Enhanced Investments - Financial Portal

Published: 2023-07-14 00:00:00 ET

EX-99.1 2 blk-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1


INVESTOR RELATIONS: Caroline Rodda 212.810.3442	MEDIA RELATIONS: Ed Sweeney 646.231.0268

BlackRock Reports Second Quarter 2023 Diluted EPS of $9.06, or $9.28 as adjusted
New York, July 14, 2023 – BlackRock, Inc. (NYSE: BLK) today reported financial results for the three and six months ended June 30, 2023.

$80 billion of quarterly total net inflows reflect continued strength of broad-based platform with positive flows across client types and regions
$831 billion increase in AUM since year-end 2022, driven by consistent organic growth and positive market and foreign exchange movements
1% decrease in revenue year-over-year primarily driven by the impact of market movements over the past twelve months on average AUM 
3% decrease in operating income year-over-year 
28% increase in diluted EPS year-over-year (26% as adjusted) reflects significantly higher nonoperating income in the current quarter 
$375 million of share repurchases in the current quarter

Laurence D. Fink, Chairman and CEO:
“Our platform-as-a-service strategy is designed to deliver better investment and technology outcomes, and is resonating with clients. BlackRock generated an industry-leading $190 billion of total net inflows in the first half of 2023, including $80 billion in the second quarter. Our strong investment performance and deep partnerships with clients have led to sustained organic growth, which when combined with improving market and currency movements has resulted in an $831 billion increase in BlackRock’s AUM since year-end 2022.
“As highlighted at our recent investor day, we are in the early stages of clients consolidating their investment management and technology requirements with comprehensive platforms that deliver the performance they need. Wealth and institutional clients across regions continue to turn to BlackRock for solutions across their whole portfolio – driving second quarter net inflows across ETFs with $48 billion, cash with $23 billion and active with $4 billion. We delivered technology services revenue and ACV growth as clients leverage Aladdin to support their investment processes. Clients are looking to do more with Aladdin, and approximately half of 2023 mandates have been across multiple technology offerings.
“For years, we have focused on delivering One BlackRock to clients with cohesive, horizontal connectivity and a set of integrated services. We have built the sole platform strategy in asset management, providing technology and advisory services, alongside ETFs, active and private markets capabilities. Our platform-as-a-service strategy powered by strong performance is leading to clients consolidating more of their portfolios with BlackRock. We believe our clients, shareholders and employees will all be beneficiaries of our differentiated approach.”


FINANCIAL RESULTS							NET FLOW HIGHLIGHTS(1)
	Q2			Q2						Q2			YTD
(in millions, except per share data)	2023			2022			(in billions)			2023			2023
AUM	$	9,425,212		$	8,487,410		Long-term net flows:			$	57		$	159
% change		11	%
Average AUM	$	9,187,240		$	9,022,278		By region:
% change		2	%					Americas		$	28		$	90
Total net flows	$	80,162		$	89,573			EMEA			13			36
								APAC			16			33
GAAP basis:
Revenue	$	4,463		$	4,526		By client type:
% change		(1	)%
Operating income	$	1,615		$	1,668			Retail:		$	4		$	4
% change		(3	)%						US		4			4
Operating margin		36.2	%		36.9	%			International		0.2			0.3
Net income(1)	$	1,366		$	1,077
% change		27	%					ETFs:		$	48		$	70
Diluted EPS	$	9.06		$	7.06				Core equity		13			17
% change		28	%						Strategic		40			69
Weighted-average diluted shares		150.7			152.5				Precision		(5	)		(16	)
% change		(1	)%
								Institutional:		$	5		$	86
As Adjusted(2):									Active		9			81
Operating income	$	1,675		$	1,727				Index		(4	)		5
% change		(3	)%
Operating margin		42.5	%		43.7	%
Net income(1)	$	1,399		$	1,122		Cash management net flows			$	23		$	31
% change		25	%
Diluted EPS	$	9.28		$	7.36
% change		26	%				Total net flows			$	80		$	190
_________________________ (1) Net income represents net income attributable to BlackRock, Inc. (2) See pages 11 through 13 for the reconciliation to GAAP and notes (1) through (3) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items. Beginning in the first quarter of 2023, BlackRock updated the definitions of its non- GAAP financial measures to exclude the impact of market valuation changes on certain deferred cash compensation plans which the Company began economically hedging in 2023.							_________________________ (1) Totals may not add due to rounding.

BUSINESS RESULTS


											Q2 2023
						Q2 2023					Base fees(1)
						Base fees(1)		June 30, 2023			and securities
	Q2 2023			June 30, 2023		and securities		AUM			lending revenue
(in millions), (unaudited)	Net flows			AUM		lending revenue		% of Total			% of Total
RESULTS BY CLIENT TYPE
Retail	$	3,789		$	903,630	$	1,044		10	%		29	%
ETFs		47,993			3,215,932		1,460		33	%		40	%
Institutional:
Active		9,392			1,812,719		640		19	%		18	%
Index		(4,483	)		2,782,790		241		30	%		7	%
Total institutional		4,909			4,595,509		881		49	%		25	%
Long-term		56,691			8,715,071		3,385		92	%		94	%
Cash management		23,471			710,141		226		8	%		6	%
Total	$	80,162		$	9,425,212	$	3,611		100	%		100	%

RESULTS BY INVESTMENT STYLE
Active	$	4,435		$	2,516,396	$	1,635		27	%		46	%
Index and ETFs		52,256			6,198,675		1,750		65	%		48	%
Long-term		56,691			8,715,071		3,385		92	%		94	%
Cash management		23,471			710,141		226		8	%		6	%
Total	$	80,162		$	9,425,212	$	3,611		100	%		100	%

RESULTS BY PRODUCT TYPE
Equity	$	(4,317	)	$	4,961,344	$	1,805		52	%		51	%
Fixed income		43,821			2,668,851		879		28	%		24	%
Multi-asset		17,365			811,927		300		9	%		8	%
Alternatives:
Illiquid alternatives		3,049			127,678		206		1	%		6	%
Liquid alternatives		(2,485	)		78,056		146		1	%		4	%
Currency and commodities		(742	)		67,215		49		1	%		1	%
Total Alternatives		(178	)		272,949		401		3	%		11	%
Long-term		56,691			8,715,071		3,385		92	%		94	%
Cash management		23,471			710,141		226		8	%		6	%
Total	$	80,162		$	9,425,212	$	3,611		100	%		100	%

(1)

Base fees include investment advisory and administration fees.

INVESTMENT PERFORMANCE AT June 30, 2023(1)


	One-year period	Three-year period	Five-year period
Fixed income:
Actively managed AUM above benchmark or peer median
Taxable	78%	88%	90%
Tax-exempt	74%	66%	38%
Index AUM within or above applicable tolerance	95%	98%	99%
Equity:
Actively managed AUM above benchmark or peer median
Fundamental	75%	52%	81%
Systematic	72%	67%	71%
Index AUM within or above applicable tolerance	98%	98%	99%

(1)

Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 14 for performance disclosure detail.

TELECONFERENCE, WEBCAST AND PRESENTATION INFORMATION

Chairman and Chief Executive Officer, Laurence D. Fink, President, Robert S. Kapito, and Chief Financial Officer, Martin S. Small, will host a teleconference call for investors and analysts on Friday, July 14, 2023 at 7:30 a.m. (Eastern Time). Members of the public who are interested in participating in the teleconference should dial, from the United States, (773) 305-6867, or from outside the United States, (866) 400-0049, shortly before 7:30 a.m. and reference the BlackRock Conference Call (ID Number 9612017). A live, listen-only webcast will also be available via the investor relations section of www.blackrock.com.

The webcast will be available for replay by 10:30 a.m. (Eastern Time) on Friday, July 14, 2023. To access the replay of the webcast, please visit the investor relations section of www.blackrock.com.

ABOUT BLACKROCK

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

(in millions, except per share data), (unaudited)


											Three Months
	Three Months Ended										Ended
	June 30,										March 31,
	2023			2022			Change				2023			Change
Revenue
Investment advisory, administration fees and securities lending revenue:
Investment advisory and administration fees	$	3,427		$	3,528		$	(101	)		$	3,335		$	92
Securities lending revenue		184			160			24				167			17
Total investment advisory, administration fees and securities lending revenue		3,611			3,688			(77	)			3,502			109
Investment advisory performance fees		118			106			12				55			63
Technology services revenue		359			332			27				340			19
Distribution fees		319			361			(42	)			319			-
Advisory and other revenue		56			39			17				27			29
Total revenue		4,463			4,526			(63	)			4,243			220

Expense
Employee compensation and benefits		1,429			1,414			15				1,427			2
Distribution and servicing costs		518			572			(54	)			505			13
Direct fund expense		344			304			40				315			29
General and administration expense		520			530			(10	)			521			(1	)
Amortization of intangible assets		37			38			(1	)			37			-
Total expense		2,848			2,858			(10	)			2,805			43

Operating income		1,615			1,668			(53	)			1,438			177

Nonoperating income (expense)
Net gain (loss) on investments		231			(314	)		545				89			142
Interest and dividend income		89			21			68				86			3
Interest expense		(69	)		(54	)		(15	)			(59	)		(10	)
Total nonoperating income (expense)		251			(347	)		598				116			135

Income before income taxes		1,866			1,321			545				1,554			312
Income tax expense		443			358			85				385			58
Net income		1,423			963			460				1,169			254
Less:
Net income (loss) attributable to noncontrolling interests		57			(114	)		171				12			45
Net income attributable to BlackRock, Inc.	$	1,366		$	1,077		$	289			$	1,157		$	209

Weighted-average common shares outstanding
Basic		149.6			151.3			(1.7	)			149.9			(0.3	)
Diluted		150.7			152.5			(1.7	)			151.3			(0.6	)
Earnings per share attributable to BlackRock, Inc. common stockholders
Basic	$	9.13		$	7.12		$	2.01			$	7.72		$	1.41
Diluted	$	9.06		$	7.06		$	2.00			$	7.64		$	1.42
Cash dividends declared and paid per share	$	5.00		$	4.88		$	0.12			$	5.00		$	-

Supplemental information:

AUM (end of period)	$	9,425,212		$	8,487,410		$	937,802			$	9,090,271		$	334,941
Shares outstanding (end of period)		149.4			151.0			(1.6	)			149.9			(0.5	)
GAAP:
Operating margin		36.2	%		36.9	%		(70	)	bps		33.9	%		230		bps
Effective tax rate		24.5	%		24.9	%		(40	)	bps		25.0	%		(50	)	bps
As adjusted:
Operating income (1)	$	1,675		$	1,727		$	(52	)		$	1,511		$	164
Operating margin (1)		42.5	%		43.7	%		(120	)	bps		40.4	%		210		bps
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests (2)	$	178		$	(233	)	$	411			$	87		$	91
Net income attributable to BlackRock, Inc. (3)	$	1,399		$	1,122		$	277			$	1,200		$	199
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (3)	$	9.28		$	7.36		$	1.92			$	7.93		$	1.35
Effective tax rate		24.5	%		24.9	%		(40	)	bps		25.0	%		(50	)	bps

See pages 11 through 13 for the reconciliation to GAAP and notes (1) through (3) to the condensed consolidated statements of income and supplemental information for more information on as adjusted items.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

(in millions, except per share data), (unaudited)



	Six Months Ended
	June 30,
	2023			2022			Change
Revenue
Investment advisory, administration fees and securities lending revenue:
Investment advisory and administration fees	$	6,762		$	7,223		$	(461	)
Securities lending revenue		351			298			53
Total investment advisory, administration fees and securities lending revenue		7,113			7,521			(408	)
Investment advisory performance fees		173			204			(31	)
Technology services revenue		699			673			26
Distribution fees		638			742			(104	)
Advisory and other revenue		83			85			(2	)
Total revenue		8,706			9,225			(519	)

Expense
Employee compensation and benefits		2,856			2,912			(56	)
Distribution and servicing costs		1,023			1,146			(123	)
Direct fund expense		659			633			26
General and administration expense		1,041			1,026			15
Amortization of intangible assets		74			76			(2	)
Total expense		5,653			5,793			(140	)

Operating income		3,053			3,432			(379	)

Nonoperating income (expense)
Net gain (loss) on investments		320			(416	)		736
Interest and dividend income		175			39			136
Interest expense		(128	)		(108	)		(20	)
Total nonoperating income (expense)		367			(485	)		852

Income before income taxes		3,420			2,947			473
Income tax expense		828			621			207
Net income		2,592			2,326			266
Less:
Net income (loss) attributable to noncontrolling interests		69			(187	)		256
Net income attributable to BlackRock, Inc.	$	2,523		$	2,513		$	10

Weighted-average common shares outstanding
Basic		149.8			151.5			(1.8	)
Diluted		151.0			153.0			(1.9	)
Earnings per share attributable to BlackRock, Inc. common stockholders
Basic	$	16.85		$	16.59		$	0.26
Diluted	$	16.70		$	16.43		$	0.27
Cash dividends declared and paid per share	$	10.00		$	9.76		$	0.24

Supplemental information:

AUM (end of period)	$	9,425,212		$	8,487,410		$	937,802
Shares outstanding (end of period)		149.4			151.0			(1.6	)
GAAP:
Operating margin		35.1	%		37.2	%		(210	)	bps
Effective tax rate		24.7	%		19.8	%		490		bps
As adjusted:
Operating income (1)	$	3,186		$	3,549		$	(363	)
Operating margin (1)		41.5	%		43.9	%		(240	)	bps
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests (2)	$	265		$	(298	)	$	563
Net income attributable to BlackRock, Inc. (3)	$	2,599		$	2,584		$	15
Diluted earnings attributable to BlackRock, Inc. common stockholders per share (3)	$	17.21		$	16.89		$	0.32
Effective tax rate		24.7	%		20.5	%		420		bps

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)


Current Quarter Component Changes by Client Type and Product Type
			Net
	March 31,		inflows			Market						June 30,
	2023		(outflows)			change			FX impact(1)			2023		Average AUM(2)
Retail:
Equity	$	394,274	$	1,997		$	17,687		$	1,517		$	415,475	$	400,742
Fixed income		305,937		4,361			(2,161	)		1,312			309,449		307,599
Multi-asset		128,681		546			4,130			189			133,546		131,273
Alternatives		48,087		(3,115	)		84			104			45,160		46,614
Retail subtotal		876,979		3,789			19,740			3,122			903,630		886,228
ETFs:
Equity		2,191,437		13,889			102,818			910			2,309,054		2,220,744
Fixed income		810,776		34,741			(8,499	)		741			837,759		824,579
Multi-asset		7,688		(24	)		182			46			7,892		7,715
Alternatives		64,402		(613	)		(2,595	)		33			61,227		63,996
ETFs subtotal		3,074,303		47,993			91,906			1,730			3,215,932		3,117,034
Institutional:
Active:
Equity		176,053		(6,439	)		8,011			432			178,057		176,835
Fixed income		814,637		(4,650	)		(2,698	)		(122	)		807,167		811,375
Multi-asset		629,018		16,930			15,544			2,577			664,069		641,330
Alternatives		158,632		3,551			972			271			163,426		160,607
Active subtotal		1,778,340		9,392			21,829			3,158			1,812,719		1,790,147
Index:
Equity		1,945,580		(13,764	)		136,617			(9,675	)		2,058,758		1,979,995
Fixed income		722,394		9,369			(10,514	)		(6,773	)		714,476		716,052
Multi-asset		6,493		(87	)		112			(98	)		6,420		6,387
Alternatives		3,244		(1	)		(84	)		(23	)		3,136		3,159
Index subtotal		2,677,711		(4,483	)		126,131			(16,569	)		2,782,790		2,705,593
Institutional subtotal		4,456,051		4,909			147,960			(13,411	)		4,595,509		4,495,740
Long-term		8,407,333		56,691			259,606			(8,559	)		8,715,071		8,499,002
Cash management		682,938		23,471			1,886			1,846			710,141		688,238
Total	$	9,090,271	$	80,162		$	261,492		$	(6,713	)	$	9,425,212	$	9,187,240
Current Quarter Component Changes by Investment Style and Product Type (Long-Term)
			Net
	March 31,		inflows			Market						June 30,
	2023		(outflows)			change			FX impact(1)			2023		Average AUM(2)
Active:
Equity	$	410,889	$	(9,729	)	$	16,548		$	955		$	418,663	$	412,335
Fixed income		1,098,737		(3,747	)		(4,249	)		803			1,091,544		1,095,152
Multi-asset		757,692		17,475			19,672			2,766			797,605		772,595
Alternatives		206,716		436			1,057			375			208,584		207,220
Active subtotal		2,474,034		4,435			33,028			4,899			2,516,396		2,487,302
Index and ETFs:
ETFs:
Equity		2,191,437		13,889			102,818			910			2,309,054		2,220,744
Fixed income		810,776		34,741			(8,499	)		741			837,759		824,579
Multi-asset		7,688		(24	)		182			46			7,892		7,715
Alternatives		64,402		(613	)		(2,595	)		33			61,227		63,996
ETFs subtotal		3,074,303		47,993			91,906			1,730			3,215,932		3,117,034
Non-ETF Index:
Equity		2,105,018		(8,477	)		145,767			(8,681	)		2,233,627		2,145,237
Fixed income		744,231		12,827			(11,124	)		(6,386	)		739,548		739,874
Multi-asset		6,500		(86	)		114			(98	)		6,430		6,395
Alternatives		3,247		(1	)		(85	)		(23	)		3,138		3,160
Non-ETF Index subtotal		2,858,996		4,263			134,672			(15,188	)		2,982,743		2,894,666
Index and ETFs subtotal		5,933,299		52,256			226,578			(13,458	)		6,198,675		6,011,700
Long-term	$	8,407,333	$	56,691		$	259,606		$	(8,559	)	$	8,715,071	$	8,499,002
Current Quarter Component Changes by Product Type (Long-Term)
			Net
	March 31,		inflows			Market						June 30,
	2023		(outflows)			change			FX impact(1)			2023		Average AUM(2)
Equity	$	4,707,344	$	(4,317	)	$	265,133		$	(6,816	)	$	4,961,344	$	4,778,316
Fixed income		2,653,744		43,821			(23,872	)		(4,842	)		2,668,851		2,659,605
Multi-asset		771,880		17,365			19,968			2,714			811,927		786,705
Alternatives:
Illiquid alternatives		123,416		3,049			856			357			127,678		125,350
Liquid alternatives		80,151		(2,485	)		276			114			78,056		78,905
Currency and commodities(3)		70,798		(742	)		(2,755	)		(86	)		67,215		70,121
Alternatives subtotal		274,365		(178	)		(1,623	)		385			272,949		274,376
Long-term	$	8,407,333	$	56,691		$	259,606		$	(8,559	)	$	8,715,071	$	8,499,002

(1)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(2)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing four months.

(3)

Amounts include commodity ETFs.

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)


Year-to-Date Component Changes by Client Type and Product Type
			Net
	December 31,		inflows			Market						June 30,
	2022		(outflows)			change			FX impact(1)			2023		Average AUM(2)
Retail:
Equity	$	370,612	$	3,995		$	37,415		$	3,453		$	415,475	$	396,013
Fixed income		299,114		4,782			2,052			3,501			309,449		306,870
Multi-asset		125,168		(599	)		8,471			506			133,546		129,891
Alternatives		48,581		(4,107	)		414			272			45,160		47,489
Retail subtotal		843,475		4,071			48,352			7,732			903,630		880,263
ETFs:
Equity		2,081,742		3,784			219,991			3,537			2,309,054		2,192,715
Fixed income		758,093		68,254			9,146			2,266			837,759		803,927
Multi-asset		8,875		(1,651	)		620			48			7,892		7,904
Alternatives		60,900		(687	)		964			50			61,227		62,526
ETFs subtotal		2,909,610		69,700			230,721			5,901			3,215,932		3,067,072
Institutional:
Active:
Equity		168,734		(10,121	)		17,995			1,449			178,057		173,796
Fixed income		774,955		11,052			19,312			1,848			807,167		801,706
Multi-asset		544,469		73,516			40,679			5,405			664,069		617,997
Alternatives		153,433		6,478			2,698			817			163,426		158,477
Active subtotal		1,641,591		80,925			80,684			9,519			1,812,719		1,751,976
Index:
Equity		1,814,266		(8,766	)		258,022			(4,764	)		2,058,758		1,942,828
Fixed income		704,661		13,609			(2,061	)		(1,733	)		714,476		714,153
Multi-asset		6,392		(226	)		362			(108	)		6,420		6,429
Alternatives		3,296		76			(216	)		(20	)		3,136		3,204
Index subtotal		2,528,615		4,693			256,107			(6,625	)		2,782,790		2,666,614
Institutional subtotal		4,170,206		85,618			336,791			2,894			4,595,509		4,418,590
Long-term		7,923,291		159,389			615,864			16,527			8,715,071		8,365,925
Cash management		671,194		31,090			3,704			4,153			710,141		672,509
Total	$	8,594,485	$	190,479		$	619,568		$	20,680		$	9,425,212	$	9,038,434
Year-to-Date Component Changes by Investment Style and Product Type (Long-Term)
			Net
	December 31,		inflows			Market						June 30,
	2022		(outflows)			change			FX impact(1)			2023		Average AUM(2)
Active:
Equity	$	392,836	$	(14,822	)	$	37,748		$	2,901		$	418,663	$	409,793
Fixed income		1,053,083		12,260			21,631			4,570			1,091,544		1,085,735
Multi-asset		669,629		72,918			49,147			5,911			797,605		747,880
Alternatives		202,012		2,370			3,113			1,089			208,584		205,966
Active subtotal		2,317,560		72,726			111,639			14,471			2,516,396		2,449,374
Index and ETFs:
ETFs:
Equity		2,081,742		3,784			219,991			3,537			2,309,054		2,192,715
Fixed income		758,093		68,254			9,146			2,266			837,759		803,927
Multi-asset		8,875		(1,651	)		620			48			7,892		7,904
Alternatives		60,900		(687	)		964			50			61,227		62,526
ETFs subtotal		2,909,610		69,700			230,721			5,901			3,215,932		3,067,072
Non-ETF Index:
Equity		1,960,776		(70	)		275,684			(2,763	)		2,233,627		2,102,844
Fixed income		725,647		17,183			(2,328	)		(954	)		739,548		736,994
Multi-asset		6,400		(227	)		365			(108	)		6,430		6,437
Alternatives		3,298		77			(217	)		(20	)		3,138		3,204
Non-ETF Index subtotal		2,696,121		16,963			273,504			(3,845	)		2,982,743		2,849,479
Index and ETFs subtotal		5,605,731		86,663			504,225			2,056			6,198,675		5,916,551
Long-term	$	7,923,291	$	159,389		$	615,864		$	16,527		$	8,715,071	$	8,365,925
Year-to-Date Component Changes by Product Type (Long-Term)
			Net
	December 31,		inflows			Market						June 30,
	2022		(outflows)			change			FX impact(1)			2023		Average AUM(2)
Equity	$	4,435,354	$	(11,108	)	$	533,423		$	3,675		$	4,961,344	$	4,705,352
Fixed income		2,536,823		97,697			28,449			5,882			2,668,851		2,626,656
Multi-asset		684,904		71,040			50,132			5,851			811,927		762,221
Alternatives:
Illiquid alternatives		117,751		7,481			1,482			964			127,678		123,067
Liquid alternatives		80,654		(4,610	)		1,779			233			78,056		79,714
Currency and commodities(3)		67,805		(1,111	)		599			(78	)		67,215		68,915
Alternatives subtotal		266,210		1,760			3,860			1,119			272,949		271,696
Long-term	$	7,923,291	$	159,389		$	615,864		$	16,527		$	8,715,071	$	8,365,925

(1)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(2)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing seven months.

(3)

Amounts include commodity ETFs.

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)


Year-over-Year Component Changes by Client Type and Product Type
			Net
	June 30,		inflows			Market						June 30,
	2022		(outflows)			change			FX impact(1)			2023		Average AUM(2)
Retail:
Equity	$	371,226	$	(1,437	)	$	42,414		$	3,272		$	415,475	$	385,196
Fixed income		313,860		(6,058	)		(2,506	)		4,153			309,449		306,249
Multi-asset		129,142		(3,720	)		7,485			639			133,546		128,986
Alternatives		49,197		(4,426	)		21			368			45,160		48,090
Retail subtotal		863,425		(15,641	)		47,414			8,432			903,630		868,521
ETFs:
Equity		2,010,343		40,042			255,483			3,186			2,309,054		2,123,824
Fixed income		695,888		152,257			(13,756	)		3,370			837,759		764,009
Multi-asset		7,868		(549	)		614			(41	)		7,892		7,851
Alternatives		70,197		(10,028	)		1,021			37			61,227		62,166
ETFs subtotal		2,784,296		181,722			243,362			6,552			3,215,932		2,957,850
Institutional:
Active:
Equity		163,697		(5,956	)		18,789			1,527			178,057		170,136
Fixed income		661,852		135,460			7,374			2,481			807,167		753,556
Multi-asset		534,159		88,470			37,226			4,214			664,069		581,246
Alternatives		151,154		10,103			1,169			1,000			163,426		154,626
Active subtotal		1,510,862		228,077			64,558			9,222			1,812,719		1,659,564
Index:
Equity		1,799,854		(43,320	)		305,843			(3,619	)		2,058,758		1,886,078
Fixed income		768,244		22,169			(74,685	)		(1,252	)		714,476		718,640
Multi-asset		7,296		(991	)		212			(97	)		6,420		6,680
Alternatives		5,209		(1,734	)		(305	)		(34	)		3,136		3,585
Index subtotal		2,580,603		(23,876	)		231,065			(5,002	)		2,782,790		2,614,983
Institutional subtotal		4,091,465		204,201			295,623			4,220			4,595,509		4,274,547
Long-term		7,739,186		370,282			586,399			19,204			8,715,071		8,100,918
Cash management		739,457		(40,407	)		5,532			5,559			710,141		690,482
Advisory		8,767		(8,764	)		(3	)		-			-		676
Total	$	8,487,410	$	321,111		$	591,928		$	24,763		$	9,425,212	$	8,792,076
Year-over-Year Component Changes by Investment Style and Product Type (Long-Term)
			Net
	June 30,		inflows			Market						June 30,
	2022		(outflows)			change			FX impact(1)			2023		Average AUM(2)
Active:
Equity	$	393,048	$	(17,668	)	$	40,113		$	3,170		$	418,663	$	402,006
Fixed income		953,957		125,397			6,236			5,954			1,091,544		1,037,866
Multi-asset		663,295		84,749			44,708			4,853			797,605		710,224
Alternatives		200,348		5,676			1,192			1,368			208,584		202,715
Active subtotal		2,210,648		198,154			92,249			15,345			2,516,396		2,352,811
Index and ETFs:
ETFs:
Equity		2,010,343		40,042			255,483			3,186			2,309,054		2,123,824
Fixed income		695,888		152,257			(13,756	)		3,370			837,759		764,009
Multi-asset		7,868		(549	)		614			(41	)		7,892		7,851
Alternatives		70,197		(10,028	)		1,021			37			61,227		62,166
ETFs subtotal		2,784,296		181,722			243,362			6,552			3,215,932		2,957,850
Non-ETF Index:
Equity		1,941,729		(33,045	)		326,933			(1,990	)		2,233,627		2,039,404
Fixed income		789,999		26,174			(76,053	)		(572	)		739,548		740,579
Multi-asset		7,302		(990	)		215			(97	)		6,430		6,688
Alternatives		5,212		(1,733	)		(307	)		(34	)		3,138		3,586
Non-ETF Index subtotal		2,744,242		(9,594	)		250,788			(2,693	)		2,982,743		2,790,257
Index and ETFs subtotal		5,528,538		172,128			494,150			3,859			6,198,675		5,748,107
Long-term	$	7,739,186	$	370,282		$	586,399		$	19,204		$	8,715,071	$	8,100,918
Year-over-Year Component Changes by Product Type (Long-Term)
			Net
	June 30,		inflows			Market						June 30,
	2022		(outflows)			change			FX impact(1)			2023		Average AUM(2)
Equity	$	4,345,120	$	(10,671	)	$	622,529		$	4,366		$	4,961,344	$	4,565,234
Fixed income		2,439,844		303,828			(83,573	)		8,752			2,668,851		2,542,454
Multi-asset		678,465		83,210			45,537			4,715			811,927		724,763
Alternatives:
Illiquid alternatives		112,039		14,246			70			1,323			127,678		118,397
Liquid alternatives		83,770		(7,275	)		1,445			116			78,056		80,744
Currency and commodities(3)		79,948		(13,056	)		391			(68	)		67,215		69,326
Alternatives subtotal		275,757		(6,085	)		1,906			1,371			272,949		268,467
Long-term	$	7,739,186	$	370,282		$	586,399		$	19,204		$	8,715,071	$	8,100,918

(1)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(2)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

(3)

Amounts include commodity ETFs.

SUMMARY OF REVENUE


	Three Months							Three Months					Six Months
	Ended							Ended					Ended
	June 30,							March 31,					June 30,
(in millions), (unaudited)	2023		2022		Change			2023		Change			2023		2022		Change
Revenue
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	506	$	550	$	(44	)	$	500	$	6		$	1,006	$	1,166	$	(160	)
ETFs		1,102		1,103		(1	)		1,078		24			2,180		2,261		(81	)
Non-ETF Index		197		186		11			177		20			374		373		1
Equity subtotal		1,805		1,839		(34	)		1,755		50			3,560		3,800		(240	)
Fixed income:
Active		482		503		(21	)		468		14			950		1,037		(87	)
ETFs		309		274		35			295		14			604		563		41
Non-ETF Index		88		102		(14	)		87		1			175		220		(45	)
Fixed income subtotal		879		879		-			850		29			1,729		1,820		(91	)
Multi-asset		300		331		(31	)		296		4			596		690		(94	)
Alternatives:
Illiquid alternatives		206		184		22			201		5			407		363		44
Liquid alternatives		146		161		(15	)		145		1			291		328		(37	)
Currency and commodities		49		62		(13	)		46		3			95		118		(23	)
Alternatives subtotal		401		407		(6	)		392		9			793		809		(16	)
Long-term		3,385		3,456		(71	)		3,293		92			6,678		7,119		(441	)
Cash management		226		232		(6	)		209		17			435		402		33
Total investment advisory, administration fees and securities lending revenue		3,611		3,688		(77	)		3,502		109			7,113		7,521		(408	)
Investment advisory performance fees:
Equity		15		3		12			6		9			21		15		6
Fixed income		-		13		(13	)		1		(1	)		1		22		(21	)
Multi-asset		3		7		(4	)		15		(12	)		18		12		6
Alternatives:
Illiquid alternatives		79		65		14			21		58			100		102		(2	)
Liquid alternatives		21		18		3			12		9			33		53		(20	)
Alternatives subtotal		100		83		17			33		67			133		155		(22	)
Total investment advisory performance fees		118		106		12			55		63			173		204		(31	)
Technology services revenue		359		332		27			340		19			699		673		26
Distribution fees		319		361		(42	)		319		-			638		742		(104	)
Advisory and other revenue:
Advisory		31		15		16			14		17			45		31		14
Other		25		24		1			13		12			38		54		(16	)
Total advisory and other revenue		56		39		17			27		29			83		85		(2	)
Total revenue	$	4,463	$	4,526	$	(63	)	$	4,243	$	220		$	8,706	$	9,225	$	(519	)

Highlights

•

Investment advisory, administration fees and securities lending revenue decreased $77 million from the second quarter of 2022, primarily driven by the negative impact of market beta on average AUM over the last twelve months, partially offset by higher securities lending revenue. Securities lending revenue of $184 million increased from $160 million in the second quarter of 2022, primarily reflecting higher spreads.

Investment advisory, administration fees and securities lending revenue increased $109 million from the first quarter of 2023, primarily driven by higher average AUM, the effect of one additional day in the quarter and higher securities lending revenue. Securities lending revenue of $184 million increased from $167 million in the first quarter of 2023, primarily reflecting higher spreads.

•

Performance fees increased $12 million from the second quarter of 2022 and $63 million from the first quarter of 2023, primarily reflecting higher revenue from illiquid alternative products.

•

Technology services revenue increased $27 million from the second quarter of 2022 and $19 million from the first quarter of 2023, reflecting continued strong client demand for Aladdin but also the impact of fixed income market movements over the last twelve months on positions held on the Aladdin platform. Technology services annual contract value (“ACV”)(1) increased 8% from the second quarter of 2022, and was similarly impacted by fixed income market movements.

•

Advisory and other revenue increased $17 million from the second quarter of 2022 and $29 million from the first quarter of 2023, primarily reflecting higher revenue from advisory assignments.

(1)

See note (4) to the condensed consolidated statements of income and supplemental information on page 13 for more information on ACV.

SUMMARY OF OPERATING EXPENSE


	Three Months							Three Months						Six Months
	Ended							Ended						Ended
	June 30,							March 31,						June 30,
(in millions), (unaudited)	2023		2022		Change			2023			Change			2023		2022			Change
Operating expense
Employee compensation and benefits	$	1,429	$	1,414	$	15		$	1,427		$	2		$	2,856	$	2,912		$	(56	)
Distribution and servicing costs		518		572		(54	)		505			13			1,023		1,146			(123	)
Direct fund expense		344		304		40			315			29			659		633			26
General and administration expense:
Marketing and promotional		82		76		6			80			2			162		136			26
Occupancy and office related		100		106		(6	)		110			(10	)		210		205			5
Portfolio services		69		67		2			68			1			137		136			1
Sub-advisory		19		20		(1	)		20			(1	)		39		42			(3	)
Technology		141		148		(7	)		135			6			276		293			(17	)
Professional services		35		42		(7	)		42			(7	)		77		82			(5	)
Communications		12		10		2			12			-			24		21			3
Foreign exchange remeasurement		2		2		-			(1	)		3			1		(1	)		2
Contingent consideration fair value adjustments		1		-		1			-			1			1		1			-
Other general and administration		59		59		-			55			4			114		111			3
Total general and administration expense		520		530		(10	)		521			(1	)		1,041		1,026			15
Amortization of intangible assets		37		38		(1	)		37			-			74		76			(2	)
Total operating expense	$	2,848	$	2,858	$	(10	)	$	2,805		$	43		$	5,653	$	5,793		$	(140	)

Highlights

•

Employee compensation and benefits expense increased $15 million from the second quarter of 2022, reflecting higher base compensation, driven primarily by base salary increases, partially offset by lower incentive compensation, primarily as a result of lower operating income.

•

Direct fund expense increased $40 million from the second quarter of 2022 and $29 million from the first quarter of 2023, primarily reflecting higher average index AUM and lower rebates.

SUMMARY OF NONOPERATING INCOME (expense), less net income (loss) attributable TO noncontrolling interests


	Three Months									Three Months						Six Months
	Ended									Ended						Ended
	June 30,									March 31,						June 30,
(in millions), (unaudited)	2023			2022			Change			2023			Change			2023			2022			Change
Nonoperating income (expense), GAAP basis	$	251		$	(347	)	$	598		$	116		$	135		$	367		$	(485	)	$	852
Less: Net income (loss) attributable to noncontrolling interests ("NCI")		57			(114	)		171			12			45			69			(187	)		256
Nonoperating income (expense), net of NCI		194			(233	)		427			104			90			298			(298	)		596
Less: Hedge gain (loss) on deferred cash compensation plans(1)		16			-			16			17			(1	)		33			-			33
Nonoperating income (expense), net of NCI, as adjusted(2)	$	178		$	(233	)	$	411		$	87		$	91		$	265		$	(298	)	$	563

	Three Months									Three Months						Six Months
	Ended									Ended						Ended
	June 30,									March 31,						June 30,
(in millions), (unaudited)	2023			2022			Change			2023			Change			2023			2022			Change
Net gain (loss) on investments, net of NCI
Private equity	$	151		$	(8	)	$	159		$	39		$	112		$	190		$	2		$	188
Real assets		2			1			1			6			(4	)		8			14			(6	)
Other alternatives(3)		4			(5	)		9			6			(2	)		10			(1	)		11
Other investments(4)		(7	)		(112	)		105			12			(19	)		5			(187	)		192
Hedge gain (loss) on deferred cash compensation plans(1)		16			-			16			17			(1	)		33			-			33
Subtotal		166			(124	)		290			80			86			246			(172	)		418
Other gains (losses)		8			(76	)		84			(3	)		11			5			(57	)		62
Total net gain (loss) on investments, net of NCI		174			(200	)		374			77			97			251			(229	)		480
Interest and dividend income		89			21			68			86			3			175			39			136
Interest expense		(69	)		(54	)		(15	)		(59	)		(10	)		(128	)		(108	)		(20	)
Net interest income (expense)		20			(33	)		53			27			(7	)		47			(69	)		116
Nonoperating income (expense), net of NCI		194			(233	)		427			104			90			298			(298	)		596
Less: Hedge gain (loss) on deferred cash compensation plans(1)		16			-			16			17			(1	)		33			-			33
Nonoperating income (expense), net of NCI, as adjusted(2)	$	178		$	(233	)	$	411		$	87		$	91		$	265		$	(298	)	$	563

(1)

Amount relates to the gain (loss) from economically hedging certain BlackRock deferred cash compensation plans.

(2)

Management believes nonoperating income (expense), net of NCI, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating results, which ultimately impacts BlackRock’s book value. For more information on as adjusted items and the reconciliation to GAAP see notes to the condensed consolidated statements of income and supplemental information on pages 11 through 13.

(3)

Amounts primarily include net gains (losses) related to credit funds, direct hedge fund strategies and hedge fund solutions.

(4)

Amounts primarily include net gains (losses) related to unhedged seed investments.

summary of INCOME TAX EXPENSE


	Three Months								Three Months						Six Months
	Ended								Ended						Ended
	June 30,								March 31,						June 30,
(in millions), (unaudited)	2023			2022			Change		2023				Change		2023			2022			Change
Income tax expense	$	443		$	358		$	85		$	385		$	58	$	828		$	621		$	207
Effective tax rate		24.5	%		24.9	%		(40) bps			25.0	%		(50) bps		24.7	%		19.8	%		490 bps

Highlights

•

First quarter 2022 income tax expense included $133 million of discrete tax benefits related to stock-based compensation awards that vested in the first quarter and the resolution of certain outstanding tax matters.


RECONCILIATION OF GAAP OPERATING INCOME AND OPERATING MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS ADJUSTED
	Three Months Ended									Six Months Ended
	June 30,						March 31,			June 30,
(in millions), (unaudited)	2023			2022			2023			2023			2022
Operating income, GAAP basis	$	1,615		$	1,668		$	1,438		$	3,053		$	3,432
Non-GAAP expense adjustments:
Compensation expense related to appreciation (depreciation) on deferred cash compensation plans (a)		12			-			20			32			-
Amortization of intangible assets (b)		37			38			37			74			76
Acquisition-related compensation costs (b)		4			6			5			9			13
Acquisition-related transaction costs (b)(1)		3			-			-			3			-
Contingent consideration fair value adjustments (b)		1			-			-			1			1
Lease costs - New York (c)		3			15			11			14			27
Operating income, as adjusted (1)	$	1,675		$	1,727		$	1,511		$	3,186		$	3,549
Revenue, GAAP basis	$	4,463		$	4,526		$	4,243		$	8,706		$	9,225
Non-GAAP adjustments:
Distribution fees		(319	)		(361	)		(319	)		(638	)		(742	)
Investment advisory fees		(199	)		(211	)		(186	)		(385	)		(404	)
Revenue used for operating margin measurement	$	3,945		$	3,954		$	3,738		$	7,683		$	8,079
Operating margin, GAAP basis		36.2	%		36.9	%		33.9	%		35.1	%		37.2	%
Operating margin, as adjusted (1)		42.5	%		43.7	%		40.4	%		41.5	%		43.9	%

(1)

Amount included within general and administration expense.

See note (1) to the condensed consolidated statements of income and supplemental information on page 12 for more information on as adjusted items.


RECONCILIATION OF GAAP NONOPERATING INCOME (EXPENSE) TO NONOPERATING INCOME (EXPENSE), LESS NET INCOME (LOSS) ATTRIBUTABLE TO NCI, AS ADJUSTED
	Three Months Ended							Six Months Ended
	June 30,					March 31,		June 30,
(in millions), (unaudited)	2023		2022			2023		2023		2022
Nonoperating income (expense), GAAP basis	$	251	$	(347	)	$	116	$	367	$	(485	)
Less: Net income (loss) attributable to NCI		57		(114	)		12		69		(187	)
Nonoperating income (expense), net of NCI		194		(233	)		104		298		(298	)
Less : Hedge gain (loss) on deferred cash compensation plans (a)		16		-			17		33		-
Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted (2)	$	178	$	(233	)	$	87	$	265	$	(298	)

See notes (1) and (2) to the condensed consolidated statements of income and supplemental information on pages 12 and 13 for more information on as adjusted items.


RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO BLACKROCK TO NET INCOME ATTRIBUTABLE TO BLACKROCK, AS ADJUSTED
	Three Months Ended							Six Months Ended
	June 30,					March 31,		June 30,
(in millions, except per share data), (unaudited)	2023			2022		2023		2023			2022
Net income attributable to BlackRock, Inc., GAAP basis	$	1,366		$	1,077	$	1,157	$	2,523		$	2,513
Non-GAAP adjustments(1):
Net impact of hedged deferred cash compensation plans (a)		(3	)		-		2		(1	)		-
Amortization of intangible assets (b)		28			29		28		56			58
Acquisition-related compensation costs (b)		3			5		4		7			10
Acquisition-related transaction costs (b)		2			-		-		2			-
Contingent consideration fair value adjustments (b)		1			-		-		1			1
Lease costs - New York (c)		2			11		9		11			20
Income tax matters		-			-		-		-			(18	)
Net income attributable to BlackRock, Inc., as adjusted (3)	$	1,399		$	1,122	$	1,200	$	2,599		$	2,584
Diluted weighted-average common shares outstanding		150.7			152.5		151.3		151.0			153.0
Diluted earnings per common share, GAAP basis	$	9.06		$	7.06	$	7.64	$	16.70		$	16.43
Diluted earnings per common share, as adjusted (3)	$	9.28		$	7.36	$	7.93	$	17.21		$	16.89

(1)

Non-GAAP adjustments are net of tax excluding income tax matters.

See note (3) to the condensed consolidated statements of income and supplemental information on page 13 for more information on as adjusted items.

NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION (unaudited)

BlackRock reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”); however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. Adjustments to GAAP financial measures (“non-GAAP adjustments”) include certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow. Management reviews non-GAAP financial measures, in addition to GAAP financial measures, to assess ongoing operations and considers them to be helpful, for both management and investors, in evaluating BlackRock’s financial performance over time. Management also uses non-GAAP financial measures as a benchmark to compare its performance with other companies and to enhance comparability for the reporting periods presented. Non-GAAP financial measures may pose limitations because they do not include all of BlackRock’s revenue and expense. BlackRock’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Non-GAAP financial measures may not be comparable to other similarly titled measures of other companies.

Computations for all periods are derived from the condensed consolidated statements of income as follows:

(1) Operating income, as adjusted, and operating margin, as adjusted: Management believes operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRock’s financial performance over time, and, therefore, provide useful disclosure to investors. Management believes that operating margin, as adjusted, reflects the Company’s long-term ability to manage ongoing costs in relation to its revenues. The Company uses operating margin, as adjusted, to assess the Company’s financial performance, to determine the long-term and annual compensation of the Company’s senior-level employees and to evaluate the Company’s relative performance against industry peers. Furthermore, this metric eliminates margin variability arising from the accounting of revenues and expenses related to distributing different product structures in multiple distribution channels utilized by asset managers.

•

Operating income, as adjusted, includes the following non-GAAP expense adjustments:

(a)

Compensation expense related to appreciation (depreciation) on deferred cash compensation plans. Beginning in the first quarter of 2023, the Company updated its definition of operating income, as adjusted, to exclude compensation expense related to the market valuation changes on certain deferred cash compensation plans, which the Company began hedging economically in 2023. For these deferred cash compensation plans, the final value of the deferred amount to be distributed to employees in cash upon vesting is determined based on the returns on specified investment funds. The Company recognizes compensation expense for the appreciation (depreciation) of the deferred cash compensation liability in proportion to the vested amount of the award during a respective period, while the gain (loss) to economically hedge these plans is immediately recognized in nonoperating income (expense), which creates a timing difference impacting net income. This timing difference will reverse and offset to zero over the life of the award at the end of the multi-year vesting period. Management believes excluding market valuation changes related to the deferred cash compensation plans in the calculation of operating income, as adjusted, provides useful disclosure to both management and investors of the Company’s financial performance over time as these amounts are economically hedged, while also increasing comparability with other companies.

(b)

Acquisition related costs. Acquisition related costs include adjustments related to amortization of intangible assets, other acquisition-related costs, including compensation costs for nonrecurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions. Management believes excluding the impact of these expenses when calculating operating income, as adjusted, provides a helpful indication of the Company’s financial performance over time, thereby providing helpful information for both management and investors while also increasing comparability with other companies.

(c)

Lease costs – New York. In 2022 and 2023, the Company continued to recognize lease expense within general and administration expense for both its current headquarters located at 50 Hudson Yards in New York and prior headquarters until the Company's lease on its prior headquarters expired in April 2023. The Company began lease payments related to its current headquarters in May 2023, but began recording lease expense in August 2021 when it obtained access to the building to begin its tenant improvements. Prior to the Company’s move to its current headquarters in February 2023, the impact of lease costs related to 50 Hudson Yards was excluded from operating income, as adjusted. In February 2023, the Company completed the majority of its move to 50 Hudson Yards and no longer excluded the impact of these lease costs. Subsequently, from February 2023 through April 2023, the Company excluded the impact of lease costs related to the Company's prior headquarters. Management believes excluding the impact of these respective New York lease costs (“Lease costs – New York”) when calculating operating income, as adjusted, is useful to assess the Company’s financial performance, ongoing operations, and enhances comparability among periods presented.

•

Revenue used for calculating operating margin, as adjusted, is reduced to exclude all of the Company’s distribution fees, which are recorded as a separate line item on the condensed consolidated statements of income, as well as a portion of investment advisory fees received that is used to pay distribution and servicing costs. For certain products, based on distinct arrangements, distribution fees are collected by the Company and then passed-through to third-party client intermediaries. For other products, investment advisory fees are collected by the Company and a portion is passed-through to third-party client intermediaries. However, in both structures, the third-party client intermediary similarly owns the relationship with the retail client and is responsible for distributing the product and servicing the client. The amount of distribution and investment advisory fees fluctuates each period primarily based on a predetermined percentage of the value of AUM during the period. These fees also vary based on the type of investment product sold and the geographic location where it is sold. In addition, the Company may waive fees on certain products that could result in the reduction of payments to the third-party intermediaries.

(2) Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted: Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating contribution to its results and provides comparability of this information among reporting periods. Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, excludes the gain (loss) on the economic hedge of certain deferred cash compensation plans. As the gain (loss) on investments and derivatives used to hedge these compensation plans over time substantially offsets the compensation expense related to the market valuation changes on these deferred cash compensation plans, which is included in operating income, GAAP basis, management believes excluding the gain (loss) on the economic hedge of the deferred cash compensation plans when calculating nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, provides a useful measure for both management and investors of BlackRock’s nonoperating results that impact book value.

(3) Net income attributable to BlackRock, Inc., as adjusted: Management believes net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted, are useful measures of BlackRock’s profitability and financial performance. Net income attributable to BlackRock, Inc., as adjusted, equals net income attributable to BlackRock, Inc., GAAP basis, adjusted for certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.

See notes (1) and (2) above regarding operating income, as adjusted, for information on the updated presentation of non-GAAP adjustments. For each period presented, the non-GAAP adjustments were tax effected at the respective blended rates applicable to the adjustments. Amounts for income tax matters represent net noncash (benefit) expense primarily associated with the revaluation of certain deferred tax liabilities related to intangible assets and goodwill as a result of tax rate changes. These amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to enhance comparability among periods presented.

Per share amounts reflect net income attributable to BlackRock, Inc., as adjusted, divided by diluted weighted-average common shares outstanding.

(4) ACV: Management believes ACV is an effective metric for reviewing BlackRock’s technology services’ ongoing contribution to its operating results and provides comparability of this information among reporting periods while also providing a useful supplemental metric for both management and investors of BlackRock’s growth in technology services revenue over time, as it is linked to the net new business in technology services. ACV represents forward-looking, annualized estimated value of the recurring subscription fees under client contracts, assuming all client contracts that come up for renewal are renewed, unless we received a notice of termination, even though such notice may not be effective until a later date. ACV also includes the annualized estimated value of new sales, for existing and new clients, when we execute client contracts, even though the recurring fees may not be effective until a later date and excludes nonrecurring fees such as implementation and consulting fees.

FORWARD-LOOKING STATEMENTS

This earnings release, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions.

BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

BlackRock has previously disclosed risk factors in its Securities and Exchange Commission (“SEC”) reports. These risk factors and those identified elsewhere in this earnings release, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management (“AUM”); (3) the relative and absolute investment performance of BlackRock’s investment products; (4) BlackRock’s ability to develop new products and services that address client preferences; (5) the impact of increased competition; (6) the impact of future acquisitions or divestitures; (7) BlackRock’s ability to integrate acquired businesses successfully; (8) the unfavorable resolution of legal proceedings; (9) the extent and timing of any share repurchases; (10) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and cybersecurity protection; (11) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; (12) the impact of legislative and regulatory actions and reforms, regulatory, supervisory or enforcement actions of government agencies and governmental scrutiny relating to BlackRock; (13) changes in law and policy and uncertainty pending any such changes; (14) any failure to effectively manage conflicts of interest; (15) damage to BlackRock’s reputation; (16) geopolitical unrest, terrorist activities, civil or international hostilities, including the war between Russia and Ukraine, and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (17) a pandemic or health crisis, and related impact on BlackRock’s business, operations and financial condition; (18) climate-related risks to BlackRock's business, products, operations and clients; (19) the ability to attract, train and retain highly qualified and diverse professionals; (20) fluctuations in the carrying value of BlackRock’s economic investments; (21) the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products or transactions, which could affect the value proposition to clients and, generally, the tax position of the Company; (22) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (23) the failure by key third-party providers of BlackRock to fulfill their obligations to the Company; (24) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (25) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds (“ETF”) platform; (26) the impact of BlackRock electing to provide support to its products from time to time and any potential liabilities related to securities lending or other indemnification obligations; and (27) the impact of problems, instability or failure of other financial institutions or the failure or negative performance of products offered by other financial institutions.

BlackRock’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and BlackRock’s subsequent filings with the SEC, accessible on the SEC’s website at www.sec.gov and on BlackRock’s website at www.blackrock.com, discuss these factors in more detail and identify additional factors that can affect forward-looking statements. The information contained on the Company’s website is not a part of this earnings release.

PERFORMANCE NOTES

Past performance is not indicative of future results. Except as specified, the performance information shown is as of June 30, 2023 and is based on preliminary data available at that time. The performance data shown reflects information for all actively and passively managed equity and fixed income accounts, including US registered investment companies, European-domiciled retail funds and separate accounts for which performance data is available, including performance data for high net worth accounts available as of May 31, 2023. The performance data does not include accounts terminated prior to June 30, 2023 and accounts for which data has not yet been verified. If such accounts had been included, the performance data provided may have substantially differed from that shown.

Performance comparisons shown are gross-of-fees for institutional and high net worth separate accounts, and net-of-fees for retail funds. The performance tracking shown for index accounts is based on gross-of-fees performance and includes all institutional accounts and all iShares® funds globally using an index strategy. AUM information is based on AUM available as of June 30, 2023 for each account or fund in the asset class shown without adjustment for overlapping management of the same account or fund. Fund performance reflects the reinvestment of dividends and distributions.

Performance shown is derived from applicable benchmarks or peer median information, as selected by BlackRock, Inc. Peer medians are based in part on data either from Lipper, Inc. or Morningstar, Inc. for each included product.