Exhibit 99.1
BlackRock, Inc. (NYSE: BLK) reported record net income for the first quarter
ended March 31, 2000 of $19.2 million, a 57% increase compared with the $12.2
million earned in the first quarter of 1999 and a 12% increase compared with the
$17.2 million earned in the fourth quarter of 1999. Diluted earnings per share
for the first quarter was $0.30 compared with $0.22 and $0.27 in the first and
fourth quarters of 1999, respectively. Operating income of $32.1 million
increased $8.4 million or 36% and $2.5 million or 8% compared with the $23.7
million and the $29.7 million earned in the first quarter and fourth quarter of
1999, respectively.
"I am pleased with our first quarter results, particularly in light of recent
volatility in both the fixed income and equity markets," commented Laurence D.
Fink, Chairman and CEO. "More importantly, investment performance, one of the
factors most critical to our long-term growth strategies, continued to be strong
in the first quarter."
First Quarter Highlights
- ------------------------
. Assets under management rose to a record $172.6 billion, an increase of 5%
from the $164.5 billion reported at December 31, 1999 and 23% above the
March 31, 1999 total of $140.2 billion.
. Net subscriptions for the first quarter were $4.6 billion, which represented
57% of the total increase in assets under management of $8.1 billion.
. BlackRock's European Equity Team, who started with the firm in January of
this year, generated approximately $3 billion of new business in the first
quarter.
. BlackRock's operating margin, was 36.4% compared with 33.9% for the first
quarter of 1999 and 36.1% for the fourth quarter of 1999.
Total revenue increased $20.2 million or 23% to $108.1 million compared with the
first quarter of 1999 and was strong across all products with separate account
revenue and mutual fund fees increasing 21% and 22%, respectively. The increase
in revenue was driven by higher assets under management which totaled $172.6
billion at March 31, 2000, a 23% increase compared with March 31, 1999. Separate
account revenue growth was primarily attributable to a 31% increase in assets
under management (24% in fixed income assets, 202% in equity assets and 37% in
liquidity assets). The growth in equity assets was primarily the result of
increased business in the international sector generated by BlackRock's European
equity team. Mutual fund revenue growth was the result of an
18% increase in assets under management in the BlackRock Funds and a 12%
increase in the Provident Institutional Funds. Other income increased 14% in the
first quarter of 2000 compared with the first quarter of 1999 primarily due to
new risk management advisory engagements.
Compared with the fourth quarter of 1999, revenue increased $7.3 million or 7%
in the first quarter of 2000. Mutual fund revenue increased $5.7 million or 11%
primarily due to growth in mutual fund assets. Separate account fees decreased
$0.8 million or 2% as a decline in performance fees more than offset a $3.4
million or 10% increase in all other separate account revenue.
About BlackRock BlackRock is one of the largest publicly traded investment
management firms in the United States with $172.6 billion of assets under
management as of March 31, 2000. BlackRock manages assets on behalf of more
than 3,000 institutions and 160,000 individuals through a variety of equity,
fixed income, liquidity and alternative investment separate accounts and mutual
funds, including the Company's flagship fund families, BlackRock Funds and
Provident Institutional Funds. In addition, risk management and advisory
services are provided to a growing number of large institutional fixed income
investors. BlackRock is a majority-owned subsidiary of The PNC Financial
Services Group, Inc. (NYSE: PNC).
The PNC Financial Services Group, Inc., headquartered in Pittsburgh,
is one of the largest diversified financial services organizations in the United
States. Its major businesses include PNC Bank-Regional Banking, PNC Bank-
Corporate Banking, PNC Bank-Real Estate Finance, PNC Bank-Mortgage Banking, PNC
Secured Finance, PNC Advisors, BlackRock and PFPC.
Forward Looking Statements The information set forth herein contains forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act with respect to financial performance and other financial and
business matters. Forward-looking statements are typically identified by words
or phrases such as "believe," "expect" "anticipate," "intend," "estimate,"
"position," and variations of such words and similar expressions, or future or
conditional verbs such as "will", "would," "should," "could," "may" or similar
expressions. BlackRock cautions that these forward-looking statements are
subject to numerous assumptions, risks and uncertainties, all of which change
over time, and BlackRock assumes no duty to update forward-looking statements.
Actual results could differ materially from those anticipated in these forward-
looking statements.
The following factors, among others, could cause actual results to differ
materially from forward-looking statements: the introduction, withdrawal,
success and timing of business initiatives and strategies; changes in economic
conditions, interest rates, and financial and capital markets; the investment
performance of BlackRock's sponsored investment products and separately managed
accounts; competitive conditions; future acquisitions; and the impact, extent
and timing of technological changes and legislative and regulatory actions and
reforms.
Reference is made to BlackRock's Annual Report on Form 10-K and subsequent
reports filed with the Securities and Exchange Commission which identify
additional factors that can affect forward-looking statements.
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BlackRock, Inc.
Financial Highlights
($ in thousands, except share data)
(unaudited)
Three months ended Variance vs.
--------------------------------------- ------------
March 31, December 31, March 31, 1999 December 31, 1999
--------- ------------ -------------- -----------------
2000 1999 1999 Amount % Amount %
---- ---- ---- ------ -- ------ --
Total revenue........................ $108,060 $87,875 $100,782 $20,185 23.0% $7,278 7.2%
Total expense........................ $75,942 $64,169 $71,123 $11,773 18.3 $4,819 6.8
Operating income..................... $32,118 $23,706 $29,659 $8,412 35.5 $2,459 8.3
Net income........................... $19,197 $12,218 $17,209 $6,979 57.1 $1,988 11.6
Diluted earnings per share........... $0.30 $0.22 $0.27 $0.08 36.4 $0.03 11.1
Diluted cash earnings per share (a).. $0.34 $0.27 $0.31 $0.07 25.9 $0.03 9.7
Average diluted shares outstanding... 64,342,592 54,982,635 64,185,316 9,359,957 17.0 157,276 0.2
EBITDA (b)........................... $37,801 $29,679 $35,299 $8,122 27.4 $2,502 7.1
Operating margin (c)................. 36.4% 33.9% 36.1%
Assets under management ($ in millions). 172,573 140,226 164,517 32,347 23.1 8,056 4.9
(a) Net income plus goodwill amortization for the period divided by weighted
average shares outstanding.
(b) Earnings before interest, taxes, depreciation and amortization.
(c) Operating income divided by total revenue less fund administration and
servicing costs - affiliates
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BlackRock, Inc.
Condensed Consolidated Statements of Income
(Dollar amounts in thousands, except share data)
(unaudited)
Variance vs.
------------
Three months ended Mar. 31, 1999 Dec. 31, 2999
------------------ ------------- -------------
Mar. 31, 2000 Mar. 31, 1999 Dec. 31, 1999 Amount Percent Amount Percent
------------- ------------- ------------- ------ ------- ------ -------
Revenue
Investment advisory and
administration fees:
Mutual funds................... $59,100 $48,514 $53,426 $10,586 21.82% $5,674 10.62%
Separate accounts.............. 42,770 35,366 43,571 7,404 20.94 (801) (1.84)
BAI............................ - (1,440) - 1,440 NM - NM
--------------------------------------------------- ---------------------------------------
Total investment advisory
and administration fees........ 101,870 82,440 96,997 19,430 23.57 4,873 5.02
Other income..................... 6,190 5,435 3,785 755 13.89 2,405 63.54
--------------------------------------------------- ---------------------------------------
Total revenue.................... 108,060 87,875 100,782 20,185 22.97 7,278 7.22
--------------------------------------------------- ---------------------------------------
Expense
Employee compensation and
benefits..................... 40,670 33,232 36,890 7,438 22.38 3,780 10.25
BAI incentive compensation..... - (1,378) - 1,378 NM - NM
Fund administration and
servicing costs -
affiliates................... 19,759 17,976 18,608 1,783 9.92 1,151 6.19
General administration......... 13,100 11,925 12,701 1,175 9.85 399 3.14
Amortization of goodwill....... 2,413 2,414 2,413 (1) (0.04) - -
Closed-end fund offering costs. - - 511 - - (511) NM
--------------------------------------------------- ---------------------------------------
Total expense.................... 75,942 64,169 71,123 11,773 18.35 4,819 6.78
--------------------------------------------------- ---------------------------------------
Operating income................. 32,118 23,706 29,659 8,412 35.48 2,459 8.29
Non-operating income
(expense)
Interest and dividend income... 1,050 618 1,234 432 69.90 (184) (14.91)
Interest expense - affiliates.. (353) (3,670) (701) 3,317 (90.38) 348 (49.64)
--------------------------------------------------- ---------------------------------------
697 (3,052) 533 3,749 (122.84) 164 30.77
Income before income taxes....... $32,815 $20,654 $30,192 $12,161 58.88 $2,623 8.69
Income taxes................... 13,618 8,436 12,983 5,182 61.43 635 4.89
--------------------------------------------------- ---------------------------------------
Net income....................... $19,197 $12,218 $17,209 $6,979 57.12 $1,988 11.55
=================================================== =======================================
Weighted-average shares
outstanding
Basic.......................... 63,864,382 54,807,482 63,864,382 9,056,900 16.52% - -
Diluted........................ 64,342,592 54,982,635 64,185,316 9,359,957 17.02% 157,276 0.25%
Earnings per share
Basic.......................... $0.30 $0.22 $0.27 $0.08 36.36% $0.03 11.11%
Diluted........................ $0.30 $0.22 $0.27 $0.08 36.36% $0.03 11.11%
NM - Not meaningful
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BlackRock, Inc.
Condensed Consolidated Statements of Financial Condition
(Dollar amounts in thousands)
(unaudited)
March 31, December 31, March 31,
2000 1999 1999
---- ---- ----
Assets
Cash and cash equivalents...................................... $ 88,670 $157,129 $ 72,639
Accounts receivable............................................ 72,468 65,837 100,560
Investments.................................................... 2,196 2,255 4,476
Property and equipment, net.................................... 26,087 22,677 14,241
Goodwill....................................................... 191,844 194,257 201,496
Other assets................................................... 7,165 5,427 6,133
-------- -------- --------
Total assets................................................... $388,430 $447,582 $399,545
======== ======== ========
Liabilities and stockholders' equity
Note and loan payable to affiliates............................ $ 0 $ 28,200 $178,200
Accrued compensation........................................... 38,800 90,350 71,686
Accounts payable and accrued liabilities....................... 48,088 44,655 31,248
Other liabilities.............................................. 1,536 3,851 36
-------- -------- --------
Total liabilities.............................................. 88,424 167,056 281,170
Stockholders' equity........................................... 300,006 280,526 118,375
-------- -------- --------
Total liabilities and stockholders' equity..................... $388,430 $447,582 $399,545
======== ======== ========
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BlackRock, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollar amounts in thousands)
(unaudited)
Three months ended March 31,
----------------------------
2000 1999
---- ----
Cash flows from operating activities
Net income.............................................................................. $19,197 $12,218
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization....................................................... 4,633 5,355
Amortization of discount on issuance of class B common stock........................ 149 -
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable........................................ (7,796) 5,650
Decrease (increase) in receivable from affiliate.................................. 1,165 (2,237)
Increase in other assets.......................................................... (1,738) (1,449)
Decrease in accrued compensation.................................................. (51,550) (38,643)
Increase in accounts payable and accrued liabilities.............................. 4,138 5,966
(Decrease) increase in accrued interest payable to affiliates..................... (705) 2
Decrease in other liabilities..................................................... (2,315) (1,948)
----------------------------
Cash used in operating activities....................................................... (34,822) (15,086)
Cash flows from investing activities
Purchase of property and equipment...................................................... (5,630) (4,930)
Sale (purchase) of investments.......................................................... 41 (1,995)
----------------------------
Cash used in investing activities....................................................... (5,589) (6,925)
Cash flows from financing activities
Net repayment of note and loan payable to affiliates.................................... (28,200) (18,800)
Additional proceeds received from issuance of class A common stock...................... 222 -
Expenses related to issuance of class A common stock.................................... (60) -
----------------------------
Cash used in financing activities....................................................... (28,038) (18,800)
Effect of exchange rate changes on cash and cash equivalents............................ (10) -
Net decrease in cash and cash equivalents............................................... (68,459) (40,811)
Cash and cash equivalents, beginning of period.......................................... 157,129 113,450
----------------------------
Cash and cash equivalents, end of period................................................ $88,670 $72,639
============================
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BlackRock, Inc.
Assets Under Management
(Dollar amounts in millions)
(unaudited)
March 31, December 31,
2000 1999 1999
------------- -------------- ----------------
Separate Accounts
Fixed income*................................. $ 79,825 $ 64,381 $ 75,206
Liquidity..................................... 19,110 13,975 20,934
Equity........................................ 6,414 2,121 3,080
------------ -------------- ---------------
Subtotal...................................... 105,349 80,477 99,220
------------ --------------- ---------------
Mutual Funds
Fixed income.................................. 13,923 13,882 13,318
Liquidity..................................... 36,862 33,536 36,587
Equity........................................ 16,439 12,331 15,392
------------ --------------- ---------------
Subtotal...................................... 67,224 59,749 65,297
------------ --------------- ---------------
Total.......................................... $172,573 $140,226 $164,517
============ ================ ================
* includes alternative investment products.
Component Changes in Assets Under Management
Three months ended
------------------------------------
March 31, 2000 March 31, 1999
---------------- ---------------
(Dollar amounts in million)
Separate Accounts
Beginning assets under management............... $ 99,220 $ 69,112
Net subscriptions............................... 3,807 11,624
Market appreciation (depreciation).............. 2,322 (259)
------------ --------------
Ending assets under management.................. 105,349 80,477
Mutual Funds
Beginning assets under management................ 65,297 61,530
Net subscriptions (redemptions)................. 760 (1,906)
Market appreciation............................. 1,167 125
------------ --------------
Ending assets under management.................. 67,224 59,749
------------ --------------
Total............................................ $172,573 $140,226
============ ==============
Net subscriptions................................ $4,567 $9,718
% of Change in AUM from net subscriptions........ 56.7% 101.4%
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BlackRock, Inc.
Assets Under Management
Quarterly Trend
(Dollar amounts in millions)
(unaudited)
Quarter Ended
-----------------------------------------------------------------------------------------------
1999 2000
-----------------------------------------------------------------------------------------------
March 31 June 30 September 30 December 31 March 31
Separate Accounts
Fixed Income
Beginning assets under management..... $52,869 $64,381 $68,286 $69,266 $75,206
Net subscriptions..................... 11,816 4,509 886 6,106 2,541
Market appreciation (depreciation).... (304) (604) 94 (166) 2,078
-----------------------------------------------------------------------------------------------
Ending assets under management........ 64,381 68,286 69,266 75,206 79,825
-----------------------------------------------------------------------------------------------
Liquidity
Beginning assets under management..... 13,826 13,975 12,362 17,310 20,934
Net subscriptions (redemptions)....... 152 (1,626) 4,933 3,602 (1,847)
Market appreciation (depreciation).... (3) 13 15 22 23
-----------------------------------------------------------------------------------------------
Ending assets under management........ 13,975 12,362 17,310 20,934 19,110
-----------------------------------------------------------------------------------------------
Equity
Beginning assets under management..... 2,417 2,121 2,353 2,454 3,080
Net subscriptions (redemptions)....... (344) 20 94 35 3,113
Market appreciation................... 48 212 7 591 221
-----------------------------------------------------------------------------------------------
Ending assets under management........ 2,121 2,353 2,454 3,080 6,414
-----------------------------------------------------------------------------------------------
Total Separate Accounts
Beginning assets under management..... 69,112 80,477 83,001 89,030 99,220
Net subscriptions..................... 11,624 2,903 5,913 9,743 3,807
Market appreciation (depreciation).... (259) (379) 116 447 2,322
-----------------------------------------------------------------------------------------------
Ending assets under management........ $80,477 $83,001 $89,030 $99,220 $105,349
===============================================================================================
Mutual Funds
BlackRock Funds
Beginning assets under management..... $24,231 $24,757 $25,255 $24,453 $27,339
Net subscriptions (redemptions)....... 313 (259) (172) 1,577 994
Market appreciation (depreciation).... 213 757 (630) 1,309 947
-----------------------------------------------------------------------------------------------
Ending assets under management........ 24,757 25,255 24,453 27,339 29,280
-----------------------------------------------------------------------------------------------
PIF
Beginning assets under management..... 25,368 22,978 21,578 22,387 25,554
Net subscriptions (redemptions)....... (2,390) (1,400) 809 3,167 201
Market appreciation................... - - - - -
-----------------------------------------------------------------------------------------------
Ending assets under management........ 22,978 21,578 22,387 25,554 25,755
-----------------------------------------------------------------------------------------------
Closed End
Beginning assets under management..... 7,756 7,668 7,507 7,579 7,340
Net subscriptions (redemptions)....... - (1) 121 (130) -
Market appreciation (depreciation).... (88) (160) (49) (109) 220
-----------------------------------------------------------------------------------------------
Ending assets under management........ 7,668 7,507 7,579 7,340 7,560
-----------------------------------------------------------------------------------------------
Short Term Investment Funds (STIF)
Beginning assets under management..... 4,175 4,346 4,460 4,653 5,064
Net subscriptions (redemptions)....... 171 114 193 411 (435)
Market appreciation................... - - - - -
-----------------------------------------------------------------------------------------------
Ending assets under management........ 4,346 4,460 4,653 5,064 4,629
===============================================================================================
Total Mutual Funds
Beginning assets under management..... 61,530 59,749 58,800 59,072 65,297
Net subscriptions (redemptions)....... (1,906) (1,546) 951 5,025 760
Market appreciation (depreciation).... 125 597 (679) 1,200 1,167
-----------------------------------------------------------------------------------------------
Ending assets under management........ $59,749 $58,800 $59,072 $65,297 $67,224
===============================================================================================
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