BlackRock, Inc. Reports Fourth Quarter and Full Year 2004 Diluted EPS of $0.75 and $2.17, Respectively; Assets Under Management at December 31, 2004 Total $341.8 Billion.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- 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 quarter ended December December: see month. 31, 2004 of $49.8 million, or $0.75 per 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. share, compared to net income of $41.4 million, or $0.63 per diluted share, earned in the fourth quarter of 2003. Net income for the year ended December 31, 2004 was $143.1 million, or $2.17 per diluted share, compared to net income of $155.4 million, or $2.36 per diluted share, earned during 2003. As previously announced, fourth quarter 2004 earnings included an income tax benefit of $9.5 million, or $0.14 per diluted share, associated with the release of reserves allocated to the Company's 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. tax liability due to the receipt of a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. preliminary audit finding for the 1998-2000 tax years. In addition, earnings for the fourth quarter included $13.4 million of 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 (LTIP LTIP Long Term Incentive Plan LTIP Laughing Till I Puke LTIP Local Transportation Improvement Program LTIP Long Term Instrument Plan LTIP Long Term Infrastructure Program LTIP Long Term Independent Project ) expense, $3.2 million of underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite) UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. structuring fees for a 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. and professional fees of $1.0 million associated with the pending acquisition of SSRM SSRM Scanning Spreading Resistance Microscopy SSRM State-Specific and Regional Migration (Australia) SSRM Strap-On Solid Rocket Motor (additional solid rocket motors to increase mass liftoff capacity) Holdings, Inc. (SSR (Scalable Sampling Rate) See AAC. SSR - Scalable Sampling Rate ), which, in total, resulted in after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charges of $11.2 million, or $0.17 per diluted share. The Company's net income for the year ended December 31, 2004 reflects LTIP expense of $104.0 million, or approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.99 per diluted share, and $4.2 million, or approximately $0.04 per diluted share, in charges reflecting the after-tax impact of underwriter structuring fees for a new closed-end fund and professional fees associated with the acquisition of SSR, which were partially offset by New York City and State income tax benefits of $18.1 million, or $0.27 per diluted share and a $0.02 per diluted share benefit related to the sale of the Company's interest in Trepp LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control during the second quarter of 2004. 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 , as adjusted (see Table 2), for the quarter and year ended December 31, 2004 were $0.72 and $2.70, respectively, as compared to $0.63 and $2.36 earned for the fourth quarter and year ended December 31, 2003, respectively. Diluted earnings per share, as adjusted, reflects the exclusion exclusion /ex·clu·sion/ (eks-kloo´zhun) 1. a shutting out or elimination. 2. surgical isolation of a part, as of a segment of intestine, without removal from the body. of LTIP expense to be funded by a capital contribution of stock 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 (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 ), New York State and City tax benefits, the sale of the Company's interest in Trepp LLC and professional fees associated with the acquisition of SSR. Growth in diluted earnings per share, as adjusted, during 2004 is primarily due to 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. growth associated with the rise in 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. ) during the period and an increase in alternative investment product performance fees, partially offset by increased compensation costs and professional fees associated with Sarbanes-Oxley Act See SOX. compliance activities. AUM rose $18.3 billion during the quarter to $341.8 billion at December 31, 2004, up 6% from $323.5 billion at the end of the third quarter. For the full year, AUM increased $32.4 billion, or 10%, from $309.4 billion at 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. 2003. During the quarter, new business flows were positive in all asset classes, contributing $12.7 billion of the total increase in AUM. For the full year, net new business totaled $19.6 billion, driven by strong results across client channels worldwide. BlackRock Solutions business remained robust with the addition of eleven net new assignments and a 37% increase in revenues during 2004, and our 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 effort got off to a strong start, winning two assignments in its first year. "We closed 2004 on a strong note, both in terms of new business and investment performance," 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 Chief Executive Officer of BlackRock. "While fixed income remains the cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to of our firm, we achieved 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. both within and across asset classes. For example, global bond AUM increased 57% during the year, domestic equities rose 35% and alternative investments were up 18%. Similarly, we have expanded and diversified diversified (di·verˑ·s our client base both across channels and geographically ge·o·graph·ic also ge·o·graph·i·cal adj. 1. Of or relating to geography. 2. Concerning the topography of a specific region. ge . Net new business was positive in each of our institutional client channels and, for the first time, inflows from international clients outpaced inflows from domestic investors for the full year. In addition, BlackRock Solutions achieved strong revenue growth with the addition or expansion of numerous client relationships. "In many respects, we achieved our results by capitalizing on significant investments made over the past several years - in expanding our global presence, in enhancing our focus on alternatives, in improving coordination coordination /co·or·di·na·tion/ (ko-or?di-na´shun) the harmonious functioning of interrelated organs and parts. co·or·di·na·tion n. 1. The harmonious adjustment or interaction of parts. of our marketing and client service efforts, in building out our infrastructure, in the continued development of our technology and, most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , in continuing to foster the growth of intellectual capital in all areas of the firm. The efforts of every member of our team have been essential not only to continued success in our core activities, but also to the pursuit of our strategic initiatives, including our pending acquisition of SSR. Integration, planning and client consents are proceeding as expected, and we remain on track to close the acquisition at the end of January January: see month. 2005. "Our employees are focused on delivering superior investment results and service to our clients, and we remain committed to sustaining our culture of teamwork (product, software, tool) Teamwork - A SASD tool from Sterling Software, formerly CADRE Technologies, which supports the Shlaer/Mellor Object-Oriented method and the Yourdon-DeMarco, Hatley-Pirbhai, Constantine and Buhr notations. and excellence and to continuous improvement in all of our efforts. BlackRock is most significantly differentiated dif·fer·en·ti·ate v. dif·fer·en·ti·at·ed, dif·fer·en·ti·at·ing, dif·fer·en·ti·ates v.tr. 1. To constitute the distinction between: by our unique ability to integrate our capital markets and investing expertise, our BlackRock Solutions tools and intellectual capital, and our advisory services capabilities to help clients frame and solve problems ranging from investment management to risk management, hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. advice and strategic balance sheet advice. The quality and commitment of our team and our focus on delivering value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. to our clients are the factors that I believe will enable us to further expand BlackRock's franchise in 2005." Fourth Quarter and Full Year Business Highlights --Fixed income AUM closed the year at $240.7 billion, up $5.2 billion for the quarter and $26.4 billion for the year ended December 31, 2004. While we continued to attract new fundings in core bond products, strong inflows in targeted duration and global bond 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. helped to further diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our asset base. While 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 flows were not a significant factor in 2004, approximately $7.7 billion of outflows resulted from one client's implementation of a macro call Same as macro instruction. on the markets and from merger activity impacting a number of other clients. In total, we recorded net new business of $1.3 billion and $15.6 billion during the quarter and full year, respectively. Investment performance remained competitive, with 88% or more of our institutional taxable fixed income composites outperforming their benchmarks and 89% or more of our taxable bond Taxable Bond A debt security whose return to the investor is subject to taxes at the local, state or federal level, or some combination thereof. Notes: The majority of bonds issued are taxable bonds. fund assets Fund assets The total value of a portfolio's securities, cash, and other holdings, minus any outstanding debts. ranked in the top two Lipper Business Description Lipper, Inc., a subsidiary of Reuters provides mutual and hedge fund information, analytical tools, data and commentary. Lipper's benchmarking provides a guidepost to asset managers, fund companies, financial intermediaries, traditional media, quartiles for the one-, three- and five-year periods ending December 31, 2004. --Liquidity, or cash management, AUM closed the year up sharply to $78.1 billion. Net new business in all products other than securities lending Securities Lending When a brokerage lends securities owned by its clients to short sellers. Notes: This allows brokers to create additional revenue (commissions) on the short sale transaction. totaled $11.9 billion and $6.7 billion for the quarter and full year, respectively. Securities lending portfolios experienced outflows of $1.7 billion during the quarter and $3.0 billion throughout the year. Fourth quarter inflows were notable given that the Federal Reserve increased the discount rate in November November: see month. and December of 2004. We believe that we benefited from enhancements in our portfolio management process, improved competitiveness of our institutional funds, and selective expansion of our sales force and our product line. Although 100% of our institutional money market funds ranked in the top two Lipper quartiles for the one-, three- and five-year periods ending December 31, 2004, we expect flows 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. as the Federal Reserve continues to raise interest rates. --Equity AUM ended the year at $14.8 billion, up 17% from $12.7 billion at third quarter-end and 8% from $13.7 billion at year-end 2003. Net new business in actively managed domestic equity products (i.e., other than the index fund) totaled $645 million for the quarter and $1.4 billion for the full year. During the year, we successfully launched several new open- and 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. mutual funds, including the BlackRock Global Energy and Resources Trust, a closed-end fund offered 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 SSR during the fourth quarter. Although outflows in international equities totaled $2.1 billion for the year, the majority occurred during the first half of the year. As performance strengthened, the pace of outflows diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. and selected clients awarded us additional funds and new accounts. We closed the year well-positioned for additional growth, with 77% and 94% of equity mutual fund assets ranked in the top two Lipper quartiles for the year and the fourth quarter, respectively, including BlackRock Select Equity, which was ranked among the ten best performing large cap core equity funds in 2004. --Alternative investment AUM closed the year at $8.2 billion, up $784 million (11%) versus September September: see month. 30, 2004 levels and $1.3 billion (18%) year-over-year. Throughout the year, we benefited from a highly robust new product effort. During the fourth quarter, we offered a new collateralized debt obligation Collateralized Debt Obligation (CDO) A general inclusive term which covers Collateralized Bond Obligations, Collateralized Loan Obligations, and Collateralized Mortgage Obligations, , and had first closings for our new real estate mezzanine mez·za·nine n. 1. A partial story between two main stories of a building. 2. The lowest balcony in a theater or the first few rows of that balcony. debt fund and for a credit-oriented fixed income 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" . We also continued to attract assets in an absolute return bond product launched earlier this year, as well as in our existing hedge fund and 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. offerings. Performance was competitive and strong across most products. Of particular note, 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. hedge fund of funds reached its five-year anniversary, outperforming the HFRI HFRI Hedge Fund Research Performance Index (USA) HFRI Hedge Funds Research Institute (Monaco) Fund of Funds Composite index Composite Index A grouping of equities, indexes or other factors combined in a standardized way, providing a useful statistical measure of overall market or sector performance over time. Also known simply as a "composite". for each of the one-, three- and five-year periods ended December 31, 2004. --BlackRock Solutions recorded a 37% increase in revenues versus 2003. During the quarter, we added two new risk management assignments and completed two advisory assignments. For the year, we added eleven net new assignments, including three Aladdin Aladdin Hero of a well-known story in The Thousand and One Nights. The son of a poor widow, Aladdin is a lazy, careless boy who meets an African magician claiming to be his uncle. (R) (investment 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. ), seven risk management and one advisory mandate A judicial command, order, or precept, written or oral, from a court; a direction that a court has the authority to give and an individual is bound to obey. A mandate might be issued upon the decision of an appeal, which directs that a particular action be taken, or upon a . Among these mandates was our first international assignment, opening a previously untapped source of new business for BlackRock Solutions. In addition to the foregoing, our newly formed Advisory Services Group was retained on two assignments during 2004. Although much progress has been made, staffing remains the most critical constraint Constraint A restriction on the natural degrees of freedom of a system. If n and m are the numbers of the natural and actual degrees of freedom, the difference n - m is the number of constraints. to the growth of these businesses, and additional investments will be required to sustain our momentum in these products and services. --New business efforts, which continued to flourish across multiple channels, yielded $12.7 billion of net inflows for the quarter and $19.6 billion for the full year. Led by institutional liquidity investors ($10.4 billion) and 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. institutions ($1.7 billion), net new business was positive in every client channel during the quarter. For the full year, net inflows included $7.5 billion from taxable institutions, $7.0 billion from tax-exempt clients, $5.6 billion from institutional liquidity investors and $2.1 billion from mutual fund investors other than PNC-related clients. Geographically, new business flows evidenced continued growth of our global presence, with $10.0 billion of net fundings from international clients during the year. --We ended 2004 with positive momentum across much of our product line-up line-up Noun 1. people or things assembled for a particular purpose: Christmas TV line-up 2. . Our pipeline remains robust, with $8.2 billion of wins funded or to be funded since quarter-end and over 250 searches in process across products. In addition, interest in our BlackRock Solutions and Advisory Services offerings remains very high, and multiple opportunities are in development. The combination of strong, competitive performance and exceptional client service remains vital to maintaining our momentum. SSR Acquisition Update --In late August 2004, we announced that BlackRock had entered into a definitive agreement to acquire SSR from MetLife, Inc. and SSR employees. All areas of both firms have worked closely together to plan the integration and to ensure a smooth transition for clients of the combined firm. We remain on track to close the transaction at the end of January 2005. --Since we announced the transaction, we have worked closely with SSR's management team to assess our respective capabilities and develop an integration plan that brings together the best of both organizations. As a result of this process, more than 350 employees associated with SSR were given offers to join the combined firm, 94% of which were accepted. Their talents will augment aug·ment v. aug·ment·ed, aug·ment·ing, aug·ments v.tr. 1. To make (something already developed or well under way) greater, as in size, extent, or quantity: our capabilities in fixed income, enhance our domestic equity and alternative investment platforms, and expand our mutual fund distribution efforts. We look forward to welcoming these professionals to the BlackRock team. --In addition to organizational planning, BlackRock and SSR teams have worked closely with the board of directors of the SSR Funds. Following their unanimous decision A Unanimous Decision is a winning criterion in several full-contact combat sports, such as boxing, kickboxing, Muay Thai, mixed martial arts and others sports involving striking in which all 3 judges agree on which fighter won the match. to recommend merger of our funds, we solicited approval from the shareholders of SSR's fifteen mutual funds. Ten of these funds received approval prior to year-end, and we expect the remaining five to be approved at a general meeting of shareholders on January 24th. Notably, during the fourth quarter, these teams also worked together on the offering of the BlackRock Global Energy and Resources Trust, a closed-end fund in which we raised $635 million. This early success highlights the potential for the combined firm in private client channels. --BlackRock, SSR and MetLife, Inc. professionals have also coordinated communication with all institutional clients and consultants. We recognized at the outset that manager concentration and organizational changes might adversely impact AUM, but we maintained an open dialogue and shared decisions as early as possible with all investors. The client consent process, though still ongoing, is proceeding as anticipated. We continue to work diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to ensure a smooth transition for all clients. Importantly, we remain enthusiastic about the scale, scope and strength of the combined firm and the opportunities we will have to better serve our clients in the future. Total revenue for the quarter ended December 31, 2004 increased $27.5 million, or 17%, to $188.7 million, compared to $161.2 million for the quarter ended December 31, 2003. Separate account revenue and other income increased by $23.4 million, or 28%, and $5.0 million, or 25%, respectively, which were partially offset by a decrease in mutual funds revenue of $1.0 million, or 2%. The increase in separate account revenue represents a $17.6 million, or 19%, increase in separate account base fees driven by a $25.3 billion, or 11%, increase in AUM, and a $5.8 million increase in performance fees primarily driven by positive performance in the Company's fixed income hedge fund and real estate products. Other income increased largely due to strong sales in BlackRock Solutions products and services and fees earned by the Company's Advisory Services Group. Mutual fund revenue decreased primarily due to decreases in average assets in the BlackRock Funds and the BlackRock Liquidity Funds, partially offset by new closed-end funds launched since December 31, 2003, which generated $1.9 billion of additional AUM.
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Three months ended Variance vs.
----------------------------
Dec. Sept.
31, 30,
Dec. 31, Sept. 30, 2003 2004
------------------- ---------------- --------
2004 2003 2004 Amount % Amount %
--------- --------- --------- -------- ------- -------- --
(Dollar amounts
in thousands)
Mutual funds
revenue
BlackRock
Funds $16,937 $18,865 $16,289 ($1,928) (10.2%) $648 4.0%
Closed-end
Funds 19,191 15,804 17,978 3,387 21.4 1,213 6.7
BlackRock
Liquidity
Funds 18,986 21,486 19,508 (2,500) (11.6) (522) (2.7)
Other
commingled
funds 337 263 298 74 28.1 39 13.1
--------- --------- --------- -------- ------- -------- ----
Total mutual
funds
revenue 55,451 56,418 54,073 (967) (1.7) 1,378 2.5
--------- --------- --------- -------- ------- -------- ----
Separate
accounts
revenue
Separate
accounts
base
fees 100,643 83,059 92,943 17,584 21.2 7,700 8.3
Separate
accounts
performance
fees 7,649 1,800 539 5,849 NM 7,110 NM
--------- --------- --------- -------- ------- -------- ----
Total separate
accounts
revenue 108,292 84,859 93,482 23,433 27.6 14,810 15.8
--------- --------- --------- -------- ------- -------- ----
Total
investment
advisory and
administration
fees 163,743 141,277 147,555 22,466 15.9 16,188 11.0
Other
income 24,934 19,934 23,444 5,000 25.1 1,490 6.4
--------- --------- --------- -------- ------- -------- ----
Total
revenue $188,677 $161,211 $170,999 $27,466 17.0% $17,678 10.3%
========= ========= ========= ======== ======= ======== =====
----------------------------------------------------------------------
NM = Not meaningful
During the fourth quarter of 2004, revenue increased approximately $17.7 million, or 10%, as compared to the third quarter of 2004 primarily due to a $7.7 million increase in separate account base fees due to a $5.0 billion increase in AUM, increased alternative product performance fees of $7.4 million and a $1.2 million increase in closed end fund fees. During the fourth quarter of 2004, new closed-end fund launches resulted in a $0.9 billion increase in AUM. Total revenue for the year ended December 31, 2004 increased $127.1 million, or 21%, to $725.3 million compared to $598.2 million during the year ended December 31, 2003. Separate account revenue increased by $90.1 million, or 28%, mutual funds revenue increased by $14.8 million, or 7%, and other income increased by $22.2 million, or 32%, compared with the year ended December 31, 2003. The growth in separate account fees primarily consisted of an increase in base fees of $57.4 million, or 18%, reflecting a $25.3 billion, or 11%, increase in AUM and an increase in alternative product performance fees of $32.1 million. The increase in mutual funds revenue was due to an $18.8 million, or 36%, increase in closed-end fund revenue partially offset by a decrease in fees earned from the BlackRock Liquidity Funds of $4.8 million, or 6%. Closed-end fund revenue increased during the period due to several closed-end fund launches during the year, resulting in a $1.5 billion increase in AUM. The reduction in BlackRock Liquidity Funds revenue was the result of a decrease of approximately $2.7 billion in average AUM. Other income increased primarily due to strong sales of BlackRock Solutions products and services and fees earned by the Company's Advisory Services Group.
----------------------------------------------------------------------
Year ended
December 31, Variance
------------------- ---------------
2004 2003 Amount %
-------- -------- --------- -----
(Dollar amounts in thousands)
Mutual funds revenue
BlackRock Funds $ 70,066 $ 69,361 $ 705 1.0%
Closed-end Funds 71,443 52,685 18,758 35.6
BlackRock Liquidity Funds 78,265 83,035 (4,770) (5.7)
Other commingled funds 1,175 1,055 120 11.4
-------- -------- -------- -----
Total mutual funds revenue 220,949 206,136 14,813 7.2
-------- -------- -------- -----
Separate accounts revenue
Separate accounts base fees 371,068 313,681 57,387 18.3
Separate accounts performance fees 41,606 8,875 32,731 NM
-------- -------- -------- -----
Total separate accounts revenue 412,674 322,556 90,118 27.9
-------- -------- -------- -----
Total investment advisory and
administration fees 633,623 528,692 104,931 19.8
Other income 91,688 69,520 22,168 31.9
-------- -------- -------- -----
Total revenue $725,311 $598,212 $127,099 21.2%
======== ======== ======== =====
----------------------------------------------------------------------
NM = Not meaningful
Total expense for the quarter ended December 31, 2004 increased $33.4 million, or 34%, to $132.8 million, compared to $99.5 million during the quarter ended December 31, 2003. The increase in expense for the quarter primarily reflects increases of $15.8 million in employee compensation and benefits, $13.4 million in LTIP-related charges and $5.7 million in general and administration expense. Exclusive of LTIP-related charges, total expense for the fourth quarter of 2004 would have increased $20.0 million, or 20%, from 2003. The rise in employee compensation and benefits is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to increased salary and benefits expense of $6.6 million, largely due to higher staffing levels, increased incentive compensation due to operating income growth and alternative investment product incentives and $1.7 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 the Company's deferred compensation plans. Appreciation or depreciation on Rabbi trust assets are also reflected in the Company's investment income. The rise in general and administration expense primarily reflects increased marketing and promotional costs of $4.6 million, or 62%, including $3.2 million in underwriter structuring fees for a new closed-end fund (The BlackRock Global Energy & Resources Trust), and $1.0 million in professional fees associated with the pending acquisition of SSR.
----------------------------------------------------------------------
Three months ended Variance vs.
-----------------------
Dec. 31, Sept. 30,
Dec. 31, Sept. 30, 2003 2004
----------------- -----------------------
2004 2003 2004 Amount % Amount %
-------- -------- -------- ------------- ------------
(Dollar amounts in
thousands)
General and administration
expense:
Marketing and
promotional $11,933 $7,372 $7,823 $4,561 61.9% $4,110 52.5%
Occupancy 5,774 5,422 6,066 352 6.5 (292) (4.8)
Technology 4,903 5,008 4,771 (105) (2.1) 132 2.8
Other general and
administration 14,206 13,287 10,599 919 6.9 3,607 34.0
-------- -------- -------- ------- ----- ------- -----
Total general
and
administration
expense $36,816 $31,089 $29,259 $5,727 18.4% $7,557 25.8%
======== ======== ======== ======= ===== ======= =====
The $60.5 million decrease in expense from third quarter of 2004 is primarily due to $90.6 million in LTIP-related charges recognized during the third quarter of 2004 versus $13.4 million during the current quarter. Exclusive of LTIP-related charges, total expense for the fourth quarter of 2004 would have increased $16.7 million, or 16%, from the third quarter of 2004 due to a $6.8 million increase in incentive compensation costs, a $4.1 million rise in marketing and promotional costs, primarily consisting of $3.2 million in underwriter structuring fees for a new closed-end fund, $1.8 million in increased appreciation on Rabbi trust assets associated with the Company's deferred compensation plans and a $1.6 million rise in professional fees primarily related to the pending acquisition of SSR and Sarbanes-Oxley Act compliance activities. Total expenses for the year ended December 31, 2004 increased $189.6 million to $559.5 million compared to $369.9 million during the year ended December 31, 2003. The increase was primarily attributable to $104.0 million in LTIP-related charges recognized during 2004 as well as an increase of $58.2 million, or 25%, in employee compensation and benefits, an increase of $21.4 million, or 20%, in general and administration expense and the recognition of a $6.1 million 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. of an acquired management contract during 2004. Exclusive of LTIP-related charges and the impairment charge, total expense for 2004 would have increased $79.5 million, or 21%, from 2003. The rise in employee compensation expense reflects increased incentive compensation of $30.8 million and a $26.2 million rise in salaries and benefits largely due to higher staffing levels to support Company growth particularly in BlackRock Solutions. General and administration expense rose during the period due to a $9.6 million, or 34%, increase in marketing and promotional expense Noun 1. promotional expense - the cost of promoting a product business expense, trade expense - ordinary and necessary expenses incurred in a taxpayer's business or trade largely related to new closed-end issuance, higher professional fees of $5.2 million for legal and accounting services related to mutual fund 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. inquiries, Sarbanes-Oxley Act compliance activities and the acquisition of SSR and a $3.1 million increase in subadvisory fees primarily related to performance fees earned on a collaterized debt obligation during 2004.
----------------------------------------------------------------------
Year ended
December 31, Variance
------------------- --------------
2004 2003 Amount %
--------- --------- -------- -----
(Dollar amounts in thousands)
General and administration expense:
Marketing and promotional $37,602 $28,052 $9,550 34.0%
Occupancy 23,407 22,033 1,374 6.2
Technology 18,835 18,544 291 1.6
Other general and administration 48,894 38,704 10,190 26.3
--------- --------- -------- -----
Total general and administration
expense $128,738 $107,333 $21,405 19.9%
========= ========= ======== =====
Fourth quarter operating income of $55.8 million, which included $13.4 million of LTIP expense, $3.2 million of underwriter structuring fees on a new closed-end fund, $1.0 million of SSR acquisition costs and a $1.7 million increase in appreciation on Rabbi trust assets, declined $6.0 million from the $61.8 million earned in 2003. Operating income for the year ended December 31, 2004 of $165.8 million, which included $104.0 million of LTIP expense, $3.2 million of underwriter structuring fees on a new closed-end fund, $1.0 million of SSR acquisition costs and a $1.3 million increase in appreciation on Rabbi trust assets, declined $62.5 million from the $228.3 million earned in 2003. Non-operating income for the quarter ended December 31, 2004 increased $2.4 million as compared to the fourth quarter of 2003 primarily due to increased appreciation on Rabbi trust assets associated with the Company's deferred compensation plans of $1.7 million and increased securities gains of $0.5 million during the period. During the fourth quarter of 2004, non-operating income increased $2.0 million as compared to the third quarter of 2004 largely due to a $1.8 million increase in appreciation on Rabbi trust assets associated with the Company's deferred compensation plans. For the year ended December 31, 2004, non-operating income increased $12.0 million compared to the prior year primarily due to the recognition of a $12.9 million gain on the sale of the Company's interest in Trepp LLC during 2004 partially offset by decreased securities gains and investment income. Outlook Based on current conditions, which assume no significant changes in economic activity, interest rates or new business momentum, management expects first quarter 2005 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). diluted earnings per share to be in a range of $0.58 to $0.62 and diluted earnings per share, as adjusted, to be in a range of $0.79 to $0.83. Full year 2005 GAAP diluted earnings per share are expected to be in a range of $2.83 to $3.13 and diluted earnings per share, as adjusted, are expected to be in a range of $3.40 to $3.70, respectively. 2005 guidance reflects the estimated impact of the Company's acquisition of SSR including expected financing costs and one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges of approximately $0.09 per diluted share in the first quarter. The following table reconciles GAAP and adjusted diluted earnings per share.
----------------------------------------------------------------------
Outlook
-----------------------------
First Quarter Full Year
2005 2005
-------------- --------------
Diluted earnings per share, GAAP basis $0.58 - $0.62 $2.83 - $3.13
Per diluted share adjustments:
PNC LTIP funding obligation $0.12 $0.48
SSR acquisition costs $0.09 $0.09
-------------- --------------
Diluted earnings per share, as adjusted $0.79 - $0.83 $3.40 - $3.70
============== ==============
Management believes that earnings per diluted share, as adjusted, is an effective indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of the Company's profitability and financial performance over time. The LTIP expense associated with awards to be met by PNC's funding requirement has been excluded from adjusted earnings per diluted share because, exclusive of the impact related to LTIP participants' put options, these non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. will not impact BlackRock's book value. SSR acquisition costs, which have been deemed non-recurring by management, has been excluded from earnings per diluted share, as adjusted, to help ensure the comparability of this information to prior reporting periods. Performance Notes Past performance is no guarantee of future results. Mutual fund performance data assumes the reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of dividends and capital gains distributions and reflects the performance of the Institutional Class, with the exception of the BlackRock Funds, Government Income Portfolio, which reflects the performance of the Investor B Shares class. BlackRock waives fees, without which performance would be lower. Investments in BlackRock Funds and BlackRock Liquidity Funds are neither insured The person who obtains or is otherwise covered by insurance on his or her health, life, or property. The insured in a policy is not limited to the insured named in the policy but applies to anyone who is insured under the policy. insured n. nor guaranteed by the U.S. government. Relative peer group performance is based on quartiles from Lipper Inc. Lipper rankings are based on total returns with dividends and distributions reinvested and do not reflect sales charges Sales Charge A commission or fee paid by an investor at the time of purchasing mutual fund shares. The charge is paid to a mutual fund salesperson or financial advisor and is intended to provide compensation for the financial salesperson's efforts in assisting their client select . Funds with returns among the top 25% of a peer group of funds group of funds See family of funds. with comparable objectives are in the first quartile Quartile A statistical term describing a division of observations into four defined intervals based upon the values of the data and how they compare to the entire set of observations. Notes: Each quartile contains 25% of the total observations. and funds with returns in the next 25% of a peer group are in the second quartile. Some funds have less than five years of performance. Fixed Income Portfolios of BlackRock Funds: The Core Bond Total Return and the Managed Income Portfolios are in the Intermediate Investment Grade Debt Lipper peer group. The Intermediate Bond Portfolio is in the Short-Intermediate Investment Grade Debt Lipper peer group. The Low Duration Bond Portfolio is in the Short Investment Grade Debt Lipper peer group. The High Yield Bond Portfolio is in the High Current Yield Lipper peer group and the GNMA GNMA abbr. Government National Mortgage Association Portfolio is in the GNMA Lipper peer group. The Intermediate Government Portfolio is in the Intermediate U.S. Government Lipper peer group and the Government Income Portfolio is in the General U.S. Government Lipper peer group. Equity Portfolios of BlackRock Funds: The Select Equity and Large Cap Value Equity Portfolios are in the Large Cap Core and Multi-Cap Value Lipper peer groups, respectively. The Index Equity Portfolio is in the S&P 500 Index Objective Lipper peer group. The Mid-Cap Mid-cap Short for "Middle Cap," mid cap refers to stocks with a market capitalization of between $2 billion to $10 billion. Notes: As the name implies, a mid-cap is in the middle of the pack. A mid-cap isn't too big, but at the same time has a relatively decent market cap. Value Equity Portfolio is in the Mid Cap Value Lipper peer group. The Balanced Portfolio is in the Balanced Lipper peer group. The U.S. Opportunities Portfolio is in the Mid Cap Core Lipper peer group. The International Equity Portfolio is in the International Multi-Cap Core Lipper peer group. The Small Cap Core Portfolio is in the Small Cap Core Lipper peer group. The International Opportunities Portfolio is in the International Small/Mid Cap Growth Lipper peer group. BlackRock Liquidity Funds: TempFund and TempCash are in the Institutional Money Market Lipper peer group, and Federal Trust Fund and FedFund are in the Institutional U.S. Government Money Market Lipper peer group. T-Fund and Treasury Trust Fund are in the Institutional U.S. Treasury 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. Lipper peer group. MuniCash and MuniFund are in the Institutional Tax-Exempt Money Market Lipper peer group. California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Money Fund and New York Money Fund are in the California Tax-Exempt and New York Tax-Exempt Money Market Lipper peer groups, respectively. Composites Performance: Results do not reflect the deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. of management/advisory fees and other expenses, which will reduce a client's return. For example, assuming an annual gross return of 8% and an annual management/advisory fee of 0.25%, the net annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. total return of a composite composite, alternate common name for Asteraceae or Compositae, the aster family. composite - aggregate would be 7.74% over a 5-year period. BlackRock is the source of benchmark A performance test of hardware and/or software. There are various programs that very accurately test the raw power of a single machine, the interaction in a single client/server system (one server/multiple clients) and the transactions per second in a transaction processing system. data for fixed income composites. Some BlackRock composites have less than five years of performance. 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 approximately $342 billion of assets under management at December 31, 2004. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of equity, fixed income, liquidity and alternative investment products. In addition, BlackRock provides risk management, investment system outsourcing and financial advisory services to a growing number of institutional investors 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. . Clients are served from the Company's headquarters in New York City, 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 , Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). , Sydney Sydney, city, Australia Sydney, city (1991 pop. 3,097,956), capital of New South Wales, SE Australia, surrounding Port Jackson inlet on the Pacific Ocean. Sydney is Australia's largest city, chief port, and main cultural and industrial center. , 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 Group, Inc. (NYSE:PNC) and by BlackRock employees. For additional information, please visit the Company's website at www.blackrock.com. 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 future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as "trend," "potential," "opportunity," "pipeline," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional 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. The information contained on our website is not a part of this press release. BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. In addition to factors previously disclosed 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). in BlackRock's Securities and Exchange Commission (SEC) reports and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management; (3) the relative and absolute investment performance of BlackRock's advised or sponsored investment products and separately managed accounts; (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future acquisitions or divestitures; (7) the unfavorable resolution of legal proceedings 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 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. ; (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; (12) the ability to attract and retain highly talented professionals; (13) fluctuations in foreign currency exchange rates, which may adversely affect the value of advisory fees earned by BlackRock; (14) the impact of changes to tax legislation and, generally, the tax position of the Company; (15) changes in circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or affecting the expense recognition of BlackRock's 2002 Long-Term Retention and Incentive Plan; and (16) the closing of the Company's acquisition of SSR and, after the closing, the integration of the business of SSR into the business of BlackRock, including, among other things, the levels of SSR assets retained after the closing, the retention of SSR employees and the costs of the acquisition and of the integration of the two businesses. 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, 2003 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
(Dollar amounts in thousands, except share data)
(unaudited)
Three months ended
----------------------------------
Dec. 31, Sept. 30,
---------------------- -----------
2004 2003 2004
---------------------- -----------
Total revenue $188,677 $161,211 $170,999
Total expense $132,851 $99,457 $193,375
Operating income (loss) $55,826 $61,754 ($22,376)
Net income (loss) $49,752 $41,355 ($9,814)
Diluted earnings (loss)
per share $0.75 $0.63 ($0.15)
Diluted earnings per share,
as adjusted (a) $0.72 $0.63 $0.56
Average diluted shares
outstanding 66,229,527 65,634,589 63,676,776
Operating margin (b) 38.1% 40.9% 32.0%
Assets under management
($ in millions) $341,760 $309,356 $323,465
Variance vs.
----------------------------------
Dec. 31, 2003 Sept. 30, 2004
-----------------------------------
Amount % Amount %
----------------------------------
Total revenue $27,466 17% $17,678 10%
Total expense $33,394 34% ($60,524) -31%
Operating income (loss) ($5,928)-10% $78,202 NM
Net income (loss) $8,397 20% $59,566 NM
Diluted earnings (loss)
per share $0.12 19% $0.90 NM
Diluted earnings per share,
as adjusted (a) $0.09 14% $0.16 29%
Average diluted shares
outstanding 594,938 1% 2,552,751 4%
Assets under management
($ in millions) $32,404 10% $18,295 6%
Year ended
----------------------
Dec. 31, Variance
---------------------- ------------------
2004 2003 Amount %
---------------------- ------------------
Total revenue $725,311 $598,212 $127,099 21%
Total expense $559,513 $369,936 $189,577 51%
Operating income $165,798 $228,276 ($62,478) -27%
Net income $143,141 $155,402 ($12,261) -8%
Diluted earnings
per share $2.17 $2.36 ($0.19) -8%
Diluted earnings per
share, as adjusted (a) $2.70 $2.36 $0.34 14%
Average diluted shares
outstanding 65,960,473 65,860,368 100,105 0%
Operating margin (b) 36.9% 40.9%
Assets under management
($ in millions) $341,760 $309,356 $32,404 10%
NM - Not meaningful.
(a) All required disclosures for this non-GAAP measure have been
included at Table 2.
(b) Operating income, adjusted for LTIP expense and appreciation on
Rabbi trust assets, divided by total revenue less fund
administration and servicing costs. Computations for all periods
presented include affiliated and non-affiliated fund
administration and servicing expense reported as a separate income
statement line item and are derived from the Company's
consolidated financial statements, as follows:
Three months ended
---------------------------------
Dec. 31, Sept. 30,
----------------------- ---------
2004 2003 2004
----------- ----------- ---------
Operating income (loss), GAAP basis $55,826 $61,754 ($22,376)
Add back: LTIP expense 13,393 - 90,606
Less: BlackRock's LTIP funding
requirement (2,411) - (16,481)
Add back: appreciation on Rabbi
trust assets 2,081 362 267
----------- ----------- ---------
Operating income, as adjusted 68,889 62,116 52,016
----------- ----------- ---------
Revenue, GAAP basis 188,677 161,211 170,999
Less: fund administration and
servicing costs (7,939) (9,393) (8,277)
----------- ----------- ---------
Revenue used for operating margin
measurement 180,737 151,818 162,722
----------- ----------- ---------
Operating margin, GAAP basis 29.6% 38.3% -13.1%
=========== =========== =========
Operating margin, as reported 38.1% 40.9% 32.0%
=========== =========== =========
Year ended December 31,
-----------------------
2004 2003
----------- ---------
Operating income (loss), GAAP basis $165,798 $228,276
Add back: LTIP expense 103,999 -
Less: BlackRock's LTIP funding
requirement (18,892) -
Add back: appreciation on Rabbi
trust assets 4,479 3,141
----------- ---------
Operating income, as adjusted 255,384 231,417
----------- ---------
Revenue, GAAP basis 725,311 598,212
Less: fund administration and
servicing costs (32,593) (32,773)
----------- ---------
Revenue used for operating margin
measurement 692,718 565,439
----------- ---------
Operating margin, GAAP basis 22.9% 38.2%
=========== =========
Operating margin, as reported 36.9% 40.9%
=========== =========
- We believe that operating margin, as reported, is an effective
indicator of management's ability to effectively employ the
Company's resources. Appreciation on Rabbi trust assets associated
with the Company's deferred compensation plans has been excluded
because investment performance of these assets has a nominal
impact on net income. Fund administration and servicing costs have
been excluded from operating margin because these costs fluctuate
based on the discretion of a third party.
TABLE 2
BlackRock, Inc.
Adjusted Diluted Earnings Per Share Quarterly Trend
(Dollar amounts in thousands, except share data)
(unaudited)
Management believes that adjusted earnings per diluted share is an
effective indicator of the Company's profitability and financial
performance over time. The LTIP expense associated with awards to be
met by PNC's funding requirement has been excluded from adjusted
earnings per diluted share because, exclusive of the impact related to
LTIP participants' put options, these non-cash charges will not impact
BlackRock's book value. The remaining items disclosed below, which
have been deemed non-recurring by management, have been excluded from
adjusted earnings per diluted share to help ensure the comparability
of this information to prior reporting periods.
2004 Quarter
------------------------------- --------------------------------------
1st
--------------------------------------
Non-GAAP
As reported Adjustments As adjusted
------------ ------------ ------------
Revenues $ 181,823 $ - $ 181,823
------------ ------------ ------------
Expenses
Compensation and benefits 66,069 - 66,069
Long Term Retention and
Incentive Plan - - -
Other 45,987 - 45,987
------------ ------------ ------------
Total 112,056 - 112,056
------------ ------------ ------------
Operating income (loss) 69,767 - 69,767
Nonoperating income (loss) 5,813 - 5,813
Income taxes 20,089 8,659(a) 28,748
Minority interest 284 - 284
------------ ------------ ------------
Net income (loss) $ 55,207 $ (8,659) $ 46,548
============ ============ ============
Diluted earnings (loss) per
share $ 0.84 $ (0.13) $ 0.71
============ ============ ============
Diluted shares outstanding 65,807,605 65,807,605
============ ============
2003 Quarter
------------------------------- --------------------------------------
1st
--------------------------------------
Non-GAAP
As reported Adjustments As adjusted
------------ ------------ ------------
Revenues $ 142,751 $ - $ 142,751
------------ ------------ ------------
Expenses
Compensation and benefits 55,386 - 55,386
Other 33,299 - 33,299
------------ ------------ ------------
Total 88,685 - 88,685
------------ ------------ ------------
Operating income 54,066 - 54,066
Nonoperating income 3,365 - 3,365
Income taxes 22,111 - 22,111
Minority interest - - -
------------ ------------ ------------
Net income $ 35,320 $ - $ 35,320
============ ============ ============
Diluted earnings per share $ 0.54 $ - $ 0.54
============ ============ ============
2004 Quarter
------------------------------- --------------------------------------
2nd
--------------------------------------
Non-GAAP
As reported Adjustments As adjusted
------------ ------------ ------------
Revenues $ 183,812 $ - $ 183,812
------------ ------------ ------------
Expenses
Compensation and benefits 81,618 (7,004)(b) 74,614
Long Term Retention and
Incentive Plan - - -
Other 39,613 - 39,613
------------ ------------ ------------
Total 121,231 (7,004) 114,227
------------ ------------ ------------
Operating income (loss) 62,581 7,004 69,585
Nonoperating income (loss) 15,488 (12,947)(b) 2,541
Income taxes 26,521 (1,459)(e) 24,922
(140)(a)
Minority interest 3,552 (2,912)(b) 640
------------ ------------ ------------
Net income (loss) $ 47,996 $ (1,432) $ 46,564
============ ============ ============
Diluted earnings (loss) per
share $ 0.73 $ (0.02) $ 0.71
============ ============ ============
Diluted shares outstanding 65,766,979 65,766,979
============ ============
2003 Quarter
------------------------------- --------------------------------------
2nd
--------------------------------------
Non-GAAP
As reported Adjustments As adjusted
------------ ------------ ------------
Revenues $ 143,906 $ - $ 143,906
------------ ------------ ------------
Expenses
Compensation and benefits 55,819 - 55,819
Other 33,285 - 33,285
------------ ------------ ------------
Total 89,104 - 89,104
------------ ------------ ------------
Operating income 54,802 - 54,802
Nonoperating income 8,082 - 8,082
Income taxes 24,210 - 24,210
Minority interest - - -
------------ ------------ ------------
Net income $ 38,674 $ - $ 38,674
============ ============ ============
Diluted earnings per share $ 0.58 $ - $ 0.58
============ ============ ============
2004 Quarter
------------------------------- --------------------------------------
3rd
--------------------------------------
Non-GAAP
As reported Adjustments As adjusted
------------ ------------ ------------
Revenues $ 170,999 $ - $ 170,999
------------ ------------ ------------
Expenses
Compensation and benefits 64,950 - 64,950
Long Term Retention and
Incentive Plan 90,606 (74,125)(c) 16,481
Other 37,819 - 37,819
------------ ------------ ------------
Total 193,375 (74,125) 119,250
------------ ------------ ------------
Operating income (loss) (22,376) 74,125 51,749
Nonoperating income (loss) 5,682 - 5,682
Income taxes (7,265) 27,426(e) 20,161
Minority interest 385 - 385
------------ ------------ ------------
Net income (loss) $ (9,814) $ 46,699 $ 36,885
============ ============ ============
Diluted earnings (loss) per
share $ (0.15) $ 0.71 $ 0.56
============ ============ ============
Diluted shares outstanding 63,676,776 2,303,856(f) 65,980,632
============ ============ ============
2003 Quarter
------------------------------- --------------------------------------
3rd
--------------------------------------
Non-GAAP
As reported Adjustments As adjusted
------------ ------------ ------------
Revenues $ 150,344 $ - $ 150,344
------------ ------------ ------------
Expenses
Compensation and benefits 58,956 - 58,956
Other 33,734 - 33,734
------------ ------------ ------------
Total 92,690 - 92,690
------------ ------------ ------------
Operating income 57,654 - 57,654
Nonoperating income 5,934 - 5,934
Income taxes 23,579 - 23,579
Minority interest (44) - (44)
------------ ------------ ------------
Net income $ 40,053 $ - $ 40,053
============ ============ ============
Diluted earnings per share $ 0.61 $ - $ 0.61
============ ============ ============
2004 Quarter
------------------------------- --------------------------------------
4th
--------------------------------------
Non-GAAP
As reported Adjustments As adjusted
------------ ------------ ------------
Revenues $ 188,677 $ - $ 188,677
------------ ------------ ------------
Expenses
Compensation and benefits 74,502 - 74,502
Long Term Retention and
Incentive Plan 13,393 (10,982)(c) 2,411
Other 44,956 (1,000)(d) 43,956
------------ ------------ ------------
Total 132,851 (11,982) 120,869
------------ ------------ ------------
Operating income (loss) 55,826 11,982 67,808
Nonoperating income (loss) 7,657 - 7,657
Income taxes 12,919 9,545(a) 26,837
4,373(e)
Minority interest 812 - 812
------------ ------------ ------------
Net income (loss) $ 49,752 $ (1,936) $ 47,816
============ ============ ============
Diluted earnings (loss) per
share $ 0.75 $ (0.03) $ 0.72
============ ============ ============
Diluted shares outstanding 66,229,527 66,229,527
============ ============
2003 Quarter
----------------------------------------------------------------------
4th
--------------------------------------
Non-GAAP
As reported Adjustments As adjusted
------------ ------------ ------------
Revenues $ 161,211 $ - $ 161,211
------------ ------------ ------------
Expenses
Compensation and benefits 58,744 - 58,744
Other 40,713 - 40,713
------------ ------------ ------------
Total 99,457 - 99,457
------------ ------------ ------------
Operating income 61,754 - 61,754
Nonoperating income 5,245 - 5,245
Income taxes 25,347 - 25,347
Minority interest 297 - 297
------------ ------------ ------------
Net income $ 41,355 $ - $ 41,355
============ ============ ============
Diluted earnings per share $ 0.63 $ - $ 0.63
============ ============ ============
2004
-------------------------------
Total
--------------------------------------
Non-GAAP
As reported Adjustments As adjusted
------------ ------------ ------------
Revenues $ 725,311 $ - $ 725,311
------------ ------------ ------------
Expenses
Compensation and benefits 287,139 (7,004) 280,135
Long Term Retention and
Incentive Plan 103,999 (85,107) 18,892
Other 168,375 (1,000) 167,375
------------ ------------ ------------
Total 559,513 (93,111) 466,402
------------ ------------ ------------
Operating income (loss) 165,798 93,111 258,909
Nonoperating income (loss) 34,640 (12,947) 21,693
Income taxes 52,264 48,404 100,668
Minority interest 5,033 (2,912) 2,121
------------ ------------ ------------
Net income (loss) $ 143,141 $ 34,672 $ 177,813
============ ============ ============
Diluted earnings (loss) per
share $ 2.17 $ 0.53 $ 2.70
============ ============ ============
Diluted shares outstanding 65,960,473 65,960,473
============ ============
2003
-------------------------------
Total
------------------------------------
Non-GAAP
As reported Adjustments As adjusted
------------ ------------ ------------
Revenues $ 598,212 $ - $ 598,212
------------ ------------ ------------
Expenses
Compensation and benefits 228,905 - 228,905
Other 141,031 - 141,031
------------ ------------ ------------
Total 369,936 - 369,936
------------ ------------ ------------
Operating income 228,276 - 228,276
Nonoperating income 22,626 - 22,626
Income taxes 95,247 - 95,247
Minority interest 253 - 253
------------ ------------ ------------
Net income $ 155,402 $ - $ 155,402
============ ============ ============
Diluted earnings per share $ 2.36 $ - $ 2.36
============ ============ ============
Notes to table:
---------------
(a) Tax benefits related to resolution of New York State and New York
City tax audits.
(b) Impact related to the Company's sale of its equity interest in
Trepp LLC.
(c) Incentive compensation related to PNC's LTIP funding requirement.
(d) One time charges related to SSR acquisition.
(e) Tax impact of all pre tax income adjustments.
(f) Antidilutive common stock equivalents by virtue of the Company's
net loss during the period.
TABLE 3
BlackRock, Inc.
Condensed Consolidated Statements of Income
(Dollar amounts in thousands, except share data)
(unaudited)
Three months ended
---------------------------
December 31, December 31,
2004 2003 % Change
-------------------------------------
Revenue
Investment advisory and
administration fees
Mutual funds $55,451 $56,418 (1.7%)
Separate accounts 108,292 84,859 27.6
---------------------------
Total investment advisory and
administration fees 163,743 141,277 15.9
Other income 24,934 19,934 25.1
---------------------------
Total revenue 188,677 161,211 17.0
---------------------------
Expense
Employee compensation and
benefits 74,502 58,744 26.8
Long-Term Retention and Incentive
Plan 13,393 - NM
Fund administration and servicing costs
Affiliates 4,100 6,699 (38.8)
Other 3,839 2,694 42.5
General and administration 36,816 31,089 18.4
Amortization of intangible assets 201 231 (13.0)
Impairment of intangible assets - - 0.0
---------------------------
Total expense 132,851 99,457 33.6
---------------------------
Operating income 55,826 61,754 (9.6)
Non-operating income (expense)
Investment income 7,824 5,497 42.3
Interest expense (167) (252) (33.7)
---------------------------
7,657 5,245 46.0
---------------------------
Income before income taxes and
minority interest 63,483 66,999 (5.2)
Income taxes 12,919 25,347 (49.0)
---------------------------
Income before minority interest 50,564 41,652 21.4
Minority interest 812 297 NM
---------------------------
Net income $49,752 $41,355 20.3
===========================
Weighted-average shares outstanding
Basic 63,676,069 64,072,611 (0.6%)
Diluted 66,229,527 65,634,589 0.9%
Earnings per share
Basic $0.78 $0.65 20.0%
Diluted $0.75 $0.63 19.0%
Dividends paid per share $0.25 $0.20 25.0%
Year ended
-------------------------
December 31, December 31,
2004 2003 % Change
------------------------------------
Revenue
Investment advisory and
administration fees
Mutual funds $220,949 $206,136 7.2%
Separate accounts 412,674 322,556 27.9
--------------------------
Total investment advisory and
administration fees 633,623 528,692 19.8
Other income 91,688 69,520 31.9
--------------------------
Total revenue 725,311 598,212 21.2
--------------------------
Expense
Employee compensation and
benefits 287,139 228,905 25.4
Long-Term Retention and Incentive
Plan 103,999 - NM
Fund administration and
servicing costs
Affiliates 18,342 26,949 (31.9)
Other 14,251 5,824 144.7
General and administration 128,738 107,333 19.9
Amortization of intangible assets 947 925 2.4
Impairment of intangible assets 6,097 - NM
--------------------------
Total expense 559,513 369,936 51.2
--------------------------
Operating income 165,798 228,276 (27.4)
Non-operating income (expense)
Investment income 35,475 23,349 51.9
Interest expense (835) (723) 15.5
--------------------------
34,640 22,626 53.1
--------------------------
Income before income taxes and
minority interest 200,438 250,902 (20.1)
Income taxes 52,264 95,247 (45.1)
--------------------------
Income before minority interest 148,174 155,655 (4.8)
Minority interest 5,033 253 NM
--------------------------
Net income $143,141 $155,402 (7.9)
==========================
Weighted-average shares
outstanding
Basic 63,688,955 64,653,352 (1.5%)
Diluted 65,960,473 65,860,368 0.2%
Earnings per share
Basic $2.25 $2.40 (6.3%)
Diluted $2.17 $2.36 (8.1%)
Dividends paid per share $1.00 $0.40 NM
NM - Not meaningful.
TABLE 4
BlackRock, Inc.
Condensed Consolidated Statements of Financial Condition
(Dollar amounts in thousands)
(unaudited)
December December
31, 2004 31, 2003
----------- ---------
Assets
Cash and cash equivalents $457,673 $315,941
Accounts receivable 165,342 127,316
Investments 227,497 234,923
Property and equipment, net 93,701 87,006
Intangible assets, net 184,110 192,079
Other assets 16,912 9,958
----------- ---------
Total assets $1,145,235 $967,223
=========== =========
Liabilities, minority interest and stockholders'
equity
Accrued compensation $207,352 $172,447
Long-Term Retention and Incentive Plan 103,999 -
Accounts payable and accrued liabilities 30,817 60,098
Acquired management contract obligation 4,810 5,736
Other liabilities 12,736 14,395
----------- ---------
Total liabilities 359,714 252,676
Minority interest 17,169 1,239
Stockholders' equity 768,352 713,308
----------- ---------
Total liabilities, minority interest and
stockholders' equity $1,145,235 $967,223
=========== =========
TABLE 5
BlackRock, Inc.
Consolidated Statements of Cash Flows
(Dollar amounts in thousands)
(unaudited)
Year ended
December 31,
-------------------
2004 2003
--------- ---------
Cash flows from operating activities
Net income $143,141 $155,402
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 20,686 21,366
Impairment of intangible assets 6,097 -
Minority interest 5,033 220
Stock-based compensation 11,947 6,351
Deferred income taxes (25,149) (2,311)
Tax benefit from stock-based compensation 3,424 6,506
Net gain on investments (13,636) (2,961)
Changes in operating assets and liabilities:
Increase in accounts receivable (27,040) (13,198)
Increase in investments, trading (9,692) (22,057)
Decrease in receivable from affiliates 13,040 200
Increase in other assets (4,160) (540)
Increase in accrued compensation 34,905 5,493
Increase in Long-Term Retention and Incentive
Plan 103,999 -
Increase (decrease) in accounts payable and
accrued liabilities (30,539) 23,193
Increase (decrease) in other liabilities (698) 1,931
-------------------
Cash provided by operating activities 231,358 179,595
-------------------
Cash flows from investing activities
Purchase of property and equipment (25,592) (13,453)
Purchase of investments (97,636) (181,671)
Sale of investments 192,254 184,405
Deemed cash contribution upon consolidation of VIE 6,412 -
Consolidation of sponsored investment funds (68,337) -
Acquisitions, net of cash acquired (74) (8,930)
-------------------
Cash provided by (used in) investing activities 7,027 (19,649)
-------------------
Cash flows from financing activities
Issuance of class A common stock - 623
Dividends paid (63,657) (25,614)
Distributions paid to minority interest holders (5,797) -
Subscriptions to consolidated sponsored investment
funds 12,978 -
Purchase of treasury stock (57,607) (83,418)
Reissuance of treasury stock 15,369 6,915
Acquired management contract obligation payment (926) (842)
-------------------
Cash used in financing activities (99,640) (102,336)
-------------------
Effect of exchange rate changes on cash and cash
equivalents 2,987 3,097
Net increase in cash and cash equivalents 141,732 60,707
Cash and cash equivalents, beginning of year 315,941 255,234
-------------------
Cash and cash equivalents, end of year $457,673 $315,941
===================
TABLE 6
BlackRock, Inc.
Assets Under Management
(Dollar amounts in millions)
(unaudited)
December 31,
2004 2003
--------- ---------
All Accounts
Fixed income $240,709 $214,356
Liquidity 78,057 74,345
Equity 14,792 13,721
Alternative investment products 8,202 6,934
--------- ---------
Total $341,760 $309,356
========= =========
Separate Accounts
Fixed income $216,070 $190,432
Liquidity 7,360 5,855
Liquidity-Securities lending 6,898 9,925
Equity 9,397 9,443
Alternative investment products 8,202 6,934
--------- ---------
Subtotal 247,927 222,589
--------- ---------
Mutual Funds
Fixed income 24,639 23,924
Liquidity 63,799 58,565
Equity 5,395 4,278
--------- ---------
Subtotal 93,833 86,767
--------- ---------
Total $341,760 $309,356
========= =========
Component Changes in Assets Under Management
(Dollar amounts in millions)
(unaudited)
Year ended
December 31,
2004 2003
--------- ---------
All Accounts
Beginning assets under management $309,356 $272,841
Net subscriptions 19,624 22,468
Market appreciation 12,780 14,047
--------- ---------
Ending assets under management $341,760 $309,356
========= =========
% of Change in AUM from net subscriptions 60.6% 61.5%
Separate Accounts
Beginning assets under management $222,589 $183,513
Net subscriptions 12,918 26,540
Market appreciation 12,420 12,536
--------- ---------
Ending assets under management 247,927 222,589
--------- ---------
Mutual Funds
Beginning assets under management 86,767 89,328
Net subscriptions (redemptions) 6,706 (4,072)
Market appreciation 360 1,511
--------- ---------
Ending assets under management 93,833 86,767
--------- ---------
Total $341,760 $309,356
========= =========
BlackRock, Inc.
Assets Under Management
Quarterly Trend
(Dollar amounts in millions)
(unaudited)
----------------------------------------------
Year
2003 2004 ended
--------- ------------------------------------
Dec. 31 March 31 June 30 Sept. 30 Dec. 31 Dec. 31
2004
-------------------------------------------------------
Separate
Accounts
Fixed Income
Beginning
assets under
management $156,574 $190,432 $202,055 $199,762 $211,075 $190,432
Net
subscriptions 24,113 7,141 1,365 5,201 1,121 14,828
Market
appreciation
(depreciation) 9,745 4,482 (3,658) 6,112 3,874 10,810
--------- ---------------------------------------------
Ending assets
under
management $190,432 202,055 199,762 211,075 216,070 216,070
--------- ---------------------------------------------
Liquidity
Beginning
assets under
management 5,491 5,855 6,304 6,896 7,703 5,855
Net
subscriptions
(redemptions) 327 446 591 787 (362) 1,462
Market
appreciation 37 3 1 20 19 43
--------- ---------------------------------------------
Ending assets
under
management 5,855 6,304 6,896 7,703 7,360 7,360
--------- ---------------------------------------------
Liquidity-
Securities
lending
Beginning
assets under
management 6,433 9,925 8,479 8,771 8,636 9,925
Net
subscriptions
(redemptions) 3,492 (1,446) 292 (135) (1,738) (3,027)
--------- ---------------------------------------------
Ending assets
under
management 9,925 8,479 8,771 8,636 6,898 6,898
--------- ---------------------------------------------
Equity
Beginning
assets under
management 9,736 9,443 9,003 8,790 8,129 9,443
Net
subscriptions
(redemptions) (2,920) (684) (195) (748) 31 (1,596)
Market
appreciation
(depreciation) 2,627 244 (18) 87 1,237 1,550
--------- ---------------------------------------------
Ending assets
under
management 9,443 9,003 8,790 8,129 9,397 9,397
--------- ---------------------------------------------
Alternative
investment
products
Beginning
assets under
management 5,279 6,934 6,342 6,626 7,418 6,934
Net
subscriptions
(redemptions) 1,528 (486) 220 851 665 1,251
Market
appreciation
(depreciation) 127 (106) 64 (59) 118 17
--------- ---------------------------------------------
Ending assets
under
management 6,934 6,342 6,626 7,418 8,202 8,202
--------- ---------------------------------------------
Total Separate
Accounts
Beginning
assets under
management 183,513 222,589 232,183 230,845 242,961 222,589
Net
subscriptions
(redemptions) 26,540 4,971 2,273 5,956 (283) 12,918
Market
appreciation
(depreciation) 12,536 4,623 (3,611) 6,160 5,248 12,420
--------- ---------------------------------------------
Ending assets
under
management $222,589 $232,183 $230,845 $242,961 $247,927 $247,927
========= =============================================
Mutual Funds
Fixed Income
Beginning
assets under
management $19,012 $23,924 $24,742 $23,780 $24,460 $23,924
Net
subscriptions
(redemptions) 4,295 598 (264) 270 197 801
Market
appreciation
(depreciation) 617 220 (698) 410 (18) (86)
-------------------------------------------------------
Ending assets
under
management $23,924 24,742 23,780 24,460 24,639 24,639
-------------------------------------------------------
Liquidity
Beginning
assets under
management 66,588 58,565 58,986 50,276 51,498 58,565
Net
subscriptions
(redemptions) (8,035) 420 (8,710) 1,222 12,309 5,241
Market
appreciation
(depreciation) 12 1 - - (8) (7)
-------------------------------------------------------
Ending assets
under
management 58,565 58,986 50,276 51,498 63,799 63,799
-------------------------------------------------------
Equity
Beginning
assets under
management 3,728 4,278 4,761 4,753 4,546 4,278
Net
subscriptions
(redemptions) (332) 351 4 (146) 455 664
Market
appreciation
(depreciation) 882 132 (12) (61) 394 453
-------------------------------------------------------
Ending assets
under
management 4,278 4,761 4,753 4,546 5,395 5,395
-------------------------------------------------------
Total Mutual
Funds
Beginning
assets under
management 89,328 86,767 88,489 78,809 80,504 86,767
Net
subscriptions
(redemptions) (4,072) 1,369 (8,970) 1,346 12,961 6,706
Market
appreciation
(depreciation) 1,511 353 (710) 349 368 360
--------- ---------------------------------------------
Ending assets
under
management $86,767 $88,489 $78,809 $80,504 $93,833 $93,833
========= =============================================
BlackRock, Inc.
Assets Under Management
Quarterly Trend
(Dollar amounts in millions)
(unaudited)
-----------------------------------------
Year
2003 2004 ended
------- ---------------------------------
Dec. 31 March 31 June 30 Sept. 30 Dec. 31 Dec. 31,
2004
--------------------------------------------------
Mutual Funds
BlackRock Funds
Beginning assets
under management $18,115 $18,354 $18,985 $16,603 $16,305 $18,354
Net subscriptions
(redemptions) (523) 427 (2,110) (391) 60 (2,014)
Market appreciation
(depreciation) 762 204 (272) 93 340 365
-------- -----------------------------------------
Ending assets under
management 18,354 18,985 16,603 16,305 16,705 16,705
-------- -----------------------------------------
BlackRock Global
Series
Beginning assets
under management 211 838 1,026 1,293 1,299 838
Net subscriptions
(redemptions) 521 181 275 (21) (117) 318
Market appreciation
(depreciation) 106 7 (8) 27 41 67
-------- -----------------------------------------
Ending assets under
management 838 1,026 1,293 1,299 1,223 1,223
-------- -----------------------------------------
BlackRock Liquidity
Funds
Beginning assets
under management 59,576 52,870 53,159 45,854 47,087 52,870
Net subscriptions
(redemptions) (6,706) 289 (7,305) 1,233 11,374 5,591
Market depreciation - - - - (8) (8)
-------- -----------------------------------------
Ending assets under
management 52,870 53,159 45,854 47,087 58,453 58,453
-------- -----------------------------------------
Closed End
Beginning assets
under management 10,771 13,961 14,552 14,233 14,895 13,961
Net subscriptions 2,547 449 111 433 520 1,513
Market appreciation
(depreciation) 643 142 (430) 229 (5) (64)
-------- -----------------------------------------
Ending assets under
management 13,961 14,552 14,233 14,895 15,410 15,410
-------- -----------------------------------------
Other Commingled
Funds
Beginning assets
under management 655 744 767 826 918 744
Net subscriptions 89 23 59 92 1,124 1,298
-------- -----------------------------------------
Ending assets under
management 744 767 826 918 2,042 2,042
-------- -----------------------------------------
Total Mutual Funds
Beginning assets
under management 89,328 86,767 88,489 78,809 80,504 86,767
Net subscriptions
(redemptions) (4,072) 1,369 (8,970) 1,346 12,961 6,706
Market appreciation
(depreciation) 1,511 353 (710) 349 368 360
-------- -----------------------------------------
Ending assets under
management $86,767 $88,489 $78,809 $80,504 $93,833 $93,833
======== =========================================
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