Exhibit 99.1
BlackRock
Contact:
Kathleen Baum
212-810-5429
Brian Beades
212-810-5596
invrel@blackrock.com
BlackRock, Inc. Reports Second Quarter Diluted E.P.S. of $0.80 per Share
Associated with a 31% Year-Over-Year Rise in Operating Income. Assets under Management
at June 30, 2005 total $414.4 Billion.
New York, July 19, 2005 – BlackRock, Inc. (NYSE:BLK) today reported net income for the quarter ended June 30, 2005 of $53.3 million, or $0.80 per diluted share, compared to net income of $48.0 million, or $0.73 per diluted share for the second quarter of 2004. Net income and diluted earnings per share increased 15% and 14%, respectively, from reported results for the first quarter of 2005.
For the three months ended June 30, 2005, diluted earnings per share, as adjusted, were $0.91, a 28% increase as compared to $0.71 earned in the second quarter of 2004 (see Table 1). Diluted earnings per share, as adjusted, primarily reflects the exclusion of the portion of expense related to the BlackRock, Inc. 2002 Long Term Retention and Incentive Plan (LTIP) to be funded through a capital contribution of stock currently held by The PNC Financial Services Group, Inc. (PNC). Second quarter 2005 diluted earnings per share, as adjusted, were reduced by approximately $0.01 per share due to a $0.6 million reversal of LTIP expense associated with employee forfeitures.
The double-digit growth in earnings from first quarter 2005 reflects strong organic growth in Assets Under Management (AUM), a full quarter of results from the State Street Research (SSR) acquisition, which closed on January 31, 2005 and no one-time acquisition related costs, partially offset by a significant increase in marketing costs associated with expanded international calling efforts.
Net income and diluted earnings per share for the six months ended June 30, 2005 were $99.9 million and $1.49, respectively, compared to $103.2 million and $1.57 earned in the six month period ended June 30, 2004. Results for the six months ended June 30, 2004 included approximately $10.2 million, or $0.16 per diluted share, of non-recurring gains due to certain state income tax benefits and the sale of a minority investment in Trepp LLC. In addition, BlackRock commenced LTIP expense recognition in the third quarter of 2004 and, therefore, results for the first half of 2004 were not impacted by these costs.
In management’s opinion, net income and diluted earnings per share, as adjusted, provide a more meaningful year-over-year performance comparative of the business by excluding the impact of the 2004 non-recurring items as well as 2005 LTIP expense to be funded by PNC and non-recurring State Street acquisition costs recorded in the first quarter of 2005. Net income and diluted earnings per share, as adjusted, for the first half of 2005 were $120.1 million and $1.80, respectively, and represented year-over-year increases of 29% and 28% from the $93.0 million and $1.41 earned in the first half of 2004.
“Our second quarter results reflect the strong growth momentum of our business across regions and client segments in both our core investment management franchise and in BlackRock Solutions®,” said Laurence D. Fink, Chairman and Chief Executive Officer. “The integration of SSR was completed with a minimum of interruption to our clients or our business efforts, and the benefits we are already seeing from that transaction should increase over time.”
Mr. Fink added, “BlackRock remains well positioned for the future. Our team-based, highly disciplined investment approach is generating strong performance across asset classes; demand from U.S. and international clients for broader capabilities and for innovative investment solutions is strong; and we continue to be differentiated by the talent, enthusiasm and commitment of our people.”
AUM increased 6%, or $23.1 billion in the quarter ended June 30, 2005, to $414.4 billion. Net new business during the quarter totaled $15.6 billion, with strong flows in all institutional channels globally. In addition, BlackRock continued to realize strong growth in BlackRock Solutions and advisory services, adding thirteen net new assignments during the quarter. For the twelve months ended June 30, 2005, net new business totaled $37.5 billion before giving effect to the SSR acquisition. SSR-related portfolios ended the quarter at $50.7 billion, up $1.3 billion during the second quarter.
Second Quarter Business Highlights
• | Strong new business efforts yielded $15.6 billion of net inflows during the quarter, which were well balanced geographically. Specifically, BlackRock was awarded $6.8 billion of net new funds from U.S. investors and $8.8 billion from non-U.S. clients, including $2.8 billion from Japanese institutions. Net inflows were strong across institutional client channels worldwide, including $4.7 billion from pension plans and other tax-exempt investors, $7.1 billion from insurance companies, $3.0 billion from other taxable institutions, and $1.0 billion from institutional cash management investors. In addition, BlackRock raised $305 million in a new closed-end equity fund, although retail mutual funds overall experienced net outflows of $265 million during the quarter. |
• | Fixed income assets rose $18.8 billion to $284.1 billion at June 30, 2005, driven in large measure by $12.9 billion of net new business during the quarter. Net inflows of $5.2 billion from U.S investors and $7.8 billion from non-U.S. investors were well diversified across BlackRock’s core, global, sector specialty and targeted duration offerings. As of June 30, 2005 80% or more of our composites outperformed their benchmarks and 67% or more of taxable bond funds ranked in the top two Lipper quartiles for the 1, 3, 5 and 7-year periods. |
• | Cash management (liquidity) AUM increased by $1.1 billion in the second quarter to $75.2 billion. U.S. institutional money market fund flows remained volatile, declining $1.0 billion from first quarter-end, as the Federal Reserve continued to raise rates. These outflows were more than offset by net inflows of $577 million in securities lending portfolios and, supported in part by strong cross-selling efforts, $1.5 billion in other separate accounts and funds. Performance remained competitive across products, and all of BlackRock’s institutional funds were ranked in the top two Lipper quartiles for the year-to-date, 1, 3, 5 and 7-year periods ended June 30, 2005. |
• | Equity assets ended the second quarter at $32.4 billion, unchanged from first quarter-end. Net new business results were adversely affected by $897 million of net outflows in equity separate accounts and mutual funds transitioned at the time of the SSR acquisition. Aside from these portfolios, net new business totaled $277 million, reflecting greater awareness of BlackRock’s enhanced equity capabilities. Investment performance was strong, with 80% or more of composites outperforming their benchmarks and 70% or more of equity mutual funds ranked in the top two Lipper quartiles for the year-to-date and 1-year periods ended June 30, 2005. |
• | AUM in alternative investment products rose $3.2 billion or 16% during the quarter to $22.8 billion. Net new business totaled $2.2 billion, split almost equally between net inflows from U.S. and non-U.S. investors. These strong results reflected continued interest in BlackRock’s fixed income and fund of funds offerings, successful integration of the capabilities added through the SSR acquisition, and ongoing product development efforts that enabled BlackRock to close a new collateralized debt obligation and manage approximately $.5 billion of client capital, which is expected to fund a new business development company. |
• | BlackRock continued to achieve strong growth in the BlackRock Solutions products and advisory services. During the quarter, BlackRock added thirteen net new assignments, including two new system outsourcing mandates, three new investment accounting clients, two new strategic advisory assignments and six new risk management relationships, including a new client in Japan. At quarter-end, BlackRock had four system implementations in process and interest in BlackRock’s investment tools, outsourcing and advisory services remains robust. |
• | BlackRock ended the second quarter with $8.4 billion of wins funded or to be funded and a strong pipeline of fixed income and equity searches in process. It should be noted that cash management flows are likely to remain volatile as long as the Fed maintains its tightening policy. Mutual fund flows may continue to be adversely affected by outflows in response to changes made in connection with the SSR acquisition. At the same time, BlackRock’s strong investment performance should support new business momentum, and BlackRock is already beginning to capitalize on its expanded product capabilities with new and existing clients. |
BlackRock, Inc.
Second Quarter 2005 Earnings Release
Three months ended June 30, | March 31, 2005 | Variance vs. | ||||||||||||||
June 30, 2004 | March 31, 2005 | |||||||||||||||
2005 | 2004 | Amount | % | Amount | % | |||||||||||
(Dollar amounts in thousands) | ||||||||||||||||
Mutual funds revenue | ||||||||||||||||
BlackRock Funds | $34,856 | $18,058 | $29,040 | $16,798 | 93.0% | $5,816 | 20.0% | |||||||||
Closed-end Funds | 21,095 | 17,484 | 19,898 | 3,611 | 20.7 | 1,197 | 6.0 | |||||||||
BlackRock Liquidity Funds | 20,310 | 19,160 | 21,021 | 1,150 | 6.0 | (711 | ) | (3.4 | ) | |||||||
Other commingled funds | 986 | 279 | 412 | 707 | 253.4 | 574 | 139.3 | |||||||||
Total mutual funds revenue | 77,247 | 54,981 | 70,371 | 22,266 | 40.5 | 6,876 | 9.8 | |||||||||
Separate accounts revenue | ||||||||||||||||
Separate accounts base fees | 132,786 | 89,436 | 115,229 | 43,350 | 48.5 | 17,557 | 15.2 | |||||||||
Separate accounts performance fees | 21,438 | 17,596 | 26,656 | 3,842 | 21.8 | (5,218 | ) | (19.6 | ) | |||||||
Total separate accounts revenue | 154,224 | 107,032 | 141,885 | 47,192 | 44.1 | 12,339 | 8.7 | |||||||||
Total investment advisory and administration fees | 231,471 | 162,013 | 212,256 | 69,458 | 42.9 | 19,215 | 9.1 | |||||||||
Other income | 39,918 | 21,799 | 37,827 | 18,119 | 83.1 | 2,091 | 5.5 | |||||||||
Total revenue | $271,389 | $183,812 | $250,083 | $87,577 | 47.6% | $21,306 | 8.5% | |||||||||
Total revenue for the quarter ended June 30, 2005 increased $87.6 million, or 48%, to $271.4 million, compared to $183.8 million for the quarter ended June 30, 2004. Separate account revenue, mutual fund revenue and other income increased by $47.2 million, or 44%, $22.3 million, or 41%, and $18.1 million, or 83%, respectively.
The increase in separate accounts revenue was driven by a $43.4 million, or 49%, increase in separate accounts base fees from $89.4 million for the quarter ended June 30, 2004 to $132.8 million for the quarter ended June 30, 2005 and a $3.8 million, or 22%, increase in separate accounts performance fees to $21.4 million for the quarter ended 2005 as compared to $17.6 million earned for the quarter ended June 30, 2004. Separate accounts base fees rose during the second quarter of 2005 primarily due to a $40.2 billion increase in AUM related to the SSR acquisition and an increase in AUM, exclusive of the SSR acquisition, of $44.2 billion, or 19%. The increase in separate accounts performance fees reflected increased fees earned on the Company’s equity and real estate alternative investment products which were partially offset by decreased performance fees earned on the Company’s fixed income hedge fund. The increase in mutual funds revenue was primarily due to the merger of SSR’s mutual funds into theBlackRock Funds contributing to an increase in average AUM during the second quarter of 2005 of approximately $7 billion, or 35%, and $1.9 billion of new closed-end funds launched since June 30, 2004. Other income increased $18.1 million, or 83%, to $39.9 million during the quarter ended June 30, 2005 compared to the quarter ended June 30, 2004 primarily due to $8.7 million in property management fees earned on real estate accounts assumed in the SSR acquisition, strong sales inBlackRock Solutionsproducts and services and higher distribution fees earned on theBlackRock Funds.
During the second quarter of 2005, total revenue increased approximately $21.3 million, or 9%, as compared to the first quarter of 2005 primarily due to strong organic growth in AUM, an additional month of revenue related to the SSR acquisition, which closed on January 31, 2005, and increased equity and real estate alternative investment product performance fees, which were partially offset by a decrease in performance fees earned on fixed income alternative investment products.
2
BlackRock, Inc.
Second Quarter 2005 Earnings Release
Total revenue for the six months ended June 30, 2005 increased $155.8 million, or 43%, to $521.5 million compared to $365.6 million during the six months ended June 30, 2004. Separate account revenue increased by $85.2 million, or 40%, mutual funds revenue increased by $36.2 million, or 33%, and other income increased by $34.4 million, or 80%, compared with the six months ended June 30, 2004.
The increase in separate accounts revenue was driven by a $70.5 million, or 40%, increase in separate accounts base fees from $177.5 million for the six months ended June 30, 2004 to $248.0 million for the six months ended June 30, 2005 and a $14.7 million, or 44%, increase in separate accounts performance fees to $48.1 million during the first half of 2005 as compared to $33.4 million earned in 2004. The growth in separate account base fees was primarily due to a $40.2 billion increase in AUM related to the SSR acquisition and an increase in AUM, exclusive of the SSR acquisition, of $44.2 billion, or 19%. The increase in separate accounts performance fees primarily reflects positive performance in equity alternative investment products. The increase in mutual funds revenue primarily consisted of increases inBlackRock Fundsrevenue and closed-end fund revenue of $27.1 million and $6.7 million, respectively. The rise inBlackRock Fundsrevenue was primarily due to the merger of SSR’s mutual funds into theBlackRock Funds contributing to an increase of approximately $6 billion, or 30%, in average AUM in theBlackRock Fundsduring the period as compared to prior year. Closed-end fund revenue increased during the period due to several closed-end fund launches since June 30, 2004, resulting in a $1.9 billion increase in assets under management. Other income increased primarily due to $14.3 million in property management fees earned on real estate accounts assumed in the SSR acquisition, strong sales inBlackRock Solutionsproducts and services and higher distribution fees earned on theBlackRock Funds.
3
BlackRock, Inc.
Second Quarter 2005 Earnings Release
Six months ended June 30, | Variance | |||||||
2005 | 2004 | Amount | % | |||||
(Dollar amounts in thousands) | ||||||||
Mutual funds revenue | ||||||||
BlackRock Funds | $63,896 | $36,840 | $27,056 | 73.4% | ||||
Closed-end Funds | 40,993 | 34,274 | 6,719 | 19.6 | ||||
BlackRock Liquidity Funds | 41,535 | 39,773 | 1,762 | 4.4 | ||||
Other commingled funds | 1,194 | 540 | 654 | 121.1 | ||||
Total mutual funds revenue | 147,618 | 111,427 | 36,191 | 32.5 | ||||
Separate accounts revenue | ||||||||
Separate accounts base fees | 248,015 | 177,502 | 70,513 | 39.7 | ||||
Separate accounts performance fees | 48,094 | 33,402 | 14,692 | 44.0 | ||||
Total separate accounts revenue | 296,109 | 210,904 | 85,205 | 40.4 | ||||
Total investment advisory and administration fees | 443,727 | 322,331 | 121,396 | 37.7 | ||||
Other income | 77,744 | 43,304 | 34,440 | 79.5 | ||||
Total revenue | $521,471 | $365,635 | $155,836 | 42.6% | ||||
Total expense for the quarter ended June 30, 2005 increased $68.3 million, or 56%, to $189.5 million, compared to $121.2 million for the quarter ended June 30, 2004. The increase in total expense for the quarter primarily reflects increases of $49.4 million in employee compensation and benefits to $131.0 million compared to $81.6 million for the quarter ended June 30, 2004 and $15.0 million, or 48%, in general and administration expense to $46.4 million for the quarter ended June 30, 2005. The rise in employee compensation and benefits was primarily attributable to higher staffing levels following the SSR acquisition, increased incentive compensation expense associated with operating income growth and $15.0 million of LTIP costs. General and administration expense rose during the period primarily due to a $6.1 million, or 64%, increase in marketing and promotional expense related to new closed-end fund launches and expanded international calling efforts, a rise in occupancy expense of $3.2 million, or 54%, reflecting the Company’s occupancy of approximately 88,500 square feet at 55 East 52nd Street, New York, New York in early 2005 and the assumption of additional office space associated with the SSR acquisition and an increase in market data services of $1.9 million to support higher AUM levels and increased trading activities.
4
BlackRock, Inc.
Second Quarter 2005 Earnings Release
Three months ended | Variance vs. | |||||||||||||||
June 30, | March 31, | June 30, 2004 | March 31, 2005 | |||||||||||||
2005 | 2004 | 2005 | Amount | % | Amount | % | ||||||||||
(Dollar amounts in thousands) | ||||||||||||||||
General and administration expense: | ||||||||||||||||
Marketing and promotional | $15,756 | $9,637 | $14,127 | $6,119 | 63.5% | $1,629 | 11.5% | |||||||||
Occupancy | 9,094 | 5,914 | 7,587 | 3,180 | 53.8 | 1,507 | 19.9 | |||||||||
Technology | 5,393 | 4,603 | 5,887 | 790 | 17.2 | (494 | ) | (8.4 | ) | |||||||
Other general and administration | 16,154 | 11,209 | 18,566 | 4,945 | 44.1 | (2,412 | ) | (13.0 | ) | |||||||
Total general and administration expense | $46,397 | $31,363 | $46,167 | $15,034 | 47.9% | $230 | 0.5% | |||||||||
The $6.0 million, or 3%, increase in total expense compared to the first quarter of 2005 is primarily due to increased compensation and benefits reflecting higher staffing levels, including a full quarter of continuing SSR employees, and increased shareholder servicing expenses for theBlackRock Fundsand closed-end funds, partially offset by special one-time compensation paid to continuing SSR employees during the first quarter of 2005.
Total expenses for the six months ended June 30, 2005 increased $139.7 million, or 60%, to $373.0 million compared to $233.3 million during the six months ended June 30, 2004. The increase was primarily attributable to an increase of $110.3 million, or 75%, in employee compensation and benefits, an increase of $29.9 million, or 48%, in general and administration expense. The rise in employee compensation and benefits was primarily attributable to higher staffing levels following the SSR acquisition, increased incentive compensation expense attributable to operating income growth and increased performance fees and $29.3 million of LTIP costs. General and administration expense rose during the period primarily due to a $12.0 million, or 68%, increase in marketing, promotional and travel expense related to new closed-end fund launches and expanded international calling efforts, a rise in occupancy expense of $5.1 million, or 44%, reflecting the Company’s occupancy of approximately 88,500 square feet at 55 East 52nd Street, New York, New York in early 2005 and the assumption of additional office space through the SSR acquisition, a $2.6 million rise in legal and accounting costs, $2.4 million in costs associated with the closing and integration of SSR and an increase in market data services of $3.1 million.
5
BlackRock, Inc.
Second Quarter 2005 Earnings Release
Six months ended June 30, | Variance | |||||||
2005 | 2004 | Amount | % | |||||
(Dollar amounts in thousands) | ||||||||
General and administration expense: | ||||||||
Marketing and promotional | $29,881 | $17,840 | $12,041 | 67.5% | ||||
Occupancy | 16,680 | 11,564 | 5,116 | 44.2 | ||||
Technology | 11,283 | 9,161 | 2,122 | 23.2 | ||||
Other general and administration | 34,720 | 24,097 | 10,623 | 44.1 | ||||
Total general and administration expense | $92,564 | $62,662 | $29,902 | 47.7% | ||||
Non-operating income for the quarter and six months ended June 30, 2005 decreased $11.5 million and $9.6 million, respectively, versus the comparative periods in 2004 due to $13.0 million gain realized on the Company’s sale of Trepp LLC during 2004 and interest expense associated with borrowings used to finance the SSR acquisition in 2005, partially offset by increased securities gains in 2005. During the second quarter of 2005, non-operating income declined $3.8 million, or 49%, compared to the first quarter of 2005 primarily due to lower market appreciation on investments.
During the second quarter of 2005, the Company resumed open market acquisitions of its common stock under a 2 million share repurchase program. Under the program, the Company purchased approximately 430,000 shares during the quarter for a total of $32.3 million and is authorized to purchase an additional 653,000 shares as market conditions permit.
As a result of the SSR acquisition, BlackRock significantly increased both the number and the diversity of products on which performance fees can be earned. Currently, a number of products, particularly in the real estate equity and energy equity sectors, have the potential to generate substantial performance fees in 2005. The ultimate amount and timing of the realization of such fees will be affected by investment performance in these products during the remainder of 2005.
Performance Notes
Past performance is no guarantee of future results.
Mutual fund performance data is net of fees and expenses, assumes the reinvestment of dividends and capital gains distributions and reflects the performance of the Institutional Class, with the exception of the BlackRock Funds, Government Income Portfolio, which reflects the performance of the Investor A Shares class. BlackRock waives fees, without which performance would be lower. Investments in BlackRock Funds and BlackRock Liquidity Funds are neither insured nor guaranteed by the U.S. government. Relative peer group performance is based on quartiles from Lipper Inc. Lipper rankings are based on total returns with dividends and distributions reinvested and do not reflect sales charges. Funds with returns among the top 25% of a peer group of funds with comparable objectives are in the first quartile and funds with returns in the next 25% of a peer group are in the second quartile. Some funds have less than one year of performance.
Fixed Income Portfolios of BlackRock Funds: The Core Bond Total Return, Core PLUS Total Return and the Managed Income Portfolios are in the Intermediate Investment Grade Debt Lipper peer group. The Intermediate Bond Portfolio is in the Short-Intermediate Investment Grade Debt Lipper peer group. The High Yield Bond Portfolio is in the High Current Yield Lipper peer group and the Government Income Portfolio is in the General U.S. Government Lipper peer group. The Inflation Protected Bond Portfolio is in the Treasury Inflation Protected Securities Lipper peer group and the GNMA Portfolio is in the GNMA Lipper peer group.
Equity Portfolios of BlackRock Funds: The Investment Trust Portfolio is in the Large Cap Core Lipper peer group. The Index Equity Portfolio is in the S&P 500 Index Objective Lipper peer group. The Asset Allocation Portfolio is in the Flexible Portfolio Lipper peer group. The Mid-Cap Growth and Mid-Cap Value Equity Portfolios are in the Mid-Cap Growth and Mid-Cap Value Lipper peer groups, respectively. The Large Cap Value Equity Portfolio is in the Multi-Cap Value Lipper peer group. The Small Cap Value Equity Portfolio is in the Small Cap Value Lipper Peer Group. The Health Sciences Portfolio is in the Health/Biotechnology Lipper peer group. The Global Resources Portfolio is in the Natural Resources Lipper peer group. The U.S. Opportunities and Global Science and Technology Portfolios are in the Mid-Cap Core and Science and Technology Lipper peer groups, respectively.
BlackRock Liquidity Funds: TempFund and TempCash are in the Institutional Money Market Lipper peer group, and Federal Trust Fund and FedFund are in the Institutional U.S. Government Money Market Lipper peer group. T-Fund and Treasury Trust Fund are in the Institutional U.S. Treasury Lipper peer group. MuniCash and MuniFund are in the Institutional Tax-Exempt Money Market Lipper peer group. California Money Fund and New York Money Fund are in the California Tax-Exempt and New York Tax-Exempt Money Market Lipper peer groups, respectively.
Composites Performance: Investment performance does not reflect the deduction of advisory fees and other expenses, which will reduce performance results and the return to investors. All performance results assume reinvestment of dividends, interest and/or capital gains. BlackRock is the source of benchmark data for composites. Some BlackRock composites have less than one year of performance.
About BlackRock
BlackRock is one of the largest publicly traded investment management firms in the United States with approximately $414.4 billion of assets under management at June 30, 2005. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of equity, fixed income, liquidity and alternative investment products. In addition, BlackRock provides risk management, investment system outsourcing and financial advisory services to a growing number of institutional investors. Clients are served from the Company’s headquarters in New York City, as well as offices in Boston, Edinburgh, Hong Kong, Morristown, San Francisco, Singapore, Sydney, Tokyo and Wilmington. BlackRock is majority owned by The PNC Financial Services Group, Inc. (NYSE: PNC) and by BlackRock employees. For additional information, please visit the Company’s website at www.blackrock.com.
Forward-Looking Statements
6
BlackRock, Inc.
Second Quarter 2005 Earnings Release
This press release, 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” or similar expressions. The information contained on our website is not a part of this press release.
BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
In addition to factors previously disclosed in BlackRock’s Securities and Exchange Commission (SEC) reports and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management; (3) the relative and absolute investment performance of BlackRock’s advised or sponsored investment products and separately managed accounts; (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future acquisitions or divestitures; (7) the unfavorable resolution of legal proceedings; (8) the extent and timing of any share repurchases; (9) the impact, extent and timing of technological changes and the adequacy of intellectual property protection; (10) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock or PNC; (11) terrorist activities and international hostilities, which may adversely affect the general economy, financial and capital markets, specific industries, and BlackRock; (12) the ability to attract and retain highly talented professionals; (13) fluctuations in foreign currency exchange rates, which may adversely affect the value of advisory fees earned by BlackRock; (14) the impact of changes to tax legislation and, generally, the tax position of the Company; and (15) the integration of the business of SSR into the business of BlackRock.
7
BlackRock, Inc.
Second Quarter 2005 Earnings Release
BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2004 and BlackRock’s subsequent reports filed with the SEC, accessible on the SEC’s website at http://www.sec.gov and on BlackRock’s website at http://www.blackrock.com, discuss these factors in more detail and identify additional factors that can affect forward-looking statements.
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TABLE 1
BlackRock, Inc.
Financial Highlights
(Dollar amounts in thousands, except share data)
(unaudited)
Three months ended | Variance vs. | ||||||||||||||||||||||||
June 30, | March 31, 2005 | June 30, 2004 | March 31, 2005 | ||||||||||||||||||||||
2005 | 2004 | Amount | % | Amount | % | ||||||||||||||||||||
Total revenue | $ | 271,389 | $ | 183,812 | $ | 250,083 | $ | 87,577 | 48 | % | $ | 21,306 | 9 | % | |||||||||||
Total expense | $ | 189,494 | $ | 121,231 | $ | 183,501 | $ | 68,263 | 56 | % | $ | 5,993 | 3 | % | |||||||||||
Operating income | $ | 81,895 | $ | 62,581 | $ | 66,582 | $ | 19,314 | 31 | % | $ | 15,313 | 23 | % | |||||||||||
Net income | $ | 53,335 | $ | 47,996 | $ | 46,536 | $ | 5,339 | 11 | % | $ | 6,799 | 15 | % | |||||||||||
Diluted earnings per share | $ | 0.80 | $ | 0.73 | $ | 0.70 | $ | 0.07 | 10 | % | $ | 0.10 | 14 | % | |||||||||||
Diluted earnings per share, as adjusted(a) | $ | 0.91 | $ | 0.71 | $ | 0.89 | $ | 0.20 | 28 | % | $ | 0.02 | 2 | % | |||||||||||
Average diluted shares outstanding | 66,796,087 | 65,766,979 | 66,880,713 | 1,029,108 | 2 | % | (84,626 | ) | 0 | % | |||||||||||||||
Operating margin | 30.2 | % | 34.0 | % | 26.6 | % | |||||||||||||||||||
Operating margin, as adjusted(b) | 37.0 | % | 40.2 | % | 37.7 | % | |||||||||||||||||||
Assets under management ($ in millions) | $ | 414,411 | $ | 309,654 | $ | 391,328 | $ | 104,757 | 34 | % | $ | 23,083 | 6 | % |
Six months ended | |||||||||||||||
June 30, | Variance | ||||||||||||||
2005 | 2004 | Amount | % | ||||||||||||
Total revenue | $ | 521,471 | $ | 365,635 | $ | 155,836 | 43 | % | |||||||
Total expense | $ | 372,995 | $ | 233,287 | $ | 139,708 | 60 | % | |||||||
Operating income | $ | 148,476 | $ | 132,348 | $ | 16,128 | 12 | % | |||||||
Net income | $ | 99,871 | $ | 103,203 | $ | (3,332 | ) | -3 | % | ||||||
Diluted earnings per share | $ | 1.49 | $ | 1.57 | $ | (0.08 | ) | -5 | % | ||||||
Diluted earnings per share, as adjusted(a) | $ | 1.80 | $ | 1.41 | $ | 0.39 | 28 | % | |||||||
Average diluted shares outstanding | 66,844,720 | 65,776,975 | 1,067,745 | 2 | % | ||||||||||
Operating margin | 28.5 | % | 36.2 | % | |||||||||||
Operating margin, as adjusted(b) | 37.3 | % | 40.5 | % | |||||||||||
Assets under management ($ in millions) | $ | 414,411 | $ | 309,654 | $ | 104,757 | 34 | % |
(a) Diluted earnings per share, as adjusted has been derived from the Company’s consolidated financial statements, as follows:
Three months ended | Six months ended | ||||||||||||||||||
June 30, | March 31, 2005 | June 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||||
Net income, GAAP basis | $ | 53,335 | $ | 47,996 | $ | 46,536 | $ | 99,871 | $ | 103,203 | |||||||||
Add back: PNC’s LTIP funding requirement | 7,716 | — | 7,394 | 15,110 | — | ||||||||||||||
SSR acquisition costs | — | — | 5,590 | 5,590 | — | ||||||||||||||
Release of reserves related to New York State tax audits | — | — | — | — | (8,659 | ) | |||||||||||||
Impact of Trepp sale | (486 | ) | (1,572 | ) | — | (486 | ) | (1,572 | ) | ||||||||||
Net income, as adjusted | 60,565 | 46,424 | 59,520 | 120,085 | 92,972 | ||||||||||||||
Diluted earnings per share, GAAP basis | $ | 0.80 | $ | 0.73 | $ | 0.70 | $ | 1.49 | $ | 1.57 | |||||||||
Diluted earnings per share, as adjusted | $ | 0.91 | $ | 0.71 | $ | 0.89 | $ | 1.80 | $ | 1.41 | |||||||||
Management believes net income and diluted earnings per share, as adjusted, are effective indicators 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 net income and diluted earnings per share, as adjusted, because, exclusive of the impact related to LTIP participants’ put options, these non-cash charges will not impact BlackRock’s book value. SSR acquisition costs consist of certain compensation costs and professional fees. Compensation reflected in this amount represents direct incentives related to alternative product performance fees generated in 2004 by SSR employees, assumed by BlackRock in conjunction with the acquisition and settled by BlackRock with no future service requirement. Net income and diluted earnings per share, as adjusted, exclude this amount because it does not relate to current period’s operations. Professional fees reflected in this amount, which have been deemed non-recurring by management, have been excluded from net income and earnings per diluted share, as adjusted, to help ensure the comparability of this
information to prior reporting periods.
BlackRock, Inc.
Financial Highlights (continued)
(b) Operating income 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 | Six months ended | |||||||||||||||||||
June 30, | March 31, 2005 | June 30, | ||||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||||
Operating income, GAAP basis | $ | 81,895 | $ | 62,581 | $ | 66,582 | $ | 148,476 | $ | 132,348 | ||||||||||
Add back: PNC LTIP funding obligation | 12,247 | — | 11,736 | 23,983 | — | |||||||||||||||
Appreciation on assets related to deferred compensation plans | 33 | 1,066 | 2,098 | 2,131 | 2,132 | |||||||||||||||
Trepp bonus | — | 7,004 | — | — | 7,004 | |||||||||||||||
SSR acquisition costs | — | — | 8,873 | 8,873 | — | |||||||||||||||
Operating income, as adjusted | 94,175 | 70,651 | 89,289 | 183,463 | 141,484 | |||||||||||||||
Revenue, as reported | 271,389 | 183,812 | 250,083 | 521,471 | 365,635 | |||||||||||||||
Less: fund administration and servicing costs | (10,426 | ) | (8,018 | ) | (9,109 | ) | (19,535 | ) | (16,378 | ) | ||||||||||
Reimbursable property management compensation | (6,239 | ) | — | (4,059 | ) | (10,298 | ) | — | ||||||||||||
Revenue used for operating margin measurement | 254,724 | 175,794 | 236,915 | 491,638 | 349,257 | |||||||||||||||
Operating margin, GAAP basis | 30.2 | % | 34.0 | % | 26.6 | % | 28.5 | % | 36.2 | % | ||||||||||
Operating margin, as adjusted | 37.0 | % | 40.2 | % | 37.7 | % | 37.3 | % | 40.5 | % | ||||||||||
We believe that operating income and operating margin, as adjusted, are effective indicators of management’s ability to effectively employ the Company’s resources. Fund administration and servicing costs have been excluded from operating margin because these costs are a fixed, asset-based expense which can fluctuate based on the discretion of a third party.
9
TABLE 2
BlackRock, Inc.
Condensed Consolidated Statements of Income
(Dollar amounts in thousands, except share data)
(unaudited)
Three months ended | Six months ended | |||||||||||||||||||||
June 30, 2005 | June 30, 2004 | % Change | June 30, 2005 | June 30, 2004 | % Change | |||||||||||||||||
Revenue | ||||||||||||||||||||||
Investment advisory and administration fees | ||||||||||||||||||||||
Mutual funds | $ | 77,247 | $ | 54,981 | 40.5 | % | $ | 147,618 | $ | 111,427 | 32.5 | % | ||||||||||
Separate accounts | 154,224 | 107,032 | 44.1 | 296,109 | 210,904 | 40.4 | ||||||||||||||||
Total investment advisory and administration fees | 231,471 | 162,013 | 42.9 | 443,727 | 322,331 | 37.7 | ||||||||||||||||
Other income | 39,918 | 21,799 | 83.1 | 77,744 | 43,304 | 79.5 | ||||||||||||||||
Total revenue | 271,389 | 183,812 | 47.6 | 521,471 | 365,635 | 42.6 | ||||||||||||||||
Expense | ||||||||||||||||||||||
Employee compensation and benefits | 131,015 | 81,618 | 60.5 | 257,959 | 147,687 | 74.7 | ||||||||||||||||
Fund administration and servicing costs | ||||||||||||||||||||||
Affiliates | 4,096 | 4,948 | (17.2 | ) | 8,113 | 10,016 | (19.0 | ) | ||||||||||||||
Other | 6,330 | 3,070 | 106.2 | 11,422 | 6,362 | 79.5 | ||||||||||||||||
General and administration | 46,397 | 31,363 | 47.9 | 92,564 | 62,662 | 47.7 | ||||||||||||||||
Amortization of intangible assets | 1,656 | 232 | NM | 2,937 | 463 | NM | ||||||||||||||||
Impairment of intangible assets | — | — | NM | — | 6,097 | NM | ||||||||||||||||
Total expense | 189,494 | 121,231 | 56.3 | 372,995 | 233,287 | 59.9 | ||||||||||||||||
Operating income | 81,895 | 62,581 | 30.9 | 148,476 | 132,348 | 12.2 | ||||||||||||||||
Non-operating income (expense) | ||||||||||||||||||||||
Investment income | 6,027 | 16,038 | (62.4 | ) | 15,814 | 22,935 | (31.0 | ) | ||||||||||||||
Interest expense | (2,063 | ) | (550 | ) | 275.1 | (4,077 | ) | (1,634 | ) | 149.5 | ||||||||||||
3,964 | 15,488 | (74.4 | ) | 11,737 | 21,301 | (44.9 | ) | |||||||||||||||
Income before income taxes and minority interest | 85,859 | 78,069 | 10.0 | 160,213 | 153,649 | 4.3 | ||||||||||||||||
Income taxes | 31,324 | 26,521 | 18.1 | 58,655 | 46,610 | 25.8 | ||||||||||||||||
Income before minority interest | 54,535 | 51,548 | 5.8 | 101,558 | 107,039 | (5.1 | ) | |||||||||||||||
Minority interest | 1,200 | 3,552 | (66.2 | ) | 1,687 | 3,836 | (56.0 | ) | ||||||||||||||
Net income | $ | 53,335 | $ | 47,996 | 11.1 | $ | 99,871 | $ | 103,203 | (3.2 | ) | |||||||||||
Weighted-average shares outstanding | ||||||||||||||||||||||
Basic | 64,354,069 | 63,647,316 | 1.1 | % | 64,322,465 | 63,701,625 | 1.0 | % | ||||||||||||||
Diluted | 66,796,087 | 65,766,979 | 1.6 | % | 66,844,720 | 65,776,975 | 1.6 | % | ||||||||||||||
Earnings per share | ||||||||||||||||||||||
Basic | $ | 0.83 | $ | 0.75 | 10.7 | % | $ | 1.55 | $ | 1.62 | -4.3 | % | ||||||||||
Diluted | $ | 0.80 | $ | 0.73 | 9.6 | % | $ | 1.49 | $ | 1.57 | -5.1 | % | ||||||||||
NM - Not meaningful |
10
TABLE 3
BlackRock, Inc.
Condensed Consolidated Statements of Financial Condition
(Dollar amounts in thousands)
(unaudited)
June 30, 2005 | December 31, 2004 | |||||
Assets | ||||||
Cash and cash equivalents | $ | 367,386 | $ | 457,673 | ||
Accounts receivable | 243,796 | 165,342 | ||||
Investments | 282,807 | 227,497 | ||||
Property and equipment, net | 114,625 | 93,701 | ||||
Intangible assets, net | 445,357 | 184,110 | ||||
Deferred mutual fund commissions | 15,398 | — | ||||
Other assets | 37,843 | 16,912 | ||||
Total assets | $ | 1,507,212 | $ | 1,145,235 | ||
Liabilities, minority interest and stockholders’ equity | ||||||
Long term borrowings | $ | 250,000 | $ | 0 | ||
Accrued compensation | 317,201 | 311,351 | ||||
Accounts payable and accrued liabilities | 49,338 | 30,817 | ||||
Acquired management contract obligation | 3,791 | 4,810 | ||||
Other liabilities | 22,690 | 12,736 | ||||
Total liabilities | 643,020 | 359,714 | ||||
Minority interest | 10,577 | 17,169 | ||||
Stockholders’ equity | 853,615 | 768,352 | ||||
Total liabilities, minority interest and stockholders’ equity | $ | 1,507,212 | $ | 1,145,235 | ||
11
TABLE 4
BlackRock, Inc.
Consolidated Statements of Cash Flows
(Dollar amounts in thousands)
(unaudited)
Six months ended June 30, | ||||||||
2005 | 2004 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 99,871 | $ | 103,203 | ||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 14,468 | 10,105 | ||||||
Impairment of intangible assets | — | 6,097 | ||||||
Minority interest | 1,687 | 3,836 | ||||||
Stock-based compensation | 35,251 | 6,942 | ||||||
Deferred income taxes | (8,312 | ) | 7,210 | |||||
Tax benefit from stock-based compensation | 2,503 | 1,761 | ||||||
Net gain on investments | (3,856 | ) | (11,889 | ) | ||||
Amortization of bond issuance costs | 403 | — | ||||||
Amortization of deferred mutual fund commissions | 5,426 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Increase in accounts receivable | (20,575 | ) | (19,783 | ) | ||||
Increase in investments, trading | (7,159 | ) | (9,156 | ) | ||||
Increase in receivable from affiliates | (12,863 | ) | (209 | ) | ||||
Increase in other assets | (4,906 | ) | (914 | ) | ||||
Decrease in accrued compensation | (132,072 | ) | (36,870 | ) | ||||
Increase (decrease) in accounts payable and accrued liabilities | 11,734 | (18,069 | ) | |||||
Increase (decrease) in other liabilities | 8,152 | (2,489 | ) | |||||
Cash (used in) provided by operating activities | (10,246 | ) | 39,775 | |||||
Cash flows from investing activities | ||||||||
Purchase of property and equipment | (29,138 | ) | (9,892 | ) | ||||
Purchase of investments | (13,572 | ) | (36,006 | ) | ||||
Sale of investments | 28,129 | 89,742 | ||||||
Sale of real estate held for sale | 112,184 | — | ||||||
Deemed cash contribution upon consolidation of VIE | — | 6,412 | ||||||
Consolidation of sponsored investment funds | — | (41,193 | ) | |||||
Acquisitions, net of cash acquired | (249,535 | ) | (73 | ) | ||||
Cash provided by (used in) investing activities | (151,932 | ) | 8,990 | |||||
Cash flows from financing activities | ||||||||
Borrowings, received, net of issuance costs | 395,000 | — | ||||||
Principal repayment of borrowings | (150,000 | ) | — | |||||
Repayment of short term borrowings | (111,840 | ) | — | |||||
Subscriptions to consolidated sponsored investment funds | 9,891 | 5,000 | ||||||
Transfer of cash to deconsolidated sponsored investment fund | (5,509 | ) | — | |||||
Distributions paid to minority interest holders | — | (3,975 | ) | |||||
Dividends paid | (38,434 | ) | (31,757 | ) | ||||
Reissuance of treasury stock | 8,315 | 10,049 | ||||||
Purchase of treasury stock | (32,606 | ) | (47,429 | ) | ||||
Issuance of class A common stock | 706 | — | ||||||
Acquired management contract obligation payment | (1,019 | ) | (926 | ) | ||||
Cash provided by (used in) financing activities | 74,504 | (69,038 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (2,612 | ) | 1,028 | |||||
Net decrease in cash and cash equivalents | (90,286 | ) | (19,245 | ) | ||||
Cash and cash equivalents, beginning of period | 457,673 | 315,941 | ||||||
Cash and cash equivalents, end of period | $ | 367,387 | $ | 296,696 | ||||
12
TABLE 5
BlackRock, Inc.
Assets Under Management
(Dollar amounts in millions)
(unaudited)
June 30, | December 31, 2004 | ||||||||
2005 | 2004 | ||||||||
All Accounts | |||||||||
Fixed income | $ | 284,082 | $ | 223,542 | �� | $ | 240,709 | ||
Cash Management | 75,183 | 65,943 | 78,057 | ||||||
Equity | 32,378 | 13,543 | 14,792 | ||||||
Alternative investment products | 22,768 | 6,626 | 8,202 | ||||||
Total | $ | 414,411 | $ | 309,654 | $ | 341,760 | |||
Separate Accounts | |||||||||
Fixed income | $ | 258,411 | $ | 199,762 | $ | 216,070 | |||
Cash Management | 8,164 | 6,896 | 7,360 | ||||||
Cash Management-Securities lending | 7,368 | 8,771 | 6,898 | ||||||
Equity | 18,525 | 8,790 | 9,397 | ||||||
Alternative investment products | 22,768 | 6,626 | 8,202 | ||||||
Subtotal | 315,236 | 230,845 | 247,927 | ||||||
Mutual Funds | |||||||||
Fixed income | 25,671 | 23,780 | 24,639 | ||||||
Cash Management | 59,651 | 50,276 | 63,799 | ||||||
Equity | 13,853 | 4,753 | 5,395 | ||||||
Subtotal | 99,175 | 78,809 | 93,833 | ||||||
Total | $ | 414,411 | $ | 309,654 | $ | 341,760 | |||
Component Changes in Assets Under Management
(Dollar amounts in millions)
(unaudited)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
All Accounts | ||||||||||||||||
Beginning assets under management | $ | 391,328 | $ | 320,672 | $ | 341,760 | $ | 309,356 | ||||||||
Net subscriptions (redemptions) | 15,559 | (6,697 | ) | 15,664 | (357 | ) | ||||||||||
Acquisitions | 89 | — | 49,966 | — | ||||||||||||
Market appreciation (depreciation) | 7,435 | (4,321 | ) | 7,021 | 655 | |||||||||||
Ending assets under management | $ | 414,411 | $ | 309,654 | $ | 414,411 | $ | 309,654 | ||||||||
Separate Accounts | ||||||||||||||||
Beginning assets under management | $ | 292,186 | $ | 232,183 | $ | 247,927 | $ | 222,589 | ||||||||
Net subscriptions | 16,069 | 2,273 | 20,591 | 7,244 | ||||||||||||
Acquisitions | — | — | 40,181 | — | ||||||||||||
Market appreciation (depreciation) | 6,981 | (3,611 | ) | 6,537 | 1,012 | |||||||||||
Ending assets under management | 315,236 | 230,845 | 315,236 | 230,845 | ||||||||||||
Mutual Funds | ||||||||||||||||
Beginning assets under management | 99,142 | 88,489 | 93,833 | 86,767 | ||||||||||||
Net redemptions | (510 | ) | (8,970 | ) | (4,927 | ) | (7,601 | ) | ||||||||
Acquisitions | 89 | — | 9,785 | — | ||||||||||||
Market appreciation (depreciation) | 454 | (710 | ) | 484 | (357 | ) | ||||||||||
Ending assets under management | 99,175 | 78,809 | 99,175 | 78,809 | ||||||||||||
Total | $ | 414,411 | $ | 309,654 | $ | 414,411 | $ | 309,654 | ||||||||
13
BlackRock, Inc.
Assets Under Management
Quarterly Trend
(Dollar amounts in millions)
(unaudited)
Quarter Ended | ||||||||||||||||||||||||
2004 | 2005 | Six months ended June 30, 2005 | ||||||||||||||||||||||
June 30 | September 30 | December 31 | March 31 | June 30 | ||||||||||||||||||||
Separate Accounts | ||||||||||||||||||||||||
Fixed Income | ||||||||||||||||||||||||
Beginning assets under management | $ | 202,055 | $ | 199,762 | $ | 211,075 | $ | 216,070 | $ | 239,912 | $ | 216,070 | ||||||||||||
Net subscriptions | 1,365 | 5,201 | 1,121 | 4,906 | 12,855 | 17,761 | ||||||||||||||||||
Acquisitions | — | — | — | 20,005 | — | 20,005 | ||||||||||||||||||
Market appreciation (depreciation) | (3,658 | ) | 6,112 | 3,874 | (1,069 | ) | 5,644 | 4,575 | ||||||||||||||||
Ending assets under management | 199,762 | 211,075 | 216,070 | 239,912 | 258,411 | 258,411 | ||||||||||||||||||
Cash Management | ||||||||||||||||||||||||
Beginning assets under management | 6,304 | 6,896 | 7,703 | 7,360 | 7,307 | 7,360 | ||||||||||||||||||
Net subscriptions (redemptions) | 591 | 787 | (362 | ) | (632 | ) | 809 | 177 | ||||||||||||||||
Acquisitions | — | — | — | 558 | — | 558 | ||||||||||||||||||
Market appreciation | 1 | 20 | 19 | 21 | 48 | 69 | ||||||||||||||||||
Ending assets under management | 6,896 | 7,703 | 7,360 | 7,307 | 8,164 | 8,164 | ||||||||||||||||||
Cash Management-Securities lending | ||||||||||||||||||||||||
Beginning assets under management | 8,479 | 8,771 | 8,636 | 6,898 | 6,791 | 6,898 | ||||||||||||||||||
Net subscriptions (redemptions) | 292 | (135 | ) | (1,738 | ) | (107 | ) | 577 | 470 | |||||||||||||||
Ending assets under management | 8,771 | 8,636 | 6,898 | 6,791 | 7,368 | 7,368 | ||||||||||||||||||
Equity | ||||||||||||||||||||||||
Beginning assets under management | 9,003 | 8,790 | 8,129 | 9,397 | 18,610 | 9,397 | ||||||||||||||||||
Net subscriptions (redemptions) | (195 | ) | (748 | ) | 31 | (107 | ) | (376 | ) | (483 | ) | |||||||||||||
Acquisitions | — | — | — | 9,061 | — | 9,061 | ||||||||||||||||||
Market appreciation (depreciation) | (18 | ) | 87 | 1,237 | 259 | 291 | 550 | |||||||||||||||||
Ending assets under management | 8,790 | 8,129 | 9,397 | 18,610 | 18,525 | 18,525 | ||||||||||||||||||
Alternative investment products | ||||||||||||||||||||||||
Beginning assets under management | 6,342 | 6,626 | 7,418 | 8,202 | 19,566 | 8,202 | ||||||||||||||||||
Net subscriptions | 220 | 851 | 666 | 462 | 2,204 | 2,666 | ||||||||||||||||||
Acquisitions | — | — | — | 10,557 | — | 10,557 | ||||||||||||||||||
Market appreciation (depreciation) | 64 | (59 | ) | 118 | 345 | 998 | 1,343 | |||||||||||||||||
Ending assets under management | 6,626 | 7,418 | 8,202 | 19,566 | 22,768 | 22,768 | ||||||||||||||||||
Total Separate Accounts | ||||||||||||||||||||||||
Beginning assets under management | 232,183 | 230,845 | 242,961 | 247,927 | 292,186 | 247,927 | ||||||||||||||||||
Net subscriptions (redemptions) | 2,273 | 5,956 | (282 | ) | 4,522 | 16,069 | 20,591 | |||||||||||||||||
Acquisitions | — | — | — | 40,181 | — | 40,181 | ||||||||||||||||||
Market appreciation (depreciation) | (3,611 | ) | 6,160 | 5,248 | (444 | ) | 6,981 | 6,537 | ||||||||||||||||
Ending assets under management | $ | 230,845 | $ | 242,961 | $ | 247,927 | $ | 292,186 | $ | 315,236 | $ | 315,236 | ||||||||||||
Mutual Funds | ||||||||||||||||||||||||
Fixed Income | ||||||||||||||||||||||||
Beginning assets under management | $ | 24,742 | $ | 23,780 | $ | 24,460 | $ | 24,639 | $ | 25,379 | $ | 24,639 | ||||||||||||
Net subscriptions (redemptions) | (264 | ) | 270 | 197 | (139 | ) | 68 | (71 | ) | |||||||||||||||
Acquisitions | — | — | — | 989 | 89 | 1,078 | ||||||||||||||||||
Market appreciation (depreciation) | (698 | ) | 410 | (18 | ) | (110 | ) | 135 | 25 | |||||||||||||||
Ending assets under management | 23,780 | 24,460 | 24,639 | 25,379 | 25,671 | 25,671 | ||||||||||||||||||
Cash Management | ||||||||||||||||||||||||
Beginning assets under management | 58,986 | 50,276 | 51,498 | 63,799 | 59,985 | 63,799 | ||||||||||||||||||
Net subscriptions (redemptions) | (8,710 | ) | 1,222 | 12,309 | (4,023 | ) | (334 | ) | (4,357 | ) | ||||||||||||||
Acquisitions | — | — | — | 210 | — | 210 | ||||||||||||||||||
Market depreciation | — | — | (8 | ) | (1 | ) | — | (1 | ) | |||||||||||||||
Ending assets under management | 50,276 | 51,498 | 63,799 | 59,985 | 59,651 | 59,651 | ||||||||||||||||||
Equity | ||||||||||||||||||||||||
Beginning assets under management | 4,761 | 4,753 | 4,546 | 5,395 | 13,778 | 5,395 | ||||||||||||||||||
Net subscriptions (redemptions) | 4 | (146 | ) | 455 | (255 | ) | (244 | ) | (499 | ) | ||||||||||||||
Acquisitions | — | — | — | 8,497 | — | 8,497 | ||||||||||||||||||
Market appreciation (depreciation) | (12 | ) | (61 | ) | 394 | 141 | 319 | 460 | ||||||||||||||||
Ending assets under management | 4,753 | 4,546 | 5,395 | 13,778 | 13,853 | 13,853 | ||||||||||||||||||
Total Mutual Funds | ||||||||||||||||||||||||
Beginning assets under management | 88,489 | 78,809 | 80,504 | 93,833 | 99,142 | 93,833 | ||||||||||||||||||
Net subscriptions (redemptions) | (8,970 | ) | 1,346 | 12,961 | (4,417 | ) | (510 | ) | (4,927 | ) | ||||||||||||||
Acquisitions | — | — | — | 9,696 | 89 | 9,785 | ||||||||||||||||||
Market appreciation (depreciation) | (710 | ) | 349 | 368 | 30 | 454 | 484 | |||||||||||||||||
Ending assets under management | $ | 78,809 | $ | 80,504 | $ | 93,833 | $ | 99,142 | $ | 99,175 | $ | 99,175 | ||||||||||||
14
BlackRock, Inc.
Assets Under Management
Quarterly Trend
(Dollar amounts in millions)
(unaudited)
2004 | 2005 | Six months ended June 30, 2005 | ||||||||||||||||||||||
June 30 | September 30 | December 31 | March 31 | June 30 | ||||||||||||||||||||
Mutual Funds | ||||||||||||||||||||||||
BlackRock Funds | ||||||||||||||||||||||||
Beginning assets under management | $ | 18,985 | $ | 16,603 | $ | 16,305 | $ | 16,705 | $ | 25,755 | $ | 16,705 | ||||||||||||
Net subscriptions (redemptions) | (2,110 | ) | (391 | ) | 60 | (430 | ) | (549 | ) | (979 | ) | |||||||||||||
Acquisitions | — | — | — | 9,476 | 89 | 9,565 | ||||||||||||||||||
Market appreciation (depreciation) | (272 | ) | 93 | 340 | 4 | 303 | 307 | |||||||||||||||||
Ending assets under management | 16,603 | 16,305 | 16,705 | 25,755 | 25,598 | 25,598 | ||||||||||||||||||
BlackRock Global Series | ||||||||||||||||||||||||
Beginning assets under management | 1,026 | 1,293 | 1,299 | 1,223 | 1,115 | 1,223 | ||||||||||||||||||
Net subscriptions (redemptions) | 275 | (21 | ) | (117 | ) | (104 | ) | (92 | ) | (196 | ) | |||||||||||||
Market appreciation (depreciation) | (8 | ) | 27 | 41 | (4 | ) | — | (4 | ) | |||||||||||||||
Ending assets under management | 1,293 | 1,299 | 1,223 | 1,115 | 1,023 | 1,023 | ||||||||||||||||||
BlackRock Liquidity Funds | ||||||||||||||||||||||||
Beginning assets under management | 53,159 | 45,854 | 47,087 | 58,453 | 53,864 | 58,453 | ||||||||||||||||||
Net subscriptions (redemptions) | (7,305 | ) | 1,233 | 11,374 | (4,589 | ) | (635 | ) | (5,224 | ) | ||||||||||||||
Market depreciation | — | — | (8 | ) | — | — | — | |||||||||||||||||
Ending assets under management | 45,854 | 47,087 | 58,453 | 53,864 | 53,229 | 53,229 | ||||||||||||||||||
Closed End | ||||||||||||||||||||||||
Beginning assets under management | 14,552 | 14,233 | 14,895 | 15,410 | 15,835 | 15,410 | ||||||||||||||||||
Net subscriptions | 111 | 433 | 520 | 175 | 284 | 459 | ||||||||||||||||||
Acquisitions | — | — | — | 220 | — | 220 | ||||||||||||||||||
Market appreciation (depreciation) | (430 | ) | 229 | (5 | ) | 30 | 151 | 181 | ||||||||||||||||
Ending assets under management | 14,233 | 14,895 | 15,410 | 15,835 | 16,270 | 16,270 | ||||||||||||||||||
Other Commingled Funds | ||||||||||||||||||||||||
Beginning assets under management | 767 | 826 | 918 | 2,042 | 2,573 | 2,042 | ||||||||||||||||||
Net subscriptions | 59 | 92 | 1,124 | 531 | 482 | 1,013 | ||||||||||||||||||
Ending assets under management | 826 | 918 | 2,042 | 2,573 | 3,055 | 3,055 | ||||||||||||||||||
Total Mutual Funds | ||||||||||||||||||||||||
Beginning assets under management | 88,489 | 78,809 | 80,504 | 93,833 | 99,142 | 93,833 | ||||||||||||||||||
Net subscriptions (redemptions) | (8,970 | ) | 1,346 | 12,961 | (4,417 | ) | (510 | ) | (4,927 | ) | ||||||||||||||
Acquisitions | — | — | — | 9,696 | 89 | 9,785 | ||||||||||||||||||
Market appreciation (depreciation) | (710 | ) | 349 | 368 | 30 | 454 | 484 | |||||||||||||||||
Ending assets under management | $ | 78,809 | $ | 80,504 | $ | 93,833 | $ | 99,142 | $ | 99,175 | $ | 99,175 | ||||||||||||
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