input on the design and implementation of a climate-related financial system related to asset management. In December 2019, the FSOC re-affirmed this approach when it voted to change its methodology for assessing financial stability to a products and activities-based approach. This reduces the risk of entity-level designation, however the FSOC retains the authority to designate an entity if an activities-based approach does not adequately address potential risks. In the event that BlackRock is designated as a SIFI under Dodd-Frank, it could become subject to enhanced regulatory requirements and direct supervision by the Board of Governors of the Federal Reserve (the “Federal Reserve”).

~~Taxation~~ disclosure regime.

Taxation

BlackRock’s businesses may be directly or indirectly affected by tax legislation and regulation, or the modification of existing tax laws, by US or non-US tax authorities. In the US, the Inflation Reduction Act of 2022 ("IRA") introduced new provisions including a corporate book minimum tax and an excise tax on net stock repurchases. BlackRock does not expect the IRA to have a material impact on its consolidated financial statements. In addition, legislation at both the US federal and state level has been previously proposed ~~in the House and Senate~~ to enact a financial transaction tax (“FTT”) on stocks, bonds and a broad range of financial instruments and derivative transactions. In the ~~European Union (“EU”),~~EU, certain Member States have also enacted similar FTTs and the European Commission (“EC”) has proposed legislation to harmonize these taxes and provide for the adoption of

EU-level legislation applicable to some (but not all) EU Member States. If enacted as proposed, FTTs could have an adverse effect on BlackRock’s financial results and clients’ performance results.

The Organisation for Economic Cooperation and Development (“OECD”) has proposed certain international tax reforms, which, among other things, would (1) shift taxing rights to the jurisdiction of the consumer and (2) establish a global minimum tax for multinational companies of 15%. In December 2022, EU member states agreed to adopt the OECD’s minimum tax rules, which are expected to begin going into effect in 2024. Several other countries, including the UK, are also considering changes to their tax law to implement the OECD’s minimum tax proposal. As a result of these developments, the tax laws of certain countries in which we do business could change, and any such changes could increase our tax liabilities.

The application of tax regulations involves numerous uncertainties and, in the normal course of business, US and non-US 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. Similarly, the Company manages assets in products and accounts that have investment objectives which may conform to tax positions adopted by BlackRock or to specific tax rules. To the extent there are changes in tax law or policy, or regulatory challenges to tax positions adopted by BlackRock, the value or attractiveness of such investments may be diminished and BlackRock may suffer financial or reputational harm.

LIBOR Transition

The global transition away from the London Interbank Offered Rate (“LIBOR”) continues to progress. Tenors of non-USD LIBOR ceased to be published at the end of 2021 while publication of most USD LIBOR settings is expected to continue through June 2023. In March 2022, the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was signed into law, establishing a framework for the replacement of LIBOR as a benchmark in US law contracts that reference certain tenors of USD LIBOR and do not provide for a clearly defined and practicable benchmark replacement rate following the cessation of publication. In July 2022, the Federal Reserve Board solicited public comment on proposed LIBOR transition regulations implementing the LIBOR Act. Other global regulatory authorities such as the FCA have issued consultations regarding the wind-down of LIBOR. If such proposals are not finalized, parties to unremediated contracts, and the markets more generally, face the potential for uncertainty, disputes, litigation and market disruption.

Regulation of Exchange-Traded Funds

As part of a focus on financial stability issues and due to the significant growth of this product class over the last few years, regulators globally are examining the implications of an increased presence of ETFs in the markets, including those related to transparency, liquidity and structural resiliency. 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.

Regulation of Swaps and Derivatives

The SEC, Federal Reserve, 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 compliance processes, which could result in additional costs and/or restrictions.

In November 2019, the SEC proposed a rule designed to enhance the regulation of the use of derivatives by registered investment companies, including mutual funds (other than money market funds), ETFs and closed-end funds, as well as business development companies. The proposed rule would permit such funds to use derivatives, such as forwards, futures, swaps and written options, that create future payment obligations, provided that the funds comply with certain conditions including adopting a derivatives risk management program and complying with a limit on the amount of leverage-related risk that a fund may obtain, based on value-at-risk. If adopted without change, the proposed rule would increase BlackRock’s disclosure and compliance obligations and may impact certain funds’ usage of derivatives and investment strategy.

Jurisdictions outside the US in which BlackRock operates 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. 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 impose requirements such as mandatory central clearing of certain swaps transactions, requiring execution of certain swaps transactions on or through registered electronic trading venues (as opposed to over the phone or other execution methods), reporting transactions to central data repositories, mandating certain documentation standards, requiring the posting and collection of initial and/or variation margin for bilateral swap transactions and subjecting certain types of listed and/or over-the-counter transactions to position limit or position reporting requirements.

In the US, certain interest rate swaps and certain index credit default swaps are subject to ~~Dodd-Frank~~ central clearing and ~~electronic~~ trading venue execution requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank"), with additional products and asset classes potentially becoming subject to these requirements in the future. In the EU, central clearing and trading venue requirements for certain swap transactions have become effective for certain types of BlackRock funds and accounts. ~~On March 1, 2017,~~Further, most derivatives transactions that are not centrally cleared, including non-deliverable foreign exchange forward transactions and currency option transactions, ~~became~~are subject to requirements in the US, EU and numerous other jurisdictions to post or collect mark-to-market margin payments. For certain BlackRock funds and accounts, initial margin requirements may apply in the future in addition to such mark-to-market margin payments. These rules and regulations have the potential to increase the complexity and cost of trading non-cleared derivatives for BlackRock's clients, and may produce regulatory inconsistencies in global derivatives trading rules and increase BlackRock’s operational and legal risks.

~~Regulation~~US REGULATORY REFORM

Antitrust Rules and Guidance

In 2020, the Federal Trade Commission (“FTC”) proposed certain changes to rules enacted under the Hart-Scott-Rodino Antitrust Improvements Act of ~~Exchange-Traded Funds~~

~~As part~~1976 (“HSR”) that require parties to certain transactions to provide the FTC and the Antitrust Division of the Department of Justice (the “DOJ”) prior notice and observe a ~~focus~~waiting period before consummation of such transactions. The proposals would: (1) require that investors aggregate holdings in an issuer across all associated funds when assessing HSR filing and exemption thresholds and (2) create a new exemption for acquisitions resulting in aggregate holdings of up to 10% of an issuer, which would be unavailable to investors holding interests of more than 1% in competing firms. If enacted as drafted, the proposed aggregation requirement could, absent applicable exemptions, substantially increase BlackRock’s pre-merger notification obligations, which may be costly, impair funds’ ability to trade freely creating significant tracking error and cash drag for index funds and opportunity costs for actively managed funds, require implementation of monitoring tools and introduce additional compliance burdens for both BlackRock and the companies in which it invests. In instances where filing a pre-merger notification is not practicable, the proposed changes may serve to limit the size of BlackRock’s aggregate position in certain issuers if BlackRock is unable to satisfy the revised regulatory requirements. In 2021, the FTC voted to withdraw its approval of the Vertical Merger Guidelines, previously issued jointly with the DOJ. In 2022 the FTC and DOJ jointly released a request for public comment on ~~financial stability issues and due~~modernizing the agencies’ approach to the ~~significant growth~~merger guidelines, including whether to dispense with the guidelines’ traditional distinction between the treatment of ~~this product class over the last few years, regulators globally are examining the implications of~~horizontal and vertical mergers. Such changes could have an increased presence of ETFs in the markets, including those related to transparency, liquidity and structural resiliency. BlackRock and other sponsors 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.

In addition, in September 2019, the SEC adopted rule 6c-11 under the Investment Company Act of 1940 (the “Investment Company Act”) known as the “ETF Rule”. The ETF Rule will allow ETFs that satisfy certain conditions to operate without first obtaining individual exemptive relief from the SEC. The ETF Rule is designed to create a clear and consistent regulatory framework for most ETFs operating today and will impact all BlackRock ETFs registered under the Investment Company Act (including ~~iShares~~ ETFs). The ETF Rule and related form amendments became effective in December 2019. The form amendments will have a transition period of one year following the effective date. In addition, the ETF Rule rescinds, one year after its effective date, the existing exemptive relief for all eligible ETFs (including ~~iShares~~ ~~ETFs).~~

~~Volcker Rule~~

~~Provisions of Dodd-Frank referred to as the “Volcker Rule” created a new section of the Bank Holding Company Act of 1956 (the “Bank Holding Company Act”) that places limitations~~effect on the ability of ~~banks and their subsidiaries~~the Company 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”). The Bank Holding Company Act byexpand its terms does not currently apply to BlackRock. The Federal Reserve has taken the position that PNC’s ownership interest in BlackRock, which is approximately 22%, in combination with certain other factors, causes BlackRock to be treated as a nonbank subsidiary of PNC for the purpose of the Bank Holding Company Act and that BlackRock is subject to banking regulation. Based on this interpretation of the Bank Holding Company Act, the Federal Reserve could initiate a process to formally determine that PNC controls BlackRock under the terms of the Bank Holding Company Act. Any such determination, if successful, would subject BlackRock to current and future regulatory requirements under the Bank Holding Company Act, including the Volcker Rule. Conformance with the Volcker Rule may require BlackRock to sell certain seed and co-investments that it holds in its covered funds, which may occur at a discount to existing carrying value depending on market conditions.services through strategic investments or acquisitions.

~~Standards of Conduct Rulemaking~~14

In June 2019, the SEC adopted a package of rulemakings and interpretations addressing investment adviser and broker-dealer standards of conduct. The package includes new rules requiring registered advisers and registered broker-dealers to provide a relationship summary to retail investors, a new rule establishing a standard of conduct for broker-dealers when making recommendations to retail customers and two new interpretations under the Investment Advisers Act of 1940 (the “Advisers Act”). The rulemakings and interpretations could increase BlackRock’s disclosure obligations, impact distribution arrangements between BlackRock and its distribution partners, create compliance and operational challenges for BlackRock’s distribution partners and limit BlackRock’s ability to provide certain other services to its clients. The Department of Labor (“DoL”) has also indicated it intends to propose a standards of conduct rule in 2020.

SEC ~~Guidance on Proxy Voting Responsibilities of Investment Advisors~~

In August 2019, the SEC published guidance to assist investment advisers with their proxy voting responsibilities under the Advisers Act. The guidance confirmed that investment advisers’ fiduciary duties of care and loyalty to their clients apply to proxy voting and encouraged advisors with voting authority to review their policies and procedures in detail and consider whether more analysis may be required under certain circumstances, including when a proxy advisory firm’s services are retained. This guidance could impact voting arrangements between BlackRock and its clients, and lead to additional compliance, operational and disclosure obligations for BlackRock.

~~Financial Crimes Enforcement Network Proposed Rulemaking for Registered Investment Advisers~~

In 2015, the Financial Crime Enforcement Network (“FinCEN”) 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 as investment advisers with the SEC under the Advisers Act, the requirement to establish written risk-based 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 include investment advisers 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 adopted in its current form, the Proposed Rule would expose BlackRock to additional compliance costs.

~~Securities and Exchange Commission~~ Rulemakings for US Registered Funds and Investment Advisers

~~BlackRock’s business may also be impacted by SEC regulatory initiatives.~~ The SEC ~~and its staff are~~has engaged in various initiatives and reviews that seek to improve and modernize the regulatory structure governing the asset management industry and registered investment ~~companies~~companies. For example, in ~~particular. These efforts relate~~October 2022, the SEC adopted rules requiring certain funds to provide tailored fund shareholder reports and proposed amendments expanding the scope of the application of the rule governing fund names, including to, among other things, ~~embedded leverage through~~fund names that include ESG or similar terms.

Systemically Important Financial Institution (“SIFI”) Review

The FSOC has the authority to designate nonbank financial institutions as SIFIs in the US under Dodd-Frank. In July 2014, the FSOC pivoted from an entity-specific approach and indicated that it would focus on a products and activities-based approach to designation in connection with addressing potential risks in the financial system related to asset management, which was re-affirmed in December 2019 guidance. However, recent public reports and statements by FSOC members have suggested a willingness to support a repeal or amendment to certain parts of the 2019 guidance to provide the FSOC more flexibility to designate nonbank financial institutions as SIFIs. If BlackRock is designated as a SIFI, it could become subject to enhanced regulatory requirements and direct supervision by the Federal Reserve.

Regulation of Swaps and Derivatives

The SEC, Federal Reserve, the Internal Revenue Service 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, any such limitations or restrictions could require BlackRock to change certain business practices or implement new compliance processes, which could result in additional costs and/or restrictions.

In October 2020, the SEC adopted regulations governing the use of derivatives by registered investment companies (“RICs”), including mutual funds (other than MMFs), ETFs and closed-end funds, as well as business development companies. RICs were required to implement and comply with this rule beginning in 2022. The rule, among other ~~trading practices, cybersecurity, liquidity, enhanced regulatory~~things, imposes limits on the amount of derivatives transactions a RIC can enter into, eliminates the asset segregation compliance framework and introduces new compliance requirements for funds, including the establishment of comprehensive risk management programs. The rule may impact certain RICs’ usage of derivatives and investment strategy.

In December 2021, the SEC proposed rules in connection with security-based swaps (“SBS”) transactions to require public reporting ~~requirements~~of large SBS positions. These rules, if adopted as proposed, may affect the types of transactions BlackRock may choose to execute in SBS or other SBS-related assets, introduce or increase costs relating to such transactions, and impact the liquidity in the SBS markets in which BlackRock transacts.

SEC Proposed Rules on Private Fund Advisers

During 2022, the SEC proposed new rules and amendments to enhance regulation of private fund advisors. These include a series of proposed amendments to Form PF for registered investment advisers that: (1) add new required disclosures, (2) require advisers to file reports within one business day for certain significant events, (3) lower the threshold for large private equity adviser reporting, (4) increase reporting obligations on large liquidity fund advisers, and (5) enhance reporting on basic information about advisers and the ~~evaluation of systemic risks.~~funds they advise. The SEC ~~has adopted~~proposed additional rules that ~~include (i) new monthly~~would, among other things, require registered private fund advisers to: (1) provide quarterly reports to investors of fund performance, fees and expenses, (2) obtain an annual audit for each fund and (3) distribute to investors a fairness opinion and summary of certain material business relationships with the opinion provider in connection with an adviser-led secondary transaction. The proposed rules would also prohibit private fund advisers from engaging in certain activities and practices deemed to be contrary to the public interest and investor protection, providing certain types of preferential terms for selected investors and providing any other forms of preferential treatment unless disclosed. These rules and amendments, if adopted as proposed, could significantly increase BlackRock’s reporting, ~~requirements~~disclosure and compliance obligations and create operational complexity for BlackRock’s alternatives products.

SEC Rule 15c2-11

SEC Rule 15c2-11 governs the submission of quotes into quotation systems by broker-dealers and has historically been applied to the over-the-counter (“OTC”) equity markets. However, the SEC has stated that it intends to apply the rule to fixed income securities. While SEC staff issued additional no-action relief in November 2022 delaying implementation of the rule to segments of the fixed income markets until 2025, full implementation may disrupt primary and secondary market liquidity.

Proposed Rules on Regulation ATS

In January 2022, the SEC proposed amendments to Regulation ATS. The proposed rules would expand the types of systems that could fall within the definition of “exchange” and extend Regulation ATS and Regulation Systems Compliance and Integrity to systems involving US government securities trading. If enacted as proposed, these rules may impact certain functionality and tools offered by Aladdin, which may increase compliance costs for BlackRock.

Proposed US Treasury Clearing Mandate

In September 2022, the SEC proposed rules that would mandate central clearing of certain US Treasury transactions. If enacted as proposed, the rules would require many market participants, including a large number of BlackRock funds and accounts, to clear cash Treasury securities transactions and Treasury repurchase transactions through a clearing agency registered funds; (ii) enhanced reporting regimes for investment advisers; and (iii) implementing liquidity risk management programs for ETFs and open-end funds, other than money market funds. These rules increase, and any additional rules or regulatory initiatives resulting fromwith the ~~SEC's efforts may increase, BlackRock’s public reporting and disclosure requirements,~~SEC, which could ~~be costly~~result in increased transaction costs for our clients.

INTERNATIONAL REGULATORY REFORM

EU Market Access and ~~may impede BlackRock’s growth.~~ Outsourcing

~~US Executive Order~~

~~On February 3, 2017, an executive order (the “Executive Order”~~The EU legislature continues to consider proposals amending both the Alternative Investment Fund Managers Directive (“AIFMD”) ~~was issued articulating certain core principles~~and Directive on Undertakings for regulating the US financial system and directing the Secretary of the US Treasury to report on the extent to which existing laws, treaties, rules, regulations and policies promote, support or inhibit the federal regulation of the US financial systemCollective Investment in ~~a manner~~Transferable Securities fund frameworks. The proposed changes remain broadly consistent with the ~~core principles. Treasury has issued four reports in response~~current regulatory framework but with increased notification requirements to national regulators and the European Securities and Markets Authority (“ESMA”), enhanced liquidity management requirements and new requirements for loan originating funds. There is also a proposal to require notification for instances of significant delegation of portfolio management or risk management functions to entities located outside the EU. ESMA would then be required to present market analysis and supervisory peer review every two years to the ~~Executive Order (the “Treasury Reports”~~European

Parliament (“EP”). These proposals and any further regulatory actions could impact delegated activities, increase compliance costs and impact products and services offered to EU clients.

Revised Capital Requirements for Investment Firms

In June 2021, the Directive and Regulation on prudential requirements for investment firms in scope of the EU Markets in Financial Instruments Directive for investment firms proposed by the EC came into effect, resulting in changes to regulatory capital and liquidity requirements in the EU, changes to the method of calculating such capital and liquidity, and revised disclosure obligations for large investment firms. The UK has also adopted comparable rules under the Investment Firms Prudential Regime (“IFPR”), which have applied to UK-based investment firms from January 2022. Changes to the supervisory approach to assessing the risk of harm posed by BlackRock’s operations or asset management activities more broadly could increase the amount of regulatory capital and liquidity required to be held in the future, and the new rules impose other prudential requirements.

Enhanced Regulatory Scrutiny of Technology Service Providers to Financial Services Firms

The EU’s Digital Operational Resilience Act (“DORA”), which focuses on direct regulation of providers and users of technology and data services, entered into force in January 2023, with the requirements expected to become applicable in January 2025. DORA will, among other things: (1) introduce additional governance, risk management, incident reporting, resilience testing and information sharing requirements to several of BlackRock’s European entities and certain Aladdin clients; and (2) subject Aladdin to broad additional oversight. In parallel with DORA, the UK has signaled its intention to provide His Majesty's Treasury powers to designate certain third parties to the financial sector as “critical” and subject them to oversight by UK regulators. This regime is expected to build on existing UK requirements regarding firms’ operational resilience and use of technology.

EU Central Securities Depository Regulation

Aspects of the settlement discipline regime introduced by the Central Securities Depository Regulation came into effect in February 2022. These include ~~a number~~rules for trade allocation and confirmation processing, along with cash penalties for failed transactions. However, the mandatory buy-in regime is delayed to June 2025. Implementation of ~~recommendations,~~ the ~~majority~~regime required new operational mechanisms to facilitate compliance, which may increase required resources and cost.

UK Review of Retained EU Law

Under the Financial Services and Markets Bill (the “FSM Bill”) introduced in July 2022, retained EU law relating to financial services and markets will be revoked and UK financial regulators will be delegated substantial rulemaking powers to amend and restate such retained laws. Several UK regimes are currently subject to regulatory changes as the UK considers changes to retained EU rules following the UK’s exit from the EU, including the Wholesale Markets Review of MiFID II (as defined below) and Markets in Financial Instruments Regulation (“MiFIR”) frameworks, consumer disclosures, and the regime for non-UK-based funds that are recognized for sale into the UK, which is also currently under government review.

UK Overseas Fund Regime

The Overseas Fund Regime (“OFR”), the simplified regime through which non-UK funds can register with the FCA to be marketed to UK retail investors, was enacted in February 2022 and is expected to be implemented over the next two years. The OFR will require ~~further legislative or regulatory action~~consumer protection regimes in EU countries where BlackRock funds are domiciled to be found equivalent to the UK’s regime in order to ~~be implemented, that may affect BlackRock’s business or operations. BlackRock will continue~~market such funds in the UK.

UK Conduct Regime

The FCA continues to ~~monitor~~focus on conduct regulation, including the ~~potential impact~~implementation of the ~~Executive Order, as well as the Treasury Reports~~Consumer Duty by all asset management firms, including BlackRock’s UK subsidiaries. The Consumer Duty rules require firms to act to deliver good outcomes for retail customers in their manufacture and ~~any consequential legislative or regulatory action, on its business.~~

~~British Exit from the EU~~

~~Following the June 2016 vote to exit the EU, commonly referred to as Brexit, the United Kingdom (“UK”) left the EU on January 31, 2020~~distribution of products and ~~entered an eleven-month transition period during which the UK,~~services, in respect of price and ~~UK-based entities, will retain the rights~~value, consumer understanding and ~~obligations of EU membership.~~

Substantial uncertainty remains surrounding the future relationship between the UK and EU, but the UK government has indicated its preference for negotiating a trade deal with the EU before the end of the transition period rather than continuing Single Market or Customs Union membership. BlackRock is implementing a number of steps to prepare for various outcomes, including there being no agreement in place when the transition period expires. These steps, many of which are time consuming and costly, include effecting organizational, governance and operational changes, applying for and receiving licenses and permissions in the EU, and engaging in client communications, andconsumer support. The rules are expected to ~~add complexity~~come into force in July 2023. Any failure to ~~BlackRock’s European operations.~~ meet the FCA’s regulatory expectations could expose BlackRock to regulatory sanctions and increased reputational risk.

Edinburgh Reforms

In ~~addition, depending~~December 2022, the UK announced wide-ranging reforms to financial services regulation which build on the ~~terms~~FSM Bill, marking further potential divergence from EU regimes. Potential impacts to the asset management sector include: (1) repeal and replacement of the ~~future relationship~~packaged retail and insurance based investment products ("PRIIPs") Regulation; (2) review of the UK’s green finance strategy, including potential regulation of ESG data providers; (3) review of governance through the Senior Managers and Certification Regime; (4) repeal of EU legislation on the European Long-Term Investment Fund; (5) market infrastructure reforms; (6) reassessment of the boundary between investment advice and financial guidance; and (7) independent review of the UK and the EU, BlackRock may experience further organizational and operational challenges and incur additional costs in connection with its European operations during the transition period and post-Brexit, which may impede the Company’s growth or impact its financial performance.investment research landscape.

Reform of Investment Markets

BlackRock is subject to numerous regulatory reform initiatives that may affect the Company’s provision of investment services globally. In Europe, the Markets in Financial Instruments Directive (“MiFID”) governing the provision of investment services has been revised and is accompanied by an associated Regulation (together with certain secondary regulation, “MiFID II”). The Regulation’s requirements generally apply consistently across the EU. The MiFID II reforms ~~which came into force in January 2018, are~~were substantive, materially changing market transparency requirements, enhancing protections afforded to investors, and increasing operational complexity for the Company. ~~New disclosure and reporting obligations have been introduced, together with restrictions on how research may be funded and~~Forthcoming proposals to review the ~~nature~~operation of ~~payments that may be provided to distributors.~~ MiFID II ~~together with other~~and to develop a new EU Retail Investment Strategy may affect the European market structure ~~reforms, force more derivatives~~and impact BlackRock’s ability to ~~be traded on-exchange, introduce new commodity derivatives position limits and significantly enhance reporting obligations associated with individual trades.~~operate in European markets. The broad nature of ~~the~~ MiFID II means future reforms ~~impact BlackRock’s~~could also affect product development, client servicing and distribution models. In particular, additional disclosures are required to be made in respect of costs and fees BlackRock charges to certain of its clients. MiFID II also impacts the ability of certain of BlackRock’s distribution partners to accept commissions from BlackRock for distributing BlackRock funds. Similar reforms have been ~~introduced~~implemented in Switzerland and Australia.

~~EU Market Access~~

Regulatory Environment in China

The ~~European Commission and certain EU Member States have recently advanced a more restrictive approach~~Company’s operations in China are subject to the need for a third country (i.e. non-EU country) to obtain “equivalence,” which is the process by which the legal, regulatory, and/or supervisory system in non-EU Member States is recognised by the European Commission as comparably effective to that in the EU, thereby allowing firms established in such non-EU Member States a degree of access to the EU single market in financial services. In addition, in 2019, the European Commission commenced a review of the Alternative Investment Fund Managers Directive to assess, among other things, the effectiveness of regulation on third country fund marketing passports and the continuation of national private placement regimes. To the extent the review results in formal legislation that limits the scope of existing permitted activities and EU market access rights for asset management firms with non-EU operations, BlackRock’s ability to access EU-based clients may be adversely affected.

~~Cessation of LIBOR~~

The Financial Conduct Authority (“FCA”), which regulates the administrator of the London Interbank Offered Rate (LIBOR) has announced that it will no longer compel panel banks to submit rates for LIBOR after year-end 2021. As a result, sterling LIBOR and certain other indices which are utilized as benchmarks may no longer be published. The disappearance, or change in the manner of administration, of these benchmarks could result in adverse consequences to the return on, value of and market for any BlackRock investments in instruments and securities linked to such benchmarks. BlackRock may also face operational challenges adopting successor benchmarks.

~~Revised EU Capital Requirements for Investment Firms~~

In December 2017, the European Commission published a proposal for a new Directive and Regulation on prudential requirements for MiFID investment firms. The proposal passed the EU legislative process and the final texts of the Regulation and Directive were published in December 2019. The new legislative package, which comes into effect in 2021, will result in changes to the amount of regulatory capital BlackRock is required to hold in the EU and how such capital is calculated, as well as introduce revised disclosure obligations for large investment firms.

~~UK Asset Management Market Study~~

The FCA has adopted requirements for UK fund managers to assess whether the retail collective investments they manage offer “value” to investors. Beginning in 2020, BlackRock will be required annually to disclose the conclusions of its assessment based upon various factors including cost, performance and comparable services. If “value” has not been provided to consumers, BlackRock will need to address any identified deficiencies. The FCA also requested that the UK’s Competition and Markets Authority (“CMA”) assess the investment consultant and fiduciary markets. The CMA’s final report identified a number of ~~competition issues in such markets~~regulatory risks, including an evolving regulatory environment and complex data security and data transfer regulations. These factors may increase compliance risk and costs, limit the UK regulatory regime will be revised in 2020 to introduce mandatory tendering of investment consultancy and fiduciary management services, and new standards of disclosure of fees and performance. The CMA’s remedies could have a significant impact on BlackRock’sCompany’s ability to ~~enter into fiduciary~~source and execute new investment ~~management mandates with UK pension fund clients.~~

~~Macroprudential Policies for Asset Managers~~

~~Certain European policymakers continue to raise concerns about liquidity~~opportunities and ~~leverage risks in the asset management industry and wider market-based finance sector. These concerns may~~ lead to ~~macroprudential policy measures being applied~~impairment losses on its investments. Restrictions on the transfer of the Company’s Chinese onshore data to ~~open-ended investment funds broadly, or regulation being introduced that requires changes to the structural features of certain open-ended investment funds. Either eventuality could~~offshore entities also may limit BlackRock’s ability to ~~offer products to certain clients and/or result in clients altering their investment strategies or allocations in a manner that is adverse to BlackRock.~~

~~Senior Managers~~aggregate, report and ~~Certification Regime~~

monitor such data on its global platform. In the UK, the FCA extended the Senior Managers and Certification Regime (“SMCR”) to all financial services firms in December 2019. The regime imposes greater accountability and responsibility across the senior management of UK financial services firms by making individuals in impacted firms more accountable for conduct and competence. SMCR impacts nearly all staff of the Company in the UK, and requires extensive documentation to support senior managers and evidence the discharge of their responsibilities.

~~EU Shareholder Rights Directive~~

The European Commission has revised the Shareholder Rights Directive to enhance engagement between companies and their long-term shareholders. The revisions, which became effective in June 2019, require investment managers to provide EU institutional investors with enhanced disclosures on shareholder engagement and voting, and information on how the manager’s investment strategy contributes to such investors’ medium to long-term performance.

~~EU Sustainability Regulation~~

~~In 2018, the European Commission introduced~~addition, a number of regulators in China have jurisdiction over BlackRock’s business operations, increasing operational and regulatory ~~proposals to underpin sustainable investment products; require disclosure~~engagement

complexity. These risks may be further heightened by additional scrutiny by Chinese regulators of sustainability-related information by market participants, investments products, and issuers; and require the integration of sustainability considerations into the investment and risk management processes of asset managerscertain sectors, such as technology and other ~~institutional investors. Rules arising from the reform proposals will come into effect beginning in 2021.~~industries that might be deemed to be of national importance.

~~EXISTING~~EXISTING US REGULATION - OVERVIEW

BlackRock and certain of its US subsidiaries are currently subject to extensive regulation, primarily at the federal level, by the SEC, the ~~DoL,~~DOL, the Federal Reserve, the Office of the Comptroller of the Currency (“OCC”), the Financial Industry Regulatory Authority (“FINRA”), the National Futures Association (“NFA”), the FTC, the Department of Justice, the CFTC and other federal government agencies and regulatory bodies.

Certain of BlackRock’s US subsidiaries are also subject to various anti-terrorist financing, privacy, anti-money laundering and economic sanctions laws and regulations established by various agencies. In addition, the Investment Advisers Act of 1940 (the “Advisers Act”) imposes numerous obligations on registered investment advisers such as certain BlackRock subsidiaries, including record-keeping, operational and marketing requirements, disclosure obligations and prohibitions on fraudulent activities. State level regulation through ~~Attorneys General, Insurance Commissioners~~attorneys general, insurance commissioners and other state level agencies also applies to certain BlackRock 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 certain BlackRock subsidiaries and ~~its~~ affiliates. 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, as amended (the “Exchange Act”), as well as the rules of various 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. Violation of any of these laws and regulations could result in fines or sanctions, as well as restrictions on BlackRock’s activities and damage to its reputation. Furthermore, Dodd-Frank requires one of BlackRock’s subsidiaries, BTC, ~~was required~~ to register as a municipal advisor (as that term is defined in the Exchange Act) with the SEC and Municipal Securities Rulemaking Board (“MSRB”). BTC's registration as a ~~result of SEC rules giving effect to a section of Dodd-Frank requiring such registration. The rules subject~~municipal advisor subjects 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, collateralized debt obligations, collateralized loan obligations, ~~(“CLOs”),~~ real estate funds, collective ~~investment trusts,~~trust funds, 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~~rulemaking or changes in the interpretation or enforcement of existing rules and regulations imposed by various regulators in this area.

Certain BlackRock subsidiaries are subject to ~~the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),~~ERISA, and to regulations promulgated thereunder by the ~~DoL,~~DOL, insofar as they act as a “fiduciary” under ERISA with respect to benefit plan clients that are subject to ERISA. 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 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 clients that are not subject to ERISA.

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. The CFTC and NFA each administer a comparable regulatory system covering futures contracts and various other financial instruments, including swaps as a result of Dodd-Frank, in which certain BlackRock clients may invest. ~~Two~~In addition, two of BlackRock’s subsidiaries 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. One of the broker-dealers is also ~~an approved person with the New York Stock Exchange and~~ a member of the MSRB and is subject to MSRB rules.

~~Certain of~~ BlackRock’s business activity in California that involves the processing of personal information is subject to the California Consumer Privacy Act (“CCPA”) and the California Privacy Rights Act (“CPRA”), which ~~became effective in January 2020 and which provides~~provide for enhanced consumer protections for California residents. The CCPA ~~imposes new~~and CPRA impose obligations on BlackRock for the handling, disclosure and deletion of personal information for California residents. In addition, several other US states have proposed or adopted similar privacy laws. Any failure by BlackRock to comply with the CCPA, CPRA or similar state privacy laws may result in fines, ~~enhanced~~heightened regulatory scrutiny, litigation and/or reputational harm.

US Banking Regulation

One of BlackRock’s subsidiaries, BTC, is organized as a nationally-chartered limited purpose trust company that does not accept deposits or make commercial loans. Accordingly, BTC is examined and supervised by the OCC and is subject to various banking laws and regulations enforced by the OCC, such as laws and regulations governing capital adequacy, fiduciary activities, conflicts of interest, self-dealing, and the prevention of financial crime, including money laundering. BTC is also a member of the Federal Reserve System and is 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 and/or BTC’s customers rather than BlackRock, its affiliates or stockholders.

As described in “Item 1-Business”, as of December 31, 2019 PNC owned approximately 22% of BlackRock’s capital stock, which may subject BlackRock to banking regulation as a nonbank subsidiary of PNC. The Bank Holding Company Act by its terms does not currently apply to BlackRock. The Federal Reserve has taken the position that this ownership interest, in combination with certain other factors, causes BlackRock to be treated as a nonbank subsidiary of PNC for the purpose of the Bank Holding Company Act and that BlackRock is subject to banking regulation. Based on this interpretation of the Bank Holding Company Act, the Federal Reserve could initiate a process to formally determine that PNC controls BlackRock under the terms of the Bank Holding Company Act. Any such determination, if successful, would subject BlackRock to current and future regulatory requirements under the Bank Holding Company Act, including the Volcker Rule, that are

more restrictive than those the Company is subject to under other applicable laws, as well as the enforcement authority of the Federal Reserve, which includes the power to impose substantial fines and other penalties for violations. Any effort by BlackRock to contest a control determination by the Federal Reserve may be costly and complex, and may not result in a reversal of such determination.

~~Regulation of Securities Financing Transactions~~

In its 2014 Annual Report, FSOC identified securities lending indemnification by asset managers who act as lending agents as a potential systemic risk that required further review and monitoring. The Federal Reserve is also considering whether to impose specific margin or minimum haircut requirements for securities financing transactions. In addition, in November 2015, the EU introduced a regulation on the reporting and transparency of securities financing transactions and total return swaps (“SFTR”). The SFTR aims to improve the transparency surrounding securities financing transactions and total return swaps by, among other things, requiring reporting of securities financing transactions to a trade repository and requiring disclosure of the use of securities financing transactions and total return swaps to investors. The regulation is being implemented in phases and more detailed rules and guidance, including in respect of reporting obligations, is in process. As these rules and guidance become clearer, BlackRock may be required to introduce further compliance measures, which will subject BlackRock to additional expenses and could lead to modifications in BlackRock’s securities financing transaction activities, including potential adjustments to its activities as agent lender for its clients.

~~Regulation of Money Market Funds~~

In October 2016, rules were implemented to reform the regulatory structure governing US money market funds to address perceived systemic risks of money market funds. The rules require institutional prime and institutional municipal money market funds 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 money market funds continue operating with a constant net asset value per share. The rules additionally provide for tools for institutional and retail money market funds’ boards designed to address market shocks, including the ability to impose liquidity fees and redemption gates under certain circumstances.

EXISTING INTERNATIONAL REGULATION — OVERVIEW

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

Below is a summary of certain international regulatory standards to which BlackRock is subject. It is not meant to 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 regulations to which BlackRock is subject, are the extensive and complex 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.

European Regulation

The FCA currently regulates certain BlackRock subsidiaries in the UK. It ~~also prudentially regulates those UK subsidiaries’ branches established in other EU countries and~~ is also responsible for the conduct of business regulation of the UK ~~branches~~branch of ~~certain~~one of BlackRock’s US subsidiaries. In addition, the Prudential Regulation Authority (“PRA”) regulates one BlackRock UK insurance subsidiary. Authorization by the FCA and (where relevant) the PRA is required to conduct certain financial services-related business in the UK under the Financial Services and Markets Act 2000 (the “FSMA”). The FCA’s rules adopted under the FSMA govern the majority of a firm’s capital and liquidity resources requirements, senior management arrangements, conduct of business requirements, interaction with clients, and systems and controls, whereas the rules of the PRA focus solely on the prudential requirements that apply to BlackRock’s UK-based insurance subsidiary. The FCA supervises BlackRock’s UK-regulated subsidiaries through a combination of proactive engagement, event-driven and reactive supervision and ~~theme-based~~thematic reviews in order to monitor BlackRock’s compliance with regulatory requirements. Breaches of the FCA’s rules may result in a wide range of disciplinary actions against BlackRock’s UK-regulated subsidiaries and/or its employees.

In addition, BlackRock has regulated entities in France, Germany, Ireland, Jersey, Luxembourg, the Netherlands and Switzerland. Each of these entities is required to comply with regulatory rules in the country in which it has been ~~established.~~established, including the branches of the Netherlands entity which operate across the EU.

BlackRock’s ~~UK-regulated subsidiaries and other European~~EU subsidiaries and branches must comply with the ~~pan-European~~EU regulatory regime ~~established by~~set out in MiFID II. BlackRock’s UK-regulated subsidiaries must comply with the UK version of MiFID II, which regulates the provision of investment services and activities ~~throughout~~in the ~~EU.~~UK. MiFID II, ~~sets~~and the UK equivalent of MiFID II, set out detailed requirements governing the organization and conduct of business of investment firms and regulated markets. ItThe legislation also includes pre- and post-trade transparency requirements for equity and non-equity markets and extensive transaction reporting requirements. Certain BlackRock ~~European~~UK subsidiaries must also comply with the UK regulation which implements the Consolidated Life Directive and Insurance Distribution Directive. In addition, relevant entities must comply with revised obligations on capital resources for ~~banks and~~ certain investment firms ~~(the Capital Requirements Directive and Capital Requirements Regulation).~~arising out of the IFPR. These include requirements onto ensure capital adequacy, as well as matters of governance and remuneration. Relevant BlackRock entities must also comply with the requirements of the ~~Alternative Investment Fund Managers~~UCITS Directive and the AIFMD, as implemented in the relevant EU Member States and in the UK, which ~~imposes~~impose obligations on the authorization and capital, conduct of business, organization, transparency and marketing of retail and alternative investment funds respectively that are sold in, or marketed to, the EU. The obligations introduced through these regulations and directives will ~~have a direct effect on some~~affect certain of BlackRock’s European operations.

Compliance with the UCITS Directives and the AIFMD may subject BlackRock to additional expenses associated with depositary oversight and other organizational requirements. BlackRock’s EU-regulated subsidiaries are also subject to the European Market Infrastructure Regulation ~~(“EMIR”~~("EMIR") (or the UK version of EMIR transposed into UK law in accordance with The European Union (Withdrawal) Act 2018 in the case of BlackRock’s UK-regulated subsidiaries), an EU regulation governing derivatives, central counterparties and trade repositories, which requires ~~(i)~~(1) the central clearing of ~~standardized over-the-counter (“OTC”) derivatives, (ii)~~certain OTC derivatives; (2) the application of risk-mitigation techniques to non-centrally cleared OTC derivatives (including the exchange of collateral with

certain counterparties); and ~~(iii)~~(3) the reporting of all derivative contracts to ~~a European Securities and Markets Authority~~an ESMA registered or recognized derivatives trade ~~repository.~~repository (or a UK authorized trade repository in the case of the UK version of EMIR).

The EU has ~~also adopted directives on~~seen an increase in Common Supervisory Actions by ESMA to coordinate supervisory action by national EU regulators, most notably in areas such as product governance, liquidity management and fund costs and charges. BlackRock’s EU operations may be affected to the ~~coordination of laws, regulations and administrative provisions relating to undertakings for collective investment~~extent this initiative results in transferable securities (“UCITS”). The latest initiative in this area, UCITS V, aligns 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. Compliance with the UCITS directive subjects BlackRock to additional expenses associated with depositary oversight and other organizational requirements.formal legislation or action.

~~Most~~ EU Member States, the UK and many other non-US jurisdictions have adopted statutes and/or regulations concerning ~~data~~ privacy and ~~security~~data protection and requiring notification of personal data ~~breaches.~~security breaches if certain thresholds are met. For example, ~~in May 2018,~~ the EU ~~Data Protection Directive was replaced by a more extensive~~adopted the General Data Protection Regulation (“GDPR”)., which became effective in 2018, and the UK transposed the GDPR into national law (“UK GDPR”), which became effective in 2021. In July 2020, the EU-US Privacy Shield was invalidated as a valid personal data transfer mechanism and in June 2021, the EC published a new set of standard contractual clauses, which only apply to the transfer of personal data outside of the EU to a country not approved by the EU as providing an adequate level of protection for the processing of personal data. The EU's adequacy decision with respect to the UK, which allows the continued flow of personal data from the EU to the UK, will be regularly reviewed and may be revoked if the UK diverges from its current adequate data protection laws. The UK has developed its own international data transfer agreement, which was implemented in March 2022. GDPR and UK GDPR, as well as other statutes and/or regulations concerning ~~data~~ privacy and ~~security,~~data protection, increase compliance obligations, affect BlackRock’s collection, processing, retention and ~~retention~~transfer of personal data and reporting of personal data security breaches, and provide for increased penalties for non-compliance.

BlackRock also maintains two offices in the Middle East, one in Dubai, which is regulated by the Dubai Financial Services Authority, and one in Riyadh, Saudi Arabia, which is regulated by the Saudi Capital Markets Authority. Both offices are authorized to provide certain investment services and support BlackRock’s provision of investment products and services in their countries of domicile. Other countries across the Middle Eastern region are serviced on a cross-border basis.

Regulation in the Asia-Pacific Region

In Japan, a BlackRock subsidiary is subject to the Financial Instruments and Exchange Act (“FIEA”) and the Act on Investment Trusts and Investment Corporations. These laws are administered and enforced by the Japanese Financial Services Agency (“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, cease and desist orders or the suspension or revocation of registrations and licenses granted under the FIEA. This Japanese subsidiary also holds a license for real estate brokerage activities which subjects it to the regulations set forth in the Real Estate Brokerage Act.

In Australia, BlackRock’s ~~subsidiaries are subject to various Australian federal and state laws, and certain subsidiaries are~~operating entity is principally regulated by the Australian Securities and Investments Commission (“ASIC”)~~. ASIC regulates companies and~~, which includes holding an Australian financial services ~~activities in Australia~~license and operating registered managed investment schemes. ASIC is ~~responsible for promoting investor, creditor~~Australia’s integrated corporate, markets, financial services and consumer ~~protection.~~credit regulator.

The activities of certain BlackRock subsidiaries in Hong Kong are subject to the Securities and Futures Ordinance (“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 (“SFC”). The SFC is also empowered 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.

BlackRock’s operations in Taiwan are regulated by the Taiwan Financial Supervisory Commission, which is responsible for regulating securities markets (including the Taiwan Stock Exchange and the Taiwan Futures Exchange), the banking industry and the insurance sector.

BlackRock’s Fund Management Company in China (“BlackRock FMC”) is regulated by the China Securities Regulatory Commission and is subject to the Securities Investment Fund Law and Measures for the Supervision and Administration of Mutual Fund Managers for the overall oversight from incorporation to the corporate governance and operations of fund managers and funds. BlackRock FMC is also subject to the China Securities Law and various other financial laws and regulations. BlackRock CCB Wealth Management Limited, which is BlackRock’s wealth management joint venture company with CCB Wealth Management Co., Ltd. and Fullerton Management Pte Ltd. in China, is regulated by the China Banking and Insurance Regulatory Commission (“CBIRC”). CBIRC have enacted Bank Wealth Management Supervision and Management Measures and Management Measures of Bank Wealth Management Subsidiaries since 2018 to regulate the setup, conduct of business and risk management of bank wealth management companies.

In Singapore, a BlackRock subsidiary is regulated by the Monetary Authority of Singapore (“MAS”) and its business activities are subject to the Securities and Futures Act 2001 (“SFA”). The SFA governs the regulation of activities and institutions in the securities and derivatives industry, including leveraged foreign exchange trading of financial benchmarks and of clearing facilities. The MAS is Singapore’s central bank and integrated financial regulator, which regulates the financial services sector in Singapore and conducts integrated supervision of financial services and financial stability surveillance. This BlackRock subsidiary and the employees conducting any of the regulated activities specified in the SFA are required to be licensed with the MAS, and are subject to the SFA and the rules, codes and guidelines issued by the MAS.

Other financial regulators oversee BlackRock subsidiaries, branches and representative offices across the Asia-Pacific region, including in ~~Singapore and~~ South Korea. Regulators in all of these jurisdictions have authority with respect to financial services including, among other things, the authority to grant, suspend 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:~~https://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, Governance and ~~Governance~~Sustainability 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,~~50 Hudson Yards, New York, New York ~~10055.~~10001. 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:~~https://www.sec.gov.

Item 1A. Risk Factors

As a global 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, reputational, fiduciary and 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 COMPETITION RISKS

Changes in the value levels of equity, debt, real assets, commodities, foreign exchange or other asset markets, as well as the impact of global trade policies and tariffs, may cause assets under management (“AUM”), revenue and earnings to decline.

BlackRock’s investment management revenue is primarily comprised of fees based on a percentage of the value of AUM and, in some cases, performance fees which are normally expressed as a percentage of returns to the client. Numerous factors, including price movements in the equity, debt or currency markets, or in the price of real assets, commodities or other alternative investments in which BlackRock invests on behalf of its clients, as well as the impact of global trade policies and tariffs, could cause:

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

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the value of AUM, or the returns BlackRock realizes on AUM, to decrease;

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~~the withdrawal of funds from BlackRock’s products in favor of products offered by competitors;~~

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client redemptions from BlackRock’s products;

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~~the rebalancing or reallocating of assets into BlackRock products that yield lower fees;~~

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client rebalancing or reallocating of assets into BlackRock products that yield lower fees;

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

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

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

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

These risks may also be heightened by market volatility, illiquid market conditions or other market disruptions. The occurrence of any of ~~these~~the above events may cause the Company’s AUM, revenue and earnings to decline.

Changes in interest or foreign exchange rates and/or divergent beta may cause BlackRock’s AUM and base fees to fluctuate and introduce volatility to the Company’s net income and operating cash flows.

In ~~recent~~past years, there ~~have been~~were prolonged periods of historically low interest rates, interspersed with periods in which certain central banks globally began increasing rates. Recently, global markets have experienced substantial volatility, with significant downturns in both bond and equity markets. In addition, central banks worldwide have raised interest rates in an effort to moderate rising inflation. BlackRock’s business is directly and indirectly affected by changes in global interest rates. Similarly, due to the global nature of BlackRock’s operations, a portion of its business is conducted in currencies other than the ~~U.S.~~United States ("US") dollar. ~~Any failure by BlackRock~~BlackRock’s exposure to ~~manage movements in~~ foreign exchange rates relative to the ~~U.S.~~US dollar ~~or its exposure to~~and interest rates may cause BlackRock’s AUM to fluctuate and introduce volatility to the Company’s base fees, net income and operating cash flows.

In addition, beta divergence between equity markets, where certain markets perform differently than others, may lead to an increase in the proportion of BlackRock AUM weighted toward lower fee equity products, resulting in a decline in BlackRock’s effective fee rate. Divergent market factors may also erode the correlation between the growth rates of AUM and base fees.

BlackRock’s investment advisory contracts may be terminated or may not be renewed by clients orand 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 providing investment advisory services. 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 applicable 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 US 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 arrangements under any of its advisory or management contracts may be reduced (including at the behest of a fund’s board of directors). In addition, if a number of BlackRock’s clients terminate their contracts, or otherwise remove BlackRock from its advisory roles, liquidate funds or fail to renew management contracts on ~~favorable~~similar terms, the fees or carried interest BlackRock earns could be reduced, which may cause BlackRock’s AUM, revenue and earnings to decline.

The failure or negative performance of products offered by competitors may cause AUM in similar BlackRock products to decline irrespective of BlackRock’s performance.

Many competitors offer similar products to those offered by BlackRock and the failure or negative performance of competitors’ products could lead to a loss of confidence in similar BlackRock products, irrespective of the performance of such BlackRock products. Any loss of confidence in a product type could lead to withdrawals, redemptions and liquidity issues in such products, which may cause the Company’s AUM, revenue and earnings to decline.

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

The investment management industry is highly competitive, and BlackRock competes based on a number of factors including: investment performance, liquidity, its technology and portfolio construction offerings, the level of fees charged, the quality and breadth of services and products provided, name recognition and reputation, and ~~the~~its ability to develop new investment strategies and products to meet the changing needs of investors. In addition, over the past several years, there has been significant consolidation in the asset management and financial services industries as investors increasingly seek out firms that have the capacity to deliver broad multi-asset investment capabilities and technological expertise, including in a manner that is responsive to ever more localized needs. This consolidation, together with the introduction of new technologies, as well as regulatory changes, ~~have altered~~continues to alter the competitive landscape for investment managers, which may lead to additional fee compression or require BlackRock to ~~spend~~invest more to modify or adapt its product offerings to attract and retain customers and remain competitive with the products, services and ~~services~~geographic diversity offered by other financial institutions, technology companies, trading, advisory or asset management firms. Increased competition on the basis of any of these factors, including competition leading to fee reductions on existing or new business, may cause the Company’s AUM, revenue and earnings to decline.

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

The sophisticated risk analytics, portfolio management, trade execution and investment operations that BlackRock provides via itstechnology platform to support investment advisory and Aladdin clients are important elements of BlackRock’s competitive success. Aladdin’s competitive position is based in part on its ability to combine risk analytics with portfolio management, trading and operations tools on a single platform. Increased competition from risk analytics and investment management technology providers, including as a result of growing industry consolidation giving rise to competitors with increasingly sophisticated and comprehensive product offerings, or a shift in client demand ~~away to~~toward standalone or internally developed solutions, whether due to price competition, perceived client market share, platform offerings or flexibility, or market-based or regulatory factors, may weaken Aladdin’s competitive position and may cause the Company’s revenue and earnings to decline. In addition, to the extent that Aladdin competitors are able to innovate more effectively than BlackRock or leverage delivery models that provide clients faster time to market, lower costs or the ability to more seamlessly combine or bundle with other service offerings, BlackRock may lose existing clients or fail to capture future market share, which may impede its productivity and growth. Moreover, although BlackRock takes steps to safeguard against infringements of its intellectual property, there can be no assurance that the Company will be able to effectively protect and enforce its intellectual property rights in ~~Aladdin~~Aladdin..

BlackRock may be unable to develop new products and services and the development of new products and services may expose BlackRock to reputational harm, additional costs or operational ~~risk~~.risk.

BlackRock’s financial performance depends, in part, on its ability to react to changes in the asset management industry, respond to evolving client demands and develop, market and manage new investment products and services. ~~Conversely, the~~The development and introduction of new products and services, including the creation of increasingly customizable products, ~~with a focus on environmental, social and governance (“ESG”) matters,~~ requires continued innovative effort 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~~constraints on BlackRock’s ability to manage growth within client mandates, compliance with regulatory ~~requirements.~~and disclosure requirements and intellectual property-related lawsuits or claims. A growing number of BlackRock’s new products and services also depend on data provided by third parties as analytical inputs and are subject to additional risks, including with respect to data quality, cost, availability and provider relationships. Data sets for certain developing analytics, such as those in the sustainability space, continue to evolve and difficulties approximating gaps in the data, sourcing data from reliable sources, or validating the data could adversely impact the accuracy and effectiveness of such tools. There can be no assurance that BlackRock will be able to innovate effectively in order to develop new products or services that address the needs of its clients on the ~~timescale~~timeline they require. Any failure to successfully develop new products and services, or ~~successfully~~effectively manage associated operational risks, could harm BlackRock’s reputation and expose the Company to additional costs, which may cause its AUM, revenue and earnings to decline.

Changes in the value of seed and co-investments that BlackRock owns as well as certain of BlackRock’s minority investments could affect its income and could increase the volatility of its earnings.

At December 31, ~~2019,~~2022, BlackRock’s net economic investment exposure of approximately ~~$2.7~~$3.3 billion in its investments (see ~~“Item~~Item 7, — Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations-Investments”)~~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 assets, commodities or other alternative investments, could lower the value of these investments as well as ~~other~~certain minority investments, increase the volatility of BlackRock’s earnings and cause earnings to decline.

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 out 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, ~~2019~~2022 and subject to this type of indemnification was ~~$210~~approximately $253 billion. In the Company’s capacity as lending agent, cash and securities totaling ~~$226~~approximately $268 billion was held as collateral for indemnified securities on loan at December 31, ~~2019.~~ 2022. 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 revenue and earnings to decline.

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

While not legally mandated, BlackRock may, at its option, from time to time choose to seed, warehouse or otherwise support investment products through capital or credit support for commercial or other reasons. ~~Such~~Any decision by BlackRock on whether to support products may utilize capital and liquidity that would otherwise be available for other corporate purposes. ~~Losses on such~~BlackRock’s ability to seed, warehouse or otherwise support ~~as well as regulatory restrictions on~~certain products may be restricted by regulation or by the Company’s failure to have or make available sufficient capital or liquidity. Moreover, inherent constraints arising from the business models of certain asset managers, including BlackRock, may during periods of market volatility result in BlackRock having fewer options for accessing liquidity than asset managers with alternate business models, which may adversely impact its ability to support certain products. Any decision by BlackRock to support particular products, or the inability to provide such support, ~~or the failure to have available or devote sufficient capital or liquidity to support products,~~may result in losses, which may cause AUM, revenue and earnings to decline.

Increased geopolitical unrest and other events outside of BlackRock’s control could adversely affect the global economy or specific international, regional and domestic markets, which may cause BlackRock’s AUM, revenue and earnings to decline.

Geopolitical risks, including those arising from trade tension ~~European fragmentation, unrest in~~and/or the ~~Middle East, Brexit negotiations and~~imposition of trade tariffs, terrorist activity ~~as well as~~or acts of civil or international hostility, are increasing. For instance, the war between Russia and Ukraine has and may continue to result in geopolitical instability and adversely affect the global economy, supply chains and specific markets. Strategic competition between the US and China and resulting tensions have also contributed to uncertainty in the geopolitical and regulatory landscapes. Similarly, other events outside of BlackRock’s control, including natural disasters, climate-related events, pandemics or health crises ~~(such as the coronavirus),~~ may arise from time to ~~time.~~time and be accompanied by

governmental actions that may increase international tension. Any such events and responses, ~~thereto,~~including regulatory developments, may cause significant volatility and declines in the global markets, disproportionate impacts to certain industries or sectors, disruptions to commerce (including to economic activity, travel and supply chains), loss of life and property damage, and may adversely affect the global economy or capital markets, as well as the Company’s products, operations, clients, vendors and employees, which may cause BlackRock’s AUM, revenue and earnings to decline. BlackRock’s exposure to geopolitical risks may be heightened to the extent such risks arise in countries in which BlackRock currently operates or is seeking to expand its presence.

~~Risks Related~~Climate-related risks could adversely affect BlackRock’s business, products, operations and clients, which may cause BlackRock’s AUM, revenue and earnings to decline.

BlackRock’s business and those of its clients could be impacted by climate-related risks. Climate-related risks may impact BlackRock through changes in the physical climate or from the process of transitioning to a lower-carbon economy. Climate-related physical risks arise from the direct impacts of a changing climate in the short- and long-term. Such risks may include the risks of extreme weather events and changes in temperature, which may damage infrastructure and facilities, including BlackRock’s physical assets, as well as disrupt connectivity or supply chains. Climate-related transition risks arise from exposure to the transition to a lower-carbon economy through policy, regulatory, technology and market changes. For instance, new or divergent climate regulations or guidance, as well as differing perspectives of stakeholders regarding climate impacts, have affected and may continue to affect BlackRock’s business activities and reputation, increase scrutiny and complicate compliance requirements, which could increase the Company’s costs.

Climate-related physical and transition risks could also impact BlackRock’s business both directly and indirectly through adverse impacts to its clients’ investments, including as a result of declines in asset values, changes in client preferences, increased regulatory and compliance costs and significant business disruptions. Any of these risks may cause the Company’s AUM, revenue and earnings to decline.

RISKS RELATED TO INVESTMENT PERFORMANCE

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

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

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client withdrawals in favor of better performing products offered by competitors;

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client shifts to products that charge lower fees;

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

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reduced, minimal or no performance fees;

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

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a decrease in the valuations of seed and co-investment capital.

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~~client withdrawals in favor of better performing products offered by competitors;~~

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~~client shifts to products that charge lower fees;~~

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

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~~reduced, minimal or no performance fees;~~

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

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~~a decrease in the valuations of seed and co-investment capital.~~

Performance fees may increase volatility of both revenue and earnings.

A portion of BlackRock’s revenue is derived from performance fees on investment advisory assignments. Performance fees represented ~~$450~~$514 million, or 3%, of total revenue for the year ended December 31, ~~2019.~~2022. Generally, the Company is entitled to a performance fee only if the agreement under which it is managing the assets provides for one and if returns on the related portfolio exceed agreed-upon periodic or cumulative return targets. If these targets are not exceeded, a performance 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. The volatility of the Company’s future revenue and earnings may also be affected due to illiquid alternatives becoming an increasing component of the overall composition of the Company’s performance fee generating assets. In particular, the Company expects that as ~~BlackRock takes on~~it manages more ~~advisory assignments for~~ illiquid ~~investments,~~products, its performance fees will generally be recognized over substantially longer multi-year periods than those associated with more liquid products.

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

BlackRock employs various quantitative models to support its investment processes, including those related to risk assessment, portfolio management, trading and hedging activities and product valuations. Any errors or limitations in the underlying models, model inputs or ~~model~~ assumptions, including those from third-party sources, as well as any failure of BlackRock’s governance, approval, testing and validation standards in respect of such models, model inputs or assumptions or the failure to timely update such models, model inputs or assumptions, could have ~~unanticipated and~~ adverse ~~consequences~~effects on BlackRock’s business and reputation. These risks may be heightened by the rapid growth and complexity of new models, evolving data sets and standards and market volatility.

RISKS RELATED TO THE COVID-19 PANDEMIC

The COVID-19 pandemic has and may continue to adversely affect BlackRock’s business, operations and financial condition which may cause its AUM, revenue and earnings to decline.

The COVID-19 pandemic has caused and may continue to cause significant harm to the US and global economies. It has also had and may continue to have an ongoing adverse impact on BlackRock’s business, including its operations and financial condition, as a result of, among other things, the negative impact of the pandemic on financial markets, BlackRock’s clients, key vendors (such as pricing providers), market participants and other third parties with whom it does business, and workforce disruption due to continued periods away from physical office locations in certain regions and illness and health concerns, any of which may cause the Company's AUM, revenue and earnings to decline.

The extent to which COVID-19, and the related impact on the global economy, may continue to affect BlackRock’s business, results of operations and financial condition, will depend on future developments that are uncertain and cannot be predicted, including the emergence and spread of new variants of the COVID-19 virus and/or other concurrent or overlapping pandemics and health crises, the availability, adoption and efficacy of future treatments and vaccines, future actions taken by governmental authorities, central banks and other third parties (including new financial regulation and other regulatory reform) in response to the pandemic, and the impact of the COVID-19 pandemic on BlackRock’s products, clients, vendors and employees, any of which may exacerbate the other risks described herein.

TECHNOLOGY AND OPERATIONAL RISKS

A failure in, or disruption to, BlackRock’s ~~operational~~operations, systems or infrastructure, including business continuity plans, could adversely affect operations, damage the Company’s reputation and cause BlackRock’s AUM, revenue and earnings to decline.

BlackRock’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~~is concentrated in a limited number of geographic areas, including San Francisco, New York, London, Budapest, Atlanta and Gurgaon. The failure to maintain an infrastructure commensurate with the size and scope of BlackRock’s business, or the occurrence of a business outage or event outside BlackRock’s control, including a major earthquake, hurricane, fire, terrorist act, pandemic, health crisis ~~(such as the coronavirus)~~ or other catastrophic event, or the actions of individuals or groups seeking to disrupt BlackRock’s operations in any location at which BlackRock maintains a major presence, could materially impact operations, result in business disruption ~~to the business~~ or impede ~~its~~the Company's growth.

In addition, ~~despite~~these risks may be heightened during BlackRock’s move to its new headquarters in New York, which is expected to be completed in 2023.

Despite 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 systems and the availability of back-up employees, are improperly implemented or deployed during a disruption, the Company’s ability to operate could be adversely impacted which may cause AUM, revenue and earnings to decline or impact the Company’s ability to comply with regulatory obligations or contractual obligations leading to reputational harm, legal liability, regulatory fines and/or sanctions.

A cyber-attack or a failure to implement effective information and cybersecurity policies, procedures and capabilities could disrupt operations and lead to financial losses and reputational harm, which may cause BlackRock’s AUM, revenue and earnings to decline.

BlackRock is dependent on the effectiveness of the information and cybersecurity policies, procedures and capabilities it maintains to protect its computer and telecommunications systems and the data that resides on or is transmitted through ~~them.~~them, including data provided by third parties that is significant to portions of BlackRock's business and products. An externally caused information security incident, such as a cyber-attack including a phishing scam, business email compromise, malware, or denial-of-service or ransomware attack, or an internally caused incident or disruption, 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. Moreover, developments in BlackRock’s use of process automation, as well as the ~~increased~~ use of remote access by employees and mobile and cloud technologies, could heighten these and other operational risks, as certain aspects of the security of such technologies may be complex, unpredictable or beyond BlackRock’s control. BlackRock’s growing exposure to the public Internet, as well as reliance on mobile or cloud technology or any failure by mobile technology and cloud service providers to adequately safeguard their systems and prevent cyber-attacks, could disrupt BlackRock’s operations and result in misappropriation, corruption or loss of personal, confidential or proprietary ~~information.~~information or third-party data. In addition, there is a risk that encryption and other protective measures may be circumvented, particularly to the extent that new computing technologies increase the speed and computing power available.

~~There have been a number of recent highly publicized cases involving~~The financial services ~~and consumer-based companies reporting~~industry has been the ~~unauthorized disclosure~~subject of ~~client or customer information and the unauthorized transfer of customer funds, 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 nation state actors and terrorist organizations. BlackRock has been and continues to be the target of attempted cyber-attacks, as well as the co-opting of its brand, and ~~must~~continues to 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. Although BlackRock has implemented policies and controls, and takes protective measures involving significant expense, to ~~strengthen its computer systems, processes, software, technology assets and networks to~~ prevent and address potential data breaches, inadvertent disclosures, increasingly sophisticated cyber-attacks and cyber-related fraud, there can be no assurance that any of these measures ~~prove~~proves effective. In addition, a successful cyber-attack may persist for an extended period of time before being detected, and it may take a considerable amount of time for an investigation to be completed and the severity and potential impact to be known. Moreover, due to the complexity and interconnectedness of BlackRock’s systems, the process of upgrading or patching the Company’s protective measures could itself create a risk of security issues or system disruptions for the Company, as well as for clients who rely upon, or have exposure to, BlackRock’s systems.

In addition, due to BlackRock’s interconnectivity with third-party vendors, advisors, central agents, exchanges, clearing houses and other financial institutions, BlackRock or any such third party may be adversely affected if any of them is subject to a successful cyber-attack or other information security event, including those arising due to the use of mobile technology or a third-party cloud environment. BlackRock also routinely transmits and receives personal, confidential or proprietary information by email and other electronic means. The Company collaborates with clients, vendors and other third parties to develop secure transmission capabilities and protect against cyber-attacks. However, BlackRock ~~cannot ensure that it~~ or such third parties may not have all appropriate controls in place to protect the confidentiality of such information.

Any information security incident or cyber-attack against BlackRock or third parties with whom it is connected, including any interception, mishandling or misuse of personal, confidential or proprietary information, could result in material financial loss, loss of competitive position, regulatory 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. In addition, BlackRock’s cybersecurity insurance may not cover all losses and damages from such events and BlackRock’s ability to maintain or obtain sufficient insurance coverage in the future may be limited.

Failure or unavailability of third-party dependencies may adversely affect Aladdin operations, which could cause reputational harm, lead to a loss of clients and impede BlackRock’s productivity and growth.

BlackRock must maintain effective infrastructure, including a robust and secure technological framework, in order to maximize the benefit of the Aladdin platform. In so doing, it relies in part on certain third-party service ~~providers.~~providers, including for cloud hosting and technologies supporting cloud-based operations. For example, Aladdin’s data architecture depends on third-party providers of technology solutions, including the ability of such parties to scale and perform in response to Aladdin’s growth. In addition, 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’s analytical calculations. Although BlackRock has implemented internal controls and procedures and maintains a robust vendor management program designed to perform diligence and monitor third parties that support the Aladdin platform, there can be no assurance that these measures will prove effective. Any failure by third parties to maintain infrastructure that is commensurate with Aladdin’s size and growth, or provide the data or information required to support its varying capabilities, could compromise Aladdin’s resilience, result in operational difficulties, cause reputational harm and adversely impact BlackRock’s ability to provide services to its investment advisory and Aladdin clients. ~~clients.~~

Continuing enhancements to Aladdin’s capabilities, as well as the expansion of the Aladdin platform into new markets and geographies, have led to significant growth in Aladdin’s processing scale, which may expose BlackRock to reputational harm, increased regulatory scrutiny and heightened operational, data management, cyber- and information-security risks.

The operation of BlackRock’s Aladdin platform routinely involves updating existing capabilities, configuration change management, developing, testing and rolling out new functionalities and expanding coverage into new markets and geographies, including in connection with inorganic transactions or to address client or regulatory requirements. These updates and expansion initiatives, which have led to significant growth in Aladdin’s processing scale, frequently occur on accelerated time frames and may expose BlackRock to additional cyber- and information-security risks, as well as increased execution, operational and data management risks. If BlackRock is unable to manage the pace of, or provide the operational resiliency and stability for, the expansion of Aladdin and associated growth of its processing scale, BlackRock may experience client attrition, reduced business, increased costs, reputational harm or regulatory fines and/or sanctions, which may cause BlackRock’s AUM, revenue and earnings to decline.

In addition, the highly regulated business activities of many Aladdin clients may expose BlackRock to heightened regulatory scrutiny. For example, the changing political and regulatory environment in certain jurisdictions in which Aladdin clients are based has required BlackRock to open new data centers in those jurisdictions in order to host client data in the client’s home location. Operating new data centers in foreign jurisdictions may expose BlackRock to increased operational complexity, as well as additional regulatory risks associated with the compliance requirements of such jurisdictions. In addition, there has been increased regulatory scrutiny globally on technology and information providers, which may impact Aladdin.

Failure to maintain adequate corporate and contingent liquidity may cause BlackRock’s AUM, liquidity and earnings to decline, as well as harm its prospects for growth.

BlackRock’s ability to meet anticipated cash needs depends upon a number of factors, including its creditworthiness and ability to generate operating cash flows. In addition, while BlackRock, Inc. is not subject to regulatory capital or liquidity requirements, certain of its subsidiaries are subject to regulatory capital and liquidity frameworks as well as certain other prudential requirements and standards, which require them to maintain certain levels of capital and liquidity. Failure to maintain adequate liquidity could lead to unanticipated costs and force BlackRock to revise existing strategic and business initiatives. BlackRock’s access to 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, or changes in government regulations, including tax and interest rates. Failure to obtain funds and/or financing, or any adverse change to the cost of obtaining such funds and/or financing, may cause BlackRock’s AUM, liquidity and earnings to decline, curtail its operations and limit or impede its prospects for growth.

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 any losses related to the risks of collateral investments), and BlackRock may be held liable for any failure to manage such risks.

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

BlackRock employs a variety of organic and inorganic strategies intended to enhance earnings, increase product offerings, deliver whole-portfolio solutions, access new clients, leverage advances in technology and expand into new geographies. Inorganic strategies have included hiring smaller-sized investment teams, making minority investments in early- to mid-stage technological and other ventures, entering into strategic joint ventures and acquiring investment management and technology ~~businesses.~~businesses, analytics, models and other intellectual property. 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, which must be managed in order for BlackRock to realize the benefit of such ~~transactions.~~transactions, and such transactions may be the subject of unanticipated liabilities arising from commercial disputes, information security vulnerabilities or breaches and intellectual property or other legal claims. The success of BlackRock’s inorganic strategy also depends in large part on its ability to integrate the workforce, operations, strategies, technologies and other components of a target business following the completion of an acquisition. BlackRock may be required to commit significant management time, as well as create new, or grow existing, operational and support functions, to facilitate the integration of acquired businesses, manage combined future growth and maintain a cohesive corporate culture. There can be no assurance that BlackRock will be able to successfully integrate acquired businesses, retain associated talent, scale support functions or realize other intended benefits of its inorganic strategy. Moreover, the challenges associated with BlackRock’s inorganic strategy may be heightened when ~~acquired businesses~~inorganic transactions are in new geographic locations, involve new markets, products, or business lines or early stage investments or are delivered via technology and systems that ~~differs~~differ from ~~that~~those employed by BlackRock. In addition, in the case of minority investments and joint ventures, BlackRock may be subject to risks due to reputational harm, liability or loss resulting from, or relating to operating systems, risk management controls, and employees that are outside of BlackRock’s control, as well as risks related to the jurisdictions or markets in which such investees or joint ventures operate. For example, BlackRock has a minority investment in Circle Internet Financial (“Circle”), which is associated with crypto asset markets that recently experienced substantial volatility and high-profile enterprise failures and bankruptcies. The crypto asset markets are subject to significant regulatory uncertainty, which could also negatively impact BlackRock’s investment in Circle. Any failure to identify and mitigate the risks associated with acquisitions, joint ventures or minority investments through due diligence, governance or oversight rights, indemnification provisions and/or operational expertise, or to manage the integration of acquisitions effectively, could result in losses or impairments related to such transactions and have an adverse effect on BlackRock’s reputation or cause its AUM, revenue and earnings to decline, which may harm the Company’s competitive position in the investment management industry.

~~Client~~BlackRock's alternatives products include investments in early-stage companies, private equity portfolio companies and real assets, such as real estate, infrastructure and energy assets, which may expose BlackRock and its funds and accounts to new or increased risks and liabilities, as well as reputational harm.

~~BlackRock makes~~BlackRock’s alternatives products include investments ~~on behalf of its clients~~ in early-stage companies, private equity portfolio companies and real assets, including real estate, infrastructure and energy assets, that may expose BlackRock and its funds and accounts to increased risks and liabilities that are inherent in the ownership and management of such ~~assets.~~investments and portfolio companies. These may include:

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risks related to the potential illiquidity, valuation and disposition of such investments;

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risks related to emerging and less established companies that have, among other things, short operating histories, new technologies and products, nascent control functions, quickly evolving markets and limited financial resources;

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construction risks, including as a result of force majeure, labor disputes or work stoppages, shortages of material or interruptions to the availability of necessary equipment;

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accidents, pandemics, health crises or catastrophic events, such as explosions, fires or terrorist activity beyond BlackRock’s control;

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climate-related risks, including greater frequency or intensity of adverse weather and natural disasters;

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personal injury or property damage;

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failures on the 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;

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

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

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

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risks related to the availability, cost, coverage and other limitations on insurance;

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the financial resources of tenants; and

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contingent liabilities on disposition of investments.

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

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

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~~personal injury or property damage;~~

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

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

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~~the financial resources of tenants; and~~

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~~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 losses, regulatory ~~sanction~~sanctions 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 attention away from BlackRock’s other business activities or cause its AUM, revenue and earnings to decline.

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. Operating outside the ~~United States (“US”)~~US may also expose BlackRock to increased compliance risks, as well as higher ~~compliance~~ costs to comply with US and non-US anti-corruption, anti-money laundering and sanctions laws and regulations. Similarly, certain jurisdictions in which BlackRock operates may not have comparable levels of protection for corporate assets, such as intellectual property, and client information and records, as the US. As a result, there may also be heightened information security or privacy risks in those jurisdictions. Any theft of data, technology or intellectual property may negatively impact BlackRock’s business operations and reputation. 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 HUMAN CAPITAL

The potential for human error in connection with BlackRock’s operational systems could disrupt operations, cause losses, lead to regulatory fines or damage the Company’s reputation and may cause BlackRock’s AUM, revenue and earnings to decline.

Many of BlackRock’s operations are highly complex and are dependent on the Company’s ability to process and monitor a large number of transactions, many of which occur across numerous markets and currencies at high volumes and frequencies. Although BlackRock expends considerable resources on systemic controls, supervision, technology and training in an effort to ensure that such transactions do not violate client guidelines and applicable rules and regulations or adversely affect clients, counterparties or the Company, BlackRock’s operations are dependent on its employees. From time-to-time, employees make mistakes that are not always immediately detected by systems, controls, policies and procedures intended to prevent and detect such errors. These can include calculation errors, errors in software implementation or development, failure to ensure data security, follow processes, patch systems or report issues, or errors in judgment. Such risks may be exacerbated in times of increased market volatility, high trading volumes or workforce turnover. Human errors, even if promptly discovered and remediated, may disrupt operations or result in regulatory 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.

Fraud, the circumvention of controls or the violation of risk management and workplace policies could have an adverse effect on BlackRock’s reputation, which may cause the Company’s AUM, revenue and earnings to decline.

~~Although~~ BlackRock seeks to foster a positive workplace culture, has adopted a comprehensive risk management process and continues to enhance various controls, procedures, policies and systems to monitor and manage ~~risks, it~~risks. Notwithstanding these measures, BlackRock cannot ensure that its workplace culture or such controls, procedures, policies and systems will successfully identify and manage internal and external ~~risks.~~risks and BlackRock employees have in the past engaged in improper conduct. In addition, BlackRock is subject to the risk that its employees, contractors or other third parties may in the future deliberately or recklessly seek to circumvent established controls to commit fraud, pay or solicit bribes or otherwise act in ways that are inconsistent with the Company’s controls, policies, procedures, workplace culture or principles. This risk may be heightened as BlackRock expands into new markets and increases the breadth of its business offerings and remote and alternative work models, all of which introduce additional complexity to its risk management program. Persistent attempts to circumvent policies and controls or repeated incidents involving fraud, conflicts of interests or transgressions of policies and controls could have an adverse effect on BlackRock’s reputation, ~~which could~~ cause adverse publicity, and result in litigation, regulatory inquiries, fines and/or sanctions, ~~and~~which may cause the Company’s AUM, revenue and earnings to decline.

The failure to recruit, train and retain employees and develop and implement effective executive succession could lead to the loss of clients and may cause AUM, revenue and earnings to decline.

BlackRock’s success is largely dependent on the talents and efforts of its highly skilled workforce and the Company’s ability to plan for the future long-term growth of the business by identifying and developing those employees who can ultimately transition into key roles within BlackRock. The global market for qualified fund managers, investment analysts, technology and risk specialists and other professionals is highly competitive, and factors that affect BlackRock’s ability to attract, train and retain ~~such~~highly qualified and diverse employees include the Company’s reputation and workplace culture, the immigration and public health policies in the jurisdictions in which BlackRock has offices, its approach to remote and alternative work models, the compensation and benefits it provides, and its commitment to effectively managing executive succession, including the development and training of qualified individuals.

In addition, a percentage of the deferred compensation that BlackRock pays to certain of its employees is tied to the Company’s share price. As such, ifdecreases in BlackRock’s share price ~~were to decrease,~~could impair the retention value of such deferred ~~compensation would decrease.~~compensation. There can be no assurance that the Company will continue to be successful in its efforts to recruit and retain 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.

~~Risks Related to~~RISKS RELATED TO KEY THIRD-PARTY ~~Relationships~~RELATIONSHIPS

The impairment or failure of third parties may negatively impact the performance of products and accounts that BlackRock manages, which may cause BlackRock’s AUM, revenue and earnings to decline.

BlackRock’s investment management activities expose the products and accounts it manages for its clients to many different industries and counterparties, including distributors, brokers and dealers, commercial and investment banks, clearing organizations, mutual and hedge funds, and other institutional clients. Transactions with counterparties expose BlackRock’s clients to credit risk in the event the applicable counterparty defaults. Although BlackRock ~~maintains a robust vendor management program and~~ regularly assesses risks posed by its counterparties, such counterparties may be subject to sudden swings in the financial and credit markets that may impair their ability to perform or they may fail to meet their obligations. Counterparties may also experience lapses in their internal controls or risk management systems or expose BlackRock and/or its clients to losses on account of employee malfeasance, negligence or human error. In addition, the concentration of certain financial institutions that BlackRock uses to facilitate securities and derivatives transactions for its clients, including clearing organizations, exchanges and central agents, increases the risk that a technical or operational issue at, or default by, one such institution could introduce operational issues or delays impacting multiple BlackRock clients. Any such operational issue, impairment or failure could negatively impact the performance of products or accounts that BlackRock manages for its clients, which may lead to client attrition and, in turn, cause BlackRock’s AUM, revenue and earnings to decline.

The failure of a key ~~vendor~~third-party providers to BlackRock to fulfill ~~its~~their obligations or a failure by BlackRock to maintain its relationships with key ~~vendors~~third-party providers could have a material adverse effect on BlackRock’s growth, reputation or business, which may cause the Company’s AUM, revenue and earnings to decline.

BlackRock depends on a number of key ~~vendors~~third-party providers for various fund administration, accounting, custody, market and ESG data, market indices, insurance, technology, cloud hosting and transfer agent roles and other distribution and operational needs. Further, BlackRock relies upon a relatively concentrated group of third-party index providers to deliver services that are integral to its clients’ investment decisions. The index provider industry is characterized by large vendors and the use of long-term contracts remains the market standard. This industry structure may limit BlackRock’s ability to renegotiate its index provider contracts on favorable terms or at all. While BlackRock performs focused diligence on its vendors in an effort to ensure they operate in accordance with expectations, to the extent any significant deficiencies are uncovered, there may be few, or no, alternative vendors available. In addition, BlackRock’s operations and processes rely on commercially available data provided by third parties as well as providers of services, including technology services, and operating errors, process failures or failures to comply with data usage requirements with respect to these service providers may adversely impact BlackRock. Data providers commonly disclaim the accuracy and completeness of data and BlackRock does not have the ability to validate or verify the accuracy and completeness of commercially sourced datasets. Moreover, in situations where BlackRock has limited access to alternative vendors, or where the nature of BlackRock’s arrangement with a

vendor requires a long term-commitment, BlackRock may be dependent on such vendor for continuous operational reliability and may be unable to avoid incurring costs if such vendor introduces required upgrades to its services.

BlackRock may from time to time transfer key contracts from one ~~vendor~~third-party provider to another. Key contract transfers may be costly and complex and expose BlackRock to heightened operational risks. Any failure to mitigate such risks could result in reputational harm, as well as financial losses to BlackRock and its clients. The failure or inability of BlackRock to diversify its sources for key services or the failure of any key ~~vendor~~third-party provider to fulfill its obligations could result in activities inconsistent with clients’ investment management or other agreements, have an adverse financial impact on BlackRock products or lead to operational, legal and regulatory issues for the Company, which could result in reputational harm or legal liability, fines and/or sanctions and may cause BlackRock’s AUM, revenue and earnings to decline.

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

BlackRock relies on a number of third parties to provide distribution, portfolio administration and servicing for certain BlackRock investment management products and services through their various distribution channels. BlackRock’s ability to maintain strong relationships with its distributors may impact the Company’s future performance, and its relationships with distributors are subject to periodic renegotiation that may result in increased distribution costs and/or reductions in the amount of BlackRock products and services being marketed or distributed. Moreover, new fiduciary regulations could lead to significant shifts in distributors' business models and more limited product offerings, potentially resulting in reduced distribution and/or marketing of certain of the Company’s products and services and fee compression. If BlackRock is unable to distribute its products and services successfully or if it is unable to replace or renew existing distribution arrangements, BlackRock’s AUM, revenue and earnings may decline. In addition, improper activities, as well as inadequate anti-money laundering diligence conducted by third-party distributors, could create reputational and regulatory harm to BlackRock.

Key technology partnerships may expose BlackRock to increased regulatory oversight, as well as migration, execution, technology and operational risks.

In April 2020, BlackRock announced a strategic partnership to host Aladdin infrastructure on the Microsoft Azure cloud and commenced a multi-year plan to migrate the Aladdin environments for BlackRock and its external Aladdin clients to the cloud. In addition, BlackRock has also migrated certain systems that support its corporate functions to cloud-based platforms. The benefits of cloud-based platforms are significant and BlackRock has adopted a robust risk-based approach to its migration strategies; however these partnerships also introduce new risks,

including: (1) risks associated with relying on third-parties for aspects of infrastructure reliability and stability; (2) software and information security risks arising from the use of cloud technology; (3) operational and execution risks, including those related to migration; and (4) risks related to increased regulatory oversight and new compliance obligations, which risks may be further exacerbated as BlackRock and the Aladdin platform continue to grow. Any failure by BlackRock to manage these risks, and/or risks associated with future potential technology partnerships, may result in escalating costs, financial loss, client dissatisfaction or attrition, regulatory fines and/or sanctions, reputational harm or legal liability, which, in turn, may cause BlackRock’s AUM, revenue and earnings to decline.

Disruption to the operations of third parties whose functions are integral to BlackRock’s ~~Exchange-Traded Fund~~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.~~value (“NAV”). The ~~net asset value~~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~~The creation/redemption feature and ~~the~~ arbitrage mechanism of an ETF are designed to make it more likely that the ETF’s shares normally will trade at prices close to the ~~ETF’s net asset value,~~NAV. Notwithstanding these features, exchange prices ~~may deviate significantly~~have in the past deviated measurably from the ~~ETF’s net asset value.~~NAV of certain ETFs and may under certain circumstances do so in the future. ETF market prices are subject to numerous potential risks, including trading halts invoked by a stock exchange, and the inability or unwillingness of market ~~markers,~~makers, authorized participants, settlement systems or other market participants to perform functions necessary for an ETF’s arbitrage mechanism to function ~~effectively, or~~effectively. These risks may be heightened as a result of significant market ~~volatility. Although BlackRock and other large issuers~~volatility, the growth of ~~ETFs are working~~the ETF industry combined with increased market ~~participants to seek to enhance US equity market resiliency, there can be no assurance that structural reforms will be implemented in a timely or effective fashion, or at all.~~activity, as well as the complexity associated with certain products. Moreover, if market events lead to incidences where ETFs trade at prices that deviate ~~significantly~~meaningfully from an ETF’s ~~net asset value,~~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~~LEGAL, REGULATORY AND REPUTATIONAL RISKS

BlackRock is subject to extensive regulation around the ~~world.~~world, which increases its cost of doing business.

BlackRock’s business is subject to extensive regulation around the world. These regulations subject BlackRock’s business activities to an array of increasingly detailed operational requirements, compliance with which is costly and complex.

In addition, many of BlackRock’s legal entities ~~may be~~are subject to laws and regulations aimed at preventing corruption, money laundering, inappropriate employment practices, illegal payments and engaging in business activities with certain individuals, countries or groups, including but not limited to the US Foreign Corrupt Practices Act, the USA PATRIOT Act, the Bank Secrecy Act, the EU Anti-Money Laundering Directives, the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, the UK Bribery Act, sanctions imposed by the US Treasury’s Office of Foreign Assets Control, the United Nations and the ~~European Union (“EU”)~~EU and its member states, as well as those imposed by other countries in which BlackRock ~~operates.~~ operates, such as His Majesty’s Treasury’s (“HMT”) Office of Financial Sanctions Implementation.

BlackRock is also subject to certain risk retention rules and regulation, as well as regulatory capital requirements, which require the Company to maintain capital to support certain of its businesses. Furthermore, many jurisdictions in which BlackRock operates have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including the ~~General Data Protection Regulation,~~GDPR and UK GDPR, which ~~expands~~expand data protection rules for individuals within the EUEuropean Economic Area (“EEA”) and UK, respectively, and for personal data exported outside the ~~EU.~~EEA and UK.

BlackRock is additionally subject to scrutiny from various government agencies that focus on antitrust and competition laws and regulations within the US and internationally, including in connection with merger control proceedings and proposed investments. Any determination of a failure to comply with any such laws or regulations could result in fines and/or sanctions against the Company, as well as reputational harm. Moreover, to the extent that these laws and regulations become more stringent, or if BlackRock is required to hold increased levels of capital to support its businesses, the Company’s financial performance or plans for growth may be adversely impacted.

BlackRock may also be adversely affected by a failure to comply with existing laws and regulations or by changes in the interpretation or enforcement of such laws and regulations, including those discussed above. 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 ~~BlackRock’s~~BTC’s 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 and regulated by, see ~~“Item~~Item 1, – Business – Regulation.”

New regulations informed by global standard setters and/or developed by various national authorities may expose BlackRock to increasing regulatory scrutiny and compliance costs in the jurisdictions in which it operates.

Policymaking workstreams focused on the financial services sector led by global standard setters, such as the Financial Stability Board (“FSB”), International Organization of Securities Commissions (“IOSCO”) and Bank for International Settlements, may lead to or inform new regulations in multiple jurisdictions in which BlackRock operates. Most recently, such workstreams have focused on areas such as products and activities of non-bank financial institutions, money market funds (“MMFs”), open-ended funds (“OEFs”), central counterparty margin practices and enhanced ESG disclosures. BlackRock is, and may become, subject to increasing regulation in these areas, see Item 1, Business – Regulation, including:

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Macroprudential Policies for Asset Managers: Concerns about liquidity and leverage risks in the asset management industry and wider market-based finance sector have been heightened since the COVID-19 pandemic and reinforced by the recent Liquidity Driven Investment events in the UK. Such events have prompted a broad review of existing regulations globally, including an assessment of the adequacy of certain structural market components in mitigating risks by the FSB, IOSCO, the US Securities and Exchange Commission (the “SEC”) and the Financial Stability Oversight Council (“FSOC”). In November 2022, the SEC proposed, among other things, amendments to the rules governing OEF liquidity risk management and swing pricing. The EU has also proposed reforms to increase the availability of liquidity management tools to OEFs, enhance reporting on the use of liquidity management tools by OEFs to national regulators and allow such regulators to require OEF managers to activate liquidity management tools in extreme market conditions. If any of these regulatory or policy actions result in broad application of macroprudential tools to OEFs or require BlackRock to make changes to

structural features of certain OEFs, it could limit BlackRock’s ability to offer products to certain clients and/or result in clients altering their investment strategies or allocations in a manner that is adverse to BlackRock.

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Global MMF Reforms: Following the market events of March 2020, US, EU and UK authorities initiated a review of existing regulatory frameworks with the aim of improving the resilience of MMFs in market downturns. The ongoing review of the EU Money Market Fund Regulation could result in significant changes to the rules around liquidity and how some MMFs price shares. The UK may materially depart from the EU approach as the UK develops its own legal and regulatory framework for MMFs domiciled or marketed in the UK. In the US, the SEC proposed changes to Rule 2a-7, the primary rule under the Investment Company Act of 1940 governing MMFs, including changes to required liquidity levels and certain operational aspects of such funds, and changes in pricing under certain circumstances. Such regulatory reforms, if adopted, could significantly and adversely impact certain of BlackRock’s MMF products.

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ESG and Sustainability: ESG and sustainability have been the subject of increased regulatory focus across jurisdictions. Globally, the International Sustainability Standards Board and the development of its disclosure standards may inform national regulators’ approaches on these topics. In the US, the SEC has proposed a series of rules that would require, among other things: (1) corporate issuers to make substantial climate-related disclosures in their periodic reports, including with respect to governance, risk management, business strategy, financial statement metrics and greenhouse gas (“GHG”) emissions and (2) enhanced ESG disclosures by investment companies and investment advisers in fund and adviser filings, including disclosures regarding ESG strategies and how ESG factors are considered, and GHG emissions disclosure by certain environmentally focused funds. The SEC also announced plans to propose rules to require enhanced disclosure regarding human capital management and board diversity for public issuers. It has also increased its scrutiny of disclosure and compliance issues relating to investment advisers’ and funds’ ESG strategies, policies and procedures. In addition, the US Department of Labor recently issued final rules clarifying that Employee Retirement Income Security Act of 1974, as amended (“ERISA”) plan fiduciaries can, but are not required to, consider the economic effects of ESG factors for purposes of investing ERISA plan assets and exercising voting rights with respect to plan investments. Some US states and/or state officials have adopted or proposed legislation or otherwise have taken official positions restricting or prohibiting state government entities from doing certain business with entities identified by the state as “boycotting” or “discriminating” against particular industries or considering ESG factors in their investment processes and proxy voting. Other states and localities may adopt similar legislation or other ESG-related laws and positions.

The EU has enacted numerous regulations on ESG and sustainability, including to require sustainability-related disclosure by financial market participants; require the integration of sustainability considerations into the investment and risk management processes of asset managers and other institutional investors; and make the advice and financial product distribution process more receptive to end-investor sustainability preferences. Further rules are expected to come into force in 2023 and beyond. In addition, requirements for asset managers to report against an EU-wide taxonomy of environmentally sustainable activities took effect in 2022, with a further phase expected in 2023, and new proposed regulation to enhance sustainability reporting for EU-based corporate issuers is expected to take effect in 2024. BlackRock’s EU asset management companies and investment firms will be required to publish granular disclosures relating to the ESG characteristics of their funds and portfolios starting in 2023. The EU also proposed a draft directive in 2022 that would apply new supply chain due diligence obligations pertaining to sustainability to a wide group of global companies. Furthermore, the EU released a consultation on ESG and sustainability factors in credit ratings. The EU and the UK Financial Conduct Authority (“FCA”) are developing guidelines for the use of ESG or sustainability related terms in fund names, focused on specifying a minimum threshold of assets meeting ESG or sustainable criteria for such funds.

In Asia, policymakers in Singapore, Hong Kong and Japan issued or proposed sustainability-related regulations. For instance, requirements for asset managers to integrate climate risk considerations in investment and risk management processes, together with relevant disclosure obligations, became effective in Hong Kong and Singapore in 2022. ESG fund naming and related disclosure rules became effective in Hong Kong in 2022 and in Singapore in January 2023. Further, Singapore and Japan announced enhanced sustainability reporting requirements for corporate issuers. In 2022, Japan finalized its voluntary code of conduct for ESG data and ratings providers. Meanwhile, Australia’s securities regulator issued information on “greenwashing”, and the Australian government is seeking input on the design and implementation of a climate-related financial disclosure regime.

As jurisdictions continue to develop legal frameworks on ESG and sustainability regulations, BlackRock faces increased fragmentation risk related to local implementation, resulting in complex and potentially conflicting compliance obligations and legal and regulatory uncertainty.

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LIBOR Transition: The global transition away from LIBOR continues to progress. Tenors of non-USD LIBOR ceased to be published at the end of 2021 while publication of most USD LIBOR settings is expected to continue through June 2023. In March 2022, the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was signed into law, establishing a framework for the replacement of LIBOR as a benchmark in US law contracts that reference certain tenors of USD LIBOR and do not provide for a clearly defined and practicable benchmark replacement rate following the cessation of publication. In July 2022, the Federal Reserve Board solicited public comment on proposed LIBOR transition regulations implementing the LIBOR Act. Other global regulatory authorities such as the FCA have issued consultations regarding the wind-down of LIBOR. If such proposals are not finalized, parties to unremediated contracts, and the markets more generally, face the potential for uncertainty, disputes, litigation and market disruption.

Global regulatory reforms could require BlackRock to alter its future business or operating activities, which could be time-consuming and costly, increase regulatory compliance costs, result in litigation, impede the Company’s growth and cause its AUM, revenue and earnings to decline. Regulatory reform may also impact BlackRock’s clients, which could cause them to change their investment strategies or allocations in manners that may be adverse to BlackRock.

Regulatory reforms in the ~~United States~~US expose BlackRock to increasing regulatory scrutiny, as well as regulatory uncertainty.

In recent years, a number of regulatory reforms have been proposed or fully or partially implemented in the ~~United States,~~US, and the level of regulatory scrutiny to which BlackRock is subject has increased. ~~Further changes to financial services regulation may arise, including in connection with~~These risks have been heightened as the ~~executive order issued in February 2017 (the “Executive Order”) directing the US Department~~pace of ~~the Treasury (“Treasury”) to identify~~ ~~laws, treaties, regulations and other policies that promote or inhibit certain core principles for financial regulation,~~ ~~that may directly or indirectly impact BlackRock’s business or operating activities.~~regulatory rulemaking has intensified. BlackRock, as well as its clients, vendors and distributors, have expended resources and altered certain of their business or operating activities to prepare for, address and meet the requirements that such regulatory reforms impose. While BlackRock is, orand may become, subject to numerous reform initiatives in the ~~United States,~~US, see ~~“Item~~Item 1, – Business – Regulation,” key regulatory reforms that may impact the Company include:

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~~Securities and Exchange Commission (“SEC”) Rulemakings for US Registered Funds and Investment Advisers:~~ ~~The SEC~~ and its staff are engaged 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. These efforts relate to, among other things, embedded leverage through the use of derivatives and other trading practices, cybersecurity, liquidity, enhanced regulatory and public reporting requirements and the evaluation of systemic risks. The SEC has adopted rules that include (i) new monthly and annual reporting requirements for certain US registered funds; (ii) enhanced reporting regimes for investment advisers; and (iii) implementing liquidity risk management programs for ETFs and open-end funds, other than money market funds. These rules increase, and any additional rules or regulatory initiatives resulting from the SEC's efforts may increase, BlackRock’s public reporting and disclosure requirements, which could be costly and may impede BlackRock’s growth.

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Antitrust Rules and Guidance: In 2020, the FTC proposed certain changes to rules enacted under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR”) that require parties to certain transactions to provide the FTC and the Antitrust Division of the Department of Justice (the “DOJ”) prior notice and observe a waiting period before consummation of such transactions. The proposals would: (1) require that investors aggregate holdings in an issuer across all associated funds when assessing HSR filing and exemption thresholds and (2) create a new exemption for acquisitions resulting in aggregate holdings of up to 10% of an issuer, which would be unavailable to investors holding interests of more than 1% in competing firms. If enacted as drafted, the proposed aggregation requirement could, absent applicable exemptions, substantially increase BlackRock’s pre-merger notification obligations, which may be costly, impair funds’ ability to trade freely creating significant tracking error and cash drag for index funds and opportunity costs for actively managed funds, require implementation of monitoring tools and introduce additional compliance burdens for both BlackRock and the companies in which it invests. In instances where filing a pre-merger notification is not practicable, the proposed changes may serve to limit the size of BlackRock’s aggregate position in certain issuers if BlackRock is unable to satisfy the revised regulatory requirements. In 2021, the FTC voted to withdraw its approval of the Vertical Merger Guidelines, previously issued jointly with the DOJ. In 2022 the FTC and DOJ jointly released a request for public comment on modernizing the agencies’ approach to the merger guidelines, including whether to dispense with the guidelines’ traditional distinction between the treatment of horizontal and vertical mergers. Such changes could have an effect on the ability of the Company to expand its services through strategic investments or acquisitions.

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~~SEC ETF Rule:~~ In September 2019, the SEC adopted rule 6c-11 under the Investment Company Act of 1940 (the “Investment Company Act”) known as the “ETF Rule”. The ETF Rule will allow ETFs that satisfy certain conditions to operate without first obtaining individual exemptive relief from the SEC. The ETF Rule is designed to create a clear and consistent regulatory framework for most ETFs operating today and will impact all BlackRock ETFs registered under the Investment Company Act (including ~~iShares~~ ETFs). The ETF Rule and related form amendments became effective in December 2019. The form amendments will have a transition period of one year following the effective date. In addition, the ETF Rule rescinds, one year after its effective date, the existing exemptive relief for all eligible ETFs (including ~~iShares~~ ~~ETFs).~~

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SEC Rulemakings for US Registered Funds and Investment Advisers: The SEC has engaged in various initiatives and reviews that seek to improve and modernize the regulatory structure governing the asset management industry and registered investment companies. For example, in October 2022, the SEC adopted rules requiring certain funds to provide tailored fund shareholder reports and proposed amendments expanding the scope of the application of the rule governing fund names, including to, among other things, fund names that include ESG or similar terms.

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~~Standards of Conduct Rulemaking:~~ In June 2019, the SEC adopted a package of rulemakings and interpretations addressing investment adviser and broker-dealer standards of conduct. The package includes new rules requiring registered advisers and registered broker-dealers to provide a relationship summary to retail investors, a new rule establishing a standard of conduct for broker-dealers when making recommendations to retail customers, and two new interpretations under the Investment Advisers Act of 1940 (the “Advisers Act”). The rulemakings and interpretations could increase BlackRock’s disclosure obligations, impact distribution arrangements between BlackRock and its distribution partners, create compliance and operational challenges for BlackRock’s distribution partners and limit BlackRock’s ability to provide certain other services to its clients. The Department of Labor (“DoL”) has also indicated it intends to propose a standards of conduct rule in 2020.

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Designation as a Systemically Important Financial Institution (“SIFI”): The FSOC has the authority to designate nonbank financial institutions as SIFIs in the US under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In July 2014, the FSOC pivoted from an entity-specific approach and indicated that it would focus on a products and activities-based approach to designation in connection with addressing potential risks in the financial system related to asset management, which was re-affirmed in December 2019 guidance. However, recent public reports and statements by FSOC members have suggested a willingness to support a repeal or amendment to certain parts of the 2019 guidance to provide the FSOC more flexibility to designate nonbank financial institutions as SIFIs. If BlackRock is designated as a SIFI, it could become subject to enhanced regulatory requirements and direct supervision by the Federal Reserve.

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~~SEC Derivatives Rule for US Registered Funds~~: In November 2019, the SEC proposed a rule designed to enhance the regulation of the use of derivatives by registered investment companies, including mutual funds (other than money market funds), ETFs and closed-end funds, as well as business development companies. The proposed rule would permit such funds to use derivatives, such as forwards, futures, swaps and written options, that create future payment obligations, provided that the funds comply with certain conditions including adopting a derivatives risk management program and complying with a limit on the amount of leverage-related risk that a fund may obtain, based on value-at-risk. If adopted without change, the proposed rule would increase BlackRock’s disclosure and compliance obligations and may impact certain funds’ usage of derivatives and investment strategy.

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SEC Rules Governing Security-Based Swaps: In December 2021, the SEC proposed rules in connection with security-based swaps (“SBS”) transactions to require public reporting of large SBS positions. These rules, if adopted as proposed, may affect the types of transactions BlackRock may choose to execute in SBS or other SBS-related assets, introduce or increase costs relating to such transactions, and impact the liquidity in the SBS markets in which BlackRock transacts.

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~~SEC Guidance on Proxy Voting Responsibilities of Investment Advisors~~: In August 2019, the SEC published guidance to assist investment advisers with their proxy voting responsibilities under the Advisers Act. The guidance confirmed that investment advisers’ fiduciary duties of care and loyalty to their clients apply to proxy voting and encouraged advisors with voting authority to review their policies and procedures in detail and consider whether more analysis may be required under certain circumstances, including when a proxy advisory firm’s services are retained. This guidance could impact voting arrangements between BlackRock and its clients, and lead to additional compliance, operational and disclosure obligations for BlackRock.

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SEC Proposed Rules on Private Fund Advisers: During 2022, the SEC proposed new rules and amendments to enhance regulation of private fund advisors. These include a series of proposed amendments to Form PF for registered investment advisers that: (1) add new required disclosures, (2) require advisers to file reports within one business day for certain significant events, (3) lower the threshold for large private equity adviser reporting, (4) increase reporting obligations on large liquidity fund advisers, and (5) enhance reporting on basic information about advisers and the funds they advise. The SEC proposed additional rules that would, among other things, require registered private fund advisers to: (1) provide quarterly reports to investors of fund performance, fees and expenses, (2) obtain an annual audit for each fund and (3) distribute to investors a fairness opinion and summary of certain material business relationships with the opinion provider in connection with an adviser-led secondary transaction. The proposed rules would also prohibit private fund advisers from engaging in certain activities and practices deemed to be contrary to the public interest and investor protection, providing certain types of preferential terms for selected investors and providing any other forms of preferential treatment unless disclosed. These rules and amendments, if adopted as proposed, could significantly increase BlackRock’s reporting, disclosure and compliance obligations and create operational complexity for BlackRock’s alternatives products.

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~~The Volcker Rule~~: Provisions of Dodd-Frank referred to as the “Volcker Rule” created a new section of the Bank Holding Company 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”). The Bank Holding Company Act by its terms does not currently apply to BlackRock. The Federal Reserve has taken the position that PNC’s ownership interest in BlackRock, which is approximately 22%, in combination with certain other factors, causes BlackRock to be treated as a nonbank subsidiary of PNC for the purpose of the Bank Holding Company Act and that BlackRock is subject to banking regulation. Based on this interpretation of the Bank Holding Company Act, the Federal Reserve could initiate a process to formally determine that PNC controls BlackRock under the terms of the Bank Holding Company Act. Any such determination, if successful, would subject BlackRock to current and future regulatory requirements under the Bank Holding Company Act, including the Volcker Rule. Conformance with the Volcker Rule may require BlackRock to sell certain seed and co-investments that it holds in its covered funds, which may occur at a discount to existing carrying value depending on market conditions.

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SEC Rule 15c2-11: Rule 15c2-11 governs the submission of quotes into quotation systems by broker-dealers and has historically been applied to the OTC equity markets. However, the SEC has stated that it intends to apply the rule to fixed income securities. While SEC staff issued additional no-action relief in November 2022 delaying implementation of the rule to segments of the fixed income markets until 2025, full implementation may disrupt primary and secondary market liquidity.

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~~Designation as a systemically important financial institution (“SIFI”):~~ ~~The~~Financial Stability Oversight Council (“FSOC”) has the authority to designate nonbank financial institutions as SIFIs. In July 2014, the FSOC pivoted from its previous entity-specific approach to designation and indicated that it would focus on a products and activities-based approach to designation in connection with addressing potential risks in the financial system related to asset management. In December 2019, the FSOC re-affirmed this approach when it voted to change its methodology for assessing financial stability to a products and activities-based approach. This reduces the risk of an entity-level designation, however the FSOC retains the authority to designate an entity if an activities-based approach does not adequately address potential risks. In the event that BlackRock is designated as a SIFI under Dodd-Frank, it could become subject to enhanced regulatory requirements and direct supervision by the Federal Reserve.

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Proposed Rules on Regulation ATS: In January 2022, the SEC proposed amendments to Regulation ATS. The proposed rules would expand the types of systems that could fall within the definition of “exchange” and extend Regulation ATS and Regulation Systems Compliance and Integrity to systems involving US government securities trading. If enacted as proposed, these rules may impact certain functionality and tools offered by Aladdin, which may increase compliance costs for BlackRock.

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Proposed US Treasury Clearing Mandate: In September 2022, the SEC proposed rules that would mandate central clearing of certain US Treasury transactions. If enacted as proposed, the rules would require many market participants, including a large number of BlackRock funds and accounts, to clear cash Treasury securities transactions and Treasury repurchase transactions through a clearing agency registered with the SEC, which could result in increased transaction costs for our clients.

Regulatory reforms in the ~~United States~~US could require BlackRock to alter its future business or operating activities, which could be time-consuming and costly, increase regulatory compliance costs, result in litigation, impede the Company’s growth and cause its 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.

International regulatory reforms expose BlackRock and its clients to increasing regulatory scrutiny, as well as regulatory uncertainty.

BlackRock’s business and operating activities are subject to increasing regulatory oversight outside of the ~~United States~~US and the Company may be affected by ~~a number of~~several proposed or ~~fully or partially~~ implemented reform initiatives in the EMEA and the Asia-Pacific ~~region,~~regions, as well as volatility associated with international regulatory ~~uncertainty, including:~~uncertainty. While BlackRock is, and may become, subject to numerous reform initiatives internationally, see Item 1, Business – Regulation, key reforms in these regions include:

European Union

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EU Market Access and Outsourcing: The EU legislature continues to consider proposals amending both the Alternative Investment Fund Managers Directive (“AIFMD”) and Directive on Undertakings for Collective Investment in Transferable Securities fund frameworks. The proposed changes remain broadly consistent with the current regulatory framework but with increased notification requirements to national regulators and the European Securities and Markets Authority (“ESMA”), enhanced liquidity management requirements and new requirements for loan originating funds. There is also a proposal to require notification for instances of significant delegation of portfolio management or risk management functions to entities located outside the EU. ESMA would then be required to present market analysis and supervisory peer review every two years to the European Parliament (“EP”). These proposals and any further regulatory actions could impact delegated activities, increase compliance costs and impact products and services offered to EU clients.

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Enhanced Regulatory Scrutiny of Technology Service Providers to Financial Services Firms: The EU’s Digital Operational Resilience Act (“DORA”), which focuses on direct regulation of providers and users of technology and data services, entered into force in January 2023, with the requirements expected to become applicable in January 2025. DORA will, among other things: (1) introduce additional governance, risk management, incident reporting, resilience testing and information sharing requirements to several of BlackRock’s European entities and certain Aladdin clients; and (2) subject Aladdin to broad additional oversight. In parallel with DORA, the UK has signaled its intention to provide HMT powers to designate certain third parties to the financial sector as “critical” and subject them to oversight by UK regulators. This regime is expected to build on existing UK requirements regarding firms’ operational resilience and use of technology.

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Central Securities Depository Regulation: Aspects of the settlement discipline regime introduced by the Central Securities Depository Regulation came into effect in February 2022. These include rules for trade allocation and confirmation processing, along with cash penalties for failed transactions. However, the mandatory buy-in regime is delayed to June 2025. Implementation of the regime required new operational mechanisms to facilitate compliance, which may increase required resources and cost.

United Kingdom

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Review of Retained EU Law: Under the Financial Services and Markets Bill (the “FSM Bill”) introduced in July 2022, retained EU law relating to financial services and markets will be revoked and UK financial regulators will be delegated substantial rulemaking powers to amend and restate such retained laws. Several UK regimes are currently subject to regulatory changes as the UK considers changes to retained EU rules following the UK’s exit from the EU, including the Wholesale Markets Review of the revised Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation frameworks, consumer disclosures, and the regime for non-UK-based funds that are recognized for sale into the UK, which is also currently under government review.

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Overseas Fund Regime (“OFR”): The OFR, the simplified regime through which non-UK funds can register with the FCA to be marketed to UK retail investors, was enacted in February 2022 and is expected to be implemented over the next two years. The OFR will require consumer protection regimes in EU countries where BlackRock funds are domiciled to be found equivalent to the UK’s regime in order to market such funds in the UK.

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Conduct Regulation: The FCA continues to focus on conduct regulation, including the implementation of the Consumer Duty by all asset management firms, including BlackRock’s UK subsidiaries. The Consumer Duty rules require firms to act to deliver good outcomes for retail customers in their manufacture and distribution of products and services, in respect of price and value, consumer understanding and consumer support. The rules are expected to come into force in July 2023. Any failure to meet the FCA’s regulatory expectations could expose BlackRock to regulatory sanctions and increased reputational risk.

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Edinburgh Reforms: In December 2022, the UK announced wide-ranging reforms to financial services regulation which build on the FSM Bill, marking further potential divergence from EU regimes. Potential impacts to the asset management sector include: (1) repeal and replacement of the packaged retail and insurance based investment products ("PRIIPs") Regulation; (2) review of the UK’s green finance strategy, including potential regulation of ESG data providers; (3) review of governance through the Senior Managers and Certification Regime; (4) repeal of EU legislation on the European Long-Term Investment Fund; (5) market infrastructure reforms; (6) reassessment of the boundary between investment advice and financial guidance; and (7) independent review of the UK investment research landscape.

Asia-Pacific

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Regulatory Environment in China: The Company’s operations in China are subject to a number of regulatory risks, including an evolving regulatory environment and complex data security and data transfer regulations. These factors may increase compliance risk and costs, limit the Company’s ability to source and execute new investment opportunities and lead to impairment losses on its investments. Restrictions on the transfer of the Company’s Chinese onshore data to offshore entities also may limit BlackRock’s ability to aggregate, report and monitor such data on its global platform. In addition, a number of regulators in China have jurisdiction over BlackRock’s business operations, increasing operational and regulatory engagement complexity. These risks may be further heightened by additional scrutiny by Chinese regulators of certain sectors, such as technology and other industries that might be deemed to be of national importance.

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~~British Exit from the EU~~: The UK left the EU on January 31, 2020 and entered an eleven-month transition period during which the UK, and UK-based entities, will retain the rights and obligations of EU membership. Substantial uncertainty remains surrounding the future relationship between the UK and EU, but the UK government has indicated its preference for negotiating a trade deal with the EU before the end of the transition period rather than continuing Single Market or Customs Union membership. BlackRock is implementing a number of steps to prepare for various outcomes, including there being no agreement in place when the transition period expires. These steps, many of which are time consuming and costly, include effecting organizational, governance and operational changes, applying for and receiving licenses and permissions in the EU, and engaging in client communications, and are expected to add complexity to BlackRock’s European operations. In addition, depending on the terms of the future relationship between the UK and the EU, BlackRock may experience further organizational and operational challenges and incur additional costs in connection with its European operations during the transition period and post-Brexit, which may impede the Company’s growth or impact its financial performance.

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~~Reform of investment markets:~~ In Europe, the Markets in Financial Instruments Directive (“MiFID”) governing the provision of investment services has been revised and is accompanied by an associated Regulation (together with certain secondary regulation, “MiFID II”). The Regulation’s requirements generally apply consistently across the EU. The MiFID II reforms, which came into force in January 2018, are substantive, materially changing market transparency requirements, enhancing protections afforded to investors, and increasing operational complexity for the Company. New disclosure and reporting obligations have been introduced, together with restrictions on how research may be funded and the nature of payments that may be provided to distributors. MiFID II, together with other market structure reforms, force more derivatives to be traded on-exchange, introduce new commodity derivatives position limits and significantly enhance reporting obligations associated with individual trades. The broad nature of the MiFID II reforms impact BlackRock’s product development, client servicing and distribution models. In particular, additional disclosures are required to be made in respect of costs and fees BlackRock charges to certain of its clients. MiFID II also impacts the ability of certain of BlackRock’s distribution partners to accept commissions from BlackRock for distributing BlackRock funds. Similar reforms have been introduced in Switzerland and Australia.

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~~Revised EU capital requirements for investment firms~~: In December 2017, the European Commission published a proposal for a new Directive and Regulation on prudential requirements for MiFID investment firms. The proposal passed the EU legislative process and the final texts of the Regulation and Directive were published in December 2019. The new legislative package, which comes into effect in 2021, will result in changes to the amount of regulatory capital BlackRock is required to hold in the EU and how such capital is calculated, as well as introduce revised disclosure obligations for large investment firms.

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~~EU market access:~~ In 2019, the European Commission commenced a review of the Alternative Investment Fund Managers Directive to assess, among other things, the effectiveness of regulation on third country fund marketing passports and the continuation of national private placement regimes. To the extent the review results in formal legislation that limits the scope of existing permitted activities and EU market access rights for asset management firms with non-EU operations, BlackRock’s ability to access EU-based clients may be adversely affected.

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~~Senior Managers and Certification Regime~~: In the UK, the FCA extended the Senior Managers and Certification Regime (“SMCR”) to all financial services firms in December 2019. The regime imposes greater accountability and responsibility across the senior management of UK financial services firms by making individuals in impacted firms more accountable for conduct and competence. SMCR impacts nearly all staff of the Company in the UK, and requires extensive documentation to support senior managers and evidence the discharge of their responsibilities.

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~~UK asset management market study:~~ The FCA has adopted requirements for UK fund managers to assess whether the retail collective investments they manage offer “value” to investors. Beginning in 2020, the Company will be required annually to disclose the conclusions of its assessment based upon various factors including cost, performance and comparable services. If “value” has not been provided to consumers, the Company will need to address any identified deficiencies. The FCA also requested that the UK’s Competition and Markets Authority (“CMA”) assess the investment consultant and fiduciary markets. The CMA’s final report identified a number of competition issues in such markets and the UK regulatory regime will be revised in 2020 to introduce mandatory tendering of investment consultancy and fiduciary management services, and new standards of disclosure of fees and performance. The CMA’s remedies could have a significant impact on the Company’s ability to enter into fiduciary and investment management mandates with UK pension fund clients.

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~~EU Sustainability Regulation~~: In 2018, the European Commission introduced a number of regulatory proposals to underpin sustainable investment products; require disclosure of sustainability-related information by market participants, investments products, and issuers; and require the integration of sustainability considerations into the investment and risk management processes of asset managers and other institutional investors. Rules arising from the reform proposals will come into effect beginning in 2021.

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~~Macroprudential policies for asset managers:~~ Certain European policymakers continue to raise concerns about liquidity and leverage risks in the asset management industry and wider market-based finance sector. These concerns may lead to macroprudential policy measures being applied to open-ended investment funds broadly, or regulation being introduced that requires changes to the

structural features of certain open-ended investment funds. Either eventuality could limit BlackRock’s ability to offer products to certain clients and/or result in clients altering their investment strategies or allocations in a manner that is adverse to BlackRock.

International regulatory reforms could require BlackRock to alter its future business or operating activities, which could be time-consuming and costly, increase regulatory compliance costs, result in litigation, impede the Company’s growth and cause its AUM, revenue and earnings to decline. Regulatory reform may also impact BlackRock’s ~~internationally-based~~ clients, which could cause them to change their investment strategies or allocations in manners that may be adverse to BlackRock.

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 Securities and Exchange Commission, Office of the Comptroller of the Currency (“OCC”), ~~DoL,~~Department of Labor, Commodity Futures Trading Commission, Financial Conduct Authority, Commission de Surveillance du Secteur Financial and Federal Reserve. Similarly, from time to time, BlackRock receives subpoenas or other requests for information from various US state and federal as well as non-US governmental and regulatory authorities in connection with certain industry-wide, company-specific or other investigations, proceedings or litigations. 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 governmental or regulatory authority to institute proceedings and/or impose sanctions for violations. Any such action may also result in litigation by investors in BlackRock’s funds, other BlackRock clients or BlackRock’s ~~shareholders, which~~shareholders. Such legal proceedings 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.

AsDamage to BlackRock’s reputation may harm its business.

BlackRock’s reputation is critical to its relationships with its clients, employees, shareholders and business partners. BlackRock’s reputation may be harmed by, among other factors, regulatory, enforcement or other governmental actions, technology or operational failures, poor investment performance, ineffective management or monitoring of key third-party relationships, ransomware or other cybersecurity incidents, privacy incidents, employee errors or misconduct, failures to manage risks or conflicts of interest, or legal actions related to BlackRock or its products and services. In addition, BlackRock’s business, scale and investments subject it to significant media coverage and increasing attention from a broad range of stakeholders. This heightened scrutiny has resulted in negative publicity and adverse actions for BlackRock and may continue to do so in the future. For example, different stakeholder groups have divergent views on ESG-related matters, including in the countries in which BlackRock operates and invests, as well as in states and localities where BlackRock serves public sector clients. This divergence has and continues to ~~grow,~~increase the risk that any perceived or actual action or lack thereof by BlackRock on such matters will be viewed differently by various stakeholders and adversely impact BlackRock’s reputation and business, including through redemptions or terminations by clients, and legal and governmental action and scrutiny. BlackRock’s global presence and investments on behalf of its clients around the world could also lead to heightened scrutiny and criticism in an increasingly fragmented geopolitical landscape. For example, BlackRock has received criticism from some stakeholders because of its operations and investments on behalf of clients in certain countries, including China. These criticisms could adversely impact BlackRock’s reputation and business. In addition, the increasing popularity of social media and non-mainstream Internet news sources may lead to faster and wider dissemination of adverse publicity or inaccurate information about BlackRock, making effective remediation more difficult. Damage to BlackRock’s reputation may impact BlackRock’s ability to attract and retain clients, employees, shareholders and business partners, which may cause its AUM, revenue and earnings to decline.

A failure to effectively manage potential conflicts of interest could result in litigation or enforcement actions and/or adversely affect BlackRock’s business and reputation, which may cause BlackRock’s AUM, revenue and earnings to decline.

As a global investment management firm that provides investment and technology services to a diverse range of clients, the Company must routinely address and manage 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.~~While BlackRock has ~~procedures~~policies, controls and ~~controls~~disclosure protocols in place ~~that are designed~~ to ~~detect~~manage and address ~~these issues. However, appropriately dealing with~~potential conflicts of interest, isidentifying and mitigating conflicts of interest can be complex and ifis the ~~Company~~subject of increasing regulatory and media scrutiny. It is possible that actual, potential or perceived conflicts could give rise to investor or client dissatisfaction, adverse publicity, litigation or enforcement actions. In particular, BlackRock’s broad range of investment, advisory and technology offerings, and its focus on providing clients with whole portfolio solutions, may result in clients working with multiple BlackRock businesses and/or BlackRock being engaged by institutions that have a nexus to industries or jurisdictions in which BlackRock operates, which may increase the potential for actual or perceived conflicts of interest and improper information sharing. To the extent that BlackRock fails, or appears to fail, to deal appropriately with any conflict of interest, it may face adverse publicity, reputational damage, litigation, regulatory proceedings, orclient attrition, penalties, fines and/or sanctions, any of which may cause BlackRock’s AUM, revenue and earnings to decline.

A subsidiary of BlackRock is subject to US banking regulations that may limit its business activities.

BlackRock’s trust bank subsidiary, which is a national banking association chartered by the OCC, is subject to OCC regulation and capital ~~requirements.~~requirements that may limit its business activities. The OCC has broad supervisory and enforcement authority over BlackRock’s trust bank. ~~Being~~Having a subsidiary subject to banking regulation may put BlackRock at a competitive disadvantage because certain of its competitors are not subject to ~~these limitations. In addition, as described in “Item 1-Business-Regulation”, as~~the limitations imposed by such regulation.

The implications of December 31, 2019, PNC owned approximately 22% of BlackRock’s capital stock, which may subject BlackRock to banking regulation as a nonbank subsidiary of PNC. The Bank Holding Company Act by its terms does not currently apply to BlackRock. The Federal Reserve has taken the position that this ownership interest, in combinationcomplying with certain other factors, causes BlackRock to be treated as a nonbank subsidiary of PNC for the purpose of the Bank Holding Company Act and that BlackRock is subject to banking regulation. Based on this interpretation of the Bank Holding Company Act, the Federal Reserve could initiate a process to formally determine that PNC controls BlackRock under the terms of the Bank Holding Company Act. Any such determination, if successful, would subject BlackRock to current and future regulatory requirements under the Bank Holding Company Act, including the Volcker Rule, that are more restrictive than those the Company is subject to under other applicable laws, as well as the enforcement authority of the Federal Reserve, which includes the power to impose substantial fines and other penalties for violations. Any effort by BlackRock to contest a control determination by the Federal Reserve may be costly and complex and may not result in a reversal of such determination.

~~Failure~~threshold limits and/or any failure to comply with ownership reporting requirements could result in harm to BlackRock’s reputation, impact the performance of certain BlackRock funds 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 further enhance its monitoring and reporting functions. 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 may occur in the future. Any such errors may expose BlackRock to monetary penalties or other sanctions, which could have an adverse effect on BlackRock’s reputation and may cause its AUM, revenue and earnings to decline.

Moreover, as BlackRock’s business grows it is becoming subject to a greater number of regulatory, industry-level or issuer-specific threshold limits that may prevent BlackRock from holding positions in certain equity securities, securities convertible into equity securities or futures contracts in excess of certain thresholds. Although BlackRock is actively engaged in regulatory, issuer-specific and structural initiatives to create additional investment capacity, threshold limits may nonetheless prevent the purchase of certain securities which may, in turn, impact the performance of certain BlackRock index funds by increasing tracking error relative to the funds’ benchmarks and impact the performance of certain BlackRock actively managed funds by preventing them from taking advantage of alpha generating opportunities.

BlackRock has been the subject of commentary citing concerns about the scale of its index investing ~~and~~business, as well as purported competition issues relating to the common ~~ownership.~~ownership theory.

As a leader in the index investing and asset management industry, BlackRock has been the subject of commentary citing concerns about the growth of index investing ~~as well as perceived competition issues associated with asset managers managing stakes in multiple companies within certain industries, known as “common ownership”. The~~and concentrated proxy voting power. Some commentators ~~argue~~have argued that continued growth of index funds ~~have~~has the potential to ~~distort investment flows, create~~impact stock market competitiveness by exacerbating stock price ~~bubbles,~~moves and market volatility. Some commentators, regulators and

lawmakers have also argued that index managers have accumulated outsized influence through the proxy voting power their clients have assigned them. Some have proposed limitations on the ability of index fund managers to vote on behalf of their clients, or ~~conversely, exacerbate a decline~~that voting and engagement on certain topics should trigger changes in ~~market prices.~~regulatory status. Additional commentary focuses on ~~competition issues associated with~~the common ownership ~~and~~theory, an academic theory stating that minority ownership of multiple companies within a single industry by the same investor leads to anticompetitive effects. This theory purports to link aggregated equity positions in certain ~~concentrated~~ industries ~~managed by asset managers~~ with higher consumer prices and executive compensation and lower wages and employment rates, among other things.In the US, the FTC ~~over~~cited common ownership as a disqualifying factor in a proposed exemption from pre-merger notification rules and as a consideration underlying its consultation on rules applying to acquisitions of voting securities by investment entities. In 2021, the ~~course~~FTC identified common ownership as a key enforcement area and passed a resolution empowering individual commissioners to investigate shareholder conduct in connection with common ownership. In 2022, the FTC and Antitrust Division of ~~late 2018 heldhearings~~the DOJ solicited public input on ~~Competition and Consumer Protection in~~changes to their merger guidelines, including a question on whether the 21^st ~~Century, one of which included a discussion of~~guidelines’ approach to common ~~ownership.The hearings~~ownership is adequate. Common ownership may be given greater consideration in FTC and DOJ investigations, studies, rule proposals, policy decisions and/or the ~~subject~~scrutiny of ~~a report in 2020. In the EU, the European Parliament Committee on Economic~~mergers and ~~Monetary Affairs is expected to publish a report~~acquisitions. The debate on common ownership is still on the agenda of competition regulators globally, and common ownership may continue to be a consideration for the European Commission ~~may do so~~(“EC”), among others, including in ~~2020.~~the assessment of mergers and investigations. For example, EC and EP reports in 2020 suggested that more evidence was required on the impact of common ownership on competition, and a committee of the Australian House of Representatives held an inquiry in 2021 on the implications of common ownership and capital concentration on Australian companies and markets. There is substantial literature ~~highlighting the~~

~~benefits of index investing, as well as~~ casting doubt on the assumptions, data, methodology and conclusions associated with the common ownership ~~arguments. Some~~theory and competition regulators, including at the FTC and the UK Competition & Markets Authority, have acknowledged that the debate around the theory remains unsettled. Nevertheless, some commentators have proposed remedies, including limits on the ownership stakes ~~managed by asset managers~~of common owners that, if enacted into policy, ~~measures,~~ could have a negative impact on the capital markets, as well as increase ~~transaction~~ costs and limit the availability of products for investors. ~~This may,~~Such policy solutions could, in turn, adversely affect BlackRock.

New tax legislation or changes to existing US and non-US 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 directly or indirectly affected by tax legislation and regulation, or the modification of existing tax laws, by US or non-US tax authorities.

In the US, the Inflation Reduction Act of 2022 ("IRA") introduced new provisions including a corporate book minimum tax and an excise tax on net stock repurchases. BlackRock does not expect the IRA to have a material impact on its consolidated financial statements. In addition, legislation at both the US federal and state level has been previously proposed ~~in the House and Senate~~ to enact a financial transaction tax (“FTT”) on stocks, bonds and a broad range of financial instruments and derivative transactions. In the EU, certain Member States have also enacted similar FTTs and the ~~European Commission~~EC has proposed legislation to harmonize these taxes and provide for the adoption of EU-level legislation applicable to some (but not all) EU Member States. If enacted as proposed, FTTs could have an adverse effect on BlackRock’s financial results and clients’ performance results.

The application of tax regulations involves numerous uncertainties, and in the normal course of business US and non-US 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. Similarly, the Company manages assets in products and accounts that have investment objectives which may conform to tax positions adopted by BlackRock or to specific tax rules. To the extent there are changes in tax law or policy, or regulatory challenges to tax positions adopted by BlackRock, the value or attractiveness of such investments may be diminished and BlackRock may suffer financial or reputational harm.

~~RISKS RELATED TO BLACKROCK’S SIGNIFICANT SHAREHOLDER~~

PNC owns 22% of BlackRock’s capital stock. Future sales or distributions of BlackRock’s common stock in the public market by the Company or PNC could adversely affect the trading price of BlackRock’s common stock.

As of December 31, 2019, PNC owned 22% of the Company’s capital stock. Sales or distributions of a substantial number of shares of BlackRock’s common stock in the public market, or the perception that these sales or distributions might occur, may cause the market price of BlackRock’s 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 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.

As discussed in BlackRock’s proxy statement, pursuant to 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;~~

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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 the persons holding such majority of the total voting power prior to the occurrence of any such merger, issuance of shares or similar transaction, or any sale of all or substantially all assets of BlackRock;

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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;

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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;

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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 New York Stock Exchange.~~

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

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

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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;

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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.~~

Item 1B. Unresolved Staff Comments

The Company has no unresolved comments from the ~~SEC~~Securities and Exchange Commission (“SEC”) staff relating to BlackRock’s periodic or current reports filed with the SEC pursuant to the Exchange ~~Act~~Act..

Item 2. Properties

BlackRock’s new principal office, which is leased, is located at 50 Hudson Yards, New York, New York, with occupancy beginning in December 2022. In addition, BlackRock continues to lease the office space for its prior principal office located at 55 East 52nd Street, New York, New ~~York. BlackRock leases additional office space in New~~ York ~~City at~~as well as 40 East 52nd Street and 49 East 52nd ~~Street, and~~through April 2023 when the leases expire. BlackRock leases additional office space throughout the world, including Atlanta, Belgrade (Serbia), ~~Boston,~~Budapest, Edinburgh, ~~Mumbai (India),~~ Gurgaon (India), Hong Kong, London, ~~Melbourne (Australia)~~Mumbai (India), ~~Mexico City, Munich,~~ Princeton (New Jersey), San Francisco, ~~Seattle, Frankfurt (Germany), Santa Monica, Budapest, Singapore, Sydney, Taipei and Tokyo.~~Singapore. The Company also owns an 84,500 square foot office building in Wilmington, ~~(Delaware)~~Delaware and a 43,000 square foot data center in Amherst, ~~(New York).~~New York.

Item 3. Legal Proceedings

From time to time, BlackRock receives subpoenas or other requests for information from various US federal and state governmental and regulatory authorities and international governmental and regulatory authorities in connection with industry-wide or other investigations or proceedings. It is BlackRock’s policy to cooperate fully with such matters. The Company, certain of its subsidiaries and employees have been named as defendants in various legal actions, including arbitrations and other litigation arising in connection with BlackRock’s activities. Additionally, BlackRock-advised investment portfolios may be subject to lawsuits, any of which potentially could harm the investment returnsFor a discussion of the ~~applicable portfolio or result~~Company’s legal proceedings, see Note 16. Commitments and Contingencies, in the ~~Company being liable~~notes to the ~~portfolios for any resulting damages.~~consolidated financial statements contained in Part II, Item 8.

On May 27, 2014, certain 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 US District Court for the District of New Jersey against BlackRock Advisors, LLC, BlackRock Investment Management, LLC and BlackRock International Limited under the caption ~~In re BlackRock Mutual Funds Advisory Fee Litigation~~. In the lawsuit, which purports to be brought derivatively on behalf of the Funds, the plaintiffs allege that the defendants violated Section 36(b) of the Investment Company Act by receiving allegedly excessive investment advisory fees from the Funds. On June 13, 2018, the court granted in part and denied in part the defendants’ motion for summary judgment. On July 25, 2018, the plaintiffs served a pleading that supplemented the time period of their alleged damages to run through the date of trial. The lawsuit seeks, among other things, to recover on behalf of the Funds all allegedly excessive advisory fees received by the defendants beginning twelve months preceding the start of the lawsuit with respect to each Fund and ending on the date of judgment, along with purported lost investment returns on those amounts, plus interest. The trial on the remaining issues was completed on August 29, 2018. On February 8, 2019, the court issued an order dismissing the claims in their entirety. The plaintiffs filed a notice of appeal on March 8, 2019, which remains pending. The defendants believe the claims in this lawsuit are without merit.

~~On June 16, 2016,~~ ~~iShares~~ ~~Trust, BlackRock, Inc. and certain of its advisory subsidiaries, and the directors and certain officers of the~~ ~~iShares~~ ~~ETFs were named as defendants in a purported class action lawsuit filed in California state court. The lawsuit was filed by investors in certain~~ ~~iShares~~ ETFs (the "ETFs"), and alleges the defendants violated the federal securities laws by failing to adequately disclose in prospectuses issued by the ETFs the risks to the ETFs’ shareholders in the event of a "flash crash." The plaintiffs seek unspecified monetary and rescission damages. The plaintiffs’ complaint was dismissed in December 2016 and on January 6, 2017, the plaintiffs filed an amended complaint. On April 27, 2017, the court partially granted the defendants’ motion for judgment on the pleadings, dismissing certain of the plaintiffs’ claims. On September 18, 2017, the court issued a decision dismissing the remainder of the lawsuit after a one-day bench trial. On December 1, 2017, the plaintiffs appealed the dismissal of their lawsuit and, on January 23, 2020, the California Court of Appeal affirmed the trial court’s dismissal. The defendants believe the claims in this lawsuit are without merit.

On April 5, 2017, BlackRock, Inc., BlackRock Institutional Trust Company, N.A. (“BTC”), the BlackRock, Inc. Retirement Committee and various sub-committees, and a BlackRock employee were named as defendants in a purported class action lawsuit brought in the US District Court for the Northern District of California by a former employee on behalf of all participants and beneficiaries in the BlackRock employee 401(k) Plan (the “Plan”) from April 5, 2011 to the present. The lawsuit generally alleges that the defendants breached their duties towards Plan participants in violation of the Employee Retirement Income Security Act of 1974 by, among other things, offering investment options that were overly expensive, underperformed unaffiliated peer funds, focused disproportionately on active versus passive strategies, and were unduly concentrated in investment options managed by BlackRock. On October 18, 2017, the plaintiffs filed an Amended Complaint, which, among other things, added as defendants certain current and former members of the BlackRock Retirement and Investment Committees. The Amended Complaint also included a new purported class claim on behalf of investors in certain Collective Trust Funds (“CTFs”) managed by BTC. Specifically, the plaintiffs allege that BTC, as fiduciary to the CTFs, engaged in self-dealing by, most significantly, selecting itself as the securities lending agent on terms that the plaintiffs claim were excessive. The Amended Complaint also alleged that BlackRock took undue risks in its management of securities lending cash reinvestment vehicles during the financial crisis. On August 23, 2018, the court granted permission to the plaintiffs to file a Second Amended Complaint (“SAC”) which added as defendants the BlackRock, Inc. Management Development and Compensation Committee, the Plan’s independent investment consultant and the Plan’s Administrative Committee and its members. On October 22, 2018, BlackRock filed a motion to dismiss the SAC, and on June 3, 2019, the plaintiffs filed a motion seeking to certify both the Plan and the CTF classes. On September 3, 2019, the court granted BlackRock’s motion to dismiss part of the plaintiffs’ claim seeking to recover alleged losses in the securities lending vehicles but denied the motion to dismiss in all other respects. On February 11, 2020, the court denied the plaintiffs’ motion to certify the CTF class and granted their motion to certify the Plan class. On February 25, 2020, the plaintiffs requested permission from the appeals court to immediately appeal the class certification ruling. The defendants believe the claims in this lawsuit are without merit.

Management, after consultation with legal counsel, currently does not anticipate that the aggregate liability 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 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, ~~2020,~~2023, there were ~~219~~215 common stockholders of record. Common stockholders include institutional or omnibus accounts that hold common stock for many underlying investors.

The following table sets forth for the periods indicated the dividends declared per share for the common stock as reported on the NYSE:


	Cash Dividend
	Declared
2022
First Quarter	$	4.88
Second Quarter	$	4.88
Third Quarter	$	4.88
Fourth Quarter	$	4.88
2021
First Quarter	$	4.13
Second Quarter	$	4.13
Third Quarter	$	4.13
Fourth Quarter	$	4.13

Cash
Dividend

Declared

2019

First Quarter

$
3.30

Second Quarter

$
3.30

Third Quarter

$
3.30

Fourth Quarter

$
3.30

2018

First Quarter

$
2.88

Second Quarter

$
2.88

Third Quarter

$
3.13

Fourth Quarter

$
3.13

The closing price of BlackRock’s ~~closing~~ common stock ~~price~~ as of February ~~27, 2020~~23, 2023 was ~~$475.82.~~$691.84.

Dividends

On January ~~29, 2020,~~25, 2023, the Board of Directors approved BlackRock’s quarterly dividend of ~~$3.63~~$5.00 per share to be paid on March 23, ~~2020~~2023 to stockholders of record at the close of business on March ~~5, 2020.~~7, 2023.

~~PNC receives dividends on shares of nonvoting participating preferred stock, which are equivalent to the dividends received by common stockholders.~~

Issuer Purchases of Equity Securities

During the three months ended December 31, ~~2019,~~2022, 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(1)		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(2)
October 1, 2022 through October 31, 2022		284,714	$	605.74		282,897		1,374,415
November 1, 2022 through November 30, 2022		426,524	$	705.35		425,198		949,217
December 1, 2022 through December 31, 2022		43,521	$	713.77		40,064		909,153
Total		754,759	$	668.26		748,159

Total
Number of
Shares
Purchased⁽¹⁾

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

October 1, 2019 through October 31, 2019

7,813

$
446.13

—

5,836,665

November 1, 2019 through November 30, 2019

3,681

$
466.94

—

5,836,665

December 1, 2019 through December 31, 2019

4,402

$
496.90

—

5,836,665

Total

15,896

$
465.01

—

(1)

Consists of 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 share repurchase program that the Company announced in July 2010, which initially authorized the repurchase of 5.1 million shares with no stated expiration.

(2)

In January 2023, the Company announced that the Board of Directors authorized the repurchase of an additional seven million shares under the Company’s existing share repurchase program, for a total of up to approximately 7.9 million shares of BlackRock common stock.

~~(1)~~

Item 6. ~~Selected Financial Data~~[Reserved]

~~The selected financial data presented below have been derived in part from, and should be read in conjunction with, the consolidated financial statements of BlackRock and Item 7,~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ 33included in this Form 10-K. Results for 2017 and 2016 were recast to reflect the adoption of the new revenue recognition standard. Results for 2015 reflect accounting guidance prior to the adoption of the new revenue recognition standard.

(in millions, except per share data)
2019

2018

2017

2016

2015

Income statement data:

Revenue

Related parties⁽¹⁾
$
8,522

$
8,412

$
7,903

$
7,010

$
7,084

Other third parties

6,017

5,786

5,697

5,251

4,317

Total revenue

14,539

14,198

13,600

12,261

11,401

Expense

Restructuring charge

—

60

—

76

—

Other operating expenses

8,988

8,681

8,346

7,620

6,737

Total expense

8,988

8,741

8,346

7,696

6,737

Operating income

5,551

5,457

5,254

4,565

4,664

Total nonoperating income (expense)

236

(79
)

5

(110
)

(62
)
Income before income taxes

5,787

5,378

5,259

4,455

4,602

Income tax expense⁽²⁾

1,261

1,076

270

1,289

1,250

Net income

4,526

4,302

4,989

3,166

3,352

Less: Net income (loss) attributable to noncontrolling interests

50

(3
)

37

(2
)

7

Net income attributable to BlackRock, Inc.
$
4,476

$
4,305

$
4,952

$
3,168

$
3,345

Per share data:⁽³⁾

Basic earnings
$
28.69

$
26.86

$
30.54

$
19.27

$
20.10

Diluted earnings
$
28.43

$
26.58

$
30.12

$
19.02

$
19.79

Book value⁽⁴⁾
$
216.15

$
204.23

$
197.45

$
178.32

$
172.12

Cash dividends declared and paid per share
$
13.20

$
12.02

$
10.00

$
9.16

$
8.72

~~(1)~~

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, fees for management services to equity method investments are considered related parties due to the Company’s influence over the financial and operating policies of the investee. See Note 20, ~~Related Party Transactions,~~ ~~to the consolidated financial statements for more information.~~

~~(2)~~

~~Income tax expense for 2017 reflected $1.2 billion of net tax benefit related to the 2017 Tax Cuts and Jobs Act.~~

~~(3)~~

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

~~(4)~~

~~Book value amounts reflect total BlackRock stockholders’ equity divided by total common and preferred shares outstanding at December 31 of the respective year-end.~~

December 31,

(in millions)
2019

2018

2017

2016

2015

Statement of financial condition data:

Cash and cash equivalents⁽¹⁾
$
4,829

$
6,488

$
7,038

$
6,175

$
6,231

Goodwill and intangible assets, net

32,931

31,365

30,609

30,481

30,495

Total assets⁽²⁾

168,622

159,573

220,241

220,198

225,261

Less:

Separate account assets⁽³⁾

102,844

90,285

149,937

149,089

150,851

Collateral held under securities lending agreements⁽³⁾

15,466

20,655

24,190

27,792

31,336

Consolidated sponsored investment products⁽⁴⁾

1,692

2,209

580

375

678

Adjusted total assets
$
48,620

$
46,424

$
45,534

$
42,942

$
42,396

Borrowings

4,955

4,979

5,014

4,915

4,930

Total BlackRock, Inc. stockholders’ equity
$
33,547

$
32,374

$
31,798

$
29,088

$
28,503

Assets under management:

Equity:

Active
$
316,145

$
258,205

$
311,209

$
275,033

$
281,319

iShares ETFs

1,632,972

1,274,262

1,329,610

951,252

823,156

Non-ETF index

1,871,212

1,503,358

1,730,822

1,430,891

1,319,297

Equity subtotal

3,820,329

3,035,825

3,371,641

2,657,176

2,423,772

Fixed income:

Active

939,275

795,985

815,135

749,996

719,653

iShares ETFs

565,790

427,596

395,252

314,707

254,190

Non-ETF index

810,327

660,836

645,078

507,662

448,525

Fixed income subtotal

2,315,392

1,884,417

1,855,465

1,572,365

1,422,368

Multi-asset

568,121

461,884

480,278

395,007

376,336

Alternatives:

Illiquid alternatives

75,349

59,827

47,270

41,340

40,917

Liquid alternatives

59,048

51,718

51,263

47,290

51,168

Currency and commodities⁽⁵⁾

43,675

31,813

30,814

28,308

20,754

Alternatives subtotal

178,072

143,358

129,347

116,938

112,839

Long-term

6,881,914

5,525,484

5,836,731

4,741,486

4,335,315

Cash management

545,949

448,565

449,949

403,584

299,884

Advisory⁽⁶⁾

1,770

1,769

1,515

2,782

10,213

Total
$
7,429,633

$
5,975,818

$
6,288,195

$
5,147,852

$
4,645,412

~~(1)~~

Amounts include cash and cash equivalents held by consolidated variable interest entities of $131 million, $186 million, $144 million, $84 million and $148 million at December 31, 2019, 2018, 2017, 2016 and 2015, respectively.

~~(2)~~

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.

~~(3)~~

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

~~(4)~~

~~Amounts include assets held by consolidated sponsored investment products.~~

~~(5)~~

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

~~(6)~~

~~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

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.

BlackRock has previously disclosed risk factors in its Securities and Exchange Commission (“SEC”) reports. These risk factors and those identified elsewhere in this report, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (1) a pandemic or health crisis, including the COVID-19 pandemic, and its continued impact on BlackRock’s products, clients, vendors and employees, and BlackRock’s results of operations; (2) the introduction, withdrawal, success and timing of business initiatives and strategies; ~~(2)~~(3) 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)~~(4) the relative and absolute investment performance of BlackRock’s investment products; ~~(4)~~(5) BlackRock’s ability to develop new products and services that address client preferences; ~~(5)~~(6) the impact of increased competition; ~~(6)~~(7) the impact of future acquisitions or divestitures; ~~(7)~~(8) BlackRock’s ability to integrate acquired businesses successfully; ~~(8)~~(9) the unfavorable resolution of legal proceedings; ~~(9)~~(10) the extent and timing of any share repurchases; ~~(10)~~(11) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and ~~cyber security~~cybersecurity protection; ~~(11)~~(12) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; ~~(12)~~(13) the impact of legislative and regulatory actions and reforms, ~~and~~ regulatory, supervisory or enforcement actions of government agencies and governmental scrutiny relating to ~~BlackRock or The PNC Financial Services Group, Inc. (“PNC”); (13)~~BlackRock; (14) changes in law and policy and uncertainty pending any such changes; ~~(14)~~(15) any failure to effectively manage conflicts of interest; (16) damage to BlackRock’s reputation; (17) geopolitical unrest, terrorist activities, civil or international hostilities, including the war between Russia and Ukraine, and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; ~~(15)~~(18) climate-related risks to BlackRock's business, products, operations and clients; (19) the ability to attract, train and retain highly ~~talented~~qualified and diverse professionals; ~~(16)~~(20) fluctuations in the carrying value of BlackRock’s economic investments; ~~(17)~~(21) 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; ~~(18)~~(22) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; ~~(19)~~(23) the failure by a key ~~vendor~~third-party providers of BlackRock to fulfill ~~its~~their obligations to the Company; ~~(20)~~(24) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (25) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds (“ETF”) platform; ~~(21)~~(26) 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 ~~(22)~~(27) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions.

Overview

~~Overview~~

BlackRock, Inc. (together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) is a leading publicly traded investment management firm with ~~$7.43~~$8.6 trillion of AUM at December 31, ~~2019.~~2022. With approximately ~~16,200~~19,800 employees in more than 30 countries, BlackRock provides a broad range of investment and technology services to institutional and retail clients in more than 100 countries across the globe. For further information see Note 1, Business Overview,, and Note 27, Segment Information,, in the notes to the consolidated financial statements contained in Part II, Item 8.

The following discussion includes a comparison of BlackRock’s results for ~~2019~~2022 and ~~2018.~~2021. For a discussion of BlackRock’s results for ~~2017,~~2020 and a comparison of results for 2021 and 2020, see ~~“Item~~Item 7, - Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations”~~Operations, of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2021, which was filed with the SEC on February ~~28, 2019.~~25, 2022.

Certain prior period presentations and disclosures, while not required to be recast, were reclassified to ensure comparability with current period classifications.

Business Outlook

~~United Kingdom Exit from European Union~~

~~Following~~BlackRock’s strategy continues to be guided by the ~~June 2016 vote to exit~~Company's clients' needs and focus on the ~~European Union (“EU”), commonly referred to as Brexit, the United Kingdom (“UK”) left the EU on January 31, 2020 and entered an eleven-month transition period during~~long-term, which the ~~UK,~~Company believes better enables it to deliver durable returns for shareholders and ~~UK-based entities, will retain the rights and obligations~~create value for all of ~~EU membership.~~

~~Substantial uncertainty remains surrounding the future relationship between the UK and EU, but the UK government has indicated~~ its preference for negotiating a trade deal with the EU before the end of the transition period rather than continuing Single Market or Customs Union membership. BlackRock is implementing a number of steps to prepare for various outcomes, including there being no agreement in place when the transition period expires. These steps, many of which are time consuming and costly, include effecting organizational, governance and operational changes, applying for and receiving licenses and permissions in the EU, and engaging in client communications, and are expected to add complexity to BlackRock’s European operations. In addition, depending on the terms of the future relationship between the UK and the EU, BlackRock may experience further organizational and operational challenges and incur additional costs in connection with its European operations during the transition period and post-Brexit, which may impede the Company’s growth or impact its financial performance.

~~Acquisition~~stakeholders.

On May 10, 2019, the Company acquired 100% of the equity interests of eFront Holding SAS (“eFront Transaction” or “eFront”), a leading alternative investment management software and solutions provider for approximately $1.3 billion, excluding the settlement of eFront’s outstanding debt. The acquisition of eFront expands ~~Aladdin’s illiquid alternative capabilities and enables BlackRock to provide individual alternative or whole-portfolio technology solutions to clients.~~

~~Business Outlook~~

BlackRock's framework for long-term shareholder 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 prudent discretionary expense management.

BlackRock’s investment management revenue is primarily comprised of fees earned as a percentage of AUM and, in some cases, performance fees, which are normally expressed as a percentage of fund returns to the client. Numerous factors, including price movements in the equity, debt or currency markets, or in the price of real assets, commodities or alternative investments in which BlackRock invests on behalf of clients, and BlackRock’s ability to maintain strong investment performance, could impact BlackRock’s AUM, revenue and earnings.

During 2022, BlackRock voluntarily waived a portion of its management fees on certain money market funds to ensure that they maintained a minimum level of daily net investment income. These waivers resulted in a reduction of management fees of approximately $72 million in 2022, a portion of which was partially offset by a reduction of BlackRock’s distribution and servicing costs paid to financial intermediaries.

Approximately 50% of these gross fee waivers are generally shared with distributors, reducing the impact on operating income. These waivers ceased following rate hikes by the Bank of England and the United States ("US") Federal Reserve in March 2022.

Recently, central banks globally have raised interest rates in an effort to moderate inflation. BlackRock’s business is directly and indirectly affected by changes in global interest rates. Changes in global interest rates may cause BlackRock’s AUM to fluctuate and introduce volatility to the Company’s base fees, net income and operating cash flows. BlackRock’s business may also be impacted by governmental changes, as well as potential regulations, foreign and trade policies and fiscal spending that may arise as a result of such changes. See Part I, Item 1A - Risk Factors herein for information on the possible future effects of changes in global interest rates and governmental changes on the Company's results.

BlackRock manages ~~$3.8~~$2.5 trillion in fixed income assets, nearly two-thirds of which are owned by institutions for strategic or liability-matching purposes. BlackRock believes it is well positioned for a higher rate environment due to the breadth, diversification and investment performance of its fixed income platform which encompasses active, exchange-traded funds ("ETFs") and non-ETF index fixed income products, and a range of strategies, including unconstrained, high yield, total return and short-duration.

BlackRock manages $4.4 trillion of equity assets across markets globally. Beta divergence between equity markets, where certain markets perform differently than others, may lead to an increase in the proportion of BlackRock AUM weighted toward lower fee equity products, resulting in a decline in BlackRock’s effective fee rate. Divergent market factors may also erode the correlation between the growth rates of AUM and ~~base fees.~~investment advisory and administration fees (collectively “base fees”) and securities lending revenue.

BlackRock’s highly diversified multi-product platform was created to meet client needs in all market ~~environments.~~environments and provide clients with choice in how they seek to achieve their unique financial goals. BlackRock is positioned to provide alpha-seeking active, index and cash management investment strategies across asset classes and geographies. In addition, BlackRock leverages its world-class risk management, analytics and technology capabilities, including the Aladdin platform, on behalf of clients. BlackRock serves a diverse mix of institutional and retail clients across the globe, ~~including~~as well as investors in ~~iShares~~ ETFs, maintaining differentiated client relationships and a fiduciary focus. The diversity of BlackRock’s platform facilitates the generation of organic growth in various market environments, and as client preferences evolve. ~~Client demand continues for~~BlackRock’s long-term strategy remains to keep alpha at the heart of BlackRock; accelerate growth in ETFs, ~~and~~ illiquid alternatives, and technology; deliver whole portfolio solutions and become the global leader in sustainable investing.

BlackRock is a $2.3 trillion active manager, with the active platform reflecting global reach, interconnectivity across teams and regions, growing data and insights, integrated technology and risk management and scalable processes – all of which ~~are two areas of focus~~the Company believes enables it to deliver more consistent outcomes for ~~BlackRock.~~clients over the long-term.

The index investing industry has been growing rapidly – with ETFs as a major beneficiary – driven by structural tailwinds including the migration from commission-based to fee-based wealth management, growth in model portfolios, clients’ focus on value for money, the use of ETFs as alpha tools and the ~~growth~~modernization of ~~all-to-all networked trading.~~ ~~iShares~~ ~~ETFs’~~the bond market. BlackRock’s ETF growth strategy is centered on increasing scale and pursuing global growth themes in client and product segments, including Core, Strategic, which includes Fixed Income, Factors, Sustainable and ~~Megatrends~~Thematic ETFs, and Precision Exposures.

Clients are also increasing their allocations to private markets as they search for diversification and higher returns. BlackRock has built a broad illiquid alternatives platform with $118 billion of AUM across infrastructure, private credit, real estate and private equity to meet this demand. As of December 31, 2022, BlackRock has approximately $34 billion of committed capital to deploy for institutional clients in a variety of alternatives strategies, and remains confident in its ability to accelerate growth as a leader in private markets. BlackRock also manages $81 billion in liquid alternatives, as well as $86 billion in liquid credit strategies, included within fixed income AUM.

BlackRock continues to invest in technology services offerings, which enhance the ability to manage portfolios and risk, effectively serve clients and operate efficiently. Anticipated industry consolidation and regulatory requirements should continue to drive demand for holistic and flexible technology solutions. BlackRock continues to evolve and enable clients to further simplify their operating infrastructure with Aladdin. Clients increasingly want to tailor how they use Aladdin to meet their specific needs, and BlackRock is providing them with choice and flexibility. BlackRock is creating connectivity with ecosystem providers and third-party technology solutions, which include asset servicers, cloud providers, digital asset platforms, trading systems and others, who can work with clients in their Aladdin environments to provide a more customized and seamless end-to-end experience. BlackRock is also investing to scale Aladdin for its next leg of growth through the substantially complete migration of Aladdin from BlackRock-hosted data centers to the cloud. This is expected to bring enhanced capabilities to BlackRock and its Aladdin clients, accelerating innovation and supporting greater computing scale and flexibility for clients. Through this migration as well as BlackRock’s strategic partnership with Snowflake, an industry-leader in cloud enabled data technology, the Company is building Aladdin Data Cloud, a next generation solution that brings Aladdin and non-Aladdin data together, so clients can nimbly access and use data across their organization unlocking their full potential for collaboration, creativity, and innovation.

As the ~~wealth~~asset management landscape shifts globally from individual product selection to a whole-portfolio approach, BlackRock’s ~~retail~~ strategy is focused on creating outcome-oriented client ~~solutions.~~solutions for both retail investors and institutions. This includes having a diverse platform of alpha-seeking active, index and alternative products, as well as enhanced distribution and portfolio construction technology offerings. Digital wealth tools are an important component of BlackRock’s retail strategy, as BlackRock scales and customizes model portfolios, extends Aladdin Wealth and digital wealth partnerships globally, and helps advisors build better portfolios through portfolio construction and risk management, powered by Aladdin. BlackRock has seen strong momentum in outsourcing solutions among institutional clients, including the funding of several significant mandates in 2022, and anticipates continued outsourcing opportunities in the future.

Across BlackRock, ~~more~~many clients are focusing on the impact of sustainability factors on their portfolios. This shift has been driven by an increased understanding of how sustainability-related factors can affect economic growth, asset values, and financial markets as a whole. As a fiduciary, BlackRock is committed to ~~helping~~providing clients with choice and then executing in accordance with their chosen objectives. BlackRock's longstanding model of choice helps clients build ~~more resilient portfolios. Since~~portfolios to match the preferences and goals unique to each of them – for some clients this includes investing in sustainable ~~investment options have the potential~~strategies.

BlackRock believes its strategy aligns with expected future client demand for attractive yields in fixed income, outsourcing solutions, ETFs, private markets and Aladdin technology, which it expects will continue to offer clients better outcomes, we are making sustainability integral to the way BlackRock manages risk, constructs portfolios, designs products, and engages with companies. Over the past several years, BlackRock has been deepening the integration of sustainability into technology, risk management, and product choice across BlackRock, and plans to accelerate those efforts.

~~Executive Summary~~

(in millions, except shares and per share data)

2019

2018

GAAP basis:

Total revenue

$
14,539

$
14,198

Total expense

8,988

8,741

Operating income

$
5,551

$
5,457

Operating margin

38.2
%

38.4
%

Nonoperating income (expense), less net income (loss) attributable to noncontrolling
interests

186

(76
)

Income tax expense

(1,261
)

(1,076
)

Net income attributable to BlackRock

$
4,476

$
4,305

Diluted earnings per common share

$
28.43

$
26.58

Effective tax rate

22.0
%

20.0
%

As adjusted⁽¹⁾:

Operating income

$
5,551

$
5,531

Operating margin

43.7
%

44.3
%

Nonoperating income (expense), less net income (loss) attributable to noncontrolling
interests

$
186

$
(76
)

Net income attributable to BlackRock

$
4,484

$
4,361

Diluted earnings per common share

$
28.48

$
26.93

Effective tax rate

21.9
%

20.0
%

Other:

Assets under management (end of period)

$
7,429,633

$
5,975,818

Diluted weighted-average common shares outstanding⁽²⁾

157,459,546

161,948,732

Common and preferred shares outstanding (end of period)

155,198,968

158,520,147

Book value per share⁽³⁾

$
216.15

$
204.23

Cash dividends declared and paid per share

$
13.20

$
12.02

~~(1)~~shape growth opportunities going forward.

~~As adjusted items are described in more detail in~~ ~~Non-GAAP Financial Measures~~.

~~(2)~~

~~Nonvoting participating preferred shares are considered to be common stock equivalents for purposes of determining basic and diluted earnings per share calculations.~~

~~(3)~~

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

~~2019 Compared with 2018~~

Executive Summary


(in millions, except per share data)	2022			2021
GAAP basis:
Total revenue	$	17,873		$	19,374
Total expense		11,488			11,924
Operating income	$	6,385		$	7,450
Operating margin		35.7	%		38.5	%
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests		89			419
Income tax expense		1,296			1,968
Net income attributable to BlackRock	$	5,178		$	5,901
Diluted earnings per common share	$	33.97		$	38.22
Effective tax rate		20.0	%		25.0	%
As adjusted(1):
Operating income	$	6,711		$	7,747
Operating margin		42.8	%		46.8	%
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests	$	89		$	419
Net income attributable to BlackRock	$	5,391		$	6,254
Diluted earnings per common share	$	35.36		$	40.51
Effective tax rate		20.7	%		23.4	%
Other:
Assets under management (end of period)	$	8,594,485		$	10,010,143
Diluted weighted-average common shares outstanding		152.4			154.4
Shares outstanding (end of period)		149.8			151.7
Book value per share(2)	$	252.04		$	248.50
Cash dividends declared and paid per share	$	19.52		$	16.52

(1)

As adjusted items are described in more detail in Non-GAAP Financial Measures. Beginning in the first quarter of 2022, BlackRock updated the definitions of operating income, as adjusted, operating margin, as adjusted, and net income attributable to BlackRock, Inc., as adjusted, to include new adjustments. Such measures have been recast for 2021 to reflect the inclusion of such new adjustments. For further information, refer to Non-GAAP Financial Measures or the Current Report on Form 8-K furnished on April 13, 2022.

(2)

Total BlackRock stockholders’ equity, divided by total shares outstanding at December 31 of the respective year-end.

2022 Compared with 2021

GAAP. Operating income of ~~$5,551 million increased $94 million~~$6.4 billion decreased $1.1 billion and operating margin of 35.7% decreased 280 bps from ~~2018. Operating~~2021. Decreases in operating income ~~growth~~and operating margin reflected ~~higher~~lower base fees, driven by the negative impact of market beta and ~~technology services revenue,~~foreign exchange movements, and lower performance fees, partially offset by ~~higher~~lower expense, including lower compensation and benefits expense and ~~higher general and administration expense. Operating income for 2019 also included $61~~the impact of $274 million of product launch costs ~~associated with the close~~ ~~of the $1.4 billion BlackRock Science and Technology Trust II, a closed-end active equity fund~~.incurred in 2021. Operating income for ~~2018~~2022 also included a restructuring charge of ~~$60~~$91 million from an initiative to modify the size and shape of the ~~workforce.~~ workforce to align more closely with strategic priorities.

Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests ~~(“NCI”~~("NCI")~~, increased $262~~ decreased $330 million from ~~2018~~2021, driven primarily by mark-to-market losses on the Company’s un-hedged seed capital and co-investment portfolios, partially offset by higher ~~marks on unhedged seed capital investments and the revaluation of certain minority investments. Nonoperating results for 2018 included a $40 million pre-tax gain~~noncash gains related to ~~the sale of the Company’s~~our strategic minority ~~interest~~investment in ~~DSP BlackRock Investment Managers Pvt. Ltd. to The DSP Group (“DSP Transaction”~~iCapital Network, Inc. ("iCapital"). in 2022.

Income tax expense for ~~2019 included $28~~2022 reflected $235 million of net discrete tax benefits primarily related to stock-based compensation ~~awards.~~awards that vested in 2022 and the resolution of certain outstanding tax matters, and $35 million of net noncash tax benefits related to the revaluation of certain deferred income tax liabilities. Income tax expense for ~~2018~~2021 included ~~$145~~$126 million of noncash net expense related to the revaluation of certain deferred tax assets and liabilities as a result of legislation enacted in the United Kingdom ("UK") increasing its corporate tax rate and state and local income tax changes. Income tax expense for 2021 also included a $43 million discrete tax ~~benefits, primarily~~benefit related to ~~changes in the Company’s organizational entity structure and~~ stock-based compensation awards. ~~See~~ ~~Income Tax Expense~~ ~~within~~ ~~Discussion of Financial Results~~ ~~for more information.~~

Diluted earnings per common share ~~increased $1.85,~~decreased $4.25, or 7%11%, from ~~2018,~~2021, reflecting ~~higher~~lower operating and nonoperating income, ~~and a lower diluted share count,~~ partially offset by a ~~higher~~lower effective tax rate in ~~the current year.~~2022.

As ~~Adjusted~~.Adjusted. Operating income of ~~$5,551 million increased $20 million~~$6.7 billion decreased $1.0 billion and operating margin of 42.8% decreased 400 bps from ~~2018. In 2018, the~~2021. The pre-tax restructuring charge of ~~$60~~$91 million described above has been excluded from as adjusted ~~results.~~ results for 2022. The impact of product launch costs described above has been excluded from as adjusted operating margin for 2022 and 2021.

Diluted earnings per common share ~~increased $1.55,~~decreased $5.15, or 6%13%, from ~~2018, driven primarily by higher~~2021, reflecting lower operating and nonoperating income, ~~and a lower diluted share count,~~ partially offset by a ~~higher~~lower effective tax ~~rate.~~rate in 2022. Income tax expense for 2022 and 2021 excluded the $35 million noncash net benefit and the $126 million noncash net expense, respectively, described above.

Beginning in the first quarter of 2022, BlackRock updated the definitions of operating income, as adjusted, operating margin, as adjusted, and net income attributable to BlackRock, Inc., as adjusted, to include new adjustments. Such measures have been recast for 2021 to reflect the inclusion of such new adjustments. See Non-GAAP Financial Measures for further information on as adjusted ~~items.~~items and the reconciliation to accounting principles generally accepted in the United States (“GAAP”).

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

Non-GAAP Financial Measures

BlackRock reports its financial results in accordance with ~~accounting principles generally accepted in the United States (“GAAP”);~~GAAP; however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. Adjustments to GAAP financial measures (“non-GAAP adjustments”) include certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow. Management reviews non-GAAP financial measures, in addition to GAAP financial measures, to assess ongoing operations and considers them to be helpful, for both management and investors, in evaluating 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. Non-GAAP measures may not be comparable to other similarly titled measures of other companies.

~~Management uses both GAAP~~Beginning in the first quarter of 2022, the Company updated its definition of operating income, as adjusted, operating margin, as adjusted, and ~~non-GAAP financial~~net income attributable to BlackRock, Inc., as adjusted, to include adjustments related to amortization of intangible assets, other acquisition-related costs, including compensation costs for nonrecurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions. Such measures ~~in evaluating BlackRock’s financial performance. Adjustments~~have been recast for the periods presented herein to GAAP financial measures (“non-GAAP adjustments”) include certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.reflect the inclusion of such new adjustments.

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

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


(in millions)	2022			2021			2020			2019			2018
Operating income, GAAP basis	$	6,385		$	7,450		$	5,695		$	5,551		$	5,457
Non-GAAP expense adjustments:
Restructuring charge		91			—			—			—			60
Amortization of intangible assets		151			147			106			97			50
Acquisition-related compensation costs		24			88			20			65			37
Acquisition-related transaction costs		—			—			—			18			18
Contingent consideration fair value adjustments		3			34			23			53			65
Lease cost - Hudson Yards		57			28			—			—			—
Charitable contribution		—			—			589			—			—
PNC long-term incentive plans funding obligation		—			—			—			—			14
Operating income, as adjusted		6,711			7,747			6,433			5,784			5,701
Product launch costs and commissions		6			284			172			61			13
Operating income used for operating margin measurement	$	6,717		$	8,031		$	6,605		$	5,845		$	5,714
Revenue, GAAP basis	$	17,873		$	19,374		$	16,205		$	14,539		$	14,198
Non-GAAP adjustments:
Distribution fees		(1,381	)		(1,521	)		(1,131	)		(1,069	)		(1,155	)
Investment advisory fees		(798	)		(679	)		(704	)		(616	)		(520	)
Revenue used for operating margin measurement	$	15,694		$	17,174		$	14,370		$	12,854		$	12,523
Operating margin, GAAP basis		35.7	%		38.5	%		35.1	%		38.2	%		38.4	%
Operating margin, as adjusted		42.8	%		46.8	%		46.0	%		45.5	%		45.6	%

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. Management believes that operating margin, as adjusted, reflects the Company’s long-term ability to manage ongoing costs in relation to its revenues. The Company uses operating margin, as adjusted, to assess the Company’s financial performance, ~~and~~ to determine the long-term and annual compensation of the Company’s senior-level ~~employees. Furthermore, this metric is used~~employees and to evaluate the Company’s relative performance against industry ~~peers, as it~~peers. Furthermore, this metric eliminates margin variability arising from the accounting of revenues and expenses related to distributing different product structures in multiple distribution channels utilized by asset managers.

(in millions)

2019

2018

Operating income, GAAP basis

$
5,551

$
5,457

Non-GAAP expense adjustments:

Restructuring charge

—

60

PNC LTIP funding obligation

—

14

Operating income, as adjusted

5,551

5,531

Product launch costs and commissions

61

13

Operating income used for operating margin measurement

$
5,612

$
5,544

Revenue, GAAP basis

$
14,539

$
14,198

Non-GAAP adjustments:

Distribution fees

(1,069
)

(1,155
)

Investment advisory fees

(616
)

(520
)

Revenue used for operating margin measurement

$
12,854

$
12,523

Operating margin, GAAP basis

38.2
%

38.4
%

Operating margin, as adjusted

43.7
%

44.3
%

•

Operating income, as adjusted, includes non-GAAP expense adjustments. Beginning in the first quarter of 2022, the Company updated its definition of operating income, as adjusted, to include adjustments related to amortization of intangible assets, other acquisition-related costs, including compensation costs for nonrecurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions. Management believes excluding the impact of these expenses when calculating operating income, as adjusted, provides a helpful indication of the Company’s financial performance over time, thereby providing helpful information for both management and investors while also increasing comparability with other companies. In 2022, the Company recorded a restructuring charge primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards in connection with an initiative to modify the size and shape of the workforce to align more closely with strategic priorities. In addition, the Company recorded an expense related to the lease of office space for its new headquarters located at 50 Hudson Yards in New York (“Lease cost – Hudson Yards”) from August 2021, when it obtained access to the building to begin its tenant improvements. The Company will begin cash lease payments related to the new headquarters in May 2023. As a result, the Company is recognizing lease expense for both its current and new headquarters until its current headquarters lease expires in April 2023. Management believes excluding the impact of the restructuring charge and Lease cost – Hudson Yards when calculating operating income, as adjusted, is useful to assess the Company’s financial performance, ongoing operations, and enhances comparability among periods presented. For further information on non-GAAP expense adjustments related to BlackRock's (1) 2020 charitable contribution and (2) 2018 restructuring charge and PNC Financial Services Group, Inc. ("PNC") long-term incentive plans funding obligation refer to Item 7, Management's Discussion and Analysis of Financial Conditions and Results of Operations of the Company's Annual Report on Form 10-K for the year ended December 31, 2020 and 2018, respectively, which were filed with the SEC on February 25, 2021, and February 28, 2019, respectively.

•

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) and related commissions. Management believes the exclusion of such costs and related commissions is useful because these costs can fluctuate considerably and revenue associated with the expenditure of these costs will not fully impact BlackRock’s results until future periods.

•

~~Operating income, as adjusted,~~ includes non-GAAP expense adjustments. In 2018, a restructuring charge, primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards, has been excluded to provide more meaningful analysis of BlackRock’s ongoing operations and to ensure comparability among periods presented. In 2018, 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 does not impact BlackRock’s book value.

•

Revenue used for calculating operating margin, as adjusted, is reduced to exclude all of the Company’s distribution fees, which are recorded as a separate line item on the consolidated statements of income, as well as a portion of investment advisory fees received that is used to pay distribution and servicing costs. For certain products, based on distinct arrangements, distribution fees are collected by the Company and then passed-through to third-party client intermediaries. For other products, investment advisory fees are collected by the Company and a portion is passed-through to third-party client intermediaries. However, in both structures, the third-party client intermediary similarly owns the relationship with the retail client and is responsible for distributing the product and servicing the client. The amount of distribution and investment advisory fees fluctuates each period primarily based on a predetermined percentage of the value of AUM during the period. These fees also vary based on the type of investment product sold and the geographic location where it is sold. In addition, the Company may waive fees on certain products that could result in the reduction of payments to the third-party intermediaries.

•

(2) Net income attributable to BlackRock, Inc., as adjusted:


(in millions, except per share data)	2022			2021		2020		2019		2018
Net income attributable to BlackRock, Inc., GAAP basis	$	5,178		$	5,901	$	4,932	$	4,476	$	4,305
Non-GAAP adjustments(1):
Restructuring charge		69			—		—		—		47
Amortization of intangible assets		114			112		82		75		39
Acquisition-related compensation costs		19			67		16		50		29
Acquisition-related transaction costs		—			—		—		14		14
Contingent consideration fair value adjustments		3			26		17		41		50
Lease cost - Hudson Yards		43			22		—		—		—
Charitable contribution		—			—		226		—		—
PNC long-term incentive plans funding obligation		—			—		—		—		12
Income tax matters		(35	)		126		79		8		(3	)
Net income attributable to BlackRock, Inc., as adjusted	$	5,391		$	6,254	$	5,352	$	4,664	$	4,493
Diluted weighted-average common shares outstanding		152.4			154.4		154.8		157.5		161.9
Diluted earnings per common share, GAAP basis	$	33.97		$	38.22	$	31.85	$	28.43	$	26.58
Diluted earnings per common share, as adjusted	$	35.36		$	40.51	$	34.57	$	29.62	$	27.74

(in millions, except per share data)

2019

2018

Net income attributable to BlackRock, Inc., GAAP basis

$
4,476

$
4,305

Non-GAAP adjustments:

Restructuring charge, net of tax

—

47

PNC LTIP funding obligation, net of tax

—

12

Other income tax matters

8

(3
)

Net income attributable to BlackRock, Inc., as adjusted

$
4,484

$
4,361

Diluted weighted-average common shares outstanding (3)

157.5

161.9

Diluted earnings per common share, GAAP basis (3)

$
28.43

$
26.58

Diluted earnings per common share, as adjusted (3)

$
28.48

$
26.93

(1)

Non-GAAP adjustments are net of tax excluding income tax matters.

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.

~~See aforementioned discussion regarding operating income, as adjusted, and operating margin, as adjusted, for information on the PNC LTIP funding obligation and restructuring charge.~~

For each period presented, the non-GAAP ~~adjustment related to the restructuring charge and PNC LTIP funding obligation was~~adjustments were tax effected at the ~~respective~~respective blended rates applicable to the adjustments. Amounts for income tax matters represent net noncash ~~(benefits)~~(benefit) expense primarily associated with the revaluation of certain deferred tax liabilities related to intangible assets and goodwill as a result of tax rate changes. Amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to ensure comparability among periods presented. The amounts for 2022 income tax matters included net noncash expense related to state and local income tax changes. The amounts for 2021 and 2020 income tax matters included net noncash expense related to the impact of legislation enacted in the UK increasing its corporate tax rate and state and local income tax changes. These amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to ensure comparability among periods presented.

See note (1) above regarding operating income, as adjusted, and operating margin, as adjusted, for information on the updated presentation of non-GAAP expense adjustments.

Per share amounts reflect net income attributable to BlackRock, Inc., as adjusted divided by diluted ~~weighted average~~weighted-average common shares outstanding.

~~(3)~~ ~~Nonvoting participating preferred stock is considered to be a common stock equivalent for purposes of determining basic and diluted earnings per share calculations.~~

(3) Annual Contract Value ("ACV"): Management believes ACV is an effective metric for reviewing BlackRock’s technology services’ ongoing contribution to its operating results and provides comparability of this information among reporting periods while also providing a useful supplemental metric for both management and investors of BlackRock’s growth in technology services revenue over time, as it is linked to the net new business in technology services. ACV represents forward-looking, annualized estimated value of the recurring subscription fees under client contracts, assuming all client contracts that come up for renewal are renewed, unless we received a notice of termination, even though such notice may not be effective until a later date. ACV also includes the annualized estimated value of new sales, for existing and new clients, when we execute client contracts, even though the recurring fees may not be effective until a later date and excludes nonrecurring fees such as implementation and consulting fees.

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 Inflows (Outflows) by Client Type and Product Type
	AUM				Net inflows (outflows)
(in millions)	2022		2021		2022			2021
Retail	$	843,475	$	1,040,053	$	(19,523	)	$	102,093
ETFs		2,909,610		3,267,354		220,335			305,534
Institutional:
Active		1,641,591		1,756,717		168,826			169,067
Index		2,528,615		3,181,652		23,612			(117,825	)
Institutional subtotal		4,170,206		4,938,369		192,438			51,242
Long-term		7,923,291		9,245,776		393,250			458,869
Cash management		671,194		755,057		(77,374	)		94,043
Advisory		—		9,310		(9,306	)		(13,258	)
Total	$	8,594,485	$	10,010,143	$	306,570		$	539,654

AUM and Net Inflows (Outflows) by Investment Style and Product Type
	AUM				Net inflows (outflows)
(in millions)	2022		2021		2022			2021
Active	$	2,317,560	$	2,606,325	$	135,128		$	266,740
Index and ETFs		5,605,731		6,639,451		258,122			192,129
Long-term		7,923,291		9,245,776		393,250			458,869
Cash management		671,194		755,057		(77,374	)		94,043
Advisory		—		9,310		(9,306	)		(13,258	)
Total	$	8,594,485	$	10,010,143	$	306,570		$	539,654

AUM and Net Inflows (Outflows) by Product Type
	AUM				Net inflows (outflows)
(in millions)	2022		2021		2022			2021
Equity	$	4,435,354	$	5,342,360	$	105,103		$	101,681
Fixed income		2,536,823		2,822,041		249,780			230,337
Multi-asset		684,904		816,494		31,222			97,832
Alternatives:
Illiquid alternatives		117,751		102,579		16,052			16,120
Liquid alternatives		80,654		87,348		(1,690	)		11,328
Currency and commodities(1)		67,805		74,954		(7,217	)		1,571
Alternatives subtotal		266,210		264,881		7,145			29,019
Long-term		7,923,291		9,245,776		393,250			458,869
Cash management		671,194		755,057		(77,374	)		94,043
Advisory		—		9,310		(9,306	)		(13,258	)
Total	$	8,594,485	$	10,010,143	$	306,570		$	539,654

AUM and Net Inflows (Outflows) by Client Type and Product Type

AUM

Net inflows (outflows)

(in millions)
2019

2018

2019

2018

Retail
$
703,297

$
610,850

$
15,810

$
19,079

iShares ETFs

2,240,065

1,731,425

183,492

167,535

Institutional:

Active

1,338,670

1,079,979

99,456

(9,583
)
Index

2,599,882

2,103,230

36,902

(53,704
)
Institutional subtotal

3,938,552

3,183,209

136,358

(63,287
)
Long-term

6,881,914

5,525,484

335,660

123,327

Cash management

545,949

448,565

93,074

(21
)
Advisory⁽¹⁾

1,770

1,769

2

323

Total
$
7,429,633

$
5,975,818

$
428,736

$
123,629

AUM and Net Inflows (Outflows) by Investment Style and Product Type

AUM

Net inflows (outflows)

(in millions)
2019

2018

2019

2018

Active
$
1,947,222

$
1,617,780

$
109,892

$
8

Index and iShares ETFs

4,934,692

3,907,704

225,768

123,319

Long-term

6,881,914

5,525,484

335,660

123,327

Cash management

545,949

448,565

93,074

(21
)
Advisory⁽¹⁾

1,770

1,769

2

323

Total
$
7,429,633

$
5,975,818

$
428,736

$
123,629

AUM and Net Inflows (Outflows) by Product Type

AUM

Net inflows (outflows)

(in millions)
2019

2018

2019

2018

Equity
$
3,820,329

$
3,035,825

$
28,353

$
15,167

Fixed income

2,315,392

1,884,417

263,579

79,110

Multi-asset

568,121

461,884

18,889

16,913

Alternatives:

Illiquid alternatives

75,349

59,827

14,103

7,580

Liquid alternatives

59,048

51,718

3,957

2,010

Currency and commodities⁽²⁾

43,675

31,813

6,779

2,547

Alternatives subtotal

178,072

143,358

24,839

12,137

Long-term

6,881,914

5,525,484

335,660

123,327

Cash management

545,949

448,565

93,074

(21
)
Advisory⁽¹⁾

1,770

1,769

2

323

Total
$
7,429,633

$
5,975,818

$
428,736

$
123,629

(1)

Amounts include commodity ETFs.

~~Advisory AUM represents long-term portfolio liquidation assignments.~~

~~(2)~~

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

The following table presents the component changes in BlackRock’s AUM for ~~2019~~2022 and ~~2018.~~2021.


(in millions)	2022			2021
Beginning AUM	$	10,010,143		$	8,676,680
Net inflows (outflows):
Long-term		393,250			458,869
Cash management		(77,374	)		94,043
Advisory		(9,306	)		(13,258	)
Total net inflows (outflows)		306,570			539,654
Acquisition(1)		—			41,324
Market change		(1,501,987	)		864,079
FX impact(2)		(220,241	)		(111,594	)
Total change		(1,415,658	)		1,333,463
Ending AUM	$	8,594,485		$	10,010,143

(in millions)
2019

2018

Beginning AUM
$
5,975,818

$
6,288,195

Net inflows (outflows)

Long-term

335,660

123,327

Cash management

93,074

(21
)
Advisory⁽¹⁾

2

323

Total net inflows (outflows)

428,736

123,629

Acquisitions and dispositions⁽²⁾

—

27,500

Market change

994,076

(384,136
)
FX impact⁽³⁾

31,003

(79,370
)
Total change

1,453,815

(312,377
)
Ending AUM
$
7,429,633

$
5,975,818

(1)

Amounts include AUM attributable to the acquisition of Aperio Group, LLC ("Aperio Transaction") in February 2021.

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

~~(1)~~

~~Advisory AUM represents long-term portfolio liquidation assignments.~~

~~(2)~~

Amount for 2018 represents $5.4 billion and $25.6 billion of net AUM from the acquisitions of Tennenbaum Capital Partners in August 2018 (“TCP Transaction”) and the asset management business of Citibanamex in September 2018 (“Citibanamex Transaction”), respectively. In addition, amounts include $18.6 billion and $2.3 billion of AUM reclassifications and net dispositions, respectively, related to the transfer of BlackRock’s UK Defined Contribution Administration and Platform business to Aegon N.V. in July 2018 (“Aegon Transaction”) and $1.2 billion of net AUM dispositions related to the DSP Transaction.

~~(3)~~

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

BlackRock has historically grown 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 index products, client service, developing new products and optimizing distribution capabilities.

Component Changes in AUM for ~~2019~~2022

The following table presents the component changes in AUM by client type and product type for ~~2019.~~2022.


	December 31,		Net inflows			Market			FX			December 31,		Full year average
(in millions)	2021		(outflows)			change			impact(1)			2022		AUM(2)
Retail:
Equity	$	471,937	$	(103	)	$	(90,767	)	$	(10,455	)	$	370,612	$	401,582
Fixed income		365,306		(20,299	)		(41,706	)		(4,187	)		299,114		323,500
Multi-asset		155,461		(3,143	)		(26,064	)		(1,086	)		125,168		136,690
Alternatives		47,349		4,022			(2,271	)		(519	)		48,581		48,937
Retail subtotal		1,040,053		(19,523	)		(160,808	)		(16,247	)		843,475		910,709
ETFs:
Equity		2,447,248		100,756			(449,140	)		(17,122	)		2,081,742		2,163,108
Fixed income		745,373		122,893			(103,957	)		(6,216	)		758,093		719,931
Multi-asset		9,119		1,333			(1,441	)		(136	)		8,875		8,231
Alternatives		65,614		(4,647	)		70			(137	)		60,900		66,599
ETFs subtotal		3,267,354		220,335			(554,468	)		(23,611	)		2,909,610		2,957,869
Institutional:
Active:
Equity		199,980		9,882			(34,912	)		(6,216	)		168,734		175,567
Fixed income		767,402		114,742			(95,291	)		(11,898	)		774,955		715,600
Multi-asset		642,951		33,950			(112,028	)		(20,404	)		544,469		571,448
Alternatives		146,384		10,252			(243	)		(2,960	)		153,433		150,357
Active subtotal		1,756,717		168,826			(242,474	)		(41,478	)		1,641,591		1,612,972
Index:
Equity		2,223,195		(5,432	)		(341,087	)		(62,410	)		1,814,266		1,937,695
Fixed income		943,960		32,444			(203,501	)		(68,242	)		704,661		792,941
Multi-asset		8,963		(918	)		(1,285	)		(368	)		6,392		7,550
Alternatives		5,534		(2,482	)		569			(325	)		3,296		4,696
Index subtotal		3,181,652		23,612			(545,304	)		(131,345	)		2,528,615		2,742,882
Institutional subtotal		4,938,369		192,438			(787,778	)		(172,823	)		4,170,206		4,355,854
Long-term		9,245,776		393,250			(1,503,054	)		(212,681	)		7,923,291		8,224,432
Cash management		755,057		(77,374	)		1,071			(7,560	)		671,194		719,284
Advisory		9,310		(9,306	)		(4	)		—			—		4,854
Total	$	10,010,143	$	306,570		$	(1,501,987	)	$	(220,241	)	$	8,594,485	$	8,948,570

(in millions)

December 31,
2018

Net
inflows
(outflows)

Market
change

FX
impact⁽¹⁾

December 31,
2019

Full year
average
AUM⁽²⁾

Retail:

Equity

$
205,714

$
(652
)

$
45,820

$
1,531

$
252,413

$
229,688

Fixed income

271,588

21,222

11,882

573

305,265

289,632

Multi-asset

113,417

(9,291
)

16,138

175

120,439

117,366

Alternatives

20,131

4,531

506

12

25,180

22,384

Retail subtotal

610,850

15,810

74,346

2,291

703,297

659,070

iShares ETFs:

Equity

1,274,262

64,705

292,840

1,165

1,632,972

1,453,395

Fixed income

427,596

112,345

25,878

(29
)

565,790

503,266

Multi-asset

4,485

113

601

11

5,210

4,489

Alternatives

25,082

6,329

4,664

18

36,093

29,767

iShares ETFs subtotal

1,731,425

183,492

323,983

1,165

2,240,065

1,990,917

Institutional:

Active:

Equity

110,976

1,852

27,547

743

141,118

124,722

Fixed income

538,961

55,006

55,358

2,043

651,368

611,383

Multi-asset

336,237

28,785

68,410

801

434,233

385,495

Alternatives

93,805

13,813

3,852

481

111,951

103,369

Active subtotal

1,079,979

99,456

155,167

4,068

1,338,670

1,224,969

Index:

Equity

1,444,873

(37,552
)

380,101

6,404

1,793,826

1,640,715

Fixed income

646,272

75,006

55,969

15,722

792,969

733,371

Multi-asset

7,745

(718
)

1,203

9

8,239

8,095

Alternatives

4,340

166

272

70

4,848

4,580

Index subtotal

2,103,230

36,902

437,545

22,205

2,599,882

2,386,761

Institutional subtotal

3,183,209

136,358

592,712

26,273

3,938,552

3,611,730

Long-term

5,525,484

335,660

991,041

29,729

6,881,914

6,261,717

Cash management

448,565

93,074

3,054

1,256

545,949

486,636

Advisory⁽³⁾

1,769

2

(19
)

18

1,770

1,766

Total

$
5,975,818

$
428,736

$
994,076

$
31,003

$
7,429,633

$
6,750,119

(1)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(2)

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

~~(1)~~

~~Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US 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.~~

The following table presents component changes in AUM by investment style and product type for ~~2019.~~2022.


	December 31,		Net inflows			Market			FX			December 31,		Full year average
(in millions)	2021		(outflows)			change			impact(1)			2022		AUM(2)
Active:
Equity	$	507,103	$	(2,672	)	$	(100,240	)	$	(11,355	)	$	392,836	$	426,141
Fixed income		1,107,085		92,721			(132,590	)		(14,133	)		1,053,083		1,016,918
Multi-asset		798,404		30,806			(138,092	)		(21,489	)		669,629		708,130
Alternatives		193,733		14,273			(2,516	)		(3,478	)		202,012		199,294
Active subtotal		2,606,325		135,128			(373,438	)		(50,455	)		2,317,560		2,350,483
Index and ETFs:
ETFs:
Equity		2,447,248		100,756			(449,140	)		(17,122	)		2,081,742		2,163,108
Fixed income		745,373		122,893			(103,957	)		(6,216	)		758,093		719,931
Multi-asset		9,119		1,333			(1,441	)		(136	)		8,875		8,231
Alternatives		65,614		(4,647	)		70			(137	)		60,900		66,599
ETFs subtotal		3,267,354		220,335			(554,468	)		(23,611	)		2,909,610		2,957,869
Non-ETF Index:
Equity		2,388,009		7,019			(366,526	)		(67,726	)		1,960,776		2,088,703
Fixed income		969,583		34,166			(207,908	)		(70,194	)		725,647		815,123
Multi-asset		8,971		(917	)		(1,285	)		(369	)		6,400		7,558
Alternatives		5,534		(2,481	)		571			(326	)		3,298		4,696
Non-ETF Index subtotal		3,372,097		37,787			(575,148	)		(138,615	)		2,696,121		2,916,080
Index & ETFs subtotal		6,639,451		258,122			(1,129,616	)		(162,226	)		5,605,731		5,873,949
Long-term		9,245,776		393,250			(1,503,054	)		(212,681	)		7,923,291		8,224,432
Cash management		755,057		(77,374	)		1,071			(7,560	)		671,194		719,284
Advisory		9,310		(9,306	)		(4	)		—			—		4,854
Total	$	10,010,143	$	306,570		$	(1,501,987	)	$	(220,241	)	$	8,594,485	$	8,948,570

(in millions)
December 31,
2018

Net
inflows
(outflows)

Market
change

FX
impact⁽¹⁾

December 31,
2019

Full year
average
AUM⁽²⁾

Active:

Equity
$
258,205

$
(2,918
)

$
59,701

$
1,157

$
316,145

$
286,461

Fixed income

795,985

74,972

66,150

2,168

939,275

885,170

Multi-asset

449,654

19,494

84,549

975

554,672

502,860

Alternatives

113,936

18,344

4,357

493

137,130

125,753

Active subtotal

1,617,780

109,892

214,757

4,793

1,947,222

1,800,244

Index and iShares ETFs:

iShares ETFs:

Equity

1,274,262

64,705

292,840

1,165

1,632,972

1,453,395

Fixed income

427,596

112,345

25,878

(29
)

565,790

503,266

Multi-asset

4,485

113

601

11

5,210

4,489

Alternatives

25,082

6,329

4,664

18

36,093

29,767

iShares ETFs subtotal

1,731,425

183,492

323,983

1,165

2,240,065

1,990,917

Non-ETF Index:

Equity

1,503,358

(33,434
)

393,767

7,521

1,871,212

1,708,664

Fixed income

660,836

76,262

57,059

16,170

810,327

749,216

Multi-asset

7,745

(718
)

1,202

10

8,239

8,096

Alternatives

4,340

166

273

70

4,849

4,580

Non-ETF Index subtotal

2,176,279

42,276

452,301

23,771

2,694,627

2,470,556

Index & iShares ETFs subtotal

3,907,704

225,768

776,284

24,936

4,934,692

4,461,473

Long-term

5,525,484

335,660

991,041

29,729

6,881,914

6,261,717

Cash management

448,565

93,074

3,054

1,256

545,949

486,636

Advisory⁽³⁾

1,769

2

(19
)

18

1,770

1,766

Total
$
5,975,818

$
428,736

$
994,076

$
31,003

$
7,429,633

$
6,750,119

The following table presents component changes in AUM by product type for ~~2019.~~2022.


	December 31,		Net inflows			Market			FX			December 31,		Full year average
(in millions)	2021		(outflows)			change			impact(1)			2022		AUM(2)
Equity	$	5,342,360	$	105,103		$	(915,906	)	$	(96,203	)	$	4,435,354	$	4,677,952
Fixed income		2,822,041		249,780			(444,455	)		(90,543	)		2,536,823		2,551,972
Multi-asset		816,494		31,222			(140,818	)		(21,994	)		684,904		723,919
Alternatives:
Illiquid alternatives		102,579		16,052			1,112			(1,992	)		117,751		111,075
Liquid alternatives		87,348		(1,690	)		(3,710	)		(1,294	)		80,654		84,024
Currency and commodities(3)		74,954		(7,217	)		723			(655	)		67,805		75,490
Alternatives subtotal		264,881		7,145			(1,875	)		(3,941	)		266,210		270,589
Long-term		9,245,776		393,250			(1,503,054	)		(212,681	)		7,923,291		8,224,432
Cash management		755,057		(77,374	)		1,071			(7,560	)		671,194		719,284
Advisory		9,310		(9,306	)		(4	)		—			—		4,854
Total	$	10,010,143	$	306,570		$	(1,501,987	)	$	(220,241	)	$	8,594,485	$	8,948,570

December 31,

Net
inflows

Market

FX

December 31,

Full year
average

(in millions)
2018

(outflows)

change

impact⁽¹⁾

2019

AUM⁽²⁾

Equity
$
3,035,825

$
28,353

$
746,308

$
9,843

$
3,820,329

$
3,448,520

Fixed income

1,884,417

263,579

149,087

18,309

2,315,392

2,137,652

Multi-asset

461,884

18,889

86,352

996

568,121

515,445

Alternatives:

Illiquid alternatives

59,827

14,103

1,101

318

75,349

68,030

Liquid alternatives

51,718

3,957

3,224

149

59,048

55,088

Currency and commodities⁽⁴⁾

31,813

6,779

4,969

114

43,675

36,982

Alternatives subtotal

143,358

24,839

9,294

581

178,072

160,100

Long-term

5,525,484

335,660

991,041

29,729

6,881,914

6,261,717

Cash management

448,565

93,074

3,054

1,256

545,949

486,636

Advisory⁽³⁾

1,769

2

(19
)

18

1,770

1,766

Total
$
5,975,818

$
428,736

$
994,076

$
31,003

$
7,429,633

$
6,750,119

(1)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US 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)

Amounts include commodity ETFs.

~~(1)~~

~~Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US 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.~~

~~(4)~~

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

AUM ~~increased $1.5~~decreased $1.4 trillion to ~~$7.43~~$8.6 trillion at December 31, ~~2019~~2022 from ~~$5.98~~$10.0 trillion at December 31, ~~2018~~2021 driven by net market ~~appreciation~~depreciation and the negative impact of foreign exchange movements, partially offset by positive net inflows, led by flows ~~across all investment styles~~into bond ETFs, significant outsourcing mandates and ~~product types.~~growth in private markets.

Net market ~~appreciation~~depreciation of ~~$994.1 billion~~$1.5 trillion was primarily driven ~~primarily~~ by ~~higher~~ global equity and fixed income ~~markets.~~market depreciation.

AUM ~~increased $31~~decreased $220 billion due to the negative impact of foreign exchange movements, ~~primarily~~ due to the ~~weakening~~strengthening of the US dollar, largely against the British ~~pound.~~ pound, the Japanese yen and the Euro.

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

Component Changes in AUM for ~~2018~~2021

The following table presents the component changes in AUM by client type and product type for ~~2018.~~2021.


	December 31,		Net inflows					Market			FX			December 31,		Full year average
(in millions)	2020		(outflows)			Acquisition(1)		change			impact(2)			2021		AUM(3)
Retail:
Equity	$	338,434	$	42,060		$	41,324	$	54,310		$	(4,191	)	$	471,937	$	428,218
Fixed income		340,468		34,870			—		(6,716	)		(3,316	)		365,306		356,075
Multi-asset		132,624		12,579			—		10,793			(535	)		155,461		145,903
Alternatives		34,391		12,584			—		644			(270	)		47,349		41,413
Retail subtotal		845,917		102,093			41,324		59,031			(8,312	)		1,040,053		971,609
ETFs:
Equity		1,905,101		222,855			—		331,275			(11,983	)		2,447,248		2,199,698
Fixed income		690,033		78,858			—		(17,894	)		(5,624	)		745,373		703,004
Multi-asset		6,268		2,266			—		589			(4	)		9,119		7,607
Alternatives		67,605		1,555			—		(3,475	)		(71	)		65,614		66,023
ETFs subtotal		2,669,007		305,534			—		310,495			(17,682	)		3,267,354		2,976,332
Institutional:
Active:
Equity		169,522		6,104			—		26,852			(2,498	)		199,980		182,054
Fixed income		716,269		64,200			—		(5,428	)		(7,639	)		767,402		720,006
Multi-asset		511,242		82,981			—		59,919			(11,191	)		642,951		573,144
Alternatives		127,429		15,782			—		4,489			(1,316	)		146,384		137,630
Active subtotal		1,524,462		169,067			—		85,832			(22,644	)		1,756,717		1,612,834
Index:
Equity		2,006,749		(169,338	)		—		413,914			(28,130	)		2,223,195		2,123,482
Fixed income		927,718		52,409			—		(5,892	)		(30,275	)		943,960		937,784
Multi-asset		8,599		6			—		708			(350	)		8,963		9,424
Alternatives		5,617		(902	)		—		933			(114	)		5,534		5,633
Index subtotal		2,948,683		(117,825	)		—		409,663			(58,869	)		3,181,652		3,076,323
Institutional subtotal		4,473,145		51,242			—		495,495			(81,513	)		4,938,369		4,689,157
Long-term		7,988,069		458,869			41,324		865,021			(107,507	)		9,245,776		8,637,098
Cash management		666,252		94,043			—		(1,137	)		(4,101	)		755,057		711,160
Advisory(4)		22,359		(13,258	)		—		195			14			9,310		16,690
Total	$	8,676,680	$	539,654		$	41,324	$	864,079		$	(111,594	)	$	10,010,143	$	9,364,948

December 31,

Net
inflows

Acquisitions and

Market

FX

December 31,

Full year
average

(in millions)
2017

(outflows)

dispositions⁽¹⁾

change

impact⁽²⁾

2018

AUM⁽³⁾

Retail:

Equity
$
233,218

$
2,090

$
2,137

$
(28,005
)

$
(3,726
)

$
205,714

��
$
231,556

Fixed income

257,571

11,546

14,070

(8,630
)

(2,969
)

271,588

268,818

Multi-asset

120,855

2,914

2,519

(12,107
)

(764
)

113,417

120,907

Alternatives

16,733

2,529

1,628

(590
)

(169
)

20,131

18,492

Retail subtotal

628,377

19,079

20,354

(49,332
)

(7,628
)

610,850

639,773

iShares ETFs:

Equity

1,329,610

112,817

—

(159,433
)

(8,732
)

1,274,262

1,360,991

Fixed income

395,252

50,930

—

(14,355
)

(4,231
)

427,596

404,236

Multi-asset

3,761

1,050

—

(317
)

(9
)

4,485

3,837

Alternatives

23,616

2,738

—

(1,196
)

(76
)

25,082

24,663

iShares ETFs subtotal

1,752,239

167,535

—

(175,301
)

(13,048
)

1,731,425

1,793,727

Institutional:

Active:

Equity

137,185

(7,895
)

(4,296
)

(11,485
)

(2,533
)

110,976

131,474

Fixed income

570,050

(20,701
)

2,417

(7,301
)

(5,504
)

538,961

554,107

Multi-asset

347,825

11,944

(1,593
)

(14,650
)

(7,289
)

336,237

348,342

Alternatives

84,248

7,069

3,374

444

(1,330
)

93,805

88,715

Active subtotal

1,139,308

(9,583
)

(98
)

(32,992
)

(16,656
)

1,079,979

1,122,638

Index:

Equity

1,671,628

(91,845
)

4,749

(122,252
)

(17,407
)

1,444,873

1,648,418

Fixed income

632,592

37,335

2,051

(4,835
)

(20,871
)

646,272

640,733

Multi-asset

7,837

1,005

(243
)

(880
)

26

7,745

8,031

Alternatives

4,750

(199
)

1

(142
)

(70
)

4,340

4,689

Index subtotal

2,316,807

(53,704
)

6,558

(128,109
)

(38,322
)

2,103,230

2,301,871

Institutional subtotal

3,456,115

(63,287
)

6,460

(161,101
)

(54,978
)

3,183,209

3,424,509

Long-term

5,836,731

123,327

26,814

(385,734
)

(75,654
)

5,525,484

5,858,009

Cash management

449,949

(21
)

686

1,593

(3,642
)

448,565

453,883

Advisory⁽⁴⁾

1,515

323

—

5

(74
)

1,769

1,381

Total
$
6,288,195

$
123,629

$
27,500

$
(384,136
)

$
(79,370
)

$
5,975,818

$
6,313,273

(1)

Amounts include AUM attributable to the Aperio Transaction.

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US 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.

~~(1)~~

~~Amount represents net AUM impact from the TCP Transaction, the Citibanamex Transaction, the Aegon Transaction and the DSP Transaction.~~

~~(2)~~

~~Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US 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.~~

The following table presents component changes in AUM by investment style and product type for ~~2018.~~2021.


	December 31,		Net inflows					Market			FX			December 31,		Full year average
(in millions)	2020		(outflows)			Acquisition(1)		change			impact(2)			2021		AUM(3)
Active:
Equity	$	410,189	$	48,773		$	—	$	53,689		$	(5,548	)	$	507,103	$	466,291
Fixed income		1,035,015		94,047			—		(11,322	)		(10,655	)		1,107,085		1,053,764
Multi-asset		643,864		95,555			—		70,711			(11,726	)		798,404		719,041
Alternatives		161,819		28,365			—		5,134			(1,585	)		193,733		179,043
Active subtotal		2,250,887		266,740			—		118,212			(29,514	)		2,606,325		2,418,139
Index and ETFs:
ETFs:
Equity		1,905,101		222,855			—		331,275			(11,983	)		2,447,248		2,199,698
Fixed income		690,033		78,858			—		(17,894	)		(5,624	)		745,373		703,004
Multi-asset		6,268		2,266			—		589			(4	)		9,119		7,607
Alternatives		67,605		1,555			—		(3,475	)		(71	)		65,614		66,023
ETFs subtotal		2,669,007		305,534			—		310,495			(17,682	)		3,267,354		2,976,332
Non-ETF Index:
Equity		2,104,516		(169,947	)		41,324		441,387			(29,271	)		2,388,009		2,267,463
Fixed income		949,440		57,432			—		(6,714	)		(30,575	)		969,583		960,101
Multi-asset		8,601		11			—		709			(350	)		8,971		9,430
Alternatives		5,618		(901	)		—		932			(115	)		5,534		5,633
Non-ETF Index subtotal		3,068,175		(113,405	)		41,324		436,314			(60,311	)		3,372,097		3,242,627
Index & ETFs subtotal		5,737,182		192,129			41,324		746,809			(77,993	)		6,639,451		6,218,959
Long-term		7,988,069		458,869			41,324		865,021			(107,507	)		9,245,776		8,637,098
Cash management		666,252		94,043			—		(1,137	)		(4,101	)		755,057		711,160
Advisory(4)		22,359		(13,258	)		—		195			14			9,310		16,690
Total	$	8,676,680	$	539,654		$	41,324	$	864,079		$	(111,594	)	$	10,010,143	$	9,364,948

December 31,

Net
inflows

Acquisitions and

Market

FX

December 31,

Full year
average

(in millions)
2017

(outflows)

dispositions⁽¹⁾

change

impact⁽²⁾

2018

AUM⁽³⁾

Active:

Equity
$
311,209

$
(12,439
)

$
(2,160
)

$
(33,819
)

$
(4,586
)

$
258,205

$
300,671

Fixed income

815,135

(12,009
)

16,487

(15,869
)

(7,759
)

795,985

808,997

Multi-asset

468,679

14,858

926

(26,757
)

(8,052
)

449,654

469,249

Alternatives

100,982

9,598

5,002

(146
)

(1,500
)

113,936

107,206

Active subtotal

1,696,005

8

20,255

(76,591
)

(21,897
)

1,617,780

1,686,123

Index and iShares ETFs:

iShares ETFs:

Equity

1,329,610

112,817

—

(159,433
)

(8,732
)

1,274,262

1,360,991

Fixed income

395,252

50,930

—

(14,355
)

(4,231
)

427,596

404,236

Multi-asset

3,761

1,050

—

(317
)

(9
)

4,485

3,837

Alternatives

23,616

2,738

—

(1,196
)

(76
)

25,082

24,663

iShares ETFs subtotal

1,752,239

167,535

—

(175,301
)

(13,048
)

1,731,425

1,793,727

Non-ETF Index:

Equity

1,730,822

(85,211
)

4,750

(127,923
)

(19,080
)

1,503,358

1,710,777

Fixed income

645,078

40,189

2,051

(4,897
)

(21,585
)

660,836

654,661

Multi-asset

7,838

1,005

(243
)

(880
)

25

7,745

8,031

Alternatives

4,749

(199
)

1

(142
)

(69
)

4,340

4,690

Non-ETF Index subtotal

2,388,487

(44,216
)

6,559

(133,842
)

(40,709
)

2,176,279

2,378,159

Index & iShares ETFs subtotal

4,140,726

123,319

6,559

(309,143
)

(53,757
)

3,907,704

4,171,886

Long-term

5,836,731

123,327

26,814

(385,734
)

(75,654
)

5,525,484

5,858,009

Cash management

449,949

(21
)

686

1,593

(3,642
)

448,565

453,883

Advisory⁽⁴⁾

1,515

323

—

5

(74
)

1,769

1,381

Total
$
6,288,195

$
123,629

$
27,500

$
(384,136
)

$
(79,370
)

$
5,975,818

$
6,313,273

The following table presents component changes in AUM by product type for ~~2018.~~2021.


	December 31,		Net inflows			Acquisition		Market			FX			December 31,		Full year average
(in millions)	2020		(outflows)			Acquisition(1)		change			impact(2)			2021		AUM(3)
Equity	$	4,419,806	$	101,681		$	41,324	$	826,351		$	(46,802	)	$	5,342,360	$	4,933,452
Fixed income		2,674,488		230,337			—		(35,930	)		(46,854	)		2,822,041		2,716,869
Multi-asset		658,733		97,832			—		72,009			(12,080	)		816,494		736,078
Alternatives:
Illiquid alternatives		85,770		16,120			—		1,750			(1,061	)		102,579		94,768
Liquid alternatives		73,218		11,328			—		3,129			(327	)		87,348		80,866
Currency and commodities(5)		76,054		1,571			—		(2,288	)		(383	)		74,954		75,065
Alternatives subtotal		235,042		29,019			—		2,591			(1,771	)		264,881		250,699
Long-term		7,988,069		458,869			41,324		865,021			(107,507	)		9,245,776		8,637,098
Cash management		666,252		94,043			—		(1,137	)		(4,101	)		755,057		711,160
Advisory(4)		22,359		(13,258	)		—		195			14			9,310		16,690
Total	$	8,676,680	$	539,654		$	41,324	$	864,079		$	(111,594	)	$	10,010,143	$	9,364,948

December 31,

Net
inflows

Acquisitions and

Market

FX

December 31,

Full year
average

(in millions)
2017

(outflows)

dispositions⁽¹⁾

change

impact⁽²⁾

2018

AUM⁽³⁾

Equity
$
3,371,641

$
15,167

$
2,590

$
(321,175
)

$
(32,398
)

$
3,035,825

$
3,372,439

Fixed income

1,855,465

79,110

18,538

(35,121
)

(33,575
)

1,884,417

1,867,894

Multi-asset

480,278

16,913

683

(27,954
)

(8,036
)

461,884

481,117

Alternatives:

Illiquid alternatives

47,270

7,580

4,968

828

(819
)

59,827

52,764

Liquid alternatives

51,263

2,010

27

(857
)

(725
)

51,718

51,888

Currency and commodities⁽⁵⁾

30,814

2,547

8

(1,455
)

(101
)

31,813

31,907

Alternatives subtotal

129,347

12,137

5,003

(1,484
)

(1,645
)

143,358

136,559

Long-term

5,836,731

123,327

26,814

(385,734
)

(75,654
)

5,525,484

5,858,009

Cash management

449,949

(21
)

686

1,593

(3,642
)

448,565

453,883

Advisory⁽⁴⁾

1,515

323

—

5

(74
)

1,769

1,381

Total
$
6,288,195

$
123,629

$
27,500

$
(384,136
)

$
(79,370
)

$
5,975,818

$
6,313,273

(1)

Amounts include AUM attributable to the Aperio Transaction.

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US 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.

(5)

Amounts include commodity ETFs.

~~(1)~~

~~Amount represents net AUM impact from the TCP Transaction, the Citibanamex Transaction, the Aegon Transaction and the DSP Transaction.~~

~~(2)~~

~~Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US 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.~~

~~(5)~~

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

AUM ~~decreased $312.4 billion~~increased $1.3 trillion to ~~$5.98~~$10.0 trillion at December 31, ~~2018~~2021 from ~~$6.29~~$8.7 trillion at December 31, ~~2017~~2020 driven primarily by net market ~~depreciation~~appreciation, positive net flows across all investment styles and product types, and AUM added from the Aperio Transaction, partially offset by the negative impact of foreign exchange ~~movements, partially offset by positive long-term net flows, led by~~ ~~iShares~~movements. ~~ETFs, active multi-asset and illiquid alternatives, and net AUM added from strategic transactions.~~

Net market ~~depreciation~~appreciation of ~~$384.1~~$864 billion was driven primarily by ~~lower~~higher global equity markets.

AUM decreased ~~$79.4~~$112 billion due to the impact of foreign exchange movements, primarily due to the strengthening of the US dollar, largely against the Euro, the Japanese yen and the British ~~pound and Euro.~~ pound.

Discussion of Financial Results

Introduction

The Company derives a substantial portion of its revenue from investment advisory and administration fees, which are recognized as the services are performed over time because the customer is receiving and consuming the benefits as they are provided by the Company. Fees are primarily based on agreed-upon percentages of AUM and recognized for services provided during the period, which are distinct from services provided in other periods. Such fees are affected by changes in AUM, including market appreciation or depreciation, foreign exchange translation and net inflows or outflows. Net inflows or 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 translating non-US dollar denominated AUM into US dollars for reporting purposes.

The Company also earns revenue by lending securities on behalf of clients, primarily 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 the Company and the funds or accounts managed by the Company from which the securities are borrowed. ~~Historically, securities lending revenue in the second quarter exceeds revenue in 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 the Company’s revenue and earnings. The magnitude of performance fees can fluctuate quarterly due to the timing of carried interest recognition on illiquid alternative ~~products; however, the third~~products and ~~fourth quarters have~~ a greater number and size of ~~nonalternative~~liquid products with performance measurement periods that end ~~on either September 30 or December 31.~~in the third and fourth quarters.

The Company offers investment management technology systems, risk management services, wealth management and digital distribution tools, all on a fee basis. Clients include banks, insurance companies, official institutions, pension funds, asset managers, retail distributors and other investors. Fees earned for technology services are primarily recorded as services are performed over time and are generally determined using the value of positions on the Aladdin platform, or on a fixed-rate basis. Revenue derived from the sale of software licenses is recognized upon the granting of access rights.

The Company earns distribution and service fees for distributing investment products and providing support services to ~~investments~~investment portfolios. The fees are based on AUM and are recognized when the amount of fees is known.

The Company advises global financial institutions, regulators, and government entities across a range of risk, regulatory, capital markets and strategic services. Fees earned for advisory services, which are included in advisory and other revenue, are determined using fixed-rate fees and are recognized over time as the related services are completed.

The Company earns fees for transition management services primarily comprised of commissions recognized in connection with buying and selling securities on behalf of its customers. Commissions related to transition management services,which are included in advisory and other revenue, are recorded on a trade-date basis as transactions occur.

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

Operating expense reflects employee compensation and benefits, distribution and servicing costs, direct fund expense, general and administration 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.~~

•

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

•

Distribution and servicing costs, which are primarily AUM driven, include payments to third parties, primarily associated with distribution and servicing of client investments in certain Company products.

•

Direct fund expense primarily consists of third-party nonadvisory expenses incurred by the Company 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 expense, and audit and tax services as well as other fund-related expenses 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 expense includes marketing and promotional, occupancy and office-related costs, portfolio services (including clearing expense related to transition management services), technology, professional services, communications, contingent consideration fair value adjustments, product launch costs, the impact of foreign currency remeasurement, and other general and administration expense. Foreign currency remeasurement losses were $31 million and $16 million for 2019 and 2018, respectively.

•

General and administration expense includes marketing and promotional (including travel and entertainment expense), occupancy and office-related, portfolio services (including clearing expense related to transition management services, and market data costs), sub-advisory, technology, professional services, communications, contingent consideration fair value adjustments, product launch costs, the net impact of foreign currency remeasurement, and other general and administration expense.

Approximately ~~75%~~80% of the Company’s revenue is generated in US 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.~~US.

Nonoperating income (expense) includes the effect of changes in the valuations on investments and earnings on equity method investments as well as interest and dividend income and interest expense. The Company primarily holds seed and co-investments in sponsored investment products that invest in a variety of asset classes, including private equity, hedge funds and real assets. Investments generally are made for co-investment purposes, to establish a performance track record or for regulatory purposes, including Federal Reserve Bank stock. The Company 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.~~products (“CIPs”). The portion of nonoperating income (expense) not attributable to the Company is allocated to NCI on the consolidated statements of income.

Revenue

The ~~following~~ table below presents detail of revenue for ~~2019~~2022 and ~~2018~~2021 and includes the product type mix of ~~investment advisory, administration~~base fees and securities lending revenue ~~(collectively “base fees”)~~ and performance fees.


(in millions)	2022		2021
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	2,147	$	2,571
ETFs		4,345		4,658
Non-ETF index		711		771
Equity subtotal		7,203		8,000
Fixed income:
Active		1,977		2,191
ETFs		1,122		1,201
Non-ETF index		396		471
Fixed income subtotal		3,495		3,863
Multi-asset		1,299		1,414
Alternatives:
Illiquid alternatives		741		668
Liquid alternatives		633		629
Currency and commodities(1)		216		216
Alternatives subtotal		1,590		1,513
Long-term		13,587		14,790
Cash management		864		470
Total investment advisory, administration fees and securities lending revenue		14,451		15,260
Investment advisory performance fees:
Equity		49		153
Fixed income		25		48
Multi-asset		25		32
Alternatives:
Illiquid alternatives		296		208
Liquid alternatives		119		702
Alternatives subtotal		415		910
Total performance fees		514		1,143
Technology services revenue		1,364		1,281
Distribution fees:
Retrocessions		1,026		1,098
12b-1 fees (US mutual fund distribution fees)		312		358
Other		43		65
Total distribution fees		1,381		1,521
Advisory and other revenue:
Advisory		56		68
Other		107		101
Total advisory and other revenue		163		169
Total revenue	$	17,873	$	19,374

(in millions)
2019

2018

Investment advisory, administration fees and securities lending revenue:

Equity:

Active
$
1,554

$
1,654

iShares ETFs

3,495

3,549

Non-ETF index

667

685

Equity subtotal

5,716

5,888

Fixed income:

Active

1,918

1,840

iShares ETFs

963

825

Non-ETF index

405

387

Fixed income subtotal

3,286

3,052

Multi-asset

1,148

1,176

Alternatives:

Illiquid alternatives

488

348

Liquid alternatives

413

384

Currency and commodities ⁽¹⁾

108

98

Alternatives subtotal

1,009

830

Long-term

11,159

10,946

Cash management

618

607

Total base fees

11,777

11,553

Investment advisory performance fees:

Equity

36

91

Fixed income

10

8

Multi-asset

19

19

Alternatives:

Illiquid alternatives

136

70

Liquid alternatives

249

224

Alternatives subtotal

385

294

Total performance fees

450

412

Technology services revenue

974

785

Distribution fees:

Retrocessions

658

709

12b-1 fees (US mutual fund distribution fees)

358

406

Other

53

40

Total distribution fees

1,069

1,155

Advisory and other revenue:

Advisory

99

113

Other

170

180

Total advisory and other revenue

269

293

Total revenue
$
14,539

$
14,198

(1)

Amounts include commodity ETFs.

~~(1)~~

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

The table below lists a percentage breakdown of base fees and securities lending revenue and mix of average AUM by product type:

Mix of Base Fees

Mix of Average AUM⁽¹⁾

2019

2018

2019

2018

Equity:

Active

13
%

14
%

4
%

5
%

iShares ETFs

30
%

31
%

22
%

22
%

Non-ETF index

6
%

6
%

25
%

26
%

Equity subtotal

49
%

51
%

51
%

53
%

Fixed income:

Active

16
%

17
%

13
%

13
%

iShares ETFs

8
%

7
%

7
%

6
%

Non-ETF index

3
%

3
%

11
%

10
%

Fixed income subtotal

27
%

27
%

31
%

29
%

Multi-asset

10
%

10
%

8
%

8
%

Alternatives:

Illiquid alternatives

4
%

3
%

1
%

1
%

Liquid alternatives

4
%

3
%

1
%

1
%

Currency and commodities ⁽²⁾

1
%

1
%

1
%

1
%

Alternatives subtotal

9
%

7
%

3
%

3
%

Long-term

95
%

95
%

93
%

93
%

Cash management

5
%

5
%

7
%

7
%

Total excluding Advisory AUM

100
%

100
%

100
%

100
%

~~(1)~~

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

~~(2)~~

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

~~2019 Compared with 2018~~


	Percentage of Base Fees and Securities Lending Revenue						Percentage of Average AUM by Product Type(1)
	2022			2021			2022			2021
Equity:
Active		14	%		17	%		5	%		5	%
ETFs		30	%		31	%		24	%		24	%
Non-ETF index		5	%		5	%		24	%		24	%
Equity subtotal		49	%		53	%		53	%		53	%
Fixed income:
Active		14	%		14	%		11	%		10	%
ETFs		8	%		8	%		8	%		8	%
Non-ETF index		3	%		3	%		9	%		10	%
Fixed income subtotal		25	%		25	%		28	%		28	%
Multi-asset		9	%		9	%		8	%		8	%
Alternatives:
Illiquid alternatives		5	%		5	%		1	%		1	%
Liquid alternatives		4	%		4	%		1	%		1	%
Currency and commodities(2)		2	%		1	%		1	%		1	%
Alternatives subtotal		11	%		10	%		3	%		3	%
Long-term		94	%		97	%		92	%		92	%
Cash management		6	%		3	%		8	%		8	%
Total AUM		100	%		100	%		100	%		100	%

(1)

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

(2)

Amounts include commodity ETFs.

Revenue ~~increased $341 million,~~decreased $1.5 billion, or 2%8%, from ~~2018, primarily~~2021, largely driven by ~~higher base fees~~the negative impact of market beta and ~~24% growth in technology services revenue.~~US dollar appreciation on average AUM and lower performance fees.

Investment advisory, administration fees and securities lending revenue of ~~$11,777 million~~$14.5 billion in ~~2019 increased $224~~2022 decreased $809 million from ~~$11,553 million~~$15.3 billion in ~~2018, reflecting~~2021, primarily driven by the ~~positive~~negative impact of market beta and foreign exchange movements ~~organic growth and acquisitions,~~on average AUM, partially offset by organic base fee growth, the ~~negative impact~~elimination of ~~strategic price changes to certain products.~~yield-related fee waivers on money market funds, and higher securities lending revenue. Securities lending revenue of ~~$617~~$599 million increased $44 million from $555 million in ~~2019 compared with $627 million in 2018.~~ 2021, primarily reflecting higher spreads.

Investment advisory performance fees of ~~$450~~$514 million in ~~2019 increased $38~~2022 decreased $629 million from ~~$412~~$1.1 billion in 2021, reflecting lower revenue from liquid alternative and long-only products, partially offset by higher revenue from illiquid alternative products.

Technology services revenue of $1.4 billion for 2022 increased $83 million from $1.3 billion in ~~2018,~~2021, primarily reflecting higher revenue from ~~illiquid and liquid alternative products, partially offset by lower revenue from long-only equity products.~~

~~Technology services revenue~~ ~~of $974 million for 2019 increased $189 million from $785 million in 2018, primarily reflecting~~Aladdin, despite the negative impact of ~~the eFront Transaction~~foreign exchange movements and ~~higher~~market declines on Aladdin’s fixed income platform assets. Approximately 25% of Aladdin’s 2022 revenue ~~from~~ ~~Aladdin~~was denominated in non-US currencies..

~~Advisory and other revenue~~Expense ~~of $269 million in 2019 decreased $24 million from $293 million in 2018, primarily reflecting lower fees from advisory assignments.~~

~~Expense~~

The following table presents expense for ~~2019~~2022 and ~~2018.~~2021.


(in millions)	2022		2021
Expense:
Employee compensation and benefits	$	5,681	$	6,043
Distribution and servicing costs:
Retrocessions		1,026		1,098
12b-1 costs		306		350
Other		847		752
Total distribution and servicing costs		2,179		2,200
Direct fund expense		1,226		1,313
General and administration expense:
Marketing and promotional		331		238
Occupancy and office related		403		364
Portfolio services		280		263
Sub-advisory		80		99
Technology		600		508
Professional services		180		179
Communications		44		44
Foreign exchange remeasurement		10		4
Contingent consideration fair value adjustments		3		34
Product launch costs		6		274
Other general and administration		223		214
Total general and administration expense		2,160		2,221
Restructuring charge		91		—
Amortization of intangible assets		151		147
Total expense	$	11,488	$	11,924

(in millions)

2019

2018

Expense, GAAP:

Employee compensation and benefits

$
4,470

$
4,320

Distribution and servicing costs:

Retrocessions

658

709

12b-1 costs

354

399

Other

673

567

Total distribution and servicing costs

1,685

1,675

Direct fund expense

978

998

General and administration:

Marketing and promotional

350

361

Occupancy and office related

307

293

Portfolio services

261

271

Technology

289

234

Professional services

161

158

Communications

39

37

Foreign exchange remeasurement

31

16

Contingent consideration fair value adjustments

53

65

Product launch costs

59

12

Other general and administration

208

191

Total general and administration expense

1,758

1,638

Restructuring charge

—

60

Amortization of intangible assets

97

50

Total expense, GAAP

$
8,988

$
8,741

~~2019 Compared with 2018~~

~~GAAP~~. Expense ~~increased $247~~decreased $436 million, or 3%4%, from ~~2018, primarily driven by higher~~2021, reflecting lower employee compensation and benefits expense, ~~higher~~direct fund expense, and general and administration expense, ~~and expense linked to~~including the ~~eFront Transaction.~~impact of product launch costs incurred in 2021, partially offset by the impact of a $91 million restructuring charge recorded in 2022.

Employee compensation and benefits expense ~~increased $150~~ decreased $362 million ~~or 3%,~~from 2021, reflecting lower incentive compensation due to ~~$4,470 million in 2019 from $4,320 million in 2018, primarily reflecting higher headcount, higher~~lower operating income, performance fees and ~~higher~~ deferred compensation ~~expense. Employees at December 31, 2019 totaled approximately 16,200 compared with approximately 14,900 at December 31, 2018.~~driven in part by the lower mark-to-market impact of certain deferred cash compensation programs, partially offset by higher base compensation.

Direct fund expense decreased $87 million from 2021, reflecting lower average AUM.

General and administration expense ~~increased $120~~ decreased $61 millionfrom ~~2018, reflecting higher technology expense, higher~~2021, primarily driven by $274 million of product launch costs ~~the impact of the eFront Transaction and the impact of foreign exchange remeasurement expense, partially offset by~~incurred in 2021, lower contingent consideration fair value adjustments ~~related to prior acquisitions~~in 2022 and lower sub-advisory expense, partially offset by higher marketing and promotional expense, including the impact from higher travel and ~~portfolio services~~entertainment expense, and higher technology expense. General and administration expense also reflected higher occupancy and office related expense, including higher noncash occupancy expense related to the lease of office space the Company recorded for its new headquarters located at 50 Hudson Yards in New York (“Lease cost – Hudson Yards”). The Company will begin lease payments related to the new headquarters in May 2023. As a result, the Company is recognizing lease expense for both its current and new headquarters until its current lease expires in April 2023. Lease cost – Hudson Yards has been excluded from our “as adjusted” financial results. See Non-GAAP Financial Measures for further information on as adjusted items.

~~Amortization~~Restructuring charge of ~~intangible assets~~$91 million, primarily comprised of severance and accelerated amortization expense ~~increased $47 million, or 94%,~~ of previously granted deferred compensation awards, was recorded in 2022 in connection with an initiative to ~~$97 million in 2019, primarily reflecting amortization~~modify the size and shape of ~~intangible assets associated~~the workforce to align more closely with ~~the eFront Transaction.~~strategic priorities. The restructuring charge has been excluded from our "as adjusted" financial results. See Non-GAAP Financial Measures for further information on as adjusted items.

Nonoperating Results

The summary ~~and reconciliation of GAAP nonoperating income (expense) to nonoperating income (expense), as adjusted for 2019 and 2018 was as follows:~~

(in millions)

2019

2018

Nonoperating income (expense), GAAP basis⁽¹⁾

$
236

$
(79
)

Less: Net income (loss) attributable to NCI

50

(3
)

Nonoperating income (expense), as adjusted, net of NCI⁽²⁾⁽³⁾

$
186

$
(76
)

~~(1)~~

~~Amounts included gains of $210 million and losses of $105 million attributable to consolidated variable interest entities (“VIEs”) for 2019 and 2018, respectively.~~

~~(2)~~

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

~~(3)~~

~~Management believes nonoperating income (expense), as adjusted, is an effective measure for reviewing the Company’s nonoperating results, which ultimately impact BlackRock’s book value. See~~ ~~Non-GAAP Financial Measures~~ ~~for further information on non-GAAP financial measures for 2019 and 2018.~~

~~The components~~ of nonoperating income (expense), less net income (loss) attributable to NCI for ~~2019~~2022 and ~~2018 were~~2021 was as follows:


(in millions)	2022			2021
Nonoperating income (expense), GAAP basis(1)	$	(95	)	$	723
Less: Net income (loss) attributable to NCI		(184	)		304
Nonoperating income (expense), as adjusted net of NCI(2)(3)	$	89		$	419


(in millions)	2022			2021
Net gain (loss) on investments(1)(2)
Private equity	$	88		$	278
Real assets		28			20
Other alternatives(3)		5			47
Other investments(4)		(201	)		22
Subtotal		(80	)		367
Other gains (losses)(5)		229			170
Total net gain (loss) on investments(1)(2)		149			537
Interest and dividend income		152			87
Interest expense		(212	)		(205	)
Net interest expense		(60	)		(118	)
Nonoperating income (expense)(1)	$	89		$	419

(in millions)

2019

2018

Net gain (loss) on investments⁽¹⁾⁽²⁾

Private equity

$
47

$
(5
)

Real assets

21

26

Other alternatives⁽³⁾

19

2

Other investments⁽⁴⁾

144

(70
)

Subtotal

231

(47
)

Other gains (losses) ⁽⁵⁾

61

51

Total net gain (loss) on investments⁽¹⁾⁽²⁾

292

4

Interest and dividend income

97

104

Interest expense

(203
)

(184
)

Net interest expense

(106
)

(80
)

Nonoperating income (expense), as adjusted⁽¹⁾⁽²⁾

$
186

$
(76
)

(1)

Net of net income (loss) attributable to NCI.

(2)

Management believes nonoperating income (expense), less net income (loss) attributable to NCI, is an effective measure for reviewing BlackRock’s nonoperating results, which ultimately impacts BlackRock’s book value. See Non-GAAP Financial Measures for further information on other non-GAAP financial measures.

(3)

Amounts primarily include net gains (losses) related to credit funds, direct hedge fund strategies and hedge fund solutions.

(4)

Amounts primarily include net gains (losses) related to unhedged equity, fixed income and multi-asset seed investments.

(5)

The amounts for the year ended December 31, 2022 and 2021 primarily include nonoperating noncash pre-tax gains in connection with the Company’s strategic minority investment in iCapital of approximately $267 million and $119 million, respectively. The amounts for the year ended December 31, 2021 also include nonoperating noncash pre-tax gains in connection with the Company’s strategic minority investment in Scalable Capital Limited of approximately $46 million. Additional amounts include noncash pre-tax gains (losses) related to the revaluation of certain other minority investments.

~~(1)~~

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

~~(2)~~

~~(3)~~

~~Amounts primarily include net gains (losses) related to direct hedge fund strategies and hedge fund solutions.~~

~~(4)~~

~~Amounts primarily include net gains (losses) related to equity and fixed income investments.~~

~~(5)~~

2019 primarily include noncash pre-tax gains (losses) related to the revaluation of certain minority investments. 2018 primarily includes a $40 million pre-tax gain related to the DSP Transaction and a $10 million noncash pre-tax gain related to the revaluation of another minority investment.

Income Tax Expense


	GAAP						As Adjusted
(in millions)	2022			2021			2022			2021
Operating income(1)	$	6,385		$	7,450		$	6,711		$	7,747
Total nonoperating income (expense)(1)(2)	$	89		$	419		$	89		$	419
Income before income taxes(2)	$	6,474		$	7,869		$	6,800		$	8,166
Income tax expense	$	1,296		$	1,968		$	1,409		$	1,912
Effective tax rate		20.0	%		25.0	%		20.7	%		23.4	%

GAAP

As adjusted
(in millions)

2019

2018

2019

2018

Operating income⁽¹⁾

$
5,551

$
5,457

$
5,551

$
5,531

Total nonoperating income (expense)⁽¹⁾⁽²⁾

$
186

$
(76
)

$
186

$
(76
)

Income before income taxes⁽²⁾

$
5,737

$
5,381

$
5,737

$
5,455

Income tax expense

$
1,261

$
1,076

$
1,253

$
1,094

Effective tax rate

22.0
%

20.0
%

21.9
%

20.0
%

(1)

(2)

Net of net income (loss) attributable to NCI.

~~(1)~~

~~(2)~~

~~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 that have different statutory tax rates than the US federal statutory rate of 21% include the ~~United Kingdom, Ireland,~~UK, Canada, Switzerland and ~~Netherlands.~~Germany.

~~2019~~2022 Income tax expense (GAAP) reflected:

~~a discrete tax benefit of $28 million primarily related to stock-based compensation awards that vested in 2019.~~

•

a discrete tax benefit of $148 million, primarily related to the resolution of certain outstanding tax matters;

•

a discrete tax benefit of $87 million, related to stock-based compensation awards that vested in 2022; and

•

a discrete tax benefit of $35 million associated with the net noncash tax benefit related to the revaluation of certain deferred income tax liabilities.

~~2018~~The as adjusted effective tax rate of 20.7% for 2022 excluded the $35 million net noncash benefit mentioned above as it will not have a cash flow impact and to ensure comparability among periods presented.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law, which introduced new provisions including a corporate book minimum tax and an excise tax on net stock repurchases which became effective on January 1, 2023. BlackRock does not expect the IRA to have a material impact on its consolidated financial statements.

2021 Income tax expense (GAAP) reflected:

•

a $126 million net noncash expense associated with the revaluation of certain deferred income tax assets and liabilities related to legislation enacted in the UK increasing its corporate tax rate and state and local income tax changes; and

•

a discrete tax benefit of $43 million, related to stock-based compensation awards that vested in 2021.

The as adjusted effective tax rate of 23.4% for 2021 excluded the $126 million net noncash expense mentioned above as it will not have a cash flow impact and to ensure comparability among periods presented.

Statement of financial condition Overview

~~$81 million discrete tax benefits, primarily related to changes in the Company’s organization entity structure; and~~

~~a $64 million discrete tax benefit related to stock-based compensation awards that vested in 2018.~~

~~Balance Sheet Overview~~

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 and ~~consolidated sponsored investment products.~~CIPs.

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~~NCI that ultimately do not have an impact on stockholders’ equity or cash flows. Management views the as adjusted ~~balance sheet,~~statement of financial condition, which contains non-GAAP financial measures, as an economic presentation of 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 that is a registered life insurance company in the ~~United Kingdom,~~UK, 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 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 its clients.

In addition, the Company records on its consolidated statements of financial condition the separate account collateral ~~received~~obtained under BlackRock Life Limited securities lending arrangements for which it has legal title as its own asset in addition to an equal and offsetting separate account collateral liability for the obligation to return the collateral. The collateral is not available to creditors of the Company, and the borrowers under the securities lending arrangements have no recourse to the Company’s assets.

Consolidated Sponsored Investment Products

The Company consolidates certain sponsored investment products accounted for as ~~VIEs~~variable interest entities (“VIEs”) and voting rights entities (“VREs”), (collectively, ~~“consolidated sponsored investment products”~~“CIPs”). See Note 2, Significant Accounting Policies,, in the notes to the consolidated financial statements contained in Part II, Item 8 of this filing for more information on the Company’s consolidation policy.

The Company cannot readily access cash and cash equivalents or other assets held by ~~consolidated sponsored investment products~~CIPs to use in its operating activities. In addition, the Company cannot readily sell investments held by ~~consolidated sponsored investment products~~CIPs in order to obtain cash for use in the Company’s operations.


	December 31, 2022
(in millions)	GAAP Basis		Separate Account Assets/ Collateral(1)		CIPs(2)		As Adjusted
Assets
Cash and cash equivalents	$	7,416	$	—	$	265	$	7,151
Accounts receivable		3,264		—		—		3,264
Investments		7,466		—		1,047		6,419
Separate account assets and collateral held under securities lending agreements		59,831		59,831		—		—
Operating lease right-of-use assets		1,516		—		—		1,516
Other assets(3)		4,492		—		97		4,395
Subtotal		83,985		59,831		1,409		22,745
Goodwill and intangible assets, net		33,643		—		—		33,643
Total assets	$	117,628	$	59,831	$	1,409	$	56,388
Liabilities
Accrued compensation and benefits	$	2,272	$	—	$	—	$	2,272
Accounts payable and accrued liabilities		1,294		—		—		1,294
Borrowings		6,654		—		—		6,654
Separate account liabilities and collateral liabilities under securities lending agreements		59,831		59,831		—		—
Deferred income tax liabilities(4)		3,381		—		—		3,381
Operating lease liabilities		1,835		—		—		1,835
Other liabilities		3,576		—		427		3,149
Total liabilities		78,843		59,831		427		18,585
Equity
Total BlackRock, Inc. stockholders’ equity		37,744		—		—		37,744
Noncontrolling interests		1,041		—		982		59
Total equity		38,785		—		982		37,803
Total liabilities and equity	$	117,628	$	59,831	$	1,409	$	56,388

December 31, 2019

(in millions)

GAAP
Basis

Separate
Account
Assets/
Collateral⁽¹⁾

Consolidated Sponsored Investment Products⁽²⁾

As
Adjusted

Assets

Cash and cash equivalents

$
4,829

$
—

$
141

$
4,688

Accounts receivable

3,179

—

—

3,179

Investments

5,489

—

1,494

3,995

Separate account assets and collateral held under securities
lending agreements

118,310

118,310

—

—

Other assets⁽³⁾

3,884

—

57

3,827

Subtotal

135,691

118,310

1,692

15,689

Goodwill and intangible assets, net

32,931

—

—

32,931

Total assets

$
168,622

$
118,310

$
1,692

$
48,620

Liabilities

Accrued compensation and benefits

$
2,057

$
—

$
—

$
2,057

Accounts payable and accrued liabilities

1,167

—

—

1,167

Borrowings

4,955

—

—

4,955

Separate account liabilities and collateral liabilities under
securities lending agreements

118,310

118,310

—

—

Deferred income tax liabilities⁽⁴⁾

3,734

—

—

3,734

Other liabilities

3,470

—

310

3,160

Total liabilities

133,693

118,310

310

15,073

Equity

Total stockholders’ equity

33,547

—

—

33,547

Noncontrolling interests

1,382

—

1,382

—

Total equity

34,929

—

1,382

33,547

Total liabilities and equity

$
168,622

$
118,310

$
1,692

$
48,620

(1)

Amounts represent segregated client assets and related liabilities, in which BlackRock has no economic interest. BlackRock earns an investment advisory fee for the service of managing these assets on behalf of its clients.

(2)

Amounts represent the impact of consolidating CIPs.

(3)

Amount includes property and equipment and other assets.

(4)

Amount includes approximately $4.3 billion of deferred income tax liabilities related to goodwill and intangibles. See Note 25, Income Taxes, in the notes to the consolidated financial statements contained in Part II, Item 8 of this filing for more information.

~~(1)~~

Amounts represent segregated client assets and related liabilities. 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 its clients.

~~(2)~~

~~Amounts represent the portion of assets and liabilities of Consolidated Sponsored Investment Products attributable to NCI.~~

~~(3)~~

~~Amount includes property and equipment and other assets.~~

~~(4)~~

~~Amount includes approximately $4.2 billion of deferred income tax liabilities related to goodwill and intangibles. See Note 25,~~ ~~Income Taxes, in the notes to the consolidated financial statements contained in Part II, Item 8 of this filing 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, ~~2019~~2022 and ~~2018~~2021 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, ~~2019~~2022 and ~~2018~~2021 included ~~$141~~$265 million and ~~$245~~$308 million, respectively, of cash held by ~~consolidated sponsored investment products~~CIPs (see Liquidity and Capital Resources for details on the change in cash and cash equivalents during ~~2019)~~2022).

Accounts receivable at December 31, ~~2019 increased $522~~2022 decreased $525 million from December 31, ~~2018,~~2021, primarily due to ~~higher~~lower base ~~fees, technology services~~ and performance fee receivables. Investments, ~~were $5,489~~including the impact of CIPs increased $204 million atfrom December 31, ~~2019~~2021 (for more information see Investments herein). Goodwill and intangible assets ~~increased $1,566~~decreased $161 million from December 31, ~~2018,~~2021, primarily due to ~~the eFront Transaction, partially offset by~~ amortization of intangible assets. Other assets ~~(including operating lease right-of-use (“ROU”) assets and property and equipment)~~ increased ~~$237~~$950 million from December 31, ~~2018,~~2021, primarily ~~due to the initial recognition of the operating lease ROU assets~~ related to ~~the adoption of the new lease accounting guidance and~~ an increase in certain corporate minority investments and property and equipment, ~~and~~partially offset by lower unit trust receivables (substantially offset by ~~an increase~~a decrease in unit trust payables recorded within other liabilities)~~, partially offset by a decrease in other assets of consolidated sponsored investment products.~~.

Liabilities. Accrued compensation and benefits at December 31, ~~2019 increased $69~~2022 decreased $679 million from December 31, ~~2018,~~2021, primarily due to ~~higher 2019 deferred~~lower 2022 incentive compensation accruals. ~~Other~~Accounts payable and accrued liabilities ~~increased $207~~at December 31, 2022 decreased $103 million from December 31, ~~2018,~~2021. Borrowings at December 31, 2022 decreased $792 million from December 31, 2021, primarily due to ~~the initial recognition~~repayments of ~~the operating lease~~$750 million. Other liabilities ~~related~~at December 31, 2022 decreased $448 million from December 31, 2021, primarily due to ~~the adoption of the new lease accounting guidance~~a decrease in uncertain tax positions and ~~higher~~lower unit trust payables (substantially offset by ~~an increase~~a decrease in unit trust receivables recorded within other assets), partially offset by a decrease in contingent liability in connection with certain prior acquisitions, and restructuring liability payments and a decrease in other liabilities of consolidated sponsored investment products.. Net deferred income tax liabilities at December 31, ~~2019~~2022 increased ~~$163~~$623 million from December 31, ~~2018,~~2021, primarily due to the ~~effects~~effect of temporary differences associated with ~~the eFront Transaction and investment income.~~capitalized costs.

Investments

The Company’s investments were ~~$5,489 million~~$7.5 billion and ~~$4,476 million~~$7.3 billion at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively. Investments include ~~consolidated investments held by sponsored investment products~~CIPs accounted for as VIEs and VREs. Management reviews BlackRock’s investments on an “economic” basis, which eliminates the portion of 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 investments, as adjusted, to enable investors to understand the portion of investments that is owned by the Company, net of NCI, as a gauge to measure the impact of changes in net nonoperating 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,~~exposures, to reflect another helpful measure for investors. The ~~economic impact of investments held pursuant to deferred compensation arrangements is offset by a change in compensation expense. The~~ impact of certain investments is ~~substantially~~ mitigated by ~~swap hedges.~~derivatives including total return swaps and futures. 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, 2022			December 31, 2021
Investments, GAAP	$	7,466		$	7,262
Investments held by CIPs		(4,669	)		(4,623	)
Net interest in CIPs(1)		3,622			3,391
Investments, as adjusted		6,419			6,030
Federal Reserve Bank stock		(91	)		(96	)
Hedged exposures		(1,461	)		(720	)
Carried interest		(1,550	)		(1,555	)
Total “economic” investment exposure(2)	$	3,317		$	3,659

(in millions)

December 31,
2019

December 31,
2018

Investments, GAAP

$
5,489

$
4,476

Investments held by consolidated sponsored investment products

(3,784
)

(3,204
)
Net interest in consolidated sponsored investment products⁽¹⁾

2,290

2,109

Investments, as adjusted

3,995

3,381

Federal Reserve Bank stock

(93
)

(92
)
Deferred compensation investments

(23
)

(34
)
Hedged investments

(644
)

(483
)
Carried interest

(528
)

(387
)
Total “economic” investment exposure

$
2,707

$
2,385

(1)

Amounts included $1.5 billion of carried interest (VIEs) as of both December 31, 2022 and 2021, which has no impact on the Company’s “economic” investment exposure.

(2)

Amounts exclude investments in strategic minority investments included in other assets on the consolidated statements of financial condition.

~~(1)~~

~~Amount included $514 million and $369 million of carried interest (VIEs) as of December 31, 2019 and 2018, respectively, 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, ~~2019~~2022 and ~~2018:~~2021:


(in millions)	December 31, 2022			December 31, 2021
Equity/Fixed income/Multi-asset(1)	$	2,423		$	2,773
Alternatives:
Private equity		1,207			960
Real assets		368			279
Other alternatives(2)		780			367
Alternatives subtotal		2,355			1,606
Hedged exposures		(1,461	)		(720	)
Total “economic” investment exposure	$	3,317		$	3,659

(in millions)

December 31,
2019

December 31,
2018

Private equity

$
355

$
305

Real assets

322

377

Other alternatives⁽¹⁾

235

199

Other investments⁽²⁾

1,795

1,504

Total “economic” investment exposure

$
2,707

$
2,385

(1)

Amounts include seed investments in equity, fixed income, and multi-asset mutual funds/strategies.

(2)

Other alternatives primarily include co-investments in direct hedge fund strategies, hedge fund solutions, and alternative solutions.

~~(1)~~

~~Other alternatives primarily include hedge funds/funds of hedge funds.~~

~~(2)~~

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

As adjusted investment activity for ~~2019~~2022 and ~~2018~~2021 was as follows:


(in millions)	2022			2021
Investments, as adjusted, beginning balance	$	6,030		$	4,433
Purchases/capital contributions		1,532			1,885
Sales/maturities		(695	)		(1,397	)
Distributions (1)		(142	)		(228	)
Market appreciation(depreciation)/earnings from equity method investments		(224	)		461
Carried interest capital allocations/(distributions)		(5	)		928
Other(2)		(77	)		(52	)
Investments, as adjusted, ending balance	$	6,419		$	6,030

(in millions)

2019

2018

Investments, as adjusted, beginning balance

$
3,381

$
3,154

Purchases/capital contributions/acquisitions

975

1,494

Sales/maturities

(617
)

(1,124
)
Distributions ⁽¹⁾

(226
)

(95
)
Market appreciation(depreciation)/earnings from equity method investments

333

(107
)
Carried interest capital allocations/(distributions)/acquired

141

89

Other

8

(30
)
Investments, as adjusted, ending balance

$
3,995

$
3,381

(1)

Amount includes distributions representing return of capital and return on investments.

(2)

Amount includes the impact of foreign exchange movements.

~~(1)~~

~~Amount includes distributions representing return of capital and return on investments.~~

LIQUIDITY AND CAPITAL RESOURCES

BlackRock Cash Flows Excluding the Impact of ~~Consolidated Sponsored Investment Products~~CIPs

The consolidated statements of cash flows include the cash flows of the ~~consolidated sponsored investment products.~~CIPs. The Company uses an adjusted cash flow statement, which excludes the impact of ~~Consolidated Sponsored Investment Products,~~CIPs, 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 products,~~CIPs, 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 products:~~CIPs:


(in millions)	GAAP Basis			Impact on Cash Flows of Consolidated Sponsored Investment Products			Cash Flows Excluding Impact of Consolidated Sponsored Investment Products			GAAP Basis			Impact on Cash Flows of CIPs			Cash Flows Excluding Impact of CIPs
Cash, cash equivalents and restricted cash, December 31, 2017	$	7,096		$	207		$	6,889
Cash, cash equivalents and restricted cash, December 31, 2020										$	8,681		$	206		$	8,475
Net cash provided by/(used in) operating activities		3,075			(1,181	)		4,256			4,944			(1,224	)		6,168
Net cash provided by/(used in) investing activities		(808	)		(84	)		(724	)		(1,937	)		(104	)		(1,833	)
Net cash provided by/(used in) financing activities		(2,765	)		1,303			(4,068	)		(2,287	)		1,430			(3,717	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(93	)		—			(93	)		(61	)		—			(61	)
Net increase/(decrease) in cash, cash equivalents and restricted cash		(591	)		38			(629	)		659			102			557
Cash, cash equivalents and restricted cash, December 31, 2018	$	6,505		$	245		$	6,260
Cash, cash equivalents and restricted cash, December 31, 2021										$	9,340		$	308		$	9,032
Net cash provided by/(used in) operating activities		2,884			(1,563	)		4,447			4,956			(712	)		5,668
Net cash provided by/(used in) investing activities		(2,014	)		(110	)		(1,904	)		(1,130	)		77			(1,207	)
Net cash provided by/(used in) financing activities		(2,583	)		1,569			(4,152	)		(5,442	)		592			(6,034	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		54			—			54			(291	)		—			(291	)
Net increase/(decrease) in cash, cash equivalents and restricted cash		(1,659	)		(104	)		(1,555	)		(1,907	)		(43	)		(1,864	)
Cash, cash equivalents and restricted cash, December 31, 2019	$	4,846		$	141		$	4,705
Cash, cash equivalents and restricted cash, December 31, 2022										$	7,433		$	265		$	7,168

Sources of BlackRock’s operating cash primarily include ~~investment advisory, administration~~base fees and securities lending revenue, performance fees, technology services revenue, advisory and other revenue and distribution fees. BlackRock uses its cash to pay ~~for~~ all operating ~~expense,~~expenses, interest and principal on borrowings, income taxes, dividends on BlackRock’s capital stock, repurchases of the Company’s stock, acquisitions, capital expenditures and purchases of co-investments and seed investments.

For details of the Company’s GAAP cash flows from operating, investing and financing activities, see the Consolidated Statements of Cash Flows contained in Part II, Item 8 of this filing.

Cash flows provided byby/(used in) operating activities, excluding the impact of ~~consolidated sponsored investment products,~~CIPs, primarily include the receipt of ~~investment advisory and administration~~base fees, securities lending revenue, ~~and~~ performance fees and technology services revenue, offset by the payment of operating expenses incurred in the normal course of business, including year-end incentive and deferred compensation accrued ~~for in the~~during prior ~~year.~~years, and income tax payments.

Cash flows used in investing activities, excluding the impact of ~~consolidated sponsored investment products,~~CIPs, for ~~2019~~2022 were ~~$1,904 million~~$1.2 billion and primarily reflected ~~$1.5 billion~~$744 million of ~~cash outflow related to the eFront Transaction, $693 million of~~net investment purchases and ~~$254~~$533 million of purchases of property and equipment, partially offset by ~~$417~~$70 million of ~~net proceeds~~distributions of capital from ~~sales and maturities of certain investments.~~equity method investees.

Cash flows used in financing activities, excluding the impact of ~~consolidated sponsored investment products,~~CIPs, for ~~2019~~2022 were ~~$4,152 million,~~$6.0 billion, primarily resulting from ~~$1.9~~$3.0 billion of cash dividend payments, $2.3 billion of share repurchases, including ~~$400 million~~$1.9 billion in open market transactions ~~a $1.3~~and $0.4 billion ~~private transaction and $245 million~~ of employee tax withholdings related to employee stock transactions, ~~$2.1 billion of cash dividend payments,~~ and $1$0.8 billion of repayments of ~~long-term borrowings, partially offset by $992 million of proceeds from long-term~~ borrowings.

The Company manages its financial condition and funding to maintain appropriate liquidity for the business. Management believes that the Company’s liquid assets, continuing cash flows from operations, borrowing capacity under the Company’s existing revolving credit facility and uncommitted commercial paper private placement program, provide sufficient resources to meet the Company’s short-term and long-term cash needs, including operating, debt and other obligations as they come due and anticipated future capital requirements. Liquidity resources at December 31, ~~2019~~2022 and ~~2018~~2021 were as follows:


(in millions)	December 31, 2022			December 31, 2021
Cash and cash equivalents	$	7,416		$	9,323
Cash and cash equivalents held by CIPs(1)		(265	)		(308	)
Subtotal(2)		7,151			9,015
Credit facility — undrawn		4,700			4,400
Total liquidity resources	$	11,851		$	13,415

(in millions)

December 31,
2019

December 31,
2018

Cash and cash equivalents⁽¹⁾

$
4,829

$
6,488

Cash and cash equivalents held by consolidated sponsored investment products⁽²⁾

(141
)

(245
)
Subtotal

4,688

6,243

Credit facility — undrawn

4,000

4,000

Total liquidity resources⁽³⁾

$
8,688

$
10,243

(1)

The Company cannot readily access such cash and cash equivalents to use in its operating activities.

(2)

The percentage of cash and cash equivalents held by the Company’s US subsidiaries was approximately 50% at both December 31, 2022 and 2021. See Net Capital Requirements herein for more information on net capital requirements in certain regulated subsidiaries.

~~(1)~~

~~The percentage of cash and cash equivalents held by the Company’s US subsidiaries was approximately 45% and 50% at December 31, 2019 and 2018, respectively. See~~ ~~Net Capital Requirements~~ ~~herein for more information on net capital requirements in certain regulated subsidiaries.~~

~~(2)~~

~~The Company cannot readily access such cash to use in its operating activities.~~

~~(3)~~

~~Amounts do not reflect a reduction for year-end incentive compensation accruals of approximately $1.4 billion for both 2019 and 2018, which are paid in the first quarter of the following year.~~

Total liquidity resources decreased ~~$1,555 million~~$1.6 billion during ~~2019,~~2022, primarily reflecting cash dividend payments of ~~$2.1~~$3.0 billion, share repurchases of ~~$1.9~~$2.3 billion ~~reflecting the impact of a $1.3 billion private transaction,~~ and ~~approximately $1.5~~$0.8 billion of ~~cash outflow related to the eFront Transaction,~~repayments of borrowings, partially offset by cash flows from other operating ~~activities.~~activities and a $0.3 billion increase in the aggregate commitment amount under the credit facility.

A significant portion of the Company’s ~~$3,995 million~~$6.4 billion of investments, as adjusted, is illiquid in nature and, as such, cannot be readily convertible to cash.

Share Repurchases. During 2022, the Company repurchased 2.7 million common shares under the Company’s existing share repurchase program for approximately $1.9 billion. At December 31, 2022, there were approximately 0.9 million shares still authorized to be repurchased under the program.

In January ~~2019,~~2023, the Company announced that the Board of Directors authorized the repurchase of an additional seven million shares under the Company’s existing share repurchase program for a total of up to approximately ~~9.9~~7.9 million shares of BlackRock common stock.

During 2019, the Company repurchased 4.0 million common shares under the share repurchase program for approximately $1.7 billion, including a $1.3 billion private transaction that closed on March 25, 2019. At December 31, 2019, there were 5.9 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 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 deposits or make commercial loans and whose powers are limited to trust and other fiduciary activities. BTC provides investment management and other fiduciary services, including investment advisory and securities lending agency services, to institutional clients. BTC is subject to regulatory capital and liquid asset requirements administered by the US Office of the Comptroller of the Currency.

At December 31, ~~2019~~2022 and ~~2018,~~2021, the Company was required to maintain approximately ~~$1.9~~$2.2 billion and ~~$1.8~~$2.3 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,~~UK, and the Company’s broker-dealers. The Company was in compliance with all applicable regulatory net capital requirements.

Undistributed Earnings of Foreign Subsidiaries. As a result of ~~The~~the 2017 Tax Cuts and Jobs Act and the one-time mandatory deemed repatriation tax on untaxed accumulated foreign earnings, US income taxes were provided on the Company’s undistributed foreign earnings. The financial statement basis in excess of tax basis of its foreign subsidiaries remains indefinitely reinvested in foreign operations. The Company will continue to evaluate its capital management ~~plans throughout 2020.~~plans.

Short-Term Borrowings

~~2019~~2022 Revolving Credit Facility. The ~~Company’s~~Company maintains an unsecured revolving credit facility ~~has an~~which is available for working capital and general corporate purposes (the “2022 credit facility”). In March 2022, the 2022 credit facility was amended to, among other things, (1) increase the aggregate commitment amount ~~of $4~~by $300 million to $4.7 billion, ~~and was amended in March 2019 to~~(2) extend the maturity date to March ~~2024 (the “2019 credit facility”~~2027, (3) change the rate for borrowings denominated in US dollars from a rate based on the London Interbank Offered Rate (“LIBOR”). to a rate based on the secured overnight financing rate (“SOFR”) subject to certain adjustments and (4) modify certain specified targets for the sustainability-linked pricing mechanics. The ~~2019~~2022 credit facility permits the Company to request up to an additional $1$1.0 billion of borrowing capacity, subject to lender credit approval, ~~increasing~~which could increase the overall size of the ~~2019~~2022 credit facility to an aggregate principal amount ~~not~~of up to ~~exceed $5~~$5.7 billion. ~~Interest on borrowings outstanding accrues at a rate based on the applicable London Interbank Offered Rate plus a spread.~~ The ~~2019~~2022 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, ~~2019. The 2019 credit facility provides back-up liquidity to fund ongoing working capital for general corporate purposes and various investment opportunities.~~2022. At December 31, ~~2019,~~2022, the Company had no amount outstanding under the 2022 credit facility.

Commercial Paper Program. The Company can issue unsecured commercial paper notes (the “CP Notes”) on a private-placement basis up to a maximum aggregate amount outstanding at any time of $4 billion. The commercial paper program is currently supported by the ~~2019~~2022 credit facility. At December 31, ~~2019,~~2022, BlackRock had no CP Notes outstanding.

Long-Term Borrowings

The carrying value of long-term borrowings at December 31, ~~2019~~2022 included the following:


(in millions)	Maturity Amount		Carrying Value		Maturity
3.50% Notes	$	1,000	$	999	March 2024
1.25% Notes(1)		747		745	May 2025
3.20% Notes		700		697	March 2027
3.25% Notes		1,000		992	April 2029
2.40% Notes		1,000		994	April 2030
1.90% Notes		1,250		1,241	January 2031
2.10% Notes		1,000		986	February 2032
Total Long-term Borrowings	$	6,697	$	6,654

(in millions)
Maturity Amount

Carrying Value

Maturity
4.25% Notes
$
750

$
749

May 2021
3.375% Notes

750

748

June 2022
3.50% Notes

1,000

996

March 2024
1.25% Notes⁽¹⁾

786

781

May 2025
3.20% Notes

700

695

March 2027
3.25% Notes

1,000

986

April 2029
Total Long-term Borrowings
$
4,986

$
4,955

(1)

~~(1)~~

The carrying value ~~of the 1.25% Notes is calculated using the EUR/USDforeign exchange rate as of December 31, 2019.~~

~~In April 2019, the Company issued $1 billion in aggregate principal amount of 3.25% senior unsecured and unsubordinated notes maturing on April 30, 2029 (the “2029 Notes”). The net proceeds~~ of the ~~2029~~1.25% Notes ~~were used for general corporate purposes, which included a portion~~is calculated using the EUR/USD foreign exchange rate as of ~~the purchase price of the eFront Transaction, repayment of a portion of the $1 billion 5.00% notes in~~ December 2019 and repayment of borrowings under its commercial paper program. Interest is payable semi-annually on April 30 and October 30 of each year, which commenced on October 30, 2019, and is approximately $33 million per year. The 2029 Notes may be redeemed prior to January 30, 2029 in whole or in part at any time, at the option of the Company, at a “make-whole” redemption price or at par thereafter. The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2029 Notes.

31, 2022.

In ~~December 2019,~~June 2022, the Company fully repaid ~~$1 billion~~$750 million of ~~5.00%~~3.375% notes at maturity.

In January 2020, the Company issued $1 billion in aggregate principal amount of 2.40% senior unsecured and unsubordinated notes maturing on April 30, 2030 (the “2030 Notes”). The net proceeds of the 2030 Notes will be used for general corporate purposes. Interest of approximately $24 million per year will be payable semi-annually on April 30 and October 30 of each year, commencing April 30, 2020. The 2030 Notes may be redeemed prior to January 30, 2030 in whole or in part at any time, at the option of the Company, at a “make-whole” redemption price or at 100% of the principal amount of the 2030 Notes thereafter. The discount and debt issuance costs will be amortized over the term of the 2030 Notes.

For more information on Company’s borrowings, see Note 15, Borrowings,, in the notes to the consolidated financial statements contained in Part II, Item 8 of this filing.

Contractual Obligations, Commitments and Contingencies

The ~~following table sets forth~~Company’s material contractual obligations, commitments and contingencies ~~by year of payment~~ at December 31, ~~2019:~~2022 include borrowings, operating leases, investment commitments, compensation and benefits obligations, and purchase obligations.

Borrowings. At December 31, 2022, the Company had outstanding borrowings with varying maturities for an aggregate principal amount of $6.7 billion, all of which is payable beyond the next 12 months. Future interest payments associated with these borrowings total $974 million, of which $168 million is payable within 12 months. See Note 15, Borrowings, in the notes to the consolidated financial statements contained in Part II, Item 8 of this filing.

(in millions)
2020

2021

2022

2023

2024

Thereafter

Total

Contractual obligations and commitments:

Long-term borrowings⁽¹⁾:

Principal
$
—

$
750

$
750

$
—

$
1,000

$
2,486

$
4,986

Interest

157

141

112

100

82

213

805

Operating leases

158

152

141

125

110

1,682

2,368

Purchase obligations

149

98

37

20

12

—

316

Investment commitments

553

—

—

—

—

—

553

Total contractual obligations and commitments

1,017

1,141

1,040

245

1,204

4,381

9,028

Contingent obligations:

Contingent payments related to business acquisitions⁽²⁾

189

19

—

—

—

—

208

Total contractual obligations, commitments and
contingent obligations⁽³⁾
$
1,206

$
1,160

$
1,040

$
245

$
1,204

$
4,381

$
9,236

~~(1)~~

~~The amount of principal and interest payments for the 1.25% Notes (issued in Euros) represents the expected payment amounts using the EUR/USD foreign exchange rate as of December 31, 2019.~~

~~(2)~~

The amount of contingent payments reflected for any year represents the expected payments using foreign currency exchange rates as of December 31, 2019. The fair value of the remaining aggregate contingent payments at December 31, 2019 totaled $193 million and is included in other liabilities on the consolidated statements of financial condition.

~~(3)~~

At December 31, 2019, the Company had approximately $618 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 2043. ~~In connection with certain lease agreements,~~At December 31, 2022, the Company ~~is responsible for escalation payments. The contractual~~had operating lease payment obligations ~~table above includes only guaranteed minimum lease payments for such leases and does not project potential escalation or other lease-related payments.~~

~~In May 2017, the Company entered into an agreement with 50 HYMC Owner LLC, for the lease~~ of approximately ~~847,000 square feet~~$2.3 billion, of ~~office space located at 50 Hudson Yards, New York, New York. The term of the lease~~which $142 million is twenty years from the date that rental payments begin, expected to occur in May 2023, with the option to renew for a specified term. The lease requires annual base rental payments of approximately $51 million per year during the first five years of the lease term, increasing every five years to $58 million, $66 million and $74 million per year (or approximately $1.2 billion in base rent over its twenty-year term). In November 2019, the Company exercised its initial expansion option with respect to two additional floors of approximately 122,000 square feet of office space. The additional space requires approximately $185 million in base rent over its twenty-year term.

~~For more information on the Company’s operating leases, see~~payable within 12 months. See Note 13, Leases,, in the notes to the consolidated financial statements contained in Part II, Item 8 of this filing.

~~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.Investment Commitments. At December 31, 2019, the Company’s obligations primarily reflected standard service contracts for portfolio services, market data, office-related services and third-party marketing and promotional services, and obligations for equipment. Purchase obligations are recorded on the 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, 2019.

~~Investment Commitments.~~ ~~At December 31, 2019,~~2022, the Company had ~~$553~~$884 million of various capital commitments to fund sponsored investment products, including ~~consolidated sponsored investment products.~~CIPs. These products include various illiquid alternative products, including private equity funds and real assets funds, and 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. 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 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 Payments Related to Business Acquisitions~~. In connection with certain acquisitions, BlackRock is required to make contingent payments, subject to achieving specified performance targets, which may include revenue related to acquired contracts or new capital commitments for certain products. ~~The fair value of the remaining aggregate contingent payments at December 31, 2019 totaled $193 million, and is included in other liabilities on the consolidated statements 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 products, 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, or cash and cash equivalents to the extent that it is distributed, and as a deferred carried interest liability on its consolidated statements of financial condition. Carried interest is recorded as performance fees on BlackRock’s consolidated statements of income when fees are no longer probable of significant reversal.

~~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 and, therefore, has not been included in the table above or recorded in the consolidated statement of financial condition at December 31, 2019. See further discussion in Note 16, ~~Commitments and Contingencies, in the notes to the consolidated financial statements contained in Part II, Item 8 of this filing.~~

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. In connection with securities lending transactions, BlackRock has agreed to indemnify 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. The amount of securities on loan as of December 31, 2019 and subject to this type of indemnification was $210 billion. In the Company’s capacity as lending agent, cash and securities totaling $226 billion was held as collateral for indemnified securities on loan at December 31, 2019. The fair value of these indemnifications was not material at December 31, 2019.

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.

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.~~arrangements. Accrued compensation and benefits at December 31, ~~2019~~2022 totaled ~~$2,057 million~~$2.3 billion and included annual incentive compensation of ~~$1,372 million,~~$1.4 billion, deferred compensation of ~~$399 million~~$0.5 billion and other compensation and benefits related obligations of ~~$286 million.~~$0.4 billion. Substantially all of the incentive compensation liability was paid in the first quarter of ~~2020,~~2023, while the deferred compensation obligations are payable over various periods, with the majority payable over periods of up to three years.

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 represent executory contracts, which are either noncancelable or cancelable with a penalty. At December 31, 2022, the Company’s obligations primarily reflected standard service contracts for market data, technology, office-related services, marketing and promotional services, and obligations for equipment. Purchase obligations are recorded on the 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, 2022. At December 31, 2022, the Company had purchase obligations of $650 million, of which approximately $190 million is payable within 12 months.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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 revenue and expense during the reporting periods. Actual results could differ significantly from those estimates. These estimates, judgments and assumptions are affected by the Company’s application of accounting policies. Management considers the following ~~critical~~ accounting policies ~~important~~and estimates critical to understanding the consolidated financial statements. These policies and estimates are considered critical because they had a material impact, or are reasonably likely to have a material impact on the Company’s consolidated financial statements and because they require management to make significant judgments, assumptions or estimates. For a summary of these and additional accounting policies see Note 2, Significant Accounting Policies,, in the notes to the consolidated financial statements included in Part II, Item 8 of this ~~filing, including information regarding the adoption of Accounting Standards Update 2016-02,~~ ~~Leases~~filing..

Consolidation

~~In the normal course of business,~~The Company consolidates entities in which the Company ishas a controlling financial interest. The company has a controlling financial interest when it owns a majority of the ~~manager of various types of sponsored investment vehicles. The Company performs an analysis for investment products to determine if the product~~VRE or is a ~~VIE or~~primary beneficiary (“PB”) of a ~~VRE.~~VIE. Assessing whether an entity is a VIE or a VRE involves judgment and ~~analysis.~~analysis on a structure-by-structure basis. Factors considered in this assessment include the entity’s legal organization, the entity’s capital structure, the rights of equity investment holders, the Company’s contractual involvement with and ~~equity ownership,~~economic interest in the entity and any related party or de facto agent implications of the Company’s involvement with the entity. ~~Investments~~Entities 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. ~~Investments~~Entities that are determined to be VIEs are consolidated if the Company is the ~~primary beneficiary (“PB”)~~PB of the entity. BlackRock is deemed to be the PB of a VIE if it (1) has the power to direct the activities that most significantly impact the entities’ economic performance and (2) has the obligation to absorb losses or the right to receive benefits that potentially could be significant to the VIE. There is judgment involved in assessing whether the Company is the PB of a VIE. In addition, the Company’s ownership interest in VIEs is subject to variability and is impacted by actions of other investors such as on-going redemptions and contributions. The Company generally consolidates VIEs in which it holds an economic interest of 10% or greater and deconsolidates such VIEs once ~~equity ownership~~its economic interest falls below 10%. As of December 31, 2022, the Company was deemed to be the PB of 90 VIEs. See Note 6, Consolidated Sponsored Investment Products,, in the notes to the consolidated financial statements contained in Part II, Item 8 of this filing for more information.

~~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 advisory and other revenue for certain corporate minority investments, which are recorded in other assets, since such investees are considered to be an extension of BlackRock’s core business.

At December 31, 2019, the Company had $943 million and $531 million of equity method investments, included in investments and other assets, respectively, and at December 31, 2018, the Company had $781 million and $459 million of equity method investments included in investments and other assets, respectively.

~~Other nonequity method corporate minority investments.~~ Other nonequity method corporate minority investments are recorded within other assets on the consolidated statements of financial condition. At December 31, 2019 and 2018, these investments totaled $282 million and $199 million, respectively, and included investments in e~~quity securities, which are generally measured at fair value or under the~~ ~~measurement alternative to fair value for nonmarketable securities.~~ ~~Changes in value of these securities are~~ ~~recorded in nonoperating income (expense) on the consolidated statements of income.~~ ~~See Note 2,~~ ~~Significant Accounting Policies, in the consolidated financial statements contained in Part II, Item 8 of this filing for more information.~~

~~Impairments of Investments.~~ Evaluation of 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. See Note 2, ~~Significant Accounting Policies, in the consolidated financial statements contained in Part II, Item 8 of this filing for more information.~~

Fair Value Measurements

The Company’s assessment of the significance of a particular input to the fair value measurement according to the fair value hierarchy (i.e., Level 1, 2 and 3 inputs, as defined) in its entirety requires judgment and considers factors specific to the financial instrument. See Note 2, Significant Accounting Policies,, and Note 8, Fair Value Disclosures, in the consolidated financial statements contained in Part II, Item 8 of this filing for more information on fair value measurements.

Changes in Valuation. Changes in value on ~~$5,489 million~~$5.3 billion of investments will impact the Company’s nonoperating income (expense), ~~$342~~$635 million are held at cost or amortized cost and the remaining ~~$528 million~~$1.6 billion relates to carried interest, which will not impact nonoperating income (expense). At December 31, ~~2019,~~2022, changes in fair value of ~~$3,270 million~~$3.2 billion of ~~consolidated sponsored investment products~~CIPs will impact BlackRock’s net income (loss) attributable to NCI on the consolidated statements of income. BlackRock’s net exposure to changes in fair value of ~~consolidated sponsored investment products~~CIPs was ~~$1,776 million.~~$2.1 billion.

~~Leases~~

The Company determines if a contract is a lease or contains a lease at inception. The identification of whether a contract contains a lease requires judgment, including determining whether there are identified assets in the contract that the Company has control over for a specified period of time in exchange for consideration.

~~Fixed lease payments are included in the measurement of ROU assets and lease liabilities on the consolidated statement of financial condition.~~The Company recognizes ROU assets and lease liabilities based on the present value of these future lease payments over the lease term at the commencement date discounted using the Company’s incremental borrowing rate (“IBR”). Management judgment is required in determining the Company’s IBR, including assessing the Company’s credit rating using various financial metrics, such as revenue, operating margin and revenue growth, and, as appropriate, performing market analysis of yields on publicly traded bonds (secured or unsecured) of comparable companies. See Note 2, ~~Significant Accounting Policies, in the consolidated financial statements contained in Part II, Item 8 of this filing for more information on leases.~~

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 if they are expected to generate cash flows indefinitely.Goodwill. Goodwill represents the cost of a business acquisition in excess of the fair value of the net assets acquired. ~~Indefinite-lived intangible assets and goodwill are not amortized.~~

Finite-lived management contracts, which relate to acquired separate accounts and funds, investor/customer relationships, and technology related assets that are expected to contribute to the future cash flows of the Company for a specified period of time are amortized over their remaining expected useful lives, which, at December 31, 2019 ranged from 1 to 11 years with a weighted-average remaining estimated useful life of 7.8 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, ~~2019~~2022 indicated no impairment charge was required. The Company continues to monitor its book value per share compared with closing prices of its common stock for potential indicators of impairment. At December 31, ~~2019,~~2022, the Company’s common stock closed at ~~$502.70,~~$708.63, which exceeded its book value of ~~approximately $216.15~~$252.04 per share.

Indefinite-lived and finite-lived intangibles. Indefinite-lived intangible assets represent the value of advisory contracts acquired in business acquisitions to manage AUM in proprietary open-end investment funds, collective trust funds and certain other commingled products without a specified termination date. The assignment of indefinite lives to such contracts primarily is based upon the following: (1) the assumption that there is no foreseeable limit on the contract period to manage these products; (2) the Company expects to, and has the ability to, continue to operate these products indefinitely; (3) the products have multiple investors and are not reliant on a single investor or small group of investors for their continued operation; (4) current competitive factors and economic conditions do not indicate a finite life; and (5) there is a high likelihood of continued renewal based on historical experience. In addition, trade names/trademarks are considered indefinite-lived intangibles if they are expected to generate cash flows indefinitely. Indefinite-lived intangible assets are not amortized.

Finite-lived intangible assets represent finite-lived investor/customer relationships, technology related assets, and management contracts, which relate to acquired separate accounts and funds, that are expected to contribute to the future cash flows of the Company for a specified period of time. Finite-lived intangible assets are amortized over their remaining expected useful lives, which, at December 31, 2022 ranged from approximately 1 to 8 years with a weighted-average remaining estimated useful life of approximately 6 years.

The Company performs assessments to determine if any intangible assets are impaired ~~and whether~~at least annually, as of July 31st, or more frequently if events or changes in circumstances indicate that it is more likely than not that the ~~indefinite-life and finite-life classifications are still appropriate.~~intangible asset might be impaired.

In evaluating whether it is more likely than not that the fair value of indefinite-lived intangibles is less than its carrying value, BlackRock performed certain quantitative assessments and assessed various significant ~~qualitative~~quantitative factors including AUM, revenue basis points, projected AUM growth rates, operating margins, tax rates and discount rates. In addition, the Company considered other qualitative factors including: ~~(i)~~(1) 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)~~(2) industry and market considerations such as a deterioration in the environment in which the Company 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) the~~(3) Company-specific events, such as a change in management or key personnel, overall financial performance and litigation that could affect significant 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, which is generally determined using an income approach, 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.

For finite-lived intangible assets, if potential impairment circumstances are considered to exist, the Company will perform a recoverability test, using an undiscounted cash flow analysis. Factors included in evaluating finite-lived customer relationships, technology related assets and trade names include technology services revenue trends, customer attrition rates, obsolescence rates, and royalty rates. For finite-lived management contracts, evaluation is based on changes in assumptions including AUM, revenue basis points, projected AUM growth rates, operating margins, tax rates and discount rates. 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 recoverable based on the undiscounted cash flow test, the difference between the book value of the asset and its current estimated 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.~~consumed and whether the indefinite-life and finite-life classifications are still appropriate. 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 ~~$97~~$151 million, ~~$50~~$147 million and ~~$89~~$106 million for ~~2019, 2018~~2022, 2021 and ~~2017,~~2020, respectively.

In ~~2019, 2018~~2022, 2021 and ~~2017,~~2020, the Company performed impairment tests, including evaluating various qualitative factors and performing certain quantitative assessments. The Company determined that no impairment charges were required and that the classification of indefinite-lived versus finite-lived intangibles was still appropriate and no changes were required to the expected lives of the finite-lived intangibles. The Company continuously monitors various factors, including AUM, for potential indicators of impairment.

~~Contingent Consideration Liabilities~~Revenue Recognition

~~In connection with certain acquisitions, BlackRock~~The Company recognizes revenues when its obligations related to the services are satisfied and it is required to make contingent payments, subject to achieving specified performance targets. The fair value of this contingent consideration is estimated at the time of acquisition closing and is included in other liabilities on the consolidated statements of financial condition. As the fair valueprobable that a significant reversal of the ~~expected payments~~revenue amount ~~subsequently changes, the contingent consideration liability is adjusted, resulting~~would not occur in contingent consideration fair value adjustments recorded within general and administration expense of the consolidated statements of income. Cash payments up to the acquisition date fair value amount of the contingent consideration liability are reflected as financing activities with excess (if any) cash payments classified in operating activities. Any cash payments made soon after the acquisition date will be classified in investing activities.

~~Revenue Recognition~~

~~Revenue is recognized upon transfer of control of promised services to customers in an amount to which the Company expects to be entitled in exchange for those services.~~future periods. The Company enters into contracts that can include multiple services, which are accounted for separately if they are determined to be distinct. Management judgment is required ~~to identify distinct services and involves~~in assessing ~~such factors as whether~~ the promised services significantly modify or customize one another or are highly interdependent or interrelated. Management judgment may be also required when determining the following: when variable consideration is no longer probableprobability of significant revenue reversal ~~(and hence can be included~~and in revenue); whether certain revenue should be presented gross or net of certain related costs; when a promised service transfers to the customer; and the applicable method of measuring progress for services transferred to the customer over time.~~Many of BlackRock's promised services represent a series~~identification of distinct ~~services (e.g.,~~services.

The Company derives a substantial portion of its revenue from investment ~~advisory services) in which the associated variable consideration (e.g., management fees) is allocated to specific days of service as opposed to over the entire contract term.~~

~~Investment~~ advisory and administration fees which are recognized as the services are performed over time because the customer is receiving and consuming the benefits as they are provided by the Company. Fees are primarily based on agreed-upon percentages of AUM and recognized for services provided during the period, which are distinct from services provided in other periods. Such fees are affected by changes in AUM, including market appreciation or depreciation, foreign exchange translation and net inflows or outflows. AUM represents the broad range of financial assets the Company manages for clients on a discretionary basis pursuant to investment management and trust 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 determining revenue (for example, net asset values).

The Company earns revenue by lending securities on behalf of clients, primarily to highly rated banks and broker-dealers. The securities loaned are secured by collateral, generally ranging from 102% to 112% of the value of the loaned securities. For 2019, 2018 and 2017, securities lending revenue earned by the Company totaled $617 million, $627 million and $597 million, respectively, and is recorded in investment advisory, administration 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, including incentive allocations (carried interest) from certain actively managed investment funds and certain separately managed accounts. These performance fees are dependent upon exceeding specified relative or absolute investment return thresholds, which ~~may~~ vary by product or account, and include monthly, quarterly, annual or longer measurement periods.

Performance fees, including carried interest, are recognized when it is determined that they are no longer probable of significant reversal (such as upon the sale of a fund’s investment or when the ~~amount of AUM becomes known as of~~investment performance exceeds a contractual threshold at the end of a specified measurement period). Given the unique nature of each fee arrangement, contracts with customers are evaluated on an individual basis to determine the timing of revenue recognition. Significant ~~judgement~~judgment is involved in making such determination. Performance fees typically arise from investment management services that began in prior reporting periods. Consequently, a portion of the fees the Company recognizes may be partially related to the services performed in prior periods that meet the recognition criteria in the current period. At each reporting date, the Company considers various factors in estimating performance fees to be recognized, including carried interest. These factors include but are not limited to whether: (1) the ~~fees~~amounts are dependent on the ~~market~~financial markets and, thus, are highly susceptible to factors outside the Company’s influence; (2) the ~~fees~~ultimate payments have a large number and a broad range of possible amounts; and (3) the funds or separately managed accounts have the ability to (a) invest or reinvest their sales ~~proceeds.~~proceeds or (b) distribute their sales proceeds, and determine the timing of such distributions.

The Company is ~~allocated~~allocated/distributed carried interest from certain alternative investment products upon exceeding performance thresholds. The Company may be required to reverse/return all, or part, of such carried interest allocations/distributions depending upon future performance of these ~~funds.~~products. Carried interest subject to such clawback provisions is recorded in investments or cash and cash equivalents to the extent that it is distributed, on its consolidated statements of financial condition.

The Company records a liability for deferred carried interest to the extent it receives cash or capital allocations related to carried interest prior to meeting the revenue recognition criteria. At December 31, ~~2019~~2022 and ~~2018,~~2021, the Company had ~~$483 million~~$1.4 billion and ~~$293 million,~~$1.5 billion, respectively, of deferred carried interest recorded in other liabilities on the consolidated statements of financial condition. A portion of the deferred carried interest may also be paid to certain employees. The ultimate timing of the recognition of performance fee revenue and related compensation expense, if any, ~~for these products~~ is unknown. See Note 17, Revenue,, in the notes to the consolidated financial statements for detailed changes in the deferred carried interest liability balance for ~~2019~~2022 and ~~2018.~~2021.

The Company earns revenue for providing technology services. Determining the amount of revenue to recognize requires judgment and estimates. Complex arrangements with nonstandard terms and conditions may require contract interpretation to determine the appropriate accounting, including whether promised goods and services specified in an arrangement, are distinct performance obligations, and should be accounted for separately. Other judgments include determining whether performance obligations are satisfied over time or at a point in time. Fees earned for technology services are primarily recorded as services are performed over time and are generally determined using the value of positions on the Aladdin platform or on a fixed-rate basis. Revenue derived from the sale of software licenses is recognized upon the granting of access rights.

Distribution and service fees earned for distributing investment products and providing support services to investment portfolios, are based on AUM, and are recognized when the amount of fees is known.

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 AUM, recognized when known, and ~~since~~given the Company does not record performance fee revenue until: (1) performance thresholds have been exceeded and (2) management determines the fees are no longer

probable of significant reversal. See Note 2, Significant Accounting Policies, in the consolidated financial statements contained in Part II, Item 8 of this filing for more information on revenue recognition, including other revenue streams.

Income Taxes

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, ~~2019,~~2022, BlackRock had ~~$900~~$912 million of gross unrecognized tax benefits, of which ~~$513~~$497 million, if recognized, would affect the effective tax rate.

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, ~~2019,~~2022, the Company had deferred income tax assets of ~~$175~~$237 million and deferred income tax liabilities of ~~$3,734 million~~$3.4 billion on the consolidated statement of financial condition. Changes in 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.

The Company 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. 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.

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 $282 million and current income taxes payables of $293 million at December 31, 2019.55

~~Accounting Developments~~

~~For accounting pronouncements that the Company adopted during the year ended December 31, 2019 and for recent accounting pronouncements not yet adopted, see Note 2,~~ ~~Significant Accounting Policies, in the consolidated financial statements contained in Part II, Item 8 of this filing.~~

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, ~~2019,~~2022, 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 assets, 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~~The Company has a seed capital hedging program in which it enters into futures and swaps to hedge market and interest rate exposure to certain investments. AtThe Company had outstanding futures with an aggregate notional value of approximately $1.5 billion and zero at December 31, ~~2019,~~2022 and 2021, respectively. In addition, the Company had outstanding total return swaps with an aggregate notional value of zero and approximately ~~$644 million.~~ $720 million at December 31, 2022 and 2021, respectively.

At December 31, ~~2019, there were no outstanding interest rate swaps.~~

~~At December 31, 2019,~~2022, approximately ~~$3.8~~$4.7 billion of BlackRock’s investments were maintained in consolidated sponsored investment products accounted for as ~~VIEs and VREs.~~variable interest entities or voting rights entities. 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 ~~$2.7~~$3.3 billion. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations-Balance Sheet ~~Overview~~-~~Investments~~Overview-Investments for further information on the Company’s investments.

Equity Market Price Risk. At December 31, ~~2019,~~2022, the Company’s net exposure to equity market price risk in its investment portfolio was approximately ~~$763 million~~$1.4 billion of the Company’s total economic investment exposure. Investments subject to market price risk include public and private equity and real assets 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 ~~$76.3~~$142 million in the carrying value of such investments.

Interest-Rate/Credit Spread Risk. At December 31, ~~2019,~~2022, the Company was exposed to interest rate risk and credit spread risk as a result of approximately ~~$1,944 million~~$1.9 billion of 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 ~~$40~~$43 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 British pound and Euro, was ~~$753 million~~approximately $1 billion at December 31, ~~2019.~~2022. A 10% adverse change in the applicable foreign exchange rates would result in approximately a ~~$75.3~~$100 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, ~~2019,~~2022, the Company had outstanding forward foreign currency exchange contracts with an aggregate notional value of approximately ~~$3.4 billion.~~$2.2 billion with expiration dates in January 2023.

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 Financial Reporting. There were no changes in our internal control over financial reporting that occurred during the fourth quarter of the fiscal year ending December 31, ~~2019~~2022 that have materially affected or are reasonably likely to materially affect 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) and 15d-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 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 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.

•

~~pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;~~

•

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, ~~2019~~2022 based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, ~~2019,~~2022, 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, 2020~~24, 2023

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of BlackRock, Inc.:

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of BlackRock, Inc. and subsidiaries (the “Company”) as of December 31, ~~2019,~~2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2019,~~2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the ~~consolidated statement of~~ financial ~~condition~~statements as of ~~December 31, 2019~~ and ~~the related consolidated statements of income, comprehensive income, changes in equity and cash flows~~ for the year ~~then~~ ended December 31, 2022, of the Company and our report dated February ~~28, 2020,~~24, 2023, expressed an unqualified opinion on those ~~consolidated~~ financial statements.

Basis for Opinion

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 are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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 its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

New York, New York

February ~~28, 2020~~24, 2023

Item 9b. Other Information

The Company is furnishing no other information in this Form 10-K.

Item 9c. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

Not applicable.

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 – Director Nominee Biographies” and ~~“Item 1: Election of Directors – Corporate~~“Corporate Governance – Other Executive Officers” of the Proxy Statement is incorporated herein by reference.

~~The information~~Information regarding compliance with Section 16(a) of the Exchange Act required by Item 10, if any, is set forth under the caption ~~“Item 1: Election of Directors – Delinquent~~“Delinquent Section 16(a) Reports” of the Proxy Statement isand incorporated herein by reference.

The information regarding BlackRock’s Code of Ethics for Chief Executive and Senior Financial Officers under the caption ~~“Item 1: Election of Directors – Corporate~~“Corporate Governance – Our Corporate Governance Framework” of the Proxy Statement is incorporated herein by reference.

The information regarding BlackRock’s Audit Committee under the caption ~~“Item 1: Election of Directors – Corporate~~“Corporate Governance – Board Committees” of the Proxy Statement is incorporated herein by reference.

Item 11. Executive Compensation

The information contained in the sections captioned “Management Development & Compensation Committee Interlocks and Insider Participation,” ~~“Item 2: Approval, in a Non-Binding Advisory Vote, of the Compensation for Named Executive Officers – Executive~~“Executive Compensation – Compensation Discussion and Analysis” and ~~“Item 1: Election of Directors – Corporate~~“Corporate Governance – ~~2019~~2022 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: Election of Directors – Ownership~~“Ownership of BlackRock Common ~~and Preferred~~ Stock” and ~~“Item 2 – Approval, in a Non-Binding Advisory Vote, of the Compensation for Named Executive Officers – Executive~~“Executive Compensation – Compensation Discussion and Analysis – 5.6. Executive Compensation ~~Policies and Practices~~Tables – 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: Election of Directors – Certain~~“Certain Relationships and Related Transactions” and “Item 1: Election of Directors – Criteria for Board Membership – 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 3:4: Ratification of the Appointment of the Independent Registered Public Accounting Firm” of the Proxy Statement is incorporated herein by reference.

Part IV

Item 15. Exhibits and Financial Statement Schedules

1. Financial Statements

The Company’s consolidated financial statements are included beginning on page F-1.

2. Financial Statement Schedules

Financial statement 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
3.1(1)		Amended and Restated Certificate of Incorporation of BlackRock.
~~3.2(2)~~3.1.1(2)		Certificate of ~~Amendment to the Amended and Restated Certificate~~Change of ~~Incorporation of BlackRock, Inc.~~Registered Agent and/or Registered Office.
~~3.3(3)~~3.2(2)		Amended and Restated Bylaws of BlackRock.
~~3.4(1)~~4.1(3)		~~Certificate of Designations of Series A Convertible Participating Preferred Stock of BlackRock.~~
~~3.5(4)~~		~~Certificate of Designations of Series B Convertible Participating Preferred Stock of BlackRock.~~
~~3.6(4)~~		~~Certificate of Designations of Series C Convertible Participating Preferred Stock of BlackRock.~~
~~3.7(5)~~		~~Certificate of Designations of Series D Convertible Participating Preferred Stock of BlackRock.~~
~~4.1(6)~~		Specimen of Common Stock Certificate.
~~4.2(7)~~4.2(4)		Indenture, dated September 17, 2007, between BlackRock and The Bank of New York, as trustee, relating to senior debt securities.
~~4.3(8)~~4.3(5)		~~Form of 5.00% Notes due 2019.~~
~~4.4(9)~~		~~Form of 4.25% Notes due 2021.~~
~~4.5(10)~~		~~Form of 3.375% Notes due 2022.~~
~~4.6(11)~~		Form of 3.500% Notes due 2024.
~~4.7(12)~~4.4(6)		Form of 1.250% Notes due 2025.
~~4.8(13)~~4.5(7)		Form of 3.200% Notes due 2027.
~~4.9(14)~~4.6(8)		Form of 3.250% Notes due 2029.
~~4.10(12)~~4.7(9)		Form of 2.400% Notes due 2030.
4.8(10)		Form of 1.900% Notes due 2031.
4.9(11)		Form of 2.10% Notes due 2032.
4.10(6)		Officers’ Certificate, dated May 6, 2015, for the 1.250% Notes due 2025 issued pursuant to the Indenture.
~~4.11~~4.11(12)		Description of Securities.
~~10.1(15)~~10.1(13)		BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.2(16)~~10.2(14)		Amendment to the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.3(17)~~10.3(15)		Amended and Restated BlackRock, Inc. 1999 Annual Incentive Performance Plan.+
~~10.4(18)~~10.4(16)		Amendment No. 1 to the BlackRock, Inc. Amended and Restated 1999 Annual Incentive Performance Plan.+
~~10.5(19)~~10.5(17)		Form of Restricted Stock Unit Agreement under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.6(20)~~10.6(17)		Form of Performance-Based Restricted Stock Unit Agreement (BPIP) under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan.+
~~10.7(1)~~10.7(19)		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.+
~~10.8(1)~~10.8(19)		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.+
~~10.9(1)~~10.9(19)		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(20)~~10.10(18)		Form of Performance-Based Stock Option Agreement under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan. +
~~10.11(15)~~10.11(13)		BlackRock, Inc. Amended and Restated Voluntary Deferred Compensation Plan, as amended and restated as of November 16, 2015.+
~~10.12(21)~~10.12(20)		~~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.+~~
~~10.13(22)~~		~~First Amendment, dated as of February 15, 2006, to the Share Surrender Agreement.+~~
~~10.14(23)~~		~~Second Amendment, dated as of June 11, 2007, to the Share Surrender Agreement.+~~
~~10.15(4)~~		~~Third Amendment, dated as of February 27, 2009, to the Share Surrender Agreement.+~~
~~10.16(24)~~		~~Fourth Amendment, dated as of August 7, 2012, to the Share Surrender Agreement.+~~
~~10.17(25)~~		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.
~~10.18(26)~~10.13(21)		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.
~~10.19(27)~~10.14(22)		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.
~~10.20(28)~~10.15(23)		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.


~~10.21(29)~~Exhibit No.		Description
10.16(24)		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.
~~10.22(30)~~10.17(25)		Amendment No. 5, dated as of April 8, 2016, 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.
~~10.23(31)~~10.18(26)		Amendment No. 6, dated as of April 6, 2017, 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.

~~10.24(32)~~10.19(27)		Amendment No. 7, dated as of April 3, 2018, 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.
~~10.25(34)~~10.20(28)		Amendment No. 8, dated as of March 29, 2019, 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.
~~10.26(4)~~10.21(29)		~~Amended and Restated Implementation and Stockholder Agreement, dated as of February 27, 2009, between The PNC Financial Services Group, Inc. and BlackRock.~~
~~10.27(33)~~		Amendment No. 1,9, dated as of ~~June 11, 2009,~~March 31, 2020, 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 ~~the Amended and Restated Implementation and Stockholder Agreement between The PNC Financial Services Group, Inc. and BlackRock.~~therein.
~~10.28(35)~~10.22(30)		Amendment No. 10, dated as of March 31, 2021, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, a swingline lender, an issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
10.23(31)		Amendment No. 11, dated as of December 13, 2021, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, a swingline lender, an issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
10.24(32)		Amendment No. 12, dated as of March 31, 2022, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, a swingline lender, an issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.
10.25(33)		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.
~~10.29(36)~~10.26(34)		Lease, by and between BlackRock, Inc. and 50 HYMC Holdings LLC.*
~~10.30(37)~~10.27(35)		Letter Agreement, dated February 12, 2013, between Gary S. Shedlin and BlackRock.+
~~10.31(38)~~10.28(36)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Barclays Capital Inc., dated as of December 23, 2014.
~~10.32(38)~~10.29(36)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Citigroup Global Markets Inc., dated as of December 23, 2014.
~~10.33(38)~~10.30(36)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Merrill Lynch, Pierce, Fenner & Smith Incorporated, dated as of January 6, 2015.
~~10.34(38)~~10.31(36)		Amended and Restated Commercial Paper Dealer Agreement between BlackRock and Credit Suisse Securities (USA) LLC dated as of January 6, 2015.
~~10.35~~10.32(37)		BlackRock, Inc. Leadership Retention Carry Plan.++
~~10.36(39)~~10.33(38)		Form of Percentage Points Award Agreement pursuant to the BlackRock, Inc. Leadership Retention Carry Plan.+
21.1		Subsidiaries of Registrant.
23.1		Deloitte & Touche LLP ~~Consent~~Consent..
31.1		Section 302 Certification of Chief Executive ~~Officer~~Officer..
31.2		Section 302 Certification of Chief Financial ~~Officer~~Officer..
32.1		Section 906 Certification of Chief Executive Officer and Chief Financial ~~Officer~~Officer..
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
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101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page ~~formatted~~Interactive Data File (formatted as Inline XBRL and contained in Exhibit ~~101~~

~~(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 Current Report on Form 8-K filed on July 22, 2016.~~

~~(4)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on February 27, 2009.~~

~~(5)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on December 3, 2009.~~

~~(6)~~

~~Incorporated by reference to BlackRock’s Registration Statement on Form S-8 (Registration No. 333-137708) filed on September 29, 2006.~~

~~(7)~~

~~Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2007.~~

~~(8)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on December 10, 2009.~~

~~(9)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 25, 2011.~~

~~(10)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 31, 2012.~~

~~(11)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on March 18, 2014.~~

~~(12)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 6, 2015.~~

~~(13)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on March 28, 2017.~~

~~(14)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 29, 2019.~~

~~(15)~~

~~Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2015.~~

~~(16)~~

~~Incorporated by reference to BlackRock’s Definitive Proxy Statement on Form DEF 14A filed on April 13, 2018~~

~~(17)~~

~~Incorporated by reference to Old BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2002.~~

~~(18)~~

~~Incorporated by reference to Old BlackRock’s Current Report on Form 8-K filed on May 24, 2006.~~

~~(19)~~

~~Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015~~

~~(20)~~

~~Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018~~

~~(21)~~

~~Incorporated by reference to Old BlackRock’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002.~~

~~(22)~~

~~Incorporated by reference to Old BlackRock’s Current Report on Form 8-K filed on February 22, 2006.~~101).

(1)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 28, 2021.

(2)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on July 23, 2021.

(3)

Incorporated by reference to BlackRock’s Registration Statement on Form S-8 (Registration No. 333-137708) filed on September 29, 2006.

(4)

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2007.

(5)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on March 18, 2014.

(6)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 6, 2015.

(7)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on March 28, 2017.

(8)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 29, 2019.

(9)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on January 27, 2020.

(10)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on May 6, 2020.

(11)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on December 10, 2021.

(12)

Incorporated by reference to BlackRock's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

(13)

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2015.

(14)

Incorporated by reference to BlackRock’s Definitive Proxy Statement on Form DEF 14A filed on April 13, 2018.

(15)

Incorporated by reference to Old BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2002.

(16)

Incorporated by reference to Old BlackRock’s Current Report on Form 8-K filed on May 24, 2006.

(17)

Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.

(18)

Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.

(19)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on October 5, 2006.

(20)

Incorporated by reference to BlackRock’s Current Report on Form 8-K/A filed on August 24, 2012.

(21)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 4, 2012.

(22)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 3, 2013.

(23)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on March 28, 2014.

(24)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 3, 2015.

(25)

Incorporated by reference to BlackRock's Current Report on Form 8-K filed on April 14, 2016.

(26)

Incorporated by reference to BlackRock's Current Report on Form 8-K filed on April 11, 2017.

(27)

Incorporated by reference to BlackRock's Current Report on Form 8-K filed on April 6, 2018.

(28)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on March 29, 2019.

(29)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 1, 2020.

(30)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 6, 2021.

(31)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on December 13, 2021.

(32)

Incorporated by reference to BlackRock's Current Report on Form 8-K filed on April 1, 2022.

(33)

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2009.

(34)

Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

(35)

Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on February 19, 2013.

(36)

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2014.

(37)

Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2019.

(38)

Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.

+ Denotes compensatory plans or arrangements.

* Portions of this exhibit have been omitted pursuant to a confidential treatment order from the SEC.

Item 16. Form 10-K Summary

Not applicable.

SIGNATURES

~~(23)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on June 15, 2007.~~

~~(24)~~

~~Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.~~

~~(25)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K/A filed on August 24, 2012.~~

~~(26)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 4, 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 March 28, 2014.~~

~~(29)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on April 3, 2015.~~

~~(30)~~

~~Incorporated by reference to BlackRock's Current Report on Form 8-K filed on April 14, 2016.~~

~~(31)~~

~~Incorporated by reference to BlackRock's Current Report on Form 8-K filed on April 11, 2017.~~

~~(32)~~

~~Incorporated by reference to BlackRock's Current Report on Form 8-K filed on April 6, 2018.~~

~~(33)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on June 17, 2009.~~

~~(34)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on March 29, 2019.~~

~~(35)~~

~~Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2009.~~

~~(36)~~

~~Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.~~

~~(37)~~

~~Incorporated by reference to BlackRock’s Current Report on Form 8-K filed on February 19, 2013.~~

~~(38)~~

~~Incorporated by reference to BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2014.~~

~~(39)~~

~~Incorporated by reference to BlackRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.~~

+	~~Denotes compensatory plans or arrangements.~~

*	~~Portions of this exhibit have been omitted pursuant to a confidential treatment order from the SEC~~

~~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:	/s/ LAURENCE D. FINK
	Laurence D. Fink
	Chairman, Chief Executive Officer and Director

February ~~28, 2020~~24, 2023

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, Christopher J. Meade, ~~Daniel R. Waltcher~~Laura Hildner and 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	Date
/S/ LAURENCE D. FINK ~~Laurence D. Fink~~	Chairman, Chief Executive Officer and Director ~~(Principal Executive Officer)~~	February ~~28, 2020~~24, 2023
Laurence D. Fink	(Principal Executive Officer)
/S/ GARY S. SHEDLIN ~~Gary S. Shedlin~~	Senior Managing Director and Chief Financial Officer ~~(Principal Financial Officer)~~	February ~~28, 2020~~24, 2023
Gary S. Shedlin	(Principal Financial Officer)
/S/ MARC D. COMERCHERO ~~Marc D. Comerchero~~	Managing Director and Chief Accounting Officer ~~(Principal Accounting Officer)~~	February ~~28, 2020~~24, 2023
Marc D. Comerchero	(Principal Accounting Officer)
/S/ BADER M. ALSAAD	Director	February ~~28, 2020~~24, 2023
Bader M. Alsaad
/S/ ~~MATHIS CABIALLAVETTA~~ PAMELA DALEY	Director	February ~~28, 2020~~24, 2023
~~Mathis Cabiallavetta~~Pamela Daley
~~/S/ PAMELA DALEY~~	~~Director~~	~~February 28, 2020~~
~~Pamela Daley~~
~~/S/ WILLIAM S. DEMCHAK~~	~~Director~~	~~February 28, 2020~~
~~William S. Demchak~~
~~/S/ JESSICA P. EINHORN~~	~~Director~~	~~February 28, 2020~~
~~Jessica P. Einhorn~~
/S/ WILLIAM E. FORD	Director	February ~~28, 2020~~24, 2023
William E. Ford
/S/ FABRIZIO FREDA	Director	February ~~28, 2020~~24, 2023
Fabrizio Freda
/S/ MURRY S. GERBER	Director	February ~~28, 2020~~24, 2023
Murry S. Gerber
/S/ MARGARET L. JOHNSON	Director	February 24, 2023
Margaret L. Johnson		~~Director~~	~~February 28, 2020~~
~~Margaret L. Johnson~~
/S/ ROBERT S. KAPITO	Director	February ~~28, 2020~~24, 2023
Robert S. Kapito
/S/ CHERYL D. MILLS	Director	February ~~28, 2020~~24, 2023
Cheryl D. Mills
/S/ GORDON M. NIXON	Director	February 24, 2023
Gordon M. Nixon		~~Director~~	~~February 28, 2020~~
~~Gordon M. Nixon~~/S/ KRISTIN PECK	Director	February 24, 2023
Kristin Peck
/S/ CHARLES H. ROBBINS	Director	February ~~28, 2020~~24, 2023
Charles H. Robbins
~~/S/ IVAN G. SEIDENBERG~~	~~Director~~	~~February 28, 2020~~
~~Ivan G. Seidenberg~~
/S/ MARCO ANTONIO SLIM DOMIT	Director	February ~~28, 2020~~24, 2023
Marco Antonio Slim Domit
/S/ HANS E. VESTBERG	Director	February 24, 2023
Hans E. Vestberg
/S/ SUSAN L. WAGNER	Director	February ~~28, 2020~~24, 2023
Susan L. Wagner
/S/ MARK WILSON	Director	February ~~28, 2020~~24, 2023
Mark Wilson

INDEX TO FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm (PCAOB ID 34)	F-2
Consolidated Statements of Financial Condition	~~F-4~~F-3
Consolidated Statements of Income	~~F-5~~F-4
Consolidated Statements of Comprehensive Income	~~F-6~~F-5
Consolidated Statements of Changes in Equity	~~F-7~~F-6
Consolidated Statements of Cash Flows	~~F-8~~F-7
Notes to the Consolidated Financial Statements	~~F-9~~F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of BlackRock, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial condition of BlackRock, Inc. and subsidiaries (the "Company") as of December 31, ~~2019~~2022 and ~~2018,~~2021, 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, ~~2019,~~2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2019~~2022 and ~~2018,~~2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2019,~~2022, 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) (PCAOB), the Company's internal control over financial reporting as of December 31, ~~2019,~~2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February ~~28, 2020,~~24, 2023, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of indefinite-lived intangible assets — Refer to Notes 2 and 12 to the financial statements

Critical Audit Matter Description

The Company’s indefinite-lived intangible assets are comprised of management contracts and trade names/trademarks acquired in business acquisitions. The Company performs its impairment assessment of its indefinite-lived intangible assets at least annually, as of July 31st. In evaluating whether it is more likely than not that the fair value of indefinite-lived intangibles is less than carrying value, the Company performs ~~certain quantitative assessments~~an assessment of factors impacting the fair value of the indefinite lived intangible asset, including assets under management (“AUM”), revenue basis points, projected AUM growth rates, operating margins, tax rates and ~~assesses various significant qualitative factors. If~~discount rates. In addition, the Company also considers macroeconomic conditions; industry and market considerations; and Company-specific events. The assessment of whether an indefinite-lived intangible asset is determined to be more likely than not impaired the fair value of the asset is then 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. The determination of fair value requires management to make ~~estimates and assumptions related to projected assets under management (“AUM”) growth rates, revenue basis points, operating margins, tax rates, and discount rates.~~judgments about the factors that impact the indefinite-lived intangible assets’ fair value.

Given the significant judgments made by management ~~to estimate~~when assessing the ~~fair value~~likelihood of ~~its~~impairment of the Company’s indefinite-lived intangible assets, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions ~~related to projected AUM growth rates, revenue basis points, operating margins, tax rates, and discount rates, required~~requires a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to ~~the determination~~evaluating management's assessment of ~~fair value of~~whether the indefinite-lived intangible assets were more likely than not impaired included the following, among others:

•

We tested the design and operating effectiveness of controls over the Company’s indefinite-lived intangible asset impairment analysis, including those related to management’s assessment of the factors that impact the fair value of the Company’s indefinite lived intangible assets.

•

We evaluated management’s assessment of the factors considered including AUM growth rates, revenue basis points, operating margins, tax rates and discount rate by comparing management’s assumptions to historical amounts, and internal communications to management and the Board of Directors. Further, with the assistance of our fair value specialists, we evaluated the Company’s assumptions by comparing them to analyst and industry reports; the Company’s peers; GDP growth rates; inflation rates; and other macroeconomic factors utilizing external market data.

•

We evaluated the impact of changes in the impairment factors, including macroeconomic conditions, industry and market considerations, and Company-specific events from July 31, 2022, the annual impairment assessment date, to December 31, 2022 and evaluated any changes in the impairment factors.

•

We tested the design, implementation and operating effectiveness of controls over the Company’s indefinite-lived intangible asset impairment analysis, including those related to management’s determination of fair value for the indefinite-lived intangible asset. This includes controls related to management’s projected AUM growth rates, operating margins, tax rates, and the selection of the discount rates.

•

~~We evaluated the reasonableness of management’s projected AUM growth rates, revenue basis points, operating margins, and tax rates by comparing management’s projections to:~~

~~historical amounts,~~

~~internal communications to management and the Board of Directors, and~~

~~forecasted information included in analyst and industry reports for the Company and certain of its peer companies.~~

•

~~We evaluated management’s ability to accurately project AUM growth rates, operating margins, and tax rates by comparing actual results to management’s historical forecasts.~~

•

With the assistance of our fair value specialists, we evaluated the reasonableness of the Company’s valuation methodology and assumptions, including the selection of the discount rate by: (1) tested the source information underlying the determination of the discount rate and the mathematical accuracy of the evaluation and (2) developed a range of independent estimates and compared those to the discount rate selected by management.

•

~~We evaluated the impact of changes in management’s forecasts from July 31, 2019, the annual impairment assessment date, to December 31, 2019.~~

/s/ Deloitte & Touche LLP

New York, New York

February ~~28, 2020~~24, 2023

We have served as the Company's auditor since 2002.

F-2

BlackRock, Inc.

Consolidated Statements of Financial Condition


(in millions, except shares and per share data)	December 31, 2022			December 31, 2021
Assets
Cash and cash equivalents(1)	$	7,416		$	9,323
Accounts receivable		3,264			3,789
Investments(1)		7,466			7,262
Separate account assets		54,066			86,226
Separate account collateral held under securities lending agreements		5,765			7,081
Property and equipment (net of accumulated depreciation and amortization of $1,390 and $1,256 at December 31, 2022 and 2021, respectively)		1,031			762
Intangible assets (net of accumulated amortization of $483 and $399 at December 31, 2022 and 2021, respectively)		18,302			18,453
Goodwill		15,341			15,351
Operating lease right-of-use assets		1,516			1,621
Other assets(1)		3,461			2,780
Total assets	$	117,628		$	152,648
Liabilities
Accrued compensation and benefits	$	2,272		$	2,951
Accounts payable and accrued liabilities		1,294			1,397
Borrowings		6,654			7,446
Separate account liabilities		54,066			86,226
Separate account collateral liabilities under securities lending agreements		5,765			7,081
Deferred income tax liabilities		3,381			2,758
Operating lease liabilities		1,835			1,872
Other liabilities(1)		3,576			4,024
Total liabilities		78,843			113,755
Commitments and contingencies (Note 16)
Temporary equity
Redeemable noncontrolling interests		909			1,087
Permanent equity
BlackRock, Inc. stockholders’ equity
Common stock, $0.01 par value;		2			2
Shares authorized: 500,000,000 at December 31, 2022 and 2021; Shares issued: 172,075,373 at December 31, 2022 and 2021; Shares outstanding: 149,756,492 and 151,684,491 at December 31, 2022 and 2021, respectively
Additional paid-in capital		19,772			19,640
Retained earnings		29,876			27,688
Accumulated other comprehensive loss		(1,101	)		(550	)
Treasury stock, common, at cost (22,318,881 and 20,390,882 shares held at December 31, 2022 and 2021, respectively)		(10,805	)		(9,087	)
Total BlackRock, Inc. stockholders’ equity		37,744			37,693
Nonredeemable noncontrolling interests		132			113
Total permanent equity		37,876			37,806
Total liabilities, temporary equity and permanent equity	$	117,628		$	152,648

(in millions, except shares and per share data)

December 31,
2019

December 31,
2018

Assets

Cash and cash equivalents⁽¹⁾

$
4,829

$
6,488

Accounts receivable

3,179

2,657

Investments⁽¹⁾

5,489

4,476

Separate account assets

102,844

90,285

Separate account collateral held under securities lending agreements

15,466

20,655

Property and equipment (net of accumulated depreciation of $880 and $750 at December 31,
   2019 and 2018, respectively)

715

643

Intangible assets (net of accumulated amortization of $185 and $244 at December 31, 2019
   and 2018, respectively)

18,369

17,839

Goodwill

14,562

13,526

Other assets⁽¹⁾

3,169

3,004

Total assets

$
168,622

$
159,573

Liabilities

Accrued compensation and benefits

$
2,057

$
1,988

Accounts payable and accrued liabilities

1,167

1,292

Borrowings

4,955

4,979

Separate account liabilities

102,844

90,285

Separate account collateral liabilities under securities lending agreements

15,466

20,655

Deferred income tax liabilities

3,734

3,571

Other liabilities⁽¹⁾

3,470

3,263

Total liabilities

133,693

126,033

Commitments and contingencies (Note 16)

Temporary equity

Redeemable noncontrolling interests

1,316

1,107

Permanent equity

BlackRock, Inc. stockholders’ equity

Common stock, $0.01 par value;

2

2

Shares authorized: 500,000,000 at December 31, 2019 and 2018;
  Shares issued: 171,252,185 at December 31, 2019 and 2018;
  Shares outstanding: 154,375,780 and 157,553,501 at December 31, 2019 and
  2018, respectively

Series B nonvoting participating preferred stock, $0.01 par value;

—

—

Shares authorized: 150,000,000 at December 31, 2019 and 2018; Shares issued and outstanding:
  823,188 at December 31, 2019 and 2018;

Series C nonvoting participating preferred stock, $0.01 par value;

—

—

Shares authorized: 6,000,000 at December 31, 2019 and 2018; Shares issued and outstanding:
  0 and 143,458 at December 31, 2019 and 2018, respectively

Additional paid-in capital

19,186

19,168

Retained earnings

21,662

19,282

Accumulated other comprehensive loss

(571
)

(691
)
Treasury stock, common, at cost (16,876,405 and 13,698,684 shares held at December 31, 2019 and
   2018, respectively)

(6,732
)

(5,387
)
Total BlackRock, Inc. stockholders’ equity

33,547

32,374

Nonredeemable noncontrolling interests

66

59

Total permanent equity

33,613

32,433

Total liabilities, temporary equity and permanent equity

$
168,622

$
159,573

(1)

At December 31, 2022, cash and cash equivalents, investments, other assets and other liabilities include $234 million, $3.9 billion, $68 million and $1.9 billion, respectively, related to consolidated variable interest entities (“VIEs”). At December 31, 2021, cash and cash equivalents, investments, other assets and other liabilities include $251 million, $4.0 billion, $50 million and $1.9 billion, respectively, related to consolidated VIEs.

~~(1)~~

For 2019, cash and cash equivalents, investments, other assets and other liabilities include $131 million, $3,301 million, $68 million, and $820 million, respectively, related to consolidated variable interest entities (“VIEs”). For 2018, cash and cash equivalents, investments, other assets and other liabilities include $186 million, $2,680 million, $876 million, and $1,374 million, respectively, related to consolidated VIEs.

See accompanying notes to consolidated financial statements.

F-3

BlackRock, Inc.

Consolidated Statements of Income

(in millions, except shares and per share data)	2019			2018			2017

(in millions, except per share data)										2022			2021			2020
Revenue
Investment advisory, administration fees and securities lending revenue:
Related parties	$	8,323		$	8,226		$	7,692		$	10,848		$	11,474		$	9,079
Other third parties		3,454			3,327			3,176			3,603			3,786			3,560
Total investment advisory, administration fees and securities lending revenue		11,777			11,553			10,868			14,451			15,260			12,639
Investment advisory performance fees		450			412			594			514			1,143			1,104
Technology services revenue		974			785			657			1,364			1,281			1,139
Distribution fees		1,069			1,155			1,183			1,381			1,521			1,131
Advisory and other revenue		269			293			298			163			169			192
Total revenue		14,539			14,198			13,600			17,873			19,374			16,205
Expense
Employee compensation and benefits		4,470			4,320			4,253			5,681			6,043			5,041
Distribution and servicing costs		1,685			1,675			1,663			2,179			2,200			1,835
Direct fund expense		978			998			895			1,226			1,313			1,063
General and administration		1,758			1,638			1,446
General and administration expense											2,160			2,221			2,465
Restructuring charge		—			60			—			91			—			—
Amortization of intangible assets		97			50			89			151			147			106
Total expense		8,988			8,741			8,346			11,488			11,924			10,510
Operating income		5,551			5,457			5,254			6,385			7,450			5,695
Nonoperating income (expense)
Net gain (loss) on investments		342			1			161			(35	)		841			972
Interest and dividend income		97			104			49			152			87			62
Interest expense		(203	)		(184	)		(205	)		(212	)		(205	)		(205	)
Total nonoperating income (expense)		236			(79	)		5			(95	)		723			829
Income before income taxes		5,787			5,378			5,259			6,290			8,173			6,524
Income tax expense		1,261			1,076			270			1,296			1,968			1,238
Net income		4,526			4,302			4,989			4,994			6,205			5,286
Less:
Net income (loss) attributable to noncontrolling interests		50			(3	)		37			(184	)		304			354
Net income attributable to BlackRock, Inc.	$	4,476		$	4,305		$	4,952		$	5,178		$	5,901		$	4,932
Earnings per share attributable to BlackRock, Inc. common stockholders:
Basic	$	28.69		$	26.86		$	30.54		$	34.31		$	38.76		$	32.13
Diluted	$	28.43		$	26.58		$	30.12		$	33.97		$	38.22		$	31.85
Weighted-average common shares outstanding:
Basic		156,014,343			160,301,116			162,160,601			150.9			152.2			153.5
Diluted		157,459,546			161,948,732			164,415,035			152.4			154.4			154.8

See accompanying notes to consolidated financial statements.

F-4

BlackRock, Inc.

Consolidated Statements of Comprehensive Income


(in millions)	2022			2021			2020
Net income	$	4,994		$	6,205		$	5,286
Other comprehensive income (loss):
Foreign currency translation adjustments(1)		(551	)		(213	)		234
Other comprehensive income (loss)		(551	)		(213	)		234
Comprehensive income		4,443			5,992			5,520
Less: Comprehensive income (loss) attributable to noncontrolling interests		(184	)		304			354
Comprehensive income attributable to BlackRock, Inc.	$	4,627		$	5,688		$	5,166

(in millions)

2019

2018

2017

Net income

$
4,526

$
4,302

$
4,989

Other comprehensive income (loss):

Foreign currency translation adjustments⁽¹⁾

120

(253
)

284

Other comprehensive income (loss)

120

(253
)

284

Comprehensive income

4,646

4,049

5,273

Less: Comprehensive income (loss) attributable to noncontrolling interests

50

(3
)

37

Comprehensive income attributable to BlackRock, Inc.

$
4,596

$
4,052

$
5,236

(1)

Amount for 2022 includes a gain from a net investment hedge of $37 million (net of tax expense of $12 million). Amount for 2021 includes a gain from a net investment hedge of $46 million (net of tax expense of $14 million). Amount for 2020 includes a loss from a net investment hedge of $54 million (net of tax benefit of $17 million).

~~(1)~~

Amounts for 2019 and 2018 include gains from a net investment hedge of $11 million (net of tax expense of $3 million) and $30 million (net of tax expense of $10 million), respectively. Amount for 2017 includes a loss from a net investment hedge of $64 million (net of tax benefit of $38 million).

See accompanying notes to consolidated financial statements.

F-5

BlackRock, Inc.

Consolidated Statements of Changes in Equity


(in millions)	Additional Paid-in Capital(1)			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, 2019	$	19,188		$	21,662		$	(571	)	$	(6,732	)	$	33,547		$	66		$	33,613		$	1,316
Net income		—			4,932			—			—			4,932			(1	)		4,931			355
Dividends declared ($14.52 per share)		—			(2,260	)		—			—			(2,260	)		—			(2,260	)		—
Stock-based compensation		622			—			—			—			622			—			622			—
Issuance of common shares related to employee stock transactions		(515	)		—			—			532			17			—			17			—
Employee tax withholdings related to employee stock transactions		—			—			—			(297	)		(297	)		—			(297	)		—
Shares repurchased		—			—			—			(1,512	)		(1,512	)		—			(1,512	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			(14	)		(14	)		2,065
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			—			—			(1,414	)
Other comprehensive income (loss)		—			—			234			—			234			—			234			—
December 31, 2020	$	19,295		$	24,334		$	(337	)	$	(8,009	)	$	35,283		$	51		$	35,334		$	2,322
Net income		—			5,901			—			—			5,901			(2	)		5,899			306
Dividends declared ($16.52 per share)		—			(2,547	)		—			—			(2,547	)		—			(2,547	)		—
Stock-based compensation		734			—			—			—			734			—			734			—
Issuance of common shares related to employee stock transactions		(387	)		—			—			407			20			—			20			—
Employee tax withholdings related to employee stock transactions		—			—			—			(285	)		(285	)		—			(285	)		—
Shares repurchased		—			—			—			(1,200	)		(1,200	)		—			(1,200	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			67			67			1,408
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			(3	)		(3	)		(2,949	)
Other comprehensive income (loss)		—			—			(213	)		—			(213	)		—			(213	)		—
December 31, 2021	$	19,642		$	27,688		$	(550	)	$	(9,087	)	$	37,693		$	113		$	37,806		$	1,087
Net income		—			5,178			—			—			5,178			6			5,184			(190	)
Dividends declared ($19.52 per share)		—			(2,990	)		—			—			(2,990	)		—			(2,990	)		—
Stock-based compensation		708			—			—			—			708			—			708			—
Issuance of common shares related to employee stock transactions		(576	)		—			—			614			38			—			38			—
Employee tax withholdings related to employee stock transactions		—			—			—			(457	)		(457	)		—			(457	)		—
Shares repurchased		—			—			—			(1,875	)		(1,875	)		—			(1,875	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			4			4			614
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			9			9			(602	)
Other comprehensive income (loss)		—			—			(551	)		—			(551	)		—			(551	)		—
December 31, 2022	$	19,774		$	29,876		$	(1,101	)	$	(10,805	)	$	37,744		$	132		$	37,876		$	909

(in millions)
Additional
Paid-in
Capital⁽¹⁾

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, 2016
$
19,339

$
13,650

$
(716
)

$
(3,185
)

$
29,088

$
52

$
29,140

$
194

Net income

—

4,952

—

—

4,952

2

4,954

35

Dividends declared
  ($10.00 per share)

—

(1,662
)

—

—

(1,662
)

—

(1,662
)

—

Stock-based compensation

542

—

—

—

542

—

542

—

PNC preferred stock capital contribution

193

—

—

—

193

—

193

—

Retirement of preferred stock

(193
)

—

—

—

(193
)

—

(193
)

—

Issuance of common shares related to
   employee stock transactions

(626
)

—

—

639

13

—

13

—

Employee tax withholdings related to
   employee stock transactions

—

—

—

(321
)

(321
)

—

(321
)

—

Shares repurchased

—

—

—

(1,100
)

(1,100
)

—

(1,100
)

—

Subscriptions (redemptions/distributions)
   — noncontrolling interest holders

—

—

—

—

—

(18
)

(18
)

482

Net consolidations (deconsolidations) of
   sponsored investment funds

—

—

—

—

—

14

14

(295
)
Other comprehensive income (loss)

—

—

284

—

284

—

284

—

Adoption of new accounting
  pronouncement

3

(1
)

—

—

2

—

2

—

December 31, 2017
$
19,258

$
16,939

$
(432
)

$
(3,967
)

$
31,798

$
50

$
31,848

$
416

Net income

—

4,305

—

—

4,305

—

4,305

(3
)
Dividends declared ($12.02 per share)

—

(1,968
)

—

—

(1,968
)

—

(1,968
)

—

Stock-based compensation

564

—

—

—

564

—

564

—

PNC preferred stock capital contribution

58

—

—

—

58

—

58

—

Retirement of preferred stock

(58
)

—

—

—

(58
)

—

(58
)

—

Issuance of common shares related to
   employee stock transactions

(652
)

—

—

667

15

—

15

—

Employee tax withholdings related to
   employee stock transactions

—

—

—

(427
)

(427
)

—

(427
)

—

Shares repurchased

—

—

—

(1,660
)

(1,660
)

—

(1,660
)

—

Subscriptions (redemptions/distributions)
   — noncontrolling interest holders

—

—

—

—

—

9

9

1,254

Net consolidations (deconsolidations) of
   sponsored investment funds

—

—

—

—

—

—

—

(560
)
Other comprehensive income (loss)

—

—

(253
)

—

(253
)

—

(253
)

—

Adoption of new accounting
  pronouncement

—

6

(6
)

—

—

—

—

—

December 31, 2018
$
19,170

$
19,282

$
(691
)

$
(5,387
)

$
32,374

$
59

$
32,433

$
1,107

Net income

—

4,476

—

—

4,476

7

4,483

43

Dividends declared ($13.20 per share)

—

(2,096
)

—

—

(2,096
)

—

(2,096
)

—

Stock-based compensation

567

—

—

—

567

—

567

—

PNC preferred stock capital contribution

60

—

—

—

60

—

60

—

Retirement of preferred stock

(60
)

—

—

—

(60
)

—

(60
)

—

Issuance of common shares related to
  employee stock transactions

(549
)

—

—

566

17

—

17

—

Employee tax withholdings related to
   employee stock transactions

—

—

—

(245
)

(245
)

—

(245
)

—

Shares repurchased

—

—

—

(1,666
)

(1,666
)

—

(1,666
)

—

Subscriptions (redemptions/distributions)
   — noncontrolling interest holders

—

—

—

—

—

2

2

1,456

Net consolidations (deconsolidations) of
   sponsored investment funds

—

—

—

—

—

(2
)

(2
)

(1,290
)
Other comprehensive income (loss)

—

—

120

—

120

—

120

—

December 31, 2019
$
19,188

$
21,662

$
(571
)

$
(6,732
)

$
33,547

$
66

$
33,613

$
1,316

(1)

Amounts include $2 million of common stock at December 31, 2022, 2021, 2020 and 2019.

~~(1)~~

~~Amounts include $2 million of common stock at December 31, 2019, 2018, 2017 and 2016.~~

See accompanying notes to consolidated financial statements.

F-6

BlackRock, Inc.

Consolidated Statements of Cash Flows


(in millions)	2019			2018			2017			2022			2021			2020
Operating activities
Net income	$	4,526		$	4,302		$	4,989		$	4,994		$	6,205		$	5,286
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation and amortization		405			220			240			418			415			358
Noncash lease expense											165			144			118
Stock-based compensation		567			564			542			708			734			622
Deferred income tax expense (benefit)		17			(226	)		(1,221	)		602			(865	)		(157	)
Charitable Contribution											—			—			589
Gain related to the Charitable Contribution											—			—			(122	)
Contingent consideration fair value adjustments		53			65			8			3			34			23
Other gains		(30	)		(50	)		—
Net (gains) losses within consolidated sponsored investment products		(254	)		149			(218	)
Net (purchases) proceeds within consolidated sponsored investment products		(1,746	)		(1,938	)		(570	)
Other investment gains											(268	)		(165	)		(244	)
Net (gains) losses within CIPs											400			(302	)		(501	)
Net (purchases) proceeds within CIPs											(1,190	)		(1,683	)		(2,282	)
(Earnings) losses from equity method investees		(116	)		(94	)		(122	)		(29	)		(315	)		(148	)
Distributions of earnings from equity method investees		70			30			35			50			84			32
Changes in operating assets and liabilities:
Accounts receivable		(433	)		4			(521	)		416			(322	)		(313	)
Investments, trading		(21	)		179			146			196			323			160
Other assets		141			(223	)		(173	)		(166	)		(172	)		(60	)
Accrued compensation and benefits		58			(230	)		276			(711	)		412			487
Accounts payable and accrued liabilities		(111	)		43			308			(151	)		342			(115	)
Other liabilities		(242	)		280			231			(481	)		75			10
Net cash provided by/(used in) operating activities		2,884			3,075			3,950			4,956			4,944			3,743
Investing activities
Purchases of investments		(693	)		(327	)		(489	)		(824	)		(910	)		(359	)
Proceeds from sales and maturities of investments		417			449			166			242			429			187
Distributions of capital from equity method investees		136			24			32			70			95			183
Net consolidations (deconsolidations) of sponsored investment funds		(110	)		(51	)		(60	)		(85	)		(104	)		(71	)
Acquisitions, net of cash acquired		(1,510	)		(699	)		(102	)		—			(1,106	)		—
Purchases of property and equipment		(254	)		(204	)		(155	)		(533	)		(341	)		(194	)
Net cash provided by/(used in) investing activities		(2,014	)		(808	)		(608	)		(1,130	)		(1,937	)		(254	)
Financing activities
Proceeds from long-term borrowings		992			—			697			—			991			2,245
Repayments of long-term borrowings		(1,000	)		—			(700	)		(750	)		(750	)		—
Cash dividends paid		(2,096	)		(1,968	)		(1,662	)		(2,990	)		(2,547	)		(2,260	)
Proceeds from stock options exercised											11			—			—
Repurchases of common stock		(1,911	)		(2,087	)		(1,421	)		(2,332	)		(1,485	)		(1,809	)
Net proceeds from (repayments of) borrowings by consolidated sponsored investment products		111			40			—
Net proceeds from (repayments of) borrowings by CIPs											(26	)		32			51
Net (redemptions/distributions paid)/subscriptions received from noncontrolling interest holders		1,458			1,263			464			618			1,475			2,051
Other financing activities		(137	)		(13	)		(8	)		27			(3	)		(34	)
Net cash provided by/(used in) financing activities		(2,583	)		(2,765	)		(2,630	)		(5,442	)		(2,287	)		244
Effect of exchange rate changes on cash, cash equivalents and restricted cash		54			(93	)		192			(291	)		(61	)		102
Net increase (decrease) in cash, cash equivalents and restricted cash		(1,659	)		(591	)		904
Net increase/(decrease) in cash, cash equivalents and restricted cash											(1,907	)		659			3,835
Cash, cash equivalents and restricted cash, beginning of year		6,505			7,096			6,192			9,340			8,681			4,846
Cash, cash equivalents and restricted cash, end of year	$	4,846		$	6,505		$	7,096		$	7,433		$	9,340		$	8,681
Supplemental disclosure of cash flow information:
Cash paid for:
Interest	$	193		$	177		$	205		$	177		$	189		$	183
Income taxes (net of refunds)	$	1,168		$	1,159		$	1,124		$	1,067		$	2,720		$	1,308
Supplemental schedule of noncash investing and financing transactions:
Issuance of common stock	$	549		$	652		$	626		$	576		$	387		$	515
PNC preferred stock capital contribution	$	60		$	58		$	193
Increase (decrease) in noncontrolling interests due to net consolidation (deconsolidation) of sponsored investment funds	$	(1,292	)	$	(560	)	$	(281	)
Charitable Contribution of an investment										$	—		$	—		$	(589	)
Increase/(decrease) in noncontrolling interests due to net consolidation (deconsolidation) of sponsored investment funds										$	(593	)	$	(2,952	)	$	(1,414	)

See accompanying notes to consolidated financial statements.

F-7

BlackRock, Inc.

Notes to the Consolidated Financial Statements

1. Business Overview

BlackRock’s diverse platform of alpha-seeking active, index and cash management investment strategies across asset classes enables the Company to offer choice and tailor investment outcomes and asset allocation solutions for clients. Product offerings include single- and multi-asset 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~~^®iShares® and BlackRock exchange-traded funds (“ETFs”), separate accounts, collective ~~investment trusts~~trust funds and other pooled investment vehicles. BlackRock also offers technology services, including the investment and risk management technology platform, ~~Aladdin~~^®Aladdin®, Aladdin Wealth, eFront ~~Cachematrix~~ and ~~FutureAdvisor,~~Cachematrix, as well as advisory services and solutions to a broad base of institutional and wealth management clients.

At December 31, 2019, The PNC Financial Services Group, Inc. (“PNC”) held 22.0% of the Company’s voting common stock and 22.4% of the Company’s capital stock, which includes outstanding common and nonvoting preferred stock.

2. Significant Accounting Policies

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 (“NCI”) on the consolidated statements of financial condition ~~represents~~represent the portion of consolidated sponsored investment ~~funds~~products (“CIPs”) and a consolidated affiliate (collectively, “consolidated entities”) in which the Company does not have direct equity ownership. ~~Accounts~~Intercompany balances and transactions ~~between consolidated entities~~ have been ~~eliminated.~~eliminated upon consolidation.

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 revenue and expense during the reporting periods. Actual results could differ from those estimates.

Certain prior period presentations and disclosures, while not required to be recast, ~~were~~may be reclassified to ensure comparability with current period classifications. The prior year amounts related to the Company’s consolidated variable interest entities have been reclassified to cash and cash equivalents, investments, other assets and other liabilities within the Company’s consolidated statement of financial condition for consistency with the current year’s presentation. In addition, conforming changes were made to the prior year amounts within the statements of cash flows and the related notes to the consolidated financial statements. The reclassifications had no effect on the previously reported total stockholders’ equity, results of operations, or cash flows from operating, investing or financing activities.

~~Accounting Pronouncements Adopted in 2019~~

~~Leases. In February 2016, the Financial Accounting Standards Board (“FASB”) issued~~ ~~Accounting Standards Update (“ASU”)~~ ~~2016-02,~~ ~~Leases~~, and several amendments (collectively, “ASU 2016-02”), which requires lessees to recognize assets and liabilities arising from most operating leases on the consolidated statements of financial condition.

The Company adopted ASU 2016-02 on its effective date of January 1, 2019 on a modified retrospective basis and elected not to apply ASU 2016-02 to the comparative periods presented. Under this transition method, any cumulative effect adjustment is recognized in the opening balance of retained earnings in the period of adoption. The Company elected the package of practical expedients to alleviate certain operational complexities related to the adoption, which allowed the Company to carry forward the existing lease classification. The Company elected to account for lease and non-lease components as a single component for its leases. The Company also elected the short-term lease practical expedient. Consequently, leases with an initial term of 12 months or less are not recorded on the consolidated statement of financial condition. Upon adoption of ASU 2016-02, the Company recorded a net increase of approximately $0.7 billion in its assets and liabilities related to the right-of-use (“ROU”) asset and lease liability for its operating leases. The adoption of ASU 2016-02 did not have a material impact on the consolidated statement of income or cash flows. See Note 13, ~~Leases, for more information.~~

Cash and Cash ~~Equivalents~~.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.~~less. 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 VIEs and voting rights entities (“VREs”)are not considered legally restricted and are included in cash and cash equivalents on the consolidated statements of financial ~~condition~~condition..

Investments

~~Investments~~

Investments in Debt Securities. The Company classifies debt investments as ~~available-for-sale,~~ held-to-maturity or trading based on the Company’s ~~intent to sell the security or, its~~ intent and ability to hold the debt security to ~~maturity.~~maturity or its intent to sell the security.

Available-for-sale securities are those securities that are not classified as trading or held-to-maturity. Available-for-sale securities include certain investments in collateralized loan obligations (“CLOs”) and are carried at fair value on the consolidated statements of financial condition with changes in fair value recorded in accumulated other comprehensive income (loss) (“AOCI”) within 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 AOCI to nonoperating income (expense) on the consolidated statements of income.

Held-to-maturity 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.

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. Trading securities include certain investments in ~~CLOs~~collateralized loan obligations (“CLOs”) for which the fair value option is elected in order to reduce operational complexity of bifurcating embedded derivatives.

Investments in Equity Securities. Equity securities are generally carried at fair value on the consolidated statements of financial condition with changes in the fair value recorded through net income (“FVTNI”) within nonoperating income (expense). For nonmarketable equity securities, the Company generally elects to apply the practicality exception to fair value measurement, under which such securities will be measured at cost, less impairment, plus or minus observable price changes for identical or similar securities of the same issuer with such changes recorded ~~in the consolidated statements of income.~~through net income within nonoperating income (expense). Dividends received are recorded as dividend income within nonoperating income (expense).

Equity Method. The Company applies the equity method of accounting for equity investments where the Company does not consolidate the investee, but can exert significant influence over the financial and operating policies of the investee. The evaluation of whether the Company exerts control or significant influence over the financial and operational policies of its investees is 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 of BlackRock's contractual agreements, including investor voting or other rights, any influence BlackRock may have on the governing board of the investee, the legal rights of other investors in the entity pursuant to the entity’s operating documents and the relationship between BlackRock and other investors in the entity. The Company’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 ~~corporate~~strategic minority investments since such investees are considered to be an extension of the Company’s core business. The Company’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 reduce the Company’s carrying value of the investee and the cost basis if deemed to be a return of capital. The Company classifies distributions in the consolidated statements of cash flows as either distributions of earnings (operating) or distributions of capital (investing) based on the nature of the distribution.

Impairments of Investments. Management periodically assesses equity method, ~~available-for-sale~~nonmarketable investments, and held-to-maturity investments for ~~other-than-temporary~~impairment. If impairment ~~(“OTTI”). If an OTTI~~ exists, an impairment charge would be recorded for the excess of the carrying amount of the investment over its estimated fair value in the consolidated statements of income.

F-8

For equity method investments and nonmarketable investments, impairment evaluation considers qualitative factors, including the financial conditions and specific events related to an investee, that may indicate the fair value of the investment is less than its carrying value. For held-to-maturity investments, ~~if circumstances indicate that an OTTI may exist, the investments are~~impairment is evaluated using market values, where available, or the expected future cash flows of the investment.

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.

In addition, for nonmarketable equity securities that are accounted for under the measurement alternative to fair value, the Company applies the impairment model that does not require the Company to consider whether the impairment is other-than-temporary.

Consolidation. 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~~analysis include the entity’s legal organization, the entity’s capital structure, the rights of equity investment holders and ~~equity ownership,~~the Company’s contractual involvement with, and economic interest in, the entity and any related party or de facto agent implications of the Company’s involvement with the entity. ~~Investments~~Entities that are determined to be VIEs are consolidated if the Company is the primary beneficiary (“PB”) of the entity. VREs are typically consolidated if the Company holds the majority voting interest. Upon the occurrence of certain events (such as contributions and redemptions, either by the Company, or third parties, or amendments to ~~the~~an entity’s governing ~~documents of the Company’s investment products)~~documents), 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~~.Entities. Certain investment products for which a controlling financial interest is achieved through arrangements that do not involve or are not directly linked to voting interests are deemed consolidated VIEs. BlackRock reviews factors, including whether or not i)(1) the entity has equity at risk that is sufficient to permit the entity to finance its activities without additional subordinated support from other parties and ~~ii)~~(2) the equity holders at risk have the obligation to absorb losses, the right to receive 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 re-evaluates such factors as facts and circumstances change.~~

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)~~(1) the power to direct the activities of the VIE that most significantly impact its economic performance and ~~(ii)~~(2) 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 Company generally consolidates VIEs in which it holds an economic interest of ~~10%~~10% or greater and deconsolidates such VIEs once ~~equity ownership~~economic interest falls below ~~10%~~10%.

Consolidation of Voting Rights ~~Entities~~.Entities. BlackRock 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% voting equity interest.

Retention of Specialized Investment Company Accounting Principles. Upon consolidation of sponsored investment ~~funds,~~products, the Company retains the specialized investment company accounting principles of the underlying funds. All of the underlying investments held by such ~~consolidated sponsored investment funds~~CIPs are carried at fair value with corresponding changes in the investments’ fair values reflected in net income within 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 as an equity method investment or equity securities ~~FVTNI if the Company still maintains an investment.~~FVTNI.

Separate Account Assets and ~~Liabilities~~. 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 ("UK"), 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.

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 (collectively “base 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 accounts maintained by BlackRock Life Limited are lent to third parties under global master securities lending agreements. In exchange, the Company receives collateral by obtaining either (1) legal title ~~to the~~or (2) first ranking priority security interest. The minimum collateral ~~with minimum~~ values generally ~~ranging~~range from approximately ~~102%~~102% to ~~112%~~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. 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.

~~The~~In situations where the Company receives the legal title to collateral under these securities lending arrangements, the Company records an asset 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. Additionally, in situations where the Company obtains a first ranking priority security interest in the collateral, the Company does not have the ability to pledge or resell the collateral and therefore does not record the collateral on the consolidated statements of financial condition.

F-9

At December 31, 2022 and 2021, the fair value of loaned securities held by separate accounts was approximately $10.2 billion and $13.2 billion, respectively, and the fair value of the collateral under these securities lending agreements was approximately $11.0 billion and $14.1 billion, respectively, of which approximately $5.8 billion as of 2022 and $7.1 billion as of 2021 was recognized on the consolidated statements of financial condition. During 2022 and 2021, the Company had not resold or repledged any of the collateral received under these arrangements. The securities lending revenue earned from lending securities held by the separate accounts is included in ~~investment advisory, administration~~base fees and securities lending revenue on the consolidated statements of income.During 2019 and 2018, the Company had not resold or repledged any of the collateral received under these arrangements. At December 31, 2019 and 2018, the fair value of loaned securities held by separate accounts was approximately $14.4 billion and $18.9 billion, respectively, and the fair value of the collateral held under these securities lending agreements was approximately $15.5 billion and $20.7 billion, respectively.

Property and ~~Equipment~~.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.

The Company capitalizes certain costs incurred in connection with developing or obtaining software within property and equipment. Capitalized software costs are amortized, beginning when the software product is ready for its intended use, over the estimated useful life of the software of approximately three ~~years.~~years.

Goodwill and Intangible ~~Assets~~.Assets. Goodwill represents the cost of a business acquisition in excess of the fair value of the net 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. The Company performs an impairment assessment of its goodwill at least annually, as of July 31st. 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 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.

Indefinite-lived intangible assets and goodwill are not amortized. Finite-lived investor/customer relationships, technology-related assets, and management contracts, which relate to acquired separate accounts and funds, ~~and investor/customer relationships, and technology-related assets~~ that are expected to contribute to the future cash flows of the Company for a specified period of time, are amortized over their ~~remaining~~ useful lives. On a quarterly basis, the Company considers whether the indefinite-lived and finite-lived classifications are still appropriate.

The Company performs assessments to determine if any intangible assets are potentially impaired ~~and whether the indefinite-lived and finite-lived classifications are still appropriate~~ at least annually, as of July 31^st.31st. The carrying value of finite-lived assets and their remaining useful lives are reviewed ~~at least annually~~ to determine if circumstances exist which may indicate a potential impairment or revisions to the amortization period.

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~~quantitative 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 the 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 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.

For finite-lived intangible assets, if potential impairment circumstances are considered to exist, the Company will perform 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 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.

Consolidated Affiliate. During the second quarter of 2021, the Company formed a majority-controlled asset management company in China - BlackRock CCB Wealth Management Company Ltd. (“WMC”). WMC is 50.1% owned by the Company. The Company consolidates WMC, which it deems to be a VRE, because it exerts control over the financial and operating policies of the entity, based on the Company’s 50.1% ownership and voting rights.

Noncontrolling Interests. NCI consist of third-party investments in the Company’s CIPs (“NCI – CIPs”) and the WMC. The Company reports ~~noncontrolling interests as~~NCI in stockholders’ equity, separate from the parent’s equity, on the consolidated statements of financial condition. ~~In addition,~~NCI that are redeemable at the ~~Company’s consolidated net income on the consolidated statements of income includes the income (loss) attributable to noncontrolling interest holders~~option of the ~~Company’s consolidated sponsored investment products. Income (loss) attributable to noncontrolling interests is not adjusted for income taxes for consolidated sponsored investment products that~~holders are ~~treated~~classified 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 products in~~ temporary equity onat estimated redemption value and nonredeemable NCI are classified as a component of permanent equity in the consolidated statements of financial condition. In addition, the Company reports net income (loss) attributable to redeemable and nonredeemable NCI holders in net income (loss) attributable to NCI in the consolidated statements of income.

Treasury ~~Stock~~.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. Revenue is recognized upon transfer of control of promised services to customers in an amount to which the Company expects to be entitled in exchange for those services. The Company enters into contracts that can include multiple services, which are accounted for separately if they are determined to be distinct. Consideration for the Company’s services is generally in the form of variable consideration because the amount of fees is subject to market conditions that are outside of the Company’s influence. The Company includes variable consideration in revenue when it is no longer probable of significant reversal, i.e. when the associated uncertainty is resolved. For some contracts with customers, the Company has discretion to involve a third party in providing services to the customer. Generally, the Company is deemed to be the principal in these arrangements because the Company controls the promised services before they are transferred to customers, and accordingly presents the revenue gross of related costs.

F-10

Investment Advisory, Administration Fees and Securities Lending Revenue. Investment advisory and administration fees are recognized as the services are performed over time because the customer is receiving and consuming the benefits as they are provided by the Company. Fees are primarily based on agreed-upon percentages of AUM and recognized for services provided during the period, which are distinct from services provided in other periods. Such fees are affected by changes in AUM, including market appreciation or depreciation, foreign exchange translation and net inflows or outflows. Investment advisory and administration fees for investment funds are shown net of fee waivers. In addition, the Company may contract with third parties to provide sub-advisory services on its behalf. The Company presents the investment advisory fees and associated costs to such third-party advisors on a gross basis where it is deemed to be the principal and on a net basis where it is deemed to be the agent. Management judgment involved in making these assessments is focused on ascertaining whether the Company is primarily responsible for fulfilling the promised service.

The Company also earns revenue by lending securities on behalf of clients, primarily to highly rated banks and broker-dealers. The securities loaned are collateralized by either cash or securities, generally ranging from 102% to 112% of the value of the loaned securities. Securities lending fees are based on (1) a percentage of the notional value of the loaned securities and (2) a spread between the interest earned on the reinvested cash collateral and the amount rebated to the borrower. Revenue is recognized over time as services are performed. Generally, the securities lending fees are shared between the Company and the funds or other third-party accounts managed by the Company from which the securities are borrowed. For 2022, 2021 and 2020, securities lending revenue earned by the Company totaled $599 million, $555 million and $652 million, respectively, and is recorded in investment advisory, administration 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.

Money Market Fee Waivers. The Company may voluntarily waive a portion of its management fees on certain money market funds to ensure that they maintain a targeted level of daily net investment income (the “Yield Support waivers”). During 2022, 2021 and 2020, these waivers resulted in a reduction of management fees of approximately $72 million, $500 million, and $35 million respectively, which was partially offset by a reduction of BlackRock’s distribution and servicing costs paid to financial intermediaries. The Company may increase or decrease the level of Yield Support waivers in future periods.

Investment Advisory Performance Fees / Carried Interest. The Company receives investment advisory performance fees, including incentive allocations (carried interest) from certain actively managed investment funds and certain separately managed accounts. These performance fees are dependent upon exceeding specified relative or absolute investment return thresholds, which ~~may~~ vary by product or account, and include monthly, quarterly, annual or longer measurement periods.

Performance fees, including carried interest, are recognized when it is determined that they are no longer probable of significant reversal (such as upon the sale of a fund’s investment or when the ~~amount of AUM becomes known as of~~investment performance exceeds a contractual threshold at the end of a specified measurement period). Given the unique nature of each fee arrangement, contracts with customers are evaluated on an individual basis to determine the timing of revenue recognition. Significant ~~judgement~~judgment is involved in making such determination. Performance fees typically arise from investment management services that began in prior reporting periods. Consequently, a portion of the fees the Company recognizes may be partially related to the services performed in prior periods that meet the recognition criteria in the current period. At each reporting date, the Company considers various factors in estimating performance fees to be recognized, including carried interest. These factors include but are not limited to whether: (1) the fees are dependent on the market and thus are highly susceptible to factors outside the Company’s influence; (2) the fees have a large number and a broad range of possible amounts; and (3) the funds or separately managed accounts have the ability to invest or reinvest their sales proceeds.

The Company is allocated carried interest from certain alternative investment products upon exceeding performance thresholds. The Company may be required to reverse/return all, or part, of such carried interest allocations/distributions depending upon future performance of these funds. Carried interest subject to such clawback provisions is recorded in investments or cash and cash equivalents to the extent that it is distributed, on its consolidated statements of financial condition.

The Company records a liability for deferred carried interest to the extent it receives cash or capital allocations related to carried interest prior to meeting the revenue recognition criteria. A portion of the deferred carried interest may also be paid to certain employees. The ultimate timing of the recognition of performance fee revenue and related compensation expense, if any, ~~for these products~~ is unknown.

Technology services revenue. The Company offers investment management technology systems, risk management services, wealth management and digital distribution tools, all on a fee basis. Clients include banks, insurance companies, official institutions, pension funds, asset managers, retail distributors and other investors. Fees earned for technology services are primarily recorded as services are performed over time and are generally determined using the value of positions on the Aladdin platform, or on a fixed-rate basis. Revenue derived from the sale of software licenses is recognized upon the granting of access rights.

Distribution Fees. The Company earns distribution and service fees ~~for~~related to distributing investment products and ~~providing ongoing~~ shareholder support services tofor investment portfolios. Distribution fees are passed-through to third-party distributors, which perform various fund distribution services and shareholder servicing of certain funds on the Company’s behalf, and are recognized as distribution and servicing costs. The Company presents distribution fees and related distribution and servicing costs incurred on a gross basis.

Distribution fees primarily consist of ongoing distribution fees, shareholder servicing fees and upfront sales commissions for serving as the principal underwriter and/or distributor for certain managed mutual funds. The service of distribution is satisfied at the point in time when an investor makes an investment in a share class of the managed mutual funds. Fees are generally considered variable consideration because they are based on the value of AUM and are uncertain on trade date. Accordingly, the Company recognizes distribution fees ~~over the investment period as~~when the amounts become known and the portion recognized in the current period may relate to distribution services performed in prior periods. Upfront sales commissions are recognized on a trade date basis. Shareholder servicing fees are based on AUM and recognized in revenue as the services are performed.

Advisory and other revenue. Advisory and other revenue primarily includes fees earned for advisory services, fees earned for transition management services primarily comprised of commissions recognized in connection with buying and selling securities on behalf of customers, and equity method investment earnings related to certain ~~corporate~~strategic minority investments.

Advisory services fees are determined using fixed-rate fees and are recognized over time as the related services are completed.

Commissions related to transition management services are recorded on a trade-date basis as transactions occur.

F-11

Stock-based ~~Compensation~~.Compensation. The Company recognizes compensation cost for equity classified awards 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~~stock price on the date of grant. Stock-based awards may have performance, market and/or service conditions. For employee ~~share~~stock options and ~~instruments~~awards with market conditions, the Company uses pricing models. ~~Stock option~~Compensation cost for awards ~~may have~~containing performance ~~market and/or service conditions.~~conditions is recognized if it is probable that the conditions will be achieved. The probability of achievement is assessed on a quarterly basis. If ~~an equity~~a stock-based award is modified after the 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 and is adjusted for actual forfeitures as they occur.

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.

The Company recognizes all excess tax benefits and deficiencies in income tax expense on the consolidated statements of income, which results in volatility of income tax expense as a result of fluctuations in the Company’s stock price. Accordingly, the Company recorded a discrete income tax benefit of ~~$23~~$87 million, ~~$64~~$43 million and ~~$151~~$36 million during ~~2019, 2018~~2022, 2021 and ~~2017,~~2020, respectively, for vested RSUs where the grant date stock price was lower than the vesting date stock price. ~~The Company accounts for forfeitures as they occur.~~

Distribution and Servicing ~~Costs~~.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~~as incurred.

Direct Fund ~~Expense~~.Expense. Direct fund expense, which is expensed as incurred, primarily consists of third-party nonadvisory expense incurred by BlackRock related to certain ~~funds~~investment products 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 expense directly attributable to the nonadvisory operations of the fund.

~~Leases~~.Leases. The Company determines if a contract is a lease or contains a lease at inception. The Company accounts for its office facility leases as operating leases, which may include escalation clauses that are based on an index or market rate. The Company accounts for lease and non-lease components, including common areas maintenance charges, as a single component for its leases. The Company elected the short-term lease exception for l~~eases~~leases with an initial term of 12 months or less. Consequently, such leases are not recorded on the consolidated ~~statement~~statements of financial condition. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain they will be exercised or ~~not, respectively.~~not.

~~Fixed lease payments are included in ROU~~The Company recognizes operating right-of-use (“ROU”) assets and operating lease liabilities ~~within other assets and other liabilities, respectively,~~ on the consolidated ~~statement~~statements of financial ~~condition.ROU assets and lease liabilities are recognized~~condition based on the present value of ~~these~~ future lease payments over the lease term at the commencement date discounted using ~~the Company’s~~an incremental borrowing rate (“IBR”). The IBR for individual leases is estimated considering the Company’s or a subsidiary’s credit rating using various financial metrics, such as revenue, operating margin and revenue growth, and, as appropriate, performing market analysis of yields on publicly traded bonds (secured or unsecured) with similar terms of comparable companies in a similar economic environment. ROU assets are tested for impairment when there is an indication that the ~~discount rate.~~carrying value of an asset may not be recoverable. Fixed lease payments made over the lease term are recorded as lease expense on a straight-line basis. Variable lease payments based on usage, changes in an index or market rate are expensed as incurred.

Upon adoption of ASU 2016-02, for existing leases, the Company elected to determine the discount rate based on the remaining lease term as of January 1, 2019 and for lease payments based on an index or rate to apply the rate at commencement date. For new leases, the discount rates are based on the entire noncancelable lease term.

Foreign ~~Exchange~~.Exchange. Foreign currency transactions are recorded at the exchange rates prevailing on the dates of the transactions. Monetary assets and liabilities that are denominated in foreign currencies are subsequently remeasured into the functional currencies of the Company's subsidiaries at the 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 income. Revenue and expenses are translated at average exchange rates during the period. Gains or losses resulting from translating foreign currency financial statements into USUnited States ("US") dollars are included in ~~AOCI,~~accumulated other comprehensive income (loss) (“AOCI”), a separate component of stockholders’ equity, on the consolidated statements of financial condition.

Income ~~Taxes~~.Taxes. 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 on 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 an income tax benefit on the consolidated statements of income and are reflected as operating cash flows on the consolidated statements of cash flows.

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.

Business ~~Segments~~.Segments. The Company’s management directs BlackRock’s operations as 1one 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.

Fair Value Measurements

Hierarchy of Fair Value Inputs. The Company uses a fair value hierarchy that prioritizes inputs to valuation approaches used to measure fair 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:

F-12

Level 1 Inputs:

Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date.

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~~Level 1 assets may include listed mutual funds, ETFs, listed equities and certain exchange-traded derivatives.~~

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Level 1 assets may include listed mutual 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.

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Level 2 assets may include debt securities, investments in CLOs, bank loans, short-term floating-rate notes, asset-backed securities, securities held within consolidated hedge funds, 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.

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Level 2 assets may include debt securities, bank loans held within consolidated CLOs, short-term floating-rate notes, asset-backed securities, as well as over-the-counter derivatives, including interest 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.

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~~Level 3 assets may include direct private equity investments held within consolidated funds, investments in CLOs and bank loans of a consolidated CLO.~~

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Level 3 assets may include direct private equity investments held within consolidated funds, investments in CLOs and bank loans held within consolidated CLOs and CIPs.

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~~Level 3 liabilities include contingent liabilities related to acquisitions valued based upon discounted cash flow analyses using unobservable market data and borrowings of a consolidated CLO.~~

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Level 3 liabilities may include borrowings of consolidated CLOs and contingent liabilities related to acquisitions valued based upon discounted cash flow analyses using unobservable market data.

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 Approaches. The fair values of certain Level 3 assets and liabilities were determined using various valuation approaches as appropriate, including third-party pricing vendors, broker quotes and market and income approaches.

A significant number of inputs used to value equity, debt securities, investments in CLOs and bank loans is sourced from 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.

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.

Investments Measured at ~~NAV.~~Net Asset Values. As a practical expedient, the Company uses net asset value (“NAV”) as the fair value for certain investments. The inputs to value these investments may include the Company’s capital accounts for its partnership interests in various alternative investments, including hedge funds, real assets 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 could be used as an input to value these investments.

Fair Value Assets and Liabilities of Consolidated CLO. The Company applies the fair value option provisions for eligible assets, including bank loans, held by a consolidated CLO. As the fair value of the financial assets of the consolidated CLO is more observable than the fair value of the borrowings of the consolidated CLO, the Company measures the fair value of the borrowings of the consolidated CLO asequal to the fair value of the assets of the consolidated CLO less the fair value of the Company’s economic interest in the CLO.

Derivatives and Hedging ~~Activities~~.Activities. The Company does not use derivative financial instruments for trading or speculative purposes. The Company uses derivative financial instruments primarily for purposes of hedging exposures to fluctuations in foreign currency exchange rates of certain assets and liabilities, and market exposures for certain seed investments. However, certain ~~consolidated sponsored investment funds may~~CIPs also utilize derivatives as a part of their investment strategy.

The Company records all derivative financial instruments as either assets or liabilities at fair value on a gross basis in the consolidated statements of financial condition. Credit risks are managed through master netting and collateral support agreements. The amounts related to the right to reclaim or the obligation to return cash collateral may not be used to offset amounts due under the derivative instruments in the normal course of settlement. Therefore, such amounts are not offset against fair value amounts recognized for derivative instruments with the same counterparty and are included in other assets and other liabilities. Changes in the fair value of the Company’s derivative financial instruments are 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.

The Company may also use financial instruments designated as net investment hedges for accounting purposes to hedge net investments in international subsidiaries whose functional currency is not US dollars. The gain or loss from revaluing ~~accounting~~net investment hedges ~~of net investments in foreign operations~~ at the spot rate is deferred and reported within AOCI on the consolidated statements of financial condition. ~~Amounts excluded from the effectiveness assessment are reported in the consolidated statements of income using a systematic and rational method.~~ The Company reassesses the effectiveness of its net investment hedge at least quarterly.

~~Recent Accounting Pronouncements Not Yet Adopted in 2019~~F-13

~~Measurement of Credit Losses.~~

~~In June 2016, the FASB issued ASU 2016-13,~~ 3. Acquisition~~Measurement of Credit Losses on Financial Instruments~~

(“ASU 2016-13”), which significantly changes the accounting and disclosures for credit losses for most financial assets. The new guidance requires an estimate of expected lifetime credit losses and eliminates the existing recognition thresholds under current models. The adoption of ASU 2016-13, which was effective for the Company on JanuaryAperio Group, LLC

On February 1, ~~2020, did not have a material impact on its consolidated financial statements.~~

~~3. Acquisition~~

~~On May 10, 2019,~~2021, the Company acquired ~~100%~~100% of the equity interests of ~~eFront Holding SAS (“eFront~~Aperio Group, LLC (the “Aperio Transaction” or ~~“eFront”~~“Aperio”), a ~~leading alternative investment management software and solutions provider~~pioneer in customizing tax-optimized index equity separately managed accounts (“SMAs”) for approximately ~~$1.3~~$1.1 billion ~~excluding the settlement of eFront’s outstanding debt.~~in cash, using existing cash resources. The acquisition of ~~eFront expands~~ ~~Aladdin’s illiquid alternative~~Aperio increased BlackRock’s SMA assets under management and expanded the breadth of the Company’s capabilities via tax-managed strategies across factors, broad market indexing, and ~~enables BlackRock to provide individual alternative or whole-portfolio technology solutions to clients.~~investor environmental, social, and governance preferences across all asset classes.

~~The purchase price was funded through a combination of existing cash and issuance of commercial paper (subsequently repaid with existing cash) and long-term notes in April 2019. See Note 15,~~ ~~Borrowings, for information on the debt issuance in April 2019.~~

The purchase price for the ~~eFront~~Aperio Transaction was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the transaction. The goodwill recognized in connection with the acquisition is ~~non-deductible for tax purposes and is~~ primarily attributable to anticipated synergies from the transaction.

Goodwill, finite-lived intangible assets and deferred income tax liabilities were retrospectively adjusted to reflect new information obtained about facts that existed as of May 10, 2019, the eFront acquisition date. There was no material change to the consolidated statements of income for the year ended December 31, 2019 as a result of these adjustments. A summary of the ~~initial and revised~~ fair values of the assets acquired and liabilities assumed in this acquisition is as ~~follows~~follows:⁽¹⁾:


(in millions)	Fair Value
Accounts receivable	$	16
Finite-lived intangible assets:
Customer relationships		270
Other		17
Goodwill		776
Deferred income tax liabilities		(16	)
Other liabilities assumed		(12	)
Total consideration, net of cash acquired	$	1,051

Summary of consideration, net of cash acquired:
Cash paid	$	1,055
Cash acquired		(4	)
Total consideration, net of cash acquired	$	1,051

Initial

Revised

Estimate of

Estimate of

(in millions)

Fair Value

Fair Value

Accounts receivable

$
65

$
61

Finite-lived intangible assets:

Customer relationships⁽²⁾

452

400

Technology-related⁽³⁾

205

203

Trade name⁽⁴⁾

21

14

Goodwill

990

1,044

Other assets

31

49

Deferred income tax liabilities

(194
)

(146
)
Other liabilities assumed

(64
)

(125
)
Total consideration, net of cash acquired

$
1,506

$
1,500

Summary of consideration, net of cash acquired:

Cash paid including settlement of outstanding debt of approximately $0.2 billion

$
1,555

$
1,555

Cash acquired

(49
)

(55
)
Total consideration, net of cash acquired

$
1,506

$
1,500

⁽¹⁾	~~At this time, the Company does not expect additional material changes to the value of the assets acquired or liabilities assumed in conjunction with the transaction.~~

⁽²⁾	The fair value was determined based on the excess earnings method (a Level 3 input), has a weighted-average estimated useful life of approximately 10 years and is amortized using the accelerated amortization method.

⁽³⁾	The fair value was determined based upon a relief from royalty method (a Level 3 input), has a weighted-average estimated useful life of approximately eight years and is amortized using the accelerated amortization method.

⁽⁴⁾	~~The fair value was determined using a relief from royalty method (a Level 3 input), has an estimated useful life of approximately four years and is amortized using the accelerated amortization method.~~

Finite-lived intangible assets in the table above are amortized over their estimated useful lives, which range from four to 10 years. Amortization expense related to the finite-lived intangible assets was $38 million for the year ended December 31, 2019. The finite-lived intangible assets had a weighted-average remaining useful life of approximately nine years with remaining amortization expense as follows:

(in millions)

Year

Amount

2020

$
60

2021

64

2022

68

2023

69

2024

71

Thereafter

247

Total

$
579

For the year ended December 31, 2019, eFront contributed $96 million of revenue and did not have a material impact to net income attributable to BlackRock, Inc. Consequently, the Company has not presented pro forma combined results of operations for this acquisition.

4. Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents reported within the consolidated statements of financial condition to the cash, cash equivalents, and restricted cash reported within the consolidated statements of cash flows.


	December 31,		December 31,
(in millions)	2022		2021
Cash and cash equivalents	$	7,416	$	9,323
Restricted cash included in other assets		17		17
Total cash, cash equivalents and restricted cash	$	7,433	$	9,340

December 31,

December 31,

(in millions)

2019

2018

Cash and cash equivalents

$
4,829

$
6,488

Restricted cash included in other assets

17

17

Total cash, cash equivalents and restricted cash

$
4,846

$
6,505

5. Investments

A summary of the carrying value of total investments is as follows:


(in millions)	December 31, 2022		December 31, 2021
Debt securities:
Trading securities (including $1,279 and $1,140 trading debt securities of CIPs at December 31, 2022 and December 31, 2021, respectively)	$	1,331	$	1,186
Held-to-maturity investments		544		430
Total debt securities		1,875		1,616
Equity securities at FVTNI (including $1,089 and $1,485 equity securities at FVTNI of CIPs at December 31, 2022 and December 31, 2021, respectively)		1,211		1,738
Equity method investments(1)		1,895		1,694
Bank loans held by CIPs		354		284
Federal Reserve Bank stock(2)		91		96
Carried interest(3)		1,550		1,555
Other investments(4)		490		279
Total investments	$	7,466	$	7,262

(in millions)

December 31,
2019

December 31,
2018

Debt securities:

Held-to-maturity investments

$
249

$
188

Trading securities

1,249

1,660

Total debt securities

1,498

1,848

Equity securities at FVTNI

1,926

1,021

Equity method investments⁽¹⁾

943

781

Bank loans

204

84

Federal Reserve Bank stock⁽²⁾

93

92

Carried interest⁽³⁾

528

387

Other investments⁽⁴⁾

297

263

Total investments

$
5,489

$
4,476

(1)

Equity method investments primarily include BlackRock’s direct investments in certain BlackRock sponsored investment funds.

(2)

Federal Reserve Bank stock is held for regulatory purposes and is restricted from sale.

(3)

Carried interest represents allocations to BlackRock’s general partner capital accounts from certain sponsored investment funds. These balances are subject to change upon cash distributions, additional allocations or reallocations back to limited partners within the respective funds.

(4)

Other investments include BlackRock’s investments in nonmarketable equity securities, which are measured at cost, adjusted for observable price changes and private equity and real asset investments held by CIPs measured at fair value.

⁽¹⁾	~~Equity method investments primarily include BlackRock’s direct investments in certain BlackRock sponsored investment funds.~~

⁽²⁾	~~At both December 31, 2019 and 2018, there were no indicators of impairment of Federal Reserve Bank stock, which is held for regulatory purposes and is restricted from sale.~~

⁽³⁾

Carried interest of consolidated sponsored investment funds 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⁾	Other investments include BlackRock’s investments in nonmarketable equity securities, which are measured at cost, adjusted for observable price changes and private equity and real assets investments of consolidated sponsored investment products.

~~Available-for-Sale Investments~~

~~A summary of sale activity of available-for-sale during 2019, 2018 and 2017 is shown below.~~

Year ended December 31,

(in millions)

2019

2018

2017

Sales proceeds

$
—

$
173

$
—

Net realized gain (loss):

Gross realized gains

$
—

$
—

$
—

Gross realized losses

—

—

—

Net realized gain (loss)

$
—

$
—

$
—

~~There were 0 available-for-sale investments at both December 31, 2019 and 2018.~~

Held-to-Maturity Investments

~~The carrying value of held-to-maturity investments was $249 million and $188 million at December 31, 2019 and 2018, respectively.~~ Held-to-maturity investments included certain investments in BlackRock sponsored ~~CLOs and foreign government debt held primarily for regulatory purposes.~~CLOs. The amortized cost (carrying value) of these investments approximated fair value (primarily a Level 2 input). At December 31, ~~2019, $80~~2022, $36 million of these investments mature between one year to five years, $236 million of these investments mature between five ~~years~~ to ten years and ~~$169~~$272 million of these investments mature after ten years.

~~Equity and~~ F-14

Trading Debt Securities and Equity Securities at FVTNI

A summary of the cost and carrying value of ~~equity and~~ trading debt securities and equity securities at FVTNI is as follows:


	December 31, 2022				December 31, 2021
(in millions)	Cost		Carrying Value		Cost		Carrying Value
Trading debt securities:
Corporate debt	$	823	$	795	$	703	$	701
Government debt		420		400		365		363
Asset/mortgage-backed debt		154		136		126		122
Total trading debt securities	$	1,397	$	1,331	$	1,194	$	1,186
Equity securities at FVTNI:
Equity securities/mutual funds	$	1,216	$	1,211	$	1,451	$	1,738

December 31, 2019

December 31, 2018

(in millions)

Cost

Carrying
Value

Cost

Carrying
Value

Trading debt securities:

Corporate debt

$
822

$
844

$
800

$
798

Government debt

268

269

771

756

Asset/mortgage backed debt

141

136

115

106

Total trading debt securities

$
1,231

$
1,249

$
1,686

$
1,660

Equity securities at FVTNI:

Deferred compensation plan mutual funds

$
6

$
23

$
21

$
34

Equity securities/multi-asset mutual funds

1,763

1,903

995

987

Total equity securities at FVTNI

$
1,769

$
1,926

$
1,016

$
1,021

6. Consolidated Sponsored Investment Products

The Company consolidates certain sponsored investment funds accounted for as VREs because it is deemed to control such funds.

In 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 or loan arrangements 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’s consolidated VIEs include certain sponsored investment products in which BlackRock has an investment and as the investment manager, is deemed to have both the power to direct the most significant activities of the products and the right to receive benefits (or the obligation to absorb losses) that could potentially be significant to these sponsored investment products. 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 following table presents the balances related to these ~~consolidated sponsored investment products~~CIPs accounted for as VIEs and VREs that were recorded on the consolidated statements of financial condition, including BlackRock’s net interest in these products:


	December 31, 2022									December 31, 2021
(in millions)	VIEs			VREs			Total			VIEs			VREs			Total
Cash and cash equivalents(1)	$	234		$	31		$	265		$	251		$	57		$	308
Investments:
Trading debt securities		949			330			1,279			870			270			1,140
Equity securities at FVTNI		821			268			1,089			1,100			385			1,485
Bank loans		234			120			354			284			—			284
Other investments		373			77			450			210			—			210
Carried interest		1,497			—			1,497			1,504			—			1,504
Total investments		3,874			795			4,669			3,968			655			4,623
Other assets		68			29			97			50			32			82
Other liabilities(2)		(1,876	)		(48	)		(1,924	)		(1,919	)		(82	)		(2,001	)
Noncontrolling interests - CIPs		(857	)		(125	)		(982	)		(1,046	)		(79	)		(1,125	)
BlackRock's net interest in CIPs	$	1,443		$	682		$	2,125		$	1,304		$	583		$	1,887

December 31, 2019

December 31, 2018

(in millions)
VIEs

VREs

Total

VIEs

VREs

Total

Cash and cash equivalents
$
131

$
10

$
141

$
186

$
59

$
245

Investments:

Trading debt securities

1,059

151

1,210

1,395

233

$
1,628

Equity securities at FVTNI

1,330

332

1,662

569

291

860

Bank loans

204

—

204

84

—

84

Other investments

194

—

194

263

—

263

Carried interest

514

—

514

369

—

369

Total investments

3,301

483

3,784

2,680

524

3,204

Other assets

68

5

73

876

8

884

Other liabilities⁽¹⁾

(820
)

(20
)

(840
)

(1,374
)

(53
)

(1,427
)
Noncontrolling interests

(1,348
)

(34
)

(1,382
)

(1,076
)

(90
)

(1,166
)
BlackRock's net interest in
consolidated investment products
$
1,332

$
444

$
1,776

$
1,292

$
448

$
1,740

(1)

The Company cannot readily access cash and cash equivalents held by CIPs to use in its operating activities.

(2)

At both December 31, 2022 and 2021, other liabilities of VIEs primarily include deferred carried interest liabilities and borrowings of a consolidated CLO.

~~(1)~~

~~At December 31, 2019 and 2018, other liabilities of VIEs include $195 million and $84 million, respectively, related to borrowings of a consolidated CLO.~~

BlackRock’s total exposure to ~~consolidated sponsored investment products~~CIPs represents the value of its economic ownership interest in these ~~sponsored investment products.~~CIPs. Valuation changes associated with investments held at fair value by these ~~consolidated sponsored investment products~~CIPs are reflected in nonoperating income (expense) and partially offset in net income (loss) attributable to ~~noncontrolling interests~~NCI for the portion not attributable to BlackRock.

~~The Company cannot readily access cash and cash equivalents held by consolidated sponsored investment products to use in its operating activities.~~

Net gain (loss) related to consolidated VIEs is presented in the following table:


(in millions)	2022			2021		2020
Nonoperating net gain (loss) on consolidated VIEs	$	(311	)	$	296	$	477

Net income (loss) attributable to NCI on consolidated VIEs	$	(161	)	$	289	$	348

Nonconsolidated VIEs.At December 31, ~~2019~~2022 and ~~2018,~~2021, the Company’s 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:

The net assets of sponsored investment products that are nonconsolidated VIEs approximated ~~$12~~$19 billion and $9$20 billion at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively.

~~Direct~~Level 3 Assets. Level 3 assets predominantly include investments in ~~private equity companies may be valued using the market approach or the income approach, or a combination thereof,~~CLOs and bank loans of consolidated CIPs, which were valued based on ~~an assessment of each underlying investment, incorporating evaluation of additional~~single-broker nonbinding quotes or quotes from pricing services which use 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 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 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 investments utilizing a discounted cash flow valuation technique, a significant increase (decrease) in the discount rate, risk premium or discount for lack of marketability in isolation could have resulted in a significantly lower (higher) fair value measurement as of December 31, 2019. For investments utilizing the market-comparable valuation technique, a significant increase (decrease) in a valuation multiple in isolation could have resulted in a significantly higher (lower) fair value measurement as of December 31, 2019.

unobservable inputs.

Level 3 ~~Liabilities~~.Liabilities. Level 3 liabilities primarily include ~~contingent liabilities associated with certain acquisitions, which were valued based upon discounted cash flow analyses using unobservable market data inputs and~~ borrowings of a consolidated CLO, which were valued based on the fair value of the assets of the consolidated CLO less the fair value of the Company’s economic interest in the ~~CLO.~~ CLO, as well as contingent liabilities related to certain acquisitions, 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 ~~2019~~2022

The impairment tests performed for intangible assets as of July 31, ~~2019, 2018~~2022, 2021 and ~~2017~~2020 indicated 0no impairment charges were required.

In ~~2019, in~~ connection with the ~~eFront~~Aperio Transaction, which closed on February 1, 2021, the Company acquired ~~$400~~$270 million of finite-lived customer relationships, ~~$203~~$9 million of finite-lived trade name and $8 million of finite-lived technology-related intangible assets, ~~and $14 million of a finite-lived trade name,~~ with weighted-average estimated lives of approximately 10 years, ~~eight~~five years and ~~four~~three years, respectively. See Note 3, Acquisition,, for ~~information on the eFront Transaction.~~more information.

In 2018, in connection with the TCP and Citibanamex transactions, the Company acquired $145 million and $255 million of indefinite-lived management contracts, respectively, and $48 million and $31 million of finite-lived management contracts, respectively, with a weighted-average estimated life of approximately six and eight years, respectively. F-22

The table below summarizes BlackRock’s future minimum commitments under the operating leases at December 31, 2018, reflecting accounting guidance prior to the adoption of the new lease accounting standard:

In May 2017, the Company entered into an agreement with 50 HYMC Owner LLC, for the lease of approximately 847,000 square feet of office space located at 50 Hudson Yards, New York, New York. The term of the lease is twenty years from the date that rental payments begin, expected to occur in May 2023, with the option to renew for a specified term. The lease requires annual base rental payments of approximately $51 million per year during the first five years of the lease term, increasing every five years to $58 million, $66 million and $74 million per year (or approximately $1.2 billion in base rent over its twenty-year term). In November 2019, the Company exercised its initial expansion option with respect to 2 additional floors of approximately 122,000 square feet of office space. The additional space requires approximately $185 million in base rent over its twenty-year term.

~~The Company accounts for its interest in PennyMac Financial Services, Inc. (“PennyMac”) as an equity method investment.~~ At December 31, ~~2019~~2022 and ~~2018,~~2021, the ~~Company’s investment in PennyMac is included in~~Company had $809 million and $583 million of equity method investments, respectively, recorded within other assets on the consolidated statements of financial ~~condition. The~~condition, since such investees are considered to be an extension of BlackRock’s core business. BlackRock’s share of these investees’ underlying net income or loss is based upon the most currently available information and is recorded within advisory and other revenue. In 2022, the Company recorded a nonoperating, noncash, pre-tax gain of approximately $267 million in connection with the dilution of its ownership interest to approximately 25% in its strategic minority investment in iCapital Network, Inc. ("iCapital"). In 2021, the Company recorded a nonoperating, noncash, pre-tax gain in connection with the dilution of its ownership interests in iCapital of approximately $119 million. At December 31, 2022 and 2021, the carrying ~~value and market~~ value of the ~~Company’s~~Company's interest ~~(approximately 20% or 16 million shares) were~~in iCapital was approximately ~~$451~~$669 million and ~~$530~~$409 million, respectively. In accordance with GAAP, certain equity method investees, including iCapital, 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.

At December 31, 2022 and 2021, the Company had $375 million and $268 million, respectively, of other nonequity method corporate minority investments recorded within other assets on the consolidated statements of financial condition, which included investments in equity securities, generally measured at ~~December 31, 2019 and approximately $397 million and $331 million, respectively, at December 31, 2018. The market~~fair value or under the measurement alternative to fair value for nonmarketable securities. Changes in value of these securities are recorded in nonoperating income (expense) on the ~~Company’s interest reflected the PennyMac stock price at December 31, 2019 and 2018, respectively (a Level 1 input).~~consolidated statements of income. See Note 2, Significant Accounting Policies, for further information.

~~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, 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. Interest on the 4.25% notes due in 2021 (“2021 Notes”) is payable semi-annually on May 24 and November 24 of each year, 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 unamortized discount and debt issuance costs~~ ~~are being amortized over the remaining term of the 2021 Notes.~~F-24

In addition to amounts disclosed in the ~~table~~tables above, certain technology services contracts require fixed minimum fees, which are billed on a monthly or quarterly basis in arrears. The Company recognizes such revenue as services are performed. As of December 31, ~~2019,~~2022, the estimated annual fixed minimum fees for ~~2020~~2023 for outstanding contracts approximated ~~$640~~$895 million. The term for these contracts, which are either in their initial or renewal period, ranges from one to five ~~years.~~years.

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 nonemployee directors. A maximum of 41,500,000 shares of common stock were authorized for issuance under the Award Plan. Of this amount, ~~7,197,212~~4,264,917 shares remain available for future awards at December 31, ~~2019.~~2022. 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 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. Restricted stock and RSUs are not considered participating securities for purposes of calculating EPS as the dividend equivalents are subject to forfeiture prior to vesting of the award.

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/restricted stock granted to employees during ~~2019, 2018~~2022, 2021 and ~~2017~~2020 was ~~$508~~$662 million, ~~$492~~$664 million and ~~$421~~$517 million, respectively. The total grant-date fair market value of RSUs/restricted stock converted to common stock during ~~2019, 2018~~2022, 2021 and ~~2017~~2020 was ~~$398~~$461 million, ~~$443~~$391 million and ~~$457~~$421 million, respectively.

The expected term was derived using a Monte Carlo simulation with the embedded lattice model and represents the period of time that options granted are expected to be outstanding. The expected stock volatility was based upon an average of historical stock price fluctuations of BlackRock’s common stock and an implied volatility at the grant date. The dividend yield was calculated as the most recent quarterly dividend divided by the average three-month stock price as of the grant date. The ~~risk free~~risk-free interest rate is based on the US Treasury Constant Maturities yield curve at date of grant.

At December 31, ~~2019,~~2022, total unrecognized stock-based compensation expense related to unvested performance-based stock options was ~~$108~~$20 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of ~~3.9~~1.4 years. The total fair value of options vested during 2022 was $59 million. The aggregate intrinsic value of options exercised during 2022 was $4 million.

Employee Stock Purchase Plan (“ESPP”). The ESPP allows eligible employees to purchase the Company’s common stock at ~~95%~~95% of the fair market value on the last day of each three-month offering ~~period. The~~period; therefore, the Company does not record compensation expense related to employees purchasing shares under the ESPP.

A restructuring charge of ~~$60~~$91 million ($4769 million after-tax), comprised of ~~$53~~$58 million of severance and $7$33 million of expense related to the accelerated amortization of previously granted ~~equity~~stock-based compensation awards, was recorded in the fourth quarter of ~~2018~~2022 in connection with an initiative to modify the size and shape of the ~~workforce.~~workforce to align more closely with strategic priorities.

The foreign income before taxes includes countries that have statutory tax rates that are different than the US federal statutory tax rate of ~~21%~~21%, such as the ~~United Kingdom, Ireland,~~UK, Canada, Switzerland and ~~Netherlands.~~Germany.

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.

Included in the balance of unrecognized tax benefits at December 31, ~~2019, 2018~~2022, 2021 and ~~2017,~~2020, respectively, are ~~$513~~$497 million, ~~$462~~$616 million and ~~$316~~$565 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 ~~$27~~$(40) million during ~~2019~~2022 and in total, as of December 31, ~~2019,~~2022, had recognized a liability for interest and penalties of ~~$133~~$160 million. The Company accrued interest and penalties of ~~$30~~$36 million during ~~2018~~2021 and in total, as of December 31, ~~2018,~~2021, had recognized a liability for interest and penalties of ~~$106~~$200 million. The Company accrued interest and penalties of ~~$17~~$31 million during ~~2017~~2020 and in total, as of December 31, ~~2017,~~2020, had recognized a liability for interest and penalties of ~~$76~~$164 million.

BlackRock is subject to US federal income tax, state and local income tax, and foreign income tax in multiple jurisdictions. Tax years after ~~2009~~2011 remain open to US federal income tax examination.

In June 2014, the Internal Revenue Service commenced its examination of BlackRock’s 2010 through 2012 tax ~~years.~~years of which 2010 and 2011 examination is closed. During 2019, 2020, and 2021, the Internal Revenue Service commenced its examination of BlackRock’s 2013 through 2015 tax ~~years. While the examination impact on the Company’s consolidated financial statements is undetermined, it is not expected to be material.~~years, 2017 through 2018 tax years and 2019 tax year, respectively.

The Company is currently under audit in several state and local jurisdictions. The significant state and local income tax examinations are in New York State for tax years 2012 through 2014, in which the examination was concluded in January 2023, and New York City for tax years ~~2009~~2012 through ~~2011, and California~~2014. The conclusion of New York State income tax examination for tax years ~~2015 through 2016.~~2012 – 2014 did not have a material impact to the consolidated financial statements. No open state and local income tax audits cover years earlier than ~~2009. No state and local income tax audits are expected to result in an assessment material to BlackRock’s consolidated financial statements.~~2012.

Upon conclusion of its examination, Her Majesty’s Revenue and Customs (“HMRC”) issued a closure notice during 2017 for various UK BlackRock subsidiaries for tax years 2009 and years after. ~~The~~At that time, the Company ~~made a decision~~decided to pursue litigation for the tax matters included on such notice. During 2020, the Company received a favorable decision from the First Tier Tribunal (“FTT”), however, HMRC appealed to the Upper Tribunal (“UT”) and the UT ruled in HMRC’s favor, overturning the FTT’s decision in July 2022. BlackRock appealed UT’s decision to the UK Court of Appeal (“CoA”) and is waiting for an appeal hearing date. BlackRock does not expect the ultimate resolution to result in a material impact to the consolidated financial statements.

From time to time, BlackRock may receive or be subject to tax authorities’ assessments and challenges related to income taxes. BlackRock does not currently expect the ultimate resolution of any other existing matters to be material to the consolidated financial statements.

At December 31, ~~2019,~~2022, 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 $5$200 million to ~~$20~~$370 million within the next twelve months.


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	BLK	New York Stock Exchange
1.250% Notes due 2025	BLK25	New York Stock Exchange


Large accelerated filer☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐


☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


PART I

Item 1	Business	1
Item 1A	Risk Factors	1820
Item 1B	Unresolved Staff Comments	2932
Item 2	Properties	3032
Item 3	Legal Proceedings	3032
Item 4	Mine Safety Disclosures	3032

PART II

Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3133
Item 6	~~Selected Financial Data~~[Reserved]	3233
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	5856
Item 8	Financial Statements and Supplemental Data	5957
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	5957
Item 9A	Controls and Procedures	5957
Item 9B	Other Information	6260
Item 9C	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	60
~~PART III~~
PART III

Item 10	Directors, Executive Officers and Corporate Governance	6260
Item 11	Executive Compensation	6260
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	6260
Item 13	Certain Relationships and Related Transactions, and Director Independence	6260
Item 14	Principal Accountant Fees and Services	6260

PART IV

Item 15	Exhibits and Financial Statement Schedules	6261
Item 16	Form 10-K Summary	63
	Signatures	6664


(in millions, except per share data)
GAAP:	2022			2021			2020			2019			2018
Total revenue	$	17,873		$	19,374		$	16,205		$	14,539		$	14,198
Operating income	$	6,385		$	7,450		$	5,695		$	5,551		$	5,457
Operating margin		35.7	%		38.5	%		35.1	%		38.2	%		38.4	%
Nonoperating income (expense)(1)	$	89		$	419		$	475		$	186		$	(76	)
Net income attributable to BlackRock, Inc.	$	5,178		$	5,901		$	4,932		$	4,476		$	4,305
Diluted earnings per common share	$	33.97		$	38.22		$	31.85		$	28.43		$	26.58


(in millions, except per share data)
As adjusted(2):	2022			2021			2020			2019			2018
Operating income	$	6,711		$	7,747		$	6,433		$	5,784		$	5,701
Operating margin		42.8	%		46.8	%		46.0	%		45.5	%		45.6	%
Nonoperating income (expense)(1)	$	89		$	419		$	353		$	186		$	(76	)
Net income attributable to BlackRock, Inc.	$	5,391		$	6,254		$	5,352		$	4,664		$	4,493
Diluted earnings per common share	$	35.36		$	40.51		$	34.57		$	29.62		$	27.74

(in millions, except per share data)
As adjusted⁽²⁾:	2019			2018			2017⁽⁴⁾			2016⁽⁴⁾			2015⁽⁴⁾
Operating income	$	5,551		$	5,531		$	5,269		$	4,669		$	4,695
Operating margin		43.7	%		44.3	%		44.1	%		43.8	%		42.9	%
Nonoperating income (expense)⁽¹⁾	$	186		$	(76	)	$	(32	)	$	(108	)	$	(70	)
Net income attributable to BlackRock, Inc.⁽³⁾	$	4,484		$	4,361		$	3,698		$	3,210		$	3,313
Diluted earnings per common share⁽³⁾	$	28.48		$	26.93		$	22.49		$	19.27		$	19.60

(in millions)	December 31, 2014		Net inflows (outflows)			Adjustment/ acquisitions and dispositions⁽¹⁾		Market change		FX impact			December 31, 2019		5-Year CAGR⁽²⁾
Equity	$	2,451,111	$	277,866		$	2,590	$	1,134,325	$	(45,563	)	$	3,820,329		9	%
Fixed income		1,393,653		718,376			18,539		232,306		(47,482	)		2,315,392		11	%
Multi-asset		377,837		77,525			1,048		123,068		(11,357	)		568,121		8	%
Alternatives		111,240		48,035			10,121		11,255		(2,579	)		178,072		10	%
Long-term		4,333,841		1,121,802			32,298		1,500,954		(106,981	)		6,881,914		10	%
Cash management		296,353		168,051			81,321		6,583		(6,359	)		545,949		13	%
Advisory		21,701		(18,149	)		—		174		(1,956	)		1,770		(39	)%
Total	$	4,651,895	$	1,271,704		$	113,619	$	1,507,711	$	(115,296	)	$	7,429,633		10	%

(in millions)	Retail		iShares ETFs		Institutional		Total
Active	$	608,552	$	—	$	1,338,670	$	1,947,222
Non-ETF Index		94,745	—			2,599,882		2,694,627
iShares ETFs		—		2,240,065		—		2,240,065
Long-term		703,297		2,240,065		3,938,552		6,881,914
Cash management		10,842	—			535,107		545,949
Advisory		—	—			1,770		1,770
Total	$	714,139	$	2,240,065	$	4,475,429	$	7,429,633

(in millions)	December 31, 2018⁽¹⁾		Net inflows (outflows)		Market change		FX impact		December 31, 2019
Americas	$	3,931,771	$	280,069	$	691,361	$	7,753	$	4,910,954
EMEA		1,615,140		122,787		243,226		20,764		2,001,917
Asia-Pacific		428,907		25,880		59,489		2,486		516,762
Total	$	5,975,818	$	428,736	$	994,076	$	31,003	$	7,429,633

	Total Number of Shares Purchased⁽¹⁾		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
October 1, 2019 through October 31, 2019		7,813	$	446.13		—		5,836,665
November 1, 2019 through November 30, 2019		3,681	$	466.94		—		5,836,665
December 1, 2019 through December 31, 2019		4,402	$	496.90		—		5,836,665
Total		15,896	$	465.01		—

(in millions)	December 31, 2018		Net inflows (outflows)			Market change			FX impact⁽¹⁾			December 31, 2019		Full year average AUM⁽²⁾
(in millions)	December 31, 2018		Net inflows (outflows)			Market change			FX impact⁽¹⁾			December 31, 2019		Full year average AUM⁽²⁾
Retail:
Equity	$	205,714	$	(652	)	$	45,820		$	1,531		$	252,413	$	229,688
Fixed income		271,588		21,222			11,882			573			305,265		289,632
Multi-asset		113,417		(9,291	)		16,138			175			120,439		117,366
Alternatives		20,131		4,531			506			12			25,180		22,384
Retail subtotal		610,850		15,810			74,346			2,291			703,297		659,070
iShares ETFs:
Equity		1,274,262		64,705			292,840			1,165			1,632,972		1,453,395
Fixed income		427,596		112,345			25,878			(29	)		565,790		503,266
Multi-asset		4,485		113			601			11			5,210		4,489
Alternatives		25,082		6,329			4,664			18			36,093		29,767
iShares ETFs subtotal		1,731,425		183,492			323,983			1,165			2,240,065		1,990,917
Institutional:
Active:
Equity		110,976		1,852			27,547			743			141,118		124,722
Fixed income		538,961		55,006			55,358			2,043			651,368		611,383
Multi-asset		336,237		28,785			68,410			801			434,233		385,495
Alternatives		93,805		13,813			3,852			481			111,951		103,369
Active subtotal		1,079,979		99,456			155,167			4,068			1,338,670		1,224,969
Index:
Equity		1,444,873		(37,552	)		380,101			6,404			1,793,826		1,640,715
Fixed income		646,272		75,006			55,969			15,722			792,969		733,371
Multi-asset		7,745		(718	)		1,203			9			8,239		8,095
Alternatives		4,340		166			272			70			4,848		4,580
Index subtotal		2,103,230		36,902			437,545			22,205			2,599,882		2,386,761
Institutional subtotal		3,183,209		136,358			592,712			26,273			3,938,552		3,611,730
Long-term		5,525,484		335,660			991,041			29,729			6,881,914		6,261,717
Cash management		448,565		93,074			3,054			1,256			545,949		486,636
Advisory⁽³⁾		1,769		2			(19	)		18			1,770		1,766
Total	$	5,975,818	$	428,736		$	994,076		$	31,003		$	7,429,633	$	6,750,119

	December 31,		Net inflows			Acquisitions and			Market			FX			December 31,			Full year average
(in millions)	2017		(outflows)			dispositions⁽¹⁾			change			impact⁽²⁾			2018			AUM⁽³⁾
Retail:
Equity	$	233,218	$	2,090		$	2,137		$	(28,005	)	$	(3,726	)	$	205,714	��	$	231,556
Fixed income		257,571		11,546			14,070			(8,630	)		(2,969	)		271,588			268,818
Multi-asset		120,855		2,914			2,519			(12,107	)		(764	)		113,417			120,907
Alternatives		16,733		2,529			1,628			(590	)		(169	)		20,131			18,492
Retail subtotal		628,377		19,079			20,354			(49,332	)		(7,628	)		610,850			639,773
iShares ETFs:
Equity		1,329,610		112,817			—			(159,433	)		(8,732	)		1,274,262			1,360,991
Fixed income		395,252		50,930			—			(14,355	)		(4,231	)		427,596			404,236
Multi-asset		3,761		1,050			—			(317	)		(9	)		4,485			3,837
Alternatives		23,616		2,738			—			(1,196	)		(76	)		25,082			24,663
iShares ETFs subtotal		1,752,239		167,535			—			(175,301	)		(13,048	)		1,731,425			1,793,727
Institutional:
Active:
Equity		137,185		(7,895	)		(4,296	)		(11,485	)		(2,533	)		110,976			131,474
Fixed income		570,050		(20,701	)		2,417			(7,301	)		(5,504	)		538,961			554,107
Multi-asset		347,825		11,944			(1,593	)		(14,650	)		(7,289	)		336,237			348,342
Alternatives		84,248		7,069			3,374			444			(1,330	)		93,805			88,715
Active subtotal		1,139,308		(9,583	)		(98	)		(32,992	)		(16,656	)		1,079,979			1,122,638
Index:
Equity		1,671,628		(91,845	)		4,749			(122,252	)		(17,407	)		1,444,873			1,648,418
Fixed income		632,592		37,335			2,051			(4,835	)		(20,871	)		646,272			640,733
Multi-asset		7,837		1,005			(243	)		(880	)		26			7,745			8,031
Alternatives		4,750		(199	)		1			(142	)		(70	)		4,340			4,689
Index subtotal		2,316,807		(53,704	)		6,558			(128,109	)		(38,322	)		2,103,230			2,301,871
Institutional subtotal		3,456,115		(63,287	)		6,460			(161,101	)		(54,978	)		3,183,209			3,424,509
Long-term		5,836,731		123,327			26,814			(385,734	)		(75,654	)		5,525,484			5,858,009
Cash management		449,949		(21	)		686			1,593			(3,642	)		448,565			453,883
Advisory⁽⁴⁾		1,515		323			—			5			(74	)		1,769			1,381
Total	$	6,288,195	$	123,629		$	27,500		$	(384,136	)	$	(79,370	)	$	5,975,818		$	6,313,273

	Mix of Base Fees						Mix of Average AUM⁽¹⁾
	2019			2018			2019			2018
Equity:
Active		13	%		14	%		4	%		5	%
iShares ETFs		30	%		31	%		22	%		22	%
Non-ETF index		6	%		6	%		25	%		26	%
Equity subtotal		49	%		51	%		51	%		53	%
Fixed income:
Active		16	%		17	%		13	%		13	%
iShares ETFs		8	%		7	%		7	%		6	%
Non-ETF index		3	%		3	%		11	%		10	%
Fixed income subtotal		27	%		27	%		31	%		29	%
Multi-asset		10	%		10	%		8	%		8	%
Alternatives:
Illiquid alternatives		4	%		3	%		1	%		1	%
Liquid alternatives		4	%		3	%		1	%		1	%
Currency and commodities ⁽²⁾		1	%		1	%		1	%		1	%
Alternatives subtotal		9	%		7	%		3	%		3	%
Long-term		95	%		95	%		93	%		93	%
Cash management		5	%		5	%		7	%		7	%
Total excluding Advisory AUM		100	%		100	%		100	%		100	%

(in millions)	Additional Paid-in Capital⁽¹⁾			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, 2016	$	19,339		$	13,650		$	(716	)	$	(3,185	)	$	29,088		$	52		$	29,140		$	194
Net income		—			4,952			—			—			4,952			2			4,954			35
Dividends declared ($10.00 per share)		—			(1,662	)		—			—			(1,662	)		—			(1,662	)		—
Stock-based compensation		542			—			—			—			542			—			542			—
PNC preferred stock capital contribution		193			—			—			—			193			—			193			—
Retirement of preferred stock		(193	)		—			—			—			(193	)		—			(193	)		—
Issuance of common shares related to employee stock transactions		(626	)		—			—			639			13			—			13			—
Employee tax withholdings related to employee stock transactions		—			—			—			(321	)		(321	)		—			(321	)		—
Shares repurchased		—			—			—			(1,100	)		(1,100	)		—			(1,100	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			(18	)		(18	)		482
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			14			14			(295	)
Other comprehensive income (loss)		—			—			284			—			284			—			284			—
Adoption of new accounting pronouncement		3			(1	)		—			—			2			—			2			—
December 31, 2017	$	19,258		$	16,939		$	(432	)	$	(3,967	)	$	31,798		$	50		$	31,848		$	416
Net income		—			4,305			—			—			4,305			—			4,305			(3	)
Dividends declared ($12.02 per share)		—			(1,968	)		—			—			(1,968	)		—			(1,968	)		—
Stock-based compensation		564			—			—			—			564			—			564			—
PNC preferred stock capital contribution		58			—			—			—			58			—			58			—
Retirement of preferred stock		(58	)		—			—			—			(58	)		—			(58	)		—
Issuance of common shares related to employee stock transactions		(652	)		—			—			667			15			—			15			—
Employee tax withholdings related to employee stock transactions		—			—			—			(427	)		(427	)		—			(427	)		—
Shares repurchased		—			—			—			(1,660	)		(1,660	)		—			(1,660	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			9			9			1,254
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			—			—			(560	)
Other comprehensive income (loss)		—			—			(253	)		—			(253	)		—			(253	)		—
Adoption of new accounting pronouncement		—			6			(6	)		—			—			—			—			—
December 31, 2018	$	19,170		$	19,282		$	(691	)	$	(5,387	)	$	32,374		$	59		$	32,433		$	1,107
Net income		—			4,476			—			—			4,476			7			4,483			43
Dividends declared ($13.20 per share)		—			(2,096	)		—			—			(2,096	)		—			(2,096	)		—
Stock-based compensation		567			—			—			—			567			—			567			—
PNC preferred stock capital contribution		60			—			—			—			60			—			60			—
Retirement of preferred stock		(60	)		—			—			—			(60	)		—			(60	)		—
Issuance of common shares related to employee stock transactions		(549	)		—			—			566			17			—			17			—
Employee tax withholdings related to employee stock transactions		—			—			—			(245	)		(245	)		—			(245	)		—
Shares repurchased		—			—			—			(1,666	)		(1,666	)		—			(1,666	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			2			2			1,456
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			(2	)		(2	)		(1,290	)
Other comprehensive income (loss)		—			—			120			—			120			—			120			—
December 31, 2019	$	19,188		$	21,662		$	(571	)	$	(6,732	)	$	33,547		$	66		$	33,613		$	1,316

	Initial			Revised
	Estimate of			Estimate of
(in millions)	Fair Value			Fair Value
Accounts receivable	$	65		$	61
Finite-lived intangible assets:
Customer relationships⁽²⁾		452			400
Technology-related⁽³⁾		205			203
Trade name⁽⁴⁾		21			14
Goodwill		990			1,044
Other assets		31			49
Deferred income tax liabilities		(194	)		(146	)
Other liabilities assumed		(64	)		(125	)
Total consideration, net of cash acquired	$	1,506		$	1,500

Summary of consideration, net of cash acquired:
Cash paid including settlement of outstanding debt of approximately $0.2 billion	$	1,555		$	1,555
Cash acquired		(49	)		(55	)
Total consideration, net of cash acquired	$	1,506		$	1,500

(in millions)
Year	Amount
2020	$	60
2021		64
2022		68
2023		69
2024		71
Thereafter		247
Total	$	579

	Year ended December 31,
(in millions)	2019		2018		2017
Sales proceeds	$	—	$	173	$	—
Net realized gain (loss):
Gross realized gains	$	—	$	—	$	—
Gross realized losses		—		—		—
Net realized gain (loss)	$	—	$	—	$	—

(in millions) At December 31, 2019	Investments		Advisory Fee Receivables		Other Net Assets (Liabilities)			Maximum Risk of Loss⁽¹⁾

(in millions)										Investments		Advisory Fee Receivables		Other Net Assets (Liabilities)			Maximum Risk of Loss(1)
December 31, 2022
Sponsored investment products	$	539	$	71	$	(10	)	$	627	$	1,060	$	95	$	(12	)	$	1,172
At December 31, 2018
December 31, 2021
Sponsored investment products	$	348	$	43	$	(6	)	$	408	$	882	$	62	$	(12	)	$	961

December 31, 2019 (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⁽²⁾		December 31, 2019
Assets:
Investments
Debt securities:
Held-to-maturity investments	$	—	$	—	$	—	$	—	$	249	$	249
Trading securities		—		1,241		8		—		—		1,249
Total debt securities		—		1,241		8		—		249		1,498
Equity securities at FVTNI:
Deferred compensation plan mutual funds		23		—		—		—		—		23
Equity securities/Multi-asset mutual funds		1,903		—		—		—		—		1,903
Total equity securities at FVTNI		1,926		—		—		—		—		1,926
Equity method:
Equity and fixed income mutual funds		157		—		—		—		—		157
Hedge funds/funds of hedge funds		—		—		—		220		—		220
Private equity funds		—		—		—		248		—		248
Real assets funds		—		—		—		296		—		296
Other		12		—		—		10		—		22
Total equity method		169		—		—		774		—		943
Bank loans		—		27		177		—		—		204
Federal Reserve Bank Stock		—		—		—		—		93		93
Carried interest		—		—		—		—		528		528
Other investments⁽³⁾		—		—		9		98		190		297
Total investments		2,095		1,268		194		872		1,060		5,489
Other assets⁽⁴⁾		173		—		—		—		—		173
Separate account assets		72,515		29,582		—		—		747		102,844
Separate account collateral held under securities lending agreements:
Equity securities		10,209		—		—		—		—		10,209
Debt securities		—		5,257		—		—		—		5,257
Total separate account collateral held under securities lending agreements		10,209		5,257		—		—		—		15,466
Total	$	84,992	$	36,107	$	194	$	872	$	1,807		123,972
Liabilities:
Separate account collateral liabilities under securities lending agreements	$	10,209	$	5,257	$	—	$	—	$	—	$	15,466
Other liabilities⁽⁵⁾		—		10		388		—		—		398
Total	$	10,209	$	5,267	$	388	$	—	$	—	$	15,864


December 31, 2022 (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(2)		December 31, 2022
Assets:
Investments
Debt securities:
Trading securities	$	—	$	1,279	$	52	$	—	$	—	$	1,331
Held-to-maturity investments		—		—		—		—		544		544
Total debt securities		—		1,279		52		—		544		1,875
Equity securities at FVTNI:
Equity securities/mutual funds		1,211		—		—		—		—		1,211
Equity method:
Equity, fixed income, and multi-asset mutual funds		181		—		—		—		—		181
Hedge funds/funds of hedge funds/other		—		—		—		525		—		525
Private equity funds		—		—		—		885		—		885
Real assets funds		—		—		—		304		—		304
Total equity method		181		—		—		1,714		—		1,895
Bank loans		—		106		248		—		—		354
Federal Reserve Bank Stock		—		—		—		—		91		91
Carried interest		—		—		—		—		1,550		1,550
Other investments		28		—		—		316		146		490
Total investments		1,420		1,385		300		2,030		2,331		7,466
Other assets(3)		145		1		—		—		—		146
Separate account assets		34,823		18,544		—		—		699		54,066
Separate account collateral held under securities lending agreements:
Equity securities		2,163		—		—		—		—		2,163
Debt securities		—		3,602		—		—		—		3,602
Total separate account collateral held under securities lending agreements		2,163		3,602		—		—		—		5,765
Total	$	38,551	$	23,532	$	300	$	2,030	$	3,030	$	67,443
Liabilities:
Separate account collateral liabilities under securities lending agreements	$	2,163	$	3,602	$	—	$	—	$	—	$	5,765
Other liabilities(4)		—		31		280		—		—		311
Total	$	2,163	$	3,633	$	280	$	—	$	—	$	6,076

December 31, 2018 (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⁽²⁾		December 31, 2018
Assets:
Investments
Debt securities:
Held-to-maturity investments	$	—	$	—	$	—	$	—	$	188	$	188
Trading securities		—		1,656		4		—		—		1,660
Total debt securities		—		1,656		4		—		188		1,848
Equity securities at FVTNI:
Deferred compensation plan mutual funds		34		—		—		—		—		34
Equity securities/Multi-asset mutual funds		987		—		—		—		—		987
Total equity securities at FVTNI		1,021		—		—		—		—		1,021
Equity method:
Equity and fixed income mutual funds		122		—		—		—		—		122
Hedge funds/funds of hedge funds		—		—		—		173		—		173
Private equity funds		—		—		—		116		—		116
Real assets funds		—		—		—		353		—		353
Other		—		—		—		14		3		17
Total equity method		122		—		—		656		3		781
Bank loans		—		14		70		—		—		84
Federal Reserve Bank Stock		—		—		—		—		92		92
Carried interest		—		—		—		—		387		387
Other investments⁽³⁾		—		—		82		106		75		263
Total investments		1,143		1,670		156		762		745		4,476
Other assets⁽⁴⁾		122		—		—		—		—		122
Separate account assets		63,610		25,810		—		—		865		90,285
Separate account collateral held under securities lending agreements:
Equity securities		15,066		—		—		—		—		15,066
Debt securities		—		5,589		—		—		—		5,589
Total separate account collateral held under securities lending agreements		15,066		5,589		—		—		—		20,655
Total	$	79,941	$	33,069	$	156	$	762	$	1,610	$	115,538
Liabilities:
Separate account collateral liabilities under securities lending agreements	$	15,066	$	5,589	$	—	$	—	$	—	$	20,655
Other liabilities⁽⁵⁾		—		6		371		—		—		377
Total	$	15,066	$	5,595	$	371	$	—	$	—	$	21,032


December 31, 2021 (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(2)		December 31, 2021
Assets:
Investments
Debt securities:
Trading securities	$	—	$	1,169	$	17	$	—	$	—	$	1,186
Held-to-maturity investments		—		—		—		—		430		430
Total debt securities		—		1,169		17		—		430		1,616
Equity securities at FVTNI:
Equity securities/mutual funds		1,738		—		—		—		—		1,738
Equity method:
Equity and fixed income mutual funds		245		—		—		—		—		245
Hedge funds/funds of hedge funds/other		—		—		—		369		—		369
Private equity funds		—		—		—		846		—		846
Real assets funds		—		—		—		234		—		234
Total equity method		245		—		—		1,449		—		1,694
Bank loans		—		14		270		—		—		284
Federal Reserve Bank Stock		—		—		—		—		96		96
Carried interest		—		—		—		—		1,555		1,555
Other investments(3)		—		—		5		96		178		279
Total investments		1,983		1,183		292		1,545		2,259		7,262
Other assets(4)		195		39		—		—		—		234
Separate account assets		54,675		30,786		—		—		765		86,226
Separate account collateral held under securities lending agreements:
Equity securities		3,717		—		—		—		—		3,717
Debt securities		—		3,364		—		—		—		3,364
Total separate account collateral held under securities lending agreements		3,717		3,364		—		—		—		7,081
Total	$	60,570	$	35,372	$	292	$	1,545	$	3,024	$	100,803
Liabilities:
Separate account collateral liabilities under securities lending agreements	$	3,717	$	3,364	$	—	$	—	$	—	$	7,081
Other liabilities(5)		—		26		342		—		—		368
Total	$	3,717	$	3,390	$	342	$	—	$	—	$	7,449


(in millions)	December 31, 2021		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and Other Settlements(1)			Transfers into Level 3		Transfers out of Level 3			December 31, 2022		Total Net Unrealized Gains (Losses) Included in Earnings(2)
Assets:
Investments:
Debt securities:
Trading	$	17	$	(5	)	$	36	$	(18	)	$	—		$	26	$	(4	)	$	52	$	(5	)
Total debt securities		17		(5	)		36		(18	)		—			26		(4	)		52		(5	)
Private equity		5		(2	)		—		—			—			—		(3	)		—		—
Bank loans		270		(6	)		59		(61	)		—			9		(23	)		248		(6	)
Total investments	$	292	$	(13	)	$	95	$	(79	)	$	—		$	35	$	(30	)	$	300	$	(11	)
Liabilities:
Other liabilities	$	342	$	3		$	—	$	—		$	(59	)	$	—	$	—		$	280	$	3


(in millions)	December 31, 2020		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and Other Settlements(1)		Transfers into Level 3		Transfers out of Level 3			December 31, 2021		Total Net Unrealized Gains (Losses) Included in Earnings(2)
Assets:
Investments:
Debt securities:
Trading	$	11	$	2		$	43	$	(22	)	$	—	$	—	$	(17	)	$	17	$	2
Total debt securities		11		2			43		(22	)		—		—		(17	)		17		2
Private equity		9		1			—		—			—		—		(5	)		5		1
Bank loans		232		—			46		(5	)		—		15		(18	)		270		—
Total investments	$	252	$	3		$	89	$	(27	)	$	—	$	15	$	(40	)	$	292	$	3
Liabilities:
Other liabilities	$	272	$	(34	)	$	—	$	—		$	36	$	—	$	—		$	342	$	(34	)


	Assets					Liabilities
	Statement of Financial Condition	December 31,		December 31,		Statement of Financial Condition	December 31,		December 31,
(in millions)	Classification	2022		2021		Classification	2022		2021
Derivative instruments
Total return swaps	Other assets	$	—	$	5	Other liabilities	$	—	$	14
Forward foreign currency exchange contracts	Other assets		1		34	Other liabilities		19		—
Total		$	1	$	39		$	19	$	14


														Gains (Losses)
(in millions)			Gains (Losses)										Statement of Income Classification	2022			2021			2020
Derivative Instruments		Statement of Income Classification	2019			2018			2017
Total return swaps		Nonoperating income (expense)	$	(106	)	$	54		$	(118	)		Nonoperating income (expense)	$	83		$	(99	)	$	(93	)
Interest rate swaps		Nonoperating income (expense)		—			—			(2	)
Exchange traded futures													Nonoperating income (expense)		36			—			—
Forward foreign currency exchange contracts		General and administration expense		55			(124	)		63			General and administration expense		(222	)		(29	)		47
Total gain (loss) from derivative instruments	Total gain (loss) from derivative instruments		$	(51	)	$	(70	)	$	(57	)	Total gain (loss) from derivative instruments		$	(103	)	$	(128	)	$	(46	)


	Estimated Useful	December 31,
(in millions)	Life-In Years	2022		2021
Property and equipment:
Land	N/A	$	6	$	6
Building	39		33		33
Building improvements	15		31		31
Leasehold improvements	1-15		613		614
Equipment and computer software	3		1,033		914
Other transportation equipment	10		192		191
Furniture and fixtures	7		96		70
Construction in progress	N/A		417		159
Total			2,421		2,018
Less: accumulated depreciation and amortization			1,390		1,256
Property and equipment, net		$	1,031	$	762


(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, 2019
At December 31, 2022
Indefinite-lived intangible assets:
Management contracts	N/A		$	16,169	$	—	$	16,169	N/A	$	16,169	$	—	$	16,169
Trade names / trademarks	N/A			1,403		—		1,403
Trade names/trademarks									N/A		1,403		—		1,403
License	N/A			6		—		6	N/A		6		—		6
Total indefinite-lived intangible assets				17,578		—		17,578			17,578		—		17,578
Finite-lived intangible assets:
Management contracts		4.8		283		135		148	2.9		177		130		47
Investor/customer relationships		9.2		476		39		437	7.0		746		254		492
Technology-related		7.4		203		9		194	4.6		261		81		180
Trade names / trademarks		3.3		14		2		12
Trade names/trademarks									2.6		23		18		5
Total finite-lived intangible assets		7.8		976		185		791	6.1		1,207		483		724
Total intangible assets			$	18,554	$	185	$	18,369		$	18,785	$	483	$	18,302
At December 31, 2018

At December 31, 2021
Indefinite-lived intangible assets:
Management contracts	N/A		$	16,169	$	—	$	16,169	N/A	$	16,169	$	—	$	16,169
Trade names / trademarks	N/A			1,403		—		1,403
Trade names/trademarks									N/A		1,403		—		1,403
License	N/A			6		—		6	N/A		6		—		6
Total indefinite-lived intangible assets				17,578		—		17,578			17,578		—		17,578
Finite-lived intangible assets:
Management contracts		5.2		439		237		202	3.5		244		169		75
Investor/customer relationships		10.7		66		7		59	8.0		746		169		577
Technology-related									4.1		261		49		212
Trade names/trademarks									3.0		23		12		11
Total finite-lived intangible assets		6.5		505		244		261	6.6		1,274		399		875
Total intangible assets			$	18,083	$	244	$	17,839		$	18,852	$	399	$	18,453

(in millions)	2019
Lease cost ⁽¹⁾:
Operating lease cost ⁽²⁾	$	141
Variable lease cost ⁽³⁾		39
Total lease cost	$	180

(in millions)	Statement of Financial Condition Classification	December 31, 2019
Statement of Financial Condition information:
Operating lease ROU assets	Other assets	$	669
Operating lease liabilities	Other liabilities	$	776