UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 16, 2005 (January 19, 2005)
BLACKROCK, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-15305 | 51-0380803 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
40 East 52nd Street, New York, New York | 10022 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (212) 810-5300
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Explanatory Note: This Form 8-K/A amends the Form 8-K of BlackRock, Inc. furnished to the Securities and Exchange Commission on January 19, 2005 in order to furnish the press release attached as Exhibit 99.1 to the previously filed 8-K under Item 2.02 hereunder, and to file a portion of such press release under Item 8.01 hereunder.
Item 2.02. Results of Operations and Financial Condition
On January 19, 2005, BlackRock, Inc. (the “Company”) reported results of operations and financial condition for the three months and year ended December 31, 2004. A copy of the press release issued by the Company is attached as Exhibit 99.1.
Item 8.01 Other Events
BlackRock, Inc. Reports Fourth Quarter and Full Year 2004
Diluted EPS of $0.75 and $2.17, respectively.
Assets under Management at December 31, 2004 total $341.8 Billion.
New York, January 19, 2005 – BlackRock, Inc. (NYSE:BLK) today reported net income for the quarter ended December 31, 2004 of $49.8 million, or $0.75 per diluted share, compared to net income of $41.4 million, or $0.63 per diluted share, earned in the fourth quarter of 2003. Net income for the year ended December 31, 2004 was $143.1 million, or $2.17 per diluted share, compared to net income of $155.4 million, or $2.36 per diluted share, earned during 2003.
As previously announced, fourth quarter 2004 earnings included an income tax benefit of $9.5 million, or $0.14 per diluted share, associated with the release of reserves allocated to the Company’s New York City tax liability due to the receipt of a favorable preliminary audit finding for the 1998-2000 tax years. In addition, earnings for the fourth quarter included $13.4 million of Long-Term Retention and Incentive Plan (LTIP) expense, $3.2 million of underwriter structuring fees for a new closed-end fund and professional fees of $1.0 million associated with the pending acquisition of SSRM Holdings, Inc. (SSR), which, in total, resulted in after-tax charges of $11.2 million, or $0.17 per diluted share.
The Company’s net income for the year ended December 31, 2004 reflects LTIP expense of $104.0 million, or approximately $0.99 per diluted share, and $4.2 million, or approximately $0.04 per diluted share, in charges reflecting the after-tax impact of underwriter structuring fees for a new closed-end fund and professional fees associated with the acquisition of SSR, which were partially offset by New York City and State income tax benefits of $18.1 million, or $0.27 per diluted share and a $0.02 per diluted share benefit related to the sale of the Company’s interest in Trepp LLC during the second quarter of 2004.
Diluted earnings per share, as adjusted (see Table 2), for the quarter and year ended December 31, 2004 were $0.72 and $2.70, respectively, as compared to $0.63 and $2.36 earned for the fourth quarter and year ended December 31, 2003, respectively. Diluted earnings per share, as adjusted, reflects the exclusion of LTIP expense to be funded by a capital contribution of stock by The PNC Financial Services Group (PNC), New York State and City tax benefits, the sale of the Company’s interest in Trepp LLC and professional fees associated with the acquisition of SSR. Growth in diluted earnings per share, as adjusted, during 2004 is primarily due to operating income growth associated with the rise in assets under management (AUM) during the period and an increase in alternative investment product performance fees, partially offset by increased compensation costs and professional fees associated with Sarbanes-Oxley Act compliance activities.
AUM rose $18.3 billion during the quarter to $341.8 billion at December 31, 2004, up 6% from $323.5 billion at the end of the third quarter. For the full year, AUM increased $32.4 billion, or 10%, from $309.4 billion at year-end 2003. During the quarter, new business flows were positive in all asset classes, contributing $12.7 billion of the total increase in AUM. For the full year, net new business totaled $19.6 billion, driven by strong results across client channels worldwide.BlackRock Solutions business remained robust with the addition of eleven net new assignments and a 37% increase in revenues during 2004, and our Advisory Services effort got off to a strong start, winning two assignments in its first year.
Fourth Quarter and Full Year Business Highlights
• | Fixed income AUM closed the year at $240.7 billion, up $5.2 billion for the quarter and $26.4 billion for the year ended December 31, 2004. While we continued to attract new fundings in core bond products, strong |
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inflows in targeted duration and global bond mandates helped to further diversify our asset base. While rebalancing flows were not a significant factor in 2004, approximately $7.7 billion of outflows resulted from one client’s implementation of a macro call on the markets and from merger activity impacting a number of other clients. In total, we recorded net new business of $1.3 billion and $15.6 billion during the quarter and full year, respectively. Investment performance remained competitive, with 88% or more of our institutional taxable fixed income composites outperforming their benchmarks and 89% or more of our taxable bond fund assets ranked in the top two Lipper quartiles for the one-, three- and five-year periods ending December 31, 2004.
• | Liquidity, or cash management, AUM closed the year up sharply to $78.1 billion. Net new business in all products other than securities lending totaled $11.9 billion and $6.7 billion for the quarter and full year, respectively. Securities lending portfolios experienced outflows of $1.7 billion during the quarter and $3.0 billion throughout the year. Fourth quarter inflows were notable given that the Federal Reserve increased the discount rate in November and December of 2004. We believe that we benefited from enhancements in our portfolio management process, improved competitiveness of our institutional funds, and selective expansion of our sales force and our product line. Although 100% of our institutional money market funds ranked in the top two Lipper quartiles for the one-, three- and five-year periods ending December 31, 2004, we expect flows to remain volatile as the Federal Reserve continues to raise interest rates. |
• | Equity AUM ended the year at $14.8 billion, up 17% from $12.7 billion at third quarter-end and 8% from $13.7 billion at year-end 2003. Net new business in actively managed domestic equity products (i.e., other than the index fund) totaled $645 million for the quarter and $1.4 billion for the full year. During the year, we successfully launched several new open- and closed-end mutual funds, including theBlackRock Global Energy and Resources Trust, a closed-end fund offered in conjunction with SSR during the fourth quarter. Although outflows in international equities totaled $2.1 billion for the year, the majority occurred during the first half of the year. As performance strengthened, the pace of outflows diminished and selected clients awarded us additional funds and new accounts. We closed the year well-positioned for additional growth, with 77% and 94% of equity mutual fund assets ranked in the top two Lipper quartiles for the year and the fourth quarter, respectively, includingBlackRock Select Equity, which was ranked among the ten best performing large cap core equity funds in 2004. |
• | Alternative investment AUM closed the year at $8.2 billion, up $784 million (11%) versus September 30, 2004 levels and $1.3 billion (18%) year-over-year. Throughout the year, we benefited from a highly robust new product effort. During the fourth quarter, we offered a new collateralized debt obligation, and had first closings for our new real estate mezzanine debt fund and for a credit-oriented fixed income hedge fund. We also continued to attract assets in an absolute return bond product launched earlier this year, as well as in our existing hedge fund and fund of funds offerings. Performance was competitive and strong across most products. Of particular note, our flagship hedge fund of funds reached its five-year anniversary, outperforming the HFRI Fund of Funds Composite index for each of the one-, three- and five-year periods ended December 31, 2004. |
• | BlackRock Solutions recorded a 37% increase in revenues versus 2003. During the quarter, we added two new risk management assignments and completed two advisory assignments. For the year, we added eleven net new assignments, including three Aladdin® (investment system outsourcing), seven risk management and one advisory mandate. Among these mandates was our first international assignment, opening a previously untapped source of new business forBlackRock Solutions. In addition to the foregoing, our newly formed Advisory Services Group was retained on two assignments during 2004. Although much progress has been made, staffing remains the most critical constraint to the growth of these businesses, and additional investments will be required to sustain our momentum in these products and services. |
• | New business efforts, which continued to flourish across multiple channels, yielded $12.7 billion of net inflows for the quarter and $19.6 billion for the full year. Led by institutional liquidity investors ($10.4 billion) and tax-exempt institutions ($1.7 billion), net new business was positive in every client channel during the quarter. For the full year, net inflows included $7.5 billion from taxable institutions, $7.0 billon from tax-exempt clients, $5.6 billion from institutional liquidity investors and $2.1 billion from mutual fund investors other than PNC-related clients. Geographically, new business flows evidenced continued growth of our global presence, with $10.0 billion of net fundings from international clients during the year. |
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• | We ended 2004 with positive momentum across much of our product line-up. Our pipeline remains robust, with $8.2 billion of wins funded or to be funded since quarter-end and over 250 searches in process across products. In addition, interest in ourBlackRock Solutions and Advisory Services offerings remains very high, and multiple opportunities are in development. The combination of strong, competitive performance and exceptional client service remains vital to maintaining our momentum. |
Total revenue for the quarter ended December 31, 2004 increased $27.5 million, or 17%, to $188.7 million, compared to $161.2 million for the quarter ended December 31, 2003. Separate account revenue and other income increased by $23.4 million, or 28%, and $5.0 million, or 25%, respectively, which were partially offset by a decrease in mutual funds revenue of $1.0 million, or 2%. The increase in separate account revenue represents a $17.6 million, or 19%, increase in separate account base fees driven by a $25.3 billion, or 11%, increase in AUM, and a $5.8 million increase in performance fees primarily driven by positive performance in the Company’s fixed income hedge fund and real estate products. Other income increased largely due to strong sales inBlackRock Solutions products and services and fees earned by the Company’s Advisory Services Group. Mutual fund revenue decreased primarily due to decreases in average assets in theBlackRock Funds and theBlackRock Liquidity Funds, partially offset by new closed-end funds launched since December 31, 2003, which generated $1.9 billion of additional AUM.
Variance vs. | |||||||||||||||||||||||
Three months ended December 31, | September 30, 2004 | December 31, 2003 | September 30, 2004 | ||||||||||||||||||||
(Dollar amounts in thousands)
| 2004 | 2003 | Amount | % | Amount | % | |||||||||||||||||
Mutual funds revenue | |||||||||||||||||||||||
BlackRock Funds | $ | 16,937 | $ | 18,865 | $ | 16,289 | ($ | 1,928 | ) | (10.2 | )% | $ | 648 | 4.0 | % | ||||||||
Closed-end Funds | 19,191 | 15,804 | 17,978 | 3,387 | 21.4 | 1,213 | 6.7 | ||||||||||||||||
BlackRock Liquidity Funds | 18,986 | 21,486 | 19,508 | (2,500 | ) | (11.6 | ) | (522 | ) | (2.7 | ) | ||||||||||||
Other commingled funds | 337 | 263 | 298 | 74 | 28.1 | 39 | 13.1 | ||||||||||||||||
Total mutual funds revenue | 55,451 | 56,418 | 54,073 | (967 | ) | (1.7 | ) | 1,378 | 2.5 | ||||||||||||||
Separate accounts revenue | |||||||||||||||||||||||
Separate accounts base fees | 100,643 | 83,059 | 92,943 | 17,584 | 21.2 | 7,700 | 8.3 | ||||||||||||||||
Separate accounts performance fees | 7,649 | 1,800 | 539 | 5,849 | NM | 7,110 | NM | ||||||||||||||||
Total separate accounts revenue | 108,292 | 84,859 | 93,482 | 23,433 | 27.6 | 14,810 | 15.8 | ||||||||||||||||
Total investment advisory and administration fees | 163,743 | 141,277 | 147,555 | 22,466 | 15.9 | 16,188 | 11.0 | ||||||||||||||||
Other income | 24,934 | 19,934 | 23,444 | 5,000 | 25.1 | 1,490 | 6.4 | ||||||||||||||||
Total revenue | $ | 188,677 | $ | 161,211 | $ | 170,999 | $ | 27,466 | 17.0 | % | $ | 17,678 | 10.3 | % | |||||||||
NM = Not meaningful
During the fourth quarter of 2004, revenue increased approximately $17.7 million, or 10%, as compared to the third quarter of 2004 primarily due to a $7.7 million increase in separate account base fees due to a $5.0 billion increase in AUM, increased alternative product performance fees of $7.4 million and a $1.2 million increase in closed end fund fees. During the fourth quarter of 2004, new closed-end fund launches resulted in a $0.9 billion increase in AUM.
Total revenue for the year ended December 31, 2004 increased $127.1 million, or 21%, to $725.3 million compared to $598.2 million during the year ended December 31, 2003. Separate account revenue increased by $90.1 million, or 28%, mutual funds revenue increased by $14.8 million, or 7%, and other income increased by $22.2 million, or 32%, compared with the year ended December 31, 2003. The growth in separate account fees primarily consisted of an increase in base fees of $57.4 million, or 18%, reflecting a $25.3 billion, or 11%, increase in AUM and an
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increase in alternative product performance fees of $32.1 million. The increase in mutual funds revenue was due to a $18.8 million, or 36%, increase in closed-end fund revenue partially offset by a decrease in fees earned from theBlackRock Liquidity Funds of $4.8 million, or 6%. Closed-end fund revenue increased during the period due to several closed-end fund launches during the year, resulting in a $1.5 billion increase in AUM. The reduction inBlackRock Liquidity Funds revenue was the result of a decrease of approximately $2.7 billion in average AUM. Other income increased primarily due to strong sales ofBlackRock Solutions products and services and fees earned by the Company’s Advisory Services Group.
Year ended December 31, | Variance | ||||||||||||
(Dollar amounts in thousands)
| 2004 | 2003 | Amount | % | |||||||||
Mutual funds revenue | |||||||||||||
BlackRock Funds | $ | 70,066 | $ | 69,361 | $ | 705 | 1.0 | % | |||||
Closed-end Funds | 71,443 | 52,685 | 18,758 | 35.6 | |||||||||
BlackRock Liquidity Funds | 78,265 | 83,035 | (4,770 | ) | (5.7 | ) | |||||||
Other commingled funds | 1,175 | 1,055 | 120 | 11.4 | |||||||||
Total mutual funds revenue | 220,949 | 206,136 | 14,813 | 7.2 | |||||||||
Separate accounts revenue | |||||||||||||
Separate accounts base fees | 371,068 | 313,681 | 57,387 | 18.3 | |||||||||
Separate accounts performance fees | 41,606 | 8,875 | 32,731 | NM | |||||||||
Total separate accounts revenue | 412,674 | 322,556 | 90,118 | 27.9 | |||||||||
Total investment advisory and administration fees | 633,623 | 528,692 | 104,931 | 19.8 | |||||||||
Other income | 91,688 | 69,520 | 22,168 | 31.9 | |||||||||
Total revenue | $ | 725,311 | $ | 598,212 | $ | 127,099 | 21.2 | % | |||||
NM = Not meaningful
Total expense for the quarter ended December 31, 2004 increased $33.4 million, or 34%, to $132.8 million, compared to $99.5 million during the quarter ended December 31, 2003. The increase in expense for the quarter primarily reflects increases of $15.8 million in employee compensation and benefits, $13.4 million in LTIP-related charges and $5.7 million in general and administration expense. Exclusive of LTIP-related charges, total expense for the fourth quarter of 2004 would have increased $20.0 million, or 20%, from 2003. The rise in employee compensation and benefits is primarily attributable to increased salary and benefits expense of $6.6 million, largely due to higher staffing levels, increased incentive compensation due to operating income growth and alternative investment product incentives and $1.7 million in appreciation on Rabbi trust assets associated with the Company’s deferred compensation plans. Appreciation or depreciation on Rabbi trust assets are also reflected in the Company’s investment income. The rise in general and administration expense primarily reflects increased marketing and promotional costs of $4.6 million, or 62%, including $3.2 million in underwriter structuring fees for a new closed-end fund (The BlackRock Global Energy & Resources Trust), and $1.0 million in professional fees associated with the pending acquisition of SSR.
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Three months ended | Variance vs. | ||||||||||||||||||||||
December 31, | September 30, 2004 | December 31, 2003 | September 30, 2004 | ||||||||||||||||||||
(Dollar amounts in thousands)
| 2004 | 2003 | Amount | % | Amount | % | |||||||||||||||||
General and administration expense: | |||||||||||||||||||||||
Marketing and promotional | $ | 11,933 | $ | 7,372 | $ | 7,823 | $ | 4,561 | 61.9 | % | $ | 4,110 | 52.5 | % | |||||||||
Occupancy | 5,774 | 5,422 | 6,066 | 352 | 6.5 | (292 | ) | (4.8 | ) | ||||||||||||||
Technology | 4,903 | 5,008 | 4,771 | (105 | ) | (2.1 | ) | 132 | 2.8 | ||||||||||||||
Other general and administration | 14,206 | 13,287 | 10,599 | 919 | 6.9 | 3,607 | 34.0 | ||||||||||||||||
Total general and administration expense | $ | 36,816 | $ | 31,089 | $ | 29,259 | $ | 5,727 | 18.4 | % | $ | 7,557 | 25.8 | % | |||||||||
The $60.5 million decrease in expense from third quarter of 2004 is primarily due to $90.6 million in LTIP-related charges recognized during the third quarter of 2004 versus $13.4 million during the current quarter. Exclusive of LTIP-related charges, total expense for the fourth quarter of 2004 would have increased $16.7 million, or 16%, from the third quarter of 2004 due to a $6.8 million increase in incentive compensation costs, a $4.1 million rise in marketing and promotional costs, primarily consisting of $3.2 million in underwriter structuring fees for a new closed-end fund, $1.8 million in increased appreciation on Rabbi trust assets associated with the Company’s deferred compensation plans and a $1.6 million rise in professional fees primarily related to the pending acquisition of SSR and Sarbanes-Oxley Act compliance activities.
Total expenses for the year ended December 31, 2004 increased $189.6 million to $559.5 million compared to $369.9 million during the year ended December 31, 2003. The increase was primarily attributable to $104.0 million in LTIP-related charges recognized during 2004 as well as an increase of $58.2 million, or 25%, in employee compensation and benefits, an increase of $21.4 million, or 20%, in general and administration expense and the recognition of a $6.1 million impairment of an acquired management contract during 2004. Exclusive of LTIP-related charges and the impairment charge, total expense for 2004 would have increased $79.5 million, or 21%, from 2003. The rise in employee compensation expense reflects increased incentive compensation of $30.8 million and a $26.2 million rise in salaries and benefits largely due to higher staffing levels to support Company growth particularly in BlackRock Solutions. General and administration expense rose during the period due to a $9.6 million, or 34%, increase in marketing and promotional expense largely related to new closed-end issuance, higher professional fees of $5.2 million for legal and accounting services related to mutual fund regulatory inquiries, Sarbanes-Oxley Act compliance activities and the acquisition of SSR and a $3.1 million increase in subadvisory fees primarily related to performance fees earned on a collaterized debt obligation during 2004.
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Year ended December 31, | Variance | |||||||||||
(Dollar amounts in thousands)
| 2004 | 2003 | Amount | % | ||||||||
General and administration expense: | ||||||||||||
Marketing and promotional | $ | 37,602 | $ | 28,052 | $ | 9,550 | 34.0 | % | ||||
Occupancy | 23,407 | 22,033 | 1,374 | 6.2 | ||||||||
Technology | 18,835 | 18,544 | 291 | 1.6 | ||||||||
Other general and administration | 48,894 | 38,704 | 10,190 | 26.3 | ||||||||
Total general and administration expense | $ | 128,738 | $ | 107,333 | $ | 21,405 | 19.9 | % | ||||
Fourth quarter operating income of $55.8 million, which included $13.4 million of LTIP expense, $3.2 million of underwriter structuring fees on a new closed-end fund, $1.0 million of SSR acquisition costs and a $1.7 million increase in appreciation on Rabbi trust assets, declined $6.0 million from the $61.8 million earned in 2003.
Operating income for the year ended December 31, 2004 of $165.8 million, which included $104.0 million of LTIP expense, $3.2 million of underwriter structuring fees on a new closed-end fund, $1.0 million of SSR acquisition costs and a $1.3 million increase in appreciation on Rabbi trust assets, declined $62.5 million from the $228.3 million earned in 2003.
Non-operating income for the quarter ended December 31, 2004 increased $2.4 million as compared to the fourth quarter of 2003 primarily due to increased appreciation on Rabbi trust assets associated with the Company’s deferred compensation plans of $1.7 million and increased securities gains of $0.5 million during the period. During the fourth quarter of 2004, non-operating income increased $2.0 million as compared to the third quarter of 2004 largely due to a $1.8 million increase in appreciation on Rabbi trust assets associated with the Company’s deferred compensation plans. For the year ended December 31, 2004, non-operating income increased $12.0 million compared to the prior year primarily due to the recognition of a $12.9 million gain on the sale of the Company’s interest in Trepp LLC during 2004 partially offset by decreased securities gains and investment income.
# # #
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TABLE 1
BlackRock, Inc.
Financial Highlights
(Dollar amounts in thousands, except share data)
(unaudited)
Three months ended | Variance vs. | |||||||||||||||||||||||||
December 31, | September 30, 2004 | December 31, 2003 | September 30, 2004 | |||||||||||||||||||||||
2004 | 2003 | Amount | % | Amount | % | |||||||||||||||||||||
Total revenue | $ | 188,677 | $ | 161,211 | $ | 170,999 | $ | 27,466 | 17 | % | $ | 17,678 | 10 | % | ||||||||||||
Total expense | $ | 132,851 | $ | 99,457 | $ | 193,375 | $ | 33,394 | 34 | % | $ | (60,524 | ) | -31 | % | |||||||||||
Operating income (loss) | $ | 55,826 | $ | 61,754 | $ | (22,376 | ) | $ | (5,928 | ) | -10 | % | $ | 78,202 | NM | |||||||||||
Net income (loss) | $ | 49,752 | $ | 41,355 | $ | (9,814 | ) | $ | 8,397 | 20 | % | $ | 59,566 | NM | ||||||||||||
Diluted earnings (loss) per share | $ | 0.75 | $ | 0.63 | $ | (0.15 | ) | $ | 0.12 | 19 | % | $ | 0.90 | NM | ||||||||||||
Diluted earnings per share, as adjusted(a) | $ | 0.72 | $ | 0.63 | $ | 0.56 | $ | 0.09 | 14 | % | $ | 0.16 | 29 | % | ||||||||||||
Average diluted shares outstanding | 66,229,527 | 65,634,589 | 63,676,776 | 594,938 | 1 | % | 2,552,751 | 4 | % | |||||||||||||||||
Operating margin(b) | 38.1 | % | 40.9 | % | 32.0 | % | ||||||||||||||||||||
Assets under management ($ in millions) | $ | 341,760 | $ | 309,356 | $ | 323,465 | $ | 32,404 | 10 | % | $ | 18,295 | 6 | % |
Year ended December 31, | Variance | ||||||||||||||
2004 | 2003 | Amount | % | ||||||||||||
Total revenue | $ | 725,311 | $ | 598,212 | $ | 127,099 | 21 | % | |||||||
Total expense | $ | 559,513 | $ | 369,936 | $ | 189,577 | 51 | % | |||||||
Operating income | $ | 165,798 | $ | 228,276 | $ | (62,478 | ) | -27 | % | ||||||
Net income | $ | 143,141 | $ | 155,402 | $ | (12,261 | ) | -8 | % | ||||||
Diluted earnings per share | $ | 2.17 | $ | 2.36 | $ | (0.19 | ) | -8 | % | ||||||
Diluted earnings per share, as adjusted(a) | $ | 2.69 | $ | 2.36 | $ | 0.34 | 14 | % | |||||||
Average diluted shares outstanding | 65,960,473 | 65,860,368 | 100,105 | 0 | % | ||||||||||
Operating margin(b) | 36.9 | % | 40.9 | % | |||||||||||
Assets under management ($ in millions) | $ | 341,760 | $ | 309,356 | $ | 32,404 | 10 | % |
NM - Not meaningful.
(a) | All required disclosures for this non-GAAP measure have been included at Table 2. |
(b) | Operating income, adjusted for LTIP expense and appreciation on Rabbi trust assets, divided by total revenue less fund administration and servicing costs. Computations for all periods presented include affiliated and non-affiliated fund administration and servicing expense reported as a separate income statement line item and are derived from the Company’s consolidated financial statements, as follows: |
Three months ended | Year ended December 31, | |||||||||||||||||||
December 31, | September 30, 2004 | |||||||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||||||
Operating income (loss), GAAP basis | $ | 55,826 | $ | 61,754 | $ | (22,376 | ) | $ | 165,798 | $ | 228,276 | |||||||||
Add back: LTIP expense | 13,393 | — | 90,606 | 103,999 | — | |||||||||||||||
Less: BlackRock’s LTIP funding requirement | (2,411 | ) | — | (16,481 | ) | (18,892 | ) | — | ||||||||||||
Add back: appreciation on Rabbi trust assets | 2,081 | 362 | 267 | 4,479 | 3,141 | |||||||||||||||
Operating income, as adjusted | 68,889 | 62,116 | 52,016 | 255,384 | 231,417 | |||||||||||||||
Revenue, GAAP basis | 188,677 | 161,211 | 170,999 | 725,311 | 598,212 | |||||||||||||||
Less: fund administration and servicing costs | (7,939 | ) | (9,393 | ) | (8,277 | ) | (32,593 | ) | (32,773 | ) | ||||||||||
Revenue used for operating margin measurement | 180,737 | 151,818 | 162,722 | 692,718 | 565,439 | |||||||||||||||
Operating margin, GAAP basis | 29.6 | % | 38.3 | % | -13.1 | % | 22.9 | % | 38.2 | % | ||||||||||
Operating margin, as reported | 38.1 | % | 40.9 | % | 32.0 | % | 36.9 | % | 40.9 | % | ||||||||||
We believe that operating margin, as reported, is an effective indicator of management’s ability to effectively employ the Company’s resources. Appreciation on Rabbi trust assets associated with the Company’s deferred compensation plans has been excluded because investment performance of these assets has a nominal impact on net income. Fund administration and servicing costs have been excluded from operating margin because these costs fluctuate based on the discretion of a third party.
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TABLE 2
BlackRock, Inc.
Adjusted Diluted Earnings Per Share Quarterly Trend
(Dollar amounts in thousands, except share data)
(unaudited)
Management believes that adjusted earnings per diluted share is an effective indicator of the Company’s profitability and financial performance over time. The LTIP expense associated with awards to be met by PNC’s funding requirement has been excluded from adjusted earnings per diluted share because, exclusive of the impact related to LTIP participants’ put options, these non-cash charges will not impact BlackRock’s book value. The remaining items disclosed below, which have been deemed non-recurring by management, have been excluded from adjusted earnings per diluted share to help ensure the comparability of this information to prior reporting periods.
2004 | Quarter | ||||||||||||||||||||||||||||||
1st | 2nd | 3rd | |||||||||||||||||||||||||||||
As reported | Non-GAAP Adjustments | As adjusted | As reported | Non-GAAP Adjustments | As adjusted | As reported | Non-GAAP Adjustments | As adjusted | |||||||||||||||||||||||
Revenues | $ | 181,823 | $ | — | $ | 181,823 | $ | 183,812 | $ | — | $ | 183,812 | $ | 170,999 | $ | — | $ | 170,999 | |||||||||||||
Expenses | |||||||||||||||||||||||||||||||
Compensation and benefits | 66,069 | — | 66,069 | 81,618 | (7,004 | )(b) | 74,614 | 64,950 | — | 64,950 | |||||||||||||||||||||
Long Term Retention and Incentive Plan | — | — | — | — | — | — | 90,606 | (74,125 | )(c) | 16,481 | |||||||||||||||||||||
Other | 45,987 | — | 45,987 | 39,613 | — | 39,613 | 37,819 | — | 37,819 | ||||||||||||||||||||||
Total | 112,056 | — | 112,056 | 121,231 | (7,004 | ) | 114,227 | 193,375 | (74,125 | ) | 119,250 | ||||||||||||||||||||
Operating income (loss) | 69,767 | — | 69,767 | 62,581 | 7,004 | 69,585 | (22,376 | ) | 74,125 | 51,749 | |||||||||||||||||||||
Nonoperating income (loss) | 5,813 | — | 5,813 | 15,488 | (12,947 | )(b) | 2,541 | 5,682 | — | 5,682 | |||||||||||||||||||||
Income taxes | 20,089 | 8,659 | (a) | 28,748 | 26,521 | (1,459 | )(e) | 25,062 | (7,265 | ) | 27,426 | (e) | 20,161 | ||||||||||||||||||
— | (a) | ||||||||||||||||||||||||||||||
Minority interest | 284 | — | 284 | 3,552 | (2,912 | )(b) | 640 | 385 | — | 385 | |||||||||||||||||||||
�� | |||||||||||||||||||||||||||||||
Net income (loss) | $ | 55,207 | $ | (8,659 | ) | $ | 46,548 | $ | 47,996 | $ | (1,572 | ) | $ | 46,424 | $ | (9,814 | ) | $ | 46,699 | $ | 36,885 | ||||||||||
Diluted earnings (loss) per share | $ | 0.84 | $ | (0.13 | ) | $ | 0.71 | $ | 0.73 | $ | (0.02 | ) | $ | 0.71 | $ | (0.15 | ) | $ | 0.71 | $ | 0.56 | ||||||||||
Diluted shares outstanding | 65,807,605 | 65,807,605 | 65,766,979 | 65,766,979 | 63,676,776 | 2,303,856 | (f) | 65,980,632 | |||||||||||||||||||||||
2004 | Quarter | |||||||||||||||||||
4th | Total | |||||||||||||||||||
As reported | Non-GAAP Adjustments | As adjusted | As reported | Non-GAAP Adjustments | As adjusted | |||||||||||||||
Revenues | $ | 188,677 | $ | — | $ | 188,677 | $ | 725,311 | $ | — | $ | 725,311 | ||||||||
Expenses | ||||||||||||||||||||
Compensation and benefits | 74,502 | — | 74,502 | 287,139 | (7,004 | ) | 280,135 | |||||||||||||
Long Term Retention and Incentive Plan | 13,393 | (10,982 | )(c) | 2,411 | 103,999 | (85,107 | ) | 18,892 | ||||||||||||
Other | 44,956 | (1,000 | )(d) | 43,956 | 168,375 | (1,000 | ) | 167,375 | ||||||||||||
Total | 132,851 | (11,982 | ) | 120,869 | 559,513 | (93,111 | ) | 466,402 | ||||||||||||
Operating income (loss) | 55,826 | 11,982 | 67,808 | 165,798 | 93,111 | 258,909 | ||||||||||||||
Nonoperating income (loss) | 7,657 | — | 7,657 | 34,640 | (12,947 | ) | 21,693 | |||||||||||||
Income taxes | 12,919 | 9,545 | (a) | 26,837 | 52,264 | 48,544 | 100,808 | |||||||||||||
4,373 | (e) | |||||||||||||||||||
Minority interest | 812 | — | 812 | 5,033 | (2,912 | ) | 2,121 | |||||||||||||
Net income (loss) | $ | 49,752 | $ | (1,936 | ) | $ | 47,816 | $ | 143,141 | $ | 34,532 | $ | 177,673 | |||||||
Diluted earnings (loss) per share | $ | 0.75 | $ | (0.03 | ) | $ | 0.72 | $ | 2.17 | $ | 0.52 | $ | 2.69 | |||||||
Diluted shares outstanding | 66,229,527 | 66,229,527 | 65,960,473 | 65,960,473 | ||||||||||||||||
2003 | Quarter | ||||||||||||||||||||||||||||
1st | 2nd | 3rd | |||||||||||||||||||||||||||
As reported | Non-GAAP Adjustments | As adjusted | As reported | Non-GAAP Adjustments | As adjusted | As reported | Non-GAAP Adjustments | As adjusted | |||||||||||||||||||||
Revenues | $ | 142,751 | $ | — | $ | 142,751 | $ | 143,906 | $ | — | $ | 143,906 | $ | 150,344 | $ | — | $ | 150,344 | |||||||||||
Expenses | |||||||||||||||||||||||||||||
Compensation and benefits | 55,386 | — | 55,386 | 55,819 | — | 55,819 | 58,956 | — | 58,956 | ||||||||||||||||||||
Other | 33,299 | — | 33,299 | 33,285 | — | 33,285 | 33,734 | — | 33,734 | ||||||||||||||||||||
Total | 88,685 | — | 88,685 | 89,104 | — | 89,104 | 92,690 | — | 92,690 | ||||||||||||||||||||
Operating income | 54,066 | — | 54,066 | 54,802 | — | 54,802 | 57,654 | — | 57,654 | ||||||||||||||||||||
Nonoperating income | 3,365 | — | 3,365 | 8,082 | — | 8,082 | 5,934 | — | 5,934 | ||||||||||||||||||||
Income taxes | 22,111 | — | 22,111 | 24,210 | — | 24,210 | 23,579 | — | 23,579 | ||||||||||||||||||||
Minority interest | — | — | — | — | — | — | (44 | ) | — | (44 | ) | ||||||||||||||||||
Net income | $ | 35,320 | $ | — | $ | 35,320 | $ | 38,674 | $ | — | $ | 38,674 | $ | 40,053 | $ | — | $ | 40,053 | |||||||||||
Diluted earnings per share | $ | 0.54 | $ | — | $ | 0.54 | $ | 0.58 | $ | — | $ | 0.58 | $ | 0.61 | $ | — | $ | 0.61 | |||||||||||
2003 | Quarter | |||||||||||||||||
4th | Total | |||||||||||||||||
As reported | Non-GAAP Adjustments | As adjusted | As reported | Non-GAAP Adjustments | As adjusted | |||||||||||||
Revenues | $ | 161,211 | $ | — | $ | 161,211 | $ | 598,212 | $ | — | $ | 598,212 | ||||||
Expenses | ||||||||||||||||||
Compensation and benefits | 58,744 | — | 58,744 | 228,905 | — | 228,905 | ||||||||||||
Other | 40,713 | — | 40,713 | 141,031 | — | 141,031 | ||||||||||||
Total | 99,457 | — | 99,457 | 369,936 | — | 369,936 | ||||||||||||
Operating income | 61,754 | — | 61,754 | 228,276 | — | 228,276 | ||||||||||||
Nonoperating income | 5,245 | — | 5,245 | 22,626 | — | 22,626 | ||||||||||||
Income taxes | 25,347 | — | 25,347 | 95,247 | — | 95,247 | ||||||||||||
Minority interest | 297 | — | 297 | 253 | — | 253 | ||||||||||||
Net income | $ | 41,355 | $ | — | $ | 41,355 | $ | 155,402 | $ | — | $ | 155,402 | ||||||
Diluted earnings per share | $ | 0.63 | $ | — | $ | 0.63 | $ | 2.36 | $ | — | $ | 2.36 | ||||||
Notes to table:
(a) | Tax benefits related to resolution of New York State and New York City tax audits. |
(b) | Impact related to the Company’s sale of its equity interest in Trepp LLC. |
(c) | Incentive compensation related to PNC’s LTIP funding requirement. |
(d) | One time charges related to SSR acquisition. |
(e) | Tax impact of all pre tax income adjustments. |
(f) | Antidilutive common stock equivalents by virtue of the Company’s net loss during the period. |
9
TABLE 3
BlackRock, Inc.
Condensed Consolidated Statements of Income
(Dollar amounts in thousands, except share data)
(unaudited)
Three months ended | Year ended | |||||||||||||||||||||
December 31, 2004 | December 31, 2003 | % Change | December 31, 2004 | December 31, 2003 | % Change | |||||||||||||||||
Revenue | ||||||||||||||||||||||
Investment advisory and administration fees | ||||||||||||||||||||||
Mutual funds | $ | 55,451 | $ | 56,418 | (1.7 | )% | $ | 220,949 | $ | 206,136 | 7.2 | % | ||||||||||
Separate accounts | 108,292 | 84,859 | 27.6 | 412,674 | 322,556 | 27.9 | ||||||||||||||||
Total investment advisory and administration fees | 163,743 | 141,277 | 15.9 | 633,623 | 528,692 | 19.8 | ||||||||||||||||
Other income | 24,934 | 19,934 | 25.1 | 91,688 | 69,520 | 31.9 | ||||||||||||||||
Total revenue | 188,677 | 161,211 | 17.0 | 725,311 | 598,212 | 21.2 | ||||||||||||||||
Expense | ||||||||||||||||||||||
Employee compensation and benefits | 74,502 | 58,744 | 26.8 | 287,139 | 228,905 | 25.4 | ||||||||||||||||
Long-Term Retention and Incentive Plan | 13,393 | — | NM | 103,999 | — | NM | ||||||||||||||||
Fund administration and servicing costs | ||||||||||||||||||||||
Affiliates | 4,100 | 6,699 | (38.8 | ) | 18,342 | 26,949 | (31.9 | ) | ||||||||||||||
Other | 3,839 | 2,694 | 42.5 | 14,251 | 5,824 | 144.7 | ||||||||||||||||
General and administration | 36,816 | 31,089 | 18.4 | 128,738 | 107,333 | 19.9 | ||||||||||||||||
Amortization of intangible assets | 201 | 231 | (13.0 | ) | 947 | 925 | 2.4 | |||||||||||||||
Impairment of intangible assets | — | — | 0.0 | 6,097 | — | NM | ||||||||||||||||
Total expense | 132,851 | 99,457 | 33.6 | 559,513 | 369,936 | 51.2 | ||||||||||||||||
Operating income | 55,826 | 61,754 | (9.6 | ) | 165,798 | 228,276 | (27.4 | ) | ||||||||||||||
Non-operating income (expense) | ||||||||||||||||||||||
Investment income | 7,824 | 5,497 | 42.3 | 35,475 | 23,349 | 51.9 | ||||||||||||||||
Interest expense | (167 | ) | (252 | ) | (33.7 | ) | (835 | ) | (723 | ) | 15.5 | |||||||||||
7,657 | 5,245 | 46.0 | 34,640 | 22,626 | 53.1 | |||||||||||||||||
Income before income taxes and minority interest | 63,483 | 66,999 | (5.2 | ) | 200,438 | 250,902 | (20.1 | ) | ||||||||||||||
Income taxes | 12,919 | 25,347 | (49.0 | ) | 52,264 | 95,247 | (45.1 | ) | ||||||||||||||
Income before minority interest | 50,564 | 41,652 | 21.4 | 148,174 | 155,655 | (4.8 | ) | |||||||||||||||
Minority interest | 812 | 297 | NM | 5,033 | 253 | NM | ||||||||||||||||
Net income | $ | 49,752 | $ | 41,355 | 20.3 | $ | 143,141 | $ | 155,402 | (7.9 | ) | |||||||||||
Weighted-average shares outstanding | ||||||||||||||||||||||
Basic | 63,676,069 | 64,072,611 | (0.6 | )% | 63,688,955 | 64,653,352 | (1.5 | )% | ||||||||||||||
Diluted | 66,229,527 | 65,634,589 | 0.9 | % | 65,960,473 | 65,860,368 | 0.2 | % | ||||||||||||||
Earnings per share | ||||||||||||||||||||||
Basic | $ | 0.78 | $ | 0.65 | 20.0 | % | $ | 2.25 | $ | 2.40 | (6.3 | )% | ||||||||||
Diluted | $ | 0.75 | $ | 0.63 | 19.0 | % | $ | 2.17 | $ | 2.36 | (8.1 | )% | ||||||||||
Dividends paid per share | $ | 0.25 | $ | 0.20 | 25.0 | % | $ | 1.00 | $ | 0.40 | NM |
NM- Not meaningful.
10
TABLE 4
BlackRock, Inc.
Condensed Consolidated Statements of Financial Condition
(Dollar amounts in thousands)
(unaudited)
December 31, 2004 | December 31, 2003 | |||||
Assets | ||||||
Cash and cash equivalents | $ | 457,673 | $ | 315,941 | ||
Accounts receivable | 165,342 | 127,316 | ||||
Investments | 227,497 | 234,923 | ||||
Property and equipment, net | 93,701 | 87,006 | ||||
Intangible assets, net | 184,110 | 192,079 | ||||
Other assets | 16,912 | 9,958 | ||||
Total assets | $ | 1,145,235 | $ | 967,223 | ||
Liabilities, minority interest and stockholders’ equity | ||||||
Accrued compensation | $ | 207,352 | $ | 172,447 | ||
Long-Term Retention and Incentive Plan | 103,999 | — | ||||
Accounts payable and accrued liabilities | 30,817 | 60,098 | ||||
Acquired management contract obligation | 4,810 | 5,736 | ||||
Other liabilities | 12,736 | 14,395 | ||||
Total liabilities | 359,714 | 252,676 | ||||
Minority interest | 17,169 | 1,239 | ||||
Stockholders’ equity | 768,352 | 713,308 | ||||
Total liabilities, minority interest and stockholders’ equity | $ | 1,145,235 | $ | 967,223 | ||
11
TABLE 5
BlackRock, Inc.
Consolidated Statements of Cash Flows
(Dollar amounts in thousands)
(unaudited)
Year ended December 31, | ||||||||
2004 | 2003 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 143,141 | $ | 155,402 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 20,686 | 21,366 | ||||||
Impairment of intangible assets | 6,097 | — | ||||||
Minority interest | 5,033 | 220 | ||||||
Stock-based compensation | 11,947 | 6,351 | ||||||
Deferred income taxes | (25,149 | ) | (2,311 | ) | ||||
Tax benefit from stock-based compensation | 3,424 | 6,506 | ||||||
Net gain on investments | (13,636 | ) | (2,961 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Increase in accounts receivable | (27,040 | ) | (13,198 | ) | ||||
Increase in investments, trading | (9,692 | ) | (22,057 | ) | ||||
Decrease in receivable from affiliates | 13,040 | 200 | ||||||
Increase in other assets | (4,160 | ) | (540 | ) | ||||
Increase in accrued compensation | 34,905 | 5,493 | ||||||
Increase in Long-Term Retention and Incentive Plan | 103,999 | — | ||||||
Increase (decrease) in accounts payable and accrued liabilities | (30,539 | ) | 23,193 | |||||
Increase (decrease) in other liabilities | (698 | ) | 1,931 | |||||
Cash provided by operating activities | 231,358 | 179,595 | ||||||
Cash flows from investing activities | ||||||||
Purchase of property and equipment | (25,592 | ) | (13,453 | ) | ||||
Purchase of investments | (97,636 | ) | (181,671 | ) | ||||
Sale of investments | 192,254 | 184,405 | ||||||
Deemed cash contribution upon consolidation of VIE | 6,412 | — | ||||||
Consolidation of sponsored investment funds | (68,337 | ) | — | |||||
Acquisitions, net of cash acquired | (74 | ) | (8,930 | ) | ||||
Cash provided by (used in) investing activities | 7,027 | (19,649 | ) | |||||
Cash flows from financing activities | ||||||||
Issuance of class A common stock | — | 623 | ||||||
Dividends paid | (63,657 | ) | (25,614 | ) | ||||
Distributions paid to minority interest holders | (5,797 | ) | — | |||||
Subscriptions to consolidated sponsored investment funds | 12,978 | — | ||||||
Purchase of treasury stock | (57,607 | ) | (83,418 | ) | ||||
Reissuance of treasury stock | 15,369 | 6,915 | ||||||
Acquired management contract obligation payment | (926 | ) | (842 | ) | ||||
Cash used in financing activities | (99,640 | ) | (102,336 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 2,987 | 3,097 | ||||||
Net increase in cash and cash equivalents | 141,732 | 60,707 | ||||||
Cash and cash equivalents, beginning of year | 315,941 | 255,234 | ||||||
Cash and cash equivalents, end of year | $ | 457,673 | $ | 315,941 | ||||
12
TABLE 6
BlackRock, Inc.
Assets Under Management
(Dollar amounts in millions)
(unaudited)
December 31, | ||||||||
2004 | 2003 | |||||||
All Accounts | ||||||||
Fixed income | $ | 240,709 | $ | 214,356 | ||||
Liquidity | 78,057 | 74,345 | ||||||
Equity | 14,792 | 13,721 | ||||||
Alternative investment products | 8,202 | 6,934 | ||||||
Total | $ | 341,760 | $ | 309,356 | ||||
Separate Accounts | ||||||||
Fixed income | $ | 216,070 | $ | 190,432 | ||||
Liquidity | 7,360 | 5,855 | ||||||
Liquidity-Securities lending | 6,898 | 9,925 | ||||||
Equity | 9,397 | 9,443 | ||||||
Alternative investment products | 8,202 | 6,934 | ||||||
Subtotal | 247,927 | 222,589 | ||||||
Mutual Funds | ||||||||
Fixed income | 24,639 | 23,924 | ||||||
Liquidity | 63,799 | 58,565 | ||||||
Equity | 5,395 | 4,278 | ||||||
Subtotal | 93,833 | 86,767 | ||||||
Total | $ | 341,760 | $ | 309,356 | ||||
Component Changes in Assets Under Management (Dollar amounts in millions) (unaudited) |
| |||||||
Year ended December 31, | ||||||||
2004 | 2003 | |||||||
All Accounts | ||||||||
Beginning assets under management | $ | 309,356 | $ | 272,841 | ||||
Net subscriptions | 19,624 | 22,468 | ||||||
Market appreciation | 12,780 | 14,047 | ||||||
Ending assets under management | $ | 341,760 | $ | 309,356 | ||||
% of Change in AUM from net subscriptions | 60.6 | % | 61.5 | % | ||||
Separate Accounts | ||||||||
Beginning assets under management | $ | 222,589 | $ | 183,513 | ||||
Net subscriptions | 12,918 | 26,540 | ||||||
Market appreciation | 12,420 | 12,536 | ||||||
Ending assets under management | 247,927 | 222,589 | ||||||
Mutual Funds | ||||||||
Beginning assets under management | 86,767 | 89,328 | ||||||
Net subscriptions (redemptions) | 6,706 | (4,072 | ) | |||||
Market appreciation | 360 | 1,511 | ||||||
Ending assets under management | 93,833 | 86,767 | ||||||
Total | $ | 341,760 | $ | 309,356 | ||||
13
BlackRock, Inc.
Assets Under Management
Quarterly Trend
(Dollar amounts in millions)
(unaudited)
2003 | 2004 | Year ended | ||||||||||||||||||||||
December 31 | March 31 | June 30 | September 30 | December 31 | December 31, 2004 | |||||||||||||||||||
Separate Accounts | ||||||||||||||||||||||||
Fixed Income | ||||||||||||||||||||||||
Beginning assets under management | $ | 156,574 | $ | 190,432 | $ | 202,055 | $ | 199,762 | $ | 211,075 | $ | 190,432 | ||||||||||||
Net subscriptions | 24,113 | 7,141 | 1,365 | 5,201 | 1,121 | 14,828 | ||||||||||||||||||
Market appreciation (depreciation) | 9,745 | 4,482 | (3,658 | ) | 6,112 | 3,874 | 10,810 | |||||||||||||||||
Ending assets under management | 190,432 | 202,055 | 199,762 | 211,075 | 216,070 | 216,070 | ||||||||||||||||||
Liquidity | ||||||||||||||||||||||||
Beginning assets under management | 5,491 | 5,855 | 6,304 | 6,896 | 7,703 | 5,855 | ||||||||||||||||||
Net subscriptions (redemptions) | 327 | 446 | 591 | 787 | (362 | ) | 1,462 | |||||||||||||||||
Market appreciation | 37 | 3 | 1 | 20 | 19 | 43 | ||||||||||||||||||
Ending assets under management | 5,855 | 6,304 | 6,896 | 7,703 | 7,360 | 7,360 | ||||||||||||||||||
Liquidity-Securities lending | ||||||||||||||||||||||||
Beginning assets under management | 6,433 | 9,925 | 8,479 | 8,771 | 8,636 | 9,925 | ||||||||||||||||||
Net subscriptions (redemptions) | 3,492 | (1,446 | ) | 292 | (135 | ) | (1,738 | ) | (3,027 | ) | ||||||||||||||
Ending assets under management | 9,925 | 8,479 | 8,771 | 8,636 | 6,898 | 6,898 | ||||||||||||||||||
Equity | ||||||||||||||||||||||||
Beginning assets under management | 9,736 | 9,443 | 9,003 | 8,790 | 8,129 | 9,443 | ||||||||||||||||||
Net subscriptions (redemptions) | (2,920 | ) | (684 | ) | (195 | ) | (748 | ) | 31 | (1,596 | ) | |||||||||||||
Market appreciation (depreciation) | 2,627 | 244 | (18 | ) | 87 | 1,237 | 1,550 | |||||||||||||||||
Ending assets under management | 9,443 | 9,003 | 8,790 | 8,129 | 9,397 | 9,397 | ||||||||||||||||||
Alternative investment products | ||||||||||||||||||||||||
Beginning assets under management | 5,279 | 6,934 | 6,342 | 6,626 | 7,418 | 6,934 | ||||||||||||||||||
Net subscriptions (redemptions) | 1,528 | (486 | ) | 220 | 851 | 665 | 1,251 | |||||||||||||||||
Market appreciation (depreciation) | 127 | (106 | ) | 64 | (59 | ) | 118 | 17 | ||||||||||||||||
Ending assets under management | 6,934 | 6,342 | 6,626 | 7,418 | 8,202 | 8,202 | ||||||||||||||||||
Total Separate Accounts | ||||||||||||||||||||||||
Beginning assets under management | 183,513 | 222,589 | 232,183 | 230,845 | 242,961 | 222,589 | ||||||||||||||||||
Net subscriptions (redemptions) | 26,540 | 4,971 | 2,273 | 5,956 | (283 | ) | 12,918 | |||||||||||||||||
Market appreciation (depreciation) | 12,536 | 4,623 | (3,611 | ) | 6,160 | 5,248 | 12,420 | |||||||||||||||||
Ending assets under management | $ | 222,589 | $ | 232,183 | $ | 230,845 | $ | 242,961 | $ | 247,927 | $ | 247,927 | ||||||||||||
Mutual Funds | ||||||||||||||||||||||||
Fixed Income | ||||||||||||||||||||||||
Beginning assets under management | $ | 19,012 | $ | 23,924 | $ | 24,742 | $ | 23,780 | $ | 24,460 | $ | 23,924 | ||||||||||||
Net subscriptions (redemptions) | 4,295 | 598 | (264 | ) | 270 | 197 | 801 | |||||||||||||||||
Market appreciation (depreciation) | 617 | 220 | (698 | ) | 410 | (18 | ) | (86 | ) | |||||||||||||||
Ending assets under management | $ | 23,924 | 24,742 | 23,780 | 24,460 | 24,639 | 24,639 | |||||||||||||||||
Liquidity | ||||||||||||||||||||||||
Beginning assets under management | 66,588 | 58,565 | 58,986 | 50,276 | 51,498 | 58,565 | ||||||||||||||||||
Net subscriptions (redemptions) | (8,035 | ) | 420 | (8,710 | ) | 1,222 | 12,309 | 5,241 | ||||||||||||||||
Market appreciation (depreciation) | 12 | 1 | — | — | (8 | ) | (7 | ) | ||||||||||||||||
Ending assets under management | 58,565 | 58,986 | 50,276 | 51,498 | 63,799 | 63,799 | ||||||||||||||||||
Equity | ||||||||||||||||||||||||
Beginning assets under management | 3,728 | 4,278 | 4,761 | 4,753 | 4,546 | 4,278 | ||||||||||||||||||
Net subscriptions (redemptions) | (332 | ) | 351 | 4 | (146 | ) | 455 | 664 | ||||||||||||||||
Market appreciation (depreciation) | 882 | 132 | (12 | ) | (61 | ) | 394 | 453 | ||||||||||||||||
Ending assets under management | $ | 4,278 | $ | 4,761 | $ | 4,753 | $ | 4,546 | $ | 5,395 | $ | 5,395 | ||||||||||||
14
BlackRock, Inc.
Assets Under Management
Quarterly Trend
(Dollar amounts in millions)
(unaudited)
2003 | 2004 | Year ended December 31, 2004 | |||||||||||||||||||||
December 31 | March 31 | June 30 | September 30 | December 31 | |||||||||||||||||||
Mutual Funds | |||||||||||||||||||||||
BlackRock Funds | |||||||||||||||||||||||
Beginning assets under management | $ | 18,115 | $ | 18,354 | $ | 18,985 | $ | 16,603 | $ | 16,305 | $ | 18,354 | |||||||||||
Net subscriptions (redemptions) | (523 | ) | 427 | (2,110 | ) | (391 | ) | 60 | (2,014 | ) | |||||||||||||
Market appreciation (depreciation) | 762 | 204 | (272 | ) | 93 | 340 | 365 | ||||||||||||||||
Ending assets under management | 18,354 | 18,985 | 16,603 | 16,305 | 16,705 | 16,705 | |||||||||||||||||
BlackRock Global Series | |||||||||||||||||||||||
Beginning assets under management | 211 | 838 | 1,026 | 1,293 | 1,299 | 838 | |||||||||||||||||
Net subscriptions (redemptions) | 521 | 181 | 275 | (21 | ) | (117 | ) | 318 | |||||||||||||||
Market appreciation (depreciation) | 106 | 7 | (8 | ) | 27 | 41 | 67 | ||||||||||||||||
Ending assets under management | 838 | 1,026 | 1,293 | 1,299 | 1,223 | 1,223 | |||||||||||||||||
BlackRock Liquidity Funds | |||||||||||||||||||||||
Beginning assets under management | 59,576 | 52,870 | 53,159 | 45,854 | 47,087 | 52,870 | |||||||||||||||||
Net subscriptions (redemptions) | (6,706 | ) | 289 | (7,305 | ) | 1,233 | 11,374 | 5,591 | |||||||||||||||
Market depreciation | — | — | — | — | (8 | ) | (8 | ) | |||||||||||||||
Ending assets under management | 52,870 | 53,159 | 45,854 | 47,087 | 58,453 | 58,453 | |||||||||||||||||
Closed End | |||||||||||||||||||||||
Beginning assets under management | 10,771 | 13,961 | 14,552 | 14,233 | 14,895 | 13,961 | |||||||||||||||||
Net subscriptions | 2,547 | 449 | 111 | 433 | 520 | 1,513 | |||||||||||||||||
Market appreciation (depreciation) | 643 | 142 | (430 | ) | 229 | (5 | ) | (64 | ) | ||||||||||||||
Ending assets under management | 13,961 | 14,552 | 14,233 | 14,895 | 15,410 | 15,410 | |||||||||||||||||
Other Commingled Funds | |||||||||||||||||||||||
Beginning assets under management | 655 | 744 | 767 | 826 | 918 | 744 | |||||||||||||||||
Net subscriptions | 89 | 23 | 59 | 92 | 1,124 | 1,298 | |||||||||||||||||
Ending assets under management | 744 | 767 | 826 | 918 | 2,042 | 2,042 | |||||||||||||||||
Total Mutual Funds | |||||||||||||||||||||||
Beginning assets under management | 89,328 | 86,767 | 88,489 | 78,809 | 80,504 | 86,767 | |||||||||||||||||
Net subscriptions (redemptions) | (4,072 | ) | 1,369 | (8,970 | ) | 1,346 | 12,961 | 6,706 | |||||||||||||||
Market appreciation (depreciation) | 1,511 | 353 | (710 | ) | 349 | 368 | 360 | ||||||||||||||||
Ending assets under management | $ | 86,767 | $ | 88,489 | $ | 78,809 | $ | 80,504 | $ | 93,833 | $ | 93,833 | |||||||||||
15
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 hereunto duly authorized.
BlackRock, Inc. | ||||
(Registrant) | ||||
By: | /s/ Robert P. Connolly | |||
Date: February 16, 2005 | Robert P. Connolly | |||
Managing Director, General Counsel and Secretary |
Exhibit Index
No. | Description | |
99.1 | Press Release dated January 19, 2005. |