BlackRock, Inc. Reports 13% Increase in Assets Under Management to $309.4 Billion.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 21, 2004 Fourth Quarter and Full Year Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. E.P.S. Increases 21% and 16%, Respectively, to $0.63 and $2.36; Board Approves New Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program BlackRock BlackRock Inc. (NYSE: BLK) is a major American investment management firm. As of September 30, 2007, BlackRock’s assets under management totaled $1.3 trillion[2] across fixed income, liquidity, equity, alternative investment and real estate strategies. , Inc. (NYSE NYSE See: New York Stock Exchange :BLK BLK Black BLK Blank BLK Block BLK Bulk BLK Blocked Shot (basketball) BLK Blocked Kick (football) BLK Blackpool, England, United Kingdom - Blackpool (Airport Code) ) today reported net income for the fourth quarter ended December December: see month. 31, 2003 of $41.4 million, a 22% increase compared with $33.8 million earned in the fourth quarter of 2002 and a 3% increase compared with $40.1 million earned in the third quarter of 2003. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the fourth quarter were $0.63, a 21% increase compared with $0.52 for the fourth quarter of 2002 and a 3% increase compared with $0.61 for the third quarter of 2003. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $61.8 million for the fourth quarter of 2003 increased $6.8 million, or 12%, compared to the fourth quarter of 2002 and $4.1 million, or 7%, compared to the third quarter of 2003. Net income for the year ended December 31, 2003 was $155.4 million, a 17% increase compared with $133.2 million earned in 2002. Diluted earnings per share for the year ended December 31, 2003 were $2.36, a 16% increase compared with $2.04 for the year ended December 31, 2002. Operating income for the year ended December 31, 2003 was $228.3 million, a $13.1 million, or 6%, increase compared with $215.1 million earned in 2002. Assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. ("AUM Aum (ä·ōōmˑ), n.pr 1. in Ayurveda, the subtle, noiseless cosmic vibration in which consciousness existed in the beginning, before the elements appeared. ") were up $15.9 billion during the quarter and $36.5 billion for the year to $309.4 billion, a 5% increase from the $293.5 billion reported at September September: see month. 30, 2003 and a 13% increase from the $272.8 billion reported at December 31, 2002. New business during the quarter totaled $11.7 billion, with positive results in all distribution channels. For the full year, net new business was $22.5 billion, with $26.7 billion of inflows in long-dated adj. 1. (Finance) of a gilt-edged security: having more than 15 years to run before redemption. Adj. 1. long-dated - of a gilt-edged security; having more than 15 years to run before redemption Britain, Great Britain, U.K. assets overwhelming $4.2 billion of outflows in liquidity products. In addition, new business in BlackRock Solutions was very strong, driving an increase of more than 15% in revenue year-over-year. "BlackRock achieved exceptional results in 2003, particularly in light of the headwinds we faced throughout the year, including anticipated outflows in liquidity assets, lower performance fees, and increased costs associated with industry-wide accounting and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. matters," commented Laurence D. Fink Laurence D. Fink is the Chairman & Chief Executive Officer of BlackRock, Inc. Popularly known as Larry, he started his career at First Boston upon graduating from the University of California Los Angeles. , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of BlackRock. "We overcame these challenges with strong new business results in fixed income and alternatives and, I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in very happy to report, positive net flows in domestic equities. BlackRock Solutions had a terrific year as well, reflecting broad-based broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased investor focus on operational and risk management. Importantly, we also delivered competitive investment performance in most products and the quality of our client service effort continues to differentiate differentiate /dif·fer·en·ti·ate/ (dif?er-en´she-at) 1. to distinguish, on the basis of differences. 2. to develop specialized form, character, or function differing from that surrounding it or from the original. the firm. Our success in 2003 can only be attributed to the hard work and dedication of our people. The quality of our team and their ongoing commitment to our clients gives me confidence in our ability to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. our momentum and further expand BlackRock's platform in 2004." Fourth Quarter and Full Year Highlights -- Fixed income assets increased $13.0 billion during the quarter and $38.8 billion for the year to $214.4 billion. Net new business totaled $10.8 billion during the quarter and $28.4 billion throughout the year, with positive inflows in every product category and from every client channel in both periods. While we continued to attract assets in our flagship This article is about the lead ship, store, or product of a group. For other uses, see Flagship (disambiguation). A flagship is the ship used by the commanding officer of a group of naval ships. core bond products, $11.9 billion of net inflows in targeted duration accounts and $5.6 billion of net new business in global bonds during the year contributed to greater diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. of our product mix. -- Liquidity assets ended the year at $74.3 billion, with net inflows of $2.2 billion from domestic institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. and $860 million of outflows in retail and international liquidity products during the quarter. Year-over-year, liquidity assets declined $4.2 billion or 5%, including $3.5 billion of inflows in security lending accounts and $7.7 billion of net outflows in all other products. As anticipated, $6.6 billion of outflows in institutional money market funds partially reversed the $14.3 billion of inflows that followed the Fed's rate cut in November November: see month. 2002. While liquidity flows are expected to remain volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. , our domestic institutional market position held steady in 2003 and we will seek to expand our market share in 2004. -- Total equity assets were up $1.3 billion during the quarter and $257 million for the full year, ending at $13.7 billion. During the quarter, we recorded net new business in domestic equities of $557 million. For the year, new business of $860 million in external channels was overshadowed by $759 million of outflows from PNC-related clients. International equities continued to struggle, with $1.2 billion of outflows during the quarter bringing the total for the year to $3.4 billion. Momentum in domestic equities accelerated throughout the year, and we believe we will have the opportunity to more broadly market these products in 2004. We have also made additional investments in our international equity effort and are hopeful that performance will stabilize stabilize See peg. and return to historical levels. -- Alternative investment AUM increased $258 million during the quarter and $1.7 billion during the year to $6.9 billion. We have expanded our alternative product offerings, adding our equity hedge fund hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" , Cyllenius, in the fourth quarter of 2002 and, in 2003, introducing a municipal bond hedge fund in the first quarter, launching our fund of funds Fund of Funds A mutual fund that invests in other mutual funds. Notes: For example, an investor would select a general risk profile and the fund-of-funds manager would pick underlying investments from a range of products managed by external managers. effort in the second quarter, and issuing a new collateralized debt obligation in the third quarter. These initiatives helped bring our total new business for the year to $1.5 billion, including $237 million in the fourth quarter. -- While our distribution effort demonstrated strength broadly, growth was most notable in our insurance effort, which attracted $3.6 billion and $13.0 billion of net new business during the fourth quarter and full year, respectively. Net inflows from domestic tax-exempt tax-ex·empt adj. 1. Not subject to taxation, as the capital or income of a philanthropic organization. 2. Producing interest that is exempt from income tax: tax-exempt bonds. n. investors totaled $3.6 billion for the quarter and $7.0 billion for the year, as pension plan rebalancing Rebalancing The process of realigning the weightings of one's portfolio of assets. Notes: For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting out of bonds abated Abated, an ancient technical term applied in masonry and metal work to those portions which are sunk beneath the surface, as in inscriptions where the ground is sunk round the letters so as to leave the letters or ornament in relief. From 1911 Encyclopædia Britannica and BlackRock benefited from contributions to defined benefit plans Defined benefit plan A pension plan obliging the sponsor to make specified dollar payments to qualifying employees at retirement. The pension obligations are effectively the debt obligation of the plan sponsor. Related: Defined contribution plan . We also had strong new business results during the year among non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. clients and mutual fund investors, including net inflows of $2.1 billion from international institutions (excluding insurance companies) and $3.5 billion in long-dated closed-end closed-end adj. Issuing a fixed number of shares that can be traded publicly but are not redeemable by the issuer: a closed-end investment company. and open-end o·pen-end adj. 1. Having no definite limit of duration or amount: an open-end contract. 2. mutual funds. -- BlackRock Solutions revenue increased by more than 15% year-over-year as a result of strong new business efforts. In total, we added sixteen new risk management, investment accounting and system outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. assignments during the year, including two new assignments during the quarter. We completed two system implementations and one additional implementation is in process. New business during the year included six risk management relationships and one investment accounting client. Discussions are ongoing with several potential clients and we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that we will be able to capitalize on some of these opportunities during the first quarter of 2004. -- At year end 2003, we took steps to further enhance the continuity of our team by granting previously unallocated awards in our 2002 Long Term Retention and Incentive Program to a broader universe of key employees and by introducing the use of restricted stock as a form of compensation. The restricted stock awards, which consisted of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 191,000 shares that vest ratably over four years, represented as much as 30% of total compensation for senior executives. At the same time, we discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the regular use of incentive stock option awards. Taken together, we believe these actions enhance our ability to retain key professionals and maintain appropriate alignment Alignment is the adjustment of an object in relation with other objects, or a static orientation of some object or set of objects in relation to others.
shareholders. -- As more fully discussed below, our Board has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: a 2 million share stock buy-back program, which includes a repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of shares owned by members of BlackRock's Management Committee, to maintain relative stability in the publicly-traded float of BlackRock's stock. -- We entered 2004 with strong momentum supported by competitive investment performance in most products and a growing presence among investors worldwide. Liquidity assets, which are expected to exhibit continued volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the , are up more than $4.0 billion in January January: see month. . In addition, our pipeline is as robust as ever, with approximately $800 million of wins funded since year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , over $6.0 billion of wins to be funded and nearly 400 searches in process across products. The level of inquiry regarding BlackRock Solutions also remains high, suggesting strong potential for additional risk management and system-related assignments in 2004. We also announced earlier this month that former Under-Secretary of the U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. Peter Fisher Peter Fisher could be:
investment and risk management capabilities, together with his expertise, to enhance our balance sheet advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal . His addition and ongoing investments throughout the firm reflect our continuing commitment to more fully serve our existing and prospective clients and, thereby, enhance and expand BlackRock's platform. In December 2003, the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). ("FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). ") issued FASB Interpretation No. 46 (revised December 2003), "Consolidation of Variable Interest Entities" ("FIN fin, organ of locomotion characteristic of fish and consisting of thin tissue supported by cartilaginous or bony rays. In some fish, e.g., the eel, a single fin extends from the back, around the tail, and along the ventral surface. 46R"). The Interpretation revised previous guidance issued by the FASB, which BlackRock adopted on July July: see month. 1, 2003, requiring BlackRock to consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. six collateralized debt obligations Collateralized Debt Obligation (CDO) A general inclusive term which covers Collateralized Bond Obligations, Collateralized Loan Obligations, and Collateralized Mortgage Obligations, ("CDOs"). Under the guidance set forth in FIN 46R, the Company's management has concluded that BlackRock is not the primary beneficiary beneficiary Person or entity (e.g., a charity or estate) that receives a benefit from something (e.g., a trust, life-insurance policy, or contract). A primary beneficiary receives proceeds from a trust or insurance policy before any other. of these CDOs and, therefore, has adjusted previously issued financial results to reflect the deconsolidation of the CDOs at December 31, 2003. Certain reclassifications were made to BlackRock's third quarter 2003 results to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current financial statement presentation. The impact of the deconsolidation of the CDOs was immaterial Not essential or necessary; not important or pertinent; not decisive; of no substantial consequence; without weight; of no material significance. immaterial adj. to BlackRock's results of operations for the three months ended September 30, 2003. As previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). , BlackRock has received subpoenas from the New York State Attorney General The New York State Attorney General is the chief legal officer of the State of New York. The office has been in existence in some form since 1626, under the Dutch colonial government of New York. and the Secretary of the Commonwealth of Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. and various information requests from the Securities and
Exchange Commission in connection with industry-wide investigations of
mutual fund matters. BlackRock is continuing to cooperate fully in these
matters, and has incurred or reserved approximately $4 million to cover
the currently estimated aggregate costs in connection with these
regulatory matters.Total revenue for the quarter ended December 31, 2003 increased $24.2 million, or 18%, to $161.2 million compared to $137.0 million for the quarter ended December 31, 2002. Separate account revenue increased by $13.3 million, or 19%, mutual funds revenue increased by $6.2 million, or 12%, and other income increased by $4.6 million, or 30%, compared with the quarter ended December 31, 2002. The increase in separate account revenue primarily consisted of a $12.4 million, or 18%, increase in separate account base fees driven by a $39.0 billion, or 21%, increase in AUM, concentrated in fixed income mandates mandates, system of trusteeships established by Article 22 of the Covenant of the League of Nations for the administration of former Turkish territories and of former German colonies. . Mutual fund revenue increased primarily due to new closed-end fund Closed-end fund An investment company that issues shares like any other corporation and usually does not redeem its shares. A publicly traded fund sold on stock exchanges or over the counter that may trade above or below its net asset value. Related: Open-end fund. launches in 2003, which generated $2.5 billion of additional AUM. Other income increased primarily due to strong sales in BlackRock Solutions products and services.
----------------------------------------------------------------------
Three months ended
December 31, September 30,
-------------------
2003 2002 2003
--------- --------- -------------
(Dollar amounts in thousands)
Mutual funds revenue
BlackRock Funds $18,865 $16,862 $17,255
Closed-end Funds 15,804 11,442 13,267
BPIF 21,486 21,674 21,694
STIF 263 232 266
--------- --------- -------------
Total mutual funds revenue 56,418 50,210 52,482
--------- --------- -------------
Separate accounts revenue
Separate accounts base fees 83,059 70,648 78,152
Separate accounts performance fees 1,800 883 2,403
--------- --------- -------------
Total separate accounts revenue 84,859 71,531 80,555
--------- --------- -------------
Total investment advisory and
administration fees 141,277 121,741 133,037
Other income 19,934 15,296 17,307
--------- --------- -------------
Total revenue $161,211 $137,037 $150,344
========= ========= =============
Variance vs.
-------------------------------
December 31, September 30,
2002 2003
-------------- ---------------
Amount % Amount %
-------- ----- -------- -----
(Dollar amounts in thousands)
Mutual funds revenue
BlackRock Funds $2,003 11.9% $1,610 9.3%
Closed-end Funds 4,362 38.1 2,537 19.1
BPIF (188) (0.9) (208) (1.0)
STIF 31 13.4 (3) (1.1)
-------- ------ -------- ------
Total mutual funds revenue 6,208 12.4 3,936 7.5
-------- ------ -------- ------
Separate accounts revenue
Separate accounts base fees 12,411 17.6 4,907 6.3
Separate accounts performance fees 917 103.9 (603) (25.1)
-------- ------ -------- ------
Total separate accounts revenue 13,328 18.6 4,304 5.3
-------- ------ -------- ------
Total investment advisory and
administration fees 19,536 16.0 8,240 6.2
Other income 4,638 30.3 2,627 15.2
-------- ------ -------- ------
Total revenue $24,174 17.6% $10,867 7.2%
======== ====== ======== ======
----------------------------------------------------------------------
Revenue growth from third quarter 2003 largely reflects an increase in separate account AUM of $12.7 billion or 6%, the successful offering of new closed-end funds during the third and fourth quarters of 2003, which generated $2.0 billion in AUM, and increased sales of BlackRock Solutions products and services. Total revenue for the year ended December 31, 2003 increased $21.2 million, or 4%, to $598.2 million compared to $577.0 million during the year ended December 31, 2002. Increases in separate account base fees of $47.4 million, or 18%, and other income of $11.7 million, or 20%, were partially offset by decreases of $31.8 million, or 78%, in separate account performance fees and $6.1 million, or 3%, in mutual funds revenue. The growth in separate account base fees was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to an increase in assets under management of $39.0 billion, or 21%. The decline in separate account performance fees was attributable to a decrease in performance fees earned on BlackRock's fixed income hedge fund which, as previously disclosed, cannot earn additional performance fees until investment performance exceeds the high water mark. The decrease in mutual funds revenue consists of decreases in BlackRock Funds revenue and BPIF BPIF British Printing Industries Federation BPIF Backplane Interface revenue of $14.3 million and $3.1 million, respectively, partially offset by an $11.1 million increase in closed-end fund revenue. The decline in BlackRock Funds revenue reflects 2002 market depreciation and a reduction of PNC-related fees by $18.4 million associated with 2003 net redemptions of $2.0 billion, which offset higher revenues attributable to $1.4 billion of third party net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight . The decline in BPIF revenue was due primarily to a $1.3 billion decrease in average AUM in 2003 compared with 2002 and $1.8 million related to a rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. of Securities and Exchange Commission ("SEC") registration fees in 2002. Other income increased primarily due to strong sales of BlackRock Solutions products and services.
----------------------------------------------------------------------
Year ended
December 31, Variance
------------------- -----------------
2003 2002 Amount %
--------- --------- -------- -------
(Dollar amounts in thousands)
Mutual funds revenue
BlackRock Funds $69,361 $83,647 ($14,286) (17.1%)
Closed-end Funds 52,685 41,591 11,094 26.7
BPIF 83,035 86,115 (3,080) (3.6)
STIF 1,055 861 194 22.5
--------- --------- --------- -------
Total mutual funds revenue 206,136 212,214 (6,078) (2.9)
--------- --------- --------- -------
Separate accounts revenue
Separate accounts base fees 313,681 266,252 47,429 17.8
Separate accounts performance
fees 8,875 40,699 (31,824) (78.2)
--------- --------- --------- -------
Total separate accounts revenue 322,556 306,951 15,605 5.1
--------- --------- --------- -------
Total investment advisory and
administration fees 528,692 519,165 9,527 1.8
Other income 69,520 57,812 11,708 20.3
--------- --------- --------- -------
Total revenue $598,212 $576,977 $21,235 3.7%
========= ========= ========= =======
----------------------------------------------------------------------
Total expenses for the quarter ended December 31, 2003 increased $17.4 million, or 21%, to $99.5 million compared to $82.0 million during the quarter ended December 31, 2002. The increase in total expenses during the quarter reflects increases of $9.5 million in general and administration expense, $6.5 million in employee compensation and benefits and $1.4 million in fund administration and servicing costs. The increase in general and administration expense primarily reflects $4.3 million in professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. and other costs incurred or reserved in connection with governmental investigations of the mutual fund industry and implementation of FIN 46R, increased marketing and promotional costs of $2.7 million primarily attributable to new closed-end fund launches, $0.8 million in occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal due to rent escalations and property tax increases, a $0.5 million rise in PNC PNC Purdue University North Central (Westville, Indiana) PnC Point 'n Click PNC Police National Computer PNC People's National Congress (Guyana) PNC People's National Congress inter-company costs and higher insurance premiums of $0.4 million. The rise in employee compensation and benefits primarily reflects increased salary and incentive compensation expense, which was partially reduced by a $2.2 million reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of deferred compensation expense. Fund administration and servicing costs increased $1.4 million during the fourth quarter of 2003 due to $1.3 million in BlackRock Funds sub-accounting fees that will not reappear reappear Verb to come back into view reappearance n Verb 1. reappear - appear again; "The sores reappeared on her body"; "Her husband reappeared after having left her years ago" in 2004 and a $1.1 million rise in third party servicing costs associated with closed-end fund launches, partially offset by a $1.0 million decline in affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: costs due to a decline in PNC-related assets.
----------------------------------------------------------------------
Three months ended
December 31, September 30,
-------------------
2003 2002 2003
--------- --------- -------------
(Dollar amounts in thousands)
General and administration
expense:
Marketing and promotional $7,372 $4,633 $7,303
Occupancy 5,422 4,621 5,598
Technology 4,853 4,488 4,271
Other general and administration 13,442 7,847 8,497
--------- --------- -------------
Total general and administration
expense $31,089 $21,589 $25,669
========= ========= =============
Variance vs.
-------------------------------
December 31, September 30,
2002 2003
-------------- ---------------
Amount % Amount %
-------- ----- -------- -----
(Dollar amounts in thousands)
General and administration expense:
Marketing and promotional $2,739 59.1% $69 0.9%
Occupancy 801 17.3 (176) (3.1)
Technology 365 8.1 582 13.6
Other general and administration 5,396 68.8 4,945 58.2
-------- ------ -------- ------
Total general and administration
expense $9,500 44.0% $5,420 21.1%
======== ====== ======== ======
----------------------------------------------------------------------
The $4.9 million increase in other general and administration expense from the third quarter 2003 was largely attributable to a $3.9 million rise in professional services and other costs incurred or reserved in connection with governmental investigations of the mutual fund industry and $0.7 million in foreign currency losses. Total expenses for the year ended December 31, 2003 increased $8.1 million, or 2%, to $369.9 million compared to $361.8 million during the year ended December 31, 2002. The increase was attributable to an $18.7 million, or 21%, increase in general and administration expense that was partially offset by decreases of $9.0 million in fund administration costs and $1.7 million in employee compensation and benefits. The rise in general and administration expense was primarily attributable to the following increases: $5.7 million in marketing and promotional costs to support new closed-end fund launches and general business growth, $2.8 million in occupancy costs related to the completion of BlackRock's new headquarters facility in mid- mid- pref. Middle: midbrain. 2002, $4.8 million in professional services and other costs incurred or reserved in connection with governmental investigations of the mutual fund industry and implementation of FIN 46R, $1.8 million in foreign currency expense due to the decline in the U.S. dollar, $1.5 million in market data services and $1.3 million in corporate insurance premiums. The decrease in fund administration and servicing costs reflects a $13.4 million decrease in affiliated expense attributable to a decline in PNC-related AUM which more than offset a $4.3 million increase in third-party servicing costs that includes $3.3 million of recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. expense associated with new closed-end fund offerings. Employee compensation and benefits decreased $1.7 million due to a decrease of $13.2 million in incentive compensation as a result of the substantial decrease in performance fees partially offset by increases of $6.8 million in salaries and benefits due to staff growth and $4.6 million in appreciation on Rabbi trust Rabbi Trust A trust created for the purpose of supporting the non-qualified benefit obligations of employers to their employees. Notes: Called a Rabbi trust due to the first initial ruling made by the IRS on behalf of a synagogue, these forms of trusts create security for assets associated with BlackRock's deferred compensation plans.
----------------------------------------------------------------------
Year ended
December 31, Variance
------------------- -----------------
2003 2002 Amount %
--------- --------- -------- -------
(Dollar amounts in thousands)
General and administration
expense:
Marketing and promotional $28,052 $22,379 $5,673 25.3%
Occupancy 22,033 19,263 2,770 14.4
Technology 17,613 17,822 (209) (1.2)
Other general and administration 39,635 29,137 10,498 36.0
--------- --------- --------- -------
Total general and administration
expense $107,333 $88,601 $18,732 21.1%
========= ========= ========= =======
----------------------------------------------------------------------
Operating income growth for the fourth quarter and full year 2003 would have approximated 16% and 9%, respectively, after adjusting for Rabbi Trust investment returns, a fourth quarter reversal of deferred compensation expense and costs associated with implementation of FIN 46R and investigations of the mutual fund industry. Non-operating income for the three months ended December 31, 2003 increased $3.4 million largely due to the recognition of $2.8 million in securities losses in 2002 as compared to realizing $0.7 million of gains in the fourth quarter of 2003. Non-operating income for the year ended December 31, 2003 increased $13.8 million compared with the year ended December 31, 2002 due to increased appreciation on Rabbi trust assets associated with BlackRock's deferred compensation plans totaling $4.7 million, $4.1 million of increased interest and dividend income on higher levels of corporate investments, the recognition of impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. losses approximating approximating, adj See approximal. $4.0 million on the Company's CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the and mutual fund investments and $2.0 million in gains on seed equity trading In finance, equity trading is the buying and selling of company stock shares. Shares in large publicly-traded companies are bought and sold through one of the major stock exchanges, such as the New York Stock Exchange, London Stock Exchange or Tokyo Stock Exchange, which serve as investments for new quantitative quantitative /quan·ti·ta·tive/ (kwahn´ti-ta?tiv) 1. denoting or expressing a quantity. 2. relating to the proportionate quantities or to the amount of the constituents of a compound. equity strategies. Share Repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. Program BlackRock's Board of Directors has approved a new 2 million share repurchase program. BlackRock may make the repurchases from time to time as market conditions warrant in open market or privately negotiated transactions. Except as highlighted below, the amount of shares repurchased and the timing of the repurchases will be at the discretion of BlackRock's management. Repurchases through December 31, 2003 under the previous repurchase program authorizations totaled approximately 1,690,000 shares at a total cost of $76.9 million. During the fourth quarter of 2003, the Company acquired approximately 387,300 shares at a total cost of $19.4 million. The authority to purchase 310,000 shares remaining available under the pre-existing Adj. 1. pre-existing - existing previously or before something; "variations on pre-existent musical themes" pre-existent, preexistent, preexisting antecedent - preceding in time or order repurchase program has been terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: effective with the new authorization The right or permission to use a system resource; the process of granting access. See access control. . Repurchased shares will be available for general corporate purposes including the funding of various employee benefit and compensation plans. In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with authorizing the new share repurchase program, the Board also approved a senior management stock buy-back that authorizes BlackRock to purchase management shares through the repurchase program. The senior management buy-back is designed to ensure that personal asset management, estate planning Estate Planning The overall planning of a person's wealth, including the preparation of a will and the planning of taxes after the individual's death. Notes: Contrary to popular belief, estate planning involves much more than preparing a will, and it is not only for the and tax planning Tax planning Devising strategies throughout the year in order to minimize tax liability, for example, by choosing a tax filing status that is most beneficial to the taxpayer. by members of the firm's management committee is carried out in a manner consistent with the best interests of the Company. Shares repurchased by the Company under the senior management buy-back will reduce the number of shares available for repurchase under the new 2 million share repurchase program. The shares will be repurchased at the average daily closing price for the five trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. ending January 28, 2004. In total, eligible participants have elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. to sell 690,575 shares, representing 5.4% of the total holdings (defined as vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) and unvested stock and stock options and, subject to satisfaction of performance goals, shares issuable under the Company's Long-Term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. Retention and Incentive Plan) of senior management (8.3% of vested stock and stock options). Among the eligible participants, Laurence D. Fink, CEO, is selling 250,000 shares; Ralph L. Schlosstein, President, is selling 100,000 shares; Robert S. Kapito Robert S. Kapito, a recognized industry leader in portfolio management, Kapito is Vice-Chairman and a founder of BlackRock, Inc., an investment management firm in New York, NY. , Vice Chairman, is selling 50,000 shares and Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. L. Audet, CFO See Chief Financial Officer. , is selling 25,000 shares. In all cases, the sales by these executives represent less than 10% of their total holdings. The Board of Directors also decided to review BlackRock's dividend policy annually at its regularly scheduled February February: see month. meeting. Outlook Based on current conditions, which assumes no significant changes in economic activity, interest rates or new business momentum, management expects full year and first quarter 2004 diluted earnings per share to be in a range of $2.70 - $2.90 and $0.66 - $0.68, respectively. About BlackRock BlackRock is one of the largest publicly traded investment management firms in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. with $309 billion of assets under management as of December 31, 2003. 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 and investment system 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 New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , as well as offices in Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. , Edinburgh Edinburgh (ĕd`ĭnbərə), city (1991 pop. 433,200) and council area, royal burgh, capital of Scotland, on the Firth of Forth. Leith, part of the city since 1920, is Edinburgh's port. , Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , Tokyo Tokyo (tō`kēō), city (1990 pop. 8,163,573), capital of Japan and of Tokyo prefecture, E central Honshu, at the head of Tokyo Bay. and Wilmington Wilmington. 1 City (1990 pop. 71,529), seat of New Castle co., NE Del., on the Delaware River and tributary streams, the Christina and the Brandywine; settled 1638, inc. as a city 1832. . BlackRock is majority-owned by The PNC Financial Services PNC Financial Services (NYSE: PNC) is a U.S.-based financial services corporation, with assets of $92.0 billion. PNC operations include a regional banking franchise operating primarily in eight states and the District of Columbia, specialized financial businesses serving Group, Inc. (NYSE: PNC) and by BlackRock employees. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and , with respect to BlackRock's outlook for full year and first quarter 2004 earnings, fixed income hedge fund investment performance, potential new business opportunities, liquidity asset levels and other 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," "current," "intention," "estimate," "position," "assume," "outlook," "continue," "remain," "maintain," "sustain," "seek," "pursue," "achieve," and similar expressions, or future or conditional Subject to change; dependent upon or granted based on the occurrence of a future, uncertain event. A conditional payment is the payment of a debt or obligation contingent upon the performance of a certain specified act. 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 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 SEC reports and those identified elsewhere in this press release, forward-looking statements are subject, among others, to the following risks and uncertainties that could cause actual results of future events 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 or of BlackRock's investments; (3) the 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; (7) the unfavorable resolution of legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. ; (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 su·per·vi·sor n. 1. One who supervises. 2. One who is in charge of a particular department or unit, as in a governmental agency or school system. 3. One who is an elected administrative officer in certain U.S. or enforcement actions of government agencies relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc BlackRock or PNC; (11) terrorist activities and international hostilities hos·til·i·ty n. pl. hos·til·i·ties 1. The state of being hostile; antagonism or enmity. See Synonyms at enmity. 2. a. A hostile act. b. hostilities Acts of war; overt warfare. , which may adversely affect the general economy, financial and capital markets, specific industries, and BlackRock; and (12) the ability to attract and retain highly talented professionals. BlackRock's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2002 and BlackRock's subsequent reports filed with the SEC, accessible on the SEC's website at http://www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. 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.
Table 1
BlackRock, Inc.
Financial Highlights
($ in thousands, except share data)
(unaudited)
Three months ended
--------------------------------------
December 31, September 30,
---------------------- ---------------
2003 2002 2003 (a)
---------------------- ---------------
Total revenue $161,211 $137,037 $150,344
Total expense $99,457 $82,034 $92,700
Operating income $61,754 $55,003 $57,644
Net income $41,355 $33,848 $40,053
Diluted earnings per share $0.63 $0.52 $0.61
Average diluted shares
outstanding 65,634,589 65,336,460 65,692,272
Operating margin (b) 40.7% 42.6% 40.5%
Assets under management
($ in millions) $309,356 $272,841 $293,501
Variance vs.
-------------------------------------
December 31, 2002 September 30, 2003
-------------------------------------
Amount % Amount %
-------------------------------------
Total revenue $24,174 18% $10,867 7%
Total expense $17,423 21% $6,757 7%
Operating income $6,751 12% $4,110 7%
Net income $7,507 22% $1,302 3%
Diluted earnings per share $0.11 21% $0.02 3%
Average diluted shares
outstanding 298,129 0% (57,682) 0%
Operating margin (b)
Assets under management
($ in millions) $36,515 13% $15,855 5%
Year ended
December 31, Variance
---------------------- ---------------
2003 2002 Amount %
---------------------- ------- -----
Total revenue $598,212 $576,977 $21,235 4%
Total expense $369,936 $361,838 $8,098 2%
Operating income $228,276 $215,139 $13,137 6%
Net income $155,402 $133,249 $22,153 17%
Diluted earnings per share $2.36 $2.04 $0.32 16%
Average diluted shares
outstanding 65,860,368 65,307,548 552,819 1%
Operating margin (b) 40.4% 40.2%
Assets under management
($ in millions) $309,356 $272,841 $36,515 13%
(a) In December 2003, the Financial Accounting Standards Board
("FASB") issued FASB Interpretation ("FIN") 46 (revised December
2003), Consolidation of Variable Interest Entities ("FIN 46R"),
which revised the conceptual framework for determining which party
holds a controlling interest in a variable interest entity. Under
previous guidance, the Company's management had determined that
the Company was the primary beneficiary of six collaterized debt
obligations ("CDO") and had consolidated the results of
operations, financial position and cash flow for these entities
during the three months ended September 30, 2003. Under guidance
set forth in FIN 46R, the Company's management has determined that
the Company is not the primary beneficiary of the CDOs and has
elected to reflect its deconsolidation of the CDOs through an
adjustment of previously reported financial results. Certain
reclassifications were made to BlackRock's third quarter 2003
results to conform with the current financial statement
presentation. The impact of the deconsolidation of the CDOs was
immaterial to BlackRock's results of operations for the three
months ended September 30, 2003.
(b) Operating income divided by total revenue less fund administration
and servicing costs. Computations for all periods presented are
derived from the Company's consolidated financial statements, as
follows:
Three months ended
----------------------------------
December 31, September 30,
-----------------
2003 2002 2003
----------------- --------------
Operating income, as reported $61,754 $55,003 $57,644
----------------- --------------
Revenue, as reported 161,211 137,037 150,344
Less: fund administration and
servicing costs (9,393) (7,962) (7,844)
----------------- --------------
Revenue used for operating margin
measurement 151,818 129,075 142,500
----------------- --------------
Adjusted operating margin 38.3% 40.1% 38.3%
================= ==============
Operating margin, as reported 40.7% 42.6% 40.5%
================= ==============
Year ended
December 31,
---------------------
2003 2002
--------- ---------
Operating income, as reported $228,276 $215,139
--------- ---------
Revenue, as reported 598,212 576,977
Less: fund administration and servicing
costs (32,773) (41,779)
--------- ---------
Revenue used for operating margin
measurement 565,439 535,198
--------- ---------
Adjusted operating margin 38.2% 37.3%
========= =========
Operating margin, as reported 40.4% 40.2%
========= =========
We believe that operating margin, as reported, is an effective
indicator 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.
Table 2
BlackRock, Inc.
Condensed Consolidated Statements of Income
(Dollar amounts in thousands, except share data)
(unaudited)
Three months ended
------------------
December 31,
------------
2003 2002 % Change
---- ---- --------
Revenue
Investment advisory and administration
fees
Mutual funds $56,418 $50,210 12.4%
Separate accounts 84,859 71,531 18.6
----------------------
Total investment advisory and
administration fees 141,277 121,741 16.0
Other income 19,934 15,296 30.3
----------------------
Total revenue 161,211 137,037 17.6
----------------------
Expense
Employee compensation and benefits 58,744 52,262 12.4
Fund administration and servicing
costs
Affiliates 6,699 7,379 (9.2)
Other 2,694 583 362.1
General and administration 31,089 21,589 44.0
Amortization of intangible assets 231 221 4.5
----------------------
Total expense 99,457 82,034 21.2
----------------------
Operating income 61,754 55,003 12.3
Non-operating income (expense)
Investment income 5,497 2,049 168.3
Interest expense (252) (164) 53.7
----------------------
5,245 1,885 178.2
----------------------
Income before income taxes and
minority interest 66,999 56,888 17.8
Income taxes 25,347 23,040 10.0
----------------------
Income before minority interest 41,652 33,848 23.1
Minority interest 297 - NM
----------------------
Net income $41,355 $33,848 22.2
======================
Weighted-average shares outstanding
Basic 64,072,611 64,848,221 (1.2%)
Diluted 65,634,589 65,336,460 0.5%
Earnings per share
Basic $0.65 $0.52 25.0%
Diluted $0.63 $0.52 21.2%
Year ended
----------
December 31,
------------
2003 2002 % Change
---- ---- --------
Revenue
Investment advisory and administration
fees
Mutual funds $206,136 $212,214 (2.9%)
Separate accounts 322,556 306,951 5.1
----------------------
Total investment advisory and
administration fees 528,692 519,165 1.8
Other income 69,520 57,812 20.3
----------------------
Total revenue 598,212 576,977 3.7
----------------------
Expense
Employee compensation and benefits 228,905 230,634 (0.7)
Fund administration and servicing
costs
Affiliates 26,949 40,304 (33.1)
Other 5,824 1,475 294.8
General and administration 107,333 88,601 21.1
Amortization of intangible assets 925 824 12.3
----------------------
Total expense 369,936 361,838 2.2
----------------------
Operating income 228,276 215,139 6.1
Non-operating income (expense)
Investment income 23,345 9,492 145.9
Interest expense (719) (683) 5.3
----------------------
22,626 8,809 156.9
----------------------
Income before income taxes and
minority interest 250,902 223,948 12.0
Income taxes 95,247 90,699 5.0
----------------------
Income before minority interest 155,655 133,249 16.8
Minority interest 253 - NM
----------------------
Net income $155,402 $133,249 16.6
======================
Weighted-average shares outstanding
Basic 64,653,348 64,756,290 (0.2%)
Diluted 65,860,368 65,307,548 0.8%
Earnings per share
Basic $2.40 $2.06 16.5%
Diluted $2.36 $2.04 15.7%
NM Not meaningful
Table 3
BlackRock, Inc.
Condensed Consolidated Statements of Financial Condition
(Dollar amounts in thousands)
(unaudited)
December 31, December 31,
2003 2002
---- ----
Assets
Cash and cash equivalents $315,941 $255,234
Accounts receivable 127,316 114,070
Investments 234,923 210,559
Property and equipment, net 87,006 93,923
Intangible assets, net 192,079 182,827
Other assets 9,958 7,575
--------- ---------
Total assets $967,223 $864,188
========= =========
Liabilities
Accrued compensation $172,447 $173,047
Accounts payable and accrued liabilities 60,098 37,963
Acquired management contract obligation 5,736 6,578
Other liabilities 14,395 11,946
--------- ---------
Total liabilities 252,676 229,534
Minority interest 1,239 -
Stockholders' equity 713,308 634,654
--------- ---------
Total liabilities, minority interest and
stockholders' equity $967,223 $864,188
========= =========
Table 4
BlackRock, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollar amounts in thousands)
(unaudited)
Year ended
December 31,
------------
2003 2002
---- ----
Cash flows from operating activities
Net income $155,402 $133,249
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 21,366 20,238
Minority interest 220 -
Stock-based compensation 6,351 4,926
Deferred income taxes (2,311) 7,053
Tax benefit from stock-based compensation 6,506 7,679
Purchase of investments, trading, net (17,071) (17,350)
Net (gain) loss on investments (7,947) 2,031
Changes in operating assets and liabilities:
Increase in accounts receivable (13,198) (19,699)
Decrease in receivable from affiliates 200 2,288
(Increase) decrease in other assets (540) 946
Increase in accrued compensation 5,493 33,349
Increase (decrease) in accounts payable and
accrued liabilities 23,193 (4,137)
Increase in other liabilities 1,931 1,472
-------------------
Cash provided by operating activities 179,595 172,045
-------------------
Cash flows from investing activities
Purchase of property and equipment (13,453) (42,827)
Purchase of investments (177,775) (353,762)
Sale of investments 180,509 301,517
Acquisition of businesses, net of cash acquired (8,930) (1,733)
-------------------
Cash used in investing activities (19,649) (96,805)
-------------------
Cash flows from financing activities
Issuance of class A common stock 623 2,658
Issuance of class B common stock - 332
Dividends paid (25,614) -
Purchase of treasury stock (83,418) (12,444)
Reissuance of treasury stock 6,915 2,048
Acquired management contract obligation payment (842) (766)
-------------------
Cash used in financing activities (102,336) (8,172)
-------------------
Effect of exchange rate changes on cash and cash
equivalents 3,097 1,715
Net increase in cash and cash equivalents 60,707 68,783
Cash and cash equivalents, beginning of year 255,234 186,451
-------------------
Cash and cash equivalents, end of year $315,941 $255,234
===================
Table 5
BlackRock, Inc.
Assets Under Management
(Dollar amounts in millions)
(unaudited)
December 31,
2003 2002
--------- ---------
All Accounts
Fixed income $214,356 $175,586
Liquidity 74,345 78,512
Equity 13,721 13,464
Alternative investment products 6,934 5,279
--------- ---------
Total $309,356 $272,841
========= =========
Separate Accounts
Fixed income $190,432 $156,574
Liquidity 5,855 5,491
Liquidity-Securities lending 9,925 6,433
Equity 9,443 9,736
Alternative investment products 6,934 5,279
--------- ---------
Subtotal 222,589 183,513
--------- ---------
Mutual Funds
Fixed income 23,924 19,012
Liquidity 58,565 66,588
Equity 4,278 3,728
--------- ---------
Subtotal 86,767 89,328
--------- ---------
Total $309,356 $272,841
========= =========
Component Changes in Assets Under Management
(Dollar amounts in millions)
(unaudited)
Year ended
December 31,
2003 2002
--------- ---------
All Accounts
Beginning assets under management $272,841 $238,584
Net subscriptions 22,468 25,378
Market appreciation 14,047 8,879
--------- ---------
Ending assets under management $309,356 $272,841
========= =========
% of Change in AUM from net subscriptions 61.5% 74.1%
Separate Accounts
Beginning assets under management $183,513 $151,986
Net subscriptions 26,540 21,322
Market appreciation 12,536 10,205
--------- ---------
Ending assets under management 222,589 183,513
--------- ---------
Mutual Funds
Beginning assets under management 89,328 86,598
Net subscriptions (redemptions) (4,072) 4,056
Market appreciation (depreciation) 1,511 (1,326)
--------- ---------
Ending assets under management 86,767 89,328
--------- ---------
Total $309,356 $272,841
========= =========
Table 6
BlackRock, Inc.
Assets Under Management
Quarterly Trend
(Dollar amounts in millions)
(unaudited)
----------------------------------------------
2002 2003
----------------------------------------------
December March June September December
31 31 30 30 31
----------------------------------------------
Separate Accounts
Fixed Income
Beginning assets under
management $145,839 $156,574 $167,778 $174,480 $178,390
Net subscriptions 7,455 8,889 1,682 3,700 9,842
Market appreciation 3,280 2,315 5,020 210 2,200
----------------------------------------------
Ending assets under
management 156,574 167,778 174,480 178,390 190,432
----------------------------------------------
Liquidity
Beginning assets under
management 5,438 5,491 6,040 5,366 5,707
Net subscriptions
(redemptions) 42 541 (677) 328 135
Market appreciation 11 8 3 13 13
----------------------------------------------
Ending assets under
management 5,491 6,040 5,366 5,707 5,855
----------------------------------------------
Liquidity-Securities
lending
Beginning assets under
management 5,693 6,433 6,344 8,374 9,996
Net subscriptions
(redemptions) 740 (89) 2,030 1,622 (71)
----------------------------------------------
Ending assets under
management 6,433 6,344 8,374 9,996 9,925
----------------------------------------------
Equity
Beginning assets under
management 8,322 9,736 8,995 9,105 9,143
Net subscriptions
(redemptions) 867 174 (1,526) (334) (1,234)
Market appreciation
(depreciation) 547 (915) 1,636 372 1,534
----------------------------------------------
Ending assets under
management 9,736 8,995 9,105 9,143 9,443
----------------------------------------------
Alternative investment
products
Beginning assets under
management 5,490 5,279 5,398 6,352 6,676
Net subscriptions
(redemptions) (217) 6 900 385 237
Market appreciation
(depreciation) 6 113 54 (61) 21
----------------------------------------------
Ending assets under
management 5,279 5,398 6,352 6,676 6,934
----------------------------------------------
Total Separate Accounts
Beginning assets under
management 170,782 183,513 194,555 203,677 209,912
Net subscriptions 8,887 9,521 2,409 5,701 8,909
Market appreciation 3,844 1,521 6,713 534 3,768
----------------------------------------------
Ending assets under
management $183,513 $194,555 $203,677 $209,912 $222,589
==============================================
Mutual Funds
Fixed Income
Beginning assets under
management $18,471 $19,012 $20,280 $21,480 $22,974
Net subscriptions 677 1,104 788 1,426 977
Market appreciation
(depreciation) (136) 164 412 68 (27)
----------------------------------------------
Ending assets under
management 19,012 20,280 21,480 22,974 23,924
----------------------------------------------
Liquidity
Beginning assets under
management 52,426 66,588 55,594 57,845 57,334
Net subscriptions
(redemptions) 14,160 (10,995) 2,247 (512) 1,225
Market appreciation 2 1 4 1 6
----------------------------------------------
Ending assets under
management 66,588 55,594 57,845 57,334 58,565
----------------------------------------------
Equity
Beginning assets under
management 4,184 3,728 3,170 3,307 3,281
Net subscriptions
(redemptions) (698) (418) (346) (147) 579
Market appreciation
(depreciation) 242 (140) 483 121 418
----------------------------------------------
Ending assets under
management 3,728 3,170 3,307 3,281 4,278
----------------------------------------------
Total Mutual Funds
Beginning assets under
management 75,081 89,328 79,044 82,632 83,589
Net subscriptions
(redemptions) 14,139 (10,309) 2,689 767 2,781
Market appreciation 108 25 899 190 397
----------------------------------------------
Ending assets under
management $89,328 $79,044 $82,632 $83,589 $86,767
==============================================
Year ended
December 31, 2003
-----------------
Separate Accounts
Fixed Income
Beginning assets under management $156,574
Net subscriptions 24,113
Market appreciation 9,745
---------
Ending assets under management 190,432
---------
Liquidity
Beginning assets under management 5,491
Net subscriptions (redemptions) 327
Market appreciation 37
---------
Ending assets under management 5,855
---------
Liquidity-Securities lending
Beginning assets under management 6,433
Net subscriptions (redemptions) 3,492
---------
Ending assets under management 9,925
---------
Equity
Beginning assets under management 9,736
Net subscriptions (redemptions) (2,920)
Market appreciation (depreciation) 2,627
---------
Ending assets under management 9,443
---------
Alternative investment products
Beginning assets under management 5,279
Net subscriptions (redemptions) 1,528
Market appreciation (depreciation) 127
---------
Ending assets under management 6,934
---------
Total Separate Accounts
Beginning assets under management 183,513
Net subscriptions 26,540
Market appreciation 12,536
---------
Ending assets under management $222,589
=========
Mutual Funds
Fixed Income
Beginning assets under management $19,012
Net subscriptions 4,295
Market appreciation (depreciation) 617
---------
Ending assets under management 23,924
---------
Liquidity
Beginning assets under management 66,588
Net subscriptions (redemptions) (8,035)
Market appreciation 12
---------
Ending assets under management 58,565
---------
Equity
Beginning assets under management 3,728
Net subscriptions (redemptions) (332)
Market appreciation (depreciation) 882
---------
Ending assets under management 4,278
---------
Total Mutual Funds
Beginning assets under management 89,328
Net subscriptions (redemptions) (4,072)
Market appreciation 1,511
---------
Ending assets under management $86,767
=========
Table 7
BlackRock, Inc.
Assets Under Management
Quarterly Trend
(Dollar amounts in millions)
(unaudited)
----------------------------------------------
2002 2003
----------------------------------------------
December March June September December
31 31 30 30 31
----------------------------------------------
Mutual Funds
BlackRock Funds
Beginning assets under
management $18,484 $18,115 $18,013 $18,410 $18,044
Net subscriptions
(redemptions) (604) 18 (213) (385) 57
Market appreciation
(depreciation) 235 (120) 610 19 253
----------------------------------------------
Ending assets under
management 18,115 18,013 18,410 18,044 18,354
----------------------------------------------
BlackRock Global Series
Beginning assets under
management 188 211 500 589 794
Net subscriptions
(redemptions) 9 287 44 193 (3)
Market appreciation 14 2 45 12 47
----------------------------------------------
Ending assets under
management 211 500 589 794 838
----------------------------------------------
BPIF
Beginning assets under
management 45,328 59,576 48,489 51,163 51,078
Net subscriptions
(redemptions) 14,248 (11,087) 2,674 (85) 1,792
----------------------------------------------
Ending assets under
management 59,576 48,489 51,163 51,078 52,870
----------------------------------------------
Closed End
Beginning assets under
management 10,425 10,771 11,294 11,723 12,920
Net subscriptions 487 380 185 1,038 944
Market appreciation
(depreciation) (141) 143 244 159 97
----------------------------------------------
Ending assets under
management 10,771 11,294 11,723 12,920 13,961
----------------------------------------------
Short Term Investment
Funds (STIF)
Beginning assets under
management 656 655 748 747 753
Net subscriptions
(redemptions) (1) 93 (1) 6 (9)
----------------------------------------------
Ending assets under
management 655 748 747 753 744
----------------------------------------------
Total Mutual Funds
Beginning assets under
management 75,081 89,328 79,044 82,632 83,589
Net subscriptions
(redemptions) 14,139 (10,309) 2,689 767 2,781
Market appreciation 108 25 899 190 397
----------------------------------------------
Ending assets under
management $89,328 $79,044 $82,632 $83,589 $86,767
==============================================
Year ended
December 31, 2003
-----------------
Mutual Funds
BlackRock Funds
Beginning assets under management $18,115
Net subscriptions (redemptions) (523)
Market appreciation (depreciation) 762
--------
Ending assets under management 18,354
--------
BlackRock Global Series
Beginning assets under management 211
Net subscriptions (redemptions) 521
Market appreciation 106
--------
Ending assets under management 838
--------
BPIF
Beginning assets under management 59,576
Net subscriptions (redemptions) (6,706)
--------
Ending assets under management 52,870
--------
Closed End
Beginning assets under management 10,771
Net subscriptions 2,547
Market appreciation (depreciation) 643
--------
Ending assets under management 13,961
--------
Short Term Investment Funds (STIF)
Beginning assets under management 655
Net subscriptions (redemptions) 89
--------
Ending assets under management 744
--------
Total Mutual Funds
Beginning assets under management 89,328
Net subscriptions (redemptions) (4,072)
Market appreciation 1,511
--------
Ending assets under management $86,767
========
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion