☒ QUARTERLY 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.

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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.

Indicate by check mark whether the registrant has submitted electronically, ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

As of October 31, ~~2017,~~2023, there were ~~160,332,161~~148,762,471 shares of the registrant’s common stock outstanding.

⁽¹⁾	~~Amounts include $2 million of common stock at both September 30, 2016 and December 31, 2015.~~

(1)

Amounts include $2 million of common stock at both September 30, 2022 and June 30, 2022.

See accompanying notes to condensed consolidated financial statements.

~~BlackRock,~~

BlackRock, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Nine Months Ended
	September 30,
(in millions)	2023			2022
Operating activities
Net income	$	4,187		$	3,687
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation and amortization		316			308
Noncash lease expense		108			123
Stock-based compensation		469			536
Deferred income tax expense (benefit)		41			(104	)
Other investment gains		—			(276	)
Net (gains) losses within CIPs		(116	)		510
Net (purchases) proceeds within CIPs		(1,387	)		(804	)
(Earnings) losses from equity method investees		(304	)		54
Distributions of earnings from equity method investees		32			27
Changes in operating assets and liabilities:
Accounts receivable		(607	)		254
Investments, trading		52			217
Other assets		(1,410	)		(2,273	)
Accrued compensation and benefits		(479	)		(1,282	)
Accounts payable and accrued liabilities		(67	)		123
Other liabilities		1,332			1,883
Net cash provided by/(used in) operating activities		2,167			2,983
Investing activities
Purchases of investments		(681	)		(516	)
Proceeds from sales and maturities of investments		270			190
Distributions of capital from equity method investees		26			59
Net consolidations (deconsolidations) of sponsored investment funds		21			(48	)
Acquisition, net of cash acquired		(189	)		—
Purchases of property and equipment		(220	)		(399	)
Net cash provided by/(used in) investing activities		(773	)		(714	)
Financing activities
Repayments of long-term borrowings		—			(750	)
Proceeds from long-term borrowings		1,238			—
Cash dividends paid		(2,292	)		(2,259	)
Proceeds from stock options exercised		51			—
Repurchases of common stock		(1,500	)		(1,827	)
Net proceeds from (repayments of) borrowings by CIPs		(38	)		—
Net subscriptions received/(redemptions/distributions paid) from noncontrolling interest holders		1,032			501
Other financing activities		20			19
Net cash provided by/(used in) financing activities		(1,489	)		(4,316	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(5	)		(479	)
Net increase/(decrease) in cash, cash equivalents and restricted cash		(100	)		(2,526	)
Cash, cash equivalents and restricted cash, beginning of period		7,433			9,340
Cash, cash equivalents and restricted cash, end of period	$	7,333		$	6,814
Supplemental schedule of noncash investing and financing transactions:
Issuance of common stock	$	554		$	567
Increase (decrease) in noncontrolling interests due to net consolidation (deconsolidation) of sponsored investment funds	$	(129	)	$	(514	)

Nine Months Ended

(in millions)

September 30,

2017

2016

Cash flows from operating activities

Net income

$
2,697

$
2,319

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization

190

198

Stock-based compensation

417

408

Deferred income tax expense (benefit)

175

(6
)
Assets and liabilities of consolidated VIEs:

Change in cash and cash equivalents

(19
)

(127
)
Net (gains) losses within consolidated VIEs

(95
)

(34
)
Net (purchases) proceeds within consolidated VIEs

(148
)

(855
)
(Earnings) losses from equity method investees

(92
)

(71
)
Distributions of earnings from equity method investees

24

16

Changes in operating assets and liabilities:

Accounts receivable

(776
)

(336
)
Investments, trading

(145
)

(278
)
Other assets

(190
)

(114
)
Accrued compensation and benefits

(267
)

(484
)
Accounts payable and accrued liabilities

595

309

Other liabilities

120

17

Cash flows from operating activities

2,486

962

Cash flows from investing activities

Purchases of investments

(400
)

(292
)
Proceeds from sales and maturities of investments

121

215

Distributions of capital from equity method investees

26

26

Net consolidations (deconsolidations) of sponsored investment funds

(35
)

(74
)
Acquisitions

(102
)

(30
)
Purchases of property and equipment

(100
)

(88
)
Cash flows from investing activities

(490
)

(243
)
Cash flows from financing activities

Proceeds from long-term borrowings

697

—

Repayments of long-term borrowings

(700
)

—

Cash dividends paid

(1,259
)

(1,171
)
Proceeds from stock options exercised

—

26

Repurchases of common stock

(1,133
)

(1,118
)
Net (redemptions/distributions paid)/subscriptions received from noncontrolling
interest holders

324

999

Excess tax benefit from stock-based compensation

—

81

Other financing activities

(12
)

3

Cash flows from financing activities

(2,083
)

(1,180
)
Effect of exchange rate changes on cash and cash equivalents

161

(168
)
Net increase (decrease) in cash and cash equivalents

74

(629
)
Cash and cash equivalents, beginning of period

6,091

6,083

Cash and cash equivalents, end of period

$
6,165

$
5,454

Supplemental disclosure of cash flow information:

Cash paid for:

Interest

$
150

$
144

Income taxes (net of refunds)

$
916

$
910

Supplemental schedule of noncash investing and financing transactions:

Issuance of common stock

$
612

$
654

PNC preferred stock capital contribution

$
193

$
172

Increase (decrease) in noncontrolling interests due to net consolidation (deconsolidation) of
sponsored investment funds

$
(226
)

$
(881
)

See accompanying notes to condensed consolidated financial statements.

~~BlackRock,~~

BlackRock, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

1. Business Overview

BlackRock, Inc. (together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) is a leading publicly traded investment management firm providing a broad range of investment management and ~~risk management~~technology services to institutional and retail clients worldwide.

BlackRock’s diverse platform of alpha-seeking active, ~~(alpha)~~index and ~~index (beta)~~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^® and BlackRock exchange-traded funds (“ETFs”), separate accounts, collective ~~investment~~trust funds and other pooled investment vehicles. BlackRock also offers antechnology services, including the investment and risk management technology platform, Aladdin®, ~~risk analytics,~~Aladdin Wealth, eFront and Cachematrix, as well as advisory ~~and technology~~ services and solutions to a broad base of institutional and wealth management ~~investors.~~clients.

At September 30, 2017, The PNC Financial Services Group, Inc. (“PNC”) held 21.4% of the Company’s voting common stock and 21.9% of the Company’s capital stock, which includes outstanding common and nonvoting preferred stock.

2. Significant Accounting Policies

Basis of Presentation.

These condensed 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 condensed 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 financial information that normally is included in annual financial statements, including certain financial statement footnotes, is not required for interim reporting purposes and has been condensed or omitted herein. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and ~~notes~~footnotes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022, which was filed with the Securities and Exchange Commission (“SEC”) on February ~~28, 2017~~24, 2023 (“~~2016~~2022 Form 10-K”).

The interim financial information at September 30, ~~2017~~2023 and for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 is unaudited. However, in the opinion of management, the interim information includes all normal recurring adjustments necessary for the fair presentation of the Company’s results for the periods presented. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

~~Certain items previously reported have been reclassified to conform to the current year presentation. Beginning with the first quarter of 2017,~~ ~~Aladdin~~ ~~revenue previously reported within “BlackRock Solutions~~^® ~~and advisory” has been presented within “Technology and risk management revenue” on the condensed consolidated statements of income. The remaining previously reported “BlackRock Solutions~~ ~~and advisory” revenue is currently reported as part of “Advisory and other revenue.” The prior period amounts reported for~~ ~~BlackRock Solutions~~ ~~and advisory for the three and nine months ended September 30, 2016 have been reclassified to conform to the current presentation.~~

~~Accounting Pronouncements Adopted in the Nine Months Ended September 30, 2017.~~

~~Accounting for Share-Based Payments.~~ ~~In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting~~ (“ASU 2016-09”). ASU 2016-09 simplifies accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the condensed consolidated

statements of cash flows. The Company adopted ASU 2016-09 as of January 1, 2017. ASU 2016-09 requires all excess tax benefits and deficiencies to be recognized in income tax expense on the condensed consolidated statements of income. Accordingly, the Company recorded a discrete income tax benefit of $81 million during the three months ended March 31, 2017 for vested restricted stock units where the grant date stock price was lower than the vesting date stock price. The new guidance will increase the volatility of income tax expense as a result of fluctuations in the Company’s stock price. Upon adoption, the Company elected to account for forfeitures as they occur, which did not have a material impact on the condensed consolidated financial statements. In addition, the Company elected to present excess tax benefits and deficiencies prospectively in operating activities on the condensed consolidated statements of cash flows.

Fair Value ~~Measurements.~~Measurements

Hierarchy of Fair Value ~~Inputs~~. 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:

Level 1 Inputs:

Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date.

•

Level 1 assets may include listed mutual funds, ETFs, listed equities, commodities 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.

•

Level 2 assets may include debt securities, ~~investments in CLOs,~~loans held within consolidated collateralized loan obligations (“CLOs”), 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.

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.

•

Level 3 assets may include direct private equity investments, including those held within CIPs, investments in CLOs, and loans held within consolidated ~~funds~~CLOs and ~~investments in CLOs.~~

CIPs.

•

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.~~

data, or other valuation techniques.

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. Such quotes and modeled prices are evaluated for reasonableness through various procedures, including due diligence reviews of third-party pricing vendors, variance analyses, consideration of the current market environment and other analytical procedures.

A significant number of inputs used to value equity, debt securities, and ~~investments in~~loans held within CLOs isand CIPs are 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. Annually, BlackRock’s internal valuation committee or other designated groups review both the valuation approaches, including the general assumptions and methods used to value various asset classes, and

~~operational processes with these vendors. On a quarterly basis, meetings are held with key vendors to identify any significant changes to the vendors’ processes.~~

In addition, quotes obtained from brokers generally are nonbinding and categorized as Level 3 inputs. However, if the Company is able to determine that market participants have transacted for the asset in an orderly manner near the quoted price or if the Company can determine that the inputs used by the broker are observable, the quote is classified as a Level 2 input.

Investments Measured at 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 ~~BlackRock~~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.

~~Derivative Instruments~~Fair Value Assets and Liabilities of Consolidated CLO. The Company applies the fair value option provisions for eligible assets, including 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 equal 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 price and interest rate exposures ~~for certain~~with respect to its total portfolio of seed ~~investments. However, certain consolidated~~investments in sponsored investment ~~funds may~~products. Certain CIPs also utilize derivatives as a part of their investment strategy.

In addition, during 2023, the Company acquired both investments and derivatives to economically hedge market valuation changes on certain deferred cash compensation plans, for which the final value of the deferred amount distributed to employees in cash upon vesting is determined based on the returns of specified investment funds. The Company recognizes compensation expense for the appreciation (depreciation) of the deferred cash compensation liability in proportion to the vested amount of the award during a respective period, while the gain (loss) to economically hedge these plans is immediately recognized in nonoperating income (expense). See Note 4, Investments, and Note 8, Derivatives and Hedging, for further information on the Company’s investments and derivatives, respectively, used to economically hedge these deferred cash compensation plans.

The Company records all derivative financial instruments as either assets or liabilities at fair value on a gross basis in the condensed 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 or hedged assets or liabilities, ~~or hedged investments,~~ on the condensed 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 ~~U.S.~~United States ("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 accumulated other comprehensive income (loss) (“AOCI”) on the condensed consolidated statements of financial condition. The Company reassesses the effectiveness of its net investment hedge ~~on a quarterly basis.~~at least quarterly.

~~Money Market Fee Waivers~~. The Company is currently voluntarily waiving a portion of its management fees on certain money market funds to ensure that they maintain a targeted level of daily net investment income (the “Yield Support waivers”). During the three and nine months ended September 30, 2017, these waivers resulted in a reduction of management fees of approximately $0~~million and $6 million, respectively. During the three and nine months ended September 30, 2016, these waivers resulted in a reduction of management fees of approximately $17~~million and $42 million, respectively. Approximately 0% and 45% of Yield Support waivers for the nine months ended September 30, 2017 and 2016, respectively, were offset by a reduction of BlackRock’s distribution and servicing costs paid to a financial intermediary. BlackRock may increase or decrease the level of Yield Support waivers in future periods.

Separate Account Assets and Liabilities. Separate account assets are maintained by BlackRock Life Limited, a wholly owned subsidiary of the Company, which is a registered life insurance company in the United Kingdom (“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 condensed 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 condensed consolidated statements of income. While BlackRock has no economic interest in these separate account assets and liabilities, BlackRock earns policy administration and management fees associated with these products, which are included in investment advisory, administration fees and securities lending revenue on the condensed 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~~obtains either (1) the legal title, toor (2) a first ranking priority security interest, in the collateral. 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~~9

In situations where the Company obtains the legal title to collateral under these securities lending arrangements, the Company records an asset on the condensed 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 condensed consolidated statements of financial condition. At September 30, 2023 and December 31, 2022, the fair value of loaned securities held by separate accounts was approximately $8.6 billion and $10.2 billion, respectively, and the fair value of the collateral under these securities lending agreements was approximately $9.3 billion and $11.0 billion, respectively, of which approximately $4.7 billion as of September 30, 2023 and $5.8 billion as of December 31, 2022 was recognized on the condensed consolidated statements of financial condition. During the nine months ended September 30, 2023 and 2022, the Company had not resold or repledged any of the collateral obtained under these arrangements. The securities lending revenue earned from lending securities held by the separate accounts is included in investment advisory, administration fees and securities lending revenue on the condensed consolidated statements of ~~income.~~income.

Property and Equipment. Property and equipment are recorded at cost less accumulated depreciation. Depreciation is generally determined by cost less any estimated residual value using the straight-line method over the estimated useful lives of the various classes of property and equipment. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life or the remaining lease term. During the nine months ended September 30, ~~2017~~2023, BlackRock reclassed approximately $400 million from construction in progress to leasehold improvements primarily related to its new headquarters located at 50 Hudson Yards in New York.

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”). There were no Yield Support waivers during the three and ~~2016, the Company had not resold or repledged any of the collateral received under these arrangements. At~~nine months ended September 30, ~~2017~~2023 and ~~December 31, 2016,~~during the ~~fair value~~three months ended September 30, 2022. During the nine months ended September 30, 2022 Yield Support waivers resulted in a reduction of ~~loaned securities held~~management fees of approximately $72 million. The reduction in management fees was partially offset by ~~separate accounts was approximately $24.7 billion~~a reduction of BlackRock’s distribution and ~~$25.7 billion, respectively, and the fair value of the collateral held under these securities lending agreements was approximately $27.4 billion and $27.8 billion, respectively.~~

~~Recent Accounting Pronouncements Not Yet Adopted.~~

~~Revenue from Contracts with Customers.~~ ~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~ ~~(“ASU 2014-09”). ASU 2014-09 outlines a single comprehensive model for entities~~servicing costs paid to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance also changes the accounting for certain contract costs and revises the criteria for determining if an entity is acting as a principal or agent in certain arrangements.financial intermediaries. The Company ~~continues to evaluate~~may increase or decrease the ~~impact~~level of ~~ASU 2014-09 on the presentation~~Yield Support waivers in future periods.

3. Cash, Cash Equivalents, and ~~recognition~~Restricted Cash

The following table provides a reconciliation of ~~its revenue contracts~~cash and certain contract costs. The most significant change identified to date relates to the presentation of certain distribution costs, which are currently presented net against revenues (contra-revenue) and will likely be presented as an expense on a gross basis. The Company currently expects such net gross up to annual revenue to be approximately $1 billion with a corresponding gross up to annual expense. The Company is currently evaluating which transition method it will apply when it adopts the new revenue recognition guidance in the first quarter of 2018.

~~Recognition and Measurement of Financial Instruments~~.~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities~~ (“ASU 2016-01”). ASU 2016-01 amends guidance on the classification and measurement of financial instruments, including significant revisions in accounting related to the classification and measurement of investments in equity securities and presentation of certain fair value changes for financial liabilities when the fair value option is elected. ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments. The Company does not currently expect the reclassification of unrealized gains(losses) on equity securitiescash equivalents reported within ~~accumulated other comprehensive income to retained earnings to be material upon adoption effective January 1, 2018.~~

~~Leases.~~ ~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases~~ ~~(“ASU 2016-02”), which requires lessees to recognize assets and liabilities arising from most operating leases on~~ the condensed consolidated statements of financial ~~condition. The Company expects~~condition to ~~record assets~~the cash, cash equivalents, and ~~liabilities for its current operating leases upon adoption of ASU 2016-02 and does not expect the adoption to have a material impact on its results of operations or~~restricted cash flows. ASU 2016-02 is effective for the Company on January 1, 2019, and the Company intends to apply the practical expedients allowed by the standard upon transition. See Note 13 of the 2016 Form 10-K for information on the Company’s operating lease commitments.

~~Cash Flow Classification.~~ ~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Classification of Certain Cash Receipts and Cash Payments~~ ~~(“ASU 2016-15”), which amends and clarifies the current guidance to reduce diversity in practice of the classification of certain cash receipts and payments in~~reported within the condensed consolidated statements of cash flows. The Company is currently evaluating the impact of adopting ASU 2016-15, which is effective for the Company on January 1, 2018 with early adoption permitted. The Company must apply the guidance retrospectively to all periods presented.


	September 30,		December 31,
(in millions)	2023		2022
Cash and cash equivalents	$	7,316	$	7,416
Restricted cash included in other assets		17		17
Total cash, cash equivalents and restricted cash	$	7,333	$	7,433

104. Investments

~~3. Investments~~

A summary of the carrying value of total investments is as follows:


	September 30,		December 31,
(in millions)	2023		2022
Debt securities:
Trading securities (including $2,059 and $1,279 held by CIPs at September 30, 2023 and December 31, 2022, respectively)	$	2,100	$	1,331
Held-to-maturity investments		595		544
Total debt securities		2,695		1,875
Equity securities at FVTNI (including $1,332 and $1,089 held by CIPs at September 30, 2023 and December 31, 2022, respectively)(1)		1,449		1,211
Equity method investments:
Equity method investments(2)		2,306		1,895
Investments related to deferred cash compensation plans(1)		228		—
Total equity method investments		2,534		1,895
Loans held by CIPs		542		354
Federal Reserve Bank stock(3)		92		91
Carried interest(4)		1,945		1,550
Other investments(1)(5)		578		490
Total investments	$	9,835	$	7,466

September 30,

December 31,

(in millions)

2017

2016

Available-for-sale investments

$
104

$
80

Held-to-maturity investments

76

51

Trading investments:

Consolidated sponsored investment funds

507

465

Other equity and debt securities

131

101

Deferred compensation plan mutual funds

54

59

Total trading investments

692

625

Other investments:

Equity method investments⁽¹⁾

944

730

Cost method investments⁽²⁾

92

91

Carried interest⁽³⁾

20

18

Total other investments

1,056

839

Total investments

$
1,928

$
1,595

(1)

⁽¹⁾	~~Equity method investments primarily include BlackRock’s direct investments in certain BlackRock sponsored investment funds.~~

⁽²⁾

Amounts include nonmarketable securities, primarily Federal Reserve Bank stock, which is held for regulatory purposes and is restricted from sale. At September 30, 2017 and December 31, 2016, there were no indicatorsAmounts include investments held to economically hedge the impact of market valuation changes on certain deferred cash compensation plans of $228 million, $14 million, and $10 million included within equity method investments, equity securities at fair value recorded through net income ("FVTNI") and other investments, respectively, as of ~~impairment on these investments.~~

⁽³⁾

Carried interest of consolidated sponsor investment funds accounted for as voting rights entities (“VREs”) 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.

~~Available-for-Sale Investments~~

~~At both~~ September 30, ~~2017~~2023.

(2)

Equity method investments primarily include BlackRock’s direct investments in certain BlackRock sponsored investment funds.

(3)

Federal Reserve Bank stock is held for regulatory purposes and ~~December 31, 2016, available-for-sale~~is restricted from sale.

(4)

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.

(5)

Other investments ~~primarily~~include BlackRock’s investments in nonmarketable equity securities, which are measured at cost, adjusted for observable price changes, and private equity, real asset, and commodity investments held by CIPs, which are measured at fair value.

Held-to-maturity investments included certain investments in ~~CLOs and seed investments in~~ BlackRock sponsored ~~mutual funds. The cost of these investments approximated carrying value.~~

The carrying value of held-to-maturity investments was $76 million and $51 million at September 30, 2017 and December 31, 2016, respectively. Held-to-maturity investments included foreign government debt held primarily for regulatory purposes and certain investments in CLOs. The amortized cost (carrying value) of these investments approximated fair ~~value.~~value (primarily a Level 2 input). At September 30, ~~2017, $11~~2023, $9 million of these investments mature between one to five years, $299 million of these investments mature between five toten years and ~~$65~~$287 million of these investments mature after ten years.

6.7. Fair Value Disclosures

Fair Value Hierarchy

Assets and liabilities measured at fair value on a recurring basis ~~and other assets not held at fair value~~


September 30, 2023 (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)		September 30, 2023
Assets:
Investments
Debt securities:
Trading securities	$	—	$	2,060	$	40	$	—	$	—	$	2,100
Held-to-maturity investments		—		—		—		—		595		595
Total debt securities		—		2,060		40		—		595		2,695
Equity securities at FVTNI:
Equity securities/mutual funds		1,449		—		—		—		—		1,449
Equity method:
Equity, fixed income, and multi-asset mutual funds		231		—		—		—		—		231
Hedge funds/funds of hedge funds/other		—		—		—		495		—		495
Private equity funds		—		—		—		1,200		—		1,200
Real assets funds		—		—		—		380		—		380
Investments related to deferred cash compensation plans		—		—		—		228		—		228
Total equity method		231		—		—		2,303		—		2,534
Loans		—		161		381		—		—		542
Federal Reserve Bank Stock		—		—		—		—		92		92
Carried interest		—		—		—		—		1,945		1,945
Other investments		18		—		—		405		155		578
Total investments		1,698		2,221		421		2,708		2,787		9,835
Other assets(3)		104		5		107		—		—		216
Separate account assets		33,308		17,524		—		—		774		51,606
Separate account collateral held under securities lending agreements:
Equity securities		1,906		—		—		—		—		1,906
Debt securities		—		2,834		—		—		—		2,834
Total separate account collateral held under securities lending agreements		1,906		2,834		—		—		—		4,740
Total	$	37,016	$	22,584	$	528	$	2,708	$	3,561	$	66,397
Liabilities:
Separate account collateral liabilities under securities lending agreements	$	1,906	$	2,834	$	—	$	—	$	—	$	4,740
Other liabilities(4)		—		41		295		—		—		336
Total	$	1,906	$	2,875	$	295	$	—	$	—	$	5,076

September 30, 2017

Quoted
Prices in
Active
Markets for
Identical
Assets

Significant
Other
Observable
Inputs

Significant
Unobservable
Inputs

Investments
Measured at

Other Assets
Not Held at

September 30,

(in millions)

(Level 1)

(Level 2)

(Level 3)

NAV⁽¹⁾

Fair Value⁽²⁾

2017

Assets:

Investments

Available-for-sale

$
8

$
73

$
23

$
—

$
—

$
104

Held-to-maturity securities

—

—

—

—

76

76

Trading:

—

Deferred compensation plan mutual funds

54

—

—

—

—

54

Equity securities/Multi-asset mutual funds

353

—

—

—

—

353

Debt securities / fixed income mutual funds

1

282

2

—

—

285

Total trading

408

282

2

—

—

692

Other investments:

Equity method:

Equity and fixed income mutual funds

314

—

—

10

—

324

Other

—

—

—

608

12

620

Total equity method

314

—

—

618

12

944

Cost method investments

—

—

—

—

92

92

Carried interest

—

—

—

—

20

20

Total investments

730

355

25

618

200

1,928

Separate account assets

112,957

34,268

—

—

713

147,938

Separate account collateral held under securities lending
   agreements:

Equity securities

19,093

—

—

—

—

19,093

Debt securities

—

8,338

—

—

—

8,338

Total separate account collateral held under securities
   lending agreements

19,093

8,338

—

—

—

27,431

Investments of consolidated VIEs:

Private / public equity⁽³⁾

5

3

114

69

83

274

Equity securities

338

—

—

—

—

338

Debt securities

—

350

—

—

—

350

Other

—

—

—

64

—

64

Carried interest

—

—

—

—

260

260

Total investments of consolidated VIEs

343

353

114

133

343

1,286

Total

$
133,123

$
43,314

$
139

$
751

$
1,256

$
178,583

Liabilities:

Separate account collateral liabilities under securities
   lending agreements

$
19,093

$
8,338

$
—

$
—

$
—

$
27,431

Other liabilities⁽⁴⁾

—

7

228

—

—

235

Total

$
19,093

$
8,345

$
228

$
—

$
—

$
27,666

(1)

⁽¹⁾	Amounts are comprised of certain investments ~~measured at fair value using NAV (or its equivalent) as a practical expedient.~~

⁽²⁾

Amounts are comprised of investments held at cost or amortized cost, carried interest and certain equity method investments, which include sponsored investment funds and other assets, which are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and liabilities under fair value measures; therefore, the Company’s investment in such equity method investees may not represent fair value.

⁽³⁾	~~Level 3 amounts primarily include direct investments in private equity companies held by private equity funds.~~

⁽⁴⁾	~~Amounts primarily include contingent liabilities related to certain acquisitions (see Note 11,~~ ~~Commitments and Contingencies, for more information).~~

~~Assets and liabilities~~ measured at fair value onusing NAV (or its equivalent) as a ~~recurring basis~~practical expedient.

Level 3 Assets.Level 3 assets predominantly include investments in CLOs, loans of consolidated ~~VIEs of $114 million~~CIPs, and ~~$112 million at September 30, 2017~~a strategic private debt investment. Investments in CLOs and ~~December 31, 2016, respectively, related to direct investments in private equity companies held by consolidated private equity funds.~~

~~Direct investments in private equity companies may be valued using the market approach or the income approach, or a combination thereof, and~~loans were valued based on ~~an assessment of each underlying~~single-broker nonbinding quotes or quotes from pricing services which use significant unobservable inputs. BlackRock's strategic private debt investment incorporating evaluation of additional significant third-party financing, changes in valuations of comparable peer companies, the business environment of the companies, market indices, assumptions relating to appropriate risk adjustments for nonperformance and legal restrictions on disposition, among other factors. The fair value derived from the methods used 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. Underwas valued using 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.value. For investments utilizing ~~the~~a discounted ~~cash flow~~cashflow valuation technique, ~~a significant~~an increase (decrease) in the discount rate or risk premium ~~or discount for lack of marketability~~ in isolation could ~~result~~have resulted in a significantly lower (higher) fair value measurement. For investments utilizing the market-comparable valuation technique, a significant increase (decrease) in the EBITDA multiple in isolation could result in a significantly higher (lower) fair value measurement.measurement as of September 30, 2023.

Level 3 ~~assets may~~Liabilities. Level 3 liabilities primarily include ~~investments in CLOs~~borrowings of a consolidated CLO, which were valued based on ~~single-broker nonbinding quotes and direct private equity investments valued using~~ the ~~market approach or~~fair value of the ~~income approach~~assets of the consolidated CLO less the fair value of the Company’s economic interest in the CLO, as ~~described above.~~

~~Level 3 Liabilities.~~ ~~Level 3 other liabilities primarily include recorded~~well as contingent liabilities related to certain acquisitions, which were valued based upon discounted cash flow analyses, using unobservable market data ~~inputs.~~ inputs, or other valuation techniques.

(2)

Earnings attributable to the change in unrealized gains (losses) relating to assets and ~~a contingent liability payment in connection with a prior acquisition.~~

⁽²⁾ ~~Earnings attributable to the change in unrealized gains (losses) relating to assets and~~ liabilities still held at the reporting date.

⁽³⁾	~~Amounts include investments in CLOs.~~

⁽⁴⁾	~~Other liabilities amount includes contingent liabilities in connection with certain acquisitions.~~

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, ~~2017~~2023


(in millions)	December 31, 2022		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and Other Settlements(1)		Transfers into Level 3		Transfers out of Level 3			September 30, 2023		Total Net Unrealized Gains (Losses) Included in Earnings(2)
Assets:
Investments:
Debt securities:
Trading	$	52	$	(1	)	$	8	$	(19	)	$	—	$	—	$	—		$	40	$	(1	)
Total debt securities		52		(1	)		8		(19	)		—		—		—			40		(1	)
Loans		248		6			129		(21	)		—		33		(14	)		381		6
Total investments		300		5			137		(40	)		—		33		(14	)		421		5
Other assets		—		(2	)		109		—			—		—		—			107		(2	)
Total assets	$	300	$	3		$	246	$	(40	)	$	—	$	33	$	(14	)	$	528	$	3
Liabilities:
Other liabilities	$	280	$	7		$	—	$	—		$	22	$	—	$	—		$	295	$	7

(in millions)

December 31, 2016

Realized
and
Unrealized
Gains
(Losses) in
Earnings
and OCI

Purchases

Sales and
Maturities

Issuances and
other
Settlements⁽¹⁾

Transfers
into
Level 3

Transfers
out of
Level 3⁽²⁾

September 30, 2017

Total Net
Unrealized
Gains (Losses)
Included in
Earnings⁽³⁾

Assets:

Investments:

Available-for-sale securities⁽⁴⁾

$
24

$
—

$
23

$
—

$
—

$
—

$
(24
)

$
23

Trading

7

—

4

—

—

—

(9
)

2

Total investments

31

—

27

—

—

—

(33
)

25

Assets of consolidated VIEs - Private equity

112

2

—

—

—

—

114

$
2

Total Level 3 assets

$
143

$
2

$
27

$
—

$
—

$
—

$
(33
)

$
139

Liabilities:

Other liabilities⁽⁵⁾

$
115

$
(2
)

$
—

$
—

$
111

$
—

$
—

$
228

$
(2
)

⁽¹⁾

Issuance and other settlements amount includes ~~$120 million and $9 million of~~a contingent ~~liabilities~~liability in connection with the ~~acquisition~~Kreos Transaction, partially offset by repayments of ~~the equity infrastructure franchise~~borrowings of ~~First Reserve in June 2017 (“First Reserve Transaction”) and the Cachematrix Transaction, respectively, and contingent liability payments in connection with certain prior acquisitions.~~

^{a consolidated CLO.}

(2) ~~Amounts include transfers out of Level 3 due to availability of observable market inputs from pricing vendors.~~

⁽³⁾

Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.

⁽⁴⁾	~~Amounts include investments in CLOs.~~

⁽⁵⁾	~~Other liabilities amount includes contingent liabilities in connection with certain acquisitions.~~

1816

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, ~~2016~~2022


(in millions)	June 30, 2022		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and Other Settlements			Transfers into Level 3		Transfers out of Level 3			September 30, 2022		Total Net Unrealized Gains (Losses) Included in Earnings(1)
Assets:
Investments:
Debt securities:
Trading	$	16	$	(1	)	$	14	$	(5	)	$	—		$	25	$	—		$	49	$	(1	)
Total debt securities		16		(1	)		14		(5	)		—			25		—			49		(1	)
Private equity		4		(2	)		—		—			—			—		(2	)		—		—
Loans		252		(1	)		—		(16	)		—			4		(3	)		236		(1	)
Total investments	$	272	$	(4	)	$	14	$	(21	)	$	—		$	29	$	(5	)	$	285	$	(2	)
Liabilities:
Other liabilities	$	314	$	8		$	—	$	—		$	(3	)	$	—	$	—		$	303	$	8

(in millions)

June 30,
2016

Realized
and
Unrealized
Gains
(Losses) in
Earnings
and OCI

Purchases

Sales and
Maturities

Issuances and
other
Settlements

Transfers
into
Level 3

Transfers
out of
Level 3

September 30, 2016

Total Net
Unrealized
Gains (Losses)
Included in
Earnings⁽¹⁾

Assets:

Investments:

Available-for-sale securities⁽²⁾

$
—

$
—

$
24

$
—

$
—

$
—

$
—

$
24

Trading

3

—

2

—

—

—

—

5

Total investments

3

—

26

—

—

—

—

29

Assets of consolidated VIEs - Private equity

189

11

—

(6
)

—

—

—

194

$
11

Total Level 3 assets

$
192

$
11

$
26

$
(6
)

$
—

$
—

$
—

$
223

Liabilities:

Other liabilities⁽³⁾

$
121

$
(2
)

$
—

$
—

$
(5
)

$
—

$
—

$
118

$
(2
)
(1)

Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.

⁽¹⁾	~~Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.~~

⁽²⁾	~~Amounts include investments in CLOs.~~

⁽³⁾	~~Other liabilities amount includes contingent liabilities in connection with certain acquisitions.~~

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, ~~2016~~2022


(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			September 30, 2022		Total Net Unrealized Gains (Losses) Included in Earnings(2)
Assets:
Investments:
Debt securities:
Trading	$	17	$	(4	)	$	33	$	(18	)	$	—		$	25	$	(4	)	$	49	$	(4	)
Total debt securities		17		(4	)		33		(18	)		—			25		(4	)		49		(4	)
Private equity		5		(2	)		—		—			—			—		(3	)		—		—
Loans		270		(4	)		16		(34	)		—			8		(20	)		236		(4	)
Total investments	$	292	$	(10	)	$	49	$	(52	)	$	—		$	33	$	(27	)	$	285	$	(8	)
Liabilities:
Other liabilities	$	342	$	7		$	—	$	—		$	(32	)	$	—	$	—		$	303	$	7

December 31,

Realized
and
Unrealized
Gains
(Losses) in
Earnings

Sales and

Issuances and
other

Transfers
into

Transfers
out of

September 30,

Total Net
Unrealized
Gains (Losses)
Included in

(in millions)

2015

and OCI

Purchases

Maturities

Settlements⁽¹⁾

Level 3

Level 3

2016

Earnings⁽²⁾

Assets:

Investments

Available-for-sale securities⁽³⁾

$
23

$
—

$
47

$
—

$
—

$
—

$
(46
)

$
24

Trading

2

—

6

—

—

—

(3
)

5

Total investments

25

—

53

—

—

—

(49
)

29

Assets of consolidated VIEs - Private equity

196

13

—

(15
)

—

—

—

194

$
13

Total Level 3 assets

$
221

$
13

$
53

$
(15
)

$
—

$
—

$
(49
)

$
223

Liabilities:

Other liabilities⁽⁴⁾

$
48

$
—

$
—

$
—

$
70

$
—

$
—

$
118

$
—

⁽¹⁾ ~~Issuances~~

Amounts include proceeds from borrowings of a consolidated CLO and ~~other settlements amount includes~~ a contingent liability payment related to a prior acquisition.

(2)

Earnings attributable to the ~~BofA~~^® ~~Global Capital Management transaction~~change in ~~April 2016.~~

⁽²⁾	~~Earnings attributable to the change in~~ unrealized gains (losses) relating to assets and liabilities still held at the reporting date.

⁽³⁾	~~Amounts include investments in CLOs.~~

⁽⁴⁾	~~Other liabilities amount includes contingent liabilities in connection with certain acquisitions.~~

Realized and Unrealized Gains (Losses) for Level 3 Assets and Liabilities.Realized and unrealized gains (losses) recorded for Level 3 assets and liabilities are primarily reported in nonoperating income (expense) on the condensed consolidated statements of income. A portion of net income (loss) ~~for consolidated sponsored investment funds are~~related to securities held by CIPs is allocated to ~~noncontrolling interests~~NCI to reflect net income (loss) not attributable to the Company.

Transfers in and/or out of Levels.Transfers in and/or out of levels are reflected when significant inputs, including market inputs or performance attributes, used for the fair value measurement become observable/~~unobservable, or when the carrying value of certain equity method investments no longer represents fair value as determined under valuation methodologies.~~unobservable.

Disclosures of Fair Value for Financial Instruments Not Held at Fair Value. At September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the fair value of the Company’s financial instruments not held at fair value are categorized in the table below:


	September 30, 2023				December 31, 2022
(in millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Fair Value Hierarchy
Financial Assets(1):
Cash and cash equivalents	$	7,316	$	7,316	$	7,416	$	7,416	Level 1	(2)(3)
Other assets	$	103	$	103	$	86	$	86	Level 1	(2)(4)

Financial Liabilities:
Long-term borrowings	$	7,884	$	7,007	$	6,654	$	5,949	Level 2	(5)

September 30, 2017

December 31, 2016

(in millions)

Carrying
Amount

Estimated
Fair Value

Carrying
Amount

Estimated
Fair Value

Fair Value
Hierarchy

Financial Assets:

Cash and cash equivalents

$
6,165

$
6,165

$
6,091

$
6,091

Level 1
^{(1) (2)}
Accounts receivable

3,183

3,183

2,350

2,350

Level 1
⁽³⁾
Cash and cash equivalents of consolidated VIEs

82

82

84

84

Level 1
^{(1) (2)}
Other assets

62

62

25

25

Level 1
^{(1) (4)}

Financial Liabilities:

Accounts payable and accrued liabilities

1,652

1,652

1,094

1,094

Level 1
⁽³⁾
Long-term borrowings

5,000

5,248

4,915

5,165

Level 2
⁽⁵⁾
(1)

See Note 4, Investments, for further information on investments not held at fair value.

(2)

Cash and cash equivalents are carried at either cost or amortized cost, which approximates fair value due to their short-term maturities.

(3)

At September 30, 2023 and December 31, 2022, approximately $2.5 billion and $2.2 billion, respectively, of money market funds were recorded within cash and cash equivalents on the condensed consolidated statements of financial condition. Money market funds are valued based on quoted market prices, or $1.00 per share, which generally is the NAV of the fund.

(4)

At September 30, 2023 and December 31, 2022, other assets included cash collateral of approximately $86 million and $69 million, respectively. See Note 8, Derivatives and Hedging for further information on derivatives held by the Company. In addition, other assets included $17 million of restricted cash at both September 30, 2023 and December 31, 2022.

(5)

Long-term borrowings are recorded at amortized cost, net of debt issuance costs. The fair value of the long-term borrowings, including the current portion of long-term borrowings, is determined using market prices and the EUR/USD foreign exchange rate at the end of September 2023 and December 2022, respectively. See Note 13, Borrowings, for the fair value of each of the Company’s long-term borrowings.

⁽¹⁾	~~Cash and cash equivalents are carried at either cost or amortized cost, which approximates fair value due to their short-term maturities.~~

⁽²⁾

At September 30, 2017 and December 31, 2016, approximately $137 million and $132 million, respectively, of money market funds were recorded within cash and cash equivalents on the condensed consolidated statements of financial condition. In addition, at September 30, 2017 and December 31, 2016, approximately $14 million and $13 million, respectively, of money market funds were recorded within cash and cash equivalents of consolidated VIEs. Money market funds are valued based on quoted market prices, or $1.00 per share, which generally is the NAV of the fund.

⁽³⁾	~~The carrying amounts of accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short-term nature.~~

⁽⁴⁾	~~Other assets primarily include restricted cash.~~

⁽⁵⁾

Long-term borrowings are recorded at amortized cost net of debt issuance costs. The fair value of the long-term borrowings, including the current portion of long-term borrowings, is estimated using market prices at the end of September 2017 and December 2016, respectively. See Note 10, ~~Borrowings, for the fair value of each of the Company’s long-term borrowings.~~

2118

Investments in Certain Entities that Calculate ~~Net Asset Value~~NAV Per ~~Share.~~Share

As a practical expedient to value certain investments that do not have a readily determinable fair value and have attributes of an investment company, the Company uses NAV as the fair value. The following tables list information regarding all investments that use a fair value measurement to account for both their financial assets and financial liabilities in their calculation of a NAV per share (or equivalent).

September 30, 2023

(in millions)

Ref

Fair Value

Total
Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period

Equity method(1):

Hedge funds/funds of hedge
funds/other

(a)

495

142

Daily/Monthly (15%)
Quarterly (9%)
N/R (76%)

1 – 90 days

Private equity funds

(b)

1,200

184

N/R

Real assets funds

(c)

380

247

Quarterly (12%)
N/R (88%)

60 days

Investments related to deferred
cash compensation plan

(e)

228

—

Monthly

1 – 90 days

Consolidated sponsored
investment products:

Real assets funds

(c)

150

N/R

Private equity funds

(d)

N/R

Hedge funds/other

(a)

161

Quarterly (88%)
N/R (12%)

90 days

Total

2,708

746

December 31, 2022

(in millions)

Ref

Fair Value

Total
Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period

Equity method(1):

Hedge funds/funds of hedge
funds/other

(a)

525

149

Daily/Monthly (23%)
Quarterly (13%)
N/R (64%)

1 – 90 days

Private equity funds

(b)

885

174

N/R

Real assets funds

(c)

304

Quarterly (17%)
N/R (83%)

60 days

Consolidated sponsored
investment products:

Real assets funds

(c)

116

N/R

Private equity funds

(d)

183

N/R

Other funds

Quarterly

90 days

Total

2,030

789

September 30, 2017

(in millions)

Ref

Fair Value

Total
Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period
Equity method:⁽¹⁾

Hedge funds/funds of hedge funds

(a)

$
249

$
42

Daily/Monthly (19%)
Quarterly (55%)
N/R (26%)

1 – 90 days
Private equity funds

(b)

89

92

N/R

N/R
Real assets funds

(c)

265

111

Quarterly (85%)
N/R (15%)

60 days
Other

15

13

Daily/Monthly (66%)
N/R (34%)

3 – 5 days
Consolidated VIEs:

Private equity funds of funds

(d)

69

20

N/R

N/R
Hedge fund

(a)

23

—

Quarterly

90 days
Real assets funds

(c)

41

54

N/R

N/R
Total

$
751

$
332

December 31, 2016

(in millions)

Ref

Fair Value

Total
Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period
Equity method:⁽¹⁾

Hedge funds/funds of hedge funds

(a)

$
237

$
14

Daily/Monthly (21%)
Quarterly (51%)
N/R (28%)

1 – 90 days
Private equity funds

(b)

90

62

N/R

N/R
Real assets funds

(c)

60

35

Quarterly (41%)
N/R (59%)

60 days
Other

12

9

Daily/Monthly (42%)
N/R (58%)

3 – 5 days
Consolidated VIEs:

Private equity funds of funds

(d)

89

16

N/R

N/R
Hedge fund

(a)

36

—

Quarterly

90 days
Real assets funds

(c)

27

21

N/R

N/R
Total

$
551

$
157

N/R – Not Redeemable

(1)

Comprised of equity method investments, which include investment companies that account for their financial assets and most financial liabilities under fair value measures; therefore, the Company’s investment in such equity method investees approximates fair value.

(a)

This category includes hedge funds, funds of hedge funds, and other funds that invest primarily in equities, fixed income securities, private credit, opportunistic and mortgage instruments and other third-party hedge funds. The fair values of the investments have been estimated using the NAV of the Company’s ownership interest in partners’ capital. The liquidation period for the investments in the funds that are not ~~redeemable~~subject to redemption is unknown at both September 30, 2023 and December 31, 2022.

(b)

This category includes private equity funds that initially invest in nonmarketable securities of private companies, which ultimately may become public in the future. The fair values of these investments have been estimated using capital accounts representing the Company’s ownership interest in the funds and may also include other performance inputs. The Company’s investment in each fund is not subject to redemption and is normally returned through distributions as a result of the liquidation of the underlying assets of the private equity funds. The liquidation period for the investments in these funds is unknown at both September 30, 2023 and December 31, 2022.

⁽¹⁾	Comprised of equity method investments, which include investments in investment companies, which account for their financial assets and most financial liabilities under fair value measures; therefore, the Company’s investment in such equity method investees approximates fair value.

(c)

This category includes several real assets funds that invest directly and indirectly in real estate or infrastructure. The fair values of the investments have been estimated using capital accounts representing the Company’s ownership interest in the funds. The Company’s investments that are not subject to redemption or are not currently redeemable are normally returned through distributions and realizations of the underlying assets of the funds. The liquidation period for the investments in the funds that are not subject to redemptions is unknown at both September 30, 2023 and December 31, 2022. The total remaining unfunded commitments were $314 million and $398 million at September 30, 2023 and December 31, 2022, respectively. The Company’s portion of the total remaining unfunded commitments was $289 million and $364 million at September 30, 2023 and December 31, 2022, respectively.

^(a)

This category includes hedge funds and funds of hedge funds that invest primarily in equities, fixed income securities, distressed credit, opportunistic and mortgage instruments and other third-party hedge funds. The fair values of the investments have been estimated using the NAV of the Company’s ownership interest in partners’ capital. It was estimated that the investments in the funds that are not subject to redemption will be liquidated over a weighted-average period of seven years at September 30, 2017 and approximately one year at December 31, 2016.

^(b)

This category includes several private equity funds that initially invest in nonmarketable securities of private companies, which ultimately may become public in the future. The fair values of these investments have been estimated using capital accounts representing the Company’s ownership interest in the funds as well as other performance inputs. The Company’s investment in each fund is not subject to redemption and is normally returned through distributions as a result of the liquidation of the underlying assets of the private equity funds. It was estimated that the investments in these funds will be liquidated over a weighted-average period of approximately five years at both September 30, 2017 and December 31, 2016.

(d)

^(c)

This category includes several real assets funds that invest directly in real estate, real estate related assets and infrastructure. The fair values of the investments have been estimated using capital accounts representing the Company’s ownership interest in the funds. The Company’s investments that are not subject to redemption or are not currently redeemable are normally returned through distributions as a result of the liquidation of the underlying assets of the funds. It is estimated that the investments in these funds not subject to redemptions will be liquidated over a weighted-average period of approximately eight years at September 30, 2017 and six years at December 31, 2016. The total remaining unfunded commitments to other third-party funds were $165 million and $56 million at September 30, 2017 and December 31, 2016, respectively. The Company had contractual obligations to the consolidated funds of $136 million at September 30, 2017 and $56 million at December 31, 2016.

^(d)This category includes the underlying third-party private equity funds within consolidated BlackRock sponsored private equity funds of funds. The fair values of the investments in the third-party funds have been estimated using capital accounts representing the Company’s ownership interest in each fund in the portfolio as well as other performance inputs. These investments are not subject to ~~redemption;~~redemption or are not currently redeemable; however, for certain funds, the Company may sell or transfer its interest, which may need approval by the general partner of the underlying funds. Due to the nature of the investments in this category, the Company reduces its investment by distributions that are received through the realization of the underlying assets of the funds. ~~It is estimated that~~The liquidation period for the underlying assets of these funds is unknown.

(e)

This category includes hedge funds and funds of hedge funds that invest primarily in equities, fixed income securities, mortgage instruments and other third-party hedge funds. The fair values of the investments have been estimated using the NAV of the Company's ownership interest in partners' capital. The investments in hedge funds will be ~~liquidated over a weighted-average period~~redeemed upon settlement of ~~approximately five years at both~~certain deferred cash compensation liabilities.

Fair Value Option

At September 30, ~~2017~~2023 and December 31, ~~2016. The total remaining unfunded commitments to other third-party funds were $20~~2022, the Company elected the fair value option for certain investments in CLOs of approximately $41 million and ~~$16~~$52 million, respectively, reported within investments.

In addition, the Company elected the fair value option for bank loans and borrowings of a consolidated CLO, recorded within investments and other liabilities, respectively. The following table summarizes the information related to these bank loans and borrowings at September 30, ~~2017~~2023 and December 31, ~~2016, respectively. The Company had contractual obligations~~2022:


	September 30,		December 31,
(in millions)	2023		2022
CLO Bank loans:
Aggregate principal amounts outstanding	$	224	$	238
Fair value		213		234
Aggregate unpaid principal balance in excess of (less than) fair value	$	11	$	4

CLO Borrowings:
Aggregate principal amounts outstanding	$	221	$	245
Fair value	$	201	$	245

At September 30, 2023, the principal amounts outstanding of the borrowings issued by the CLO mature in 2030 and may be repaid prior to maturity at any time.

During the three and nine months ended September 30, 2023 and 2022, the net gains (losses) from the change in fair value of the bank loans and borrowings held by the consolidated ~~funds~~CLO were not material and were recorded in net gain (loss) on the condensed consolidated statements of ~~$24 million at both September 30, 2017~~income. The change in fair value of the assets and ~~December 31, 2016.~~liabilities included interest income and expense, respectively.

7.8. Derivatives and Hedging

The Company maintains a program to enter into ~~swaps~~exchange traded futures as a macro hedging strategy to hedge ~~against~~ market price and interest rate exposures with respect to ~~certain~~its total portfolio of seed investments in sponsored investment products. At September 30, ~~2017,~~2023 and December 31, 2022, the Company had outstanding ~~total return swaps~~exchange traded futures related to this macro hedging strategy with aggregate notional values of approximately ~~$538 million.~~$1.6 billion and $1.5 billion, with expiration dates during the fourth and first quarter of 2023, respectively.

In addition, beginning in the first quarter of 2023, the Company entered into futures to economically hedge the exposure to market movements on certain deferred cash compensation plans. At ~~December 31, 2016,~~September 30, 2023, the Company had outstanding ~~total return swaps and interest rate swaps~~exchange traded futures with aggregate notional values related to its deferred cash compensation hedging program of approximately ~~$572~~$182 million, ~~and $42 million, respectively.~~with expiration dates during the fourth quarter of 2023.

~~Gains (losses) on~~Changes in the ~~total return swaps~~value of the futures contracts are ~~recorded in~~recognized as gains or losses within nonoperating income (expense). Variation margin payments, which represent settlements of profit/loss, are generally received or made daily, and ~~were $~~(~~26) million~~are reflected in other assets and $(~~90) million for the three and nine months ended September 30, 2017, respectively, and $~~(~~25) million and $~~(~~33) million for the three and nine months ended September 30, 2016, respectively.~~

~~Gains (losses)~~other liabilities on the ~~interest rate swaps are recorded in nonoperating income (expense) and~~condensed consolidated statements of financial condition. These amounts were not material ~~for the three and nine months ended~~as of September 30, ~~2017~~2023 and ~~2016.~~ December 31, 2022.

The Company has entered into a derivative providing credit protection to a counterparty of approximately $17 million, representing the Company’s maximum risk of loss with respect to the provision of credit protection. The Company carries the derivative at fair value based on the expected discounted future cash outflows under the arrangement.20

The Company executes forward foreign currency exchange contracts to mitigate the risk of certain foreign exchange movements. At September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company had outstanding forward foreign currency exchange contracts with aggregate notional values of approximately ~~$1.3~~$2.4 billion and ~~$107~~$2.2 billion, with expiration dates in October 2023 and January 2023, respectively.

At both September 30, 2023 and December 31, 2022, the Company had a derivative providing credit protection with a notional amount of approximately $17 million ~~respectively.~~

~~Gains (losses)~~to a counterparty, representing the Company’s maximum risk of loss with respect to the derivative. The Company carries the derivative at fair value based on the ~~forward foreign currency exchange contracts are recorded~~expected discounted future cash outflows under the arrangement.

The following table presents the fair values of derivative instruments recognized in ~~other general~~the condensed consolidated statements of financial condition at September 30, 2023 and ~~administration expense~~December 31, 2022:

Assets

Liabilities

(in millions)

Statement of
Financial
Condition
Classification

September 30, 2023

December 31, 2022

Statement of
Financial
Condition
Classification

September 30, 2023

December 31, 2022

Derivative Instruments

Forward foreign currency
exchange contracts

Other assets

Other liabilities

The following table presents realized and ~~were $29~~unrealized gains (losses) recognized in the condensed consolidated statements of income on derivative instruments:


		Three Months Ended						Nine Months Ended
		September 30,						September 30,
	Statement of Income	2023			2022			2023		2022
(in millions)	Classification	Gains (Losses)						Gains (Losses)
Derivative Instruments
Exchange traded futures(1)	Nonoperating income (expense)	$	72		$	—		$	14	$	—
Forward foreign currency exchange contracts	General and administration expense		(66	)		(124	)		29		(295	)
Total return swaps	Nonoperating income (expense)		—			44			—		147
Total gain (loss) from derivative instruments		$	6		$	(80	)	$	43	$	(148	)

(1)

Amounts include $81 million and ~~$58~~$6 million of gains on futures used as a macro hedging strategy of seed investments for the three and nine months ended September 30, ~~2017,~~2023, respectively. ~~Gains (losses)~~In addition amounts include $9 million of losses and $8 million of gains on ~~the forward foreign currency exchange contracts were not material~~futures used to economically hedge certain deferred cash compensation plans for the three and nine months ended September 30, ~~2016.~~

2023, respectively.

The ~~Company consolidates certain sponsored investment funds, which~~Company's CIPs may utilize derivative instruments as a part of the ~~funds’~~funds' investment strategies. The change in fair value of such derivatives, which is recorded in nonoperating income (expense), was not material for the three and nine months ended September 30, ~~2017~~2023 and ~~2016.~~2022.

~~The fair value of the outstanding derivatives mentioned above were not material at September 30, 2017 and December 31, 2016.~~

See Note ~~12,~~ 15, Borrowings, in the ~~2016~~2022 Form 10-K for more information on the Company’s net investment hedge.

9. Goodwill

~~8. Goodwill~~

Goodwill activity during the nine months ended September 30, ~~2017~~2023 was as follows:


(in millions)
December 31, 2022	$	15,341
Acquisition(1)		184
Other		(9	)
September 30, 2023	$	15,516

(in millions)

December 31, 2016

$
13,118

Acquisitions⁽¹⁾

123

Goodwill adjustments related to Quellos⁽²⁾

(15
)
September 30, 2017

$
13,226

(1)

Amount represents goodwill in connection with the Kreos Transaction. The Company believes this acquisition will add to the Company's position as a leading global credit asset manager and advance its ambitions to provide clients with a diverse range of private market investment products and solutions. Total consideration for the transaction was approximately $250 million, which included contingent consideration.

⁽¹⁾

Amount includes $91 million of goodwill related to the First Reserve Transaction, which expanded the Company’s energy and power infrastructure platform and $32 million of goodwill related to the Cachematrix Transaction, which enhanced the Company’s technology and cash management capabilities. The total consideration paid for these acquisitions was approximately $231 million, including $129 million of contingent consideration at fair value at time of close.

⁽²⁾

The decrease in goodwill during the nine months ended September 30, 2017 primarily resulted from a decline related to tax benefits realized from tax-deductible goodwill in excess of book goodwill from the acquisition of the fund-of-funds business of Quellos Group, LLC in October 2007 (the “Quellos Transaction”). Goodwill related to the Quellos Transaction will continue to be reduced in future periods by the amount of tax benefits realized from tax-deductible goodwill in excess of book goodwill from the Quellos Transaction. The balance of the Quellos tax-deductible goodwill in excess of book goodwill was approximately $176 million and $200 million at September 30, 2017 and December 31, 2016, respectively.

9.10. Intangible Assets

The carrying amounts of identifiable intangible assets are summarized as follows:


(in millions)	Indefinite-lived		Finite-lived			Total
December 31, 2022	$	17,578	$	724		$	18,302
Acquisition(1)		—		106			106
Amortization expense		—		(113	)		(113	)
Other		—		(4	)		(4	)
September 30, 2023	$	17,578	$	713		$	18,291

(in millions)

Indefinite-lived

Finite-lived

Total

December 31, 2016

$
17,178

$
185

$
17,363

Amortization expense

—

(77
)

(77
)
Acquisitions⁽¹⁾

—

114

114

September 30, 2017

$
17,178

$
222

$
17,400

⁽¹⁾ ~~The amount represents $110~~

In connection with the Kreos Transaction, the Company acquired approximately $67 million of finite-lived ~~assets related to the First Reserve Transaction~~management contracts and $4$39 million of finite-lived investor relationships with weighted-average estimated lives of approximately five and ten years, respectively.

~~See Note 14,~~ ~~Stock-Based Compensation,~~ ~~in the 2016 Form 10-K for more information on market performance-based RSUs.~~

At September 30, ~~2017, the intrinsic value of outstanding market performance-based RSUs was $128 million reflecting a closing stock price of $447.09.~~

~~At September 30, 2017,~~2023, total unrecognized stock-based compensation expense related to unvested ~~market~~ performance-based ~~awards~~and time-based stock options was $4$171 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of ~~less than one year.~~2.8 years.

~~Long-Term Incentive Plans Funded by PNC.~~ ~~Under a share surrender agreement, PNC committed~~Performance-based stock options

In 2017, pursuant to ~~provide up~~the Award Plan, the Company awarded performance-based stock option grants to ~~4 million~~certain employees ("2017 Performance-based Options"). Vesting of 2017 Performance-based Options was contingent upon the achievement of obtaining 125% of BlackRock's grant-date stock price within five years from the grant date and the attainment of Company performance measures during the four-year performance period. Both hurdles have been achieved, and the first tranche of the awards vested at the end of 2022 with two subsequent equal installments vesting at the end of 2023 and 2024, respectively. The aggregate intrinsic value of 2017 Performance-based Options exercised during the nine months ended September 30, 2023 was $22 million. See Note 18, Stock-Based Compensation, in the 2022 Form 10-K for more information on 2017 Performance-based Options.

On May 30, 2023, pursuant to the Award Plan, the Company awarded performance-based options to purchase 814,482 shares of BlackRock common stock ~~held by PNC,~~ to ~~fund~~ certain ~~BlackRock~~employees as long-term incentive ~~plans (“LTIP”~~compensation ("2023 Performance-based Options"). Vesting of 2023 Performance-based Options is contingent upon the achievement of obtaining 130% of grant-date stock price over 60 calendar days within four years from the grant date and attainment of Company performance measures during the three-year performance period. If both hurdles are achieved, the award will vest in three tranches of 25%, ~~including performance-based~~25% and ~~market performance-based RSUs.~~50% in May of 2027, 2028 and 2029, respectively. Vested options are exercisable for up to nine years following the grant date, and the awards are forfeited if the employee resigns before the respective vesting date. The ~~current share surrender agreement commits PNC~~expense for each tranche is amortized over the respective requisite service period.

The 2023 Performance-based Options have a strike price of $673.58 which was the closing price of the shares on the grant date. The grant-date fair value of the 2023 Performance-based Options was $120 million and was estimated using a Monte Carlo simulation with an embedded lattice model using the assumptions included in the following table:

The 2023 Time-based Options have a strike price of ~~September 30, 2017, 3.8~~$673.58 which was the closing price of the shares on the grant date. The grant-date fair value of the 2023 Time-based Options was $55 million ~~shares had been surrendered by PNC.~~

~~517,138 shares were surrendered by PNC~~and was estimated using a Black-Scholes-Merton model using the assumptions included in the ~~first quarter~~following table:

Americas is primarily is comprised of the ~~United States~~US, Latin America and Canada, while Europe is primarily is comprised of the ~~United Kingdom~~UK, the Netherlands, Switzerland, France, Ireland and Luxembourg. Asia-Pacific is primarily is comprised of Hong Kong, Australia, Japan and Singapore.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management (“AUM”); (3) the relative and absolute investment performance of BlackRock’s investment products; (4) BlackRock’s ability to develop new products and services that address client preferences; (5) the impact of increased competition; ~~(5)~~(6) the impact of future acquisitions or divestitures; ~~(6)~~(7) BlackRock’s ability to integrate acquired businesses successfully; (8) the unfavorable resolution of legal proceedings; ~~(7)~~(9) the extent and timing of any share repurchases; ~~(8)~~(10) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and ~~cyber security~~cybersecurity protection; ~~(9)~~(11) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; ~~(10)~~(12) 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”); (11)~~BlackRock; (13) changes in law and policy and uncertainty pending any such changes; ~~(12)~~(14) any failure to effectively manage conflicts of interest; (15) damage to BlackRock’s reputation; (16) 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; ~~(13)~~(17) a pandemic or health crisis, and related impact on BlackRock’s business, operations and financial condition; (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; ~~(14)~~(20) fluctuations in the carrying value of BlackRock’s economic investments; ~~(15)~~(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; ~~(16)~~(22) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; ~~(17)~~(23) the failure by a key ~~vendor~~third-party providers of BlackRock to fulfill ~~its~~their obligations to the Company; ~~(18)~~(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”~~ETFs”) platform; ~~(19)~~(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 ~~(20)~~(27) the impact of problems, atinstability or failure of other financial institutions or the failure or negative performance of products atoffered by other financial institutions.

BlackRock, Inc. (together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) is a leading publicly traded investment management firm with ~~$5.977~~$9.1 trillion of AUM at September 30, ~~2017.~~2023. With approximately ~~13,700~~19,900 employees in more than 30 countries, BlackRock provides a broad range of investment management and ~~risk management~~technology services to institutional and retail clients ~~worldwide.~~in more than 100 countries across the globe.

BlackRock’s diverse platform of alpha-seeking active, ~~(alpha)~~index and ~~index (beta)~~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 ~~class~~ portfolios investing in equities, fixed income, alternatives and money market instruments. Products are offered directly and through intermediaries in a variety of vehicles, including open-end and closed-end mutual funds, iShares® and BlackRock ETFs, separate accounts, collective ~~investment~~trust funds and other pooled investment vehicles. BlackRock also offers technology services, including the investment and risk management technology platform, Aladdin®, ~~risk analytics,~~Aladdin Wealth, eFront, and Cachematrix, as well as advisory ~~and technology~~ services and solutions to a broad base of institutional and wealth management ~~investors.~~clients. The Company is highly regulated and manages its clients’ assets as a fiduciary. The Company does not engage in proprietary trading activities that could conflict with the interests of 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, and establishing third-party distribution relationships.~~consultants.

~~At September 30, 2017, PNC held 21.4% of the Company’s voting common stock and 21.9% of the Company’s capital stock, which includes outstanding common and nonvoting preferred stock.~~

Certain items previously reported have been reclassified to conform to the current period presentation. For more information on the current period’s reclassification, see “Discussion of Financial Results – Revenue” herein.

Acquisition. In ~~June 2017, the Company~~August 2023, BlackRock completed the acquisition of Kreos Capital, a provider of growth and venture debt financing to companies in the ~~equity infrastructure franchise~~technology and healthcare industries (the "Kreos Transaction"). The Company believes this acquisition will add to the Company's position as a leading global credit asset manager and advance its ambitions to provide clients with a diverse range of ~~First Reserve (“First Reserve Transaction”), expanding the Company’s energy~~private market investment products and ~~power infrastructure platform.~~solutions. Total consideration for the transaction was approximately ~~$193~~$250 million, ~~including $120 million~~which included contingent consideration.

Three Months Ended September 30, 2023 Compared with Brexit is highly uncertain and information regarding the long-term consequences is expected to become clearer over time as negotiations progress. The Company continues to prepare for a range of potential outcomes in connection with Brexit.Three Months Ended September 30, 2022

~~THREE MONTHS ENDED SEPTEMBER 30, 2017 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 2016~~

GAAP.Operating income of ~~$1,394 million~~$1.6 billion increased ~~$185~~$111 million and operating margin of ~~43.1%~~36.2% increased 5080 bps from the ~~third quarter of 2016. Operating~~three months ended September 30, 2022. Increases in operating income and operating margin ~~growth~~ reflected higher ~~year-over-year~~investment advisory and administration fees (collectively "base fees"), primarily driven by organic base ~~fees, performance fees~~fee growth and the impact of market movements over the past twelve months on average AUM, and higher technology ~~and risk management revenue,~~services revenue.

Nonoperating income (expense) less net income (loss) attributable to noncontrolling interests (“NCI”) decreased $30 million from the three months ended September 30, 2022, reflecting the impact of $267 million of noncash gains related to BlackRock's strategic minority investment in iCapital Network, Inc. ("iCapital") during 2022, partially offset by higher ~~compensation and benefits expense,~~mark-to-market revaluation of the Company's seed capital portfolio, net of impact of certain hedges, higher ~~direct fund expense,~~gains on private equity co-investment portfolios, and higher ~~general~~interest and ~~administration expense.~~ dividend income during the three months ended September 30, 2023.

~~Third quarter 2017~~Earnings per diluted common share increased $1.41, or 15%, from the three months ended September 30, 2022, primarily driven by higher operating income and a lower effective tax rate, partially offset by lower nonoperating income. Income tax expense for the three months ended September 30, 2023 and September 30, 2022 included ~~net noncash expense~~approximately $223 million and $93 million, respectively, of $19 million related to the revaluation of certain deferred income tax liabilities as a result of domestic state and local changes. Third quarter 2016 income tax expense included a $26 million net noncash tax benefit, primarily related to the revaluation of certain deferred income tax liabilities as a result of legislation enacted in the United Kingdom, and domestic state and local income tax changes. Third quarter 2016 income tax expense also included nonrecurringdiscrete tax benefits ~~of $16 million primarily due~~related to the resolution of certain outstanding tax matters. ~~See~~ ~~Income Tax Expense~~ ~~within~~ ~~Discussion~~

As Adjusted. Operating income of ~~Financial Results~~ ~~for more information.~~

$1.7 billion increased $106 million and operating margin of 42.3% increased 30 bps from the three months ended September 30, 2022. Earnings per diluted common share increased ~~$0.52,~~$1.36, or ~~10%~~14%, from the ~~third quarter of 2016, driven~~three months ended September 30, 2022, primarily byreflecting higher operating income and ~~the benefit of share repurchases,~~a lower effective tax rate, partially offset by ~~higher income tax expense.~~lower nonoperating income.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

GAAP. Operating income of $1,398 million increased $182 million from the third quarter of 2016, and operating margin of 45.0% increased 20 bps from the third quarter of 2016. Income tax expense for the third quarter of 2017 and 2016 excluded the $19 million net noncash expense and $26 million net noncash benefit, respectively, described above. Earnings per diluted common share increased $0.78, or 15%, from the third quarter of 2016.

~~NINE MONTHS ENDED SEPTEMBER 30, 2017 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2016~~

~~GAAP.~~ ~~Operating income of $3,783 million increased $438~~$4.7 billion decreased $268 million and operating margin of ~~41.9% increased 140~~35.5% decreased 110 bps from the nine months ended September 30, ~~2016. Operating~~2022. Decreases in operating income and operating margin ~~growth primarily~~ reflected ~~higher year-over-year~~lower base fees, ~~performance fees, and technology and risk management revenue,~~driven by the impact of lower markets, partially offset by higher ~~compensation and benefits, higher direct fund expense, and higher general and administration~~technology expense. ~~The nine months ended September 30, 2017 also included approximately $22~~

Nonoperating income (expense) less net income (loss) attributable to NCI increased $566 million ~~of expense associated with the strategic repositioning of the active equity platform. Operating income for~~from the nine months ended September 30, 2016 included a restructuring charge of $76 million in connection with a project to streamline and simplify the organization. Nonoperating income (expense), less net income (loss) attributable to noncontrolling interest (“NCI”), increased $43 million2022, driven primarily by higher ~~net~~mark-to-market gains on ~~investments. Nonoperating results for~~ the ~~nine months ended September 30, 2017 included a “make-whole” redemption premium~~Company’s private equity co-investment portfolios, higher mark-to-market revaluation of ~~$14~~Company's seed capital portfolio, net of impact of certain hedges, and higher interest and dividend income, partially offset by the impact of $267 million of noncash gains related to ~~the refinancing of $700 million of 6.25% notes, which were paid prior to their September 2017 maturity.~~ BlackRock's strategic minority investment in iCapital during 2022.

Income tax expense for the nine months ended September 30, ~~2017~~2023 included ~~an $81~~$226 million discrete tax ~~benefit reflecting~~net benefits related to the ~~adoption~~resolution of ~~new accounting guidance related to~~certain outstanding tax matters and stock-based compensation awards that vested in ~~the first quarter of 2017 and the $19 million net noncash expense mentioned above.~~2023. Income tax expense for the nine months ended September 30, ~~2016~~2022 included $226 million of discrete tax benefits related to stock-based compensation awards that vested in 2022 and the ~~$26~~resolution of certain outstanding tax matters, and $18 million of net noncash ~~benefit mentioned above and nonrecurring~~ tax benefits related to the revaluation of ~~$35 million. See~~ ~~Income Tax Expense~~ ~~within~~ ~~Discussion of Financial Results~~ ~~for more information.~~certain deferred income tax liabilities.

Earnings per diluted common share increased ~~$2.31,~~$1.69 or ~~17%~~7%, from the nine months ended September 30, ~~2016, driven~~2022, primarily reflecting higher nonoperating income, partially offset by ~~higher net income, and the benefit of share repurchases.~~lower operating income.

As ~~Adjusted~~.Adjusted. Operating income of ~~$3,795 million increased $353~~$4.9 billion decreased $257 million and operating margin of ~~43.9% increased 40~~41.8% decreased 150 bps from the nine months ended September 30, ~~2016. The pre-tax restructuring charge of $76 million described above was excluded~~2022.

Earnings per diluted common share increased $1.68, or 6%, from ~~as adjusted results for~~ the nine months ended September 30, ~~2016.~~2022. Income tax expense for the nine months ended September 30, ~~2017 and 2016~~2022 excluded the ~~previously described net noncash expense of $19~~$18 million ~~and~~ net noncash benefit ~~of $26 million, respectively, and included the nonrecurring tax benefits~~ described above. ~~Earnings per diluted common share increased $2.24, or 16%~~

Beginning in the first quarter of 2023, BlackRock updated its definitions of operating income, as adjusted, operating margin, as adjusted, nonoperating income (expense), ~~from~~as adjusted, and net income attributable to BlackRock, Inc., as adjusted, to exclude the ~~nine months ended September 30, 2016.~~

compensation expense related to the market valuation changes on certain deferred cash compensation plans, and the related nonoperating gain (loss) impact of an economic hedge of these deferred cash compensation plans. See Non-GAAP Financial Measures for further information on as adjusted items and the reconciliation to ~~accounting principles generally accepted in the United States (“GAAP“).~~GAAP.

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

BlackRock reports its financial results in accordance with GAAP; however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP 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 financial 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 financial measures may not be comparable to other similarly titled measures of other companies.

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

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

(1) Operating income, as adjusted, and operating margin, as adjusted: Management ~~uses both GAAP~~believes operating income, as adjusted, and ~~non-GAAP financial measures in evaluating~~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, to determine the long-term and annual compensation of the Company’s senior-level employees and to evaluate the Company’s relative performance against industry 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.

(2) Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted: Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating contribution to its results and provides comparability of this information among reporting periods. Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, excludes the gain (loss) on the economic hedge of certain deferred cash compensation plans. As the gain (loss) on investments and derivatives used to hedge these compensation plans over time substantially offsets the compensation expense related to the market valuation changes on these deferred cash compensation plans, which is included in operating income, GAAP basis, management believes excluding the gain (loss) on the economic hedge of the deferred cash compensation plans when calculating nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, provides a useful measure for both management and investors of BlackRock’s nonoperating results that impact book value.

(3) Net income attributable to BlackRock, Inc., as adjusted: Management believes net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted, are useful measures of BlackRock’s profitability and financial performance. ~~Adjustments~~Net income attributable to BlackRock, Inc., as adjusted, equals net income attributable to BlackRock, Inc., GAAP ~~financial measures (“non-GAAP adjustments”) include~~basis, adjusted for 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.

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

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

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

updated presentation of non-GAAP adjustments. 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 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. Amounts~~goodwill as a result of tax rate changes. These amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to ~~ensure~~enhance comparability among periods presented.

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.~~

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.

The following table presents the component changes in AUM by client type and product type for the three months ended September 30, ~~2017.~~2023.

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

The following table presents the component changes in AUM by investment style and product type for the three months ended September 30, ~~2017.~~2023.

The following table presents the component changes in AUM by product type for the three months ended September 30, ~~2017.~~2023.

(2)

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

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

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

(3)

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

⁽⁴⁾	~~Amounts include commodity~~ ~~iShares~~ ~~ETFs.~~

(4)

Amounts include commodity ETFs.

AUM ~~increased $287.6~~decreased $324 billion ~~or 5%,~~ to ~~$6.0~~$9.1 trillion at September 30, ~~2017~~2023 from ~~$5.7~~$9.4 trillion at June 30, ~~2017,~~ 2023, driven primarily by net market ~~appreciation, positive net inflows~~depreciation and the negative impact of foreign exchange ~~movements.~~movement.

~~Net market appreciation~~Long-term net outflows of ~~$147.1~~$13 billion ~~was driven~~were comprised of net outflows of $38 billion and $4 billion from institutional and retail clients, respectively, partially offset by ~~higher U.S. and global equity markets.~~

~~Long-term~~ net inflows of ~~$75.8~~$29 billion ~~included $52.3 billion, $16.1 billion and $7.4 billion from~~ ~~iShares~~ ~~ETFs~~, ~~institutional clients and retail clients, respectively.~~into ETFs. Net flows in long-term products are described below.

•

~~iShares~~ ~~ETFs net inflows of $52.3 billion reflected strength in~~ ~~iShares~~ ~~Core, precision exposure and financial instrument ETFs. Equity net inflows of $33.1 billion were driven by both U.S. and international~~

•

~~equity market exposures. Fixed income net inflows of $17.5 billion reflected inflows into treasury, investment grade corporate and broad fixed income funds. Commodities~~ ~~iShares~~ ~~generated $1.5 billion of net inflows.~~

Institutional index net ~~inflows~~outflows of ~~$16~~$36 billion ~~included~~primarily reflected $49 billion of net outflows from lower-fee institutional index equity strategies, including $19 billion from a single international client, partially offset by fixed income net ~~inflows~~inflows.

•

Institutional active net outflows of ~~$36.9~~$1 billion ~~driven~~primarily reflected fixed income net outflows, impacted by ~~demand for liability-driven solutions,~~client-specific partial redemptions, including reinsurance activity, partially offset by ~~equity~~multi-asset net inflows, reflecting continued demand for target-date strategies.

•

Retail net outflows of ~~$19.6 billion.~~

$4 billion primarily reflected net outflows from liquid alternatives.

•

~~Retail~~ETFs net inflows of ~~$7.4~~$29 billion ~~reflected net inflows of $3.7 billion in the United States and $3.7 billion internationally. Fixed income net inflows of $4.6 billion~~ were ~~diversified across the Company’s top-performing active platform,~~ led by net inflows into ~~unconstrained, municipal~~core equity and emerging market debt strategies. Equity net inflows of $1.7 billion reflected inflows into index mutual funds. Multi-asset net inflows of $1 billion were largely due to inflows into the Multi-asset Income fund family,bond ETFs, partially offset by ~~outflows~~redemptions from ~~world allocation strategies.~~

precision ETFs.

Cash management AUM increased 6% to ~~$425.4~~$724 billion, driven by ~~$20.4~~net inflows into US government money market funds.

Net market depreciation of $258 billion ~~of net inflows.~~was primarily driven by global equity and fixed income market depreciation.

AUM ~~increased $44.4~~decreased $71 billion due to the impact of foreign exchange movements, primarily resulting from the ~~weakening~~strengthening of the ~~U.S.~~US dollar against the British pound, the euro and the ~~Euro.~~Japanese yen.

4347

Component Changes in AUM for the Nine Months Ended September 30, ~~2017~~2023

The following table presents the component changes in AUM by client type and product type for the nine months ended September 30, ~~2017.~~2023.


	December 31,		Net inflows					Market			FX			September 30,		Average
(in millions)	2022		(outflows)			Acquisition(1)		change			impact(2)			2023		AUM(3)
Retail:
Equity	$	370,612	$	3,180		$	—	$	22,167		$	71		$	396,030	$	401,244
Fixed income		299,114		4,081			—		(4,615	)		1,652			300,232		306,856
Multi-asset		125,168		(203	)		—		4,119			93			129,177		130,860
Alternatives		48,581		(6,571	)		—		981			10			43,001		46,398
Retail subtotal		843,475		487			—		22,652			1,826			868,440		885,358
ETFs:
Equity		2,081,742		23,013			—		132,850			(3,330	)		2,234,275		2,232,883
Fixed income		758,093		80,730			—		(18,815	)		(1,264	)		818,744		814,245
Multi-asset		8,875		(1,492	)		—		335			(2	)		7,716		7,902
Alternatives		60,900		(4,030	)		—		797			7			57,674		62,015
ETFs subtotal		2,909,610		98,221			—		115,167			(4,589	)		3,118,409		3,117,045
Institutional:
Active:
Equity		168,734		(14,005	)		—		14,122			(934	)		167,917		174,595
Fixed income		774,955		(1,297	)		—		798			(2,875	)		771,581		798,447
Multi-asset		544,469		86,908			—		17,181			(1,565	)		646,993		632,229
Alternatives		153,433		7,989			2,177		3,686			(514	)		166,771		160,966
Active subtotal		1,641,591		79,595			2,177		35,787			(5,888	)		1,753,262		1,766,237
Index:
Equity		1,814,266		(57,763	)		—		210,289			(23,723	)		1,943,069		1,968,370
Fixed income		704,661		27,392			—		(28,274	)		(18,131	)		685,648		712,834
Multi-asset		6,392		(1,376	)		—		122			(152	)		4,986		6,246
Alternatives		3,296		197			—		(123	)		(40	)		3,330		3,252
Index subtotal		2,528,615		(31,550	)		—		182,014			(42,046	)		2,637,033		2,690,702
Institutional subtotal		4,170,206		48,045			2,177		217,801			(47,934	)		4,390,295		4,456,939
Long-term		7,923,291		146,753			2,177		355,620			(50,697	)		8,377,144		8,459,342
Cash management		671,194		46,295			—		5,962			230			723,681		683,678
Total	$	8,594,485	$	193,048		$	2,177	$	361,582		$	(50,467	)	$	9,100,825	$	9,143,020

December 31,

Net
inflows

Market

FX

September 30,

Average

(in millions)

2016

(outflows)

Acquisition⁽¹⁾

change

impact⁽²⁾

2017

AUM⁽³⁾

Retail:

Equity

$
196,221

$
3,009

$
-

$
20,892

$
5,546

$
225,668

$
212,224

Fixed income

222,256

16,497

-

6,003

3,592

248,348

236,065

Multi-asset

107,997

(847
)

-

10,005

907

118,062

112,831

Alternatives

15,478

(158
)

-

725

398

16,443

16,522

Retail subtotal

541,952

18,501

-

37,625

10,443

608,521

577,642

iShares ETFs:

Equity

951,252

129,488

-

134,562

13,093

1,228,395

1,095,500

Fixed income

314,707

58,779

-

5,105

7,676

386,267

351,985

Multi-asset

3,149

61

-

272

9

3,491

3,122

Alternatives

18,771

2,213

-

1,138

162

22,284

20,470

iShares ETFs subtotal

1,287,879

190,541

-

141,077

20,940

1,640,437

1,471,077

Institutional:

Active:

Equity

120,699

(12,357
)

-

18,023

4,001

130,366

126,223

Fixed income

536,727

(2,967
)

-

17,705

10,562

562,027

551,117

Multi-asset

276,933

16,692

-

21,531

12,577

327,733

301,793

Alternatives

75,615

2,367

3,264

2,021

1,831

85,098

79,818

Active subtotal

1,009,974

3,735

3,264

59,280

28,971

1,105,224

1,058,951

Index:

Equity

1,389,004

(25,778
)

-

193,874

30,936

1,588,036

1,504,119

Fixed income

498,675

63,528

-

97

29,478

591,778

540,163

Multi-asset

6,928

(500
)

-

1,098

215

7,741

7,518

Alternatives

7,074

(367
)

-

194

245

7,146

7,538

Index subtotal

1,901,681

36,883

-

195,263

60,874

2,194,701

2,059,338

Institutional subtotal

2,911,655

40,618

3,264

254,543

89,845

3,299,925

3,118,289

Long-term

4,741,486

249,660

3,264

433,245

121,228

5,548,883

5,167,008

Cash management

403,584

14,854

-

850

6,135

425,423

406,729

Advisory⁽⁴⁾

2,782

(188
)

-

(189
)

181

2,586

2,691

Total

$
5,147,852

$
264,326

$
3,264

$
433,906

$
127,544

$
5,976,892

$
5,576,428

(1)

Amounts include AUM attributable to the Kreos 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 ten months.

⁽¹⁾ ~~Amount represents AUM acquired in the First Reserve Transaction.~~

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

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

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

4448

The following table presents the component changes in AUM by investment style and product type for the nine months ended September 30, ~~2017.~~2023.


	December 31,		Net inflows					Market			FX		September 30,		Average		December 31,		Net inflows					Market			FX			September 30,		Average
(in millions)	2016		(outflows)			Acquisition⁽¹⁾		change			impact⁽²⁾		2017		AUM⁽³⁾		2022		(outflows)			Acquisition(1)		change			impact(2)			2023		AUM(3)
Active:
Equity	$	275,033	$	(17,475	)	$	-	$	34,966		$	7,652	$	300,176	$	289,036	$	392,836	$	(21,284	)	$	—	$	23,194		$	(1,056	)	$	393,690	$	410,836
Fixed income		749,996		10,910			-		23,502			13,432		797,840		775,996		1,053,083		(1,852	)		—		(3,276	)		(1,250	)		1,046,705		1,081,613
Multi-asset		384,930		15,845			-		31,536			13,484		445,795		414,624		669,629		86,701			—		21,300			(1,472	)		776,158		763,080
Alternatives		91,093		2,209			3,264		2,746			2,229		101,541		96,339		202,012		1,417			2,177		4,667			(504	)		209,769		207,363
Active subtotal		1,501,052		11,489			3,264		92,750			36,797		1,645,352		1,575,995		2,317,560		64,982			2,177		45,885			(4,282	)		2,426,322		2,462,892
Index and iShares ETFs:
iShares ETFs:
Index and ETFs:
ETFs:
Equity		951,252		129,488			-		134,562			13,093		1,228,395		1,095,500		2,081,742		23,013			—		132,850			(3,330	)		2,234,275		2,232,883
Fixed income		314,707		58,779			-		5,105			7,676		386,267		351,985		758,093		80,730			—		(18,815	)		(1,264	)		818,744		814,245
Multi-asset		3,149		61			-		272			9		3,491		3,122		8,875		(1,492	)		—		335			(2	)		7,716		7,902
Alternatives		18,771		2,213			-		1,138			162		22,284		20,470		60,900		(4,030	)		—		797			7			57,674		62,015
iShares ETFs subtotal		1,287,879		190,541			-		141,077			20,940		1,640,437		1,471,077
Non-ETF Index
ETFs subtotal																		2,909,610		98,221			—		115,167			(4,589	)		3,118,409		3,117,045
Non-ETF Index:
Equity		1,430,891		(17,651	)		-		197,823			32,831		1,643,894		1,553,530		1,960,776		(47,304	)		—		223,384			(23,530	)		2,113,326		2,133,373
Fixed income		507,662		66,148			-		303			30,200		604,313		551,349		725,647		32,028			—		(28,815	)		(18,104	)		710,756		736,524
Multi-asset		6,928		(500	)		-		1,098			215		7,741		7,518		6,400		(1,372	)		—		122			(152	)		4,998		6,255
Alternatives		7,074		(367	)		-		194			245		7,146		7,539		3,298		198			—		(123	)		(40	)		3,333		3,253
Non-ETF Index subtotal		1,952,555		47,630			-		199,418			63,491		2,263,094		2,119,936		2,696,121		(16,450	)		—		194,568			(41,826	)		2,832,413		2,879,405
Index & iShares ETFs subtotal		3,240,434		238,171			-		340,495			84,431		3,903,531		3,591,013
Index & ETFs subtotal																		5,605,731		81,771			—		309,735			(46,415	)		5,950,822		5,996,450
Long-term		4,741,486		249,660			3,264		433,245			121,228		5,548,883		5,167,008		7,923,291		146,753			2,177		355,620			(50,697	)		8,377,144		8,459,342
Cash management		403,584		14,854			-		850			6,135		425,423		406,729		671,194		46,295			—		5,962			230			723,681		683,678
Advisory⁽⁴⁾		2,782		(188	)		-		(189	)		181		2,586		2,691
Total	$	5,147,852	$	264,326		$	3,264	$	433,906		$	127,544	$	5,976,892	$	5,576,428	$	8,594,485	$	193,048		$	2,177	$	361,582		$	(50,467	)	$	9,100,825	$	9,143,020

The following table presents the component changes in AUM by product type for the nine months ended September 30, ~~2017.~~2023.


	December 31,		Net inflows					Market			FX			September 30,		Average
(in millions)	2022		(outflows)			Acquisition(1)		change			impact(2)			2023		AUM(3)
Equity	$	4,435,354	$	(45,575	)	$	—	$	379,428		$	(27,916	)	$	4,741,291	$	4,777,092
Fixed income		2,536,823		110,906			—		(50,906	)		(20,618	)		2,576,205		2,632,382
Multi-asset		684,904		83,837			—		21,757			(1,626	)		788,872		777,237
Alternatives:
Illiquid alternatives		117,751		10,105			2,177		2,088			(184	)		131,937		125,590
Liquid alternatives		80,654		(8,082	)		—		2,744			(177	)		75,139		78,712
Currency and commodities(4)		67,805		(4,438	)		—		509			(176	)		63,700		68,329
Alternatives subtotal		266,210		(2,415	)		2,177		5,341			(537	)		270,776		272,631
Long-term		7,923,291		146,753			2,177		355,620			(50,697	)		8,377,144		8,459,342
Cash management		671,194		46,295			—		5,962			230			723,681		683,678
Total	$	8,594,485	$	193,048		$	2,177	$	361,582		$	(50,467	)	$	9,100,825	$	9,143,020

December 31,

Net
inflows

Market

FX

September 30,

Average

(in millions)

2016

(outflows)

Acquisition⁽¹⁾

change

impact⁽²⁾

2017

AUM⁽³⁾

Equity

$
2,657,176

$
94,362

$
-

$
367,351

$
53,576

$
3,172,465

$
2,938,066

Fixed income

1,572,365

135,837

-

28,910

51,308

1,788,420

1,679,330

Multi-asset

395,007

15,406

-

32,906

13,708

457,027

425,264

Alternatives:

Core

88,630

2,353

3,264

2,753

2,168

99,168

93,963

Currency and commodities⁽⁵⁾

28,308

1,702

-

1,325

468

31,803

30,385

Alternatives subtotal

116,938

4,055

3,264

4,078

2,636

130,971

124,348

Long-term

4,741,486

249,660

3,264

433,245

121,228

5,548,883

5,167,008

Cash management

403,584

14,854

-

850

6,135

425,423

406,729

Advisory⁽⁴⁾

2,782

(188
)

-

(189
)

181

2,586

2,691

Total

$
5,147,852

$
264,326

$
3,264

$
433,906

��
$
127,544

$
5,976,892

$
5,576,428

(1)

Amounts include AUM attributable to the Kreos Transaction.

⁽¹⁾	~~Amount represents AUM acquired in the First Reserve Transaction.~~

⁽²⁾

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

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

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

(3)

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

⁽⁵⁾	~~Amounts include commodity~~ ~~iShares~~ ~~ETFs.~~

(4)

Amounts include commodity ETFs.

AUM increased ~~$829.0~~$506 billion ~~or 16%,~~ to ~~$6.0~~$9.1 trillion at September 30, ~~2017~~2023 from ~~$5.1~~$8.6 trillion at December 31, ~~2016,~~ 2022, driven by net market appreciation ~~positive~~and net inflows, partially offset by the negative impact of foreign exchange ~~movements and AUM acquired in the First Reserve Transaction.~~movement.

~~Net market appreciation of $433.9 billion was primarily driven by higher U.S. and global equity markets.~~

Long-term net inflows of ~~$249.7~~$147 billion were comprised of net inflows of ~~$190.5 billion, $40.6~~$98 billion and ~~$18.5~~$48 billion from ~~iShares~~ ETFs, ~~institutional clients~~ and ~~retail~~institutional clients, respectively. Net flows in long-term products are described below.

•

~~iShares~~ETFs net inflows of ~~$190.5~~$98 billion were led by $81 billion and $23 billion of net inflows into fixed income and equity ETFs, respectively. ETFs net inflows also included $77 billion and $51 billion of net inflows into strategic and core equity, respectively, partially offset by $30 billion in redemptions from precision ETFs.

•

Institutional active net inflows of ~~$129.5~~$80 billion ~~driven~~were led by ~~both U.S. and international equity market exposures. Fixed income~~multi-asset net inflows and included the impact of ~~$58.8 billion reflected inflows into corporate investment grade, emerging markets debt and treasury bond funds.~~

significant outsourcing mandates.

•

Institutional index net ~~inflows~~outflows of ~~$36.9~~$32 billion ~~were driven~~primarily reflected net outflows from lower-fee institutional index equity strategies, including $19 billion from a single international client in the third quarter, partially offset by fixed income net ~~inflows of $63.5 billion, partially offset by equity net outflows of $25.8 billion.~~

inflows.

Retail net inflows of $18.5 billion reflected net inflows of $12.2 billion internationally and $6.3 billion in the United States. Retail net inflows were led by fixed income net inflows of $16.5 billion, reflecting inflows into emerging markets, municipal bond funds and unconstrained strategies.

•

Institutional active net inflows of $3.7 billion primarily reflected active multi-asset net inflows of $16.7 billion, partially offset by active equity net outflows of $12.4 billion. Multi-asset net inflows were driven by ongoing demand for the ~~LifePath~~^® ~~target-date series. Equity net outflows of $12.4 billion were primarily from U.S. equity and global strategies.~~

Cash management AUM increased 5% to ~~$425.4~~$724 billion, due to net inflows into US government money market funds.

Net market appreciation of $362 billion was primarily driven by ~~$14.9 billion of net inflows.~~global equity market appreciation.

AUM ~~increased $127.5~~decreased $50 billion due to the impact of foreign exchange movements, primarily ~~resulting from~~due to the ~~weakening~~strengthening of the ~~U.S.~~US dollar against the ~~British pound and the Euro.~~Japanese yen.

4650

Component Changes in AUM for the Twelve Months Ended September 30, ~~2017~~2023

The following table presents the component changes in AUM by client type and product type for the twelve months ended September 30, ~~2017.~~2023.


	September 30,		Net inflows					Market			FX		September 30,		Average
(in millions)	2022		(outflows)			Acquisition(1)		change			impact(2)		2023		AUM(3)
Retail:
Equity	$	342,647	$	(1,842	)	$	—	$	48,731		$	6,494	$	396,030	$	392,563
Fixed income		294,977		(2,458	)		—		1,958			5,755		300,232		304,392
Multi-asset		120,814		(2,924	)		—		10,217			1,070		129,177		129,414
Alternatives		48,060		(7,115	)		—		1,452			604		43,001		46,830
Retail subtotal		806,498		(14,339	)		—		62,358			13,923		868,440		873,199
ETFs:
Equity		1,861,499		67,578			—		296,097			9,101		2,234,275		2,182,103
Fixed income		694,062		127,829			—		(8,698	)		5,551		818,744		792,396
Multi-asset		7,273		(294	)		—		707			30		7,716		7,871
Alternatives		58,576		(7,241	)		—		6,236			103		57,674		61,199
ETFs subtotal		2,621,410		187,872			—		294,342			14,785		3,118,409		3,043,569
Institutional:
Active:
Equity		150,409		(10,044	)		—		24,024			3,528		167,917		172,013
Fixed income		685,194		63,873			—		16,830			5,684		771,581		779,631
Multi-asset		502,787		91,187			—		41,619			11,400		646,993		607,567
Alternatives		148,895		10,607			2,177		3,032			2,060		166,771		158,372
Active subtotal		1,487,285		155,623			2,177		85,505			22,672		1,753,262		1,717,583
Index:
Equity		1,665,757		(71,550	)		—		332,610			16,252		1,943,069		1,924,530
Fixed income		676,030		37,177			—		(46,732	)		19,173		685,648		707,225
Multi-asset		6,571		(2,019	)		—		419			15		4,986		6,336
Alternatives		3,703		(329	)		—		(56	)		12		3,330		3,343
Index subtotal		2,352,061		(36,721	)		—		286,241			35,452		2,637,033		2,641,434
Institutional subtotal		3,839,346		118,902			2,177		371,746			58,124		4,390,295		4,359,017
Long-term		7,267,254		292,435			2,177		728,446			86,832		8,377,144		8,275,785
Cash management		694,119		14,337			—		7,321			7,904		723,681		686,105
Total	$	7,961,373	$	306,772		$	2,177	$	735,767		$	94,736	$	9,100,825	$	8,961,890

September 30,

Net
inflows

Market

FX

September 30,

Average

(in millions)

2016

(outflows)

Acquisition⁽¹⁾

change

impact⁽²⁾

2017

AUM⁽³⁾

Retail:

Equity

$
196,131

$
4,751

$
-

$
22,417

$
2,369

$
225,668

$
207,806

Fixed income

230,842

14,666

-

1,204

1,636

248,348

234,080

Multi-asset

111,369

(2,548
)

-

8,891

350

118,062

111,957

Alternatives

16,436

(814
)

-

693

128

16,443

16,435

Retail subtotal

554,778

16,055

-

33,205

4,483

608,521

570,278

iShares ETFs:

Equity

891,010

180,138

-

150,283

6,964

1,228,395

1,049,435

Fixed income

329,462

58,453

-

(5,239
)

3,591

386,267

345,114

Multi-asset

2,506

755

-

223

7

3,491

2,999

Alternatives

23,188

495

-

(1,448
)

49

22,284

20,724

iShares ETFs subtotal

1,246,166

239,841

-

143,819

10,611

1,640,437

1,418,272

Institutional:

Active:

Equity

123,770

(15,161
)

-

20,675

1,082

130,366

124,915

Fixed income

560,799

(1,700
)

-

3,168

(240
)

562,027

550,908

Multi-asset

280,406

22,351

-

19,126

5,850

327,733

295,524

Alternatives

74,678

4,553

3,264

2,092

511

85,098

78,678

Active subtotal

1,039,653

10,043

3,264

45,061

7,203

1,105,224

1,050,025

Index:

Equity

1,355,128

(17,400
)

-

246,625

3,683

1,588,036

1,468,656

Fixed income

507,165

89,725

-

(15,805
)

10,693

591,778

528,790

Multi-asset

7,980

(296
)

-

371

(314
)

7,741

7,603

Alternatives

7,228

(543
)

-

408

53

7,146

7,440

Index subtotal

1,877,501

71,486

-

231,599

14,115

2,194,701

2,012,489

Institutional subtotal

2,917,154

81,529

3,264

276,660

21,318

3,299,925

3,062,514

Long-term

4,718,098

337,425

3,264

453,684

36,412

5,548,883

5,051,064

Cash management

388,982

32,526

-

1,074

2,841

425,423

404,180

Advisory⁽⁴⁾

10,341

(7,573
)

-

(137
)

(45
)

2,586

4,323

Total

$
5,117,421

$
362,378

$
3,264

$
454,621

$
39,208

$
5,976,892

$
5,459,567

(1)

Amounts include AUM attributable to the Kreos 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.

⁽¹⁾ ~~Amount represents AUM acquired in the First Reserve Transaction.~~

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

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

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

4751

The following table presents the component changes in AUM by investment style and product type for the twelve months ended September 30, ~~2017.~~2023.


	September 30,		Net inflows					Market			FX		September 30,		Average
(in millions)	2022		(outflows)			Acquisition(1)		change			impact(2)		2023		AUM(3)
Active:
Equity	$	359,587	$	(21,978	)	$	—	$	49,389		$	6,692	$	393,690	$	404,531
Fixed income		960,932		56,585			—		18,981			10,207		1,046,705		1,061,118
Multi-asset		623,594		88,259			—		51,835			12,470		776,158		736,973
Alternatives		196,953		3,491			2,177		4,484			2,664		209,769		205,200
Active subtotal		2,141,066		126,357			2,177		124,689			32,033		2,426,322		2,407,822
Index and ETFs:
ETFs:
Equity		1,861,499		67,578			—		296,097			9,101		2,234,275		2,182,103
Fixed income		694,062		127,829			—		(8,698	)		5,551		818,744		792,396
Multi-asset		7,273		(294	)		—		707			30		7,716		7,871
Alternatives		58,576		(7,241	)		—		6,236			103		57,674		61,199
ETFs subtotal		2,621,410		187,872			—		294,342			14,785		3,118,409		3,043,569
Non-ETF Index:
Equity		1,799,226		(61,458	)		—		355,976			19,582		2,113,326		2,084,575
Fixed income		695,269		42,007			—		(46,925	)		20,405		710,756		730,130
Multi-asset		6,578		(2,015	)		—		420			15		4,998		6,344
Alternatives		3,705		(328	)		—		(56	)		12		3,333		3,345
Non-ETF Index subtotal		2,504,778		(21,794	)		—		309,415			40,014		2,832,413		2,824,394
Index & ETFs subtotal		5,126,188		166,078			—		603,757			54,799		5,950,822		5,867,963
Long-term		7,267,254		292,435			2,177		728,446			86,832		8,377,144		8,275,785
Cash management		694,119		14,337			—		7,321			7,904		723,681		686,105
Total	$	7,961,373	$	306,772		$	2,177	$	735,767		$	94,736	$	9,100,825	$	8,961,890

September 30,

Net
inflows

Market

FX

September 30,

Average

(in millions)
2016

(outflows)

Acquisition⁽¹⁾

change

impact⁽²⁾

2017

AUM⁽³⁾

Active:

Equity
$
281,726

$
(22,023
)

$
-

$
38,028

$
2,445

$
300,176

$
285,819

Fixed income

782,858

9,427

-

4,516

1,039

797,840

774,433

Multi-asset

391,775

19,803

-

28,017

6,200

445,795

407,481

Alternatives

91,114

3,739

3,264

2,785

639

101,541

95,113

Active subtotal

1,547,473

10,946

3,264

73,346

10,323

1,645,352

1,562,846

Index and iShares ETFs:

iShares ETFs:

Equity

891,010

180,138

-

150,283

6,964

1,228,395

1,049,435

Fixed income

329,462

58,453

-

(5,239
)

3,591

386,267

345,114

Multi-asset

2,506

755

-

223

7

3,491

2,999

Alternatives

23,188

495

-

(1,448
)

49

22,284

20,724

iShares ETFs subtotal

1,246,166

239,841

-

143,819

10,611

1,640,437

1,418,272

Non-ETF Index:

Equity

1,393,303

(5,787
)

-

251,689

4,689

1,643,894

1,515,558

Fixed income

515,948

93,264

-

(15,949
)

11,050

604,313

539,345

Multi-asset

7,980

(296
)

-

371

(314
)

7,741

7,603

Alternatives

7,228

(543
)

-

408

53

7,146

7,440

Non-ETF Index subtotal

1,924,459

86,638

-

236,519

15,478

2,263,094

2,069,946

Index & iShares ETFs subtotal

3,170,625

326,479

-

380,338

26,089

3,903,531

3,488,218

Long-term

4,718,098

337,425

3,264

453,684

36,412

5,548,883

5,051,064

Cash management

388,982

32,526

-

1,074

2,841

425,423

404,180

Advisory⁽⁴⁾

10,341

(7,573
)

-

(137
)

(45
)

2,586

4,323

Total
$
5,117,421

$
362,378

$
3,264

$
454,621

$
39,208

$
5,976,892

$
5,459,567

The following table presents the component changes in AUM by product type for the twelve months ended September 30, ~~2017.~~2023.


	September 30,		Net inflows					Market			FX		September 30,		Average
(in millions)	2022		(outflows)			Acquisition(1)		change			impact(2)		2023		AUM(3)
Equity	$	4,020,312	$	(15,858	)	$	—	$	701,462		$	35,375	$	4,741,291	$	4,671,209
Fixed income		2,350,263		226,421			—		(36,642	)		36,163		2,576,205		2,583,644
Multi-asset		637,445		85,950			—		52,962			12,515		788,872		751,188
Alternatives:
Illiquid alternatives		111,729		14,513			2,177		1,463			2,055		131,937		122,897
Liquid alternatives		81,418		(9,937	)		—		3,021			637		75,139		79,092
Currency and commodities(4)		66,087		(8,654	)		—		6,180			87		63,700		67,755
Alternatives subtotal		259,234		(4,078	)		2,177		10,664			2,779		270,776		269,744
Long-term		7,267,254		292,435			2,177		728,446			86,832		8,377,144		8,275,785
Cash management		694,119		14,337			—		7,321			7,904		723,681		686,105
Total	$	7,961,373	$	306,772		$	2,177	$	735,767		$	94,736	$	9,100,825	$	8,961,890

September 30,

Net
inflows

Market

FX

September 30,

Average

(in millions)

2016

(outflows)

Acquisition⁽¹⁾

change

impact⁽²⁾

2017

AUM⁽³⁾

Equity

$
2,566,039

$
152,328

$
-

$
440,000

$
14,098

$
3,172,465

$
2,850,812

Fixed income

1,628,268

161,144

-

(16,672
)

15,680

1,788,420

1,658,892

Multi-asset

402,261

20,262

-

28,611

5,893

457,027

418,083

Alternatives:

Core

88,731

3,569

3,264

2,773

831

99,168

92,758

Currency and commodities⁽⁵⁾

32,799

122

-

(1,028
)

(90
)

31,803

30,519

Alternatives subtotal

121,530

3,691

3,264

1,745

741

130,971

123,277

Long-term

4,718,098

337,425

3,264

453,684

36,412

5,548,883

5,051,064

Cash management

388,982

32,526

-

1,074

2,841

425,423

404,180

Advisory⁽⁴⁾

10,341

(7,573
)

-

(137
)

(45
)

2,586

4,323

Total

$
5,117,421

$
362,378

$
3,264

$
454,621

$
39,208

$
5,976,892

$
5,459,567

⁽¹⁾ ~~Amount represents~~

Amounts include AUM ~~acquired in~~attributable to the ~~First Reserve~~Kreos Transaction.

(2)

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

(3)

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

⁽⁵⁾	~~Amounts include commodity~~ ~~iShares~~ ~~ETFs.~~

(4)

Amounts include commodity ETFs.

AUM increased ~~$859.5 billion, or 17%,~~$1.1 trillion to ~~$6.0~~$9.1 trillion at September 30, ~~2017~~2023 from ~~$5.1~~$8.0 trillion at September 30, ~~2016,~~ 2022, driven by net market appreciation, ~~positive~~ net inflows, and the positive impact of foreign exchange ~~movements and AUM acquired in the First Reserve Transaction.~~movements.

~~Net market appreciation of $454.6 billion was primarily driven by higher U.S. and global equity markets.~~

Long-term net inflows of ~~$337.4~~$292 billion were comprised of net inflows of ~~$239.8 billion, $81.5~~$188 billion and ~~$16.1~~$119 billion from ~~iShares~~ ETFs, and institutional clients, ~~and~~respectively, partially offset by retail ~~clients, respectively.~~net outflows of $14 billion. Net flows in long-term products are described below.

•

~~iShares~~•

ETFs ~~net inflows of $239.8 billion were led by equity net inflows of $180.1 billion, reflecting demand for~~ ~~iShares~~ ~~Core and broad market exposures. Fixed income net inflows of $58.5 billion reflected inflows into corporate investment grade, emerging markets debt and treasury bond funds.~~

~~Institutional index~~ net inflows of ~~$71.5~~$188 billion were driven by ~~fixed income~~ net inflows ~~of $89.7 billion, partially offset by~~into bond and core equity ~~net outflows of $17.4 billion.~~

ETFs.

•

Institutional active net inflows of $10.0 billion reflected multi-asset net inflows of $22.4 billion and alternatives net inflows of $4.6 billion, partially offset by equity net outflows of $15.2 billion. Multi-asset net inflows were driven by ongoing demand for the ~~LifePath~~ ~~target-date series. Alternatives net inflows of $4.6~~$156 billion were led by multi-asset and fixed income net inflows ~~into infrastructure offerings. Equity~~and included the impact of several significant outsourcing mandates.

•

Institutional index net outflows of ~~$15.2~~$37 billion primarily reflected $72 billion of equity net outflows, partially offset by $37 billion of fixed income net inflows.

•

Retail net outflows of $14 billion were primarily driven by net outflows from ~~U.S. equity and global strategies.~~

Retail net inflows of $16.1 billion reflected net inflows of $11.5 billion internationally and $4.6 billion in the United States. Retail net inflows primarily reflected net inflows of $14.7 billion from fixed income products, led by core, unconstrained, emerging market and municipal bond strategies, and $4.8 billion from equity products.

liquid alternatives.

Cash management AUM increased 9% to ~~$425.4~~$724 billion due to net inflows into US government money market funds.

Net market appreciation of $736 billion was driven by ~~$32.5 billion of net inflows.~~global equity market appreciation.

AUM increased ~~$39.2~~$95 billion due to the impact of foreign exchange movements, primarily due to the weakening of the ~~U.S.~~US dollar largely against the ~~Euro~~British pound and ~~British pound,~~euro, partially offset by the strengthening of the ~~U.S.~~US dollar against the Japanese yen.

4953

DISCUSSION OF FINANCIAL RESULTS

The Company’s results of operations for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 are discussed below. For a further description of the Company’s revenue and expense, see the ~~Company’s~~Company's Annual Report on Form 10-K for the year ended December 31, ~~2016 (“2016~~2022, which was filed with the Securities and Exchange Commission on February 24, 2023 ("2022 Form ~~10-K”~~10-K.").

Revenue

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions)

2017

2016

2017

2016

Investment advisory, administration fees and
securities lending revenue:

Equity:

Active

$
421

$
409

$
1,235

$
1,201

iShares ETFs

836

691

2,333

1,970

Non-ETF index

170

170

509

508

Equity subtotal

1,427

1,270

4,077

3,679

Fixed income:

Active

442

427

1,281

1,237

iShares ETFs

210

188

595

512

Non-ETF index

88

78

257

217

Fixed income subtotal

740

693

2,133

1,966

Multi-asset

289

285

843

860

Alternatives:

Core

169

156

469

488

Currency and commodities

23

24

67

61

Alternatives subtotal

192

180

536

549

Long-term

2,648

2,428

7,589

7,054

Cash management

144

118

408

340

Total base fees

2,792

2,546

7,997

7,394

Investment advisory performance fees:

Equity

30

14

57

67

Fixed income

9

2

20

9

Multi-asset

2

1

14

6

Alternatives

150

41

218

84

Total performance fees

191

58

309

166

Technology and risk management revenue⁽¹⁾

175

152

497

439

Distribution fees

5

10

17

32

Advisory and other revenue

Advisory⁽¹⁾

25

22

74

78

Other

45

49

128

156

Advisory and other revenue

70

71

202

234

Total revenue

$
3,233

$
2,837

$
9,022

$
8,265

⁽¹⁾

~~Beginning with the first quarter of 2017,~~ ~~Aladdin~~ ~~revenue previously reported within “BlackRock Solutions~~^® ~~and advisory” has been presented within “Technology and risk management revenue” on the condensed consolidated statement of income. The remaining previously reported “BlackRock Solutions~~ ~~and advisory” revenue is currently reported as part of “Advisory and other revenue.” Under the historical presentation,~~ ~~BlackRock Solutions~~ ~~and advisory revenue would have totaled $200 million and $571 million for the three and nine months ended September 30, 2017, respectively. The prior period amounts reported for~~ ~~BlackRock Solutions~~ ~~and advisory of $174 million and $517 million for the three and nine months ended September 30, 2016, respectively, have been reclassified to conform to the current presentation.~~

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

Three Months Ended September 30,

Nine Months Ended September 30,

Mix of Base Fees

Mix of Average AUM
by Asset Class⁽¹⁾

Mix of Base Fees

Mix of Average AUM
by Asset Class⁽²⁾

2017

2016

2017

2016

2017

2016

2017

2016

Equity:

Active

15
%

16
%

5
%

6
%

15
%

16
%

5
%

6
%
iShares ETFs

30
%

27
%

20
%

17
%

29
%

27
%

20
%

17
%
Non-ETF index

6
%

7
%

28
%

27
%

6
%

7
%

28
%

27
%
Equity subtotal

51
%

50
%

53
%

50
%

50
%

50
%

53
%

50
%
Fixed income:

Active

16
%

17
%

13
%

15
%

17
%

16
%

13
%

16
%
iShares ETFs

8
%

7
%

6
%

6
%

7
%

7
%

6
%

6
%
Non-ETF index

3
%

3
%

10
%

10
%

3
%

3
%

10
%

10
%
Fixed income subtotal

27
%

27
%

29
%

31
%

27
%

26
%

29
%

32
%
Multi-asset

10
%

11
%

8
%

8
%

11
%

12
%

8
%

8
%
Alternatives:

Core

6
%

6
%

2
%

2
%

6
%

7
%

2
%

2
%
Currency and commodities

1
%

1
%

1
%

1
%

1
%

1
%

1
%

1
%
Alternatives subtotal

7
%

7
%

3
%

3
%

7
%

8
%

3
%

3
%
Long-term

95
%

95
%

93
%

92
%

95
%

96
%

93
%

93
%
Cash management

5
%

5
%

7
%

8
%

5
%

4
%

7
%

7
%
Total excluding Advisory AUM

100
%

100
%

100
%

100
%

100
%

100
%

100
%

100
%

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

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

~~Three Months Ended September 30, 2017 Compared with Three Months Ended September 30, 2016~~

~~Revenue increased $396 million, or 14%, from the third quarter of 2016, driven by growth in base fees, performance fees, and technology and risk management revenue.~~

~~Investment advisory, administration fees and securities lending revenue~~ ~~of $2,792 million increased $246 million from $2,546 million in the third quarter of 2016, reflecting the impact of higher markets and organic growth on average AUM, partially offset by~~ ~~previously announced pricing changes to select investment products.~~ ~~Securities lending revenue was $150 million in the~~ ~~current quarter compared with $142 million in the third quarter of 2016.~~

~~Investment advisory performance fees~~ of $191 million increased $133 million from the third quarter of 2016, primarily reflecting improved performance in a broad range of hedge and long-only funds, including strong performance from a single hedge fund with an annual performance measurement period that ends in the third quarter.

~~Technology and risk management revenue~~ ~~of $175 million increased $23 million from $152 million in the third quarter of 2016, reflecting ongoing demand for~~ ~~Aladdin~~ ~~and other technology offerings.~~

~~Nine Months Ended September 30, 2017 Compared with Nine Months Ended September 30, 2016~~

Revenue increased $757 million, or 9%, from the nine months ended September 30, 2016, driven by growth in base fees, performance fees, and technology and risk management revenue, partially offset by lower advisory and other revenue.

~~Investment advisory, administration fees and securities lending revenue~~ of $7,997 million increased $603 million from $7,394 million for the nine months ended September 30, 2016, reflecting the impact of higher markets and organic growth on average AUM, and the effect of AUM acquired in the BofA^® ~~Global Capital Management transaction, partially offset by previously announced pricing changes to select investment products. Securities lending revenue was $447 million for the nine months ended September 30, 2017 compared with $441 million for the nine months ended September 30, 2016.~~

~~Investment advisory performance fees~~ of $309 million increased $143 million from the nine months ended September 30, 2016, primarily reflecting improved performance in a broad range of hedge and long-only funds, including strong performance from a single hedge fund with an annual performance measurement period that ends in the third quarter.

~~Technology and risk management revenue~~ ~~of $497 million increased $58 million from $439 million for the nine months ended September 30, 2016 reflecting ongoing demand for~~ ~~Aladdin~~ ~~and other technology offerings.~~

~~Advisory and other revenue~~ of $202 million decreased $32 million from $234 million for the nine months ended September 30, 2016, reflecting lower fees for distributing certain exchange-traded products, lower earnings from a strategic minority investment and lower commissions for sales of certain funds.

~~Expense~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions)

2017

2016

2017

2016

Expense, GAAP:

Employee compensation and benefits

$
1,088

$
969

$
3,108

$
2,893

Distribution and servicing costs

123

114

361

320

Amortization of deferred sales commissions

4

8

13

27

Direct fund expense

234

200

666

583

General and administration:

Marketing and promotional

76

72

231

232

Occupancy and office related

68

65

202

208

Portfolio services

68

57

195

164

Technology

51

41

145

129

Professional services

37

27

92

84

Communications

8

9

24

29

Other general and administration

55

41

125

100

Total general and administration expense

363

312

1,014

946

Restructuring charge

—

—

—

76

Amortization of intangible assets

27

25

77

75

Total expense, GAAP

$
1,839

$
1,628

$
5,239

$
4,920

Less non-GAAP expense adjustments:

Employee compensation and benefits:

PNC LTIP funding obligation

4

7

12

21

Restructuring charge

—

—

—

76

Total non-GAAP expense adjustments

4

7

12

97

Expense, as adjusted:

Employee compensation and benefits

$
1,084

$
962

$
3,096

$
2,872

Distribution and servicing costs

123

114

361

320

Amortization of deferred sales commissions

4

8

13

27

Direct fund expense

234

200

666

583

General and administration

363

312

1,014

946

Amortization of intangible assets

27

25

77

75

Total expense, as adjusted

$
1,835

$
1,621

$
5,227

$
4,823

~~Three Months Ended September 30, 2017 Compared with Three Months Ended September 30, 2016~~

~~GAAP~~. Expense increased $211 million from the third quarter of 2016, driven primarily by higher employee compensation and benefits expense, higher general and administration expense, and higher direct fund expense.

~~Employee compensation and benefits expense~~ increased $119 million, or 12%, from the third quarter of 2016, primarily reflecting higher incentive compensation, driven primarily by higher performance fees and operating income, and higher headcount. Employees at September 30, 2017 totaled approximately 13,700 compared with approximately 13,000 at September 30, 2016.

~~Direct fund expense~~ ~~increased $34 million from the third quarter of 2016, reflecting higher average AUM.~~

~~General and administration expense~~ increased $51 million from the third quarter of 2016, reflecting higher portfolio services, technology, and professional services expense, as well as increased foreign exchange remeasurement expense and contingent consideration fair value adjustments.

~~As Adjusted~~. Expense, as adjusted, increased $214 million, or 13%, to $1,835 million from $1,621 million in the third quarter of 2016. The increase in total expense, as adjusted, is driven primarily by higher employee compensation and benefits expense, higher general and administration expense, and higher direct fund expense.

~~Nine Months Ended September 30, 2017 Compared with Nine Months Ended September 30, 2016~~

~~GAAP~~. Expense increased $319 million from the nine months ended September 30, 2016, driven primarily by higher employee compensation and benefits expense, higher direct fund expense, higher general and administration expense, and approximately $22 million of expense associated with the strategic repositioning of the active equity platform, partially offset by a restructuring charge recorded in the first quarter of 2016.

~~Employee compensation and benefits expense~~ increased $215 million, or 7%, from the nine months ended September 30, 2016, reflecting higher incentive compensation, higher headcount, and approximately $20 million of severance and accelerated compensation expense associated with the repositioning of the active equity platform.

~~Distribution and servicing costs~~ ~~increased $41 million, or 13%, from the nine months ended September 30, 2016, reflecting higher average AUM and the effect of AUM acquired in the BofA Global Capital Management transaction.~~

~~Direct fund expense~~ ~~increased $83 million from the nine months ended September 30, 2016, reflecting higher average AUM.~~

~~General and administration expense~~ ~~increased $68 million from the nine months ended September 30, 2016, reflecting higher portfolio services and technology expense, and the impact of foreign exchange remeasurement expense.~~

~~As Adjusted~~. Expense, as adjusted, increased $404 million, or 8%, to $5,227 million from $4,823 million in the nine months ended September 30, 2016. The increase in total expense, as adjusted, is driven primarily by higher employee compensation and benefit expense, higher direct fund expense, higher general and administration expense and the $22 million expense associated with the repositioning of the active equity platform. The restructuring charge recorded in the first quarter of 2016 has been excluded from the as adjusted results.

~~Nonoperating Results~~

~~The summary and reconciliation of U.S. GAAP nonoperating income (expense) to nonoperating income (expense), as adjusted~~ for the three and nine months ended September 30, ~~2017~~2023 and ~~2016 was~~2022 and includes the product type mix of base fees and securities lending revenue and performance fees.


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in millions)	2023		2022			2023		2022
Revenue
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	510	$	503		$	1,516	$	1,669
ETFs		1,136		1,063			3,316		3,324
Non-ETF index		186		179			560		552
Equity subtotal		1,832		1,745			5,392		5,545
Fixed income:
Active		479		478			1,429		1,515
ETFs		315		276			919		839
Non-ETF index		93		91			268		311
Fixed income subtotal		887		845			2,616		2,665
Multi-asset		308		316			904		1,006
Alternatives:
Illiquid alternatives		231		184			638		547
Liquid alternatives		143		155			434		483
Currency and commodities(1)		46		51			141		169
Alternatives subtotal		420		390			1,213		1,199
Long-term		3,447		3,296			10,125		10,415
Cash management		234		235			669		637
Total investment advisory, administration fees and securities lending revenue		3,681		3,531			10,794		11,052
Investment advisory performance fees:
Equity		17		(2	)		38		13
Fixed income		1		(3	)		2		19
Multi-asset		5		2			23		14
Alternatives:
Illiquid alternatives		24		79			124		181
Liquid alternatives		23		6			56		59
Alternatives subtotal		47		85			180		240
Total investment advisory performance fees		70		82			243		286
Technology services revenue		407		338			1,106		1,011
Distribution fees		321		325			959		1,067
Advisory and other revenue:
Advisory		21		8			66		39
Other		22		27			60		81
Total advisory and other revenue		43		35			126		120
Total revenue	$	4,522	$	4,311		$	13,228	$	13,536

(1)

Amounts include commodity ETFs.

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


	Three Months Ended September 30,												Nine Months Ended September 30,
	Percentage of Base Fees and Securities Lending Revenue						Percentage of Average AUM by Product Type(1)						Percentage of Base Fees and Securities Lending Revenue						Percentage of Average AUM by Product Type(2)
	2023			2022			2023			2022			2023			2022			2023			2022
Equity:
Active		14	%		14	%		4	%		5	%		14	%		14	%		4	%		5	%
ETFs		32	%		30	%		24	%		25	%		31	%		30	%		25	%		24	%
Non-ETF index		5	%		5	%		24	%		23	%		5	%		5	%		23	%		24	%
Equity subtotal		51	%		49	%		52	%		53	%		50	%		49	%		52	%		53	%
Fixed income:
Active		12	%		14	%		11	%		11	%		13	%		14	%		12	%		11	%
ETFs		9	%		8	%		9	%		8	%		9	%		7	%		9	%		8	%
Non-ETF index		3	%		3	%		8	%		9	%		2	%		3	%		8	%		9	%
Fixed income subtotal		24	%		25	%		28	%		28	%		24	%		24	%		29	%		28	%
Multi-asset		8	%		9	%		9	%		8	%		8	%		9	%		9	%		8	%
Alternatives:
Illiquid alternatives		6	%		5	%		1	%		1	%		6	%		5	%		1	%		1	%
Liquid alternatives		4	%		4	%		1	%		1	%		4	%		4	%		1	%		1	%
Currency and commodities(3)		1	%		1	%		1	%		1	%		2	%		3	%		1	%		1	%
Alternatives subtotal		11	%		10	%		3	%		3	%		12	%		12	%		3	%		3	%
Long-term		94	%		93	%		92	%		92	%		94	%		94	%		93	%		92	%
Cash management		6	%		7	%		8	%		8	%		6	%		6	%		7	%		8	%
Total AUM		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%

(1)

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

(2)

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

(3)

Amounts include commodity ETFs.

Three Months Ended September 30, 2023 Compared with Three Months Ended September 30, 2022

Revenue increased $211 million, or 5%, from the three months ended September 30, 2022, primarily driven by higher base fees due to the impact of organic growth and market movements over the past twelve months on average AUM and higher technology service revenue.

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions)

2017

2016

2017

2016

Nonoperating income (expense), GAAP basis⁽¹⁾

$
10

$
1

$
4

$
(72
)
Less: Net income (loss) attributable to NCI

12

2

31

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

$
(2
)

$
(1
)

$
(27
)

$
(70
)

Investment advisory, administration fees and securities lending revenue of $3.7 billion increased $150 million from $3.5 billion for the three months ended September 30, 2022, primarily driven by organic base fee growth and the impact of market and foreign exchange movements over the past twelve months on average AUM. Securities lending revenue of $167 million increased from $162 million for the three months ended September 30, 2022.

⁽¹⁾

Amounts include a gain of $29 million and $19 million for the three months ended September 30, 2017 and 2016, respectively, attributable to consolidated variable interest entities (“VIEs”). Amounts include a gain of $95 million and $34 million for the nine months ended September 30, 2017 and 2016, respectively, attributable to consolidated VIEs.

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

⁽³⁾

~~Management believes nonoperating income (expense), as adjusted, is an effective measure for reviewing BlackRock’s nonoperating contribution to results. See~~ ~~Non-GAAP Financial Measures~~ ~~for further information on non-GAAP financial measures for the three and nine months ended September 30, 2017 and 2016.~~

Investment advisory performance fees of $70 million decreased $12 million from $82 million for the three months ended September 30, 2022, primarily reflecting lower revenue from illiquid alternative products, partially offset by higher revenue from long-only and liquid alternative products.

Technology services revenue of $407 million increased $69 million from $338 million for the three months ended September 30, 2022, driven by sustained demand for our technology offerings. Current quarter technology services revenue also benefited from the impact of several large client renewals of eFront on-premise licenses, for which a majority of the revenue is recognized at the time of renewal.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Revenue decreased $308 million, or 2%, from the nine months ended September 30, 2022, primarily driven by the impact of lower markets on average AUM and lower performance fees, partially offset by higher technology services revenue.

Investment advisory, administration fees and securities lending revenue of $10.8 billion decreased $258 million from $11.1 billion for the nine months ended September 30, 2022, primarily driven by the negative impact of market beta on average AUM, partially offset by higher securities lending revenue. Securities lending revenue of $518 million increased from $460 million for the nine months ended September 30, 2022, primarily reflecting higher spreads.

Investment advisory performance fees of $243 million decreased $43 million from $286 million for the nine months ended September 30, 2022, primarily reflecting lower revenue from illiquid alternative and long-only fixed income products, partially offset by higher revenue from long-only equity products.

Technology services revenue of $1.1 billion increased $95 million from $1.0 billion for the nine months ended September 30, 2022, reflecting sustained demand for our technology offerings but also the impact of fixed income market movements over the last twelve months on positions on the Aladdin platform. Current period technology services revenue also benefited from the impact of several large client renewals of eFront on-premise licenses, for which a majority of the revenue is recognized at the time of renewal.

Expense

The ~~components of nonoperating income (expense), as adjusted,~~following table presents expense for the three and nine months ended September 30, ~~2017~~2023 and ~~2016 were~~2022.


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in millions)	2023			2022		2023			2022
Expense
Employee compensation and benefits	$	1,420		$	1,339	$	4,276		$	4,251
Distribution and servicing costs		526			536		1,549			1,682
Direct fund expense		354			318		1,013			951
General and administration expense:
Marketing and promotional		82			95		244			231
Occupancy and office related		103			99		313			304
Portfolio services		65			73		202			209
Sub-advisory		20			21		59			63
Technology		145			156		421			449
Professional services		51			47		128			129
Communications		12			11		36			32
Foreign exchange remeasurement		(3	)		3		(2	)		2
Contingent consideration fair value adjustments		—			1		1			2
Other general and administration		71			48		185			159
Total general and administration expense		546			554		1,587			1,580
Amortization of intangible assets		39			38		113			114
Total expense	$	2,885		$	2,785	$	8,538		$	8,578

Three Months Ended September 30, 2023 Compared with Three Months Ended September 30, 2022

Expense increased $100 million, or 4%, from the three months ended September 30, 2022, reflecting higher employee compensation and benefits expense and direct fund expense.

Employee compensation and benefits expense increased $81 million from the three months ended September 30, 2022, reflecting higher base compensation, driven primarily by base salary increases, and higher incentive compensation primarily as ~~follows:~~a result of higher operating income.

Direct fund expense increased $36 million from the three months ended September 30, 2022, primarily reflecting higher average index AUM.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Expense decreased $40 million from the nine months ended September 30, 2022, reflecting lower distribution and servicing costs due to lower average AUM, partially offset by higher direct fund expense and employee compensation and benefits expense.

Employee compensation and benefits expense increased $25 million from the nine months ended September 30, 2022, primarily resulting from higher base compensation, driven primarily by base salary increases, partially offset by lower incentive compensation, largely driven by lower operating income.

Direct fund expense increased $62 million from the nine months ended September 30, 2022, primarily reflecting higher average index AUM.

Nonoperating Results

The summary of nonoperating income (expense), less net income (loss) attributable to NCI for the three and nine months ended September 30, 2023 and 2022 was as follows:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in millions)	2023			2022			2023		2022
Nonoperating income (expense), GAAP basis	$	171		$	165		$	538	$	(320	)
Less: Net income (loss) attributable to NCI		(9	)		(45	)		60		(232	)
Nonoperating income (expense), net of NCI		180			210			478		(88	)
Less: Hedge gain (loss) on deferred cash compensation plans(1)		(4	)		—			29		—
Nonoperating income (expense), net of NCI, as adjusted(2)	$	184		$	210		$	449	$	(88	)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in millions)	2023			2022			2023			2022
Net gain (loss) on investments, net of NCI
Private equity	$	91		$	20		$	281		$	22
Real assets		3			9			11			23
Other alternatives(3)		22			1			32			—
Other investments(4)		46			(58	)		51			(245	)
Hedge gain (loss) on deferred cash compensation plans(1)		(4	)		—			29			—
Subtotal		158			(28	)		404			(200	)
Other gains (losses)(5)		(35	)		247			(30	)		190
Total net gain (loss) on investments, net of NCI		123			219			374			(10	)
Interest and dividend income		139			41			314			80
Interest expense		(82	)		(50	)		(210	)		(158	)
Net interest income (expense)		57			(9	)		104			(78	)
Nonoperating income (expense), net of NCI		180			210			478			(88	)
Less: Hedge gain (loss) on deferred cash compensation plans(1)		(4	)		—			29			—
Nonoperating income (expense), net of NCI, as adjusted(2)	$	184		$	210		$	449		$	(88	)

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions)

2017

2016

2017

2016

Net gain (loss) on investments⁽¹⁾⁽²⁾

Private equity

$
7

$
2

$
21

$
11

Real assets

1

2

2

5

Other alternatives⁽³⁾

11

9

34

13

Other investments⁽⁴⁾

10

16

35

22

Subtotal

29

29

92

51

Other gains

—

—

5

—

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

29

29

97

51

Interest and dividend income

15

22

35

33

Interest expense

(46
)

(52
)

(159
)

(154
)
Net interest expense

(31
)

(30
)

(124
)

(121
)
Nonoperating income (expense), as adjusted⁽¹⁾⁽²⁾

$
(2
)

$
(1
)

$
(27
)

$
(70
)
(1)

Amount relates to the gain (loss) from economically hedging BlackRock's deferred cash compensation plans.

(2)

Management believes nonoperating income (expense), net of NCI, as adjusted, 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 BlackRock's seed investment portfolio, net of impact of certain hedges.

(5)

The amounts for the three and nine months ended September 30, 2022, primarily include nonoperating noncash pre-tax gains in connection with strategic minority investment in iCapital Network, Inc. of approximately $267 million. Additional amounts include noncash pre-tax gains (losses) related to the revaluation of certain other minority investments

Income Tax Expense


	GAAP												As Adjusted
	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,						September 30,
(in millions)	2023			2022			2023			2022			2023			2022			2023			2022
Operating income(1)	$	1,637		$	1,526		$	4,690		$	4,958		$	1,691		$	1,585		$	4,877		$	5,134
Total nonoperating income (expense)(1)(2)	$	180		$	210		$	478		$	(88	)	$	184		$	210		$	449		$	(88	)
Income before income taxes(2)	$	1,817		$	1,736		$	5,168		$	4,870		$	1,875		$	1,795		$	5,326		$	5,046
Income tax expense	$	213		$	330		$	1,041		$	951		$	233		$	344		$	1,085		$	1,011
Effective tax rate		11.7	%		19.0	%		20.1	%		19.5	%		12.4	%		19.2	%		20.4	%		20.0	%

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

(1)

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

⁽²⁾

(2)

Net of net income (loss) attributable to NCI.

⁽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.~~

2023. Income tax expense for the three months ended September 30, 2023 included approximately $223 million of discrete tax benefits related to the resolution of certain outstanding tax matters.

~~Interest~~Income tax expense for the nine months ended September 30, ~~2017~~2023 included ~~a “make-whole” redemption premium~~approximately $185 million of ~~$14 million~~discrete tax net benefits related to ~~refinancing~~ the ~~$700~~resolution of certain outstanding tax matters and $41 million ~~6.25% notes,~~of discrete tax benefits related to stock-based compensation awards that vested in 2023.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law, which ~~were repaid prior~~became effective January 1, 2023 and introduced new provisions including a corporate book minimum tax and an excise tax on net stock repurchases. The provisions within the IRA did not have a material impact on BlackRock's condensed consolidated financial statements.

2022.Income tax expense for the three months ended September 30, 2022 included approximately $93 million of discrete tax benefits related to ~~their September 2017 maturity.~~

the resolution of certain outstanding tax matters. Income ~~Tax Expense~~

GAAP

As Adjusted

Three Months Ended

Nine Months Ended

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,

(in millions)

2017

2016

2017

2016

2017

2016

2017

2016

Operating income⁽¹⁾

$
1,394

$
1,209

$
3,783

$
3,345

$
1,398

$
1,216

$
3,795

$
3,442

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

(2
)

(1
)

(27
)

(70
)

(2
)

(1
)

(27
)

(70
)
Income before income taxes⁽²⁾

$
1,392

$
1,208

$
3,756

$
3,275

$
1,396

$
1,215

$
3,768

$
3,372

Income tax expense

$
445

$
333

$
1,090

$
954

$
427

$
361

$
1,074

$
1,010

Effective tax rate

32.0
%

27.6
%

29.0
%

29.1
%

30.6
%

29.7
%

28.5
%

30.0
%

⁽¹⁾	~~See~~ ~~Non-GAAP Financial Measures~~ ~~for further information on and reconciliation of as adjusted items.~~

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

~~2017.~~ ~~The three and~~tax expense for the nine months ended September 30, ~~2017~~2022 included $139 million of discrete tax benefits related to the resolution of certain tax matters and $87 million of discrete tax benefits related to stock-based compensation awards that vested in 2022. In addition, GAAP income tax expense ~~(GAAP) reflected~~for the nine months ended September 30, 2022 included $18 million of net noncash ~~expense of $19 million~~tax benefit related to the revaluation of certain deferred income tax ~~liabilities as a result of domestic state and local tax changes.~~liabilities.

The nine months ended September 30, 2017 income tax expense (GAAP) also included an $81 million discrete tax benefit, reflecting the adoption of new accounting guidance related to stock-based compensation awards that vested in the first quarter of 2017. See Note 2, ~~Significant Accounting Policies, for further information.~~

5459

The as adjusted effective tax rate of 30.6% and 28.5% for the three and nine months ended September 30, 2017, respectively, excluded the net noncash expense of $19 million mentioned above as it will not have a cash flow impact and to ensure comparability among periods presented.

STATEMENT OF FINANCIAL CONDITION OVERVIEW

~~2016.~~ ~~The three and nine months ended September 30, 2016 income tax expense (GAAP) reflected:~~

a $26 million net noncash tax benefit, primarily related to the revaluation of certain deferred income tax liabilities as a result of legislation enacted in the United Kingdom, and domestic state and local tax changes, and

~~nonrecurring tax benefits, which totaled $16 million and $35 million for the three and nine months ended September 30, 2016, respectively.~~

The as adjusted effective tax rate of 29.7% and 30.0% for the three and nine months ended September 30, 2016, respectively, excluded the net noncash benefit of $26 million mentioned above, as it will not have a cash flow impact and to ensure comparability among periods presented.

~~BALANCE SHEET OVERVIEW~~

As Adjusted ~~Balance Sheet~~Statement of Financial Condition

The following table presents a reconciliation of the condensed consolidated statement of financial condition presented on a GAAP basis to the condensed 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 ~~funds, including consolidated VIEs.~~products ("CIPs").

The Company presents the as adjusted ~~balance sheet~~statement of financial condition 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, a~~statement of financial condition, which contains non-GAAP financial ~~measure,~~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 condensed 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 condensed 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 ~~Funds~~Products

The Company consolidates certain sponsored investment ~~funds~~products accounted for as variable interest entities (“VIEs”) and voting rights entities (“VREs”) ~~and VIEs, (collectively, “Consolidated Sponsored Investment Funds”)~~. See Note 2, Significant Accounting Policies, in the notes to the consolidated financial statements contained in the ~~2016~~2022 Form 10-K for more information on the Company’s consolidation policy.

5660

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


	September 30, 2023
(in millions)	GAAP Basis		Separate Account Assets/ Collateral(1)		CIPs(2)		As Adjusted
Assets
Cash and cash equivalents	$	7,316	$	—	$	322	$	6,994
Accounts receivable		3,886		—		—		3,886
Investments		9,835		—		2,101		7,734
Separate account assets and collateral held under securities lending agreements		56,346		56,346		—		—
Operating lease right-of-use assets		1,429		—		—		1,429
Other assets(3)		5,966		—		155		5,811
Subtotal		84,778		56,346		2,578		25,854
Goodwill and intangible assets, net		33,807		—		—		33,807
Total assets	$	118,585	$	56,346	$	2,578	$	59,661
Liabilities
Accrued compensation and benefits	$	1,796	$	—	$	—	$	1,796
Accounts payable and accrued liabilities		1,217		—		—		1,217
Borrowings		7,884		—		—		7,884
Separate account liabilities and collateral liabilities under securities lending agreements		56,346		56,346		—		—
Deferred income tax liabilities(4)		3,448		—		—		3,448
Operating lease liabilities		1,780		—		—		1,780
Other liabilities		5,483		—		621		4,862
Total liabilities		77,954		56,346		621		20,987
Equity
Total BlackRock, Inc. stockholders’ equity		38,627		—		—		38,627
Noncontrolling interests		2,004		—		1,957		47
Total equity		40,631		—		1,957		38,674
Total liabilities and equity	$	118,585	$	56,346	$	2,578	$	59,661

September 30, 2017

(in millions)

GAAP
Basis

Separate
Account
Assets/
Collateral⁽¹⁾

Consolidated Sponsored Investment Funds⁽²⁾

As
Adjusted

Assets

Cash and cash equivalents

$
6,165

$
—

$
63

$
6,102

Accounts receivable

3,183

—

—

3,183

Investments

1,928

—

28

1,900

Assets of consolidated VIEs:

Cash and cash equivalents

82

—

82

—

Investments

1,286

—

238

1,048

Other assets

46

—

46

—

Separate account assets and collateral held
under securities lending agreements

175,369

175,369

—

—

Other assets⁽³⁾

1,882

—

8

1,874

Subtotal

189,941

175,369

465

14,107

Goodwill and intangible assets, net

30,626

—

—

30,626

Total assets

$
220,567

$
175,369

$
465

$
44,733

Liabilities

Accrued compensation and benefits

$
1,614

$
—

$
—

$
1,614

Accounts payable and accrued liabilities

1,652

—

—

1,652

Liabilities of consolidated VIEs

319

—

319

—

Borrowings

5,000

—

—

5,000

Separate account liabilities and collateral
liabilities under securities lending agreements

175,369

175,369

—

—

Deferred income tax liabilities⁽⁴⁾

4,966

—

—

4,966

Other liabilities

1,230

—

(229
)

1,459

Total liabilities

190,150

175,369

90

14,691

Equity

Total stockholders’ equity

30,042

—

—

30,042

Noncontrolling interests

375

—

375

—

Total equity

30,417

—

375

30,042

Total liabilities and equity

$
220,567

$
175,369

$
465

$
44,733

(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.

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

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

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

~~(4)~~

~~Amount includes approximately $5.6 billion of deferred income tax liabilities related to goodwill and intangibles.~~

The following discussion summarizes the significant changes in assets and liabilities on a GAAP basis. Please see the condensed consolidated statements of financial condition as of September 30, ~~2017~~2023 and December 31, ~~2016~~2022 contained in Part I, Item 1 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 September 30, ~~2017 and December 31, 2016~~2023 included ~~$73~~$322 million ~~and $53 million, respectively,~~ of cash held by ~~consolidated VREs~~CIPs (see Liquidity and Capital Resources for details on the change in cash and cash equivalents during the nine months ended September 30, ~~2017)~~2023).

Accounts receivable at September 30, ~~2017~~2023 increased ~~$833~~$622 million from December 31, ~~2016~~2022, primarily due to higher base fee and technology services receivables.Investments at September 30, 2023 increased $2.4 billion from December 31, 2022 (for more information see Investments herein). Goodwill and intangible assets at September 30, 2023 increased $164 million from December 31, 2022, primarily due to the Kreos Transaction, partially offset by the amortization of intangible assets. Other assets at September 30, 2023 increased $1.5 billion from December 31, 2022, primarily related to an increase in unit trust receivables (substantially offset by an increase in unit trust payables recorded within ~~accounts payable and accrued~~other liabilities) ~~and higher BlackRock mutual funds,~~ ~~iShares~~ ~~ETFs and performance fee receivables. Investments were $1,928 million at September 30, 2017 (for more information see~~ ~~Investments~~ ~~herein). Goodwill and intangible assets increased $145 million from December 31, 2016, primarily due to the First Reserve Transaction and Cachematrix Transaction,~~, partially offset by ~~$77 million of amortization of intangible assets.~~ ~~Other assets (including property and equipment) increased $258 million~~a decrease in due from ~~December 31, 2016, primarily~~ related ~~to an increase in current taxes receivable, certain strategic investments and other assets.~~parties.

Liabilities. Accrued compensation and benefits at September 30, ~~2017~~2023 decreased ~~$266~~$476 million from December 31, ~~2016,~~2022, primarily due to ~~2016~~2022 incentive compensation cash payments in the first quarter of ~~2017,~~2023, partially offset by ~~2017~~2023 incentive compensation accruals. ~~Accounts payable and accrued~~Other liabilities at September 30, ~~2017~~2023 increased ~~$558 million~~$1.9 billion from December 31, ~~2016~~2022, primarily due to higher unit trust payables (substantially offset by an increase in unit trust receivables recorded within ~~accounts receivable).~~

other assets) and an increase in the deferred carried interest liability. Net deferred income tax liabilities at September 30, ~~2017~~2023 increased ~~$126~~$67 million ~~partially~~from December 31, 2022, primarily due to the effects of temporary differences associated with stock-based compensation and ~~intangibles. The change also reflects~~ the revaluation of certain deferred income tax liabilities as a result of domestic state and local tax changes. Other liabilities increased $223 million from December 31, 2016, primarily related to an increase in contingent liabilities related to the First Reserve Transaction, uncertain tax positions, and other operating liabilities.Kreos Transaction.

~~Investments and Investments of Consolidated VIEs~~61

Investments

The Company’s investments were $9.8 billion and ~~investments of consolidated VIEs (collectively, “Total Investments”) were $1,928 million and $1,286 million, respectively,~~$7.5 billion at September 30, ~~2017. Total~~2023 and December 31, 2022, respectively. Investments include ~~consolidated investments held by sponsored investment funds~~CIPs accounted for as ~~VREs~~VIEs and ~~VIEs.~~VREs. Management reviews BlackRock’s ~~Total Investments~~investments on an “economic” basis, which eliminates the portion of ~~Total Investments~~investments that does not impact BlackRock’s book value or net income attributable to BlackRock. BlackRock’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

The Company presents ~~Total Investments,~~investments, as adjusted, to enable investors to understand the portion of ~~Total Investments~~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 cash compensation investments and hedged ~~investments,~~exposures, to reflect another helpful measure for investors. The economic impact of ~~Total Investments~~investments held pursuant to deferred cash compensation ~~arrangements~~plans is substantially offset by a change in associated compensation ~~expense. The~~expense, and the impact of ~~certain~~the portfolio of seed investments is ~~substantially~~ mitigated by ~~swap hedges.~~futures entered into as part of the Company's macro hedging strategy. 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.


	September 30,			December 31,
(in millions)	2023			2022
Investments, GAAP	$	9,835		$	7,466
Investments held by CIPs		(6,349	)		(4,669	)
Net interest in CIPs(1)		4,248			3,622
Investments, as adjusted		7,734			6,419
Investments related to deferred cash compensation plans		(252	)		—
Hedged exposures		(1,578	)		(1,461	)
Federal Reserve Bank stock		(92	)		(91	)
Carried interest		(1,945	)		(1,550	)
Total “economic” investment exposure(2)	$	3,867		$	3,317

(1)

Amounts included $1.9 billion and $1.5 billion of carried interest (VIEs) as of September 30, 2023 and December 31, 2022, respectively, which has no impact on the Company’s “economic” investment exposure.

(2)

Amounts do not include investments in strategic minority investments included in other assets on the condensed consolidated statements of financial condition.

September 30,

December 31,

(in millions)

2017

2016

Investments, GAAP

$
1,928

$
1,595

Investments held by consolidated VIEs, GAAP

1,286

1,008

Total Investments

3,214

2,603

Investments held by consolidated VIEs

(1,286
)

(1,008
)
Investments held by consolidated VREs

(507
)

(465
)
Net interest in consolidated VREs

479

444

Net interest in consolidated VIEs⁽¹⁾

1,048

840

Total Investments, as adjusted

2,948

2,414

Federal Reserve Bank stock

(90
)

(89
)
Deferred compensation investments

(58
)

(66
)
Hedged investments

(538
)

(614
)
Carried interest (VIEs/VREs)

(280
)

(126
)
Total “economic” investment exposure

$
1,982

$
1,519

⁽¹⁾	~~Amount includes $260 million of carried interest (VIEs) as of September 30, 2017 and $108 million as of December 31, 2016, 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 September 30, ~~2017~~2023 and December 31, ~~2016:~~2022:


	September 30,			December 31,
(in millions)	2023			2022
Equity/Fixed income/Multi-asset(1)	$	2,776		$	2,423
Alternatives:
Private equity		1,429			1,207
Real assets		467			368
Other alternatives(2)		773			780
Alternatives subtotal		2,669			2,355
Hedged exposures		(1,578	)		(1,461	)
Total “economic” investment exposure	$	3,867		$	3,317

September 30,

December 31,

(in millions)

2017

2016

Private equity

$
333

$
334

Real assets

304

94

Other alternatives⁽¹⁾

254

245

Other investments⁽²⁾

1,091

846

Total “economic” investment exposure

$
1,982

$
1,519

(1)

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

(2)

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

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

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

As adjusted investment activity for the nine months ended September 30, ~~2017~~2023 was as follows:


(in millions)	Nine Months Ended September 30, 2023
Investments, as adjusted, beginning balance	$	6,419
Purchases/capital contributions		1,142
Sales/maturities		(542	)
Distributions(1)		(68	)
Market appreciation(depreciation)/earnings from equity method investments		392
Carried interest capital allocations/(distributions)		395
Other(2)		(4	)
Investments, as adjusted, ending balance	$	7,734

(in millions)

Total Investments, as adjusted, December 31, 2016

$
2,414

Purchases/capital contributions

830

Sales/maturities

(603
)
Distributions⁽¹⁾

(67
)
Market appreciation(depreciation)/earnings from equity method investments

183

Carried interest capital allocations/(distributions)/acquired

154

Other

37

Total Investments, as adjusted, September 30, 2017

$
2,948

(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.~~

5963

LIQUIDITY AND CAPITAL RESOURCES

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

The condensed consolidated statements of cash flows include the cash flows of the ~~Consolidated Sponsored Investment Funds.~~CIPs. The Company uses an adjusted cash flow statement, which excludes the impact of ~~Consolidated Sponsored Investment Funds,~~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 Funds,~~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 condensed consolidated statements of cash flows presented on a GAAP basis to the condensed consolidated statements of cash flows, excluding the impact of the cash flows of ~~Consolidated Sponsored Investment Funds:~~CIPs:


(in millions)	GAAP Basis			Impact on Cash Flows of CIPs			Cash Flows Excluding Impact of CIPs
Cash, cash equivalents and restricted cash, December 31, 2022	$	7,433		$	265		$	7,168
Net cash provided by/(used in) operating activities		2,167			(958	)		3,125
Net cash provided by/(used in) investing activities		(773	)		21			(794	)
Net cash provided by/(used in) financing activities		(1,489	)		994			(2,483	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(5	)		—			(5	)
Net increase/(decrease) in cash, cash equivalents and restricted cash		(100	)		57			(157	)
Cash, cash equivalents and restricted cash, September 30, 2023	$	7,333		$	322		$	7,011

(in millions)

GAAP
Basis

Impact on
Cash Flows
of Consolidated
Sponsored Investment Funds

Cash Flows
Excluding
Impact of
Consolidated
Sponsored Investment Funds

Cash and cash equivalents, December 31, 2016

$
6,091

$
53

$
6,038

Cash flows from operating activities

2,486

(252
)

2,738

Cash flows from investing activities

(490
)

(52
)

(438
)
Cash flows from financing activities

(2,083
)

324

(2,407
)
Effect of exchange rate changes on cash and cash
equivalents

161

—

161

Net change in cash and cash equivalents

74

20

54

Cash and cash equivalents, September 30, 2017

$
6,165

$
73

$
6,092

Sources of BlackRock’s operating cash primarily include ~~investment advisory, administration~~base fees and securities lending revenue, performance fees, ~~revenue from~~ technology ~~and risk management~~ services revenue, advisory and other revenue and distribution fees. BlackRock uses its cash to pay all operating ~~expense,~~expenses, interest and principal on borrowings, income taxes, dividends ~~on BlackRock’s capital stock,~~and 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 ~~Condensed Consolidated Statements~~condensed consolidated statements of ~~Cash Flows~~cash flows contained in Part I, Item 1 of this filing.

Cash flows ~~from~~provided by/(used in) operating activities, excluding the impact of ~~Consolidated Sponsored Investment Funds,~~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 cash compensation accrued ~~for~~during prior years, and income tax payments.

Cash flows used in ~~the prior year.~~

~~Cash outflows from~~ investing activities, excluding the impact of ~~Consolidated Sponsored Investment Funds,~~CIPs, for the nine months ended September 30, ~~2017~~2023 were ~~$438~~$794 million and primarily reflected ~~$404~~$411 million of net investment purchases, ~~$100~~$220 million of purchases of property and equipment, ~~$73~~and $189 million related to the ~~First Reserve Transaction and $29 million related to the Cachematrix Transaction, partially offset by $142 million of net proceeds from sales and maturities of certain investments.~~Kreos Transaction.

Cash ~~outflows from~~flows used in financing activities, excluding the impact of ~~Consolidated Sponsored Investment Funds,~~CIPs, for the nine months ended September 30, ~~2017~~2023 were ~~$2,407 million,~~$2.5 billion, primarily resulting from ~~$1,133 million~~$2.3 billion of cash dividend payments, and $1.5 billion of share repurchases, including ~~$825 million~~$1.1 billion in open market transactions and ~~$308 million~~$0.4 billion of employee tax withholdings related to employee stock transactions, ~~$1,259 million of cash dividend payments and $700 million of repayments of long-term borrowings,~~ partially offset by ~~$697 million~~$1.2 billion of proceeds from ~~issuance of~~ long-term borrowings.

6064

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 September 30, ~~2017~~2023 and December 31, ~~2016~~2022 were as follows:


	September 30,			December 31,
(in millions)	2023			2022
Cash and cash equivalents	$	7,316		$	7,416
Cash and cash equivalents held by CIPs(1)		(322	)		(265	)
Subtotal(2)		6,994			7,151
Credit facility – undrawn		5,000			4,700
Total liquidity resources	$	11,994		$	11,851

September 30,

December 31,

(in millions)

2017

2016

Cash and cash equivalents⁽¹⁾

$
6,165

$
6,091

Cash and cash equivalents held by consolidated VREs⁽²⁾

(73
)

(53
)
Subtotal

6,092

6,038

Credit facility – undrawn

4,000

4,000

Total liquidity resources⁽³⁾

$
10,092

$
10,038

(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 55% and 50% at both September 30, 2023 and December 31, 2022, respectively. 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 U.S. subsidiaries was approximately 40% and 50% at September 30, 2017 and December 31, 2016, 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)~~

~~Amount at December 31, 2016 does not reflect year-end incentive compensation accruals of approximately $1.3 billion, which were paid in the first quarter of 2017.~~

Total liquidity resources increased ~~$54~~$143 million during the nine months ended September 30, ~~2017,~~2023, primarily reflecting cash flows from other operating activities, $1.2 billion of proceeds from long-term borrowings and a $300 million increase in the aggregate commitment amount under the credit facility, partially offset by cash dividend payments of ~~2016 year-end incentive awards,~~$2.3 billion, share repurchases of ~~$1,133~~$1.5 billion and $189 million ~~and cash dividend payments of $1,259 million.~~ related to the Kreos Transaction.

A significant portion of the Company’s ~~$2,948 million~~$7.7 billion of ~~Total Investments,~~investments, as adjusted, is illiquid in nature and, as such, cannot be readily convertible to cash.

Share Repurchases. In January ~~2017,~~2023, the Company announced that the Board of Directors ~~approved~~authorized the repurchase of an ~~increase in~~additional seven million shares under the Company's existing share repurchase program for a total of up to approximately 7.9 million shares ~~that may be~~of BlackRock common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including legal limitations, price and market conditions.

During the nine months ended September 30, 2023, the Company repurchased 1.6 million common shares under the Company’s existing share repurchase program ~~to allow for the repurchase of an additional 6 million shares for a total up to 9 million shares of BlackRock common stock.~~

~~The Company repurchased 2.1 million common shares in open market transactions under the share repurchase program~~ for approximately ~~$825 million during the nine months ended September 30, 2017.~~$1.1 billion. At September 30, ~~2017,~~2023, there were ~~6.9~~approximately 6.3 million shares still authorized to be ~~repurchased.~~repurchased under the program.

Net Capital Requirements. The Company is required to maintain net capital in certain regulated subsidiaries within a number of jurisdictions, which is partially maintained by retaining cash and cash equivalent investments in those subsidiaries or jurisdictions. As a result, such subsidiaries of the Company may be restricted in their ability to transfer cash between different jurisdictions and to their parents. Additionally, transfers of cash between international jurisdictions ~~including repatriation to the United States,~~ may have adverse tax consequences that could discourage such transfers.

BlackRock Institutional Trust Company, N.A. (“BTC”) is chartered as a national bank that does not accept ~~client~~ deposits 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 September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company was required to maintain approximately ~~$1.7~~$1.8 billion and ~~$1.4~~$2.2 billion, respectively, in net capital in certain regulated subsidiaries, including BTC, entities regulated by the Financial Conduct Authority and Prudential Regulation Authority in the ~~United Kingdom,~~UK, and the Company’s broker-dealers. The Company was in compliance with all applicable regulatory net capital requirements.

Short-Term Borrowings

~~2017~~2023 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 “2023 credit facility”). In March 2023, the 2023 credit facility was amended to, among other things, (1) increase the aggregate commitment amount ~~of $4.0~~by $300 million to $5 billion, ~~and was amended in April 2017 to~~(2) extend the maturity date to ~~April 2022 (the “2017 credit facility”~~March 2028 and (3) change the secured overnight financing rate (“SOFR”). adjustment to 10 bps per annum for all SOFR-based borrowings. The ~~2017~~2023 credit facility permits the Company to request up to an additional $1.0 billion of borrowing capacity, subject to lender credit approval, ~~increasing~~which could increase the overall size of the ~~2017~~2023 credit facility to an aggregate principal amount ~~not~~of up to ~~exceed $5.0~~$6 billion. ~~Interest on borrowings outstanding accrues at a rate based on the applicable London Interbank Offered Rate plus a spread.~~ The ~~2017~~2023 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 September 30, ~~2017. The 2017 credit facility provides back-up liquidity to fund ongoing working capital for general corporate purposes and various investment opportunities.~~2023. At September 30, ~~2017,~~2023, the Company had no amount outstanding under the ~~2017~~2023 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 ~~$4.0~~$4 billion. The commercial paper program is currently supported by the ~~2017~~2023 credit facility. At September 30, ~~2017,~~2023, BlackRock had no CP Notes outstanding.

Long-Term Borrowings

At September 30, ~~2017,~~2023, the principal amount of long-term ~~borrowings~~notes outstanding was ~~$5.0~~$7.9 billion. See Note ~~12,~~ 15, Borrowings, in the ~~2016~~2022 Form 10-K for more information on overall borrowings outstanding as of December 31, ~~2016.~~2022.

During the nine months ended September 30, 2023, the Company paid approximately $140 million of interest on long-term notes. Future principal repayments and interest requirements at September 30, 2023 were as follows:


(in millions)
Year	Principal		Interest		Total Payments
Remainder of 2023	$	—	$	58	$	58
2024		1,000		210		1,210
2025(1)		741		193		934
2026		—		183		183
2027		700		172		872
2028		—		161		161
Thereafter		5,500		452		5,952
Total	$	7,941	$	1,429	$	9,370

(1)

The amounts related to the 2025 Notes are calculated using the EUR/USD foreign exchange rate as of September 30, 2023.

In ~~March 2017,~~May 2023, the Company issued ~~$700 million~~$1.25 billion in aggregate principal amount of ~~3.20%~~4.75% senior unsecured ~~and unsubordinated~~ notes maturing on ~~March 15, 2027~~May 25, 2033 (the ~~“2027~~“2033 Notes”). The net proceeds of the 2033 Notes are being used for general corporate purposes, which may include the future repayment of all or a portion of the $1.0 billion 3.50% Notes maturing in March 2024. Interest of approximately $59 million per year is payable semi-annually on ~~March 15~~May 25 and ~~September 15~~November 25 of each year, commencing ~~September 15, 2017, and is approximately $22 million per year.~~on November 25, 2023. The ~~2027~~2033 Notes may be redeemed ~~prior to maturity~~ at ~~any time~~the option of the Company, in whole or in part, at ~~the option~~any time prior to February 25, 2033 at a "make-whole" redemption price, or thereafter at 100% of the ~~Company at a “make-whole” redemption price.~~principal amount of the 2033 Notes, in each case plus accrued but unpaid interest. The unamortized discount and debt issuance costs are being amortized over the remaining term of the ~~2027~~2033 Notes.

~~In April 2017, the net proceeds of the 2027 Notes were used to fully repay $700 million in aggregate principal amount outstanding of 6.25% notes prior to their maturity in September 2017.~~Commitments and Contingencies

During the nine months ended September 30, 2017, the Company paid approximately $149 million of interest on long-term borrowings. Future principal repayments and interest requirements at September 30, 2017 were as follows:

(in millions)

Year

Principal

Interest

Total
Payments

Remainder of 2017

$
—

$
54

$
54

2018

—

175

175

2019

1,000

175

1,175

2020

—

125

125

2021

750

109

859

2022

750

80

830

Thereafter⁽¹⁾

2,528

184

2,712

Total

$
5,028

$
902

$
5,930

~~__________________________~~

⁽¹⁾	~~The amount of principal and interest payments for the 2025 Notes (issued in Euros) represents the expected payment amounts using foreign exchange rates as of September 30, 2017.~~

Investment Commitments. At September 30, ~~2017,~~2023, the Company had ~~$328~~$774 million of various capital commitments to fund sponsored investment ~~funds,~~products, including ~~consolidated VIEs.~~CIPs. These ~~funds~~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 condensed 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.

~~Lease Commitment.~~ ~~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.~~

6266

~~Future minimum commitments of annual base rental payments under this operating lease are as follows:~~

(in millions)

Year
Amount

2023
$
34

2024

51

2025

51

2026

51

2027

51

Thereafter

1,007

Total
$
1,245

~~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 September 30, 2017 totaled $228 million, including $125 million related to the First Reserve Transaction, and is included in other liabilities on the condensed consolidated statements of financial condition.

~~Carried Interest Clawback.~~ As a general partner in certain investment funds, including private equity partnerships and certain hedge funds, the Company may receive carried interest cash distributions from the partnerships in accordance with distribution provisions of the partnership agreements. The Company may, from time to time, be required to return all or a portion of such distributions to the limited partners in the event the limited partners do not achieve a return as specified in the various partnership agreements. Therefore, BlackRock records carried interest subject to such clawback provisions in Total Investments, or cash/cash of consolidated VIEs to the extent that it is distributed, and as a deferred carried interest liability/other liabilities of consolidated VIEs on its condensed consolidated statements of financial condition. Carried interest is recorded as performance fees on BlackRock’s condensed consolidated statements of income upon the earlier of the termination of the investment fund or when the likelihood of clawback is considered mathematically improbable.

~~Indemnifications.~~ On behalf of certain clients, the Company lends securities to highly rated banks and broker-dealers. In these securities lending transactions, the borrower is required to provide and maintain collateral at or above regulatory minimums. Securities on loan are marked to market daily to determine if the borrower is required to pledge additional collateral. BlackRock has issued certain indemnifications to certain securities lending clients against potential loss resulting from a borrower’s failure to fulfill its obligations under the securities lending agreement should the value of the collateral pledged by the borrower at the time of default be insufficient to cover the borrower’s obligation under the securities lending agreement. At September 30, 2017, the Company indemnified certain of its clients for their securities lending loan balances of approximately $197.6 billion. The Company held, as agent, cash and securities totaling $210.6 billion as collateral for indemnified securities on loan at September 30, 2017. The fair value of these indemnifications was not material at September 30, 2017.

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.

Critical Accounting Policies and Estimates

The preparation of condensed 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 condensed 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 condensed 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 condensed 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 condensed consolidated financial ~~statements contained in Part I, Item 1 of this filing and~~ statements. In addition, see Critical Accounting Policies and Estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~in the 2016 Form 10-K~~ and Note 2, Significant Accounting Policies, in the ~~2016~~2022 Form 10-K for further information.

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. ~~See Note 4,~~ ~~Consolidated Voting Rights~~ Entities~~, in the notes to the condensed consolidated financial statements for more information. Investments~~ that are determined to be VIEs are consolidated if the Company is the ~~primary beneficiary (“PB”)~~PB of the entity.

~~At September 30, 2017,~~ BlackRock ~~was determined to be the PB for certain investment funds that were determined to be VIEs, which required BlackRock to consolidate them. BlackRock was~~is deemed to be the PB ~~because~~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 ~~equity ownership~~economic interest of 10% or greater and deconsolidates such VIEs once ~~equity ownership~~its economic interest falls below 10%. As of September 30, 2023, the Company was deemed to be the PB of 109 VIEs. See Note 5, ~~Variable Interest Entities~~Consolidated Sponsored Investment Products, in the notes to the condensed consolidated financial statements for more information.

Fair Value ~~Measurements~~. 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 7, Fair Value Disclosures, in the notes to the condensed consolidated financial statements for more information on fair value measurements.

Investment Advisory Performance Fees / Carried Interest. The Company receives investment advisory performance fees, orincluding incentive allocations (carried interest) from certain actively managed investment funds and certain separately managed ~~accounts.~~accounts ("SMAs"). These performance fees are dependent upon exceeding specified relative or absolute investment return ~~thresholds. Such fees are recorded upon completion of the measurement period,~~thresholds, which ~~varies~~vary by product or account, and ~~could be~~include monthly, quarterly, ~~annually~~annual or ~~longer.~~longer measurement periods.

~~In addition,~~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 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 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 amounts are dependent on the financial markets and, thus, are highly susceptible to factors outside the Company’s influence; (2) the ultimate payments have a large number and a broad range of possible amounts; and (3) the funds or SMAs have the ability to (a) invest or reinvest their sales 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. ~~BlackRock~~The Company may be required to reverse/return all, or part, of such carried interest ~~allocations~~allocations/distributions depending upon future performance of these ~~funds. Therefore, BlackRock records carried~~products. Carried interest subject to such clawback provisions is recorded in ~~Total Investments,~~investments or ~~cash/~~cash ~~of consolidated VIEs~~and cash equivalents to the extent that it is distributed, on its condensed

consolidated statements of financial condition. ~~Carried interest is recorded as performance fee revenue upon the earlier of the termination of the investment fund or when the likelihood of clawback is considered mathematically improbable.~~

The Company records a liability for deferred carried interest ~~liability~~ to the extent it receives cash or capital allocations related to carried interest prior to meeting the revenue recognition criteria. At September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company had ~~$303 million~~$1.9 billion and ~~$152 million,~~$1.4 billion, respectively, of deferred carried interest recorded in other ~~liabilities/other~~ liabilities ~~of consolidated VIEs~~ on the condensed consolidated statements of financial condition. A portion of the deferred carried interest ~~liability will~~may also be paid to certain ~~employees.~~employees and other third parties. The ultimate timing of the recognition of performance fee revenue and related compensation expense, if any, ~~for these products~~ is unknown.

~~The following table presents~~ SeeNote 15, Revenue, in the notes to the condensed consolidated financial statements for detailed changes in the deferred carried interest liability ~~(including the portion related to consolidated VIEs)~~balance for the three and nine months ended September 30, ~~2017~~2023 and ~~2016:~~2022.

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions)

2017

2016

2017

2016

Beginning balance

$
280

$
131

$
152

$
143

Net increase (decrease) in unrealized allocations

23

8

52

7

Performance fee revenue recognized

—

(11
)

(12
)

(22
)
Acquisition

—

—

111

—

Ending balance

$
303

$
128

$
303

$
128

~~Accounting Developments~~

~~Recent Accounting Pronouncements Not Yet Adopted.~~

~~Revenue from Contracts with Customers.~~ ~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~ (“ASU 2014-09”). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance also changes the accounting for certain contract costs and revises the criteria for determining if an entity is acting as a principal or agent in certain arrangements. The Company continues to evaluate the impact of ASU 2014-09 on the presentation and recognition of its revenue contracts and certain contract costs. The most significant change identified to date relates to the presentation of certain distribution costs, which are currently presented net against revenues (contra-revenue) and will likely be presented as an expense on a gross basis. The Company currently expects such net gross up to annual revenue to be approximately $1 billion with a corresponding gross up to annual expense. Consequently, the Company expects its GAAP operating margin to decline upon adoption of the new guidance due to the gross up of revenue. However, it currently does not expect any material impact to its as adjusted operating margin. The Company is currently evaluating which transition method it will apply when it adopts the new revenue recognition guidance in the first quarter of 2018.

~~For accounting pronouncements that the Company adopted during the nine months ended September 30, 2017 and for additional recent accounting pronouncements not yet adopted, see Note 2,~~ ~~Significant Accounting Policies, in the condensed consolidated financial statements contained in Part I, Items 1 of this filing.~~

Item 3. 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 September 30, ~~2017,~~2023, 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 (or commitments to invest) 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 notification or 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 cash compensation plans or for regulatory purposes. ~~Currently, the~~The Company has a seed capital hedging program in which it enters into ~~swaps~~futures to hedge market and interest rate exposure with respect to ~~certain investments. At September 30, 2017, the~~its total portfolio of seed investments in sponsored investment products. The Company had outstanding ~~total return swaps~~futures related to its seed capital hedging program with an aggregate notional value of approximately ~~$538 million.~~ $1.6 billion and $1.5 billion at September 30, 2023 and December 31, 2022, respectively.

At September 30, ~~2017, there were no outstanding interest rate swaps.~~

~~At September 30, 2017,~~2023, approximately ~~$1.8~~$6.3 billion of BlackRock’s ~~Total Investments~~investments were maintained in consolidated sponsored investment ~~funds~~products accounted for as ~~VREs and VIEs.~~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 cash compensation plans and certain investments that are hedged via the seed capital hedging program, the Company’s economic exposure to its investment portfolio is ~~$1,982 million.~~$3.9 billion. See ~~Balance Sheet Overview- Investments and Investments~~Statement of ~~Consolidated VIEs~~ Financial Condition Overview-Investments in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information on the Company’s ~~Total Investments.~~investments.

Equity Market Price Risk.At September 30, ~~2017,~~2023, the Company’s net exposure to equity market price risk in its investment portfolio was approximately ~~$816 million~~$1.6 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 ~~$81.6~~$160 million in the carrying value of such investments.

Interest Rate/Credit Spread Risk. At September 30, ~~2017,~~2023, the Company was exposed to ~~interest-rate~~interest rate risk and credit spread risk as a result of approximately ~~$1,166 million~~$2.3 billion of ~~Total Investments~~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 ~~$20.3~~$60 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,~~euro, was ~~$404 million~~approximately $1.1 billion at September 30, ~~2017.~~2023. A 10% adverse change in the applicable foreign exchange rates would result in approximately a ~~$40.4~~$111 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 September 30, ~~2017,~~2023, the Company had outstanding forward foreign currency exchange contracts with an aggregate notional value of approximately ~~$1.3 billion.~~$2.4 billion, with expiration dates in October 2023. In addition, the Company entered into futures to hedge economically the exposure to market movements on certain deferred cash compensation plans. At September 30, 2023, the Company had outstanding exchange traded futures with aggregate notional values related to its deferred cash compensation hedging program of approximately $182 million, with expiration dates during the fourth quarter of 2023.

Item 4. 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 quarterly report on Form 10-Q. 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 quarter ended September 30, ~~2017~~2023 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

6670

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, BlackRock receives subpoenas or other requests for information from various U.S. federal, state governmental and domestic and international regulatory authorities in connection with certain industry-wide or other investigations or proceedings. It is BlackRock’s policy to cooperate fully with such inquiries. The Company and certain of its subsidiaries have been named as defendants in various legal actions, including arbitrations and other litigation arising in connection with BlackRock’s activities. Additionally, 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 14, Commitments and Contingencies, in the ~~Company being liable~~notes to the ~~portfolios for any resulting damages.~~condensed consolidated financial statements of this Form 10-Q.

~~On May 27, 2014, certain purported investors~~Item 1A. Risk Factors

In addition to the other information set forth in this report, the ~~BlackRock Global Allocation Fund, Inc. and the BlackRock Equity Dividend Fund (collectively, the “Funds”) filed a consolidated complaint (the “Consolidated Complaint”)~~risks discussed in ~~the U.S. District Court~~BlackRock's Annual Report on Form 10-K for the ~~District of New Jersey against BlackRock Advisors, LLC, BlackRock Investment Management, LLC~~year ended December 31, 2022 could materially affect our business, financial condition, operating results and ~~BlackRock International Limited under the caption~~ ~~In re BlackRock Mutual Funds Advisory Fee Litigation~~. The Consolidated Complaint, which purports to be brought derivatively on behalf of the Funds, alleges that the defendants violated Section 36(b) of the Investment Company Act by receiving allegedly excessive investment advisory fees from the Funds. On February 24, 2015, the same plaintiffs filed another complaint in the same court against BlackRock Investment Management, LLC and BlackRock Advisors, LLC. The allegations and legal claims in both complaints are substantially similar, with the new complaint purporting to challenge fees received by defendants after the plaintiffs filed their prior complaint. Both complaints seek, among other things, to recover on behalf of the Funds all allegedly excessive advisory fees received by defendants in the twelve month period preceding the start of each lawsuit, along with purported lost investment returns on those amounts, plus interest. The defendants believe the claims in both lawsuits are without merit and intend to vigorously defend the actions. On September 25, 2017, the defendants filed a motion for summary judgment to dismiss the lawsuit.nonoperating results.

Between November 12, 2015 and November 16, 2015, BlackRock, Inc., BlackRock Realty Advisors, Inc. (“BRA”), BlackRock US Core Property Fund, Inc. (formerly known as BlackRock Granite Property Fund, Inc.) (“Granite Fund”), and certain other Granite Fund related entities (collectively, the “BlackRock Parties”) were named as defendants in thirteen lawsuits filed in the Superior Court of the State of California for the County of Alameda arising out of the June 16, 2015 collapse of a balcony at the Library Gardens apartment complex in Berkeley, California (the “Property”). The Property is indirectly owned by the Granite Fund, which is managed by BRA. The plaintiffs also named as defendants in the lawsuits Greystar, which manages the Property, and certain other non-BlackRock related entities, including the developer of the Property, building contractors and building materials suppliers. The plaintiffs allege, among other things, that the BlackRock Parties were negligent in their ownership, control and maintenance of the Property’s balcony, and seek monetary, including punitive, damages. Additionally, on March 16, 2016, three former tenants of the Library Gardens apartment unit that experienced the balcony collapse sued the BlackRock Parties. The former tenants, who witnessed (but were not physically injured in) the accident make allegations virtually identical to those in the other previously filed actions and claim that, as a result of the collapse, they suffered unspecified emotional damage. Several defendants also filed cross-complaints alleging a variety of claims, including claims against the BlackRock Parties for contribution, negligence, and declaratory relief. BlackRock, Inc. believes the claims against it are without merit and intends to vigorously defend the actions. A trial on all claims is scheduled to begin on February 5, 2018.

~~On June 16, 2016,~~ ~~iShares~~ ~~Trust, BlackRock, Inc. and certain of its advisory affiliates, 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, purportedly by failing to adequately disclose in prospectuses issued by the ETFs the risks to the ETFs’ shareholders in the event of a "flash crash." Plaintiffs seek unspecified monetary damages. The Plaintiffs’ complaint was dismissed in December 2016 and on January 6, 2017, plaintiffs filed an amended complaint. The defendants filed a motion for judgment on the pleadings dismissing that complaint. On September 18, 2017, the court dismissed the lawsuit.

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 U.S. District Court for the Northern District of California by a former employee on behalf of all BlackRock employee 401(k) Plan (the “Plan”) participants and beneficiaries in the Plan from

6772

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 peer funds, focused disproportionately on active versus passive strategies, and were unduly concentrated with investment options managed by BlackRock. While the complaint does not contain any specific amount in alleged damages, it claims that the purported underperformance and hidden fees cost Plan participants more than $60 million. On October 10, 2017, the plaintiffs filed an Amended Complaint, which, among other things, adds as defendants certain current and former members of the BlackRock Retirement and Investment Committees. The Amended Complaint also includes a new purported class claim on behalf of investors in certain Collective Trust Funds (“CTFs”) managed by BTC. Specifically, the plaintiffs allege that BTC exercised fiduciary authority over its compensation for securities lending services to the CTFs. The defendants believe the claims in this lawsuit are without merit and intend to vigorously defend the action.

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 2. Unregistered Sales of Eq~~uity~~Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities

During the three months ended September 30, ~~2017,~~2023, 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(1)
July 1, 2023 through July 31, 2023		165,353	$	739.65		154,138		6,672,170
August 1, 2023 through August 31, 2023		353,007	$	691.60		346,762		6,325,408
September 1, 2023 through September 30, 2023		34,448	$	702.46		29,677		6,295,731
Total		552,808	$	706.65		530,577

(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 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. 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.

Item 6. Exhibits

Total Number
of Shares
Purchased

Average
Price Paid
per Share

Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs

Maximum
Number of
Shares that May
Yet Be
Purchased Under
the Plans or
Programs⁽¹⁾

July 1, 2017 through July 31, 2017

198,234

⁽²⁾

$
427.31

183,716

7,407,531

August 1, 2017 through August 31, 2017

439,530

⁽²⁾

$
422.69

427,122

6,980,409

September 1, 2017 through September 30, 2017

39,343

⁽²⁾

$
419.40

37,753

6,942,656

Total

677,107

$
423.85

648,591

~~_______________________~~


⁽¹⁾Exhibit No.	In January 2017, the Board of Directors authorized the repurchase of an additional 6 million shares under the Company’s existing share repurchase program for a total of up to 9 million shares of BlackRock common stock.

⁽²⁾

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

~~Item 6.~~ ~~Exhibits~~

~~Exhibit No.~~		Description

~~12.1~~3.1(1)		~~Computation~~Amended and Restated Bylaws of ~~Ratio of Earnings to Fixed Charges~~BlackRock

31.1		Section 302 Certification of Chief Executive Officer

31.2		Section 302 Certification of Chief Financial Officer

32.1		Section 906 Certification of Chief Executive Officer and Chief Financial Officer

101.INS		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

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

~~EXHIBIT INDEX~~

~~Exhibit No.~~		~~Description~~

~~12.1~~104		~~Computation of Ratio of Earnings to Fixed Charges~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

~~31.1~~		~~Section 302 Certification of Chief Executive Officer~~

~~31.2~~		~~Section 302 Certification of Chief Financial Officer~~

~~32.1~~		~~Section 906 Certification of Chief Executive Officer and Chief Financial Officer~~

~~101.INS~~		~~XBRL Instance Document~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document~~

(1)

Incorporated by reference to BlackRock's Current Report on Form 8-K filed on September 15, 2023.

7174

~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements 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.
	(Registrant)

	By:	~~/s/ Gary~~/s/ Martin S. ~~Shedlin~~Small
Date: November ~~8, 2017~~6, 2023		~~Gary~~Martin S. ~~Shedlin~~Small
		Senior Managing Director & Chief Financial Officer (Principal Financial Officer)


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	☐


		Page

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Financial Condition	1

	Condensed Consolidated Statements of Income	2

	Condensed Consolidated Statements of Comprehensive Income	3

	Condensed Consolidated Statements of Changes in Equity	4

	Condensed Consolidated Statements of Cash Flows	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3436

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6569

Item 4.	Controls and Procedures	6670


Item 1.	Legal Proceedings	6771

Item 2.1A.	Risk Factors	72

Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	6973

Item 6.	Exhibits	7074


	September 30,			December 31,
(in millions, except shares and per share data)	2023			2022
Assets
Cash and cash equivalents(1)	$	7,316		$	7,416
Accounts receivable		3,886			3,264
Investments(1)		9,835			7,466
Separate account assets		51,606			54,066
Separate account collateral held under securities lending agreements		4,740			5,765
Property and equipment (net of accumulated depreciation and amortization of $1,487 and $1,390 at September 30, 2023 and December 31, 2022, respectively)		1,058			1,031
Intangible assets (net of accumulated amortization of $580 and $483 at September 30, 2023 and December 31, 2022, respectively)		18,291			18,302
Goodwill		15,516			15,341
Operating lease right-of-use assets		1,429			1,516
Other assets(1)		4,908			3,461
Total assets	$	118,585		$	117,628
Liabilities
Accrued compensation and benefits	$	1,796		$	2,272
Accounts payable and accrued liabilities		1,217			1,294
Borrowings		7,884			6,654
Separate account liabilities		51,606			54,066
Separate account collateral liabilities under securities lending agreements		4,740			5,765
Deferred income tax liabilities		3,448			3,381
Operating lease liabilities		1,780			1,835
Other liabilities(1)		5,483			3,576
Total liabilities		77,954			78,843
Commitments and contingencies (Note 14)
Temporary equity
Redeemable noncontrolling interests		1,851			909
Permanent equity
BlackRock, Inc. stockholders’ equity
Common stock, $0.01 par value;		2			2
Shares authorized: 500,000,000 at September 30, 2023 and December 31, 2022; Shares issued: 172,075,373 at September 30, 2023 and December 31, 2022; Shares outstanding: 148,942,746 and 149,756,492 at September 30, 2023 and December 31, 2022, respectively
Additional paid-in capital		19,687			19,772
Retained earnings		31,711			29,876
Accumulated other comprehensive loss		(1,101	)		(1,101	)
Treasury stock, common, at cost (23,132,627 and 22,318,881 shares held at September 30, 2023 and December 31, 2022, respectively)		(11,672	)		(10,805	)
Total BlackRock, Inc. stockholders’ equity		38,627			37,744
Nonredeemable noncontrolling interests		153			132
Total permanent equity		38,780			37,876
Total liabilities, temporary equity and permanent equity	$	118,585		$	117,628


(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, 2022	$	19,774		$	29,876		$	(1,101	)	$	(10,805	)	$	37,744		$	132		$	37,876		$	909
Net income		—			4,127			—			—			4,127			23			4,150			37
Dividends declared ($15.00 per share)		—			(2,292	)		—			—			(2,292	)		—			(2,292	)		—
Stock-based compensation		469			—			—			—			469			—			469			—
Issuance of common shares related to employee stock transactions		(554	)		—			—			633			79			—			79			—
Employee tax withholdings related to employee stock transactions		—			—			—			(369	)		(369	)		—			(369	)		—
Shares repurchased		—			—			—			(1,131	)		(1,131	)		—			(1,131	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			(21	)		(21	)		1,053
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			19			19			(148	)
Other comprehensive income (loss)		—			—			—			—			—			—			—			—
September 30, 2023	$	19,689		$	31,711		$	(1,101	)	$	(11,672	)	$	38,627		$	153		$	38,780		$	1,851

(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		$	13,660		$	(716	)	$	(3,185	)	$	29,098		$	52		$	29,150		$	194
Net income		—			2,666			—			—			2,666			3			2,669			28
Dividends paid		—			(1,259	)		—			—			(1,259	)		—			(1,259	)		—
Stock-based compensation		417			—			—			—			417			—			417			—
PNC preferred stock capital contribution		193			—			—			—			193			—			193			—
Retirement of preferred stock		(193	)		—			—			—			(193	)		—			(193	)		—
Issuance of common shares related to employee stock transactions		(612	)		—			—			621			9			—			9			—
Employee tax withholdings related to employee stock transactions		—			—			—			(308	)		(308	)		—			(308	)		—
Shares repurchased		—			—			—			(825	)		(825	)		—			(825	)		—
Subscriptions (redemptions/ distributions) — noncontrolling interest holders		—			—			—			—			—			(14	)		(14	)		338
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			14			14			(240	)
Other comprehensive income (loss)		—			—			243			—			243			—			243			—
Adoption of new accounting pronouncement		3			(2	)		—			—			1			—			1			—
September 30, 2017	$	19,147		$	15,065		$	(473	)	$	(3,697	)	$	30,042		$	55		$	30,097		$	320

(in millions)
At September 30, 2017	Investments		Advisory Fee Receivables		Other Net Assets (Liabilities)			Maximum Risk of Loss⁽¹⁾
Sponsored investment products	$	227	$	15	$	(7	)	$	259
At December 31, 2016
Sponsored investment products	$	171	$	9	$	(8	)	$	197


			Advisory Fee		Other Net Assets			Maximum
(in millions)	Investments		Receivables		(Liabilities)			Risk of Loss(1)
September 30, 2023
Sponsored investment products	$	2,193	$	89	$	(11	)	$	2,299
December 31, 2022
Sponsored investment products	$	1,060	$	95	$	(12	)	$	1,172

September 30, 2017	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Investments Measured at		Other Assets Not Held at		September 30,
(in millions)	(Level 1)		(Level 2)		(Level 3)		NAV⁽¹⁾		Fair Value⁽²⁾		2017
Assets:
Investments
Available-for-sale	$	8	$	73	$	23	$	—	$	—	$	104
Held-to-maturity securities		—		—		—		—		76		76
Trading:										—
Deferred compensation plan mutual funds		54		—		—		—		—		54
Equity securities/Multi-asset mutual funds		353		—		—		—		—		353
Debt securities / fixed income mutual funds		1		282		2		—		—		285
Total trading		408		282		2		—		—		692
Other investments:
Equity method:
Equity and fixed income mutual funds		314		—		—		10		—		324
Other		—		—		—		608		12		620
Total equity method		314		—		—		618		12		944
Cost method investments		—		—		—		—		92		92
Carried interest		—		—		—		—		20		20
Total investments		730		355		25		618		200		1,928
Separate account assets		112,957		34,268		—		—		713		147,938
Separate account collateral held under securities lending agreements:
Equity securities		19,093		—		—		—		—		19,093
Debt securities		—		8,338		—		—		—		8,338
Total separate account collateral held under securities lending agreements		19,093		8,338		—		—		—		27,431
Investments of consolidated VIEs:
Private / public equity⁽³⁾		5		3		114		69		83		274
Equity securities		338		—		—		—		—		338
Debt securities		—		350		—		—		—		350
Other		—		—		—		64		—		64
Carried interest		—		—		—		—		260		260
Total investments of consolidated VIEs		343		353		114		133		343		1,286
Total	$	133,123	$	43,314	$	139	$	751	$	1,256	$	178,583
Liabilities:
Separate account collateral liabilities under securities lending agreements	$	19,093	$	8,338	$	—	$	—	$	—	$	27,431
Other liabilities⁽⁴⁾		—		7		228		—		—		235
Total	$	19,093	$	8,345	$	228	$	—	$	—	$	27,666


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
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


Yes		X		No


Yes		X		No


Yes				No		X

December 31, 2016 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Investments Measured at NAV⁽¹⁾		Other Assets Not Held at Fair Value⁽²⁾		December 31, 2016
Assets:
Investments
Available-for-sale	$	7	$	49	$	24	$	—	$	—	$	80
Held-to-maturity securities		—		—		—		—		51		51
Trading:
Deferred compensation plan mutual funds		59		—		—		—		—		59
Equity/Multi-asset mutual funds		308		—		—		—		—		308
Debt securities / fixed income mutual funds		1		250		7		—		—		258
Total trading		368		250		7		—		—		625
Other investments:
Equity method:
Equity and fixed income mutual funds		323		—		—		5		—		328
Other		—		—		—		394		8		402
Total equity method		323		—		—		399		8		730
Cost method investments		—		—		—		—		91		91
Carried interest		—		—		—		—		18		18
Total investments		698		299		31		399		168		1,595
Separate account assets		109,663		38,542		—		—		884		149,089
Separate account collateral held under securities lending agreements:
Equity securities		22,173		—		—		—		—		22,173
Debt securities		—		5,619		—		—		—		5,619
Total separate account collateral held under securities lending agreements		22,173		5,619		—		—		—		27,792
Investments of consolidated VIEs:
Private / public equity⁽³⁾		3		2		112		89		79		285
Equity securities		278		—		—		—		—		278
Debt securities		—		274		—		—		—		274
Other		—		—		—		63		—		63
Carried interest		—		—		—		—		108		108
Total investments of consolidated VIEs		281		276		112		152		187		1,008
Total	$	132,815	$	44,736	$	143	$	551	$	1,239	$	179,484
Liabilities:
Separate account collateral liabilities under securities lending agreements	$	22,173	$	5,619	$	—	$	—	$	—	$	27,792
Other liabilities⁽⁴⁾		—		7		115		—		—		122
Total	$	22,173	$	5,626	$	115	$	—	$	—	$	27,914


(in millions)	June 30, 2023		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and Other Settlements(1)		Transfers into Level 3		Transfers out of Level 3			September 30, 2023		Total Net Unrealized Gains (Losses) Included in Earnings(2)
Assets:
Investments:
Debt securities:
Trading	$	41	$	(1	)	$	2	$	(2	)	$	—	$	—	$	—		$	40	$	(1	)
Total debt securities		41		(1	)		2		(2	)		—		—		—			40		(1	)
Loans		266		(17	)		117		—			—		23		(8	)		381		(17	)
Total investments		307		(18	)		119		(2	)		—		23		(8	)		421		(18	)
Other assets		109		(2	)		—		—			—		—		—			107		(2	)
Total assets	$	416	$	(20	)	$	119	$	(2	)	$	—	$	23	$	(8	)	$	528	$	(20	)
Liabilities:
Other liabilities	$	254	$	3		$	—	$	—		$	44	$	—	$	—		$	295	$	3

(in millions)	June 30, 2017		Realized and Unrealized Gains (Losses) in Earnings and OCI			Purchases		Sales and Maturities		Issuances and other Settlements⁽¹⁾		Transfers into Level 3		Transfers out of Level 3			September 30, 2017		Total Net Unrealized Gains (Losses) Included in Earnings⁽²⁾
Assets:
Investments:
Available-for-sale securities⁽³⁾	$	23	$	—		$	—	$	—	$	—	$	—	$	—		$	23
Trading		4		—			—		—		—		—		(2	)		2
Total investments		27		—			—		—		—		—		(2	)		25
Assets of consolidated VIEs - Private equity		113		1			—		—		—		—		—			114	$	1
Total Level 3 assets	$	140	$	1		$	—	$	—	$	—	$	—	$	(2	)	$	139
Liabilities:
Other liabilities⁽⁴⁾	$	218	$	(7	)	$	—	$	—	$	3	$	—	$	—		$	228	$	(7	)

(in millions)	June 30, 2016		Realized and Unrealized Gains (Losses) in Earnings and OCI			Purchases		Sales and Maturities			Issuances and other Settlements			Transfers into Level 3		Transfers out of Level 3		September 30, 2016		Total Net Unrealized Gains (Losses) Included in Earnings⁽¹⁾
Assets:
Investments:
Available-for-sale securities⁽²⁾	$	—	$	—		$	24	$	—		$	—		$	—	$	—	$	24
Trading		3		—			2		—			—			—		—		5
Total investments		3		—			26		—			—			—		—		29
Assets of consolidated VIEs - Private equity		189		11			—		(6	)		—			—		—		194	$	11
Total Level 3 assets	$	192	$	11		$	26	$	(6	)	$	—		$	—	$	—	$	223
Liabilities:
Other liabilities⁽³⁾	$	121	$	(2	)	$	—	$	—		$	(5	)	$	—	$	—	$	118	$	(2	)

	December 31,		Realized and Unrealized Gains (Losses) in Earnings				Sales and			Issuances and other		Transfers into		Transfers out of			September 30,		Total Net Unrealized Gains (Losses) Included in
(in millions)	2015		and OCI		Purchases		Maturities			Settlements⁽¹⁾		Level 3		Level 3			2016		Earnings⁽²⁾
Assets:
Investments
Available-for-sale securities⁽³⁾	$	23	$	—	$	47	$	—		$	—	$	—	$	(46	)	$	24
Trading		2		—		6		—			—		—		(3	)		5
Total investments		25		—		53		—			—		—		(49	)		29
Assets of consolidated VIEs - Private equity		196		13		—		(15	)		—		—		—			194	$	13
Total Level 3 assets	$	221	$	13	$	53	$	(15	)	$	—	$	—	$	(49	)	$	223
Liabilities:
Other liabilities⁽⁴⁾	$	48	$	—	$	—	$	—		$	70	$	—	$	—		$	118	$	—

(in millions)
December 31, 2016	$	13,118
Acquisitions⁽¹⁾		123
Goodwill adjustments related to Quellos⁽²⁾		(15	)
September 30, 2017	$	13,226

(in millions)	Maturity Amount		Unamortized Discount and Debt Issuance Costs			Carrying Value		Fair Value
5.00% Notes due 2019	$	1,000	$	(1	)	$	999	$	1,067
4.25% Notes due 2021		750		(4	)		746		802
3.375% Notes due 2022		750		(4	)		746		781
3.50% Notes due 2024		1,000		(6	)		994		1,044
1.25% Notes due 2025		828		(6	)		822		846
3.20% Notes due 2027		700		(7	)		693		708
Total Long-term Borrowings	$	5,028	$	(28	)	$	5,000	$	5,248


(in millions)	Maturity Amount		Unamortized Discount and Debt Issuance Costs(1)			Carrying Value		Fair Value
3.50% Notes due 2024	$	1,000	$	—		$	1,000	$	989
1.25% Notes due 2025		741		(1	)		740		707
3.20% Notes due 2027		700		(3	)		697		655
3.25% Notes due 2029		1,000		(8	)		992		898
2.40% Notes due 2030		1,000		(5	)		995		831
1.90% Notes due 2031		1,250		(8	)		1,242		985
2.10% Notes due 2032		1,000		(12	)		988		772
4.75% Notes due 2033		1,250		(20	)		1,230		1,170
Total long-term borrowings	$	7,941	$	(57	)	$	7,884	$	7,007

(in millions)
Year	Amount
2023	$	34
2024		51
2025		51
2026		51
2027		51
Thereafter		1,007
Total	$	1,245


	Remainder of
(in millions)	2023		2024		2025		2026		Thereafter		Total
Investment advisory and administration fees:
Alternatives(1)(2)	$	51	$	173	$	141	$	119	$	89	$	573


Outstanding at	RSUs			Weighted- Average Grant Date Fair Value
December 31, 2022		2,009,207		$	710.67
Granted		732,750		$	734.02
Converted		(895,044	)	$	633.55
Forfeited		(53,098	)	$	772.82
September 30, 2023		1,793,815		$	756.85

Outstanding at	Restricted Stock and RSUs			Weighted- Average Grant Date Fair Value
December 31, 2016		2,987,588		$	318.04
Granted		1,061,915		$	377.36
Converted		(1,363,701	)	$	320.27
Forfeited		(39,164	)	$	338.57
September 30, 2017⁽¹⁾		2,646,638		$	340.39


Outstanding at	Performance- Based RSUs			Weighted- Average Grant Date Fair Value
December 31, 2022		531,054		$	672.47
Granted		169,938		$	743.60
Additional shares due to attainment of performance measures		29,194		$	532.15
Converted		(262,797	)	$	534.00
Forfeited		(11,005	)	$	756.51
September 30, 2023		456,384		$	767.69


	2017 Performance-based Options					2023 Performance-based Options					2023 Time-based Options
	Shares Under Option			Weighted Average Exercise Price		Shares Under Option			Weighted Average Exercise Price		Shares Under Option		Weighted Average Exercise Price
Outstanding at December 31, 2022		1,735,898		$	513.50		—		$	—		—	$	—
Granted		—		$	—		814,482		$	673.58		326,391	$	673.58
Exercised		(99,145	)	$	513.50		—		$	—		—	$	—
Forfeited		(2,577	)	$	513.50		(6,787	)	$	673.58		—	$	—
Outstanding at September 30, 2023		1,634,176		$	513.50		807,695		$	673.58		326,391	$	673.58


	Options Outstanding								Options Exercisable
Option Type	Exercise Prices		Options Outstanding(1)		Weighted Average Remaining Life (years)		Aggregate Intrinsic Value (in millions)		Exercise Prices		Options Exercisable		Weighted Average Remaining Life (years)		Aggregate Intrinsic Value (in millions)
2017 Performance-based	$	513.50		1,634,176		3.2	$	217	$	513.50		495,510		3.2	$	66
2023 Performance-based	$	673.58		807,695		8.7		—	$	673.58		—		—		—
2023 Time-based	$	673.58		326,391		8.7		—	$	673.58		—		—		—
				2,768,262		5.4	$	217				495,510		3.2	$	66

Outstanding at	Market Performance- Based RSUs			Weighted- Average Grant Date Fair Value
December 31, 2016		803,474		$	151.20
Converted		(517,138	)	$	126.76
September 30, 2017⁽¹⁾		286,336		$	195.33


Grant Year	Expected Term (Years)(1)	Expected Stock Volatility(2)			Expected Dividend Yield(3)			Risk-Free Interest Rate(4)
2023	6.02		27.73	%		3.02	%		3.61	%

(in millions)	Foreign currency translation adjustments⁽¹⁾			Other⁽²⁾			Total
For the Three Months Ended September 30, 2017
June 30, 2017	$	(579	)	$	4		$	(575	)
Net other comprehensive income (loss) for the three months ended September 30, 2017		102			—			102
September 30, 2017	$	(477	)	$	4		$	(473	)
For the Nine Months Ended September 30, 2017
December 31, 2016	$	(721	)	$	5		$	(716	)
Net other comprehensive income (loss) for the nine months ended September 30, 2017		244			(1	)		243
September 30, 2017	$	(477	)	$	4		$	(473	)


AUM and Net Inflows (Outflows) by Client Type and Product Type
	AUM								Net inflows (outflows)
	September 30,		June 30,		December 31,		September 30,		Three Months Ended September 30,			Nine Months Ended September 30,			Twelve Months Ended September 30,
(in millions)	2023		2023		2022		2022		2023			2023			2023
Retail	$	868,440	$	903,630	$	843,475	$	806,498	$	(3,585	)	$	487		$	(14,339	)
ETFs		3,118,409		3,215,932		2,909,610		2,621,410		28,521			98,221			187,872
Institutional:
Active		1,753,262		1,812,719		1,641,591		1,487,285		(1,330	)		79,595			155,623
Index		2,637,033		2,782,790		2,528,615		2,352,061		(36,242	)		(31,550	)		(36,721	)
Institutional subtotal		4,390,295		4,595,509		4,170,206		3,839,346		(37,572	)		48,045			118,902
Long-term		8,377,144		8,715,071		7,923,291		7,267,254		(12,636	)		146,753			292,435
Cash management		723,681		710,141		671,194		694,119		15,205			46,295			14,337
Total	$	9,100,825	$	9,425,212	$	8,594,485	$	7,961,373	$	2,569		$	193,048		$	306,772

AUM and Net Inflows (Outflows) by Investment Style and Product Type
	AUM								Net inflows (outflows)
	September 30,		June 30,		December 31,		September 30,		Three Months Ended September 30,			Nine Months Ended September 30,			Twelve Months Ended September 30,
(in millions)	2023		2023		2022		2022		2023			2023			2023
Active	$	2,426,322	$	2,516,396	$	2,317,560	$	2,141,066	$	(7,742	)	$	64,982		$	126,357
Index and ETFs		5,950,822		6,198,675		5,605,731		5,126,188		(4,894	)		81,771			166,078
Long-term		8,377,144		8,715,071		7,923,291		7,267,254		(12,636	)		146,753			292,435
Cash management		723,681		710,141		671,194		694,119		15,205			46,295			14,337
Total	$	9,100,825	$	9,425,212	$	8,594,485	$	7,961,373	$	2,569		$	193,048		$	306,772

AUM and Net Inflows (Outflows) by Product Type
	AUM								Net inflows (outflows)
	September 30,		June 30,		December 31,		September 30,		Three Months Ended September 30,			Nine Months Ended September 30,			Twelve Months Ended September 30,
(in millions)	2023		2023		2022		2022		2023			2023			2023
Equity	$	4,741,291	$	4,961,344	$	4,435,354	$	4,020,312	$	(34,467	)	$	(45,575	)	$	(15,858	)
Fixed income		2,576,205		2,668,851		2,536,823		2,350,263		13,211			110,906			226,421
Multi-asset		788,872		811,927		684,904		637,445		12,797			83,837			85,950
Alternatives:
Illiquid alternatives		131,937		127,678		117,751		111,729		2,623			10,105			14,513
Liquid alternatives		75,139		78,056		80,654		81,418		(3,472	)		(8,082	)		(9,937	)
Currency and commodities(1)		63,700		67,215		67,805		66,087		(3,328	)		(4,438	)		(8,654	)
Alternatives subtotal		270,776		272,949		266,210		259,234		(4,177	)		(2,415	)		(4,078	)
Long-term		8,377,144		8,715,071		7,923,291		7,267,254		(12,636	)		146,753			292,435
Cash management		723,681		710,141		671,194		694,119		15,205			46,295			14,337
Total	$	9,100,825	$	9,425,212	$	8,594,485	$	7,961,373	$	2,569		$	193,048		$	306,772

	Three Months Ended September 30,												Nine Months Ended September 30,
	Mix of Base Fees						Mix of Average AUM by Asset Class⁽¹⁾						Mix of Base Fees						Mix of Average AUM by Asset Class⁽²⁾
	2017			2016			2017			2016			2017			2016			2017			2016
Equity:
Active		15	%		16	%		5	%		6	%		15	%		16	%		5	%		6	%
iShares ETFs		30	%		27	%		20	%		17	%		29	%		27	%		20	%		17	%
Non-ETF index		6	%		7	%		28	%		27	%		6	%		7	%		28	%		27	%
Equity subtotal		51	%		50	%		53	%		50	%		50	%		50	%		53	%		50	%
Fixed income:
Active		16	%		17	%		13	%		15	%		17	%		16	%		13	%		16	%
iShares ETFs		8	%		7	%		6	%		6	%		7	%		7	%		6	%		6	%
Non-ETF index		3	%		3	%		10	%		10	%		3	%		3	%		10	%		10	%
Fixed income subtotal		27	%		27	%		29	%		31	%		27	%		26	%		29	%		32	%
Multi-asset		10	%		11	%		8	%		8	%		11	%		12	%		8	%		8	%
Alternatives:
Core		6	%		6	%		2	%		2	%		6	%		7	%		2	%		2	%
Currency and commodities		1	%		1	%		1	%		1	%		1	%		1	%		1	%		1	%
Alternatives subtotal		7	%		7	%		3	%		3	%		7	%		8	%		3	%		3	%
Long-term		95	%		95	%		93	%		92	%		95	%		96	%		93	%		93	%
Cash management		5	%		5	%		7	%		8	%		5	%		4	%		7	%		7	%
Total excluding Advisory AUM		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%