EXHIBIT 99.1
[BlackRock letterhead]
CONTACT:
Paul L. Audet: (212) 409-3555
invrel@blackrock.com
--------------------
BlackRock, Inc. Reports Record Net Income and Diluted Earnings per Share of
$22.8 million and $.35, respectively, for the Third Quarter of 2000.
New York, New York-October 12, 2000, BlackRock, Inc. (NYSE: BLK) today reported
record net income for the third quarter ended September 30, 2000 of $22.8
million, a 40% increase compared with $16.2 million earned in the third quarter
of 1999 and a 9% increase compared with $20.9 million earned in the second
quarter of 2000. Diluted earnings per share for the third quarter was $0.35, a
30% increase compared with $0.27 (pro-forma) for the third quarter of 1999.
Operating income of $36.9 million increased $6.3 million or 20% and $2.6 million
or 8% compared with $30.6 million and $34.3 million earned in the third quarter
of 1999 and the second quarter of 2000, respectively (See Table 1).
Net income for the third quarter of 2000, excluding $3.7 million of additional
accruals, would have been $24.9 million, a 54% increase compared with the third
quarter of 1999 and a 19% increase compared with the $20.9 million earned in the
second quarter of this year. The $3.7 million of additional accruals included
$3.3 million of compensation and benefit costs and $0.4 million of occupancy
expense. The higher compensation and benefit costs primarily reflects a special
determination by the Compensation Committee of the Board of Directors to
increase incentive compensation and related benefit expenses in recognition of
the Company's strong operating performance for 2000. The $0.4 million of
occupancy expense primarily reflects accelerated depreciation on existing
leasehold improvements consistent with the Company's recent announcement that it
will consolidate all New York City Operations into a single facility at 40 East
52/nd/ Street.
Net income for the nine months ended September 30, 2000 was $62.8 million, a 49%
increase compared with $42.2 million earned in the nine months ended September
30, 1999. Diluted earnings per share for the nine months ended September 30,
2000 was $0.97, a 35% increase compared with $0.72 (pro-forma) for the nine
months ended September 30, 1999. Operating income for the nine months ended
September 30, 2000 was $103.4 million, a $22.1 million or 27% increase compared
with $81.3 million earned in the nine months ended September 30, 1999.
"One year ago we successfully completed BlackRock's initial public offering with
high expectations for our new shareholders, our employees and our clients,"
commented Laurence D. Fink, Chairman and CEO. "With today's earnings release, I
believe our first year accomplishments can be characterized as a great start in
achieving those expectations. The Company has continued to generate solid
investment performance and provide superior client service, which has resulted
in strong organic growth in sales and earnings. Accordingly, I remain
comfortable with BlackRock's consensus earnings per share expectations for
2000."
Third Quarter Highlights
- ------------------------
. Assets under management rose to $190.8 billion, an increase of 29%
from the $148.1 billion reported at September 30, 1999 and 16% above
the December 31, 1999 total of $164.5 billion.
. Net subscriptions for the third quarter and first nine months of 2000
were $11.6 billion and $21.2 billion, respectively versus $6.9 billion
and $17.9 billion for the comparable periods in 1999.
. BlackRock's operating margin (exclusive of additional accruals) for
the third quarter was 37.4% compared with 37.6% for the third quarter
of 1999 and 36.5% for the second quarter of 2000.
. Announced a major marketing and branding initiative for the Company's
risk management and technology services--"BlackRock Solutions".
Total revenue for the quarter ended September 30, 2000 increased $27.6 million
or 28% to $127.7 million compared with the third quarter of 1999 due to a 62%
increase in separate account revenue. The substantial increase in separate
account revenue resulted from increases in fixed income and equity assets of
$30.3 billion and $5.1 billion, respectively, as well as higher performance fees
on the Company's alternative products. For the third quarter of 2000,
performance fee revenue was approximately $10.0 million above normal
expectations with related incentive compensation higher by approximately $6.0
million. Total revenue for the nine months ended September 30, 2000 was $348.3
million, a $68.1 million or 24% increase compared to the nine months ended
September 30, 1999. The year-to-year increase was largely driven by a $47.0
million or 43% increase in separate account revenue.
Compared with the second quarter of 2000, revenue increased $15.1 million or 13%
in the third quarter of 2000. Mutual fund revenue increased $1.5 million or 3%
largely as a result of higher assets under management in the Provident
Institutional Funds. Separate account fees increased $12.3 million or 24.1% due
to the rise in fixed income assets as well as the previously noted higher levels
of performance fees.
About BlackRock--BlackRock is one of the largest publicly traded investment
management firms in the United States with $191 billion of assets under
management as of September 30, 2000. BlackRock manages assets on behalf of more
than 3,000 institutions and 160,000 individuals worldwide 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, the company provides risk
management and technology services to a growing number of institutional
investors under the BlackRock Solutions name. Clients are served from the
Company's headquarters in New York City, as well as offices in Philadelphia, PA,
Wilmington, DE, Edinburgh, Scotland and Tokyo, Japan. BlackRock is a member of
The PNC Financial Services Group, Inc. (NYSE:PNC), one of the largest
diversified financial services organizations in the United States, and is
majority-owned by PNC and by BlackRock employees.
Forward Looking Statements--This press release may contain 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
"likely," "believe," "expect" "anticipate," "intend," "estimate," "continue,"
"position," "prospects," 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. Forward-looking statements speak only as of the date they are
made, and BlackRock assumes no duty to update forward-looking statements. Actual
results could differ materially from those anticipated in these forward-looking
statements and future results could differ materially from historical
performance.
The following factors, among others, could cause actual results to differ
materially from forward-looking statements or historical performance: the
introduction, withdrawal, success and timing of business initiatives and
strategies; economic conditions; changes in interest rates and financial and
capital markets; the investment performance of BlackRock's advised or sponsored
investment products and separately managed accounts; competitive conditions;
capital improvement projects; 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 for the year ended
December 31, 1999 and subsequent reports filed with the Securities and Exchange
Commission which identify additional factors that can affect forward-looking
statements.
2
TABLE 1
BlackRock, Inc.
Financial Highlights
($ in thousands, except share data)
(unaudited)
Three months ended Variance vs.
----------------------------------- ------------------------------------
September 30, June 30, September 30, 1999 June 30, 2000
----------------------------------- ------------------------------------
2000 1999 2000 Amount % Amount %
----------------------------------- ------------------------------------
Total revenue $127,701 $100,107 $112,571 $27,594 28% $15,130 13%
Total expense $90,775 $69,449 $78,249 $21,326 31% $12,526 16%
Operating income $36,926 $30,658 $34,322 $6,268 20% $2,604 8%
Net income $22,761 $16,223 $20,857 $6,538 40% $1,904 9%
Diluted earnings per share $0.35 $0.30 $0.32 $0.05 17% $0.03 9%
Pro-forma diluted earnings per share (a) $0.35 $0.27 $0.32 $0.08 30% $0.03 9%
Diluted cash earnings per share (b) $0.39 $0.34 $0.37 $0.05 15% $0.02 5%
Pro-forma diluted cash earnings per share (a) (b) $0.39 $0.31 $0.37 $0.08 26% $0.02 5%
Average diluted shares outstanding 64,651,300 54,850,506 64,492,447 9,800,794 18% 158,853 0%
EBITDA (c) $44,580 $35,867 $40,641 $8,713 24% $3,939 10%
Operating margin (d) 34.1% 40.1% 36.5%
Operating income excluding additional accruals (e) $40,576 $28,788 $34,322 $11,788 41% $6,254 18%
Operating margin excluding additional accruals (f) 37.4% 37.6% 36.5%
Assets under management ($ in millions) $190,808 $148,102 $177,337 $42,706 29% $13,471 8%
Nine months ended
September 30, Variance
--------------------- ---------------------
2000 1999 Amount %
--------------------- ---------------------
Total revenue $348,332 $280,199 $68,133 24%
Total expense $244,966 $198,915 $46,051 23%
Operating income $103,366 $81,284 $22,082 27%
Net income $62,815 $42,208 $20,607 49%
Diluted earnings per share $0.97 $0.77 $0.20 26%
Pro-forma diluted earnings per share (a) $0.97 $0.72 $0.25 35%
Diluted cash earnings per share (b) $1.09 $0.90 $0.19 21%
Pro-forma diluted cash earnings per share (a) (b) $1.09 $0.83 $0.26 31%
Average diluted shares outstanding 64,524,607 54,938,108 9,586,499 17%
EBITDA (c) $123,022 $97,242 $25,780 27%
Operating margin (d) 35.5% 36.9%
Operating income excluding additional accruals (e) $107,016 $79,975 $27,041 34%
Operating margin excluding additional accruals (f) 36.8% 36.0%
Assets under management ($ in millions) $190,808 $148,102 $42,706 29%
(a) Based on adjusting 1999 net income to reflect the after-tax interest expense
benefit of retiring $115 million of debt (net offering proceeds) with
weighted-average common shares increased by 9 million.
(b) Net income plus amortization expense for the period divided by average
diluted shares outstanding.
(c) Earnings before interest, taxes, depreciation and amortization.
(d) Operating income divided by total revenue less fund administration and
servicing costs - affiliates.
(e) Revenue adjusted $5.2 million and $3.2 million for the three and nine month
periods ended September 30, 1999 reflecting non-recurring BlackRock Asset
Investors ("BAI") and mutual fund revenue. Expense adjusted to reflect $3.7
million in additional accruals for 2000 and $3.3 million and $1.9 million
for the three and nine month periods ended September 30, 1999 associated
with non-recurring BAI and mutual fund related expense.
(f) Operating income excluding additional accruals divided by adjusted revenue
less fund administration and servicing costs-affiliates.
3
TABLE 2
BlackRock, Inc.
Condensed Consolidated Statements of Income
(Dollar amounts in thousands, except share data)
(unaudited)
Three months ended Nine months ended
------------------- -----------------
September 30, September 30,
2000 1999 % Change 2000 1999 % Change
---- ---- -------- ---- ---- --------
Revenue
Investment advisory and administration fees:
Mutual funds $57,745 $61,665 (6.4)% $173,073 $161,302 7.3%
Separate accounts 63,539 39,141 62.3 157,513 110,475 42.6
BAI - (5,018) NM - (7,072) NM
------------------------ -------- -------------------------- --------
Total investment advisory and administration fee 121,284 95,788 26.6 330,586 264,705 24.9
Other income 6,417 4,319 48.6 17,746 15,494 14.5
------------------------ -------- -------------------------- --------
Total revenue 127,701 100,107 27.6 348,332 280,199 24.3
------------------------ -------- -------------------------- --------
Expense
Employee compensation and benefits 53,272 35,172 51.5 136,622 101,135 35.1
BAI incentive compensation - (3,894) NM - (5,387) NM
Fund administration and servicing costs -
affiliates 19,313 23,723 (18.6) 57,522 60,058 (4.2)
General and administration 15,577 12,035 29.4 43,282 35,869 20.7
Amortization of intangible assets 2,613 2,413 8.3 7,540 7,240 4.1
------------------------ -------- ------------------------- -------
Total expense 90,775 69,449 30.7 244,966 198,915 23.2
------------------------ -------- ------------------------- -------
Operating income 36,926 30,658 20.4 103,366 81,284 27.2
Non-operating income (expense)
Interest and dividend income 2,197 918 139.3 4,664 2,211 110.9
Interest expense - affiliates (215) (3,116) 93.1 (654) (10,237) 93.6
------------------------ -------- -------------------------- -------
1,982 (2,198) 190.2 4,010 (8,026) 150.0
Income before income taxes $38,908 $28,460 36.7 $107,376 $73,258 46.6
Income taxes 16,147 12,237 32.0 44,561 31,050 43.5
------------------------ -------- ------------------------- -------
Net income $22,761 $16,223 40.3 $62,815 $42,208 48.8
======================== ======== ========================= =======
Weighted-average shares outstanding
Basic 63,884,410 54,675,353 16.8% 63,871,568 54,762,955 16.6%
Diluted 64,651,300 54,850,506 17.9% 64,524,607 54,938,108 17.4%
Earnings per share
Basic $0.36 $0.30 20.0% $0.98 $0.77 27.3%
Diluted $0.35 $0.30 16.7% $0.97 $0.77 26.0%
NM - Not meaningful
4
TABLE 3
BlackRock, Inc.
Condensed Consolidated Statements of Financial Condition
(Dollar amounts in thousands)
(unaudited)
September 30, December 31, September 30,
2000 1999 1999
---- ---- ----
Assets
Cash and cash equivalents $158,928 $157,129 $158,519
Accounts receivable 77,641 65,837 60,948
Investments 14,207 2,255 2,494
Property and equipment, net 37,678 22,677 18,684
Intangible assets, net 194,757 194,257 196,671
Other assets 9,284 5,427 6,100
------------ ---------- ----------
Total assets $492,495 $447,582 $443,416
============ ========== ==========
Liabilities and stockholders' equity
Note and loan payable to affiliates $ 0 $ 28,200 $153,200
Accrued compensation 96,498 90,350 104,177
Accounts payable and accrued liabilities 41,140 44,655 35,080
Acquired management contract obligation 8,040 - -
Other liabilities 3,269 3,851 2,552
------------ ---------- ----------
Total liabilities 148,947 167,056 295,009
Stockholders' equity 343,548 280,526 148,407
------------ ---------- ----------
Total liabilities and stockholders' equity $492,495 $447,582 $443,416
============ ========== ==========
5
TABLE 4
BlackRock, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollar amounts in thousands)
(unaudited)
Nine months ended September 30,
------------------------------
2000 1999
---- ----
Cash flows from operating activities
Net income $ 62,815 $ 42,208
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 14,992 13,745
Amortization of discount on issuance of class B common stock 528 -
Shares issued under the Nonemployee Directors Stock Compensation Plan 70 -
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (12,809) 46,696
Decrease (increase) in receivable from affiliate 1,005 (988)
Increase in other assets (3,857) (4,099)
Increase (decrease) in accrued compensation 6,148 (6,152)
(Decrease) increase in accounts payable and accrued liabilities (2,810) 10,799
Decrease in accrued interest payable to affiliates (705) (999)
(Decrease) increase in other liabilities (523) 568
----------------------------
Cash provided by operating activities 64,854 101,778
Cash flows from investing activities
Purchase of property and equipment (22,453) (12,938)
Purchase of investments (11,671) (171)
----------------------------
Cash used in investing activities (34,124) (13,109)
Cash flows from financing activities
Repayment of note and loan payable to affiliates (28,200) (43,800)
Purchase of treasury stock - (550)
Reissuance of treasury stock - 750
Additional proceeds received from issuance of class A common stock 222 -
Expenses related to issuance of class A common stock (91) -
----------------------------
Cash used in financing activities (28,069) (43,600)
Effect of exchange rate changes on cash and cash equivalents (862) -
Net increase in cash and cash equivalents 1,799 45,069
Cash and cash equivalents, beginning of period 157,129 113,450
----------------------------
Cash and cash equivalents, end of period $158,928 $158,519
============================
6
TABLE 5
BlackRock, Inc.
Assets Under Management
(Dollar amounts in millions)
(unaudited)
September 30, December 31,
2000 1999 1999
-------- -------- --------
Separate Accounts
Fixed income* $ 99,600 $ 69,266 $ 75,206
Liquidity 15,990 17,310 20,934
Equity* 7,509 2,454 3,080
-------- -------- --------
Subtotal 123,099 89,030 99,220
-------- -------- --------
Mutual Funds
Fixed income 13,983 13,579 13,318
Liquidity 37,896 32,717 36,587
Equity 15,830 12,776 15,392
-------- -------- --------
Subtotal 67,709 59,072 65,297
-------- -------- --------
Total $190,808 $148,102 $164,517
======== ======== ========
* includes alternative investment products.
Component Changes in Assets Under Management
Three months ended Nine months ended
-------------------------------------- --------------------------------------
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------ ------------------ ------------------ ------------------
Separate Accounts*
Beginning assets under management $111,672 $ 83,001 $ 99,220 $ 69,112
Net subscriptions 9,647 5,913 19,269 20,440
Market appreciation (depreciation) 1,780 116 4,610 (522)
------------------ ------------------ ------------------ ------------------
Ending assets under management 123,099 89,030 123,099 89,030
Mutual Funds
Beginning assets under management 65,665 58,800 65,297 61,530
Net subscriptions (redemptions) 1,981 951 1,979 (2,501)
Market appreciation (depreciation) 63 (679) 433 43
----------------- ----------------- ----------------- -----------------
Ending assets under management 67,709 59,072 67,709 59,072
------------------ ------------------ ------------------ ------------------
Total $190,808 $148,102 $190,808 $148,102
================== ================== ================== ==================
Net subscriptions $ 11,628 $ 6,864 $ 21,248 $ 17,939
% of Change in AUM from net subscriptions 86.3% 108.9% 80.8% 102.7%
* includes alternative investment products.
7
BlackRock, Inc.
Assets Under Management
Quarterly Trend
(Dollar amounts in millions)
(unaudited)
Quarter Ended
-----------------------------------------------------------
1999 2000 Nine months ended
-----------------------------------------------------------
September 30 December 31 March 31 June 30 September 30 September 30, 2000
----------------------------------------------------------- ------------------
Separate Accounts*
Fixed Income
Beginning assets under management $68,286 $69,266 $75,206 $79,825 $86,344 $ 75,206
Net subscriptions 886 6,106 2,541 5,851 10,933 19,325
Market appreciation (depreciation) 94 (166) 2,078 668 2,323 5,069
----------------------------------------------------------- -----------------
Ending assets under management 69,266 75,206 79,825 86,344 99,600 99,600
----------------------------------------------------------- -----------------
Liquidity
Beginning assets under management 12,362 17,310 20,934 19,110 17,707 20,934
Net subscriptions (redemptions) 4,933 3,602 (1,847) (1,423) (1,737) (5,007)
Market appreciation 15 22 23 20 20 63
----------------------------------------------------------- -----------------
Ending assets under management 17,310 20,934 19,110 17,707 15,990 15,990
----------------------------------------------------------- -----------------
Equity*
Beginning assets under management 2,353 2,454 3,080 6,414 7,621 3,080
Net subscriptions 94 35 3,113 1,387 451 4,951
Market appreciation (depreciation) 7 591 221 (180) (563) (522)
----------------------------------------------------------- -----------------
Ending assets under management 2,454 3,080 6,414 7,621 7,509 7,509
----------------------------------------------------------- -----------------
Total Separate Accounts
Beginning assets under management 83,001 89,030 99,220 105,349 111,672 99,220
Net subscriptions 5,913 9,743 3,807 5,815 9,647 19,269
Market appreciation 116 447 2,322 508 1,780 4,610
----------------------------------------------------------- -----------------
Ending assets under management $89,030 $99,220 $105,349 $111,672 $123,099 $123,099
=========================================================== =================
Mutual Funds
BlackRock Funds
Beginning assets under management $25,255 $24,453 $27,339 $29,280 $28,262 $ 27,339
Net subscriptions (redemptions) (172) 1,577 994 (168) (455) 371
Market appreciation (depreciation) (630) 1,309 947 (850) 12 109
----------------------------------------------------------- -----------------
Ending assets under management 24,453 27,339 29,280 28,262 27,819 27,819
----------------------------------------------------------- -----------------
BlackRock Global Series
Beginning assets under management $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Net subscriptions - - - - 54 54
Market appreciation - - - - - -
----------------------------------------------------------- -----------------
Ending assets under management - - - - 54 54
----------------------------------------------------------- -----------------
PIF
Beginning assets under management 21,578 22,387 25,554 25,755 25,615 25,554
Net subscriptions (redemptions) 809 3,167 201 (140) 1,965 2,026
Market appreciation - - - - - -
----------------------------------------------------------- -----------------
Ending assets under management 22,387 25,554 25,755 25,615 27,580 27,580
----------------------------------------------------------- -----------------
Closed End
Beginning assets under management 7,507 7,579 7,340 7,560 7,583 7,340
Net subscriptions (redemptions) 121 (130) - (30) - (30)
Market appreciation (depreciation) (49) (109) 220 53 51 324
----------------------------------------------------------- -----------------
Ending assets under management 7,579 7,340 7,560 7,583 7,634 7,634
----------------------------------------------------------- -----------------
Short Term Investment Funds (STIF)
Beginning assets under management 4,460 4,653 5,064 4,629 4,205 5,064
Net subscriptions (redemptions) 193 411 (435) (424) 417 (442)
Market appreciation - - - - - -
----------------------------------------------------------- -----------------
Ending assets under management 4,653 5,064 4,629 4,205 4,622 4,622
----------------------------------------------------------- -----------------
Total Mutual Funds
Beginning assets under management 58,800 59,072 65,297 67,224 65,665 65,297
Net subscriptions (redemptions) 951 5,025 760 (762) 1,981 1,979
Market appreciation(depreciation) (679) 1,200 1,167 (797) 63 433
----------------------------------------------------------- -----------------
Ending assets under management $59,072 $65,297 $67,224 $65,665 $67,709 $ 67,709
=========================================================== =================
* includes alternative investment products.
8