Q2 2011 Earnings Press Release Supplement July 20, 2011 Exhibit 99.2 |
1 $727 $741 $737 $962 $819 $883 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 $578 $582 $670 $469 $463 $537 $2.40 $2.96 $3.00 $2.75 $3.42 $2.37 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Strong operating income drove earnings Operating and Net Income, as Adjusted ($ in millions) Diluted Earnings Per Share, as Adjusted Reconciliation between GAAP and as Adjusted is provided in the appendix Operating Income Net Income Second quarter EPS results were affected by volatility in non-operating. Q3 2011 will include full effect of Bank of America buy-back. |
2 Operating margin remained strong Operating Margin, as Adjusted For further information and reconciliation between GAAP and as Adjusted, see note (a) in the current earnings release as well as the 2010 Form 10-K and first quarter 2011 10-Q. YTD 2011 = 39.4% 2011 year-to-date margin is higher than the full year and second quarter 2010 margins. Full Year 2010 = 39.3% BLK/BGI Pro Forma |
3 Equity markets improved from 2010 800 900 1,000 1,100 1,200 1,300 1,400 S&P 500 Q1 2011 Spot to Spot Q2 2011 Spot to Spot Q1-11 Average: 1,303 Q2-11 Average: 1,318 Q2 2010 Spot to Spot The S&P averaged approximately 1,300 in both the first and second quarter of 2011. Q2-10 Average: 1,135 4/30/10 5/31/10 6/30/10 12/31/10 2/28/11 3/31/11 4/30/11 5/31/11 6/30/11 3/31/10 1/31/11 |
Year-over-year Q2 2011 vs. Q2 2010 4 |
5 27% year-over-year growth in EPS driven by operating EPS Q2-11 Compared to Q2-10, as Adjusted $2.46 $3.09 $0.63 ($0.10) $0.40 $0.90 $1.40 $1.90 $2.40 $2.90 $3.40 Q2-10 EPS Operating EPS Q2-11 EPS Increasing EPS Non-Operating EPS Operating EPS Total EPS: $3.00 Total EPS: $2.37 Non-Operating : ($0.09) Operating EPS: Operating EPS: For further information and reconciliation between GAAP and as Adjusted, see notes (a) through (e) in the current earnings release Non-Operating : ($0.09) |
$741 $315 ($173) $883 Q2-10 Revenue Expenses Q2-11 $700 $900 6 19% year-over-year growth in operating income $142 million Q2-11 Compared to Q2-10, as Adjusted $0 $1,100 For further information and reconciliation between GAAP and as Adjusted, see note (a) in the current earnings release as well as the 2010 Form 10-K and first quarter 2011 10-Q. |
$0 $1,800 $2,000 $2,200 $2,400 7 16% year-over-year revenue growth Q2-11 Compared to Q2-10 Increasing Revenue $315 million Total Revenue Q2-10 $2.03 billion Q2-11 $2.35 billion 88% 2% 4% 6% Base Fees Performance Fees BRS and Advisory Other Revenue 90% 2% 5% 3% Base Fees Performance Fees BRS and Advisory Other Revenue |
8 17% year-over-year base fee growth included higher fees in all long-term asset classes Decreasing Base Fees Increasing Base Fees Q2-11 Compared to Q2-10 Q2-11 $2.10 billion $308 million Base fees Q2-10 $1.79 billion $0 $1,792 $2,100 $97 $76 $55 $30 $28 $19 $18 $15 ($30) $1,700 $1,900 $2,100 Q2-10 iShares/ ETP Equity Active Equity Multi-Asset Institutional Index Equity Alternatives Active Fixed Income Institutional Index Fixed Income iShares/ ETP Fixed Income Cash Q2-11 14% 3% 2% 26% 22% 7% 10% 9% 7% Active Fixed Income iShares/ ETP Fixed Income Institutional Index Fixed Income Active Equity iShares/ ETP Equity Institutional Index Equity Multi-Asset Alternatives Cash 13% 4% 3% 25% 23% 11% 9% 5% Active Fixed Income iShares/ ETP Fixed Income Institutional Index Fixed Income Active Equity iShares/ ETP Equity Institutional Index Equity Multi-Asset Alternatives Cash 7% |
$0 $1,200 $1,300 $1,400 $1,500 9 13% year-over-year expense growth driven by continued business expansion Increasing Expenses Decreasing Expenses 55% 10% 24% 3% 7% 1% Employee Comp. & Benefits Distribution & Servicing Costs Amort. of Deferred Sales Commissions Direct Fund Expenses General & Administration Amortization of Intangibles $1.46 billion Q2-11 Expense, as Adjusted, by Category Q2-11 Compared to Q2-10, as Adjusted For further information and reconciliation between GAAP and as Adjusted, see note (a) in the current earnings release |
Sequential Quarters Q2 2011 vs. Q1 2011 10 |
11 Sequential growth in operating income offset partially by lower mark-to-market gains on investments ($0.10) $0.40 $0.90 $1.40 $1.90 $2.40 $2.90 $3.40 $3.90 Q1-11 EPS Operating EPS Non-Operating EPS Tax Adjustment Q2-11 EPS $0.04 Increasing EPS For further information and reconciliation between GAAP and as Adjusted, see notes (a) through (e) in the current earnings release Decreasing EPS Q2-11 Compared to Q1-11, as Adjusted Non-Operating EPS Operating EPS Total EPS: $2.96 Total EPS: $3.00 Operating EPS: Non-Operating: $0.05 Non-Operating: ($0.09) Operating EPS: Tax Adjustment: $0.12 Tax Adjustment $2.79 $3.09 $0.30 ($0.14) ($0.12) |
12 8% sequential growth in operating income as a result of revenue growth Q2-11 Compared to Q1-11, as Adjusted $64 million $0 $819 $883 ($1) $65 $700 $900 Q1-11 Revenue Expenses Q2-11 For further information and reconciliation between GAAP and as Adjusted, see note (a) in the current earnings release as well as the 2010 Form 10-K and first quarter 2011 10-Q. |
13 3% sequential revenue growth driven by base fees $65 million Decreasing Revenue $0 Q2-11 Compared to Q1-11 Increasing Revenue Total Revenue Q1-11 $2.28 billion Q2-11 $2.35 billion 86% 4% 4% 6% Base Fees Performance Fees BRS and Advisory Other Revenue 90% 2% 3% 5% Base Fees Performance Fees BRS and Advisory Other Revenue $1,800 $2,000 $2,200 $2,400 $2,600 |
$0 $1,800 $2,000 $2,200 14 6% sequential base fee growth reflected higher fees in all long-term asset classes as a result of strong securities lending fees and AUM growth $116 million Decreasing Base Fees Increasing Base Fees 13% 4% 3% 25% 23% 7% 11% 9% 5% Active Fixed Income iShares/ ETP Fixed Income Institutional Index Fixed Income Active Equity iShares/ ETP Equity Institutional Index Equity Multi-Asset Alternatives Cash Q2-11 Base Fees Q2-11 Compared to Q1-11 $2.10 billion $2,100 |
15 Sequential total expenses remained flat Increasing Expenses Decreasing Expenses $0 $1.46 billion Q2-11 Expense, as Adjusted, by Category Q2-11 Compared to Q1-11, as Adjusted For further information and reconciliation between GAAP and as Adjusted, see note (a) in the current earnings release 55% 10% 24% 3% 7% 1% Employee Comp. & Benefits Distribution & Servicing Costs Amort. of Deferred Sales Commissions Direct Fund Expenses General & Administration Amortization of Intangibles $1,300 $1,400 $1,500 $1,600 Q2-11 Q1-11 Direct Fund Exp G&A Amort.– Deferred Commissions Amort. – Intangible Assets Compensation & Benefits Distribution & Servicing $1,463 $10 $5 ($1) ($2) ($2) ($9) $1,464 |
Non-operating and payout ratio 16 |
17 For further information and reconciliation between GAAP and as Adjusted, see note (b) in the current earnings release as well as the 2010 Form 10-K and first quarter 2011 10-Q. Continued net investment gains offset by higher interest expense $18 ($13) $2 $1 $2 ($37) ($40) ($30) ($20) ($10) $0 $10 $20 Private Equity Real Estate Distressed Credit/ Mortgage Hedge Funds/ Funds of Hedge Funds Other Investments Net Interest Expense Q2-11 $27 million Non-Operating Expense by Category, as Adjusted Investment Losses/ Net Interest Expense Investment Gain $10 million Net Investment Gains |
18 Increase in payout ratio as a result of the $2.5 billion buyback $4.00 $3.12 $3.12 $2.68 $1.68 $1.20 $1.00 $0.80 $5.50 33% 83% 64% 50% 56% 53% 48% 44% 44% 2011 2010 2009 2008 2007 2006 2005 2004 2003 Dividend (A) Payout Ratio (B) Notes: (A) 2003 and 2011 dividends have been annualized (B) Payout ratio = (dividends + share repurchases) / GAAP net income. 2011 ratio includes Q1 & Q2 2011 data only. (C) Payout ratio = (YTD 2Q 2011 dividends x 2) + share repurchases) / (YTD 2Q 2011 GAAP net income x 2). N/A 2/26/04 2/15/05 2/17/06 2/27/07 2/15/08 N/A 2/25/10 3/7/11 Dividend Change Declared: 151% with $2.5 bn buyback (C) Excludes $2.5 bn share buyback |
Appendix 19 |
20 $883 $962 $737 $741 $727 $819 $654 $697 $707 $940 $798 $866 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 GAAP As Adjusted Quarterly operating income – GAAP and As Adjusted Operating Income ($ in millions) Non-GAAP Adjustments ($ in millions) Non-GAAP adjustments include BGI integration costs, PNC LTIP funding obligation, Merrill Lynch compensation contribution, and compensation related to appreciation (depreciation) on certain deferred compensation plans $17 $21 $22 $30 $73 $44 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 For further information and reconciliation between GAAP and as Adjusted, see note (a) in the current earnings release as well as previously filed Form 10-Qs |
21 $578 $582 $670 $469 $463 $537 $432 $551 $657 $568 $619 $423 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Quarterly net income – GAAP and As Adjusted ($41) $14 $13 $46 $31 ($14) Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Net Income ($ in millions) Non-GAAP Adjustments ($ in millions) GAAP As Adjusted For further information and reconciliation between GAAP and as Adjusted, see notes (c) and (d) in the current earnings release as well as previously filed Form 10-Qs Non-GAAP adjustments include BGI integration costs, PNC LTIP funding obligation, Merrill Lynch compensation contribution, and income tax law changes |
22 $78 $18 $15 ($27) $2 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 $39 ($28) ($6) $20 $14 GAAP As Adjusted Quarterly non-operating income – GAAP and As Adjusted Non-Operating Income ($ in millions) Non-GAAP Adjustments ($ in millions) Non-GAAP adjustments include net income (loss) attributable to non-controlling interests, and compensation expense related to (appreciation) depreciation on certain deferred compensation plans $47 ($8) ($39) $2 ($1) $0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 ($75) As Adjusted: ($27) For further information and reconciliation between GAAP and as Adjusted, see note (b) in the current earnings release as well as previously filed Form 10-Qs |
23 Forward-looking statements This presentation, 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. 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. |
24 Forward-looking statements In addition to risk factors previously disclosed in BlackRock’s Securities and Exchange Commission (“SEC”) reports and those identified elsewhere in this presentation the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management; (3) the relative and absolute investment performance of BlackRock’s investment products; (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 and information security protection; (10) the impact of legislative and regulatory actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock, Barclays Bank PLC or The PNC Financial Services Group, Inc.; (11) terrorist activities, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (12) the ability to attract and retain highly talented professionals; (13) fluctuations in the carrying value of BlackRock’s economic investments; (14) the impact of changes to tax legislation and, generally, the tax position of the Company; (15) BlackRock’s success in maintaining the distribution of its products; (16) the impact of BlackRock electing to provide support to its products from time to time; (17) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions; and (18) the ability of BlackRock to complete the integration of the operations of Barclays Global Investors. |